First Lien Mortgage Debt Fund 616
Type: Debt
Target: $1,500,000
Annual Return: 7.50% - 7.75%
Min-invest Amount: $10,000
Duration: 12 - 24 Months
| Fund Type | Private Equity Fund |
| Offering Amount | $1,500,000 U.S. Dollars |
| Estimated Return | 7.75% - 8.00% Annualized Return *1 |
| Investment Type | First Lien Mortgage |
| Unit Price | $10,000 per Subscription Unit |
| Offering Date | July 2022 |
| Investment Horizon | 12 – 24 Months *2 |
| Dividend Schedule | Prepay Before Per Period(Every 6 Months) *3 |
*1 7.75% Annualized Return For Investment of 1-19 Units;
*2 8.00% Annualized Return for investment above 20 Units;
*3 Investors will receive a minimum of 12 months of dividends, to be prepaid in 6-Month interval After 12 months, dividends will be calculated in terms of days.
- Underlying property is in Sunset Park, Brooklyn, on a 2,671 SF lot. Developer purchased the lot and demolished the previous building. The construction plan has been approved, and the developer had started the construction with equity contribution.
- According to construction plan, the 4-floor property will feature a basement and 8 condo units, including 1 Studio unit and 7 1-Bedroom units. The construction progress is about 70%, with the rest to be finished in 12 months.
| Site Address | 355 53rd St., Brooklyn, NY 11220 |
| Site Area | Sunset Park, Brooklyn, New York |
| Lot Size | 2,671 SF（26.67 ft x 100.17 ft） |
| Building Area | 7,800 SF |
| Buildable Area | 5,312 SF |
| Investment Starts | July 2022 |
| Expected Dividend Calendar | ||||||
|---|---|---|---|---|---|---|
| Round of Dividend | Dividend Date *1 | Counting Date | Ending Date | Dividend Period | Notes | |
| First | No Later than 8/8/2022 | 7/25/2022 | 1/24/2023 | 6 Months | Pre-paid Dividend | |
| Second | No Later than 2/8/2023 | 1/25/2023 | 7/24/2023 | 6 Months | Prepaid Dividend *2 | |
| Third | No Later than 8/8/2023 | 7/25/2023 | 5/31/2024 | 6 Months | Extension Option Owned by Developer *3 | |
| Forth | No Later than 2/8/2024 | 1/25/2024 | 7/24/2024 | 6 Months | Extension Option Owned by Developer *3 | |
*1In case of holidays and non-working days, the dividend date will be automatically postponed to the next working day.
*2Investors will receive a minimum dividend of 12 months. After 12 months, the dividend will be calculated in terms of days till the date the developer repays the loan.
*3After the second dividend period ends, the developer has the option to extend the loan by another 6 months. If the developer chooses to extend, investors will receive additional dividends accordingly.
- According to the Appraisal Report provided by independent appraiser SVS (Standard Valuation Services) in July 2021, the market value of the underlying property could be valued at $3,350,000 when finished according to construction plan.
- CrowdFunz Due Diligence Team had reviewed the current market condition and the feasibility of the construction plan and have decided to distribute the loan in 3 phases, in order to control the risk.
- The mortgage provided by CrowdFunz 616 Fund is protected in 3 layers: 1. CrowdFunz 616 Fund entity has the first-lien position on the underlying property. 2. Developer had pledged 100% equity of the project entity. 3. Developer had provided Unlimited Personal Guarantee and has Net Asset worth 3 times of the loan amount.
- Project is in Sunset Park, Brooklyn and is 1 minute away from subway station and bus station. Property is 5-min drive away from Highway 278.
- Most residents are Chinese and previous immigrants and have strong spending power. Local residential properties have attracted strong interest from homebuyers and investors.
- The loan provided by CrowdFunz 616 Fund will be distributed in 3 phases according to progress of the construction. The loan will be used towards construction costs and post-construction work. After completion, the developer will sell the property to repay the loan.
- The developer has over 10 years of experience in real estate brokerage, investment, and development, and has a strong expertise in identifying the most suitable property types to meet market needs.
- This project will mark the first collaboration between CrowdFunz and the developer. Two parties look forward to finishing the project in a smooth and timely manner, to benefit both parties and most importantly, the investors.
