Maplewood Avenue Apartments

George Says: "This is a very good hard money loan. Our repeat borrower has an immense net worth, reported by the borrower, but not verified, to be $115 million. This borrower values his convenient and reliable relationship with Blackburne & Sons perhaps as much as we value him as a borrower. The loan-to-value ratio is low at 60%, and this is an apartment loan. People always need a place to live. Nice deal."

Blackburne & Sons is pleased to present this first mortgage secured by a 16-unit townhouse apartment building and 1 single family residence (17 units total), located on two separate parcels in Whitehall, Franklin County, Ohio.

The purpose of this loan is to refinance the property and pull-out cash to purchase an investment condominium in Miami, Florida. The purchase price is approximately $960,000. The subject property is currently free and clear of any mortgages. The target closing date for this loan is February 20, 2026.

This is a valuable, repeat borrower, whose family has been working with Blackburne & Sons since 2011. We have made a total of 21 loans with them over the years, five of which still remain on our books. We started out making loans to the parents in 2011, and then their son in 2014. The father passed away and the son took over their estate and manages all of the properties in the portfolio.

COUNTY INFORMATION

Franklin County is at the heart of the Columbus, Ohio region and according to the July 2022 Census data, has a population of more than 1.3 million people of the region’s 2.16 million people. Franklin County is a metropolitan area with many of the area’s major educational, shopping, dining and cultural attractions as well as the Port Columbus and Rickenbacker
International Airports and the main campus of Ohio State.

Columbus is the 14th largest city in the United States, the Columbus Region continues to grow. Based on the recent US Census data, Columbus has grown 26.6% since 2000. Franklin County is a county in the U.S. state of Ohio. Most of its land area is taken up by its county seat, Columbus, the state capital and most populous city in Ohio.

The county was established on April 30, 1803, less than two months after Ohio became a state, and was named after Benjamin Franklin. Originally, Franklin County extended north to Lake Erie before it was subdivided into smaller counties. Franklin County is the central county of the Columbus, Ohio Metropolitan Statistical Area.

Franklin County, particularly Columbus, has been a centerpiece for presidential and congressional politics, most notably the 2000 presidential election, the 2004 presidential election, and the 2006 midterm elections. Franklin County is home to one of the largest universities in the United States, Ohio State University, which has about 60,000 students on its main Columbus campus.

It shares a name with Franklin County in Kentucky, where Frankfort is located. This makes it one of two pairs of capital cities in counties of the same name, along with Marion Counties in Indiana and Oregon.

Whitehall is a city in Franklin County, Ohio, United States. Located 6 miles east of the state capital of Columbus, Whitehall had a population of 20,127 in the 2020 census. Founded in 1947, Whitehall is a growing suburb of Columbus. Per the U.S. Census Bureau, Whitehall's population is culturally and racially diverse, with over 50% of the population identifying as black, African American, Hispanic or Latino. A further 20% of its residents speak a language other than English at home.

In the 1940s and 1950s, Whitehall still had working farms, and it was a mixed income area with mainly small houses. It was still a village in the 1940s, and residents filed for incorporation in 1947. In 1952 the borders expanded east to the country club and Big Walnut Creek. Rapid growth meant that it became a city during the 1950s. The first shopping center strip in the country was built and opened in Whitehall in 1948, called Casto's Town and Country. The National Road passed through Whitehall.

The subject properties are located on the east side of Maplewood Avenue, just south of East Broad Street in Whitehall, Ohio. The north parcel contains 0.94 acres and is improved with four, 4-unit townhouse apartment buildings (16 units) which were constructed in 1965.

The south parcel contains 0.93 acres and is improved with a 107-year-old, 1,104 sq. ft., 1.5 -story, three-bedroom single-family home which is rented for $939/month. The townhouse apartments each contain 2 bedrooms and 1.5 baths and are rented from $833 to $910/month, plus all utilities including water/sewer. The subject property is in fair/average condition for its age and use. The apartments and single-family home have dated kitchens and baths, which are functional.

The subject’s sixteen townhouse apartment units contain 985 sq. ft. and include 2 bedrooms and 1.5 baths. The kitchens have original cabinets and most of the units have newer flooring. The units include full, unfinished basements which house the furnaces, hot water heaters, electric panels and washer/dryer hookups. The apartment units are serviced with gas forced air heat and central air conditioning. Located at the rear of the apartment units are concrete patios.

The subject is located just south of East Broad Street which is very highly developed in the commercial and retail categories. The subject property is located within the city of Whitehall, Ohio and has access to all public utilities including natural gas, electricity, telephone, and public water and sewer.

The subject property is primarily level and at grade with the surrounding properties. Drainage appears to be adequate. Site improvements include interior asphalt drives and parking areas, lawn, concrete sidewalks and steps, parking bumpers, landscaping, patios, fencing, dumpster pads and mature tree growth.

The subject property is 100% occupied and bringing in $15,012 in gross rents monthly. The property has been owned by this family and related parties since its development. Maplewood Avenue is a moderately travelled, two-lane, asphalt paved street with curbs and gutters and sidewalks.

Our borrower holds title through a newly formed Limited Liability Company (LLC) which is owned 100% by another LLC, managed by our guarantor. The second LLC will be providing a corporate guarantee on this loan. The corporate guarantor specializes in property management. In 2024, this entity reported $1,080,632 in net rental income and in 2023 reported net rental income of $251,133.

Our borrower is a married man and will be providing a personal guarantee on this loan. His wife will not be on our loan. He self-reports a net worth of $115,530,000 and has a mid-credit score of 642. The guarantor manages many rental properties, both residential and commercial. In 2024, he reported $1,261,377 in adjusted gross income. In 2023, they reported adjusted gross income of $354,625.

We accepted an MAI appraisal that was ordered by a bank who valued this property at $1,600,000 (AS-IS). A ProForma operating statement will not be provided in the appraisal report.

We also hired a local realtor to perform a BPO (Brokers Price Opinion) who valued this property (AS-IS) at $1,360,000.

At an 11.0% yield to investors and a 60.0% 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 of hitting bottom, values reached new highs. During the Dot-Com Meltdown, commercial real estate fell by 45%. Within three years of hitting bottom, values reached new highs. During the Great Recession, commercial real estate fell by 45%. Within three years of hitting bottom, 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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