Sheehy-Patel Investment Group, LLC
The managing principal of the Sheehy-Patel Investment Group, Alan Sheehy, fell on tough times during the economic recession and there have been a number of liens, judgments, and foreclosures associated with Mr. Sheehy as a result - some of which remain unsatisfied. In inquiring about them, Mr. Sheehy shared that the liens, judgments, and foreclosures were the result of the economic downturn and being over-leveraged on a number of real properties. Since then, Mr. Sheehy has shared that he is more conservative in his use of leverage and has been slowing rebuilding his portfolio since the downturn. As a result of the liens, judgments, and foreclosures, the loan-to-value for this portfolio, approximately 70% of current market value, is lower than the typical LTV that Realty Mogul provides loans for.
Alan Sheehy's credit was significantly impaired due to losses during the real estate downturn. Since then, he has built his real estate portfolio back up slowly using various sources of debt and equity capital, but due to his impaired credit, placing long term, permanent debt financing has been a challenge for him, hence a traditional bank is not lending on this portfolio.
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Alan Sheehy - Principal -
Kent Snyder - Operations Manager -
Daniel Dawson - Leasing Manager
Alan is a Principal of Sheehy-Patel Investment Group. He graduated Cum Laude from Trinity University in San Antonio in 1988 and received his Certified Commercial Investment Member (CCIM) designation in 2007. He has started numerous companies since 1988 including the following:
- Topps Asphalt (1988) - mid-size paving company with annual sales of $3.5 million
- Sheehy Investment Group (1998) - purchased 600+ homes from 1998-2004, multifamily purchases include 1,100 units in Missouri, Illinois, Kansas, and California
- Mid America Property Partners (2004) - largest REO disposition company in Missouri, selling 600-900 homes annually, representing 44 national lenders including Fannie Mae and HUD
- Sheehy-Patel Investment Group (2009) - Sacramento-based multifamily owner and operator focused on distressed asset purchases and value-add projects with 3-5 year exit plan
Kent Snyder is the Operations Manager for Sheehy-Patel Investment Group's properties in Kansas, Missouri, and Illinois. He has 15 years of property management experience overseeing conventional, Section 8, LIHTC, RD and bond properties. He specializes in risk management and rehabilitating distressed properties. Kent provides operation and management oversight for owners and investors. His diverse experience lends to his extensive knowledge of building maintenance and market analysis, providing owners targeted execution and effective expense management. In conjunction with his leadership team, Kent is able to provide efficient resolution to problematic REAC and compliance concerns. Previously Kent held positions as Regional Manager for two large Kansas City metro developers as well as Director of Leasing and Collections, and Director of Operations for two private Missouri developers. In addition, Kent served as Regional Manager for a large retail chain, overseeing business operations of more than 17 commercial sites. Kent holds a Real Estate Broker's License in the state of Missouri, Universal EPA Certification (HVAC), as well as his Certified Occupancy Specialist (COS) designation. In addition, Kent is a member of his local IREM Chapter and is a Certified Property Manager (CPM) candidate.
Daniel Dawson is the Leasing Manager for Sheehy-Patel Investment Group. He oversees four (4) agents that cover the St. Louis market area. He is also a broker and owner of The Tenant Factory, which is the premier tenant placement company in St. Louis. Since he joined the real estate industry in 2003, he has been leasing 175-250 properties every year and has over 50 clients that collectively own more than 1,500 units. He is also a frequent guest speaker on the topics of marketing, background checks, leasing, and management. He has successfully managed more than $30 million of real estate and is an active partner in over $8 million of investment property. Daniel also has over 10 years of extensive work experience with the Section 8 Housing Authority and placed greater than 200 Section 8 tenants.
At A Glance (Portfolio Metrics)
| Property Type: | 5 Residential Properties |
| Investment Type: | Loan Refinance* |
| Estimated Return: | 10% annualized |
| Loan Term: | 12 months |
| Location: | St. Louis, MO |
| Loan Amount: | $230,000 |
| Est. Value: | $327,400 |
| Est. LTV: | 70.25% |
| Est. DSCR: | 2.65x |
Summary
The borrower is obtaining a loan for the purpose of refinancing the existing debt. The loan is tied to payments from an underlying borrower loan that is associated with five (5) residential investment properties located in St. Louis, Missouri. The five (5) properties will be cross-collateralized by a single loan. The properties are each currently owned by one of three (3) legal entities managed by Alan Sheehy, the principal of Sheehy-Patel Investment Group. The funds will be used to refinance the five(5) residential properties. The properties consist of four (4) single family homes and one 3-unit townhome. Sheehy-Patel Investment Group plans to use the loan proceeds to pay off the existing debt on each of the properties.
Realty Mogul Co. made a 12-month loan to this borrower secured by seven (7) properties, which closed escrow on 12/19/2013. The Borrower made all interest payments on time and paid back $50,000 of the original principal after selling two (2) of the original seven (7) properties in March 2014. Realty Mogul Co. is now providing the Borrower with a new 12-month loan for the remaining five (5) properties that will be utilized by the Borrower to repay the existing debt of the Realty Mogul Co. loan made on 12/19/2013.
