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Looking for Opportunity Zone Investments

Let’s suppose you were one of the very first employees of Pinterest. The company goes public, and your stock options suddenly generate a huge financial windfall. (Don’t you have to wait two years before you can sell your shares?) My point is that while you now have tons of cash, you are facing a huge, taxable capital gain on the sale of your shares. The regional manager of the IRS is rubbing his hands in glee.


Q: How do you catch a unique rabbit? 

A: Unique up on it. 

Q: How do you catch a tame rabbit? 

A: Tame way.


Now if you had sold an apartment building and enjoyed a similar gain, you could have rolled your capital gain into a new property and postponed the taxes (1031 Exchange). Unfortunately, your Pinterest shares are not real estate. You can’t do a 1031 exchange. Darn!

But wait! What about Opportunity Zones? The thing about Opportunity Zone investments is that you can take capital gains from the sale of other investments - stocks, bonds, and other personal property investments - and roll them into real estate investments in low-income areas and thereby postpone paying taxes. If you hold the property long enough, you can avoid paying capital gains taxes altogether.

Opportunity Zones were created as a result of the 2017 Tax Cuts and Jobs Act, and are now in all 50 states as well as Puerto Rico, American Samoa, the Northern Mariana Islands, the Virgin Islands and Guam. By definition, they are distressed areas that now enjoy a federal tax incentive designed to promote long-term investment in those areas that require help rebuilding. Tenants have moved out; buildings and areas are in disrepair. These blighted areas are generally not attractive to commercial institutional investors.


Earn 12% Interest By Investing in First Trust Deeds


You probably have money set aside for your retirement and for the cost of college for your children and grandchildren. It shouldn't all be invested in the stock market. In California, the first trust deed investment business is huge. A recent law change - the JOBS Act - now allows accredited investors nationwide to also invest in these same first trust deeds and first mortgages.

Please click here to receive investment offerings.


One of the requirements of earning a designation as an Opportunity Zone is that the area includes a poverty rate of at least 20%. It all ties back to promoting sustainable economic growth for these areas, which was one of the main goals of the Tax Cuts and Jobs Act.

Is it really possible to avoid paying capital gains taxes entirely on the sale of your Pinterest shares? The longer an investor keeps his interest in an opportunity zone investment, the more tax reward he will receive. After five years, an investor will pay no taxes on 10% of his gains. After seven years, 15% of his gains will not be taxed. If he holds the investment for 10 years, he will avoid paying taxes on all of his gains.

Blackburne & Sons is now looking for small, opportunity zone investments. If you run across a small (less than $1.2MM) property investment in a low-income area, would you please contact Angela Vannucci at 916-338-3232. 


Apply for a Loan From Blackburne & Sons

Blackburne & Sons is looking for commercial real estate loans that are not quite clean enough for a bank. Please click here to submit a hard money commercial loan or call us at (916) 338-3232.


Interested in investing in an Opportunity Zone investment? Please contact Angela Vannucci immediately, and she will put you on the list. You definitely want to get in on the first deal. The investors in our first deals (farms, industrial property, equity for developers) always seem to hit the longest homes runs. No guarantees, folks. Just sayin’.

Speaking of first deals, there is still room available in the Marriott Fairfield Inn in Oregon. I was describing the deal to a buddy of mine, and I think that I really nailed the essence of it. “After completing his third hotel, this developer had probably gotten pretty good at building hotels. He has completed SIXTY of them!” Projected yield of 26.2%. Hellooo? Find the offering again below.

George Blackburne III, Esq.

Owner & President

Blackburne & Sons Realty Capital Corporation

4811 Chippendale Drive, Suite 101

Sacramento, CA 95841

P: (916) 338-3232

F: (916) 338-2328

CA DRE #829677

NMLS #103430

George graduated from law school with honors, and he is an attorney licensed in California and Indiana. He graduated from the University of Santa Clara with a BS in Finance and an MBA in Finance. He owns both Blackburne & Sons Realty Capital Corporation and C-Loans, Inc., the large commercial mortgage portal. He is also a California Real Estate Broker (License #00623143). 


Important Disclosures

Investing in first mortgages involves substantial risk. A severe and prolonged decline in real estate values is possible. Foreclosed property almost always needs substantial renovation, so be sure to maintain some liquidity. This is not an offer to sell securities. Such an offer is only made when accompanied by a Private Placement Memorandum.

He is Offering a Projected Annual Yield of 26.2%*
* on a simple interest, non-compounding basis.

