Golf Course Subdivision in Maine

Saturday, May 25, 2019
Borrower   A developer in Wells, Maine, through a single-purpose LLC.
Loan   A $3,468,000 Five year loan at 12% the first year, and 18% thereafter. $1,453,000 was advanced at closing, the remainder as the development work was carried out.
Collateral   The loan is secured by a first mortgage on 360 acres of land near the town of Wells in Maine. The land is farmland at this time, and will be developed as a country club with an 18-hole championship golf course and a 9-hole par 3 course, a practice range and a 12,000 square foot clubhouse.
Guarantors   The developer and his wife.
Purpose   The loan will re-finance some existing debt and provide funds sufficient to complete the central water and septic systems and bring 31 lots to market. In addition, $550,000 is earmarked for construction work on the Golf Course.
Exit strategy   The borrower plans to repay the loan from the proceeds of lot sales. We will release finished lots for the greater of 75% of the gross sales price and 80% of the net after commissions and closing costs.
Outcome   The Borrower defaulted on his interest payments. A purchaser was found, and the loan was repaid in full. - all rights reserved

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