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Jan 11, 2016 8:28 EST

ALMA SINGLE FAMILY HOME FUND

iCrowdNewswire - Jan 11, 2016

RealtyShares investors will be providing capital to Alma Investment Properties, LLC (the “Fund”) for the purpose of purchasing, renovating, and leasing up single family and small multi-family residential properties located in the greater Jacksonville and Gainesville, Florida areas. RealtyShares 100, LLC will provide at least $1MM of capital to the Fund, while Sun Coast will contribute at least $150,000 in equity, which will be subordinate to the equity provided by RealtyShares. Sun Coast will act as the Manager of the Fund and will be solely responsible for all operations and decisions concerning property purchases, renovations, and leasing of the properties.

RealtyShares 100, LLC will receive a 14.0% annualized preferred return (net of all fees) paid monthly on the RealtyShares investment from properties purchased and recapitalized in the Fund. The principal and the preferred return will have a corporate guarantee provided by Sun Coast.

For details on completed projects, please see the Sample Projects and Track Record.

FINANCIAL OVERVIEW

INVESTMENT TYPE

Preferred Equity

TERM

30 Months

PREFERRED RETURN

14.0%
Annualized; paid monthly

INVESTMENT STRATEGY

The Fund will be expected to purchase, renovate, and sell approximately 120 properties in the Jacksonville and Gainesville areas over 2.5 years, and each property will be fully renovated and leased within 90-120 days. Once leased, the Fund will either place conventional debt on the properties or sell the properties as turnkey investments. Assuming a capital raise of $1MM, the Fund should be able to deploy all of the capital within 60 days. In the event that the Fund is unable to liquidate the properties through a sale, conventional debt will be placed on the properties to return the investor equity. Sun Coast has identified B2R, Colony American Finance (current lender), First Atlantic Bank (current lender), and Jacksonville Bank as sources of debt.

The Sponsor anticipates exiting its investments in one of the following two ways:

  1. Hold the assets using cash out capital from long term financing or short term warehousing facilities.
  2. Sale of individual assets.
INVESTMENT HIGHLIGHTS AND RISK MITIGANTS

This is an investment opportunity to participate in a fund that will purchase, renovate and recapitalize single family and small multifamily homes in the Greater Jacksonville and Gainesville areas, which have been some of the most profitable areas in the U.S. to purchase and rehabilitate properties.

  • Experienced Sponsor: Sun Coast and its affiliates have over 30 years of experience in residential investments and is one of the largest private owners of single-family residential in the Jacksonville area. Over the last three years, Sun Coast has acquired and renovated 800+ single-family properties. Sun Coast and its affiliated companies have deployed in excess of $35 million in personal and JV equity over the last five years in the residential real estate market.
  • Moderate Leverage: The transaction will benefit from a $3MM line of credit provided by Colony American Finance, which will hold first liens on the properties in the Fund. The line of credit allows for maximum leverage of 80% of cost (purchase price and capital expenditures) or 70% of appraised value of a purchased property, whichever is lower.
  • Corporate Guaranty: The Sponsor has provided a corporate guarantee on this investment. The Sponsor currently manages over 1,100 units with an estimated market value of $85MM.
  • Exit Capital: Sun Coast maintains relationships with and has identified B2R, Colony American Finance (current lender), First Atlantic Bank (current lender), and Jacksonville Bank as sources of debt, which will provide refinancing options after renovations are complete.
LOCATION HIGHLIGHTS

Sun Coast Property Management, LLC is located in Jacksonville, Florida and all homes to be purchased by the Fund will be located either in the Jacksonville, Florida MSA or the Gainesville, Florida MSA. Below are a few location highlights:

  • U.S. Census estimates the population in the Jacksonville and Gainesville, FL metropolitan statistical areas to be 1,394,624 and 273,377, respectively.
  • U.S. Census indicates the median household income in the Jacksonville and Gainesville, FL metropolitan statistical areas is $51,117 and $45,353, respectively (in 2014 inflation-adjusted dollars).
  • According to Zillow, the median sales price for homes in the Gainesville MSA is $141,000. This represents an increase of 4.1% compared to the prior year and Zillow predicts they will rise 0.2% within the next year. Comparatively, the median home value in the Jacksonville metro area is $161,500, and is expected to increase by 1.0% next year after increasing 4.5% over the past year.
  • The Port of Jacksonville is expected to benefit from a $600MM investment for growth and modernization of the Port is currently under way as part of the Port Authority’s mission to become a principle hub for global logistics.
  • Trivia: Jacksonville was known as Cowford until 1822 because cattle were transported across the St. John’s River.
RISK DISCLOSURES

Each prospective investor in this investment opportunity should read the Operating Agreement and Subscription Agreement for RealtyShares 100, LLC before investing and should consult appropriate legal, tax and investment advisors. Please note that RealtyShares is not serving as your fiduciary or advisor with respect to this opportunity. Below are risks associated with this investment that should be carefully reviewed prior to any investment in this opportunity:

  • RealtyShares 100, LLC will be investing in an entity that will be formed prior to close (the “Fund”). Any equity investment in the Fund will be subject to, among other things, the Fund’s operating agreement which provides investors with little or no control over the management of the Fund. A draft version of this Fund Operating Agreement can be found in Exhibit D to the Subscription Agreement for RealtyShares 100, LLC.
  • The Fund’s economic performance and value, and thus the value of investors’ investment in the Fund, is subject to risks associated with the property including the failure of the property to be appraised at a value sufficient to meet its debt repayment or failure of the corporate to generate sufficient cash to pay its preferred return.
  • The Fund holding periods described in this deal page are projections only. Although we believe these projections to be reasonable, there can be no assurance when an investment or if an investment will ever be liquidated.
  • The financial forecast contained in this deal page and any other materials to delivered to you are based on numerous assumptions. Although we believe these assumptions to be reasonable, all of these assumptions are subject to uncertainty.
  • Market conditions could reduce the Property’s refinanced value. This could result in investors not meeting the projected returns as shown on this deal page.

Please note that this is not an exhaustive list of the risks associated with this investment. For a complete list of risk factors, please review Exhibit A in the Subscription Agreement for RealtyShares 100, LLC, which can be found in the Documents tab.

Contact Information:

ALMA SINGLE FAMILY HOME FUND

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