2. InvestorPresentation
Fund Summary
PBRELF I invests in short-term, first lien notes
issued against real estate projects in the Pacific
Northwest (Washington, Oregon, Idaho) with
Seattle as the core market
The goal of PBRELF I is to provide investors with a
high-yield debt investment while minimizing the risk
of principal loss and maintaining near-term liquidity
Roughly $127.8M in assets under management
2
3. InvestorPresentation
Background
Pyatt Broadmark Management, LLC (“PBM”) launched the
PBRELF I in August 2010 in partnership with Broadmark
Capital, LLC, a FINRA member broker-dealer established in
1987
PBRELF I is satisfying an unmet need in the US credit market
by providing short-term loans secured by real estate to home
builders, developers, real estate investors and businesses looking
to expand real property facilities
Since launch, PBRELF I has written 288 loans and has delivered
an annualized return since inception of 11.77% to investors
3
4. InvestorPresentation
Fund Advantage vs Individual Loans
Provides a high benefit to cost way to invest in loans
Investor has no “front end” work qualifying loans
Consistent and proven management team monitors each
loan and addresses and cures defaults
Offers a diversified loan portfolio with well over 100 loans
Measurable performance with a 4+ year history
Fund offers either monthly interest paid by ACH or
automatic reinvestment
Audited financial statements and monthly reporting
4
5. InvestorPresentation
Why Pyatt Broadmark:
Seasoned team with proven management structure
No leverage
First position, senior secured loans only
Consistent Performance
Personal guarantees required of borrowers
Rigorous underwriting standards (see next page for specifics)
Max Loan to Value: 65%
Regionally focused in the Pacific Northwest
5
6. InvestorPresentation
Underwriting Process
Our team adheres to a strict underwriting process
Documents necessary prior to underwriting
6
From Borrower
Credit Application
Operating Agreement
Business Financials
Business Tax Returns
Guarantor Financials
Guarantor Tax Returns
Collateral Confirmation:
Independent Appraisal Report
Preliminary Title Report
Purchase & Sale Agreement
Itemized Budget Review
Building Permit, Plans, Specs
Borrower’s Marketing Plan & Material
Tax Records & Property Info
7. InvestorPresentation
Investor Terms
The Fund raises capital through the issuance of membership
interests in a limited liability company
$100,000 minimum investment with the current capacity to
accept up to $5M per month
Investor return:
Investors receive 20% of origination fee income, and 80% of
interest income (less direct fund expenses, e.g. taxes and audit). The
balance represents management fees and operating costs.
Monthly cash distributions paid directly to investor’s bank account
Redemption option after 1 year; then quarterly
7
8. InvestorPresentation
Monthly Cash Distributions
8
Historical Cash Distributions through June 2015
Note: Return data as of June 30, 2015. Assumes reinvestment.
2010 2010
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Return
0.98% 0.95% 0.90% 0.33% 0.90% 0.81% 4.13%
2011 2011
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Return
0.94% 0.85% 0.97% 0.84% 0.93% 0.96% 0.89% 0.92% 0.88% 0.88% 0.92% 0.87% 0.90% 11.40%
2012 2012
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Return
0.94% 0.99% 0.93% 0.90% 0.95% 1.00% 0.87% 0.95% 0.94% 0.88% 0.98% 0.91% 0.94% 11.84%
2013
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Return
0.95% 0.90% 0.94% 0.94% 0.94% 0.97% 0.93% 0.93% 0.95% 0.99% 0.91% 1.37% 0.98% 12.35%
YTD
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Return
0.95% 0.84% 0.85% 0.92% 0.95% 0.96% 0.92% 1.06% 0.97% 1.00% 0.94% 0.95% 0.94% 11.92%
YTD
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Return
0.99% 1.00% 0.97% 0.95% 0.97% 0.93% 0.97% 5.95%
2013
2014
2015
10. InvestorPresentation
Loan Economics
10
Loan economics:
Avg. Life of Loan 8.6 months
Avg. Origination fee 3.5%
Avg. Interest rates 12.3%
Annualized loan return target 18% to 20%
Out of 327 loans written across both funds, only three have been put into
foreclosure.
