Borrower
Pacific Crest School
Lender
Pacific Crest Properties, LLC
The recommended minimum investment amount is $25,000.00
Clicking "Get Started" and communicating your level of interest is not a binding commitment.
$6,700,000
Minimum Loan Goal
$6,700,000
Total Loan Requested
4.00%
Interest Rate
3.51%
Effective Rate
Investment Term
5 years
Funding Progress
52%
Amount Committed to Date
Amount Committed to Date
$3,471,985.00
Total Investors
Total Investors
69
Investors Accepting Reduced Returns
Investors Accepting Reduced Returns
27
Note: The interest rate listed above is the annual interest rate is the maximum rate you can receive on your investment.

* This listing is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any securities. Any offering or solicitation is restricted to qualified prospective investors who are supporters of Pacific Crest School, who have reviewed a confidential offering memorandum and who have executed the subsequent subscription documentation. Persons accessing this site are deemed to represent that they will not use the information herein to offer to purchase securities in a manner that would violate restrictions set out in the information or any securities laws of any jurisdiction.

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION THAT HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

Securing the Future of Pacific Crest

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Pacific Crest has the opportunity to establish a permanent home for our school.

For many years, we have recognized the advantages of owning and expressed interest to our landlord about purchasing our property. In September 2018, it was put on the market with an immediate offer from a developer seeking to build a self-storage facility.

Following our negotiation, the owners approved our counter-offer under asking price. With a signed purchase and sale agreement, we now have an opportunity to secure our future and shape a school that fully embodies our Montessori philosophy.

Our goal is to raise $6.7 million through crowd-sourced loans and gifts by January 25, 2019.  By maximizing our loan commitments before this deadline, we will reduce our need for conventional financing and be able to minimize financial burdens on the school.  

The Opportunity of Ownership

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Owning our school opens a world of possibilities and secures our future for generations to come.

We will no longer face the threats of escalating rental costs, losing our lease, or the property being sold out from under us.  We will put down even deeper roots in our local community. We will be able to invest in capital improvements that improve the quality of education. We will no longer have to work with what we have but can devote resources to support our needs. Every improvement we make will be an investment in our future.

The ability to beautifully and thoughtfully prepare the physical space, both inside and out, is central to the Montessori philosophy of education. When this school is our own, we will be able to redesign our spaces as needed for optimal educational opportunities:

  • Imagine a flexible communal space where beautiful books, maps and art fill the walls and students and families gather in discussion or study.
  • Imagine more space for our aftercare programs to better support working families.  
  • Imagine a more spacious and inviting kitchen where our students create sumptuous meals for each other, featuring produce from our own farm.
  • Imagine a warm, glass-wrapped study in our courtyard where children can study and learn surrounded by the sights and sounds of the outdoors.
  • Imagine updated spaces for creative expression where our children can refine their skills with precise tools as they create ceramics, set elements for our annual play, or other projects to sell through small student businesses.
  • Imagine improved and expanded athletic space where active bodies could stretch, dance and find their strength and stride.
  • Imagine an expansion of our buildings to allow for these ideas and to let us to welcome all of our students as they grow throughout their elementary and middle school years.

We are eager to engage our teachers and current and alumni students and parents in exploring how freedom of ownership can best serve our children.

A Model of Montessori Excellence

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For over 30 years, Pacific Crest has provided a dynamic learning environment that exemplifies the principles of Montessori education. Our longevity and success stem from the commitment, expertise and resourcefulness of our educators and families. Pacific Crest students graduate prepared, confident and self-aware, poised for fulfilling lives as their best selves.

Pacific Crest offers the only Association Montessori Internationale (AMI) primary teacher training in Washington. Over the last ten years, Pacific Crest has trained and supported hundreds of teachers from all over the Pacific Northwest as well as Kenya, England, China, Germany and Spain. Many have gone on to become directors of their own schools. Last year, we hosted an international summit that resulted in the launch of an initiative to triple the number of AMI-trained adults working in education in the U.S. by 2020. Pacific Crest has served as a pipeline of Montessori teacher talent, significantly impacting our local area schools and beyond!

