February HappeningsLand Entitlement Fund (20% Preferred Return*) + Two Apartment Offerings (Dallas and Houston) Our pipeline is quite active in Q1. We don’t necessarily like the timing that all three are coming so close together in the next 1-3 weeks. But we like the deals. So you have choices!A reminder of what happens behind the scenes befor you see an opportunity from us: The operator vets many opportunities, selecting only a few for further diligence that meet their criteria. For example, Rise48 provided these stats to me this week:They have analyzed over 250 deals in Dallas since November 2022.Only 10 deals (4%) worked in their model.Their average offer compared to the seller’s asking price was -23.7%.After the operator secures a purchase contract, Sugarhouse Investments conducts our due diligence. Examples include:Conducting a property site visit with the operator. Independent third party financial analyst review of the underwriting and forecasting to ensure conservative assumptions.Background checks on the business partners. We also invest in each deal to ensure alignment with our investors.  Understanding all this, our goal is to provide solid risk-adjusted returns. Risk cannot ever be eliminated so we encourage you to make your educated assessment and ask questions. Think diversification by operator, niche, and geography.   With that said, let’s talk about these three new opportunities, in order of when they’ll become available. 1) Rise Fossil Creek (Dallas/Fort Worth)   Mosaic Apartments (DFW) to be rebranded Rise Fossil Creek This apartment complex is in an A+ area, across the street from Lockheed Martin with their 18,000 employees. Rise is acquiring the property at a 25% discount to market pricing 12-18 months ago. 80% of the units are in classic condition, ready for upgrade.Financing: 4.75% interest rate buy down for 3 years Estimated launch 2/28 with funds in by 3/22. If you would like the full informatoin packet or to reserve a spot in advance to ensure you are in the deal, pending your full review, click here.   2) Allied Land Development Fund II is expected to launch in next 10 days. Allied Development, the operator, contracts to acquire raw land around solid growth markets, gains local city approval to build single family homes, and once approved, sells to the big nationwide homebuilders.  The success is found in doing the hard work to get land approved to build. This takes about 18 months per land deal and involves a lot of creative, out of the box planning and negotiations. The big builders are process driven and want to focus on building homes, so they rely on companies like Allied to give them shovel-ready projects.  Risk is reduced and returns can be amplified by not spending a lot of money since they don’t buy the land, just the acquisition option.The deal terms are particularly attractive to investors as the sponsor is offering a 20% preferred return plus a 15% share of profits*. The total investor hold time – three years – is much shorter than typical real estate funds. Estimated launch is March 2, with expected closing of accepting new funds by April 30. The first distribution is targeted to begin in Q1 of 2025.For more information when it becomes available, an to be  put on our waitlist with priority to invest if you like what you learn, click here. 3) Lone Star – Cortland Copperleaf (Houston) – this is a visually appealing, 2003 built, institutional quality asset. Located in northwest Houston, in a submarket where Lone Star has several successful assets they already manage. High quality asset, low execution risk, acquiring the property at a low price due to the seller’s distress across other parts of their portfolio. The seller already put $6M into property upgrades. So this is not a typical value-add story but a solid core plus asset play.Light value-add renovation strategy; turnkey asset is in a solid class B+ area6.48% going in cap rate. Loan term: 5 year fixed rate loan at 6.1% Estimated launch is March 9 with funding needing to be in by 3/22. If you’d like to get information on this deal as soon as it’s available or reserve a spot in advance (pending your full review) to ensure you are in the deal, click here.  Lone Star – Cortland Copperleaf (NW Houston)  Annual K1 Partnership Tax Statements  In March, investors will start receiving emails from the sponsors of your particular investments that will inform you that your annual K1 tax statement will be available for downloading from their portal. Inform your CPA or tax advisor of these expectations.   Let’s TalkIt’s a new year and we want to help position you for success. Schedule time with Brad here.Here are some things we can discuss:Market outlookYour current holdingsOur new asset classesHow to get started if you are new to usGeneral education on syndications1031 exchange options on your investment property salesAnything else you’d like to discuss! Feel free to reply to this email with any questions. Sincerely, Brad, Kelli, and the Sugarhouse team Real Estate News We’re Reading and Listening To…Another Firm Says Now is the Time to Buy Commerical Real EstateApartment Supply to Exceed 2023 Deliveries Apartment Market Mostly Flashing Green says C&WWe appreciate your referrals – Thank you! Share your success with us to family, friends and co-workers! Schedule A CallClick this calendar link to schedule a time to talk with Brad to learn more about our opportunities.Tired of Managing Your Own Properties? Looking at 1031 Options?  Some of our operator partners will entertain a 1031 exchange based on sale proceeds of $500K and up. What a cool way to defer your tax bill at sale, get out of active investing and reinvest your proceeds into a passive commercial real estate deal run by an experienced operator. Get cash flow and appreciation. If you would like to talk to me about your current situation, the market outlook, ideas we are sharing, or just how to get started, schedule time with me here. |
| *Past performance is no guarantee of future results.Securities offered through Finalis Securities LLC Member FINRA / SIPC. Sugarhouse Investments and Finalis Securities LLC are separate, unaffiliated entities. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. The reader agrees to the provisions set forth on those certain “Disclaimers” located at https:/www.finalis.com/disclaimers and the terms thereof are incorporated by reference as though fully set forth herein, and references therein to “An investment is illiquid and speculative and is subject to a risk of loss, including a risk of loss of principal.” Per FINRA marketing requirements, investors shall receive a copy of Form CRS for Finalis Securities LLC. The Form CRS describes the services that we provide, how we are compensated, and other important information about Finalis Securities LLC. We encourage you to read it and ask any questions that you may have. We look forward to hearing from you. |
From email archive: February Happenings – Land Entitlement Fund Launch + 2 Apartment Deals
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