Of these foreclosures, two have been completed with no loss of principal.
The third, a strip center in Spokane, WA, is recently REO (real-estate owned).
PBM has engaged a commercial real estate brokerage firm to fill vacancies
and sell the property. Principle owed at the time of foreclosure was 64.3% of
appraised value.
11. InvestorPresentation
Current Loan Portfolio: Snapshot
11
Current portfolio
133 loans
Face value of $139.5M
Appraised collateral of $241.8M
Repaid portfolio
155 repaid loans
Face value of $83.10M
Appraised collateral of $143.3M
Max Loan
to Value:
(65%)
Current
Portfolio Loan
to Value
58%
Borrower
Equity 42%
PBRELF I
12. InvestorPresentation
Why does this opportunity exist?
12
Historically these types of loans were offered by regional banks
“ … Private builders have traditionally relied on small or regional banks for funding. But many of those lenders
stopped making loans for construction and development during the financial crisis and have been slow to
resume. More than 480 banks have failed since the beginning of the downturn, according to the FDIC …”
Robbie Whelan and Dawn Wotapka, WSJ, July 15, 2013
As a result of the real estate downturn, the remaining regional
banks were left with too much real estate on their balance sheet
Surviving regional banks have completely discontinued this type of
lending due to Dodd-Frank
“Small banks have responded to the increased regulatory burdens by shrinking the products and services they
offer” and “94% will not be adding new services as a result [of Dodd-Frank]” “highlighting the
disproportionate effect Dodd-Frank [had] on small banks”
Barbara S. Mishkin, CFPB Monitor, May 5th 2014
Traditional lenders have become strictly cash flow lenders as
opposed to asset based lenders.
13. InvestorPresentation
Why does this opportunity exist?
13
Equity partners take a big bite out of profits
Outside equity partners demand to be paid first
Outside equity partners still require coupon payments
50% or more of the profits
Banks may not be able to lend in the future
“Four years into Dodd-Frank, its become less possible for [local banks] to do it all, this is the year
they’ll feel the most impact”
Abha Bhattarai – Washington Post, February 7, 2014
The outlook on construction activity and demand for our loans
looks strong
“[New home construction] starts sit well below the 20-year average of 1.4 to 1.5 million a year.
That means there could be lots of improvement ahead.”
David Englander – Barron’s, June 7, 2014
14. InvestorPresentation
Reporting and auditing
14
The Fund is valued and reported to investors monthly
All sales through 25 year old FINRA broker-dealer
Fund audited by Bader Martin P.S., Seattle, WA, a large
regional CPA firm
2014 audit is available for review
Loan recording numbers available for independent review
Loan files available for inspection in our office
Multiple investor references
15. InvestorPresentation
Risk Factors & Disclaimers
Prospective investors should be aware that an investment in PBRELF I is speculative and involves a high degree of
risk. Identified risks include a dependence on senior management, the quality and quantity of potential loans available
given the Fund’s stated investment criteria, real estate valuations and market dynamics, borrower risks, interest rate risk,
regulatory risk. Additional risks and uncertainties not presently known to Pyatt Broadmark Management, LLC (“PBM”),
manager of PBRELF I, or to affiliate, Broadmark Real Estate Management (“BREM”), or which PBM currently deem
immaterial, may also have an adverse effect on the performance or success of PBRELF I. In particular, the Fund’s
performance may be affected by changes in market or economic conditions and in legal, regulatory and tax requirements.
Loans in PBRELF I are considered Level III assets, meaning there is no active secondary market and no observable
pricing mechanism. PBRELF I does not anticipate a secondary market for these loans developing. Thus, pricing of loans
is at par unless the loan is impaired. An immediate 10% write down against all capital accounts is taken on any loan in
default. Income is distributed or reinvested monthly.
