Lot Development Property
Miami, FloridaInvest in a future auto-dealership development in Miami, Florida off 27th Avenue! Over 4500 square feet property with over fifty (50) parking spaces.
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- Tax Document
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Why We Like This Opportunity
Location
Future auto-dealership located in a great location in Miami, Florida. Miami is one of the worlds fastest growing cities!
Upfront Reserve
The Loan is structured with interest reserve for further protection. 12 months of debt service payments will be collected at closing.
Experienced Originator
The Originator and its predecessor entities have originated over 150 loans totaling over $460M, of which 10 remain active. As of 6/30/19, there has been no principal loss.
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 Guaranty
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.
Collateral Coverage
The Loans represents 85% of the appraised value of the Properties. The value of the Collateral securing the Loans would have to decrease by over 15% from its appraised value before the amount of the Loans would exceed the value of the collateral securing them.
What Should I Consider?
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.
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.
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.
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.
Additional Resources
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