624 N Beech St
Portland, OR 97227
Pref. Equity • REO - CONDO - RENOVATION

Min. Invest

$5K

Target Hold

1.5 Yr.

Preferred Returns

16%

PROGESS - 100% PLEDGED

Investment Summary

RealtyeVest has a stake in all real estate investments offered in our marketplace.


SGB Stumptown LLC has exclusively retained RealtyeVest to offer accredited investors the opportunity to invest in REV Beech St, LLC. The existing 4-plex buildings are located in Portland, OR.

This preferred equity offering is available with an annual 8% preferred return as a current pay and an additional 8% accrued for a total of 16% annualized interest for the duration of the 18-month term. There is one six (6) month extension available which would result in a 1% increase to the accrued interest. Investors can expect interest checks paid monthly in arrears. There will be a guaranteed interest period of 12 months.

The property is a pair of existing 4-plex units on one lot. A renovation was started in 2013 that never progressed past the demolition stage after being repossessed by the seller and the buildings have been sitting largely at the studs since that time and vacant since the 1970’s. The investment opportunity is the eyesore of a neighborhood going through a gentrification. New construction and completely rehabbed single family, duplex and triplex homes and condos are now commonplace in this trendy neighborhood.

Both building exteriors need the entire envelope rehabbed: roofing, siding, windows, concrete touch-up, and paint. Both need framing to be finished, plumbing, electrical and mechanical work, drywall, paint and finishes. Both basements will be finished out for storage units.

The 624 building is completely down to the studs and needs to be further framed out before trade rough-in can start. The interior stairs started with the last renovation may not be up to current code and will need to be replaced. The exterior is in better condition. There were previously decks on the units, we will rebuild them if the city allows it.

The 638 building still has 35% existing drywall and does not require the interior work that the 624 building does, but the roof will require some framing and decking and it has an exterior staircase and entry that will need to be re-built.


Investment Type:
Preferred Equity
Term:
18 Months
8% Preferred Return
 
8% Accrued
 
12 Months Guaranteed Interest


Why You Should Invest:

  • 8% Pref, 8% Accrued, 12 Months Guaranteed: The sponsors are offering a 8% preferred return with an additional 8% accrued and a guaranteed interest period of 12 Months.
  • Location Location Location: Located between Shaver St. and Fremont St. to the North and South, Mississippi St. and North Williams to the East and the West is the trendiest neighborhood in all of the Northwest United States, The Boise Neighborhood, this investment sits right in the middle, just a few streets over from The Mississippi District and The Williams District with tons of hip and trendy shops, eateries and watering holes.
  • Value Add: The property is being purchased for roughly $.33 on the dollar when compared to ARV.  This is a classic redevelopment in a modern, vibrant, uptrending urban setting.
  • Track Record: The sponsor has successfully exited 8 investments all with substantial profits to date. These investments have come between 2011 to current. Having his Broker's license is another tool that aids in his knowledge to properly evaluate properties that yield superior results. The sponsor has consulted on many successful acquisitions for third-party clients as well.
  • Asset Class: With the gentrification of the area, a much younger, affluent buyer is being attracted. One and two-bedroom condos are in high demand while supply remains nominal.

Location Highlights

  • Located close to The Mississippi District and Williams District.
  • According to walkscore.com this property boasts a 91 out of 100 walk score, 95 biking score and most importantly graded out at a B for its very low crime rate.
  • Trendy shopping, dining, bars and pubs located within walking distance.
  • Three miles from Downtown Portland.

Due Diligence Highlights

  1. Spoke with and verified comps with selling Broker.
  2. Spoke with sponsor numerous about intricacies of the deal as to timeline and budget.
  3. Careful review of purchase price, construction budget and projected sales prices.
  4. Verified strong successful investment history.

Exit Strategy

Fundamentally, the buildings have been purchased at a fair price. The underlying value of the land is in the $500k-$600k range. The buildings themselves are unique because they are grandfathered into higher density than is allowed per current zoning. Buildings + zoning are easily worth the additional $500k of the purchase price. Because this is a good acquisition, it keeps as many options on the table as possible.


Risk Mitigates

Sponsor: Sponsor has a history of nine successful exited investments to date

Transaction Structure: RealtyeVest investors are to receive a 8.0% preferred return, paid monthly, as well as a 8.0% accrued return, annualized, and paid at time of sale. RealtyeVest investors are to receive their 8.0% accrued return before the Sponsor may receive any profits from sale.

Strength of Submarket: Local, regional and institutional money have invested into this new hip, trendy neighborhood. With the rehabbing of single family, duplex and triplex homes coupled with new construction homes and newly built apartments millennials have been flocking to the neighborhood. Gentrification of The Boise Neighborhood is driving the market.

Purchase Price: The investment is being purchased at roughly 33% of ARV.

Escrowed Interest: Sponsor will escrow the first 12 months worth of interest to be paid monthly in arrears.


Sample Investor Returns

Sample Investment Amount $50,000
Monthly Payments $333
Total Monthly Payments $6,000
Accrued Payment at Sale $6,000
Net Earnings to Investor $12,000
Total Term ROI 24%


Risk Disclosures:

The offering materials to be reviewed and considered by investors with respect to this offering include the information described in the website content relating to this offering (as amended and supplemented through and until the closing of the transaction) and the subscription agreement relating to such securities (see the "Documents" tab). We refer to all of this information collectively as the "Property Information Package". Investors should review the Property Information Package in its entirety before investing and should consult with appropriate legal, tax, and investment advisors. Please note that RealtyeVest is not serving as your fiduciary or advisor with respect to this opportunity.