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION THAT HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

Loan/Offering Details

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Pacific Crest Properties, LLC (“LLC”) is a newly formed entity established for the sole purpose of raising investment funds through the sale of Notes in which 100% of the proceeds will be used to make a loan to Pacific Crest School (“PCS” or “Borrower”) evidenced by a Loan Agreement, Promissory Note and Deed of Trust secured by the property being purchased which is located at 620 Bright Street, Seattle, WA 98107 (the “Property”).

The loan from LLC will be used to purchase the Property. Each potential investor is encouraged to read all information provided within the listing including the supplemental documentation. This includes reviewing the past, current financial information provided, as well as documentation on the Property. This supplemental information helps provide context to the credit worthiness of the Borrower and the value of the Property which is collateralizing the loan.

Further, it is important to review the Borrower’s plan for repayment (“Repayment Strategy”), located in the “Borrower Information” tab, which outlines the plan for reducing principal during the term of the Loan as well as how the Borrower plans to address the balance of the Loan when it matures.

NOTE: Borrower is only required to satisfy installment payments on the loan and is not contractually obligated to make additional principal repayments on the Loan until the loan comes due.

The Notes to supporters of PCS will have a maximum interest rate return of 4% for a period of 5 years. Each investor will have the ability to further reduce the rate for their specific Note which results in greater positive impact for the Borrower. Due to the lack of liquidity for the Notes during the term of the investment, investors must assume they will be required to hold the Notes for the full 5 years.

IMPORTANT: All potential investors need to click on the black “Resources” button to the right titled "Offering Memorandum" to read all about the details of the note investment opportunity including the related risks.

Offering Disclosures

When an investor purchases a Note in this offering, the investor will be relying on the Borrower to make the installments payments due on the LLC loan and payment of principal on the maturity date of the loan. Please refer to the Offering Memorandum by clicking on the black “Resources” button to the right for further information on the Note investment opportunity.

NOTE: With any nonprofit, because of the importance of its key leadership, there is a risk that something could happen with any key leadership that would negatively impact the financial health of the organization and its ability to service the LLC loan.

Use of Proceeds / Collateral Details

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Borrower has established a minimum loan need of $6,700,000 with a total loan need of up to $7,200,000 to purchase the Property. They have $500,000 for a down payment received from a grant. The total amount of the loan may be reduced in the event that designated gifts are realized.

NOTE: The loan will have a Deed of Trust recorded in 1st position on the property unless a loan from a “Bank” is acquired. In that event, the investor loan will take a subordinated 2nd position lien to the “Bank.”

To establish a valuation of the Property and due to the fact that the Property was on the open market for purchase, the best indication of current value is the purchase price of $7,200,000,000. 

Based on purchase price of $7,200,000, the total maximum loan amount of up to $6,700,000 results in a loan-to-value ratio of 93%. This presents significant risk in the event the Property needs to be sold to satisfy the Loan. In the event PCS is not able to service the loan payments, the Property as collateral would potentially need to be sold to satisfy the Loan obligation. In such an event, due to the highly leveraged nature of the loan, it should be assumed that the sale of the Property would not provide enough proceeds to cover the Loan and investors in Notes would realize a loss.

Property Collateral

Property Address: 4351 6th Ave NW and 620 NW Bright Street, Seattle, WA 98107

Property Status: Purchasing

Property Value: $7,125,000 - Purchase Price

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION THAT HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

PHILONTHROPIC STRATEGY

After reaching our January 25, 2019 deadline, we anticipate a three year philanthropic campaign to pay back any loans we accrue, as well as raise additional funds to upgrade our facilities and expand our pool of financial aid. The ultimate goal is to use a mix of gifts and grants along with traditional financing to pay back the loans within 5 years.

