Exhibit A -- Specifics of the Loan

Non-California Residents
Must Purchase the Entire Loan

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Loan Number: N2719
Loan Amount: $885,000
Minimum Investment: $20,000
Call for availability of smaller participations
Type: First Trust Deed
Yield: 11.0%*

Important Links:
How to Invest in This Loan
Suitability Requirements
Offering Circular
Loan Servicing Agreement
Audited Financial Statement for B & S
Inventory of Available Loans
To Be Added to Our Investor Email List


PROPERTY

Project: 2nd Street Commercial
Property Address
: 82 2nd Street, Logan, MT 59741
Description:
The subject property consists of a 9,600SF industrial warehouse on a 4.64-acre parcel located in Logan, Gallatin County, Montana.

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TERMS

Term of Investment
36 months
Current Interest Rate
11.0%
Repayment Schedule
15 Year Amortization
Monthly Payment
$9,737.97*
Construction Holdback
$700,000
Purchase Price of the Note
$885,000
Current Balance on the Note
$885,000
Maturity Date
36 months
Balloon Pymt. after 60 months app.
$760,138.12
Late Charge Amount
$1,113.92**
Prepayment Penalty
None

*Net of servicing
**To be shared equally with B&S


EQUITY ANALYSIS

Appraised Value - November 3, 2022 (AS-IS)
$1,400,000
Appraised Value - (AS-Complete)
$1,900,000
Protective Equity (AS-IS)
$515,000
Protective Equity (AS-Complete)
$1,015,000
Loan-to-value - Appraisal (AS-IS)
63.21%
Loan-to-value - Appraisal (AS-Complete)
46.84%


OPERATING STATEMENT

INCOME
Rental Income
$134,400
Less 3.0% Vacancy Allowance
$4,032
Effective Gross Income:
$130,368
   
EXPENSES
.
Less Management Expense
$3,911
Total Expenses
$3,911
 
NET OPERATING INCOME
$126,457
Note: Pro forma based on appraiser's estimates

BORROWERS

Name(s)
LLC
Net Worth
$2,264,690
Occupation
Real Estate Holding Company
Percent of Ownership
100%

Name(s)
Individual #1
Net Worth
$1,837,854
Occupation
Business Owner
2021 Income
$322,560
2020 Income
$451,246

Name(s)
Individual #2
Net Worth
$2,163,900
Occupation
Business Owner
2021 Income
$322,405
2020 Income
$460,818

Earn a $250 Referral Fee 
Refer accredited trust deed investors
for our mailing list.


To invest, call Tom Blackburne
at 1-800-606-3232 or CLICK HERE.


2ND STREET COMMERCIAL

THE LOAN OFFERED HEREBY IS A CANNABIS LOAN THAT WILL BE SECURED BY A PROPERTY UTILIZED TO GROW, MANUFACTURE, PROCESS, DISTRIBUTE OR DISPENSE CANNABIS OR CANNABIS RELATED PRODUCTS. THIS LOAN INVOLVES SIGNIFICANT ADDITIONAL RISKS NOT ATTRIBUTABLE TO LOANS UNRELATED TO THE CANNABIS INDUSTRY AND SUCH LOANS ARE NOT SUITABLE FOR ALL INVESTORS. POTENTIAL PURCHASERS OF FRACTIONAL INTERESTS IN THIS LOAN MUST REVIEW AND UNDERSTAND THE INFORMATION SET FORTH IN THE OFFERING CIRCULAR ENTITLED "ADDITIONAL RISKS AND CONSIDERATIONS OF CANNABIS RELATED LOANS" PRIOR TO INVESTING. PURCHASERS OF INTERESTS IN THIS LOAN SHOULD ALSO CONSULT THEIR OWN LEGAL COUNSEL AND INVESTMENT ADVISORS WITH RESPECT TO THESE RISKS TO DETERMINE IF AN INVESTMENT IN THIS LOAN IS APPROPRIATE FOR THEIR PARTICULAR RISK TOLERANCE PROFILE AND FINANCIAL SITUATION.

Blackburne & Sons is pleased to present this First Trust Deed secured by a newly constructed 9,600SF industrial warehouse on a 4.64-acre parcel located in Logan, Gallatin County, Montana.  

