Fairfield Financial Services, Inc. - Private Money Loans, Lending & Borrowing

A private money loan prospectus – Hood Canal, Washington

Clay Sparkman
(In October of 2011, I posted this item on my Private Money Investor blog. I thought it might be useful to brokers as well—the idea being so that you may (a) see how we present loans to our internal working investors, (b) gain perspective on our entire private money loan process, from start to finish (we pride ourselves in being 100% transparent with regard to all parts of our process, and (c) get a better idea of how you, as a broker, might want to present working summaries of loans that you are working on. This is the nitty gritty of it—where the rubber meets the road. This is the heart of what we need to know conceptually in order to make a decision and move toward a quote on your loan.)
From time to time, I post a prospectus for a loan that we are currently in the process of placing. This serves three purposes: (1) It gives readers a window into the kinds of loans that we are placing, (2) It provides an example of how are loans are initially presented, and (3) It gives investors the opportunity to inquire about the investment if they are interested in doing so.
The prospectus, which is shown here, is the high-level presentation, or executive summary, of the loan.  Having read the prospectus you should have a pretty good idea what the loan/borrower/project is all about and what this loan looks like as a potential investment.
When an investor wishes to fully evaluate a loan investment, we send a full packet in Adobe Acrobat format (generally between 50 and 200 pages) password protected, and with all backup documentation to support and inform the investor in detail regarding the known relevant particulars of the loan.
Please note that this prospectus has been redacted (name and address info) since it is being broadly distributed. If a particular investors is interested in evaluating a loan, then of course the presentation is not redacted.
If you are interested in discussing private money loans in general or this one in particular, you may contact me at sparkman@lendicom.com or Kris Gillmore, who is coordinating this loan, at 503-319-7294, or gillmore@privatemoneysource.com.

Kristopher Gillmore

Fairfield Financial Services, Inc

3327 SE 50th St, Portland, OR 9706

Phone (503) 319-7294 / Fax (503) 419-4219 / E-mail: gillmore@privatemoneysource.com


Cash out refi of SFR in Tahuya, WA
Loan Details

  1. Loan Amount: $200,000
  2. Term: 36 Months
  3. 6 months minimum interest
  4. Interest Rate: 13%
  5. Monthly Payments: $2,166.67  Interest Only
  6. Security:  Deed of Trust in 1st Position security interest in real property at XXXXXXXXXX, Tahuya, WA 98588
  7. Current Value by Appraisal:  $390,000
  8. LTV based on Appraisal:  51%

Loan Overview
Mr. xxx is the owner and president of a software development company, YYY, Inc.  Beginning in 2002, both the company and Mr. XXX’s family experienced some setbacks which would ultimately put him behind on his payroll taxes.  Mr. XXX’s attorney is ready to file the taxes, but they are waiting for the funds before they file.  The estimated cost of the payroll taxes is $137,000 + interest.  A detailed letter of explanation has been provided.
In 2010, Mr. XXX’s mother in law passed away, leaving the free and clear (minus 2009-2011 property taxes) subject property to Mr. XXX and his wife Mrs. XXX.  The borrowers have requested this loan to pay the back payroll taxes.  The borrowers have a great emotional attachment to this house, so their intent is to keep this property as a vacation home and exit this loan with a conventional refi.  If the payments are too much to handle, they would then consider renting the property.  As a 3rd option, if they are unable to refi and/or find a suitable tenant they would sell the property to exit this loan.
The Subject property is a 2 story 2,321sf house located on the Hood Canal in Tahuya, WA.  There are 3 bedrooms, 3 baths, and the house sits on a .15 acre lot.  Photos and more details of the property can be found in the appraisal that has been provided for your review.
A recent appraisal with an inspection date of May 31, 2011 has been provided.  Four comps were used by the appraiser to value this property, leading to a suggested value of $390,000.  There is a large range in the date of these sales, and the appraiser does make adjustments to the price given the declining market.  A search of Zillow.com shows a number of houses (of reasonably comparable size) for sale in this area ranging from $310,000 to $795,000.  Given the decrease from original list prices on the higher priced homes on the appraisal, and the overall feel of the market right now, $390,000 seems to be a reasonably conservative estimate of value.
Mr. XXX states a monthly income of $8,180 and Mrs. XXX states a monthly income of $5,000.  In addition, Mr. XXX sold a portion of his business and has been receiving monthly payments of $5,000.  There is a balloon due on May 1, 2012, in which Mr. XXX should receive approx. $100,000.  A copy of this note has been provided.   Mr. XXX and Mrs. XXX state a combined a net worth of $341,402.  A 1003 has been provided for your review.
A recent credit report has been provided showing scores of 655, 627, and 644 for Mr. XXX, and scores of 686, 698, and 705 for Mrs. XXX.  Please note – there are red flags on this report with regard to the SSN entered for Mrs. XXX.  When this credit report was pulled, 6124 was incorrectly entered as the last 4 digits of Mrs. XXX’s SSN, when it should have been 5124.
– Clay (clay@privatemoneysource.com, 503-476-2909)
Clay is Vice President of Fairfield Financial, a primary source for private money since 1964.  Fairfield is currently targeting loans in OR, WA, AK, CA, CO, ID, FL, GA, ID, MT, NV, NY, OK and TX, but is able to source loans nationwide. To submit a loan to Fairfield for consideration: http://www.privatemoneysource.com/loanproposal.php

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