Renaissance Circle Commercial II

George says: "Every first trust deed portfolio should be anchored by lower-yielding but higher quality loans. This is just such a loan. The property is gorgeous. Our borrowers are making good money. Most important of all, the loan amount is small. Small loans have small payments. The only remaining question is, do you have the wisdom to say no to higher-yielding but riskier deals?"

Blackburne & Sons is pleased to present this first mortgage secured by a 1,760SF commercial office building, on a 0.08-acre parcel, located in Mauldin, South Carolina.

The purpose of this loan is to payoff the borrower's current loan with Blackburne. The original loan amount was $136,500 and the current principal balance is $130,868.20. The reason for our initial loan was to purchase the subject property. The borrower did have roughly 30 late payments, however it should be noted that all late fees were always paid. The reason the borrower is refinancing is due to the loan being called earlier this year.

COUNTY INFORMATION

Mauldin City is a part of Greenville County, which is included in the Greenville-Anderson-Mauldin, SC Metropolitan Statistical Area. As of the 2020 census, the population was 525,534, making it the most populous county in the state. Its county seat is Greenville. The county is also home to the Greenville County School District, the largest school system in South Carolina. Greenville County is the most populous county in Upstate South Carolina as well as the state. It is the central county of the Greenville-Anderson-Greer, SC Metropolitan Statistical Area, which in turn is part of the Greenville-Spartanburg-Anderson, SC Combined Statistical Area. Located near the northwest tip of South Carolina, the county borders North Carolina and has a total of 795 square miles; roughly 98% of this area is land.

The biggest employers in Greenville County are Prisma Health, the Greenville County Schools and the Michelin North America Headquarters. Greenville County is home to the largest school system in South Carolina, which includes Bob Jones University, Furman University and Clemson University.

Home to thriving, urban areas like Downtown Greenville, the county features numerous communities, rich with character and tradition, all surrounded by the incredible scenic beauty of the rolling foothills of the Blue Ridge Mountains. Greenville County features a low cost of living, mild climate, award winning education systems, easy access via land or air and an unrivaled, diverse population.

The City of Mauldin is located south of the center of Greenville County, between the city of Greenville to the northwest, and Simpsonville to the southeast. U.S. Route 276 (Main Street) passes through the center of Mauldin, leading northwest for 8 miles, to the center of Greenville. Mauldin is home to about 24,813 people, with a median age of 37.

In 2023, the median property value in Mauldin, SC was $242,100, with a home ownership rate of 67%, and median household income was $81,027. The economy of Mauldin, SC employs 14k people. The largest industries in Mauldin, SC are Manufacturing (2,828 people), Health Care & Social Assistance (2,166 people), and Retail Trade (1,284 people), and the highest paying industries are Professional, Scientific, & Technical Services ($72,286), Professional, Scientific, & Management, & Administrative & Waste Management Services ($70,493), and Finance & Insurance ($64,444).

The prevalence of these thriving industries is complimented with the presence of big employers, like the above mentioned Prisma Health and Michelin Headquarters. Destinations in Mauldin include Conestee Lake National Park, Discovery Island, Pelham Falls, and a multitude of lakes and nature parks located all around the city.

The subject’s neighborhood has a stable historical past, with recent expansion along the US Highway 276 corridor. Greenville County and the surrounding upstate region has a variety of world-class businesses and developments, including BMW, Mitsubishi, Michelin, and Honeywell. The location of these two developments has led to subsequent development along Laurens Road (US Hwy 276). Because of this, residential growth between Greenville and Mauldin continues at a steady pace for both single family and multi- family units. Primary access to the neighborhood is gained by US Highway 276, which is also known as Laurens Road, or North Main Street.

The subject lot consists of a 0.08-acre parcel that is slightly irregular in shape and generally level in topography. The site has ample parking and is not in a flood zone. Available utilities include water, sewer, electric, natural gas and telephone. It is situated in the heart of the town of Mauldin, one street to the right of US Highway 276. The subject has access to public sidewalks. The common area site includes a concrete parking area, good landscaping, two monument signs, stone retaining walls, and exterior lighting.

The site is improved with a a two-story, 1,760SF office building. The building is Class D construction with brick exterior walls and a shingle roof. This office building’s layout consists of six (6) offices, a reception area, break room and two (2) restrooms. The main level includes the receptionist/waiting area, break room, a private office, and a one (1) two-fixture restroom. The upper level has four (4) private offices and one (1) three-fixture restroom. Both levels have a central hallway and small storage areas. There is a covered, lighted entrance along the southern elevation of the building. The building is improved with gutters & downspouts.

Our guarantors are a married couple who will be holding title to the property via his business entity, i.e. corporation, with him and his wife personally guaranteeing this loan. The corporation (business entity) is owned 100% by the guarantors and specializes in commercial cleaning and janitorial services. It reported a net business income of $120,042 for 2023 and $124,008 for 2022.

The guarantors self-reported a net worth of $2,608,509 and have mid-credit scores of 613 and 693. They currently file their tax returns separately. He reported an adjusted gross income of $263,097 in 2024 and $258,483 in 2023. She reported an adjusted gross income of $123,743 in 2024 and $100,200 in 2023.

The borrower purchased this property in 2019 for $195,000, with 30% cash down. After purchase, the subject property has been occupied 100% by his cleaning and janitorial business.

We hired a local MAI appraiser who valued this property at $260,000 (AS-IS).

We also hired a local broker who performed a drive-by opinion of value (BPO) and valued this property at $375,000.

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.
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