Investment Structure of CrowdFunz 616 Fund
CAPITAL STRUCTURE
| Capital Stack | Percentage | |
|---|---|---|
| Loan Issued by CrowdFunz 616 Fund | $1,500,000 | 45.18% |
| Equity Investment by Developer | 1,820,000 | 54.82% |
| Total | $3,320,000 | 100.00% |
- The loan provided by CrowdFunz 616 Fund is accounted for 45.18% in the capital stack and is protected by first-lien priority and 100% equity of Project Entity. If the developer defaults on the loan, Fund has the rights to claim the property.
- In addition, the key person of the developer has signed unlimited Personal Guarantee. If the developer defaults on the loan, CrowdFunz 616 Fund may take legal action against the developer and reclaim the amount due.
Demographics in the Zip Code
| Zip Code 11220 | |
|---|---|
| Regional Population | 26,430 |
| Median Age | 34.2 |
| High School Education or above | 50% |
| Majority Race | Asian |
| Family Median Income | $84,732 |
| Child-Bearing Family | 33% |
| Average Family Size | 2.79 |
| Rental Units % | 50% |
Majority of residents are Chinese and Indian and are categorized as Middle-Class. Average family Income level of residents in Sunset Park is around $84,732, above average.
Average age of residents is 34.2, mainly young adults；33% families have more than 1 children. Average family size is around 2.79.
Half of local housing units are owner-occupied, with the other half being rental. Overall vacancy rate is low.
Local families have stable spending power. Retail and other businesses thrive locally.
* Source：United States Zip Codes. Org. & Esri Zip Code Lookup，American Community Survey in May 2022.
Comparable Land Sold
* Average unit sale price of comparable land in the area is $326.33/SF
Analysis of Comparable Rental Units
* Average unit rent of comparable rental units us $52.29 / SF /Year (Leases may be varied on a case-by-case basis)
Market Analysis of Comparable Condo Units
* Average sale price of comparable units is $600,040.
* Average unit sale price of comparable units is $851.40/SF.
Valuation Analysis
* Data Source: Appraisal; Calculated and Summarized by CrowdFunz Holding LLC.
Location
Project site is in Sunset Park, Brooklyn, one of the most famous Chinese-populated areas in New York. Subway station is 1-min away from the site. It takes 20-min of Subway to Midtown Manhattan. Local residential buildings were mostly built during World War II; newly built properties are scarce.
Transportation
- Subway Line：N, R, W
- Bus Line：B11, B37
- To Midtown Manhattan：7.5 Miles (Around 30-min by Subway)
- To JFK Airport：21 Miles (30-min Drive)
- To LGA Airport：15 Miles (25-min Drive)
Nearby Schools
The basis education system in the area ranks average. According to Great Schools, the PS 169 schools are of average rating.
Living Facilities
The area is surrounded by Japanese, Chinese, and Italian restaurants, and adjacent to banks, supermarkets, clinics, gyms, and shopping malls. The site is close to the 8th avenue, one of the busiest streets in Brooklyn.
Recreations
The neighborhood is close to Sunset Park, one of the most known community parks in Brooklyn, and the surrounding recreational businesses can meet all residents' needs.
Developer: 355 Reig LLC.
Architect: UPC Engineering DPC.
355 Reig LLC is an experienced boutique developer，with over 15-year experience in developing and operating residential properties in New York and surrounding regions. Previous completed projects are popular among Chinese homebuyers and investors.
The developer can handle the scale of the project and loan provided by CrowdFunz 616 Fund. The project is expected to be competitive in the market due to its small scale.
- The loan provided by CrowdFunz 616 Fund is a First Lien Mortgage. The Developer had started construction and will complete a residential property highly suitable for local market.
- The project invested by CrowdFunz 616 Fund has a low LTC ratio. CrowdFunz had reviewed the construction plan and factored in the cost inflation of raw materials and will distribute the loan in 3 phases to ensure the active engagement and progression of the developer in this project.
CrowdFunz 616 Project Rating
Subscription Agreement (Only available to accredited investors)
Appraisal (Only available to accredited investors)