This offering is NOT a first mortgage investment offering. It is an offer to invest in an equity participation in the construction of a Marriott Fairfield Inn in Roseburg, Oregon.1

Verified Accredited Investors ONLY
Exhibit A to Private Placement Memorandum
Version 2 - March 19, 2019


Class Number:
Initial Capital: $2,181,600
Net Equity Contribution: $2,000,000
Minimum Participation : $10,000
Call For Availability Of Smaller Participation

Type of Investment : Cash Flow Property
Anticipated Holding Period: 7 years

Important Links:
Private Placement Memorandum
Additional Risks of Construction
Subscription Agreement
Suitability Requirements
Audited Financial Statement for B&S
Inventory of Available Loans
To Be Added to Our Investor Email List


Property Address:
3101 NW Boulder Drive, Roseburg, OR 97471
This is a proposed development of a 94-room hotel under the Marriott Fairfield Inn brand.

For an aerial view of this property...Click Here!
For a street view of this property...
Click Here!


Term of Investment
84 Months
Projected Annualized Rate of Return
Acquisition Fee*
Class Management Fee (annual)**
*Payable to Blackburne & Sons at time of acquisition
**% of Initial Capital


Net Equity Contribution
8% Syndication Fee
1% Asset Management Fee (Year 1)
Total Initial Capital
Land Acquisition (To be completed May 2019)
Other Hard Costs (including contingency)
Soft Costs (including contingency)
Total Costs
Proposed Construction Loan 65%
Sponsors Equity Contribution 12.7%
Blackburne & Brown Equity Preservation 12.7%
Investment Group (TBD) 9.6%
Loan Amount
Construction Interest Rate
Permanent Loan Interest Rate
25 years
Monthly Payment Interest-Only Months 1-12
Monthly Payment Principal-Interest
PROPOSED Sale Price @ 9% Cap Rate


Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Total Cash Flow Distributions*
Pro-Rata Share of Projected Net Sale Proceeds
Net Profit/Gain on Investment**
Annualized Return on Investment**

*Net of asset management fee
**Net of profit share

Earn a $250 Referral Fee 
Refer accredited trust deed investors
for our mailing list.

To invest, please call Angela Vannucci
at 1-800-606-3232 or CLICK HERE.


George says, "This offering is projected to return in excess of 26% annually, on a simple interest, non-compounding basis. A very experienced hotel builder and developer is building a Fairfield Inn and Suites in Roseburg, Oregon. Still reeling from construction loan losses suffered during the Great Recession, banks today will not exceed 65% loan-to-cost. Therefore, in order to build a roughly $16 million hotel, the developer has to raise over $5.5 million in equity. The Blackburne & Brown Equity Preservation Fund (“EPF”) is endeavoring to raise approximately $2 million.”

“Because this venture is a new construction project, this investment involves substantial risk; however, if you are a wealthy, accredited investor, and you can afford to risk losing your entire investment, you should strongly consider this investment. There are two reasons. First, our developer, my wife’s cousin, is extraordinarily experienced. He has built on the order of 60 hotels from the ground up over the past 23 years. Secondly, this hotel is a cookie-cutter Fairfield In and Suites. The standard nature of these franchise hotels makes them much easier to design and cost. This materially reduces the risk. "

Blackburne & Sons is pleased to present this syndication offering as an equity contributor to the ground-up construction of a NEW Marriott-Fairfield Inn in Roseburg, Oregon. While this type of offering is different from other investment offerings in the past, the past performance and experience of the developer and the Marriott flagship caught the attention of Blackburne & Sons as an opportunity for our investors.

The return on this investment will come from two ways:

  • Cash distributions from operating income, after construction completion, estimated to be in 2020.

  • Gain on sale, after stabilized.

No income will be generated during construction and early start-up; therefore distributions from cash-flow are not forecasted to begin sooner than 18 months after the initiation of this investment. More on the cash-flow and distributions later in this offering.

Fairfield Inn is the second largest Marriott International brand, and the franchise is stated to be a proven performer poised for growth. Per the Fairfield Inn proposal, the current prototype is designed to deliver flexibility, whether the hotel is located in an urban, secondary or tertiary market. Franchise Hotel Performance, per Marriott, shows an average occupancy rate of 69.9% for their hotels and an average daily rate of $110.83. Key competitors are Hampton Inn, Holiday Inn Express and La Quinta.

