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Completed Debt
Residential
WA Rehab Loan
Multiple Locations
INVESTMENT STRATEGY
INVESTMENT TYPE
Debt
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100% funded
Offered By Real Property Associates
%* TARGET IRR 9.0%-%
* TARGET EQUITY MULTIPLE
Estimated Hold Period 3 to 6 months
Estimated First Distribution
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Overview
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Real Property Associates

Owned and operated by Gordon Stephenson and Jay Young, the same team who founded the company in 1991, Real Property Associates (RPA) offers an unbeatable blend of knowledge, experience and commitment — both to the community it serves and to a vision of excellent service and innovative solutions.

Backed by its strong, professional staff, RPA has grown steadily over the past 21 years, building on its solid reputation for high ethical standards, sound business practices and proven track record in brokering residential, multi-family, commercial and raw-land real estate.

Located in Seattle, RPA has 43 associate brokers and agents serving clients throughout the Puget Sound Region. In 2011 RPA was named the 2nd largest independent real estate company, and 11th largest residential brokerage in the state, by the Puget Sound Business Journal. In 2010, RPA’s brokerage business consisted of 354 residential and commercial sales transactions which represented over $170 million in gross sales.

RPA looks forward to playing an ongoing part in the region’s growth and continuing to create opportunities for the people who call Seattle home.

RPA also specializes in property management in residential properties and suburban commercial property rentals in the Puget Sound area. Through a state-of-the-art process, they have streamlined property management services, ensuring a more prompt rent collection procedure, a fully electronic payment remittance system, and e-mail reporting of monthly financial information. RPA currently employs over 20 full time property managers, bookkeepers, admins and maintenance personnel. These employees oversee and are responsible for the operations of managing over 1,500 residential and commercial rental units. The combined market value of this portfolio is over $200 million.

Real Property Funding Group, LLC, has operated as a subsidiary of RPA since 1991. It performs mortgage brokerage and other financing services, and since 2010, has acted as a principal, in cooperation with a group of investors, in purchasing, rehabbing, and reselling single family homes and condominiums in the greater Seattle area.

The advantage Real Property Funding Group has is the depth of their market knowledge in the Greater Seattle area. Gordon and Jay have both been active brokers in the Seattle market since the 80’s, and have represented thousands of buyers and sellers during their careers. They personally preview each property that is purchased and directly oversee the rehab process. Upon completion of the work, they have a team of brokers who help with staging, marketing and resell of each home. The average time on market for these transactions is well under 30 days.

In short, the Company provides a vertically integrated approach to investing in this property type – from finding the deal, to closing the purchase, then administering just the right amount of work to ensure the dollars added in the project create incrementally more value to the property, and overseeing a quick sale and closing on the resale, their experience has created a successful model which works well in this current real estate environment.

http://www.seattlehouses.com/
  • Gordon Stephenson
  • Jay Young
Gordon Stephenson

Gordon acts as the managing broker for the company, overseeing 43 agents and brokers in their sales activities, and continues to personally represent buyers and sellers. He is also involved with RPA’s growing commercial real estate division where he provides management and consultation for commercial property owners. Gordon grew up in Lake Forest Park and graduated from North Seattle's Shorecrest High School in 1984. After graduating from Stanford University in 1988 with a degree in economics he returned to Seattle and started working in real estate as a sales agent, first with Mac- Pherson's in their University District location, and then with Windermere at their Northgate office. Gordon lives with his family in Lake Forest Park, North Seattle and serves on the board of trustees with Seattle's Union Gospel Mission (www.ugm.org) and Zillow.com 

Jay Young

Jay partnered with Gordon to start Real Property Associates with the goal of providing excellent brokerage and property management services. Their original office was in Edmonds until they expanded their business and moved to Seattle in 1996. Jay oversees RPA’s property management division. He is also involved in the brokerage area, representing buyers and sellers, and in addition, spends time coordinating the management of Jay and Gordon’s rental portfolio. Jay developed an interest in real estate investing while in college and arranged to receive credit towards his degree for some of his real estate work. For several years he purchased, developed, and managed properties as an investor and partner in properties from Seattle to Everett. Jay is a lifelong resident of Edmonds and a graduate of King's Garden Schools. He graduated in 1988 from Seattle Pacific University with a B.A. in real estate and business. He has served as a board member of the First Avenue Service Center, a homeless shelter in Seattle's Belltown neighborhood and is active in local boys and girls clubs.

Track Record

Business Plan
Property

At A Glance

Property Type: 3 Residential Properties
Investment Type: Loan Purchase*
Estimated Return: 9% annualized
Loan Term: 6 months
Location: Seattle, WA
   
Purchase Price: $603,500
Loan Amount: $485,000
Est. Value After Repair: $816,295
Est. LTV After Repair: 59%
Est. Protective Equity: $331,295

Summary

Realty Mogul investors have the opportunity to invest in a loan. The loan is tied to payments from an underlying borrower loan that is secured by three (3) residential properties located in various cities outside Seattle, Washington. 

