Buffalo Apartments Refinance

George Says: "People always need a place to live. This is why most commercial real estate lenders - including Blackburne & Sons - greatly prefer apartments over office buildings and retail. This property also has 12 units. This diversifies your risk. The loss of one or two tenants is unlikely to break the borrower. This looks like a very reasonable hard money first mortgage."

Blackburne & Sons is pleased to present this first mortgage secured by an 8,640SF, 12-Unit apartment building on 0.10-acres located in Buffalo, Erie County, New York.

The purpose of this loan is to refinance the maturing first mortgage, which has an approximate balance of $885,000. The guarantor is an experienced real estate investor who has owned the property since 2021. The property is currently 91% leased and produces stable rental income.

COUNTY INFORMATION

Erie County is a large urban county along the shore of Lake Erie in the western region of the U.S. state of New York, and the most populated county in New York State outside of the NYC Metro. In 2025 the estimated population was 946,741. The county seat is Buffalo, which makes up about 28% of the county's population.

According to the U.S. Census Bureau, the county has a total area of 1,227 square miles, of which 1,043 square miles (85%) is land and 184 square miles (15%) is water. Erie County is in the western portion of upstate New York, bordering on the lake of the same name. Part of the industrial area that has included Buffalo, it is the most populous county in upstate New York outside of the New York City metropolitan area.

Buffalo is a city in the U.S. state of New York. It is the second-most populous city in New York, with a population of 278,349 at the 2020 census. The Buffalo–Niagara Falls metropolitan area, with over 1.16 million residents, is the 2nd-largest metropolitan area in New York State behind only the NYC Metro, and the 51st-largest metropolitan area in the United States. Buffalo is the county seat of Erie County. In 2019, the gross domestic product of the Buffalo–Niagara Falls metropolitan area was $53 billion (~$64 billion in 2024).

In 2024, the median property value in Buffalo, NY was $164,200, with a home ownership rate of 43%, and the median household income was $50,041. The economy of Buffalo, NY employs 124k people. In 2024, the largest industries in Buffalo, NY were Health Care & Social Assistance (24,099 people), Educational Services (14,445 people), and Retail Trade (13,016 people), and the highest paying industries were Utilities ($87,069), Management of Companies & Enterprises ($75,577), and Public Administration ($68,557). The largest universities in Buffalo, NY are SUNY Buffalo State University (1,495 degrees awarded in 2024), Erie Community College (1,349 degrees), and D'Youville University (835 degrees).

SUBJECT PROPERTY DETAILS

The subject site is a single parcel containing 0.10-acres that is rectangular in shape. The subject is situated within an established north-central Buffalo multi-family residential neighborhood generally centered along the Colvin Avenue corridor. The neighborhood is characterized by a stable mix of single-family residences, two-family homes, small apartment buildings and scattered neighborhood-oriented commercial uses located along major arterial streets. The site contains 50.00 feet of frontage along the west side of Colvin Ave. and has four leased parking spaces.

The site is improved with a Class C (masonry), three story walk-up style apartment building. The building contains 8,640SF and was originally built in 1940. It is equipped with brick exterior walls, a flat rubber roof and a full unfinished concrete block basement. Ceiling height is 10-12 feet per floor. Heat is provided via two gas-fired boilers with radiators. Three units have a mini-split with central A/C. The basement houses building mechanicals, coin laundry and storage. It should be noted that we are securitizing the coin operated laundry units.

The building contains twelve (12) - One-Bedroom Units that are 700SF each. Each unit has battery-operated smoke detectors. The units are rented for between $1,095.00 and $1,195.00 per month, for a total income of 13,585.00. There is currently only 1 vacancy.

Title to the property is held under a Limited Liability Company (LLC), of which the guarantor is the sole member. The LLC specializes in real estate rentals and was formed in August of 2020. It does not file separate tax returns, but rather claims all of its real estate holdings as line items on the Schedule E of the guarantor's personal tax returns. We were provided Profit & Loss statement showing $123,241.68 in net income for 2025 and $30,097.52 in net income so far for 2026.

GUARANTOR SUMMARY

The guarantor is a single man who works as a real estate investor. He reported an adjusted gross income of $445,513 on 2024 and $72,249 in 2023. He filed an extension for his 2025 taxes. He has a mid-credit score of 677 and self-reported net worth of $6,178,738.

The reason for the discrepancy in income from 2023 to 2024 is due to the purchase of a business. The increase in income for 2024 is reflective of the stabilization of said company.

We hired a local MAI appraiser who valued this property at $1,490,000 (AS-IS). We also hired a local broker to perform a Broker’s Price Opinion (BPO) who valued the property at $1,500,000.

At an 11.0% yield to investors and a 64.4% LTV (AS-IS), 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 Justine Smith
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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