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60 Challenger Series C First Mortgage

$730,000
Amount Raised
$1,200,000
Goal
61% Complete (success)
61%
No time left
Invest

Raise Details

  • Gross Offering
    $1,200,000 USD
  • Available Units
    3.50
  • Minimum Investment
    $50,000 USD
  • Maximum Investment
    $600,000 USD
  • Open Date
    Oct 01,2022
  • Closing Date
    Oct 31,2022
  • Investment Type
    First Mortgage
  • Maturity
    6 months
  • Real Estate Use
    Residential
  • Maturity End Date
    May 01,2023

Type

Type Number of Units Available Units Cost per Unit Gross Offering Annual Yield Term
Series C 6.00 0.00 $100,000.00 USD $600,000.00 USD 36.00% 6 months
Series D 5.00 3.50 $120,000.00 USD $600,000.00 USD 36.00% 6 months
Totals 11.00 3.50 $1,200,000.00 USD

Executive Summary

Overview. Chesterfield Faring Ltd. (“CFL”) acquired the $10.55 million first mortgage (the “Loan”) secured by development land for Challenger 60 (“C60”) on April 6, 2022 (the “Closing Date”). CFL arranged 100% senior financing of $10.55 million from Fairbridge Capital Partners (“FB”). CFL’s investors and CFL invested $511,806 Series A units on the Closing Date including two (2) months of prepaid interest and closing costs. CFL owns $238,000 of the Series A. CFL accrues 21.0% annual interest ($180,000 per month ) while paying FB currently 13.0% annual interest ($115,000). CFL’s spread income is $65,000 per month. On the original $511,866 investment, CFL receives over a 120% gross annual return. By June 1, 2022, CFL amortized and recouped all its $511,000 investment. On July 15, 2022, CFL raised a $300,000 Series B units. As of October 1, 2022, the gross profit is $1.26 million with $811,806 invested with a gross profit of $455,951 less investor interest of $146,125 to date (3.0% a month to investors). CFL is paid up to FB until October 1, 2022. This raise is to pay for the next five (5) months.

Terms of the Investment. The $600,000 Series C has six (6) $100,000 units (the “Series C”). Each Series C pays 3.0% per month accruing. CFL must still pay currently the approximate $115,000 per month. The investment does not have a term, but the investor (you) will receive a minimum of three (3) months of interest. It is anticipated that the payoff will occur before May 2023.

Risks Mitigated. CGO is valued at $34 million via appraisal. The borrower has a $33.0 million contract in hand (33% leverage) which may close by March 2023. CFL values C60 at $20.0 million (50% leverage) on a fire sale basis because the Loan is in default. CFL has multiple offers ranging from $18.0 million to $22.0 million as a fire sale. There is a $4.9 million second mortgage (the “Second”) subordinated to the Loan owned by Gated. Gated is a developer, Gated will buy C60 back in the foreclosure further if none of the fire sale buyers materialize at the auction. The borrower is not financeable, so a sale is the likely outcome even if the borrower files bankruptcy. Thus, there is literally no risk of principal or interest loss on the Loan.

Highlights

  • First Mortgage Series C
  • It is valued at $10.55 million (the “Value”)
  • 90% Free market units with 10% affordable
  • 12 minute drive by car to New York City - Manhattan

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