Boston Multi-FamilyBoston, MA
Excellent investment opportunity in Boston! Historic five-story brick row house to be converted into a two-family condominium with a total livable area of 4,592 square feet and located in the north side of the historic Charlestown neighborhood across from the Training Field.
Why We Like This Opportunity
This historic property is 80% completed for conversion to a two-family condominium. The total livable area for the building will be 4,592 square feet. The property is located on a 2,136-square foot site and on the northern side of Adams Street in Charlestown. The owner acquired the building in February 2017. To date, the borrower has over 4,000,000 invested in the property.
This property is located on the north side of Adams Street in historic Charlestown and just across from the Training Field.
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.
The Loans are personally guaranteed by the borrow, 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.
% of the appraised value of the Properties. The value of the Collateral securing the Loans would have to decrease by over
What Should I Consider?
The Borrower may default on his financial obligations.
- If the Loans are not fully repaid after the Lender has exhausted other sources of repayment, the Sponsor has provided a personal guaranty to fulfill any deficiency.
- In the event of a default, a direction letter signed at closing by the Borrower will be sent redirecting the Tenant to make rent payments into an account controlled by the Originator.
The Borrower may not have represented itself accurately.
- The Originator checks the Borrower’s credit history via a third-party credit reporting company. The Borrower has a 700 credit score.
- The Originator considers the underlying asset to be the primary source of security.
- If the Loans are not fully repaid after the Lender has exhausted other sources of repayment, the Borrower has provided a personal guaranty to fulfill any deficiency.
The Tenant may vacate the leased properties.
- The Tenant is an investment grade rated company with sizable financial resources.
- Under the triple-net leases, the Tenant is under multi-year contract to pay rent with no option to terminate.
- If the Tenant decides not to renew any of the leases or to vacate the leased premises, the Borrower will pay for an appraisal of the property “as vacant” and the borrower will have to provide the additional cash collateral and/or pay down the loan (or any combination in between) within ten days of receipt of the appraisal in order to bring the property back to an LTV.
The Borrower is seeking $1.5 million to begin the construction of a 70 unit multifamily complex. If the Loan is not fully repaid after the Lender has exhausted other sources of repayment, the Sponsor has provided a personal guaranty to fulfill any deficiency (“Guarantor”). The proceeds of the Loan will be used to begin the construction of the facade of a 70 unit multifamily complex.
Investors have an opportunity to invest in borrower payment dependent notes, the cash flow of which is dependent on the payment of interest and principal repayment on the Loans. Investors are scheduled to receive an annualized monthly interest payment of 9.5% over the Loans’ estimated remaining term of 12 months. Principal is expected to be returned on or before maturity through a refinancing with a traditional bank loan. It is important to note that the Loans are eligible for prepayment, and principal may be repaid prior to the 12-month estimated remaining term. If the Loans are paid off before maturity, investors are expected to receive at least three months of interest payments in addition to return of principal.
What Secures This Investment?
The Loans are secured by a first-priority mortgage lien on the real estate assets with an appraised value of $6.1M. The aggregate senior participation is $1.5M, which results in a loan-to-value ratio of 25%.
How Do I Get Paid?
This loan had an initial term of 12 months with an option at Yieldi’s discretion to extend for an additional 12% if needed. As of July 1, 2020 there are 12 months remaining. Investors will immediately receive monthly interest payments at an annualized rate of 9.5% on the principal balance over the life of the loan. If you invest in this loan in the middle of a month, you will receive a prorated interest payment for your investment for your first investment month and then full monthly payments thereafter. All payments are made automatically via ACH on the 1st of each month and investors all paid by the 10th of the month.
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This offering page describes only certain aspects of the offering (“Offering”) of the securities issued by YS ALTNOTES I LLC (“Issuer”). The Offering is made only by means of the Private Placement Memorandum dated April 5, 2018 and the Series Note Supplement relating to the Offering (collectively, the “Offering Documents”). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the Offering Documents, or as incorporated in the Offering Documents by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Documents or in any marketing or sales literature issued by the Issuer or XXX Management, LLC, as adviser thereto, and referred to in the Offering Documents, and, if given or made, such information or representations must not be relied upon. All investors must read the Offering Documents in their entirety prior to investing in the securities.