The Boulevard Real Estate Feasability Study and Initial Organization of Efforts of the Project at Eagle Bay Summary.
No money has been borrowed on the project or on the Real Estate Owned (REO) and all organizational efforts for the past three years had been done by the original developer Sierra Investments (Owned by Danny Hammond) Sierra Investments developed The Eagle Bay subdivision project therefore by Danny Hammond.
Who as an individual or as a sole member of a Missouri Sole Member Limited Liablility Company formed in 2022 in the state of MIssouri as a newly organized and registered entity named Boulevard at Eagle Bay, LLC is the 100% owner of the properties offered as collateral for initial funding. Eagle Bay is in the Lincoln, MO 65338 postal zip code, although it is located 15 miles from the City Limits of Lincoln, MO.
The only loan by Hammond and/or Boulevard at Eagle Bay, LLC was closed on 10-20-2023 with Drake Land Title Company of and in Warsaw, MO the County Seat of Benton County.
This loan was used to fund recording: Legal Expenses; Cleaning up collateral properties; Price labor and materials for Remodel of Larger home and Rebuild the smaller homes; cost to move Hammond from Kansas City into the main structure for collateral 28336 Paperwood Drive; Lincoln, MO. 65338 and other related expenses.
All Property taxes are paid through 2024, as well as all HOA dues.
The bridge loan needed ASAP is $70,000. The current bank even after determining that the minimum current value of 28336 Paperwood Drive (the 4,800 sq ft steel home) with comparables was $84.47 per sq ft. or $84.47 X 4,800 sq ft. = $405,456.
There is currently a one car garage attached reducing the liveable space by 480 sq ft. for market approach valuation leaving 4,320 sq ft X $84.47 = $365,342 minimum current value.
Very popular in this area, which includes two very large lake areas, are three garage door garages. There is a 14 ft door for large RVs, boats etc. Then a 10 ft. door and a standard 7 foot door.
The $35,000 current loan while stabilizing the situation in order to get organized is just a 8.7% LTV. And that money has been spent between October 30,2023 and today 04-26-2024.
The Borrower has asked for another $15,000 in order to keep working while another lender is in place and has been turned down. It is not clear to me why they made the loan in the first place. This is clearly not enough to add credibility to the project or to keep momentum going.
We would like to find a way to fund a bridge loan of $205,000. The use of funds for the bridge would be as follows:
$35,000 - To retire the debt owed to Community National Bank & Trust. has enhanced the value beyond the $35,000 used to date.
$60,000 - To Fund the entire cost of rebuilding the smaller home which if done correctly can be sold to add cash, or could be kept and rented out short or long term by financing it as a rental to keep cash in the project or used to make a payment to the new lender.
$60,000 - To be used to remodel upgrade and basically finish the larger property to FHA
standards and Hammond can get a reverse mortgage to get an affordable payment to repay the lender, or to keep the cash and start into the core business of building affordable homes on the eight remaining "free and clear" ready-to-build lots still owned. This 4,800 sq ft building will add to the credibililty of buying homes in Eagle Bay as the physical presence of the project office and greeting area for visitors from the very large geographic market that the Lake of the Ozarks and Truman Reservoir command.
$50,000 - Needs to be spent at this time to payoff 100 building lots in the same general
area as the original properties contributed by Hammond. This price is $500 per lot. There is no way to determine today's value of each lot. There have been few sales at this time. Since we have free and clear lots to begin with we can sell these lots in a home and lot package giving us comps for $15,000 to $20,000 per lot and recorded with the county as lot sales. If we have to discount the house and material sales to make our money in lots and still keep happy buyers or renters it will pay off very handsomely as we progress.
Danny Hammond will be able to survive the construction periods because he has always beeen the developer, builder, marketer, realtor and property management. He has long experience in all. Rather than pay someone else the fees for those parts of the project we will just keep them in house. Hammond will not be an expense during rehabbing or remodeling because those fees will stay in the project.
Purchasing these lots fits right into the Self-Directed IRA investor's needs. We can pay more interest or fees for the investor waiting for later to make more money. That is the whole purpose of involving Self-Directed IRAs. Especially those that the beneficiary is lamenting that he did not properly fund his retirement. Few people understand that while it is true that the beneficary cannot only put certain amounts anually, his IRA can make as much money as it can as long as all of the trust rules are followed.
$205,000 = 56% LTV
Exit Strategies -
1. if such becomes necessary would be to sell the larger home now worth more due to the update and remodel work. (and two more enhancements).
2. Refinance the larger home. This could be done with a reverse mortgage which would fund most of that money now that the first work is completed. But, to put in the bathrooms, bedrooms and new fixtures and floor coverings needed the value will go up much more than the cost. Just as soon as the finishing touches are done, the reverse mortgage would fund 60% of the value at closing and another 40% in 12 months. This scenario is favorable because Danny Hammond is 71 and in very good health.
So, in order for Danny Hammond and any new lender to exchange input and come to an agreement on just what the scope and speed of the project should be and what kind of funding would be needed to accomadate any agreed upon business plan. The project would need to cease preparation for the coming season. Danny Hammond has made a move to the property and the collateral is the planned funding for the project beginning.
He is committed for the long haul. And he purchased the collateral properties for cash in 2011.
The small home can be rebuilt and sold in 45 to 60 days and since it is free and clear to start the estimate of approximately $60,000 to rebuild and to sell in the minimum range for a quick sale is $130,000 which would put quick cash into the project as well as help to establish credibililty to any new lender.