2 min read
Sources:
Form 1-A, Kevin's account, Form 1-SA, his own videos, press and public records
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Short answer
Because Kevin will not borrow against the buildings, and the filing confirms there is no mortgage or bank debt on any of the company’s real estate. His reasons: a childhood in which a mortgage took the family home; a belief that the next crash could be long and unaided by the Fed; and a plan to borrow cheaply against paid-off property after a crash to buy more. The company does owe $38.6 million of 5% convertible bonds, which are unsecured and convert to stock; that is the debt it does carry. 123
Mortgage debt: $0 (on 38 properties, per the Form 1-A)
Convertible bonds: $38.6M (5%, unsecured, convertible at $1.40)
Real estate, net: $63.1M (June 30, 2026)
The record
The offering circular states that as of its date the company had no mortgage or bank debt on its real estate. At June 30, 2026 that real estate was carried at $63.1 million net. The company’s only borrowing is $38.6 million of 5% Series A Convertible Bonds, which are unsecured, pay monthly interest, and may convert into non-voting common stock at $1.40 from January 1, 2027. 13
Kevin’s reasons
Kevin’s account
My father could not make his monthly payments during the dot-com crash and we lost our home. That became the basis for never wanting to get into dire straits, especially with debt. 2
Kevin’s account
The next market crash could be the longest and worst since the Great Depression, because the Federal Reserve will likely be unwilling to provide the money-printing bailout of prior Feds. That is why I am bullish on acquiring real estate now with no debt, so that if the market does crash, that paid-off real estate could be piggy-banked open and leveraged into long-term fixed-rate loans to buy substantially more after rates fall. 2
The cost of the choice
Leverage magnifies returns in a rising market, and a mortgaged portfolio of the same equity would own more buildings. Reinvest gives that up. In exchange it cannot be foreclosed, has no rate-reset risk, and holds $16.3 million of liquid assets against rents with no debt service ahead of them except the bond coupon. The wedge, the roughly 20% equity created at purchase, does the job leverage would otherwise do.
In his own videos
June 8, 2020: i borrowed $1.1 MILLION to time the market, the leverage he used before he swore it off. 4
One exception in the record: a 2024 credit line
On January 11, 2024 the company opened a $25,000,000 revolving line of credit with J.P. Morgan, secured by its Treasury securities, at the base rate plus 1.05%, to buy real estate. In the first half of 2024 it borrowed and immediately repaid $15,300,000 as a bridge while Treasuries matured, paying $253,309 of interest, and drew and repaid another $1,130,675 in August 2024. Nothing was outstanding at any period end, and the line was closed by June 30, 2025. So the no-bank-debt statement is true of the balance sheet at every reporting date, with one bridge facility used and closed during the buying year. 56
No lender holds a mortgage on the buildings; the company’s unsecured bondholders and other creditors still have claims on it. The bonds are the debt that exists, and they may convert into stock at $1.40 if the conditions are met. 13
Simply put
✅ The fact
➡️ Not one of the 38 properties has a mortgage.
✅ The reasons
➡️ Kevin watched his family lose a house to a mortgage.
➡️ He thinks the next crash could be bad and long.
➡️ Paid-off buildings can be borrowed against later, cheaply, to buy more when prices are low.
✅ The exception
➡️ The company owes $38.6 million on bonds. Those are not secured by the buildings and can become shares in 2027.
Sources
Form 1-A, Summary and Business (no mortgage or bank debt on real estate as of the offering date) Open the filing
Kevin's account, The bear-bull scale: “I refuse debt ... so that if the market does crash, that paid-off real estate could be piggy-banked open and leveraged into long-term fixed-rate loans to buy substantially more after rates fall.” Read the excerpt
Form 1-SA, Note 6, Convertible Bonds ($38,612,004 gross at June 30, 2026) Open the filing
Kevin on YouTube, "i borrowed $1.1 MILLION to time the market & this happened..." (2020-06-08), at 5:26: “I literally borrowed every penny I could get my hands on” Watch from 5:26
Form 1-SA for the six months ended June 30, 2024, filed November 26, 2024, Note 5, Debt: the J.P. Morgan revolving line Open
Form 1-SA for the six months ended June 30, 2025, filed September 29, 2025, Note 5, Debt: no amounts outstanding; the line has been closed Open
