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60 Challenger Series C & D First Mortgage
Offering short link
Raise Details
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Gross Offering$1,300,000 USD
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Available Units2.50
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Minimum Investment$50,000 USD
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Maximum Investment$600,000 USD
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Open DateOct 01,2022
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Closing DateOct 31,2022
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Investment TypeFirst Mortgage
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Maturity6 months
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Real Estate UseResidential
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Maturity End DateMay 01,2023
Type
| Type | Number of Units | Available Units | Cost per Unit | Gross Offering | Annual Yield | Term |
|---|---|---|---|---|---|---|
| Series C | 7.00 | 0.00 | $100,000.00 USD | $700,000.00 USD | 36.00% | 6 months |
| Series D | 5.00 | 2.50 | $120,000.00 USD | $600,000.00 USD | 36.00% | 6 months |
| Totals | 12.00 | 2.50 | $1,300,000.00 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
Comments
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