Middletwon NY Pub & Grill

George says: "What a handsome property! The loan-to-value ratio is also only 41.7%. This is a sweet hard money loan."

Blackburne & Sons is pleased to present First Mortgage secured by a 2,294SF restaurant building on a 1-acre lot, located in Middletown, Orange County, NY.

The purpose of loan is to provide cash out to expand into the pizza business and purchase equipment at a cost of roughly $75,000. The rest of the cash out is to be used as down payment to purchase an investment property, and to bring property taxes current on the subject property. The property is currently free and clear of any liens.

Orange County is located in the U.S. state of New York. As of the 2020 United States census, the population was 401,310. This county was first created in 1683 and reorganized with its present boundaries in 1798. The county is part of the Hudson Valley region of the state and its county seat is Goshen. Orange County is part of the Kiryas Joel-Poughkeepsie-Newburgh metropolitan statistical area, which belongs to the larger New York–Newark–Bridgeport, NY–NJ–CT–PA Combined Statistical Area. As of the 2010 census the center of population of the state of New York was located in Orange County, approximately 3 mi (4.8 km) west of the hamlet of Westbrookville.

According to the U.S. Census Bureau, the county has a total area of 839 square miles, of which 812 square miles is land and 27 square miles (3.2%) are water. Orange County is in southeastern New York State, directly north of the New Jersey-New York border, west of the Hudson River, east of the Delaware River and northwest of New York City. It borders the New York counties of Dutchess, Putnam, Rockland, Sullivan, Ulster, and Westchester, as well as Passaic and Sussex counties in New Jersey and Pike County in Pennsylvania. Orange County is where the Great Valley of the Appalachians finally opens up and ends. The western corner is set off by the Shawangunk Ridge. The area along the Rockland County border (within Harriman and Bear Mountain state parks) and south of Newburgh is part of the Hudson Highlands. The land in between is the valley of the Wallkill River. In the southern portion of the county the Wallkill valley expands into a wide glacial lake bed known as the Black Dirt Region for its fertility.

CITY INFORMATION

Middletown is the largest city in Orange County, New York, United States. It lies in New York's Hudson Valley region, near the Wallkill River and the foothills of the Shawangunk Mountains. Middletown is situated between Port Jervis and Newburgh, New York. At the 2020 United States census, the city's population was 30,345, reflecting an increase of 2,259 from the 28,086 counted in the 2010 census. The ZIP Code is 10940. Middletown falls within the Kiryas Joel–Poughkeepsie–Newburgh Metropolitan Statistical Area, which belongs to the larger New York–Newark–Bridgeport, NY–NJ–CT–PA Combined Statistical Area.

In 2023, the median property value in Middletown, NY was $271,000, with a home ownership rate of 52.5% and the median household income was $77,174. The economy of Middletown, NY employs 13,700 people. The largest industries in Middletown, NY are Health Care & Social Assistance (2,699 people), Retail Trade (1,951 people), and Construction (1,041 people), and the highest paying industries are Public Administration ($94,443), Finance & Insurance ($91,607), and Information ($70,637). The largest universities in Middletown, NY are Orange County Community College (712 degrees awarded in 2022).

The subject property consists of a single, 1-acre parcel that is generally rectangular in shape and level in topography. It is located within a rural neighborhood located north of Middletown and south of Bloomingburg. The immediate area is sparsely developed with uses along Bloomingburg Road consisting of single-family dwellings, a construction equipment dealership, a cemetery, and several other industrial uses located to the south. The property operates on a private well and septic system and features propane heating and cooking fuel. The site is also equipped with 23 parking spaces.

The subject site is improved with a single story, free-standing building that was built in circa 1900. The building was designed specifically for use as a sit-down restaurant/bar. The subject contains 2,294SF and is equipped with a concrete foundation, wood framing and exterior walls and a gabled asphalt shingle roof.

The building’s floor plan consists of a front dining room with seating for 24 patrons, rear bar area with seating for 25 patrons, two lavatories and a commercial kitchen. In addition, there is a walk-in refrigerator located off of the kitchen and a walk-in cooler located behind the bar. The building underwent major renovation in 2013 and is in good condition, per the appraiser. The building also has a covered porch used for outdoor dining, as well as a rear concrete patio located off of the bar area that also provided outdoor seating/dining. The building is owner-occupied and d/b/a The Horse and Sulky Pub & Grill.

The borrower has been a tenant in the property since 2012. He purchased the property in November 2021 for $460,000.

BORROWER SUMMARY

Our borrower holds title through a limited liability Company, of which our guarantor is the sole owner / member. The LLC reports its income through the borrower’s personal tax returns and therefore does not file its own.

The entity that runs the borrower’s restaurant will also be providing a guarantee on our loan. This entity shows net business income of $983 in 2023. It is important to note, he paid $60,000 in rents to himself. In 2022, the net business income was $1,264, and also paid $60,000 in rents. We were also provided a profit & loss statement which shows net income of $856.29 for 2024. He has not yet filed taxes for 2024 for his businesses.

His second location files its income on a separate tax return.

Our guarantor is an unmarried man who works as the owner and chef at both restaurants. He will be providing a personal guarantee on this loan. He self-reported a net worth of $NEED and has a mid-credit score of 624. His personal tax returns report adjusted gross income of $93,631 in 2024 and $87,302 in 2023. He will be providing a personal guarantee on this loan.

The borrower plans on using our loan as working capital for his 2 restaurant locations. He intends to use the funds to purchase equipment for launching the restaurant into the pizza industry.

We hired an MAI appraiser who valued this property at $600,000 (AS-IS). We also hired a local broker who performed a drive-by opinion of value (BPO) and valued this property at $470,000.

At a 11.0% yield to investors and a 41.7% LTV (AS-IS) 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.

ACCREDITATION STANDARDS

Please note this offering is a SEC Regulation D filing and will be done through a Private Placement Memorandum. In order to invest, you must be an accredited investor. Generally speaking, an accredited investor is an individual:

(a) whose individual income exceeds $200,000 in each of the past two years, with reasonable expectation of reaching the same going forward OR
(b) whose joint income with spouse exceeds $300,000 in each of the past two years OR
(c) your NET WORTH exceeds $1,000,000 (exclusive of your primary residence) OR

If you plan on investing through an entity, the entity can qualify if ANY of the following are met:

(a) all equity owners must be accredited OR
(b) any trust with more than $5,000,000 in assets OR
(c) ERISA with either $5,000,000 in assets OR a bank, insurance company, or registered investment advisor as it's trustee OR
(d) any self directed ERISA with an accredited investor(s) making the business decisions OR
(e) an IRA owned by an accredited investor

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

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.
Return to C-Loans Home Page | Return to Blackburne & Sons Home Page
Copyright © 2025 Blackburne & Sons Realty Capital Corporation. All rights reserved. (800) 606-3232