The borrowers purchased the land in 2020 for $395,000, and began construction of the building. To date the borrowers have spent roughly $700,000 out of pocket on construction costs. They will be using our loan to pay off the current note holder of $136,000, and the remaining funds will be used to complete construction of the building. We will be using a third party company to hold back $700,000 to ensure the improvements are completed. The subject property will be used as a cannabis grow facility for thier cannabis business. The borrowers currently own 3 cannabis dispensaries.

Blackburne & Sons made a loan to these borrowers on a retail cannabis dispensary in 2021 on a property in Big Sky, Montana. This loan is still on our books. The borrowers have made 4 late payments but they have paid all of their late fees and are currently in good standing.

COUNTY INFORMATION

Gallatin County is the second-most populous county in Montana.  In 2020, Gallatin County had a population of 111,000 people with a median age of 33.4 and median household income of $70,124.  Between 2019 and 2020 the population of the county grew from 108,063 to 111,401, a 3.09% increase.  The median household income grew from $66,397 to $70,124, a 5.61% increase. 

The economy of Gallatin County employs 64,300 people.  The largest industries in the county are Retail Trade (8,149 people), Educational Services (7,387 people), and Construction (7,105 people).  The highest paying industries are Management of Companies & Enterprises ($250,001), Mining, Quarrying, and Oil & Gas Extraction ($81,630), and Utilities ($60,903). The largest universities in Gallatin County are Montana State University (3,472 degrees awarded in 2020), Montana Bible College (14 degrees), and Academy of Cosmetology (13 degrees). 

The county’s prominent geographical features are the Bridger mountains in the north, the Gallatin mountains, and Gallatin River in the south.  Named by Meriwether Lewis in 1805 for Albert Gallatin, the United States Treasury Secretary who formulated the Lewis and Clark Expedition.  At the southern end of the county, West Yellowstone’s entrance into Yellowstone National Park accounts for around half of all park visitors.  Big Sky Resort, one of the largest ski resorts in the United States, lies in Gallatin and neighboring Madison counties, midway between Bozeman and West Yellowstone.  According to the United States Census Bureau, the county has a total area of 2,632 square miles, of which 2,603 square miles is land and 29 square miles in water. 

CITY INFORMATION

In 2020, Logan had a population of 17 people with a median age of 64.1.  Between 2019 and 2020 the population of Logan declined from 20 to 17, a -15% decrease.  The economy of Logan, Montana employs 9 people.  The largest industry is Construction (9 people). 

The city of Logan, is an unincorporated community in Gallatin County, Montana.  Logan is situated on the Gallatin River and was established in 1889 as a railroad station on the Northern Pacific and Montana Railway.  There is no post office, so the Logan properties have a Manhattan address.  The city can be accessed via exit 283 on Interstate 90. Logan is approximately 26 miles west of Bozeman, 60 miles east of Butte, 167 miles west of Billings, and 178 miles east of Missoula. 

Bozeman is the county seat of Gallatin County and is a regional shopping center with a full range of businesses and professional services.  Bozeman is not an industrial center but rather a conglomerate of small businesses and manufacturing firms.  The area’s economy is strongly influenced by agriculture, tourism, the university, state and federal employment. In 2020, Bozeman had a population of 48.3k people.

SUBJECT PROPERTY DETAILS

The subject property consists of a 4.64-acre site with a 9,600SF clear span warehouse.  The 4.64-acre parcel is located off Interstate 90, exist 283, in Logan, Montana.  Since purchasing the property in 2021, the borrowers have enhanced the site.  The site has been graded and is mostly level.  Phase three power was bought onto the site, and two electrical boxes allows for additional construction and expansion.  A well was drilled to provide water to the site.  The warehouse is a clear span structure with 9,600SF.  At the walls, the ceiling height to the bottom of the steel joist is 11 feet.  The ceiling in the middle of the warehouse is 17 feet 6 inches.  The warehouse has a concrete floor with four floor drains. 

At completion, the interior will have two bathrooms, offices, and a break room.  As of the effective date of the appraisal, the warehouse is a shell with no interior finished.  The subject is located at the end of 2nd Street, a dead-end road.  2nd Street is accessed via a paved Frontage Road. 

Per the borrower, this property is located six miles from the International Airport and the property has views of the Gallatin River.