This material has been prepared as a matter of general information. It is not intended to be a complete description of any
security or Fund mentioned and is not an offer to buy or offer to sell any security. All facts and statistics are from
sources believed reliable, but are not guaranteed as to accuracy. Some of the information in this document may contain
projections or other forward-looking statements regarding future events or the future financial performance of the
PBRELF I. We wish to caution you that these statements are only estimates and that actual events or results may differ
materially. Broadmark Capital, LLC has been engaged by Pyatt Broadmark Management, LLC, manager of PBRELF I,
to assist in raising capital for PBRELF I. Broadmark has also been engaged by Broadmark Real Estate Management
(BREM) to assist in raising capital for Broadmark Real Estate Lending Fund II (Fund II). BREM manages Fund II in a
manner similar to PBRELF I, with an exception being a focus on the Mountain West region. Broadmark will receive a
cash commission upon success. For further detail, please see the complete set of closing documents.
Broadmark Capital, LLC – July 2015
15
16. InvestorPresentation
Risk Factors & Disclaimers, cont.
The Pyatt Broadmark Real Estate Lending Fund I (“PBRELF I”) units may be sold only to “accredited investors,”
which for natural persons are investors who meet certain minimum annual income or net worth thresholds; the units
are being offered in reliance on an exemption from the registration requirements of the Securities Act and are not
required to comply with specific disclosure requirements that apply to registration under the Securities Act; the
Securities and Exchange Commission has not passed upon the merits of or given its approval to the units, the terms
of the offering, or the accuracy or completeness of any offering materials; the units are subject to legal restrictions
on transfer and resale and investors should not assume they will be able to resell their units; investing in units
involves risk, and investors should be able to bear the loss of their investment; the units offered are not subject to
the protections of the Investment Company Act; the performance data presented here represents past performance;
past performance does not guarantee future results; current performance may be lower or higher than the
performance data presented; PBRELF I is not required by law to follow any standard methodology when calculating
and representing performance data; the performance data may not be directly comparable to the performance of
other funds or investment products; performance presented here are net of fees, assumes reinvestment, is current as
of July 30, 2015, and is based on the Fund’s inception August 1, 2010.
Broadmark Capital, LLC – July 2015
16
17. InvestorPresentation
Borrower Testimonials
17
Economics
“PBM has financed numerous development, construction, and rehab loans for us. Their
ability to close a loan quickly combined with their prompt draw funding has allowed us to
make bargain purchases and take advantage of vendor and subcontractor discounts.”
Opportunity Cost
“I really appreciate all you did for us. Having our original construction loan mature before
we qualified for conventional financing could have cost us our business. You stepped up
and helped us. I would recommend you in the future without hesitation!”
Customer Service
“Pyatt Broadmark separates themselves by doing what they say they are going to do. I have
worked with other private lenders and they do not compare to the service and execution that
Pyatt Broadmark delivers. They will always have a first right of refusal on my future projects.”
“Being a young developer/builder I encounter a lot of challenges. Pyatt Broadmark has been a
valuable business partner to have through the process of guidelines, budgeting, and
management. I know that I can pick up the phone and call these guys at a drop of a hat and
they will always respond and assist me with whatever I need .”
18. InvestorPresentation
Team Bios
Jeffrey Pyatt, Founder: Mr. Pyatt has served as Chairman, CEO, or President of several Northwest companies
over the last 22 years, in addition to leading in various capacities within the community.
Mr. Pyatt is an owner of Private Lenders Group, a private lending fund based in Bellevue, Washington. Mr. Pyatt
served as President and CEO of Pacific Financial Services Corporation from July 1994 through March 1999. Pacific
Financial was an asset-based lender located in Bellevue, Washington. Mr. Pyatt built Pacific from a start-up to being
a leader in its market, before orchestrating the successful sale of the company.
After receiving his undergraduate degree in accounting and a Master of Taxation degree from the University of
Denver, Mr. Pyatt joined the tax department of Moss Adams, a regional CPA firm in Seattle. After leaving public
accounting, Mr. Pyatt was involved in a number of acquisitions, dispositions and turn-around of companies in the
Northwest. These companies had revenues ranging from less than $1 million to more than $700 million, both
privately and publicly held.
He has also participated in the initial financing rounds of a number of telecommunications companies and currently
serves as a Director of 911 ETC, Inc.
Mr. Pyatt is active in the community, both civically and politically. He has served on the boards of three Boys and
Girls Clubs in King County since 1984 and other charitable boards. He is a past President of Park Hill Rotary of
Seattle and Eastside F.C. He currently serves on the board of directors of King County Sexual Assault Resource
Center and is a founding member of Lake Washington Velo.
