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Project Summary

Diversified Lending Solutions ("DLS") has been retained as the exclusive advisor to Boundless Properties (the "Sponsor") to obtain programmatic funding to finance Phase 1 of a 3-Phase planned urban development in Jonesborough, TN. Phase 1 of the Hulse Road Estates consists of the 4 single family homes ("the, "Project"), and the entire development will be comprised of 11 single family homes (the "Property"). The homes in Phase 1 the will each total roughly 1,870 +/- SF, and include 3 bedrooms, 2 bathrooms, and an oversized 550 +/- SF garage situated on an at least 1 acre of land. Phases 2 and 3 of the project will be comprised of four and three similarly-designed single-family homes, respectively.

The Property

The Project will benefit from energy efficient design and high-end amenities, including a one-story floor plan preferred by 55+ purchasers. Other features will be large, unfinished daylight basements, oversized garages with work and storage space, stainless steel appliances, USB-enabled outlets throughout.
Jonesboro, TN is centrally located between Bristol, Knoxville, and Kingsport, TN and home to East Tennessee State University, a school of 12,000 students and a major medical school and teaching hospital. The Property area is in a suburban neighborhood that offers convenient access to the corporate offices of Siemens, Eastman Chemical, American Water Heater and numerous employers in the region. Jonesboro benefits from a crime rates and unemployment rate that are below the regional and national averages, and a population that is 56% married, 73% homeowner, and a median income of $50k.

Background

The Sponsor acquired the Property in November 2021 for $443,643 and has invested an additional $60K into soft costs and horizontal development. The Sponsor is already in possession of all necessary approvals and permits for vertical construction of the homes included in Phase 1. Site work at the Property has already commenced and most of the needed soft cost expenditure for the Project is already underway. The Sponsor has already paid the power board to move electric lines and put in pedestals for underground power to the homes. No roads are required because all of the lots have road frontage and all of the properties will have septic.

Business Plan

The projected timeline is 9 to 12 months for completion of the Phase 1 vertical construction. The Sponsor's business plan is to build each of the homes for an all-in cost of $162/SF and sell the completed homes for $263/SF. The senior loan request for Phase 1 represents 70% of total cost and 61% of the completed value. Loan proceeds will be used to fund the vertical hard costs and closing costs.

Sponsor

The Sponsorship team is comprised of experienced real estate investors in the south who have invested in over 900 units of multifamily properties, and successfully fix-and-flip single family homes. The Sponsorship team also has extensive experience managing new construction projects as a principal and a third-party service provider through a principally-owned construction company. Construction experience has ranged from commercial to residential, and includes successfully development of over a dozen new construction homes throughout Tennessee and several commercial buildings.

JONESBOROUGH: A TOWN OF ARTISTS

The Property is located in the Jonesborough, Tennessee, near to where Tennessee State Route 93 and Tennessee State Route 81 intersect South of Kingsport, north of Jonesborough and northeast of Greeneville. The town is part of the Johnson City Metropolitan Statistical Area, which is a component of the Johnson City–Kingsport–Bristol, TN-VA Combined Statistical Area – commonly known as the "Tri-Cities" region
Jonesborough is noted for being a town of professionals, sales and office workers, and managers. There are especially a lot of people living in Jonesborough who work in management occupations (15.08%), sales jobs (12.81%), and office and administrative support (10.06%). Jonesborough also has the distinction of having more artists, designers and people working in media than 90% of the communities in America and this concentration of artists helps shape the town’s character. A relatively large numbers of people (12.76%) in the workforce are knowledge-based, white-collar professions who telecommute and work from home.
In terms of college education, Jonesborough is substantially better educated than the typical community in the nation. Approximately 31.86% of adults in Jonesborough have a college degree compared to the national average of 21.84% holding a bachelor's degree or graduate degree.
Area amenities include the International Storytelling Center, the Jonesborough Historic District, and the Appalachian Mountains which provide opportunities for hiking/backpacking, cycling, hunting, fishing, caving and a host of other outdoor activities.

THE PROPERTY AREA: FALL BRANCH

In the Fall Branch neighborhood where the Property is location, 42.0% of the working population is employed in executive, management, and professional occupations. The second most important occupational group in this neighborhood is manufacturing and laborer occupations, with 25.9% of the residents employed.
The combination of top public schools, low crime rates, and owner-occupied single-family homes, make this neighborhood among the top 5.6% of neighborhoods in Tennessee. The Fall Brach Neighborhood is also noted for having a higher concentration of married couples living here than 97.5% of all U.S. neighborhoods. Whether they have school-aged children or not, married couples are the rule in the Fall Branch neighborhood, and the per capital income for a family of four is $118,468.