Mount Pleasant, MI
A commercial building containing 4,404 square feet located on 0.230 acres in Mount Pleasant, Michigan, zoned SD-I, Industrial, allowing for a variety of industrial uses.
- 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
A commercial building containing 4,404 square feet located on 0.230 acres in Mount Pleasant, Michigan, zoned SD-I, Industrial, allowing for a variety of industrial uses. The two-story, steel framed building was originally constructed in 1970 and is in the process of being completely renovated. The first floor encompasses five multi-purpose rooms, an employee break room, a security vestibule, a vault and office, and a delivery/storage area. The second floor contains additional multi-purpose rooms as well as an area for accessing the air handling/climate control equipment. The building renovations include epoxied concrete flooring throughout, insulated metal panels in the multi-purpose rooms to increase temperature control and HVAC efficiency, interlocking PVC paneling in the service areas, and spray foam insulation in the roof above the second floor. The entire facility is waterproof, and there are minimal organic materials used in construction. Lighting will be LED throughout for its increased energy efficiency.
About the Neighborhood
Mount Pleasant, Michigan is home to one of the Midwest’s largest gaming floors at the Soaring Eagle Casino and Division 1 Athletic School, Central Michigan University. This commercial structure is located in the northern part of the city in an industrial area just west of U.S. Route 127, which is the major northeast thoroughfare in Mount Pleasant. The commute to the downtown area is approximately 2 miles south of the building location and provides schools, hospitals, restaurants, hotels, and most retail and consumer services. You can unwind and unplug while floating down the Chippewa River and explore over 1,000 acres of parkland and 18 nature preserves.
Experienced BorrowerThe borrower is a successful real estate investor in high-end real estate industry in Florida. He’s sold multiple Florida homes for over $2M+ and has a high net worth and strong liquidity.
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 June 1, 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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