18
19. InvestorPresentation
Team Bios
Joseph Schocken, Founder Mr. Schocken is the founder and president of Broadmark Capital, LLC and its
predecessor, Broadmark Capital Corporation. He is an honors graduate of the University of Washington and holds an
MBA from Harvard University. He holds Series 7, 24, 63 and 79 FINRA registrations.
With over 30 years as an investment banker, Mr. Schocken has extensive knowledge of the financial services industry and
established relationships with both strategic and institutional investors in the United States and internationally. These
projects have included private placements, debt offerings, mergers, asset purchases and public offerings in a broad array
of industries including technology, life science, broadcasting and travel. Prior to forming Broadmark Capital in 1987, Mr.
Schocken was a partner in several private investment banking firms, including a small New York Stock Exchange
member firm where he managed the corporate finance and real estate departments.
Throughout his career as an investment banker, Mr. Schocken has also been an active private investor and has worked
with a number of exceptional entrepreneurs. As an investor, board member and mentor, Mr. Schocken has played a
pivotal role in the development of numerous significant enterprises. Notable examples include Bennett Environmental
(AMEX: BEL), Optiva (acquired by Phillips) and Universal Access, Inc. (NASDAQ: UAXS), HipCricket, Inc., and
Omeros Corporation (NASDAQ: OMER). In each case, Mr. Schocken served as an influential advisor to management in
the development of a capital formation strategy that positioned the company for growth. Broadmark Asset Management
Company, which he helped form, received both direct investment and a $100-million allocation from CALPERS in 2000.
In addition, Mr. Schocken is significantly involved in national economic policy development, playing a major role in the
2012 JOBS Act. He is a member of the National Advisory Board of the Democratic National Committee and an avid
cyclist.
19
20. InvestorPresentation
Team Bios
Adam Fountain, Managing Director Mr. Fountain graduated with a B.A. in International Relations from Stanford
University in 2001. He holds Series 7, Series 63, Series 66 and Series 79 FINRA registrations. Mr. Fountain's responsibilities
at Broadmark include investor and client sourcing, and transaction management across all of Broadmark's focus areas
including life sciences, technology, new media, middle market, real estate, telecommunications and financial services. His
current interests include life science companies that have demonstrated proof of concept, particularly drugs with clinical data
and devices with at least animal data, and some mitigation of risk, e.g. shortened regulatory paths, 505(b)2, etc. Areas of
interest in technology include SaaS, new media, and any revenue generating high growth companies. Responsibilities also
include all activities related to Broadmark's merchant banking function: identifying and qualifying potential direct investments
and producing Broadmark white papers. In addition to these responsibilities, Mr. Fountain is a part owner of Pyatt
Broadmark Management, LLC and responsible for their investor relations and fund management. He also has a significant
support role for Broadmark relating to regulatory compliance.
Prior to joining Broadmark, Mr. Fountain was an Associate at L.E.K. Consulting in Los Angeles, CA from 2001 through
2003, an international strategic consulting firm headquartered in London. While at L.E.K., he worked primarily in the life
sciences practice. Key projects included developing a product marketing and distribution strategy for an established European
pharmaceutical company, formulating a product development and partnering strategy for a start-up biotechnology company,
and preparing for the likely adoption of a new product in the medical device industry.
Outside of Broadmark, Mr. Fountain was a co-founder of WINGS: The Washington Medical Technology Angel Network,
and formerly served as a Director. In addition to his role at WINGS, he has served on the Executive Committee for the
WBBA’s annual life science conference for several years. He is active in his church and resides north of Seattle with his wife,
Emily, and their son, Samuel, and daughter, Stella. He enjoys riding his bike, cooking, brewing, fantasy baseball, and
beekeeping.
20
21. InvestorPresentation
Team Bios
Alan Seidner, Senior Consultant A graduate of University of Southern California School of Business, Seidner began his career with Merrill
Lynch and then joined Security Pacific Bank as a Trust Investment Officer responsible for several large investment advisory accounts.
