Lake Geneva, WI
Attractive ranch-style home located in Somerset Association with Geneva Lake access in the City of Lake Geneva, Wisconsin.
- Tax Document
- Offering Structure
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
Why We Like This Opportunity
An attractive ranch-style home located in Somerset Association, a golf cart friendly community with Geneva Lake Access in the City of Lake Geneva. The main floor includes the master bedroom with master bath, two guest bedrooms with a jack and jill bathroom, and an additional bedroom with adjoining bath that could also be converted into an office or study. The lower-level incudes a family room with fireplace and a wet bar with a walkout lower level to a spacious and very private backyard patio area.
About the Neighborhood
The city of Lake Geneva is located on the northeast side of Geneva Lake with a relative proximity to both the Chicago metropolitan and Milwaukee metropolitan areas. It has become a popular resort city that thrives on tourism. A place with unique natural beauty and a fairytale history to be explored, combining a relaxing atmosphere with a luxurious feeling. You could enjoy wild camping or traveling down a Potawatomi trail as well as sunbathing on the Geneva Lake seashore. You could also take advantage of the great restaurants, bars, nightclubs and other modern benefits without sacrificing calmness and relaxation provided by the scenic nature nearby.
SeniorityThe 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 GuaranteeThe 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 ReserveThe Loan is structured with interest reserve for further protection. 12 months of debt service payments will be collected at closing.
What Should I Consider?
Borrower RiskThe 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 RiskThe 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 RiskThe 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.
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 8% 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 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 12 Months with an option at Yieldi's discretion to extend. As of May 31, 2022 there are 12 Months remaining. Investors will immediately receive monthly interest payments at an annualized rate of 8% 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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