NOTE 6. COMMERCIAL LOAN INVESTMENTS

Our investments in commercial loans or similar structured finance investments, such as mezzanine loans or other subordinated debt, have been and are expected to continue to be secured by commercial or residential real estate or the borrower’s pledge of its ownership interest in the entity that owns the real estate. The first mortgage loans we invest in or originate are for commercial real estate located in the United States and its territories, and are current or performing with either a fixed or floating rate. Some of these loans may be syndicated in either a pari-passu or senior/subordinated structure. Commercial first mortgage loans generally provide for a higher recovery rate due to their senior position in the underlying collateral. Commercial mezzanine loans are typically secured by a pledge of the borrower’s equity ownership in the underlying commercial real estate. Unlike a mortgage, a mezzanine loan is not secured by a lien on the property. An investor’s rights in a mezzanine loan are usually governed by an intercreditor agreement that provides holders with the rights to cure defaults and exercise control on certain decisions of any senior debt secured by the same commercial property.

On June 14, 2019, the Company originated a $8.0 million first mortgage bridge loan secured by 72 acres of land in Orlando, Florida. The loan is interest-only with a term of one-year with two 1-year extensions with a fixed interest rate of 12.00%. The Company received an origination fee of 2%, or $160,000.

As of June 30, 2019, the Company owned one performing commercial loan investment with an outstanding principal balance of approximately $8.0 million. The loan is secured by real estate located in Orange County, Florida.

The Company’s commercial loan investment was comprised of the following at June 30, 2019:

Date of

Maturity

Original Face

Current Face

Carrying

Description

Investment

Date

Amount

Value

Coupon Rate

First Mortgage – 72-Acre Land Parcel, Orlando, FL

June 2019

June 2020

8,000,000

7,847,431

12.00%

The carrying value of the commercial loan investment portfolio at June 30, 2019 consisted of the following:


	Total
Current Face Amount	$	8,000,000
Unaccreted Origination Fees		(152,569)
Total Commercial Loan Investments	$	7,847,431

The Company had no commercial loan investments as of December 31, 2018.