The kinds of things we are doing – an example

Tuesday, December 4th, 2012 at 1:09 pm

Clay Sparkman
From time to time, I like to publish the prospectus for a loan that we have placed. I do this for two reasons. One: so you can get an idea of the kinds of loans that we do, and two: so you can see how a nice tight loan presentation should look.
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. So here you go. If this reminds you of any loans currently sitting on your desk, consider getting in touch with us. We may be able to assist.

Kristopher Gillmore

Fairfield Financial Services, Inc

16055 SW Walker Road, #247, Beaverton OR 97006

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

REAL ESTATE PROSPECTUS

SECURED LOAN
Cash out refi of property in Pacific City, OR
Loan Details

Loan Amount: $320,000
Term: 36 Months
Interest Rate: 12%
Monthly Payments: $3,200.00 Interest Only
Security: Deed of Trust in 1st Position security interest in real property at xxx, Pacific City, OR
Value by Borrower CMA: $637,175
LTV based on Borrower CMA: 50%

Loan Overview
xxx, LLC purchased the subject property in 2006 for $780,000. Currently, they owe approx. $150,000 on the property, and they are looking for cash out refi of $320,000 to provide funds for a subdivision project in California.
Since the purchase of the property in 2006, the following improvements (xxx – managing member of yyy, LLC) have been made:
“We newly painted the entire interior and applied oil based preservative on the exterior shingle siding. We widened the concrete driveway 3′ and perimeter house walkways 1′. We installed new granite kitchen counters and all new appliances. We installed all new custom blinds throughout the house, as well as new light fixtures in the dining area. We installed new carpet throughout the house. We installed a new Master Bath shower with custom tile & glass block from Germany, and a new shower head. Finally, we installed a comprehensive security system. The total cost was $45,000+/-.”
Currently, the property is only used as a 2^nd / vacation home by the borrower. It is not being rented out, although the borrower believes that it could be rented out for a min. of $300/night or $36,000/year (based on occupancy 1/3 of the year) as a vacation rental.
To exit this loan, the borrower has stated 2 options. For the first option, the loan would be paid back from the proceeds of the sub development project, which xxx believes will come to fruition in the next 12-18 months. The other option would be through the sale of this property, or another property that he owns.
Property / Valuation
The property is a 4 bedroom, 3 bath home of 2,317sf. It sits on .11 acres, and is reported by the borrower to be the best location in Shorepine Village, at the base of the beach ramp with no houses between it and the ocean.
To estimate the value of this property, a CMA has been provided by xxx. It should be noted that the comps used in the CMA are all active listings. A search on Zillow.com http://www.zillow.com/homes/comps/62823756_zpid/ was performed showing all the sales of public record in this area, although there is a tremendous difference in the $/SF of these sold properties. There are not many sold houses with a comparable location with regard to an open view of the beach. There is however on sale on record a few doors down for $171,000, which is just under $100/sf. Compared to the other sales and active listings in the neighborhood, this number seems abnormally low.
Income
A signed 1003 has been provided by xxx, stating a monthly income of $13,500. He states total assets of $3,349,175 and a net worth of $2,918,143.
Credit
A recent credit report has been provided showing scores of 678, 698, and 728. There is 1 30 day late payment reported on a Shell Citibank card that occurred over 2 years ago, but otherwise his credit history is perfect.
– 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