Golf Group of Palm Coast got their final payment for its sale of Matanzas Golf Course, but the money came from developer Jim Cullis, who bought the past-due balloon mortgage.
Palm Coast, FL – February 16, 2015 – Matanzas Land LLC, owned by Palm Coast developer, Jim Cullis, has purchased the past-due mortgage for the Matanzas Golf Course. Jacksonville-based Group Golf of Palm Coast purchased the course in October. The $266,750 Matanzas sale was structured with a $100,000 cash payment and a balloon mortgage for $166,750. The balloon, due December 10th, has not been paid. Cullis purchased the note at a slight discount from face value from Palm Coast-based Golf Group of Palm Coast on January 30th.
[The names are confusing. Group Golf of Palm Coast bought the course from Golf Group of Palm Coast.]
What does it mean? It means that Golf Group of Palm Coast is out of the Matanzas picture. By accepting Cullis’s payment, they assigned their remaining interest (the mortgage) to him. Group Golf still owns the property, having purchased it from Golf Group in a sale that closed October 3rd. The mortgage purchased by Cullis remains as an encumbrance against the property.
Cullis, who once had the course under contract for an undisclosed amount, faces two possible outcomes. If Group Golf pays off the mortgage, Cullis will receive the face value of the note, $166,750, plus interest accruing at 15%. Not bad by today’s standards.
On the other hand, if Group Golf fails to pay the balance, Cullis can foreclose and possibly get title to the property at foreclosure. Or a third party might outbid Cullis at the foreclosure auction. If so, Cullis collects the face amount of the mortgage plus accrued interest. If there are no other bidders, Cullis will end up with the course.
The assignment was apparently a good deal for both Cullis and Golf Group. Cullis ends up sitting on a promising investment with a healthy return or he ends up owning the Matanzas golf course through foreclosure at an attractive price. Meanwhile, cash strapped Golf Group gets a much-needed cash infusion.
Golf Group continues to operate the Cypress Course while leasing the Pines Course (with an option to purchase) to a third party. The Pines Course operators are not moving forward with their option to buy at this time. Both courses are reportedly having trouble meeting membership goals.