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iintoo Salt Lake Alphawave LP

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Funded

Offering completed on November 22, 2017.

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* This private placement investment is only suitable for potential investors who are familiar with and willing to accept the high risk and illiquidity associated with private placement investments. Please review Terms of Use for full disclosures. Also, please review iintoo Salt Lake Alphawave LP offering documents for full detailed disclosures/risks before you make any investments.


High Concept Pitch

Purchasing an income-generating, 72 unit, multi-family property with 93% occupancy in Salt Lake City, Utah, upgrading and selling the property within 24 months. The capital enhancement plan doesn't require vacating the apartments. 

Executive Summary

 

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Salt Lake City, Utah - Arda Jean Apartments:

Purchasing an income-generating, 72-unit, multi-family property with 93% occupancy in Salt Lake City, Utah, upgrading and selling the property within 24 months. The capital enhancement plan doesn't require vacating the apartments and its execution will enable raising rents once leases are up for renewal. The property is expected to generate income that will be distributed to investors each quarter during the entire investment period.
 

Asset Type

Min. Investment

Term

Projected Annual

Returns 

Income-Generating

Multi-Family

$25,000

24 Months

12.03%

 

Location:

‎2860 S 200 E Salt Lake City, Utah US‏

Investment Summary:

Purchasing an income-generating, 72-unit, multi-family property with 93% occupancy in Salt Lake City, Utah, upgrading and selling the property within 24 months. The capital enhancement plan doesn't require vacating the apartments and its execution will enable raising rents once leases are up for renewal. The property is expected to generate income that will be distributed to investors each quarter during the entire investment period.

Milestones:

08/17/2017

 

12 Months

24 Months

24 Months

Raise

Closing

Contractual buy-out

option

Projected sale

of asset

Projected project

completion

 

Capital Stack:

Sources of Finance

%

Ownership

Amount

iintoo Equity

 

 

‎$ 1,165,500‏

iintoo Debt

 

 

‎$ 684,500‏

Sponsor

 

 

‎$ 287,500‏

Property Owner Mortgage

 

 

‎$ 4,760,000‏

Total

‎$ 6,897,500‏

Profit Distribution: 75/25

Profit distribution for the project will be 75% for all equity investors and 25% for the sponsor.
 

Preferred Returns: 10%

Pursuant to the legal structure and payout schedule, all equity investors will be entitled to a preferred return equal to a 10% annual yield on its investment.
 

Investment Structure:

iintoo's Investment in JV Deal Initiation Costs Total Capital Raise Min. Investment
$1,850,000 $210,000 $2,060,000 $25,000

Project Costs:

Acquisition        Associated Costs Total    
$5,800,000 $1,097,500 $6,897,500      

Key Points:

  • Income-generating property
    • Short term investment - only 24 months!
    • Income-generating - projected 5.8% on average cash on cash annual returns
    • Stable asset - occupancy is currently at 93% and was relatively high (approximately 90%) even during the economic crisis of 2009. The sponsor’s planned capital enhancement program is expected to result in an even higher occupancy rate
  • Strong market with 3% economic growth
    • Salt Lake City has seen robust economic growth over the past several years
    • Utah has been ranked by Forbes as the top state in the states for new opening business and working environment
    • Salt Lake City has been ranked by Forbes as the #1 city posted to become Tomorrow Tech Mecca
  • Experienced sponsor
    • ALPHA WAVE INVESTORS is an experienced company specializing in multi-family properties, with its own property management subsidiary.
    • Contractual obligation by the sponsor to meet his business plan targets including deadlines, expenses, profit distribution and reporting
  • Investor protections
    • Ownership of the asset via a designated company held by the investors
    • The principal of the sponsor has provided a personal guarantee of the obligations of the sponsor under the JV agreement
    • iintoo will oversee and monitor the project until its completion and provide investors with quarterly progress reports
  • The sponsor has an option to Buyout iintoo’s investors’ stake for a set price between 12 months and 18 months from the date of closing

Property Summary:

 

General:

Arda Jean Manor

2860 S. 200 E. Salt Lake City, Utah

Year Built: 1973

Asset Class: C

Number of Units: 72

Average SF Per Unit: 700

Number of Parking Space: 94

Unit Mix:

  • One Bedroom: 70 Units
  • Two Bedrooms: 2 Units

Location:

Salt Lake City is the capital of the state of Utah. With a population of over 194,000, the city is the core of the Salt Lake City metropolitan area, which has a population of over 1 million. The city was named after the Great Sale Lake, which surrounds it.

Thanks to its central location in the western United States, Sale Lake City is known as the "Crossroads of the West." Two major cross-country freeways, I-15 and I-80 intersect the city, constituting an important transportation corridor which is surrounded by many warehouses and distribution centers.

Sale Lake City hosted the winter Olympic games in 2002, an event that is still considered one of the most successful Olympic games ever. Many restaurants and hotels were established for the games and tourism have since flourished.

