Passive Investment Opportunity in Dallas - 506c syndication

Passive Investment Opportunity

North Creek in Dallas, TX

This is a fantastic opportunity to get in on an excellent value-add deal with rents currently well below market rate in a great location.

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QRP, Solo 401(k), SD-IRA

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506(c) For Accredited Investors Only

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15-16% Targeted IRR

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Note: This 506(c) syndication is open to ACCREDITED investors only.

Investment Overview

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Note: This 506(c) syndication is open to ACCREDITED investors only.

15-16%

Targeted IRR

10-11%

Projected Annual
Cash-on-Cash

5-10 Years

Holding Period

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8%

 Preferred Return

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Note: This 506(c) syndication is open to ACCREDITED investors only.

Opportunity Summary

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Pandemic Resilience

Landlord Friendly State:

  • Texas is very pro-landlord
  • Government is providing significant assistance programs
  • In Dallas, evictions are still possible when tenant doesn’t follow CDC rules that requires them to provide evidence they are seeking a job, to establish a rent payment plan, etc.

Resilient Renter Base

  • A & B Class residents with higher education and income are less impacted. We are focusing on ‘grey collar’ residents, who typically have fewer collection issues. 
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Financing & Underwriting

Conservative Financing

  • Fannie Mae Agency Debt (Government-Backed)
  • Low Leverage: 68% LTC new loan
  • Long-term 12-Year
  • Fixed 3% Interest
  • One year of interest only

Conservative Underwriting

  • Break-even occupancy of 60%
  • Assuming a vacancy of 12% gives us 8 units vacant to renovate to maintain stabilized cashflow.
  • Conservative assumptions of sale value based on reversion cap rate increase by 10 basis points per year.
  • Underwriting with an eye towards market trends in 2008-11 versus 2015-18.

Property Details

The Property

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Year Built: 1972

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Buildings: 29 (2-story)

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Units: 159

Property Amenities

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Gated Entrance

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Outdoor BBQ Station

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Clubhouse

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Two 24×7 Laundry Facilities

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Two Pools

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Small Dog Park

Dallas, TX

Diverse Economy = Recession-Resistant
Dallas is one of the most recession-resistant multifamily investment markets in the nation.
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Its high concentration of financial and professional service firms generate an exceptionally affluent tenant base, while its diverse economy and rapidly growing population continue to drive demand and stimulate rent growth.

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The metroplex consistently maintains a remarkably low unemployment rate coupled with nation-leading employment growth, making Dallas and Fort Worth two of the most desirable places to live and invest in the country.

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Note: This 506(c) syndication is open to ACCREDITED investors only.

Business Plan

Existing

Planned

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On average, the current rent is $50-$100 below market for units with similar interiors

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After renovations, the rents can grow an additional $100-$150 to meet market rates for renovated units

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North Creek has been owner-managed for many years. In-house management has done a good job maintaining the complex but has done very little marketing because of strong demand.

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Management will be brought into the umbrella of REM’s Property Management team along with our other portfolio of properties, including 86 units in North Augusta, GA, 80 units in Sarasota, FL, and 101 units in Beavercreek, OH.

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The interiors have been moderately upgraded over the past 5 years. The exterior has had very little done to improve curb appeal. Same with signage and name.

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The current “renovated” units will be our “classic” units and we will be meeting the higher demand in the market. Lake Highlands is a strong up-and-coming market with consistently improving resident demographic.

Capital Improvements

Existing Units

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60 units require full renovation to achieve B-Class level. These have outdated interiors with older classic looking cabinets, flooring, appliances, tub surrounds, etc.

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99 units require light renovation to achieve B-Class level. These have recently been renovated with LVP Flooring , Cabinets, Lighting and Paint.

Upgraded Units

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Complete Laminate Vinal Plank (LVP)

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New appliances

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Repainted interiors

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Bathroom vanity mirror frame and lighting

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Resurfaced tub surrounds

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Resurface/replace kitchen cabinets

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Light Fixturing

Existing Exterior

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General curb appeal needs enhancement with resurfacing and striping of parking lot, balcony fencing repairs, concrete repairs, and landscaping

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Improve on-site parking and traffic flow and upgrade/repair gating

Upgraded Exterior

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Landscaping

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Windows/Solar Screens

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Roofing/Facia Repairs

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Railing/Stairs/Landings Replaced/Fixed

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Select Siding Repairs

We Are Multifamily Investment Professionals

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Experienced

With a combined 100+ years of experience and $300MM in closed multifamily transactions, we have the subject matter expertise, key relationships, and proven track record to execute profitable deals.

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Conservative

We are opportunistic investors focused on creating long term value. We stress test our deals and use leverage carefully to create sustainable cash flow and limit our risk.

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Diligent

Closing a deal, while challenging, is the easy part. Executing on the business plan is the hard part. It takes perseverance and persistence to achieve what we set out in our underwriting.

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Note: This 506(c) syndication is open to ACCREDITED investors only.

This Deal is Closed


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