Thereafter, he served as the Senior Government Securities Sales Representative in the Investment Department of the Bank for National
Accounts. In 1980, Seidner formed his own investment management and consulting firm, Seidner & Company, Pasadena, CA, managing
investment portfolios in excess of $700 million. Seidner & Company’s client roster included healthcare organizations, high net worth private
investors, major corporations, non-profit institutions and municipalities. In 1998, Seidner & Company ceased and its clients were invited to
become clients of Fiduciary Trust International of California (FTIC). From 1998 until 2002, Seidner was an independent consultant and a
Senior Consultant to FTIC and its parent, Fiduciary Trust International, which merged with Franklin Resources, parent of Franklin
Templeton. From October 2002 to June 2004 he served as a Senior Vice President with FTIC with business development and client service
responsibilities. From 2005 thru 2007, Seidner was a Senior Vice President at Denver Investment Advisors. Currently he is a Senior
Consultant for Client Development with the Pyatt Broadmark Real Estate Lending Funds. He holds Series 7 and Series 63 FINRA
registrations.
As an author, Seidner has written financial reference works, including: Corporate Investments Manual: Short & Intermediate Term Fixed
Income Securities (Warren Gorham & Lamont Publishers, January 1989), which was used as a course text by the American Management
Association. He co-authored with William O. Cleverley, Ph.D., Professor of Finance at Ohio State University, Cash and Investment
Management for the Healthcare Industry (Aspen Publishing, November, 1989). He co-authored, with John Zietlow, Ph.D., a former
Professor of Finance at Indiana State University, and JoAnne Hankin, former Vice President, Finance at the UCLA Foundation, Financial
Management for Nonprofit Organizations (John Wiley & Sons, Inc., May 1998) and Financial Management for Nonprofit Organizations:
Policies & Practices (John Wiley & Sons January 2007). He also co-authored Cash & Investment Management for Nonprofit Organizations
with John Zietlow, Ph.D. (John Wiley & Sons April 2007).
He has served as a speaker on investment techniques and strategies at prominent financial conferences, such as those of The American
Institute of Certified Public Accountants, as well as at the Graduate Schools of Business of Duke University, Ohio State University, the
University of California (Berkeley), the University of North Carolina and the University of Southern California. Seidner has also provided
testimony before Federal Government agencies on the measurement of pension fund investment performance.
21
22. InvestorPresentation
Team Bios
Geir Watland, Senior Consultant Mr. Watland is an independent contractor representing Broadmark Capital and
the Broadmark Real Estate Fund family as a strategic marketing consultant and is an instrumental part of
Broadmark’s business development efforts. Through his consulting firm, Viking Financial Consulting, Mr. Watland
has assisted a number of asset managers including numerous hedge funds, fund of hedge funds and our own real
estate lending practice and has provided consultancy to a number of institutional and individual investors.
Mr. Watland began his career with the National Association of Securities Dealers (Now FINRA). He has since
worked with Canterbury Consulting, Bank of America/US Trust, BlackRock/Merrill Lynch Investment Managers,
Russell/Mellon Analytical Services and Rainier Investment Management in a variety of capacities including sales,
marketing, institutional client relations and consulting. In these roles Mr. Watland has built networks of investors
and asset managers in multiple countries.
Mr. Watland holds dual degrees in Business Administration and Economics from the University of Washington. He
also holds the Chartered Financial Analyst designation, the Chartered Alternative Investment Analyst designation
and the Series 7, 63 and 65 securities licenses.
22
23. InvestorPresentation
Team Bios
Joanne Van Sickle, Controller Ms. Van Sickle has served as Controller for Private Lenders Group since 2005.
Ms. Van Sickle began her career in 1983 as a CPA in the auditing department of Touche Ross.
Between 1991 and 2004, she maintained a private accounting practice, working with small companies, mainly in the
construction, real estate, and retail industries.
She continues to act as the part time administrator for The Glaser Foundation, a local private foundation with $15
million in assets, a position she has held since 1991. The foundation makes up to 100 grants each year to local
charitable organizations providing direct line services, primarily to children and the elderly in the Pacific Northwest.
Ms. Van Sickle has lived in Bellevue since 1985 with her husband and three sons. Her two older sons are now
serving in the US Navy.