All five (5) properties are currently fully occupied, and the combined monthly rent is $6,085**. All of the current tenants are on annual leases. Sheehy-Patel Investment Group plans to continue leasing each property to its current tenant or tenants.
Investors will receive interest payments of 10%, with a final, balloon payment when the loan is repaid in full.
Borrower Risk Factors
The managing principal of the Sheehy-Patel Investment Group, Alan Sheehy, fell on tough times during the economic recession and there have been a number of liens, judgments, and foreclosures associated with Mr. Sheehy as a result - some of which remain unsatisfied. In inquiring about them, Mr. Sheehy shared that the liens, judgments, and foreclosures were the result of the economic downturn and being over-leveraged on a number of real properties. Since then, Mr. Sheehy has shared that he is more conservative in his use of leverage and has been slowing rebuilding his portfolio since the downturn. As a result of the liens, judgments, and foreclosures, the loan-to-value for this portfolio, approximately 70.25% of current market value, is lower than the typical LTV that Realty Mogul provides loans for.
Alan Sheehy's credit was significantly impaired due to losses during the real estate downturn. Since then, he has built his real estate portfolio back up slowly using various sources of debt and equity capital, but due to his impaired credit, placing long term, permanent debt financing has been a challenge for him, hence a traditional bank is not lending on this portfolio.
Risk Mitigation***
- The Borrower has a 12 month payment record with Realty Mogul, Co., all current.
- The loan-to-value for this portfolio, approximately 70.25% of current market value.
- The properties are all currently fully leased, with a portfolio debt service coverage ratio of 2.65x.**
- There is a personal guarantee on all of the underlying borrower loans.*
- The underlying security interest for each of the borrower loans is a deed of trust.*
- The borrower loans are protected by title insurance.*
- Investor returns are not contingent on the appreciation of the property value and investor returns do not increase based on any resale price. The borrower is still obligated to repay the corresponding borrower loans.
- In a worst case scenario, a foreclosure of any of the properties is possible. Proceeds would be distributed to investors according to the percentage of the total investment opportunity initially funded net of any expenses incurred for the foreclosure proceedings.
*An investment in this pool of loans will be made through a borrower dependent payment note issued by Realty Mogul. These promissory notes are dependent on payments that Realty Mogul receives on the underlying borrower loans. While the borrower loans are secured by legal title on real estate, the borrower dependent payment note is not itself secured nor does it have a personal guarantee.
**Monthly Rental figures are based on information provided by Borrower. Rental income will be verified prior to escrow closing as part of the Underwriting process.
***The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Investor Document Package for a discussion of additional risks.
| Address | Square Feet | Year Built | Annual Rent | Loan Amount |
|---|---|---|---|---|
| 565 Versailles Drive | 1,064 | 1959 | $11,820 | $55,114 |
| 1725 Crystal Court | 1,248 | 1947 | $10,500 | $49,164 |
| 9531 Margo Ann Lane | 1,088 | 1956 | $9,000 | $30,964 |
| 412 South Clark Avenue | 1,187 | 1910 | $10,500 | $26,764 |
| 2640 Russell Boulevard | 3,125 | 1894 | $31,200 | $67,994 |
*Annual Rent figures are based on information provided by Borrower. Annual rent will be verified prior to escrow closing as part of the Underwriting process.
For additional information on each property information, please refer to the property PDFs attached below on the right hand side of this page.
St. Louis is one of the major cities in Missouri with a population that exceeds 300,000. It is also a major United States port on the eastern line of the state. The city seceded from St. Louis County in 1877, allowing it to become an independent city and limiting its political boundaries. The economy of St. Louis relies on service, manufacturing, trade, transportation of goods, and tourism. The city is home to several Fortune 500 corporations, including Express Scripts, Emerson Electric, Monsanto, Reinsurance Group of America, Centene, Peabody Energy, Ameren, Graybar Electric, and Edward Jones Investments.
St. Louis is home to three professional sports teams: the St. Louis Cardinals, one of the most successful Major League Baseball clubs; the hockey St. Louis Blues, and the football St. Louis Rams. The city is commonly identified with the Gateway Arch, part of the Jefferson National Expansion Memorial in downtown St. Louis. The rivers of St. Louis continue to play a large role in moving goods, especially bulk commodities such as grain, coal, salt, and certain chemicals and petroleum products.
The St. Louis area's major airport, Lambert-St. Louis International Airport, has 85 gates and serves 20 airlines. Lambert is 15 miles northwest of downtown St. Louis and has on-site access to the MetroLink light rail system. In addition, MidAmerica St. Louis Airport in St. Clair County, Illinois, is approximately 24 miles east of downtown St. Louis and serves as a reliever for Lambert. MidAmerica is a joint civilian-military use airport that focuses primarily on international cargo service.