The franchise brand is now celebrating 30 years in existence, and it boasts over 900 hotels worldwide. Fairfield Inn’s offer complimentary breakfasts, a “Corner Market” offering healthy grab and go items, a 600+SF fitness room and indoor/outdoor pool. Fairfield Inns also accept Marriott Rewards Members and allow members to redeem their benefits at other Marriott hotels.

Construction of the subject property has yet to commence. The sponsors/developers of this project are in the midst of obtaining the equity required to secure the desired construction financing, and subsequent take-out loan after construction is complete. The equity piece of the capital stack will be comprised of (1) the sponsors (more on them below), (2) Blackburne & Brown Equity Preservation Fund - Class 2019-02 (“EPF”), and (3) other investor(s) still to be determined.

Quick housekeeping matter: The Equity Preservation Fund is not a fund; rather it is a special Delaware master limited liability company. We have been using it for about 13 years. Drafting new LLC paperwork every time you create a new LLC involves an attorney, and it is expensive. Delaware allows sponsors like us to create a single master limited liability company, with a different class for each investment. Each class has all of the protections of a limited liability company, and it is financially-insulated from all other classes. One class could win the lottery, and another class could go bankrupt, and the creditors and investors of other classes cannot “jump the fence”. While our investors save some serious money on organizational costs, the State of Delaware still requires a franchise fee of around $800 per year from each class. It’s why they offer this special kind of LLC. Lastly, the name Blackburne & Brown Equity Preservation Fund was created originally to bring equity into over-leveraged properties, but the concept never caught fire. Investments in the Equity Preservation Fund do NOT go into a fund, and despite the name, there is no guarantee that your equity will, in fact, be preserved.

Back to the offering: Once the equity is secured, construction financing will be obtained. A lender has been conditionally secured, pending completion and approval of due diligence reports, as well approval of applicable permits and licenses. The initial review process of the loan has been approved by the loan committee, and due diligence reports are on track to submit for final lender approval by the end of April, 2019. Current terms of the financing offered is a 6.50% rate on the construction piece and 5.50% on the permanent financing. The first six-months of the construction loan will be interest-only payments. Payments thereafter, will be principal and interest payments until the loan is paid in full, which is projected to be in 2025 at the time the property is sold. Note that the FF&Es are included as hard costs in the construction budget and will not be financed, but purchased with the equity raised. Title to the property will be in the name of a newly formed limited liability company, Boulder5, LLC, an Oregon limited liability company. The members of Boulder5, LLC will include the two sponsors, the EPF and the other TBD investor(s). Ownership percentage in this LLC will mirror the capital contributions. An agreement between the members will exist to where repayment of each member’s capital will be outlined, along with provisions in the case of default.

Contrary to the capital contributions mirroring the ownership, distributions of cash-flow and net sale proceeds are allocated to 43% to the sponsors and 57% to the equity partners, i.e. EPF and TBD investors. This additional percentage to the sponsors is included for the sponsors liability associated with the personal guarantee required for the financing of the project, and the additional equity from each sponsor. The distribution structure of income will only come into play if EPF and TBD investors do not earn at least an annualized yield of 10% each year. For example, if in Year 2 the profits result in a 9% yield to EPF investors, the sponsors will reduce their distribution share (not to go below their 36% equity contribution). The sponsors state they are confident this provision is only a formality, as their projections (which sponsors state to be conservative) exceed the 10% annualized return each year. See CASH FLOW PROJECTIONS AFTER CONSTRUCTION in Section titled PRESENTATION OF OFFERING in your updated due diligence package dated March 19, 2019.

Per the updated construction budget and revised projections based on the conditional loan terms outlined above, the flow of distributions and return to the EPF may look like the following:

NOTE: The above is based on projections provided by the sponsors and were not confirmed by independent consultants. Additional costs will almost certainly be discovered as we approach the funding of the construction loan, but the final cost numbers should be reasonably close to the above because our builder-developer has unusual experience building franchise hotels.

In short, the plan for this project is to build, hold, operate for several years to reach stabilization, and then to sell. Per the sponsors, “REIT’s LOVE Marriott branded properties so they are the first go to on exit.” Projections reflect a sale in 2025 and assume a 9% cap rate, which reportedly a conservative cap rate for this type of property.

As for the franchise agreement with Marriott, the agreement is 20 years and is transferable to a new owner subject to Marriott’s approval.

