RealtyeVest has a stake in all real estate investments offered in our marketplace.
RealtyeVest has obtained exclusive rights to an investment opportunity for accredited investors, REV Towne Oaks, LLC . a Florida limited liability company (the “Company”). The manager of the company is RealtyeVest, LLC, a Florida limited liability company (the “Manager” and organizer of the company).
The Company has been formed for the purpose of providing investors the opportunity to invest an existing Multifamily Complex located at 3900 Old Bullard Rd Tyler, TX 75701 (the “Property”).
Towne Oaks East was acquired for $4,500,000 by a newly formed single purpose entity, 3900 Old Bullard Holdings, LLC, a Delaware limited liability company (the “SPE”). The $700,000 Equity Investment will pay-off a short-term bridge loan which was used to fund initial closing costs and the current cap-ex budget.
This offering is available with an annual 8.5% preferred return. Additionally, the sponsors are offering investors 70/30 waterfall participation in which 70% of the remaining cash flow will belong to the investors and 30% to the sponsors. Investors can expect to receive interest checks quarterly on the 8.5% preferred return.
The Manager’s investment strategy is to reposition the Property through a capital renovations program in order to bring occupancy and rents to levels consistent with competitive properties. The Property has not taken advantage of market strength in recent years, and as a result rents are significantly below market averages. In addition, current ownership has not implemented management practices designed to increase occupancy and lower resident turnover. If successful, the Manager believes the Property can generate strong cash on cash returns during the hold period. By negotiating an off market transaction, the Manager believes the acquisition costs are below the true market value of the property, resulting in downside protection in the event future market conditions decline from current levels.
With the absence of new luxury apartments, there is a clear opportunity to achieve the attractive risk adjusted returns in the Tyler market. For Towne Oaks East, the investment strategy focuses on maximizing rent potential through the combination of: 1) renovating and raising rents to market rates, 2) implementing a capital improvement program in years 1 and 2 to enhance the marketability and overall appeal of the Property, and 3) bringing in professional property management services to reposition the tenant profile and increase tenant retention. We plan to bring the Property up to the Tyler rental market’s 96% average occupancy level as well as bringing rents up to market levels, which are approximately 10 - 15% higher than current rates at the Property. We plan to aggressively increase rents upon implementation of the planned capital improvements.
The Property’s location is exceptional in terms of its proximity to shopping, dining, amenities, industry and three colleges. The Manager believes its planned upgrades of unit interiors, along with exterior improvements to enhance curb appeal, coupled with professional property management, will greatly enhance the overall appeal against its competitors. Because competing properties are achieving rents of approximately $779 per month, or approximately $1.00/sf on average, we believe the projected rent increases for the Property are highly supportable
The Manager envisions a refinance at the end of year 3, followed by a possible sale of the property in year 5, depending on market conditions at that time. Proceeds from a refinance and eventual sale will be used to pay Company liabilities, return investor (Class A) capital contributions, make up arrearages in Investor Preferred Returns if any, and split the remaining profits 70% to investors and 30% to the Manager.
8.5% Pref, 22.1% IRR and 2.1x Multiple: The sponsors are offering a 8.5% preferred return or 70/30 waterfall cash distributions with 70% belonging to the investors whichever is greater. The deal is slated to have a IRR of 22.1% and a Deal Multiple of 2.1x.
Strong Demographic Trends: Tyler ranks as the fastest growing metro area in east Texas. The population of Tyler, TX grew by 15.8% from 2000–2010, and by another 12.5% from 2010–2016. The Median Household Income for the 75701 zip code in Tyler, TX is over $42,000. The Median household value in the 75701 zip code is $117,500.
Robust Property Improvement Plan: The Manager will address various deferred maintenance and cosmetic upgrades to the Property shortly after closing: These include balcony and wood fence replacement, soffit repair, landscaping, wrought iron fence replacement as well as general cleanup of the property in order to improve the property’s curb appeal. The Manager will consider signage updates as well as window and sliding glass door replacements. A more attractive exterior appearance of the property will attract higher quality tenants, facilitate leasing, justify higher rents and charges, shorten turnover time, and therefore increase income.
