Equity Pledge Debt Fund 838
Type: Debt
Target: $2,200,000
Annual Return: 8.50% - 8.75%
Min-invest Amount: $10,000
Duration: 6 – 12 Months
| Fund Type | Private Equity Fund |
| Offering Amount | $2,200,000 |
| Estimated Return | 8.50 – 8.75% Annualized Return*1 |
| Investment Type | Equity Pledge Loan |
| Unit Price | $10,000 per Subscription Unit |
| Offering Date | August 2023 |
| Investment Timeline | 6 – 12 Months*2 |
| Dividend Schedule | Prepaid per 6 Months*3 |
*1 8.50% Annualized Return for Investment of 1-19 Units; 8.75% Annualized Return for Investment above 20 Units.
*2 Investors will receive a minimum of 6 months of dividend. After 6 months. Developer has 2 extension options, and investors will receive dividend accordingly.
*3 Investors will receive prepaid dividend before every period of 6 months.
- Property is in Long Island City, one of the fastest growing areas in New York. In the past decade, home price in Long Island City has shown its growth. With convenient public transportation, Long Island City has become an ideal living area for young professionals.
- Underlying property is in Skyline Tower, a 67-floor apartment building that features 802 units. It is the tallest building in Queens, and adjacent to subway trains E/M/R/G/7. Driving to Midtown Manhattan and Flushing takes 15 minutes and 20 minutes. Area is popular among students of NYU and Columbia University.
| Address | 3 Court Square PH308, LIC, NY 11101 |
| Area | Long Island City, Queens, New York |
| Lot Area | 1,325 Sqft |
| Sale Price | $2,900,000 |
| Unit Sale Price | $2,188.00/Sqft |
| Sale Date | 2/17/2023 |
| Expected Dividend Calendar | ||||||
|---|---|---|---|---|---|---|
| Round of Dividend | Dividend Date *1 | Counting Date | Ending Date | Dividend Period | Notes | |
| First | No Later than 09/04/2023 | 08/21/2023 | 02/20/2024 | 184 days | Prepaid Dividend *2 | |
| Second | No Later than 03/06/2024 | 02/21/2024 | 08/21/2024 | 183 days | Extension Option Owned by Developer *3< | |
*1 In case of holidays and non-working days, the dividend date will be automatically postponed to the next working day.
*2 Investors will receive at least 184 days of dividends. After 6 months, dividends will be calculated in terms of days till Developer repays the loan.
*3 After the first dividend period, Developer owns 1 extension options, and investors will receive dividends accordingly at the same dividend rate.
- The loan provided by CrowdFunz Fund 838 is a short-term acquisition loan and is collateralized by the underlying property. As of August 2023, the property is valued at $3,600,000, which is 1.63 times the loan amount.
- Borrower purchased the underlying property in February 2023 for $2,900,000, which was significantly lower than market value. In addition, Borrower would provide unlimited personal guarantee.
- Long island City is an emerging area in New York, and it’s on the other side of East River, directly facing the United Nation headquarter. The surrounding public transportation is well-developed, and there are 7 subway lines and multiple bus lines covered, making residents reach go to Queens, Brooklyn, and Manhattan conveniently.
- Currently, the population density in Long Island City has almost reached the same level of traditional prime areas in Manhattan. The population is young and has steady and growing income, which makes the local commercial and residential developments to be prosperous.
- Borrower will use the loan provided by CrowdFunz Fund 838 to cover acquisition, preliminary design, and other soft costs.
- Borrower plans to repay the loan provided by CrowdFunz Fund 838, by refinancing with a commercial bank or by using other sources of fund.
- Borrower specializes in glass curtain wall and has close relationships with local developers. Borrower had completed multiple projects in New Jersey and New York and has 2 ongoing projects.
- CrowdFunz Fund 838 marks the first cooperation between Borrower and CrowdFunz. We wish to bring value to both parties, and most importantly, to our investors through our third cooperation.
Investment Structure of CrowdFunz 838 Fund
CAPITAL STACK
| Capital Stack | Ratio | |
|---|---|---|
| CrowdFunz Fund 838 Equity Pledge Loan | $2,200,000.00 | 75.86% |
| Property Equity Value | $700,000.00 | 24.14% |
| Total | $2,900,000.00 | 100.00% |
- The $2,200,000 short-term loan provided by CrowdFunz Fund 838 is accounted for 75.86% in the Capital Stack.