BORROWERS’ SUMMARY

Title to the subject property is held by an LLC.  This LLC is a real estate holding company, with each member owning 50%. This entity owns two properties and reports a net worth of $2,264,690. Our guarantors are two single men, and both will be personally guaranteeing this loan.

The borrowers file a separate LLC tax return for their cannabis business. In 2021, this entity reported $530,120 in net income. In 2020, this entity reported $837,491 in net income. This entity will not be a part of our loan.

Guarantor #1 is a single man, reports a net worth of $1,837,854 and has a mid-credit score of 756.  In 2021 he reported $322,560 in adjusted gross income on his personal tax returns. In 2020 he reported $451,246 in adjusted gross personal income.

Guarantor #2 is a single man, reports a net worth of $2,163,900 and has a mid-credit score of 802. In 2021 he reported $322,405 in adjusted gross income. In 2020, he reported $460,818 in adjusted gross income.

VALUATION SUMMARY

We hired a local MAI appraiser who valued this property (AS-IS) appraised value of $1,400,000 and (AS-Complete) appraised value of $1,900,000. A local broker was also engaged who performed a drive-by opinion of value (BPO) who values this property at $905,000.

At a 11.0% yield to the investors and a 63.2% LTV (AS-IS) Appraised Value and 46.8% LTV (ARV) Appraised Value, this appears to be a reasonable investment. Investing in any first trust deed involves substantial risk, so be sure to read the Risk Factors Section of the Offering Circular carefully before investing. A large and prolonged decline in real estate values is possible. Foreclosed commercial properties almost always need to be renovated before they can be leased or sold, so be sure to maintain some liquidity.

George’s Advice For Successful First Mortgage Investing

  1. You should spread your mortgage investment portfolio out among lots of different deals. If you have $300,000 to invest, you should invest $10,000 to $20,000 in 15 to 20 different fractionalized first trust deeds. For example, if the deal is a $300,000 first trust deed on an office building in Boise, with a $15,000 investment you would own 5% of the loan. By spreading your money out into a bunch of different deals, you are achieving the diversity of a fund without the failed fund sponsor problem. If you are extremely wealthy, you could double (or even triple) my suggested investment amounts, but be careful about pouring too much money into a single deal. We once had a whole building fall into an old coal mine. Ouch.

  2. Be wise and resist investing in any first trust deed yielding more than 9%. I would personally never invest in a first trust deed with a double-digit yield. The payments slowly grind the borrowers into the dust.

  3. Blackburne’s Law theorizes that a portfolio of 8% and 9% first trust deeds will outperform a portfolio of 11% and 12% first trust deeds over a seven-year term. Only our wisest (and eventually the happiest) investors listen to me.

  4. You can also buy some of our smaller deals in their entirety, but I only recommend this if you are richer than Crassus.

  5. It is very easy to lose money in hard money first mortgages, so fight-fight-fight against the temptation to invest in high-yield deals. As Nancy Reagan used to say, “Just say no.” But if you choose 7% to 9% first mortgages, I predict that you will be very, very pleased. 

  6. During the S&L Crisis, commercial real estate fell by 45%. Within three years, values reached new highs. During the Dot-Com Meltdown, commercial real estate fell by 45%. Within three years, values reached new highs. During the Great Recession, commercial real estate fell by 45%. Within three years, values reached new highs. Some time in the next decade, we will have another opportunity to snatch up prime commercial real estate at a huge discount. You will be terrified, but when Blackburne and Sons invites you to join a syndicate to buy a nice commercial property at a 35% discount off its prior high, just remember that the best time to invest is when blood is running in the streets. Why not when real estate has fallen by 45%? You’ll never catch the very bottom because historically the bounces off the bottom happen much too fast. Bounce-soar. You will be terrified, but just remember that the best time to invest is when blood is running in the streets.

Earn a $250 Referral Fee 
Refer accredited trust deed investors
for our mailing list.


To invest, call Tom Blackburne
at 1-800-606-3232 or CLICK HERE.


Blackburne & Sons Realty Capital Corporation--For more information, contact Tom Blackburne
555 University Ave., Suite 150, Sacramento, CA 95825
Telephone: (916) 338-3232 * Fax: (916) 338-2328
Real Estate Broker -- California Department 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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