Cash Flowing Multifamily.
The Growth REIT continues to focus on acquiring multifamily value add projects that already have in place cash flows and can target 10% plus cash on cash yields while holding and 16-20% IRR’s over a 3 to 5 year hold.
New Multifamily Deals
The Growth REIT is under contract to close on a multifamily asset in Corsicana, Texas in late July to early August. The property features 211 cash flowing units and is located in Dallas Metroplex. It is currently owned by a private investor group from Toronto, Canada. The property is directly across from Navarro College, a 2-year community college. DiversyFund’s real estate team has finished the due diligence and has approved the closing of the deal. Kenwood Heights will be acquired with financing with UC Funds as the lender. The current investment in the Summerlyn 200-unit deal in Killeen, Texas continues to be under contract and poised to close within the next month. Summerlyn has great potential as a value-add deal and has already increased in occupancy while we’ve been under contract, increasing the value of the property without our team getting to work on it yet.
Monthly Dividends Are Here!
We are excited to announce that July was the Growth REIT’s first month paying a dividend out to its investors. The dividend was reinvested on behalf of each investor to accelerate your investment account’s growth as we continue our mission of building wealth for our investors through cash flowing commercial real estate. We expect to continue to pay dividends on a monthly basis.
Our last meeting with our architects BNIM was positive showing that the project is about 99.9% cleared with the City. We have about three more minor City comments that once addressed and signed off on, we will be ready for full permits for the project. In the meantime while the final pieces are being worked out for permits, we are working on finalizing the capital stack structure for the construction financing which we expect to finalize between late August to mid-September. With interest rates at a historic low, we are optimistic for favorable returns.
Project Stage: Pre-Construction. Demolition Permit in Progress. Construction Financing in Negotiation
We are in the process of transferring all documents to the new builder Shawmut in order to restart the vertical construction of the home. Concurrently, we have retained Michael Poirier as our architect and IMG for construction management. We are excited as construction is ready to start again as the new General Contractor will finish the shoring work on site so that we can start on the foundation. Shawmut will complete the foundation while we work to get a construction loan in place so that we don’t lose any more time. On the construction financing side, negotiations continue to secure the best construction financing option, the strongest of which at the moment may be the lender that already has a stake in the land loan for the property. We have reached out to a number of new and existing relationships to provide financing for the asset. Additionally, one of the Uber founders recently purchased a similar high-end home for $72.5 million showing that the luxury market remains robust.
Project Stage: Construction.
The asset continues to generate positive cash flow while we are working to prepare the property for sale or refinance. After discussing with multiple successful multifamily brokers in the market, we are holding off on the condo mapping process. The property’s value does not increase enough with the condo map to be worth the additional cost and potential liability since the cash flow is so high being run with the current business plan. With the current low interest rate environment, we are working on a couple options with lenders to refinance the existing loan to a lower rate that will general additional cash flow for the property until the property is listed for sale.
Project Stage: Completed and Cash flowing.
DiversyFund Q1 Investment Update The Growth Fund is invested in a brand new value-add asset named Summerlyn in Texas. Closing is anticipated next month for this new 200 unit project that is targeting an 18% IRR to the Growth Fund. Our real estate team is out in Texas currently looking at 2 other value-add opportunities…
Park Blvd Investment Update Q4 2018 The Park Blvd project is close to receiving full permits. While the holidays slowed down response time from the City, our team is clarifying what will most likely be the last round of comments before locking in the wood frame permit. As mentioned in previous updates, the foundation permit…
DiversyFund Q3 Investment Update DiversyFund Growth Fund The Growth Fund has made several preferred equity investments such as our Park Blvd multi-family project, Goshen (student housing) and Felspar (Pacific Beach condos), along with a small investment in Granito Drive. We are currently performing due diligence on several multi-family value add deals and have recently made…