Thursday, August 9, 2007

Commercial Mortgage Firm For Sale

Blackburne & Brown Mortgage Company, Incorporated (“the Company”) is a licensed California real estate brokerage company involved primarily in the hard money commercial mortgage business.

Our traditional niche is making long term, permanent loans to borrowers who cannot qualify for a bank loan. Normally their credit is too blemished, perhaps from a divorce, or their company is not making enough money on paper to qualify at the bank. It is a good market because our borrowers have significant equity in their commercial properties, and these buildings are already standing and completed. All of our loans are first mortgages.

The company can also make bridge loans, loans to renovate existing commercial buildings, or new construction loans. Nothing in our licensing prohibits the company from making home loans in the future.

We get our lending funds from accredited and near-accredited private investors residing in California. These loans are almost always fractionalized, meaning that we will usually place 10 to 30 different private investors per loan. By raising money is smaller denominations – typically $10,000 to $50,000 each – our cost of funds is lower. The private investors in our loans own their interests as tenants-in-common with each other. The company does not guarantee these investments in any way.

Our largest single investor is Blackburne & Brown Mortgage Fund I (“the Fund”), a $26 million blind mortgage pool operated as a limited partnership. The Fund has been in existence for over 12 years and has a perfect record of no principal losses. The Fund currently pays its investors 6.375%. The Company serves as the General Partner of the Fund. The Fund can easily be increased in size if a sufficient number of good loans can be found.

The Company earns its money through two methods – loans fees of typically 2.5 points per loan and from loan servicing fee. The Company earns on average a whopping 190 basis points on a portfolio of around $45 million. Therefore the company enjoys a passive loan servicing revenue of $800,000 or so per year, plus management fees on any REO’s and a management fee of one-half percent on the Fund.

Florida commercial loan and florida hard money loans are available to all business in the area.

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