Use of Funds:
$4,200
to purchase a Six Month Certificate of Deposit with the GAP Lender in the name Boulevard at Eagle Bay, LLC to demonstrate Money On Hand to the project Lender. The remaining $700 will be used to pay the appraiser hired by the Lender of the 1st phase of actual project funding of $75,000.
$6,000
to continue prepatory remodel on 4,800 sq ft 2 story free and clear house on Lots 15 & 16; Block 33; Plat 5 of Eagle Bay subdivision in Lincoln MO; Benton Couty Missouri known as 28336 Paperwood Drive; Lincoln, MO 65338 as well as Survey and clean up work on 8 ready-to-build new home lots owned by Hammond and/or The new LLC.
Total Remodel Estimated to be $72,000.
Borrower Danny Hammond is going to do the interior painting and install carpet while completing the preparation to build new affordable homes. This will save $17,000 in labor for carpet, interior painting and installing new interior light fixtures. Begin prepatory work for total Rehab of small free and clear home on Lot 7; Block 33; Plat 5 of Eagle Bay Subdivision. The rehab cost estimate is $xxxxxxx
Est $7,000
for the carpet materials to be installed in the Paperwood House by Danny Hammond.
$4,500
for clean up and dirt work (Hammond put himself through college as heavy equipment operator.) A lot of the work to clean-up, mow, haul off materials, etc. can be accomplished during this period which will greatly enhance the credibility of the peoperties and the project.
$3,600
Transportation Work truck from Hertz for 90 days
$3,000
Large front deck on the front of the Paperwood property needs repair and reviving. The Borrower will do this work himself.
Total GAP Funding $28,300 Loan
The properties have never been appraised. Boulevard built the large home for a client from Moberly in 1998. The client paid cash.
A deed was recorded but no Deed of Trust was recorded because there was no loan.
The client died in 2011 and his family asked Danny Hammond to buy the home from them. In November of 2011 he paid cash for the big house, the small house, and 8 ready to build new home construction lots. The Deed was Recorded but again, there was no Deed of Trust to record. There has never been a Deed of Trust Recorded against the property.
None of the properties have ever had any loans against them.
Value cannot be established by an "As Is" appraisal unil the remodeling is finshed.
As a function of replacement cost the house is 4,800 gross sq ft including the garage. In 1998 the construction cost was $60 psf = $288,000.
When the property was reacquired in 2011 construction costs in west-central Missouri averaged $100 psf. That is about what affordable nice homes were costing us to build in the Kansas City area between 2010 - 2013.
Today, I haven't built in the last few years as I was mostly doing project consulting work. I have heard figures from $130 to $151. I think it is closer to $130, but I have not firmed up my pricing.
At the $100 psf average construction costs in 2011 replacement cost of the building in 2011 would have been $480,000 replacement cost for the Paperwood Drive Home.
Danny Hammond is the original devleoper of Eagle Bay from 1980 - 1991. No one has been marketing Eagle Bay for that long. So, I don't know how an appraiser is going to get and support comparables. Location is going to lower value until we start building again. So, it has to be lowered to something. I suggest $400,000 minimum estimated value..
EXIT STRAGIES
1. If the new $75,000 loan closes within 90 days the $28,300 plus interest would be paid at closing to extinguish the Deed of Trust.
2. There is a Mutual of Omaha Reverse Mortgage already approved for Danny Hammond that can fund when the remodeling is finished. That closing will fund $92,000 to the Borrower now, and another $60,000 in 12 months.
3. Exit Strategies: The property can sold to payoff the $38,000 bank loan which would actually help the project capitalization. But, that is a last resort for the Borrower who needs both a personal residence and a marketing and construction project office. The first 8 Construction Lots are within 800 ft. of the Paperwood House.
The Borrower who is from this area also has grandchildren close by coiencidently. He recently moved with my son to Warsaw. I am probably here to stay. It is time.
For Total Scope of costs for the Remodeling of the Paperwood Property and the small house on Lot 7; Block 33 may be seen by Clicking Here.
Collateral for Gap Lending
,
Boulevard at Eagle Bay
Construction and Sales Office
28336 Paperwood Drive Lincoln, MO 65338
