Kings Mountain Construction Hard Money Loan
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The subject property represents a proposed self-storage facility comprised of 55,700 ± square feet of rentable area with 511 climate controlled self-storage units and 34 parking units to be built on a 5.67-acre parcel of land. Currently the subject represents raw land.
Kings Mountain Construction Hard Money Loan Details
Structure
- Tax Document
- 1099-INT
- Offering Structure
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BPDNx
SENIOR BPDN - PROMISSORY NOTE SECURED BY COLLATERAL SECURITY AGREEMENTTHIS PROMISSORY NOTE IS SECURED BY THE ISSUER'S PLEDGE OF THE RELEVANT UNDERLYING COLLATERAL LOAN (AS DEFINED BELOW) TO THE LENDER (AS DEFINED BELOW) UNDER THE COLLATERAL SECURITY AGREEMENT AND PROMISSORY NOTE. HOWEVER, EXCEPT TO THE LIMITED EXTENT PROVIDED IN THE PROMISSORY NOTE WITH RESPECT TO THE UNDERLYING COLLATERAL LOAN, THIS NOTE IS NON-RECOURSE TO THE ASSETS, FUNDS AND ACCOUNTS OF YIELDI, LLC (THE "BORROWER", "COMPANY" OR "ISSUER") OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, STOCKHOLDERS, PARENTS, OR SUBSIDIARIES EXCEPT TO THE EXTENT OF THE VALUE OF COLLATERAL LOAN NET PAYMENTS ACTUALLY RECEIVED IN RESPECT OF THE UNDERLYING BORROWER LOAN.
Example Return on Investment
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Investment Amount:
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Annual ROI:
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$0
Why We Like This Opportunity
Kings Mountain Construction Hard Money Loan Highlights
The subject property represents a proposed self-storage facility comprised of 55,700 ± square feet of rentable area with 511 climate controlled self-storage units and 34 parking units to be built on a 5.67-acre parcel of land. Currently the subject represents raw land. The property was purchased by the current owner in September 2023 for $795,000. Since the current owner purchased the property they have received full permitting, performed a market analysis, and received plans to build a self storage facility. The developers have spent an additional $400,000 in land development since acquisition. In addition, the current owner indicated that in the last year the state has also approved and initiated construction on infrastructure improvements to
the adjacent highway, making it a bypass, which will bring an exponentially higher volume of customer base to the property with projections of over 44,000 vehicles per day.
About the Neighborhood
Kings Mountain is a small suburban city located in the Charlotte, NC MSA, which has seen the 9th fastest population growth during the past decade (16.3% since 2010) and is projected to grow by 50% by 2050. Boasting over 44,000 per day along Hwy 74, this 5.73 acres +/- fully entitled development opportunity proposes 73,050 NLSF. Bolstered by a rapidly growing MSA and a 2.77 SF/Capita in a 5 mile radius, this site is poised for growth and success.
Why We Like This Opportunity
This is a great repeat client of Yieldi that has been given a massive headache in this construction loan closed with Bank of Ozarks in October 2023. Bank OZK recently failed their construction monitoring audit from the FDIC and have handcuffed multiple developments in their books. We have heard that this is a consistent problem across the country for this group and their clients. This is a first position mortgage with an excellent loan to value ratio of 50% with a completed value of $7,800,000.00 and a loan amount of $3,695,000.00.
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.What Should I Consider When Investing in Kings Mountain Construction Hard Money Loan?
Borrower Risk
The Borrower may not have represented itself accurately. Risk Mitigation- 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.
Default Risk
The Borrower may default on his financial obligations. Risk Mitigation- 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.
Vacancy Risk
The Tenant may vacate the leased properties. Risk Mitigation- 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.
Investment Summary Of Kings Mountain Construction Hard Money Loan
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 Login for details over the Loans' estimated remaining term of 15 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 15 Months 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.
How Do I Get Paid?
This loan had an initial term of 15 Months with an option at Yieldi's discretion to extend. As of April 11, 2024 there are 15 Months remaining. Investors will immediately receive monthly interest payments at an annualized rate of Login for details 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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