23
24. InvestorPresentation
Team Bios
Bryan Graf was born and raised in Central Washington, surrounded by a family actively involved in the real estate
business there. At the University of Washington, he earned a Bachelor of Arts in Business Administration with a
focus on finance and marketing. He also successfully completed a sales certificate program through the UW’s
Foster School of Business and was part of the Undergraduate Management and Consulting Association. Bryan is an
alumni of University of Washington’s Beta Theta Pi fraternity.
Before joining Pyatt Broadmark Management, LLC, Bryan spent 3 years at Ewing and Clark, Inc., managing the
personal real estate portfolio of the owner and specialized in leasing. This portfolio includes multi-family, mixed-
use, and commercial buildings throughout the greater Seattle area.
Bryan is a licensed real estate broker in Washington State and is in the process of obtaining the CCIM (Certified
Commercial Investment Member) designation. He currently lives in the Queen Anne neighborhood of Seattle and
is a Tyee season ticket holder to University of Washington football. In his spare time he plays golf, basketball, and
skis. Bryan recently joined the Board of Directors at the Wallingford Boys and Girls Club
(http://www.wallingfordboysandgirlsclub.org/) and will continue developing the Club’s success and help it remain
fiscally healthy.
24
25. InvestorPresentation
Sample Loan Profiles cont.
Seattle, WA - Loan 2013-001
In January 2013, the Fund wrote a $325,000, first position construction loan for a single
family residence on Beacon Hill in Seattle, WA. Borrower had financed the lot in 2008,
anticipating a construction loan. The borrower’s bank stopped all construction lending in
2008 and has not restarted. The home appraised for $500,000 and will be a modern five
bedroom, 2,448 s.f. home. Modern homes are the hottest segment of Seattle's market
currently. Borrower has two guarantors. One is a highly respected and successful real
estate agent with outstanding credit and a high net worth. Last year he and his team sold
more than 150 homes in the metro area. He has both represented and referred borrowers
to the Fund. We consult with him regularly when evaluating real estate in south
Seattle. The second guarantor is an experienced, reputable builder and also has strong
financials and credit. The real estate agent and builder partnership allows our borrower to
build a product that has market demand increasing the likelihood of a fast sale of the
completed home. If the home does not sell in a reasonable amount of time, both
guarantors qualify for conventional financing which provides a secondary exit for the
Fund.
25
26. InvestorPresentation
Sample Loan Profiles cont.
Kennewick, WA - Loan 2013-003
In January 2013, the Fund wrote two $243,750 first position construction loans for two
four-plex apartment buildings in Kennewick, WA. Each apartment unit is a 2 bedroom, 2
bathroom, two story town home, and roughly 950 s.f. All units have a gas fireplace and
washer/dryer. Rents are expected to be $950-$1,000/unit. The Tri-Cities vacancy rate was
reported to be about 1% in 2012 according to a local Kennewick real estate agent.
Borrower has constructed this same building more than 400 times in Idaho and
Washington. His unique design has been copyrighted. In May 2011, PBRELF I previously
wrote a $470,000 construction loan for two buildings of the same design across the street
from our subject properties. Both of these four-plex buildings sold for $375,000 each in
June of 2012. Despite an appraised value of $420,000 on our current subject properties,
PBRELF I valued the buildings at the June 2012 comparable sales price of $375,000. The
guarantor has a solid net worth and opted to use PBRELF I because of how much more
responsive we were than his bank. He felt the cost associated with waiting for his bank to
underwrite his loans exceeded our incremental financing cost.
26
27. InvestorPresentation
Sample Loan Profiles cont.