The Manager has budgeted the installation of interior upgrades including flooring, tub surrounds, bathroom sinks and fixtures, upgraded kitchen cabinets, lighting and hardware. As units become available and are renovated, rents will adjusted to market levels based on prevailing rents in the market. The underwriting assumes 100% of projected rent premiums will be collected by year three.
Outperformance: The Manager has taken a conservative approach and believes there are key areas where metrics in the Proforma may outperform projections.
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.
Mission Bay Investments, LLC (“MBI”) is a boutique real estate investment firm that was founded to acquire and manage value-added real estate investments on behalf of its principals and accredited investor partners (High Networth Individuals, Family Offices and Private Equity). Mission Bay invests in properties that are well-located with sound physical and economic fundamentals, properties that have the ability to generate attractive levels of distributable cash, and properties to which Mission Bay can add value by executing recapitalization or repositioning strategies. The founding partners of MBI are Daniel Woodford and Charles Triska. MBI has formed MBI Bullard Road, LLC, a Virginia limited liability company, to represent its interests in 3900 Bullard Investments, LLC (the Manager). Legacy Property Partners USA, LLC (LPP). Legacy Property Partners USA’s founding members, Lisa Schmidt and Paul Eterno, began investing in real estate over a decade ago, primarily in single family residential and rental properties. Mrs. Schmidt became a licensed real estate agent in San Diego and enjoyed a successful 5-year career as a residential real estate professional. Mr. Eterno purchased his first two rental properties in 2006 and more recently Mrs. Schmidt and Mr. Eterno were mentored by the founders of the US Tax Lien Association and became proficient at purchasing tax foreclosed properties at county auctions throughout the United States. In fact, in the 11-month period from April 2015 through February 2016, they purchased more than 15 tax deed properties. LPP has formed LPP Investments, LLC to represent its interests in 3900 Bullard Investments, LLC (the Manager). PLEASE SEE OM FOR INDIVIDUAL BIO’S OF THE INDIVIDUAL MEMBERS OF THE ABOVE ENTITIES WHO WILL BE MAKING INVESTMENTS DECISIONS.
Towne Oaks East is a 104-unit, 1971-built, off-market property. The property consists of eleven 2-story buildings, a one-story clubhouse and pool on 4.7 acres. Constructed of stucco and vinyl siding, composition shingle roofs on a concrete slab foundation. All units have covered porches or balconies. Interior amenities include: refrigerators, stoves, garbage disposal, dishwasher and oven and there is an on-site laundry facility. There are 106 covered parking spaces in addition to approximately 50 uncovered spaces. Tenants pay electric, while the owner currently pays water, sewer and trash.
Unit mix is: 44 one-bedroom units and 60 two-bedroom units. One two-bedroom unit is currently being utilized as an office. 34% of the current tenants have been renting at the property for 3 or more years.
|Property Address||3900 Old Bullard Rd Tyler, TX 75701|
|Property Type||Multi Family|
Tyler is a city located in central Smith County, Texas, United States. In terms of both population and land area, Tyler is by far the largest city in Smith County, of which it is the county seat, and has long been the region's major economic, educational, financial, medical, and cultural hub. The city is named for John Tyler, the tenth President of the United States. Tyler had a population 109,070 (2016) and the MSA of Tyler has a population of 225,000. Tyler is growing at a rate of 3000 people per year and is located midway between Dallas, TX and Shreveport, LA, just south of Interstate 20.
Tyler is known as the "Rose Capital of America", a nickname it gained from a long history of rose production, rose cultivation, and the large quantity of roses processed through the area. Tyler is home to the largest rose garden in the United States, a 14-acre public garden complex that boasts over 38,000 rose bushes of at least 500 different varieties. The Tyler Rose Garden is also home to the annual Texas Rose Festival, attracting tourists by the thousands each year in mid-October.
Information from Tom Mullins, President and CEO of the Tyler Economic Development Council points to growth in Tyler now and in the future. Tom states that the fastest growth in all of East Texas is Tyler and that Tyler is projected to soon create the Northeast point of what will be considered the ‘Texas Rectangle’ – vs the ‘Texas Triangle’ comprising East of Dallas to Shreveport to Houston.There are three colleges in Tyler: