Investment Bulletin


Loan Number: 1208
Loan Amount:
$153,500
Type: First Trust Deed
Yield: 13.0%

**** For Instructions on How to Invest in this Loan ****


TERMS

Terms of Investment . . . . . . . . . . . . 60 months
Current interest rate . . . . . . . . . . . . . . . .13.0%*
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
Spread over the index . . . . . . . . . . . . . . . . .N/A
Frequency of rate changes . . . . . . . . . . . . N/A
Interest rate ceiling. . . . . . . . . . . . . . . . . . . N/A
Interest rate floor. . . . . . . . . . . . . . . . . . . . .N/A
Discount points to the lender . . . . . . . . . .N/A
Repayment schedule . . . 15 year amortization
Monthly payment . . . . . . . . . . . . . . .$1,894.82*
Lockout period . . . . . . . . . . . . . .. . . 30 months
Purchase price of the note . . . . . . . . .$153,000
Current balance on the note . . . . . . . $153,000
Maturity date . . . . . . . . . . . . . . . . . . 60 months
Balloon payment after 60 mos.app. . .$135,154
Late charge amount . . . . . . . . . . . . . . . .$213.78
Prepayment penalty . . . . . . . . . . . . . . . . .None
*Net of servicing costs

EQUITY ANALYSIS

Appraised Value as of May 31, 2000. . . . . . . .$279,900
Less Senior Liens
First trust deed of . . . . . . . . . . . . . . . . . . . . . . . . . . $
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P&I payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
Matures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second trust deed of . . . . . . . . . . . . . . . . . . . . . . . $
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P&I payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
Matures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third trust deed of . . . . . . . . . . . . . . . . . . . . . . . . . $
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P&I payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
Matures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Protective equity . . . . . . . . . . . . . . . . . . . . . . . $126,400
Loan-to-value ratio . . . . . . . . . . . . . . . . . . . . . . .54.8%

PROPERTY

Project: PEOPLE'S INN

Property address: Rt. 2, Box 2012, Hwy 90, Columbus, Texas

Description: This is a 20 unit motel on an .805 acre parcel. This property is right off of Interstate 10 about 80 miles west of Houston, TX.

OPERATING STATEMENT

INCOME
Rental Income at 50% occupancy. . . . .$91,250
Telephone and other net income. . . . . . .$3,114
. . . . . . . . . . . . . . . . . . . . . Total Income: $94,364
Less % Vacancy Allowance . . . . . . . . . .
. . . . . . . . . . . . .Effective Gross Income $94,364

EXPENSES
Utilities . . . . . . . . . . . . . . . . . . . . . . . .$7,172
Insurance . . . . . . . . . . . . . . . . . . . . . .944
Mgmt. offsite . . . . . . . . . . . . . . . . . . .2,076
Mgmt. onsite . . . . . . . . . . . . . . . . . . .9,719
Repairs & maint. . . . . . . . . . . . . . . . . 7,172
Room expense. . . . . . . . . . . . . . . . . . 22,364
Supplies . . . . . . . . . . . . . . . . . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .3,963
Trash . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing. . . . . . . . . . . . . . . . . . . . . . 3,963
Reserves for replacement . . . . . . . . 755
Miscellaneous  . . . . . . . . . . . . . . . . . 283
Franchise fees. . . . . . . . . . . . . . . . . . 1,510
Telecommunications . . . . . . . . . . . . .849
Total Expenses . . . . . . . . . . . . . . . . .$60,770
   
NET OPERATING INCOME . . . . .$33,594
Note: Based on the appraiser's estimates..

BORROWERS

Name(s). . . . . . . . . . . Individuals
Net worth . . . . . . . . . . $559,355
His occupation . . . . . Hotel Operator
Employer . . . . . . . . . . . . . . . .Self
Employment income . . . . . .$54,000/yr
Her occupation . . . . . housewife
Employer . . . . . . . . . . . . . . . . . .
Employment income. . . . . . . . . .
Other income. . . . . . . . . .$2,100
Percent ownership . . . . . 100.0%
Name(s). . . . . . . . . . . . . . . . . . . .
Net worth . . . . . . . . . . . . . . . . . .
His occupation. . . . . . . . . . . . . .
Employer . . . . . . . . . . . . . . . . . . .
Employment income . . . . . . . . .
Her occupation. . . . . . . . . . . . . .
Employer . . . . . . . . . . . . . . . . . . .
Employment income. . . . . . . . . .
Other income. . . . . . . . . . . . . . . .
Percent ownership . . . . . . . . . . .
Name(s). . . . . . . . . . . . . . . . . . . .
Net worth . . . . . . . . . . . . . . . . . .
His occupation. . . . . . . . . . . . . .
Employer . . . . . . . . . . . . . . . . . . .
Employment income . . . . . . . . .
Her occupation. . . . . . . . . . . . . .
Employer . . . . . . . . . . . . . . . . . . .
Employment income. . . . . . . . . .
Other income. . . . . . . . . . . . . . . .
Percent ownership . . . . . . . . . . .
 

 

THE PEOPLE'S INN

This first mortgage loan is secured by a 20 unit motel located in Columbus, Texas. Columbus is located along Interstate 10, approximately 128 miles east of San Antonio and 70 miles west of Houston. This route is the most direct highway between San Antonio and Houston. Our borrower currently operates this motel, two other motels, and an eight unit apartment building. We are currently offering him a loan on this motel and his Red Roof Motel, both located in rural Texas. The proceeds from our loans will be used to refinance the existing note plus provide our borrower with the necessary funds for a purchase of another motel.

As discussed previously, the subject property is a 20 unit motel, that was originally constructed during the 1960s (estimated). The current owner acquired the property in October of 1999 and has upgraded it since that time.

There are three buildings which consist of 6,416 square feet. The main structure is constructed of concrete block with a flat built up tar and gravel roof. The floor and foundation is constructed of a reinforced concrete slab floor and foundation. This building houses 10 units, a office, laundry, and a manager's apartment.

The other two structures consist of two mobile homes that were moved in and modified to make a total of ten rooms. These two structures are built using typical mobile home construction and have metal roofs. They are anchored and skirted.

Our borrower has good credit and a net worth of $559,000. He received a net taxable income of over $50,000, all from the revenue of his four properties.

Our loan has a 30 month lock-out clause, which does not allow the borrower to pay off the loan for the first 30 months of the term. This first mortgage will be cross collateralized by a second mortgage on the Columbus Motel, located in Columbus, Texas. This does not allow the borrower to default on one property and keep the other. This will give the borrower more incentive to make regular monthly payments.

This mortgage is also more attractive than usual because it is a 15 year fully-amortized loan. Since your principal is scheduled to be repaid faster than usual, your loan-to-value ratio and your risk should also decline faster.

TO INVEST PLEASE CALL MIKE THURMAN @ 1-800-606-3232

 

If you would like to talk to our investment department, please contact John Caldwell or Mike Thurman
at 916-338-3232 or 800-606-3232 between the hours of 8:30 a.m. and 5:00 p.m. PST Monday--Friday.

Please read our Audited Financial Statements of Blackburne & Brown, Inc.

Real Estate Broker
California Department of
Real Estate -- License Number 829677

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