The three (3) properties were recently purchased at auction by Real Property Associates ("RPA").  RPA is obtaining a loan to help finance each acquisition and rehab. RPA is performing renovations on the property and will look to sell as quickly as possible at a higher price than the purchase price. Upon completion, the property will look like other renovations RPA has executed.

A summary of the properties in the portfolio is included as a PDF attachment above.

Investors will receive interest payments of 9% with a final balloon payment at the end of the loan term. The security interest for the underlying borrower loan is secured by a deed of trust for each of the three (3) properties in first position.* 

Risk Mitigation**

  • There is a personal guarantee on the underlying borrower loan.*
  • The borrower is a real estate investor with a history and a track record of success.
  • The security interest for the underlying borrower loan is a deed of trust for each of the three (3) properties.*
  • The underlying borrower loan is 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 loan.
  • In a worst case scenario, a foreclosure of the property 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 loan will be made through a borrower dependent payment note issued by Realty Mogul. This promissory note is dependent on payments that Realty Mogul receives on the underlying borrower loan. While the underlying borrower loan is secured by legal title on real estate, the borrower dependent payment note is not itself secured nor does it have a personal guarantee. 

**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.

Property Details

  Address Date Purchased Purchase Price Lot Size Square Ft. Bed / Bath Year Built
  17318 Spruce Way, Lynnwood, WA 98037 12/20/13 $161,500  9,583 sf 2,316 4 / 1.5 1930
  18526 Fales Rd, Snohomish, WA 98296 09/27/13 $283,000 6.12 acres 1,764 3 / 2 1979
  4315 Sunnyside Blvd Marysville, WA 98270 07/19/13 $159,000 4.09 acres 2,280 4 / 2 1957
Location

17318 Spruce Way is located in Lynnwood, the final city on the north end of the Seattle-MSA before continuing on to Everett, Bellingham, or Vancouver. Located at the junction of Interstate 5 and the north end of Interstate 405, Lynnwood is commonly known as the retail center of Snohomish County because of all the retail shopping there. The main retail center is Lynnwood is Alderwood Mall, which is Snohomish County's largest mall and one of the major retail centers in the Puget Sound region. The city is also a mix of urban and suburban living and home to many professionals who work in Seattle. The property is located within the Alderwood Manor neighborhood, which is an urban neighborhood located north of Seattle in the city of Lynnwood. Alderwood Manor real estate is primarily made up of medium sized (three or four bedroom) to small (studio to two bedroom) single-family homes and apartment complexes/high-rise apartments. Most of the residential real estate is occupied by a mixture of owners and renters. Many of the residences in the Alderwood Manor neighborhood are established but not old, having been built between 1970 and 1999. A number of residences were also built between 1940 and 1969.

18526 Fales Road is located in Snohomish, a city in Snohomish County which prides itself on its historical downtown and was once known as the "Antique Capital of the Northwest". The historic business and residential center of the town constitutes the Snohomish Historic District, which is listed on the National Register of Historic Places. Many houses bear plaques with the year the house was built and the name of the family or individual who originally occupied it. The property is located within the Cathcart / Clearview neighborhood of Snohomish, which is a suburban neighborhood located northwest of Seattle in the city of Snohomish. Cathcart / Clearview real estate is primarily made up of medium sized (three or four bedroom) to large (four, five or more bedroom) single-family homes and mobile homes. Most of the residential real estate is owner occupied. Many of the residences in the Cathcart / Clearview neighborhood are established but not old, having been built between 1970 and 1999. A number of residences were also built between 1940 and 1969.

4315 Sunnyside Boulevard is located in Marysville, a city known as the "The Strawberry City" because it was once surrounded by numerous strawberry farms. The city has seen significant residential, commercial, and industrial growth in the last decade. In 2011, the 364th Expeditionary Sustainment Command of the U.S. Army Reserve moved into a new facility in Marysville, from Fort Lawton, which was closed as a military facility in Seattle. Employment and demand associated with the naval station in nearby Everett and its support facilities also play an increasing role in the local economy. Newer shopping places in the area include the Seattle Premium Outlets, located within Tulalip, on the west side of I-5. A new shopping center near there includes a Kohl's, Ross, and WinCo grocery store. The property is located within the 43rd Ave SE / 38th St SE neighborhood of Marysville, which is a coastal suburban neighborhood located northeast of Seattle in the city of Marysville. 43rd Ave SE / 38th St SE real estate is primarily made up of medium sized (three or four bedroom) to large (four, five or more bedroom) single-family homes and mobile homes. Most of the residential real estate is owner occupied. Many of the residences in the 43rd Ave SE / 38th St SE neighborhood are newer, built in 2000 or more recently. A number of residences were also built between 1970 and 1999.

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