Sale Lake City has developed a strong outdoor recreation tourist industry based primarily on skiing but also is one of the notable industrial baking and transportation centers of the U.S.

Amenities:

  • Laundry facilities
  • BBQ area

Specifications:

  • Dishwasher
  • Mounted air conditioner units
  • Central heating

Nearby businesses:

The property is located in close proximity to downtown Salt Lake City, not far from the Sale Lake City International Airport (currently undergoing a $2.2 billion expansion) as well as major employment center in downtown. One of the major employers in the city is Delta Airlines, most of whose flights to the western United States pass through the city's airport.

Sponsor ID :

Seniority Founded in 2013
Expertise         Alpha wave's strategy is to make cycle-appropriate, value-driven investments where clear upside may be achieved through hands-on management, competitive repositioning, operational efficiencies and price appreciation.
Unit track record         Purchased 1,416 units in 14 different complexes and a hotel, manages 1,000 additional units in 20 different complexes
Asset Value track record $67,000,000
Region of expertise Las Vegas (Nevada), Tuscon (Arizona), Utah
 
 
Ken Cruse - CEO and Co-founder
 
Prior to founding Alpha Wave Investors, Mr. Cruse was CEO and a director of Sunstone Hotel Investors, a $55 billion total enterprise value publicly traded REIT (NYSE: SHO). Mr. Cruse joined Sunstone April 2005 as Senior Vice President - Asset Management, and was appointed Senior Vice President - Corporate Finance on September 1, 2006, Senior Vice President and Chief Financial Officer on January 1, 2007, Executive Vice President and Chief Financial Officer on February 18, 2010, President and Chief Financial Officer on December 17, 2010, and as President and Chief Executive Officer and a director on August 5, 2011. During Mr. Crise's tenure as CEO of Sunstone, the company acquired over $1 billion of high-quality hotels and sold hotels for over $300,000,000. From December 2007 through January 2015, Mr. Cruse was a director of BuyEfficient, LLC, a subsidiary of Sunstone. For the eight years prior to joining Sunstone, Mr. Cruse worked in a variety of roles for Host Marriot Corporation. Mr. Cruse holds a B.S. degree from Colorado State University and an M.B.A. with honors from Georgetown University.
 
 
Jordan Fisher - Co-founder Alpha Wave Investors. CEO of Next Wave Property Management 
 https://www.linkedin.com/in/jjfisher/ 
Mr. Fisher has more than twelve years of experience acquiring, redeveloping and managing multifamily properties. Through private investment fund of nine properties consisting of over 300 units throughout Southern California and Las Vegas. Mr. Fisher was founder and CEO of TPG Consulting, LLC, a web development and digital marketing company. Since its founding in 2007, he has overseen growth from two employees to over 110 with revenues over $21.5 million. TPG was recognized as an INC 500 company as well as one of Los Angeles Business Journal's 100 fastest-growing private companies. In 2014, after running the company for over 7 years, he successfully sold the company to a Beijing based multi-national business services firm. Mr. Fisher is a graduate of the U.S. Military Academy at West Point and earned his M.B.A. from the UCLA Anderson School of Business.
 
Similar projects completed by the developer

Market Summary:

Salt Lake City is a potentially attractive market for multifamily investment for several reasons: (1) very high job growth and low unemployment, (ii) below-the-radar status, (iii) increasing rental demand for workforce / attractively-priced rental properties, (iv) high population growth rate, (v) high occupancy rates and (vi) stable CAP rates. In recent years the city has seen growth in the financial, technology and retail sectors, leading to an economic growth rate of 3% and an unemployment rate below 4%. Salt Lake City has been on the top of many lists supporting apartment demand and rental growth:

  • Forbes ranks Utah as #1 for doing business
  • Bloomberg ranks Salt Lake City #1 for upward mobility
  • Realtor.com ranks Salt Lake City #1 Best City for Millenials
  • WalletHub ranks Salt Lake City as the #1 city to start a career
 
 

Economic growth in SLC:

 

Employment growth rate in SLC is higher than the national average:

Population growth in SLC:

Top tech firms are moving to SLC:

Low vacancy and high occupancy rates in SLC:

Rent growth rates in SLC:

Stable CAP rates forecasted:

Projected cash flows ($):

Projected cash flows ($) Year 1 Year 2
     
Rental income 649,212 744,251
Payroll 103,340 107,474
Property taxes and insurance 60,876 62,702
Repairs, Maintenance & Turnover 25,200 32,616
Utilities 26,076 26,598
Market & Administration 25,317 29,025
Management fee 19,724 22,591
Total expenses 260,533 281,006
Net operating income 388,679 463,244
Debt Service (249,900) (273,700)
DSCR 1.56 1.69
Asset management fee (36,375) (36,375)
Release of funds CapeX in reserve 45,000 -
Net Cash flow before tax 147,404 153,169
Project CoC 6.9% 7.2%
Expected Cash flow for iintoo investors 147,404 153,169
Expected Cash flow for iintoo - Debt investors (10% interest) 73,600 73,600
Expected Cash flow for iintoo - Equity investors 73,804 79,569
Expected CoC for iintoo - Equity investors 5.6% 6.0%

