Purchasing a 6.42-acre site in Kerrville, Texas, building a 120-unit multi-family complex on the and, renting the units within 15 months and selling the property within 36 months.
|Asset Type||Min. Investment||Term||Projected Annual Returns|
|Multi Family Development||$25,000||36 Months||13.70%|
Amelia Ct Kerrville, Texas USA
Purchasing a 6.42-acre site in Kerrville, Texas, building a 120-unit multi-family complex on the land, renting the units within 15 months and selling the property within 36 months.
9/9/2017 Closing 15 Months 18 Months 36 Months
Raise Projected End of Contractual Projected Project
Construction Buy-Out Option Completion
|Source of Finance||Amount|
|Property Owner Mortgage||$8,348,500|
Profit Distribution: 60/40
|iintoo's Investment in JV||Deal Initiation Costs||Total Capital Raise||Min. Investment|
Sendero Ridge Apartments:
The city of Kerrville is approximately one hour northeast of San Antonio and two hours west of Austin. It is considered the capital of Texas Hill County, an area with one of the highest economic growth rates in the United States.
Nestled on the banks of the Guadalupe River, Kerrville is a vibrant community. It is best known for its beautiful parks, such as Kerrville-Schreiner Park, Louise Hays Park, and Flat Rock Park. The parks line the Guadalupe River, which runs directly through the City and is treasured by those who live in and visit Kerrville.
According to the 2016 census, the population of Kerrville is 51,300.
Approximately 25% of the city's residents work in retail, 15% in finance, 7% in education and 5% in healthcare.
Major employers include:
THe transportation options enable residents to take advantage of Kerrville's central location between Austin and San Antonio.
The property is situated on Texas State Highway Loop 534, which bypasses eastern Kerrville. The highway's major intersections are Interstate 10, a cross-country highway stretching from Santa Monica, California to Jacksonville, Florida and passing through San Antonio and Houston, Texas State Highway 16, Texas State Highway 173, and Texas State Highway 23.
Seniority: Over 40 Years
Expertise: RREAF Holdings is a privately-held commercial real estate firm based in Dallas, Texas, with a history of success in the acquisition, development, asset management, ownership, repositioning, and financing of complex real estate projects throughout the United States.
Unit Track Recor: Since 2010, the company has built $175M portfolio, including 14 hotel properties totaling over 1,000 rooms, four multi-family properties totaling 510 units, and 150 acres of developable land throughout Texas, Tennessee and Florida. The company has successfully completed several development projects, including a multi-family property and two hotels. During the next few months, the company is going to break ground on two upscale full-service hotels, two senior-living communities, and a self-storage property. It will simultaneously continue to aggressively grow its portfolio via its programmatic multi-family and hospitality asset-acquisition platforms. The company owns a subsidiary that specializes in construction and renovation.
Region of Expertise: Texas, Tennessee, Florida, Alabama
|Kip Sowden - Managing Partner||Brandon Miller - Managing Partner|
|Mr. Sowden has over 30 years of experience in commercial real estate with a strong background in real estate brokerage and mortgage finance, acquisition, development, and asset management. He has been active in sales of more than 11 million square feet of commercial real estate and over 25,000 apartment units throughout the United States||Mr. Miller joined RREAF as Partner in 2013 playing an integral role in the strategic vision and growth of company's real estate portfolio. Drawing on years of experience in the real estate finance and capital markets, he is responsible for the oversight of the company's underwriting, structuring, and financing for company's acquisitions and developments.|
|Developed by RREAF - Lotus Village Apartments, Austin, TX|
|Developed by RREAF - La Quinta Inn & Suites, Andrews, TX|
|Developed by RREAF - Marriott Delta Hotel, Southlake, TX|
|Funded by iintoo - Bent Tree & Harvard House, Big Spring, TX|
|Funded by iintoo - Fountaingate Witchita Falls, TX|
|Funded by iintoo - Arden Ridge & Park on Paint Rock, San Angelo, TX|
The multi-family market in Kerrville is characterized by high occupancy rates and a lack of new development to meet growing demand.
Over the past two years, occupancy rates have averaged 98.45%. Due to the lack of new supply in the market, occupancy rates are expected to maintain a high average of over 95% in the near future.
