Condo Development Land Loan 612
Type: Debt
Target: $3,500,000
Annual Return: 7.0 - 8.0%
Min-invest Amount: $10,000
Duration: 12- 18 months
Gross Financing: $3,500,000
* (Phase I. Financing: $2,000,000; the expected closing date is December 31st, 2018 or after fundraising accomplished)
* (Phase II. Financing: $1,500,000; the expected closing date is February 15th, 2019 or after fundraising accomplished)
Expected Return: 7.0%-8.0%/year
* Subscribers of 1 to 4 membership units gain 7.0% expected return; Subscribers of 5 to 19 membership units gain 7.5% expected return； Subscribers of 20 shares or more membership units gain 8.0% expected return.
Investment Type: Land Loan
Minimum Investment: $10,000 per/Membership Unit
Investment Duration: 12 to 18 Months
Payment Period: Semi-annual Interest Payment
Address: 47-11 90th St, Queen, NY, 11373
Region: Queens, New York
Land Area: 38,935 Square Feet
Zoning：R6B, C2-3
Building Area: 80,422 Square Feet
Appraisal: $10,000,000
- The developing project is located in Elmhurst, Queens, NY, where Chinese community is flourishing with high housing demands. The developer purchased the land at $5,800,000 in 2009 and divided the development into 2 phases. The apartments of Phase I. had been constructed and been sold in 2015; fund raised in 611 project will be used to Phase II. development.
- The location of the property is in the core area of Elmhurst with 10-minute walking distance to MTA M, R, and 7 route and 15-minute driving distance to Midtown Manhattan.
- The phase II. development involves 38,935 square feet of land area and 80,422 square feet of building area; the planned building will have 5 stories with 86 condominium units in which 16 are studios, 25 are 1-bedrooms, 35 are 2-bedrooms, and 10 are 3 bedrooms. The building will also contain 66 parking lots.
* As of October 2018, the final market vacant land value is $10,000,000; the appraisal was provided by Certified General Real Estate Appraisers at Five Boroughs Appraisal Group LLC., a third-party Appraisal firm; According to phase 1 report, the land owner has historical issues with the church. The developer has already made initial agreement with it and will begin to work on the issue.
| Expected Schedule of Interest Payment | ||||||
|---|---|---|---|---|---|---|
| Payment | Round of Investor | Payment Date *1 | Interest-bearing Date | Interest Due Date | Interest Period | Notes |
| First Time | First Round Investors | 12.31, 2018 | 1.1, 2019 | 6.30, 2019 | 6 Months | Pre-paid Interest |
| Second Round Investors | 2.15, 2019 | 2.16, 2019 | 6.30, 2019 | 4.5 Months | Pre-paid Interest | |
| Second Time | All Investors | 6.30, 2019 | 7.1, 2019 | 12.31, 2019 | 6 Months | Pre-paid Interest |
| Third Time | All Investors | 12.31, 2019 | 1.1, 2020 | 6.30, 2020 | 6 Months | Interest for 6-month extension *2 |
*1 If the Payment date falls on holidays or not working day, the payment will be processed by the next business day.
*2 After the end of the first 12 months，the developer has the right of a 6-month extension; the investors will receive the third time interest payments in case of the extension.
Sufficient Collateral
According to the third-party appraisal in October 2018, the final market vacant land value is $10,000,000. After construction completed, the estimated value of the property may exceed $70,400,000. The developer collateralizes the land for financing and also provides personal guarantee and firm’s equity guarantee.
High Priority on Financial Claim
The land loan originated by CrowdFunz has the first lien as the highest priority during foreclosure to secure the investors 'interests in the event of a default. The developer will also pledge its firm’s equity to reduce the default risk bearded by investors.
Reliable Fixed Income
The annualized return of the investment is 7.0% for subscribers of 1 to 4 membership units, 7.5% for subscribers of 5 to 19 membership and 8.0% for Subscribers of 20 or more membership units. The first interest payment is expected to be paid 6-month in advance.
Great Location
The property is located in the core area of Elmhurst with convenient transportation, only 0.6 mile away from Queens Center. The community has major Chinese population; surrounding retail environment is vibrant and is convenient for living.