While the plan and projections are important in an offering this of kind, experience arguably is equally important, if not more. The first sponsor, Alex Jensen, brings the construction experience to this deal. He has experience in constructing in excess of 60 ground-up hotels throughout the country over his 23 year span in the construction industry. (Think about that - 60 hotels. Impressive.) Historically it has been Mr. Jansen’s business to build franchise hotels, as the general contractor, for other developers. Three years ago, Mr. Jansen finally started building hotels for his own account. He developed a Residence Inn by Marriott in Hillsboro, Oregon. This was a 146 room property that opened in July 2016, this very successful venture produced an IRR of excess of 30%. Here is a link to Jensen’s bio, http://www.blackburneandsons.com/AlexJansenBio.png.

Day-to-day operations will be handled by Harish Patel, who currently resides in Portland, Oregon. Mr. Patel is experienced in site selection, land acquisition, permit processes, financing, and budgeting and project management. He has been approved by Marriott to manage the property, which in and of itself is a rigorous process, as we are told. Here is a link to his bio http://www.blackburneandsons.com/HarishPatelBio.png.

Below is a more detailed list of what Patel has developed/owned/managed:

Hotels Managed thus far:

Hampton Inns, full-service Holiday Inn, Holiday Inn Express, full-service Best Western Inn & Suites, full-service Ramada Inn, Comfort Inn Quality Inn & Suites, Travelodge, Shilo Inn, and Independents.

Ground-Up Brands Developed:

Hampton Inns, Best Western Inn & Suites, and Holiday Inn Express (First in the system in Oregon, 1992)


Independents to Full Service Holiday Inn, Comfort Inn, Ramada Inn, Quality Inn & Suites and Travelodge. The state of Oregon has enjoyed strong economic growth in recent years. Roseburg has a population of 22,275, and it is 123 miles north of the California border and 67 miles south of Eugene (the state’s 2nd largest city). The proposed site of the new Fairfield Inn and Suites will be located alongside major Interstate 5, that travels not only through Oregon, but through California as well.

The state of Oregon has enjoyed strong economic growth in recent years. Roseburg has a population of 22,275, and it is 123 miles north of the California border and 67 miles south of Eugene (the state’s 2nd largest city). Our new Fairfield Inn and Suites will be located adjacent to Interstate 5, which runs north and south from Canada to Mexico. The traffic count at this location averaged 34,500 cars when last surveyed in 2016. Roseburg lies at the intersection of I-5 and Highway 42, which will take you to the Oregon coast, and Highway 138, which will take you to Bend and eastern Oregon. For more information on Roseburg's economic development, please check out this video.

Earn a $250 Referral Fee 
Refer accredited trust deed investors
for our mailing list.

To invest, please call Angela Vannucci
at 1-800-606-3232 or CLICK HERE.


Any new construction project involves substantial risk, and the list of risks is so extensive that we have attached it as an addendum here. www.blackburneandsons.com/pdf/AdditionalRisksofConstruction.pdf Please be sure to study these risk factors carefully before choosing to invest.


1. The property information contained in this Property Investment Bulletin is being provided in connection with an offering of membership interest units ("Units") by Equity Preservation Fund, LLC (the "Company") in the membership class designated above (the "Company Class"). Potential investors will purchase membership interests in the Company Class which will, in turn, hold title to the Investment Property. Units are offered only to verified accredited investors pursuant to the Company's Private Placement Memorandum dated May 9, 2017. ("Memorandum"). Potential investors should read the Memorandum and all of the exhibits thereto in their entirety prior to investing.

2. This Property Investment Bulletin contains forward-looking statements within the meaning of federal securities law. Words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “continue,” “predict,” or other similar words, identify forward-looking statements. Forward-looking statements include statements regarding the Manager’s intent, belief or current expectation about, among other things, trends affecting the economy and the market in which the property is located. Although the Manager believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those predicted in the forward-looking statements as a result of various factors, including those set forth in the “Risk Factors” section of this Memorandum. If any of the events described in “Risk Factors” occur, they could have an adverse effect on the Fund’s business, financial condition and results of operations. When considering forward-looking statements, prospective investors should keep these Risk Factors in mind as well as the other cautionary statements in this Memorandum. Prospective investors should not place undue reliance on any forward-looking statement.

Blackburne & Sons Realty Capital Corporation--For more information, contact Angela Vannucci
4811 Chippendale Drive, Suite 101, Sacramento, CA 95841
Telephone: (916) 338-3232 * Fax: (916) 338-2328
Real Estate Broker -- California Bureau of Real Estate -- License Number 829677
Offering issued with reliance upon exemption provided under section 4(a)(2) of the Securities Act of 1933
and Rule 506(c) of Regulation D.
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