Below are certain risks associated with this investment that should be carefully reviewed prior to any investment in this opportunity:

Forward-Looking Statements: Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated,” “projected,” “forecasted,” “estimated,” “prospective,” “believes,” “expects,” "plans,” “future,” “intends,” “should,” “can,” “could,” “might,” “potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements. Similarly, the financial forecasts contained herein and in any other offering materials are based on numerous assumptions. Although these assumptions are believed to be reasonable, they are all subject to uncertainty. Non-Transferability of Notes: The transferability of the Company's Notes is restricted both by the subscription agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer the Notes. There is also no public market for the Notes and none is expected to be available in the future. Moreover, although there is a defined redemption date for the preferred equity investment in the Fund, an extension option may be exercised and in any event, there can be no assurance that the investment will be liquidated at or promptly after such maturity date (as it may be extended). Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.

Real Estate Market Risk: Investments related to real estate are subject to market valuation risks that may be caused by changing economic and local market conditions such as local real estate market conditions, prevailing interest rates, the rate of unemployment, the level of consumer confidence, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. Such conditions are beyond the control of the Company and of the Fund. Real estate markets are affected by many factors, such as general economic conditions, supply and demand for real estate investments, interest rates, the availability of financing, and other factors, all of which are beyond the control of both the Company and the Fund.

Borrower Credit Risk: The Company’s obligation to make payments on a Note will not be guaranteed for the length of the term corresponding to the borrower’s loan. The Company (and thus investors) will be relying on the borrower for the execution of its business plan in a way that enables the sponsor to repay the principal of the corresponding borrower loan. The borrower may not have a significant record of performance and may be unable to sell or refinance the underlying property in a way that enables the borrower to fulfill its obligations under the corresponding borrower loan. The borrower loan is being made with respect to a property that does not generally meet the financing criteria for conventional mortgages from institutional sources. Credit risk is inherent in the mortgage lending industry, and there can be no assurance that the creditworthiness of the borrower will be sufficient to assure the full repayment of the underlying borrower loan. The Company does not guarantee payment of the Notes or the corresponding borrower loan, and the Notes are not obligations of our borrower.

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Property Summary


SGB Stumpton, LLC will acquire 2 buildings, that will be converted into 1/1, 2/1 and 2/2 condo units in Portland, OR.

Both building exteriors need the entire envelope done: roofing, siding, windows, concrete touch-up, and paint. Both need framing to be finished, plumbing, electrical and mechanical work, drywall, paint and finishes. Both basements will be finished out for storage units.

These condos are located in The Boise Neighborhood, the trendiest neighborhood in all of the Northwest, which encompasses The Mississippi District and The Williams District. These one and two-bedroom condos are positioned perfectly in the middle of those 4 square blocks. They have easy access to I-5 and are essentially across the Fremont Bridge from Downtown. There is strong demand for housing in this location.

North Portland’s Boise neighborhood is one of the liveliest and most desirable enclaves in all of Portland. This historic section of Portland’s “5th Quadrant” has seen significant gentrification over the past two decades, and homes here are now a sought-after commodity.

The Mississippi District is centered on the long stretch of Mississippi Avenue, lined with hip shops and excellent restaurants. Its residents are typically young and trendy, drawn to the community’s walkability and variety of local businesses.

The Williams District is a dynamic, must-see destination for locals and visitors alike. With its broad array of delicious eateries and breweries, unique shops and excellent services, this evolving district embodies the true spirit of Portland. The Williams District includes more than 150 businesses and is also defined by its rich cultural history.

Property Address 624 N Beech St Portland, OR 97227
Property Type REO - Condo - Renovation
Year Built 1906
Units 8

Market Overview

Portland, Oregon is the largest city in Oregon. The city covers 145 miles and has an estimated population of over 640,000 people, making it the 25th most populous MSA in the United States. Over 60% of Oregon’s population resides in the Portland MSA. The city is operated by a commission - based government and is known for the investments made to land use and transportation. Portland is second in the nation for attracting and retaining the highest number of college educated people, with the first being Louisville, Kentucky.

The Economy within Portland continues to grow and thrive. The city’s marine terminals handle over 13 million tons of cargo every year. It is home to one of the largest commercial docks in the Nation and the Port Of Portland handles the most tonnage of any port on the West Coast. The Technology and Steel industries are also 2 major contributors to the economy. There are over 1,200 technology companies with the metro area.

Portland has become a business hub for many athletic and footwear companies such as, Nike, Adidas, Columbia Sportswear, LaCrosse Footwear, Dc. Martens and more. While other companies do not have headquarters here but have placed design studios and local offices, such as Under Armour and Amer Sports.

The housing market in Portland continues to grow at an astronomical amount, making it have a faster growth in rates that other major cities, such as San Diego, Boston, Seattle and Miami. Making the average one bedroom apartment rates between 1,300-1,950.

Portland was awarded the title of “Greenest city in America” and has received similar awards due to its high walkability, large community of bicyclist and farm-to-table foods.

The Gross domestic product of Oregon is 161.1 billion making it the 26th wealthiest state in the United States.

Top 3 Employers:

Intel 18,000+ employees
Providence Health and Service 16,000+ employees
Oregon Health and Science University 15,000+ employees

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