Strong Market Demand
Based on the data provided by Trulia and Zillow, the growth rate of average condominium sales price at Elmhurst has been more than 30%, higher than the average of New York region, during 2012 to 2018. After small decline in the second quarter of 2018, the sales price has been raised again in the second half of 2018. The future trend is considered to be Bullish in the next 2 years.
Elmhurst Market Overview:
$730,000
Median Sales Price
$653 per/ft²
Average Sales Price per SF
$33.70 per/ft²/year
Average Rental per SF per Year
* Data Source：Trulia, Oct 2017 to Oct 2018； Average Rental per SF per Year is calculated by the properties listed on Streeteasy, Oct 2018.
Demographics within the Zip code:
| Zip Code: 11373 | |
|---|---|
| Total Population | 100,713 |
| Average Age | 36 |
| High School or Higher Education | 69.5% |
| Races | Chinese, White, Southeast Asian, African |
| Average Household Income | $65,470 |
| White Collar/Blue Collar | 77.4%/22.6% |
| Family with Child | 34% |
| Average Family Member | 3.16 |
| Principle Residence | 27.5% |
* Data Source: ArcGIS Esri Database, and Property Shark, Oct 2018
Surrounding Property Construction:
- In the radius of 5 miles, There were 25 similar projects under developing during the last year. 17 projects were waiting for plan approval; 6 projects were under construction, and 2 projects had been completed and listed on the market.
- The project located at 88-08 Justice Ave is the largest development among the surrounding similar cases; the completed property will contain 183 residential units and a mixed-use community center. As of October 2018, the project was closing to its completion.
- The second largest development in the surrounding area is the project located at 69-02 Queens Blvd. The final property will have 17 stories and 561 units. As of October 2018, the project was waiting for final approval of the plan.
- In the total 25 similar projects, 13 projects have property value between 1 million to 5 million; 4 projects have property value between 5 million to 10 million; 6 projects have property value exceeded 10 million. There are 19 projects designed as condominium or rental apartment.
Comparative Analysis of Surrounding Peers:
Market Summary of Similar Surrounding Condominiums: (October, 2017 to October, 2018)
- Property Involved: 20
- Unit Sold: 73
- Median Sales Price per SF: $630
- Unit Median Sales Price: $470,000
- Price Range: $415,210~$845,148
- Median Sold Unit SF: 724 ft²
* As of October 2018, there were 7 similar properties within 1 mile of distance.
| Detailed Information of 7 Peer Properties (Oct. 2017 - Oct. 2018) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Location | Built Year | Square Foot | Story | Total Unit | Average Unit Square Foot | Average Sales Price per SF | Median Sales Price | Number of Unit Sold in 1 Year |
| 84-25 Elmhurst Avenue | 1954 | 117,518 | 6 | 144 | 759 | $503.33 | $455,000 | 3 |
| 40-35 Ithaca Street | 1937 | 51,890 | 6 | 65 | 851 | $576.80 | $495,000 | 6 |
| 82-01 Britton Ave | 1939 | 82,867 | 6 | 82 | 686 | $554.83 | $490,400 | 6 |
| 42-25 80th Street | 1960 | 118,319 | 6 | 147 | 840 | $527.20 | $444,600 | 4 |
| 81-18 Queens Blvd | 2004 | 29,141 | 6 | 30 | 830 | $645.70 | $525,000 | 6 |
| 82-15 Queens Blvd | 2006 | 13,692 | 7 | 8 | 912 | $663.12 | $525,000 | 2 |
| 87-22 51st Ave | 2016 | 37,214 | 8 | 44 | 675 | $873.28 | $532,036 | 24 |
* Data Source：Property Shark，Oct. 2017 to Oct. 2018; data was summarized, calculated, and compared by CrowdFunz Holding LLC.
Geographic Location:
The property is located in the core area of Elmhurst with flourishing retail businesses. It has only 10-minute walking distance to M, R, and 7 route stations. The commute to midtown Manhattan is about 15 minutes, and driving distance is about 15 minutes as well.
