Property Highlights

Custom-designed, new construction home on a prime 0.62 acre lot located in the residential area of Chastain Park. The property is within walking distance to Chastain recreational activities, shopping, and restaurants.  The custom build boasts a first floor with 4,303 sq. ft. of heated space that includes the master suite, pool bath, keeping room, and scullery along with your family room, kitchen and dining room.  The second floor includes 2,793 sq. ft. of heated space with 4 bedrooms, 4 full baths, and a playroom.  The finished basement will contain 3,491 sq. ft. of heated space with a gym, media room, and a bedroom with a full bath.

About the Neighborhood

Chastain Park is a large community in Buckhead and Sandy Springs, Georgia. The community’s namesake is Atlanta’s second largest park. The 268-acre park begins at Sandy Springs’ southern city limit, but the community extends well into Sandy Springs. Chastain Park is the hub of activity and the main draw for families to this area. The park contains a network of walking trails, several playgrounds, and a community swimming pool. Local sports teams and organizations compete on the park’s tennis courts, baseball diamonds, and soccer fields. The park is also home to the North Fulton Golf Course and the Chastain Horse Park. The average sales price of a home in a Chastain Park neighborhood over the past 12 months was $2,608,978, which is 56.79% above last year’s average of $1,663,988. The average home was on the market for 31 days.

Why We Like This Opportunity

This is a first position construction mortgage with an excellent loan to value ratio of 66% with an as-completed property value of $5,250,000.00 and a construction loan amount of $3,500,000.00.  The borrower secured this Chastain lot for $1,200,000.00, and all permitting is complete.  The initial funding amount of this loan is $800,000 which is 66% of the original purchase price and includes funds for their initial draws for demolition.  This builder has an excellent track record and builds a really nice product.

Seniority

The first-priority mortgage lien position is the most senior and highest priority within the capital structure. In the event that a borrower defaults, the lien priority determines the order in which lenders are repaid. Senior lenders are always repaid first. All subordinated positions, including the amount held by the Originator and its investor syndicate, act as a buffer in the event of a deterioration in the Properties’ value.

Personal Guarantee

The Loans are personally guaranteed by the borrower, spouse, and all principals in the LLC. Additionally, the Sponsor and/or Guarantor are obligated to contribute monthly payments to maintain a tax and insurance reserve. Failure to adhere to reserve contribution requirements would lead to the triggering of a debt service and operating expense/shortfall guarantee.

Upfront Reserve

The Loan is structured with interest reserve for further protection.  12 months of debt service payments will be collected at closing.