RISK QUESTIONNAIRE

Are there any outstanding or pending litigations against the Borrower?
No
 
Are there any material changes in revenue sources that should be disclosed or are not represented in the financial information provided?
No
 
Are there any material changes in operating expenses that should be disclosed or are not represented in the financial information provided?
No
 
Are there any material changes in the Borrower’s leadership (compensated or non-compensated) that should be disclosed?
No
 
Are there any employment issues or claims outstanding or pending?
No
 
Are there any environmental issues on any of the real estate related to the Borrower loan?
No
 
Has the Borrower been in default in any obligations in the past 3 years?
No
 
Has any of the key leadership of the Borrower (compensated or non-compensated) been involved in any pending or current litigations or judgments that could adversely impact their ability to serve the Borrower?
No
 
Has any of the key leadership of the Borrower (compensated or non-compensated) ever been indicted or convicted of a felony?
No

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION THAT HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

 

Frequently Asked Questions

QUESTION: Who or what is Semble exactly?

Semble is a Seattle based company who built a platform which allows non-profit organizations to do crowd-sourced loans from its supporters. Think of it like Kickstarter, or Go Fund Me, but from investments rather than donations. You get your money back with interest! Semble has helped other non-profit organizations such as churches and schools raise loan amounts similar to ours. In fact, the founder built this company after his children’s school went through a fund raising opportunity nearly identical to ours. Given their niche focus on scenarios like ours, and their successful track record, we are excited to work with them!

QUESTION: How exactly will this work?

First, we hope everyone will review the information about this initiative at www.semble.com/listing/pcs. After reviewing the information on the platform you can click on the big blue button and make your commitment to help fund our loan need. You will setup an account with Semble and determine your investment amount and rate of return on that investment that is equal to 4% or something less down to 0%. If you choose a lower rate of return you will actually help lower the overall cost to the school. This will save the school money that can be used for the operation of the school. We are hopeful some families will chose a lower interest rate which will help us keep the monthly payments lower than a traditional mortgage.

Once we feel confident we will have sufficient funds to close on the loan, we will ask all participating investors (You) to fund your commitment from your IRA or Cash account. Once all the funds are received we will close on the loan at the same time we close on the purchase of the property… and then the property is ours.

After the loan closes in January, the school will make interest-only payments each month to Semble. You will receive a settlement from these payments quarterly of your interest earned and repayment of principle, if any, until the loan ends in five years (or earlier if possible) at which time the full loan amount will be due from the school.

The investment you are making with the school is a “gift” because it enables us to purchase our property without needing cash for a 20% down payment and at a lower interest rate than a traditional commercial bank loan. But it is not a charitable gift of money. You will get all of your money back, and with interest (unless you chose a zero interest loan).  

QUESTION: What is the lease expense from item 600 and 602 on P&L?

ANSWER: Building 600 and 620 expense includes rent and utilities. Click on updated P&L in resources section for complete breakout.

QUESTION: Regarding the Farm Notes Payable, what are the monthly payments, are they P&I, what are the interest rates, the maturity dates and the collateral?

ANSWER: The monthly principal and interest payments is $1,562.80 with an interest rate of 4.940% which matures 6/1/28.  The loan is collateralized by our Farm on Vashon Island address: 7316 SW 240th Street, Vashon, Wa 98070 and 23720 Dockton Road SW, Vashon, Wa 98070. Please see the Farm Note in the Resources Section.

QUESTION: Does Pacific Crest School have CPA prepared financial statements or only internally-prepared?

ANSWER:  We've contracted Jones & Associates, LLC to audit our Fiscal Year 2017-2018.  A final audit report is expected December 2018. We have just reached the $3,000,000 threshold requirement in 2017-2018 and the audit report is expected by 12/31/18.  Our prior year Financials are unaudited.  

QUESTION: Projections show enrollment of 220?   Is that the maximum the building can accommodate?  Are there any plans to expand enrollment? 