Transportation:
METRO：M, R, 7
BUS： Q53, Q58, Q29
Distance to JFK：10.9 miles (30 minutes Driving Distance)
Distance to LGA：5.6 miles (15 minutes Driving Distance)
| Public Facilities | |
|---|---|
| School | P.S 14 (Primary School) |
| Maspeth High School | |
| Newtown High School | |
| Park | Louis Simeone Park |
| Sunnyside Gardens Park | |
| Museum | Queens Museum |
| Museum of Modern Art | |
Development Firm: 90 Queens Inc.
Introduced Year: 2009
Number of Partner: 3
Total Value of Completed Projects: $ 20 Million
Project Location: Flushing and Surrounding Area; Brooklyn Sunset Park Area; Manhattan Chinatown;
Project Type: Major developing in Condominium;Experience of Mixed-use Properties.
Developed Projects:
The development firm of 47-11 90th St is a famous Chinese developer which has more than XXX years of real estate experience. The developer started its business from real estate brokerage and successfully extended its business into real estate development. In the past XX years, the firm had successfully completed XX property developments and accumulated deep understanding about New York local markets.The development firm also has a good track of record on developing condominium and commercial borrowing. The experience and credit background will help the developer obtain feasible construction loans from commercial banks in the next development stage.
1. Since the second quarter of 2018, the U.S. real estate market has been in adjusting period. The price growth rate fell from the pick at the end of 2017, and the sales prices moderately declined. Looking forward to the trends in the next 2 years, the real estate industry will face higher costs of borrowing due to incremental interest rates, and the overall market might turn back to a more rational position which is based on affordability and supply and demand. In such market trends, CrowdFunz will mainly focus on debt investment opportunities as the core of strategy, adopting conservative loan agreements to build partnerships with real estate developers, and reduce uncertainty from fluctuant market adjustment which may lower the profitability of CrowdFunz’s investors.
2. The mission of CrowdFunz is to offering fixed income products that have controllable value-at-risk, conforming to the demands of investors who would like to minimize their risk profiles. CrowdFunz also insists on selecting real estate projects with low loan-to-value ratio and high collateral as a part of core criteria of debt investment.
3. Compared to other regional real estate markets in the U.S., the market environment of New York city generally has relatively lower volatility and downward interval; the real estate market at New York city has strong local economic support and steady residential and commercial demands. By regional market familiarity and professional understanding of real estate development, CrowdFunz carefully selects those fundraising projects of which the underlying assets or development plans possess great business fundamentals and potentials.
4. As a result of our conservative strategy, CrowdFunz 612 project was successfully passed our risk filtering processes and due diligence. CrowdFunz securitized the borrowing to private equity investment opportunities and introduces it to all CrowdFunz’s clients and potential investors. We believe that the strong market fundamentals in Elmhurst real estate market, the developer’s reliable track of record, and dependable feasibility of the operational planning of the development may support the success of investment for investors who are looing for moderate risk-return trade-off.
| RISK CATEGORY | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
| Sponsor | |||||
| Experience | 1-2 yrs | 3-5 yrs | 6-10 yrs | 10+ yrs | |
| Tracking Record | 0-3M | 3-10M | 10-50M | 50M+ | |
| Credit Score | Accept | Fair | Good | Excellent | |
| Property as Collateral | No | Yes | |||
| Financials | |||||
| Investor Equity% | >60% | 50%-60% | 40%-50% | 25%-40% | <25% |
| Loan Senior Crowdfunz | 70%-79% | 60%-69% | 50%-59% | 1%-49% | 0% |
| Location | |||||
| Location | Rural | Suburban | Core Urban | ||
| Walk Score | 0-49 | 50-69 | 70-89 | 90-100 | |
| Supply & Demand | S>>D | S>D | S≈D | S<D | S<<D |
| Property Type | |||||
| Development Phase | Ground Up | Value-added | Stablized | ||
| Occupancy | Low | Moderate | High | Very High | |
| Investment Term | 60+ Mths | 25-60 Mths | 13-24 Mths | < 12 Mths |
Subscription Agreement (Only available to accredited investors)
Appraisal (Only available to accredited investors)