Spokane, WA - Loan 2013-012
In May 2013, the Fund wrote a $2,600,000 bridge loan secured by a first position deed of trust on a
commercial retail center in Spokane, WA. The subject building has a commercial MAI (Member of the
Appraisal Institute) appraised value of $4,000,000. This is a 65% loan to value ratio. In addition, the
Fund took a secondary deed of trust on additional collateral which consists of an office building
located across the street from a major shopping center. This building appraised for $870,000 with
underlying debt of $505,000. The location of our center is described as "prime" because it is in the
Central Business District in Spokane, WA on a busy street (approx. 50,000 cars per day) near Gonzaga
University. The subject property is on 0.97 acres with total rentable space of 11,644 s.f. As part of the
loan, PBM also provided the borrower with $60,000 for tenant improvements, enabling him to satisfy
the requirements of signed letters of intent (LOIs) to fully lease the building. When the building is
fully occupied with total gross rents of roughly $26,000 per month, the borrower will have the ability
to meet necessary debt coverage ratios to obtain conventional financing, enabling him to pay off our
loan. This is an example of how the Fund is able to provide bridge financing for an income producing
property, versus custom construction and other types of loans. This loan enables the Fund's borrower
to get a property fully-leased, maximizing gross rental income and the likelihood of long-term
financing from a more conventional lender.
27
28. InvestorPresentation
Sample Loan Profiles cont.
Loan 2013-018, Portland, Oregon
In August 2013, the Fund wrote a $240,000 1st Deed of Trust
construction loan in Portland, Oregon. The plans were for a 2-story, 3
bedroom, 2 bathroom 1,910 square foot modern, contemporary style
build, inspired by the modern architecture that had been selling well in
Seattle. The loan's Guarantor, an owner of a successful commercial
plumbing company, wanted to increase his involvement as a builder
given his existing relationships and expertise within the field of new
construction.
Located in the College Place neighborhood, close to the University of
Portland and north of downtown Portland, the subject site is directly
across from a large city park and close to major transit lines. The
subject home had an "as completed" appraised value of $370,000,
giving our loan a 65% loan-to-value. At the home's completion, the
borrower received a full price offer within 3 days of being listed on the
market. The borrower paid off his loan to the Fund on January 27th,
2014, one full month prior to the date of maturity. This is an example
of how the Fund helped an emerging builder with a modern
construction plan realize his goals in the Portland residential market.
28
29. InvestorPresentation
Sample Loan Profiles cont.
Loan 2013-021, Mercer Island, WA
In September 2013, PBRELF I funded a $902,000 first position, land acquisition and construction
loan for a property located in Mercer Island, WA. The proposed project was a 4,078 SF, 5 bedroom,
4 bathroom, 3 car garage, contemporary single-family home. The borrower is a talented builder, and
constructs homes of the highest quality, incorporating excellent finishes and trim work. The subject
lot is on 9,150 SF at the end of a cul-de-sac. When the loan was first underwritten, the “as
proposed” house appraised at $1,550,000, resulting in a 58% LTV. In April 2014, the newly
29
constructed home was completed on time and
within budget. On 04/27/14 the house was
listed for $1,895,000, and the real estate agent
reported that 60 individuals attended the first
“open house”. The Fund’s borrower received an
all cash offer within days of the open house and
quickly arrived at a mutually accepted purchase
and sale agreement for $1,840,000. This case
study illustrates how a quality builder in a
desirable location can achieve a very healthy
profit using private funding.
30. InvestorPresentation
Sample Loan Profiles cont.
Loan 2014-009, Kent, Washington
In February 2014, PBRELF I wrote a $175,000 first position deed
of trust loan on a Kent, WA property located close to HWY 516,
Lake Meridian and an elementary school. The property is to be
subdivided so that two existing tax parcels become three finished,
buildable lots measuring 7,600 SF each. The development costs
associated with subdividing and finishing the lots will be covered
by the funds in the construction holdback portion of the
loan. The borrower has a mutually accepted and signed purchase
and sale agreement from an accredited builder, under which he
will receive $127,500 per lot ($382,500 total) upon completion of
the development work. PBRELF I’s third party appraisal verified
the finished lot value of $127,500 resulting in a development loan
with a modest 45.75% LTV. The borrower has done a number of
development projects in the Kent Valley and is well known within
the community. Additionally, a separate individual, who has an
excellent credit score of 794, has signed as guarantor on the loan.
30
31. InvestorPresentation
Contact Info
31
Adam J. Fountain
Broadmark Capital, LLC
1800 One Union Square
600 University Street
Seattle, WA 98101
(206) 623-1200, x120
afountain@broadmark.com