The asking rent price has increased by over 2% annually over the past two years, with the asking rent in the area averaging $741/unit.
The market is strong and stable; during the crisis of 2008 and the two years following the crisis, occupancy rates remained relatively high at 88%.
Several factors have contributed to the market's stability, including:
Projected Cash Flow (US$):
|Projected Cash Flow||Year 1||Year 2||Year 3|
|Repairs, Maintenance & Turnover||-||31,212||31,836|
|Marketing & Administration||-||24,970||25,469|
|Net Operating Income||-||841,383||1,044,434|
|Asset Management Fee||-||(27,407)||(32,140)|
|Net Cash Flow Before Tax||140,000||354,809||553,126|
|Expected Cash Flow for iintoo Investors||140,000||267,759||351,284|
|Expected Cash Flow for iintoo - Debt Investors (10% interest)||140,000||140,000||140,000|
|Expected Cash Flow for iintoo - Equity Investors||-||127,759||211,284|
|Expected CoC for iintoo - Equity Investors||0.0%||6.6%||10.9%|
|Projected Profit Calculation and Waterfall|
|Distribution Waterfall Between iintoo, Sponsor, and Other Investors in the JV|
|Third Year NOI||1,044,434|
|Residual Asset Value @6.25% CAP||16,068,208|
|Cost of Sales 2.5%||(401,705)|
|Net Sale Proceeds||15,666,503|
|Net Sale Proceeds||15,666,503|
|Proceeds from Operation||1,047,935|
|Return of Capital||(4,528,500)|
|Total Profits for Distribution||3,837,438|
|Expected Cash Flow for iintoo PREF Equity||420,000|
|Expected Cash Flow for iintoo Investors||339,043|
|Expected Cash Flow for Developer and Other Equity Investors||288,892|
|Return of Remaining Capital Contribution - iintoo PREF Equity||1,400,000|
|Return of Remaining Capital Contribution - iintoo Investors - Pro Rata||1,260,957|
|Return of Remaining Capital Contribution - Developer and Other Equity Investors - Pro Rata||1,239,608|
|Additional Return to iintoo PREF Equity (6% Annually)||252,000|
|Hurdle Return to iintoo Investor (10%) - Pro Rata||529,600|
|Hurdle Return to Developer and Other Equity Investors (10%) - Pro Rata||505,934|
|Equity Share of Profits Above Hurdle Return (60%) - iintoo Share of Profits (30.69%)||653,575|
|Equity Share of Profits Above Hurdle Return (60%) - Developer Share of Profit (29.31%)||624,368|
|Developer Share of Profits (40%)||851,962|
|Total Proceeds - iintoo Investors||4,855,175|
|Total Proceeds - Developer and Other Equity Investors||3,510,763.19|
|Total Project Proceeds||8,365,938|
|Profit Distribution - iintoo Investors|
|Profit Distribution - iintoo Investors (Post Partnership Operating Expenses)||4,846,475|
|Return of Capital Contribution to iintoo Debt Investors||1,400,000|
|Interest Payments to Debt Investors 10% Annually (Including iintoo Success Fee)||525,000|
|Return of Capital Contribution to iintoo Equity Investors||1,930,000|
|Profit Remaining for Distribution to Equity Investors (Not Including iintoo Success Fee)||991,475|
|Total Profit Distribution to iintoo Investors||4,846,475|
|Net Cash Flow - Equity Unit ($25,000)||Projected Sale of Asset After 36 Months|
|iintoo Success Fee (%)||20%|
|iintoo Success Fee ($)||198,295|
|Total Return to Investors||2,723,180|
|Deduction of Principal||1,930,000|
|Total Profit for 36 Months (Before Tax)||793,180|
|Target Yield Per Year||13.70%|
|Net Profit Per Capital Unit||35,274|
|Expected Profit Per Capital Unit||10,274|
iintoo's Equity investors are expected to hold a 66.25% stake in the LP associated with the project.
After 18 months from the beginning of the project, the Sponsor is entitled to a buy-out right at a return to iintoo of 25% IRR upon the equity it invested in the project.
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