- Borrower has $700,000 of equity value in the underlying property, which is accounted for 24.14%.
- Borrower had pledged 100% equity of the property and would provide unlimited personal guarantee.
Demographics in the Zip code
| Zip Code 11101 | |
|---|---|
| Regional Population | 31,366 |
| Median Age | 35 |
| High School Education or above | 69.8% |
| Workplace | Metropolitan(99.8%) |
| Family Median Income | $66,579 |
| White Collar/Blue Collar | 90.5%/9.5% |
| Child-Bearing Family | 23.6% |
| Average Family Size | 2.21 |
| Average Housing Price | $975,000 |
Due to its premium geographic location, Long Island City has become one of the hottest areas absorbing new real estate developments in New York. Meanwhile, more companies and residents have chosen Long Island City as the destination for business and living.
Younger population dominants in the area, and most residents are middle class professionals with jobs and stable incomes. The ethnic backgrounds are also well-diversified.
The average age is 35; 23% of the families have children. Self-residence is the main demand for tenants. Due to the low housing inventory available for sale and high needs from buyers, the property prices are constantly going up.
* Data Source: United States Zip Codes. Org. & Esri Zip Code Lookup, American Community Survey, August 2023.
Current Market Overview
According to the data provided by PropertyShark, there were 79 condo transactions in the second quarter of 2023; median condominium sale increased 65.3% YoY to $785,000 price in Long Island City. Also, median unit sale price of $1,311 is 37.7% higher than a year ago.
As more new residential buildings completed, condo market in Long Island City is better than it during pandemic. Listing price, sale price, and transaction are all improved from 2022.
According to the data provided by PropertyShark, the median sale price of condo units in Long Island City is currently Top 10 in Queens, New York.
Market Trends in Long Island City
* Data Source: PropertyShark。
Comparable Condominium Sold
* According to the data from Zillow, the average unit sale price of comparable condo units is: $1,9272/ ft².
Comparable Condominium Listing
* According to the data from StreetEasy, the average unit listing price of comparable condo units is: $2,800/ ft².
Valuation Approaches
* Source: Property information, Zillow, and StreetEasy, data compiled and calculated by CrowdFunz.
Location
Project is in prime area of Long Island City. The surrounding public transportation is well-developed with 5 subway lines and multiple bus lines. The residents can conveniently reach various destinations in Queens, Brooklyn, and Manhattan. Driving from the project site takes 15 minutes to LaGuardia Airport and 25 minutes to JFK International Airport.
Transportation
- Subway：E/M/R/N/W/7 (2-min Walk)
- To Midtown Manhattan: 10-minute Subway
- To JFK Airport：25-minute Drive
- To LGA Airport：10-minute Drive
Schools
The basic education system in the area covers many elementary schools, junior high schools, and high schools. There are also many technical schools to meet young professionals’ self-development goals.
Living Facilities
In addition to well-developed public transportation, the local business environment is vigorous. Companies and government agencies has been moved to the area, and new restaurants and supermarkets have been settled.
Entertainment
The surrounding recreation facilities are improving to fit residents’ need. Museums, gyms, and entertainment venues nearby are within walking distance.
Developer Company: BCG GLASS INDUSTRY.
Developer Website: https://bcgfacades.com/
The company is led by two new Chinese developers in New York. It started from the business of glass building materials and has gradually accumulated development experience in New York local market in the last decade. The company has completed 5 developments in Queens, New York, being active on adding market footprints.
In the past 15 years, the company has established a good cooperative relationship with local developers through its main business of glass building materials and has collaborated with several well-known Chinese real estate developers.
- The short-term loan provided by CrowdFunz Fund 838 will help Borrower fund the initial acquisition and soft costs. Borrower plans to repay the loan by refinancing with a commercial bank or by using other sources of fund.
- Borrower’s established goodwill, the collateralized equity value, and unlimited personal guarantee, support the borrowing.
- CrowdFunz believes that under the loan agreement with clear legal rights and obligations, the short-term debt invested by Fund 838 has controllable risks and a low probability of default, making the fund a feasible real estate investment opportunity for retail investors.
CrowdFunz 838 Project Rating
Subscription Agreement (Only available to accredited investors)
Appraisal (Only available to accredited investors)