ANSWER: Yes, 220 is our base and we can expand to 260 students with some rooms to be redesigned and additional staff hired depending on where the demand is for Primary, Elementary or Middle School.

QUESTION: How will the school pay back the loans after 5 years?

During those 5 years, we will be embarking on a large-scale Capital Campaign to raise funds to pay back the loans. We will pursue a variety of Grants which are available to non-profit organizations while also seeking donations from families currently enrolled, extended family such as Grandparents, and Alumni families who attended PCS over the last 30 years.

After 5 years, we will refinance whatever portion of the $7.2 million we have not paid back through traditional financing. The property will be used as collateral for the loan. If we fund the entire amount of the loan through the Semble platform, the investors will be in a first priority position; if a bank is required to provide gap funding for any shortfall, the Semble facilitated loan will be in a second priority position behind the bank. So, in the worst-case scenario we sell the building and pay back the loans from the sale proceeds.  

QUESTION: What is the minimum investment amount the school will take?

We have set a minimum investment amount of $25,000. Our goal of achieving our funding needs through the Pacific Crest community will be challenging. We want to encourage those families who can to make significantly larger investments than the minimum amount. We are counting on you!  

QUESTION: What if I can’t make an investment, but I still want to help?

If you are unable to make an investment yourself, help us find people who can! You can reach out to friends and family who you think might want to be a part of what you are involved in… educating your children in a Montessori school. Many people may be interested in diversifying their investment portfolio by directing some of their investment resources toward the funding of a loan to the school.

QUESTION: Why is this better for the school than a traditional Mortgage?

There are three reasons. First, our monthly payments could be as much as 60% less than it would be through a traditional mortgage. Secondly, through this approach we avoid the need to cover a 20% down payment which would be challenging to generate within our timeframe. Lastly, we are excited about our ability to buy this property in partnership with the families at PCS. Tackling this as a community is a special opportunity that will only strengthen the school!

QUESTION: What happens if the school cannot raise enough money through these loans to close on the purchase of the school?

In partnership with Semble we are also pursuing a traditional loan which will cover the difference between what we can raise through the community and what will be needed to close on the property. Semble has experience with this hybrid approach. That said, our monthly payments will be at their lowest if we fully fund through the community.

QUESTIONl Does this investment have tax advantages like a non-profit donation?

No, this is not a gift. Instead, you are making an investment and the interest earned is not tax-free. There would be no charitable deduction unless you elect to forgive a portion of the investment or give back some interest earned to the nonprofit

QUESTION: What is the next step?
At the point that you are ready to participate, select "Get Started" and follow the simple steps. It takes about 2 minutes to enter the basic information, including your email address, amount you want to invest, and the rate of return you would like to receive. Choosing to take this first step is not a binding commitment.
QUESTION: What if I want to get my money out before the end of the investment term?
If you plan to access the funds prior to the maturity of the investment, it is encouraged that you not invest since there are currently no well-defined secondary markets for the investment. In the case of hardship, best efforts will be made to see if someone else would like to take your position, although there are no guarantees.
QUESTION: Can I make an investment using retirement funds?
Yes, but you are not typically able to direct funds from your current employer 401(k) or 403(b). If the instructions online are not clear or if you have questions, please contact Semble.
QUESTION: Are there costs in using a retirement account (i.e. IRA) to invest?
Yes, all custodians will charge a fee for holding this type of investment because they are not compensated through the normal fees they realize in holding traditional investments (stocks, bonds, mutual funds, etc.). The fee varies based on the custodian. The IRA custodian that is the preferred provider through Semble has a $25 setup fee and a flat annual cost of $65/yr. This cost should be taken into consideration when making an investment. There are no costs to invest using non tax-deferred funds since there is no need for custodial involvement.

 

Ready to commit to invest in the loan needs of Pacific Crest School?

Click the blue Get Started button to enter your commitment. This is a non-binding commitment and Semble investor support is always available if you have any questions or need assistance.