Loan Number: N2306
Loan Amount: $2,700,000
Minimum Investment: $20,000
Call for availability of smaller participations
Type: First Mortgage
Yield: 12.0%*

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PROPERTY

Project: ROYAL HAWK COUNTRY CLUB
Property Address: 5N748 Burr Road, St. Charles, IL 60175
Description: The subject property consists of a country club, private golf course, tennis courts, restaurant & bar on 171.55 acres of land, located in St. Charles, IL.

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ROYAL HAWK COUNTRY CLUB

George says, "With the economy coming back, the depression in golf course attendance and golf course prices may be past its nadir (low point). Here we have high-net-worth borrowers. Chicago, not far from Northern Indiana where I live, enjoys thousands of diverse and different businesses, and the city is benefitting from the resurgence of American manufacturing. Forget the Rust Belt. I live in this area. Rumors of the death of the American manufacturing economy have been greatly exaggerated. Northern Indiana and Northern Illinois are very healthy economies. In plain English, the rich guys in California work for, or own, software companies. The rich guys in the Great Lakes region own manufacturing companies. And yeah, it surprised the heck out of me too."

Blackburne & Sons is pleased to present this first mortgage secured by a Private Country Club, 18 hole Golf Course, pro shop, dining room, exercise facility, conference rooms and Tennis Courts on 171.55 acres located in St. Charles Township, Kane County, IL.

With a population of 515,269, Kane County is the fifth-most populous county in Illinois. Kane County is one of the collar counties of the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area. St. Charles Township is located in the Central Fox Valley River region of Kane County. The eastern border is the County line between DuPage and Kane Counties which places St. Charles directly in the center of the region.

The Country Club is located in a far west suburban community of St. Charles that has above average housing values, a highly regarded school system, a regional shopping mall, a well received, modern industrial park and adequate transportation, including a nearby airport and tollway.

The subject property is a golf course and country club that is privately owned. Configured in 1974, the Royal Hawk has been rated among the top 10 best golf experiences by Chicagoland Magazine. The golf course consists of eighteen hole play in a double fairway course layout with returning nines and is 6.547 yards in length with a par of 72. The country club offers a full 18 hole golf course, full practice facilities and tennis courts. The 15,000SF clubhouse includes an exercise facility, locker rooms and a dining room with a full kitchen and bar.

This property was purchased in 2004 for $6,500,000. Our borrowers reportedly spent an additional $4,000,000 in 2007 to build the clubhouse. The building has high quality finishes with a revolution-era theme throughout. The clubhouse is two stories in height, and patterned after George Washington’s Mount Vernon. There is also excess land available within the property, with roughly 20 acres with road frontage that could accommodate single family home development in the future.

Our borrower is a Limited Partnership, with the General Partner and his wife personally guaranteeing the loan. Our borrower owns 3 other Country Clubs as well as his own insurance company. They have reported a net worth of $24,570,448 and mid-credit scores of 665 and 636. They reported annual income of ($3,354,293) in 2014 and ($2,580,402) in 2013. Both tax years losses were due to loss carryovers from previous years. The Limited Partnership reported ($318,889) in 2014 after adding back interest and depreciation. In 2013, the Limited Partnership reported ($264,050) after add backs. In 2015, the Partnership reported income of $140,505. This loan will be used to refinance $2,650,000 in mortgages.

We engaged a local MAI appraiser to value this property. He provided a value range of $4,800,000 to $5,130,000.

At a 57.0% LTV and a 12.0% yield, this appears to be a very reasonable investment. Every first mortgage investment involves substantial risk, so be sure to read the Risk Factors section of the Offering Circular before investing. A substantial and prolonged decline in real estate values is possible.

Blackburne & Sons Realty Capital Corporation--For more information, contact Angelica Gardner
4811 Chippendale Drive, Suite 101, Sacramento, CA 95841
Telephone: (916) 338-3232 * Fax: (916) 338-2328
Real Estate Broker -- California Bureau of Real Estate -- License Number 829677 -- NMLS Number 103430
Publicly advertised to California residents only under California Department of Business Oversight business plan permit.
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