Profit Calculation and Waterfall:

Projected Profit Calculation and Waterfall  
Distribution waterfall between iintoo, sponsor, and other investors in the JV  
NOI for sale 495,141
Residual Asset Value @ 6.17% CAP 8,024,975
Cost of Sale 4% (361,124)
Net Sale Proceeds 7,663,851
   
Profit calculation  
Net Sale Proceeds 7,663,851
Proceeds from operation 300,573
Total proceeds 7,964,425
Bank Loan (4,760,000)
Return of Capital (2,137,500)
Total profits for distribution 1,066,925
   
Destruction Waterfall  
Expected Cash flow for iintoo investors 300,573
Return of the rest of Capital contribution - iintoo investors - pro rata 1,549,427
Return of the rest of Capital contribution - developer and other equity investors - pro rata 287,500
Hurdle return for iintoo investors (10%) - Pro rata 370,000
Hurdle return for developer and other equity investors (10%) - Pro rata 57,500
iintoo share of profits above hurdle return (75%) 415,065
Developer and other equity investors share of profits above hurdle return (25%) 224,360
Total proceeds - iintoo investors 2,635,065
Total proceeds- developer and other equity investors 569,360
Total project proceeds 3,204,425

Profit Distribution - iintoo investors ($):

Profit Distribution - iintoo investors ($)  
Profit Distribution - iintoo investors (post regional taxes accrual)  
   
Return of capital contribution for iintoo Debt investors 736,000
Interest payments for Debt investors 10% per annum (including iintoo success fee) 181,728
Return of capital contribution for iintoo Equity investors 1,324,000
Profit remains for distribution for Equity investors (not including iintoo success fee) 393,337
Total Profit distribution for iintoo investors 2,635,065

Net cash flow - Equity unit ($25,000):

Net cash flow - Equity unit (25,000$) Projected sale of asset after 24 months
Principal 1,324,000
Profit 393,337
iintoo success fee (%) 19%
iintoo success fee ($) 74,734
Total return to investors 1,642,603
Deduction of Principal 1,324,000
Total profit for 24 months (before Tax) 318,603
Target yield per annum 12.03%
Net profit per capital unit 31,016
Expected profit per capital unit 6,016

Legal structure:

The above may include forward-looking statements, including forecasts, evaluations, pro forma figures, estimates and other information relating to future events and issues. Forward-looking statements may relate to, among other things, revenues, earnings, cash flows, capital expenditures and other financial items. Forward-looking statements may also relate to our business strategy, goals and expectations concerning our market position, future operations, profitability, liquidity and capital resources. All statements other than statements of historical facts are forward-looking statements and can be identified by the use of forward-looking terminology such as the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "projected", "will" and similar terms and phrases. Any forward-looking information contained above is based, in addition to existing information of the company, on present company expectations and evaluations regarding future developments and trends and on the interaction of such developments and trends. Although we believe the assumptions upon which any forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our business and operations involve risks and uncertainties, many of which are outside our control, and anyone of which, or a combination of which, could materially affect our performance and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements are based on current expectations and are not guarantees of future performance. Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in the above depending on a variety of factors. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable laws, we undertake no obligation to update any information contained above or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of the publishing of the above.

Private placements of securities are intended for accredited investors (for persons residing in the U.S.). Such private placements of securities have not been registered under applicable securities laws, are restricted and not publicly traded, may be subject to holding period requirements, and are intended for investors who do not need a liquid investment. These investments are not bank deposits (and thus are not insured by the FDIC or by any other federal governmental agency), are not guaranteed by the issuer or any third party working on behalf, and may lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the Site. Investors must be able to afford the loss of their entire investment. 

Any real estate investment accessible through the Site involves substantial risks. There can be no assurance that any financial projections, real estate valuations or projected returns viewable through the Site are accurate or in agreement with market or industry valuation, an issuer and/or any third party working on behalf makes no representations or warranties as to the accuracy of such information and accepts no liability therefor whatsoever. Investors should always conduct their own due diligence, not rely on the financial assumptions or estimates displayed on the Site, and should always consult with a reputable financial advisor, attorney, accountant, and any other professional that can help them to understand and assess the risks associated with any investment opportunity accessible through the Site. 

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$2,060,000

Raised of $2,060,000
 

Quick Info

  • Investment Goal: $2,060,000
  • Pre-Money Valuation: $6,897,500
  • Security Type: Limited Partnership Interests
  • Location: United States Salt Lake City, Utah, United States
  • Days Left: Funded
  • Industry: Real Estate