INVESTMENT RETURN GOALS
INTERNAL RATE OF
EST. CASH-ON-CASH RETURN
LP Ownership after 100%
GP Ownership after 100%
“ Our goal is to return your initial investment as soon as possible ”
The Fund is focused on the acquisition, management, and disposition of value-add multifamily assets in order to rapidly return passive investor capital with a targeted 14% internal rate of return (IRR). The Fund’s strategy is to increase net operating income by achieving increased rents and ancillary incomes by renovating and rehabbing properties in targeted geographic locations with strong job, economic, population, and rent growth. The Fund will seek to reduce operating expenses using experienced and professional property managers with a history of successful renovation projects, stabilization, expense management, and strong occupancy rates.
By increasing the net operating income of the properties, the Fund seeks to provide a steady stream of tax-advantaged, passive income through quarterly distributions from the operating cash flow. The increased net operating income also builds equity through the appreciation of the asset and allows us to position the properties for eventual sale or refinance in order to deliver an attractive risk-adjusted return.
Property #1 – Suncourt Apartments
Suncourt Apartments consists of multiple single-level fourplexes built in 1984. Suncourt is located at 5825 E. University Ave in East Mesa, adjacent to Dreamland Villa Retirement Community. These red brick buildings feature 14-2 bedroom units and 14-1 bedroom units. They are 100% rented and rarely have a vacancy. Tenants are highly stable with many long-term occupants of greater than 5+ years with extremely low turnover or missed rent payments. Each unit has a private patio and full-size washer/dryer hook-ups. Interiors are well kept and separately metered for electric. The property has been owner-operated. Rents average $760 and are well below market.
Unit interiors will receive new vinyl flooring, new stainless steel appliances, new washer and dryers, fresh paint, and fully rehabbed bathrooms and kitchens. Exterior renovations include new paint, asphalt repair, newly constructed patios, and new signage.
$4.2M to purchase 28 units (7 fourplexes). Approx $2.6M in financing and a $2M equity raise for the down payment, repairs, and reserve.
With our premium interior upgrades and by addressing the exterior aesthetics, we plan to rent the one bedrooms for $1,000 and the two bedrooms for $1,200 while adding in $25 for RUBS utility and a separate pet fee.
Property #2 – Palm Square
The second property in the 1802 Capital Fund X is Palm Square Apartments. It is an 18 unit property built in 1958 in Phoenix, AZ consisting of six studios, ten 1BR, and two 2BR apartments. 17 of the units have one bathroom and one of the 2BR units has 1.5 bathrooms.
Palm Square is located just off Camelback Road and only minutes from Uptown Plaza, AJ’s Fine Foods, Restaurant Row, and more. This excellent central location also affords easy access to 7th Ave, the Camelback Light Rail Station, and the I-17 Freeway.
Many of the larger CAPEX repairs such as asphalt driveways, new curbs, exterior paint, landscaping, exterior lighting, six unit reservations, security gates, and more were conducted by the prior owners. We will continue to improve upon the property in accordance with our value-add plan, seek to renovate the remaining units, and fetch market rents or better to drive up the valuation and equity. Currently, we estimate rents to be approximately $250/month below market value.
We were able to secure this off-market property for $133.3K per door, which represents a fantastic value and instant equity, especially considering all of the renovation work already completed.
Property #3 – Sunset Mesa
Sunset Mesa is a 40 unit apartment complex located at 237 South Ashland, Mesa, AZ 85204. It is a garden style community with well manicured landscaping and covered parking on both sides of the complex. Much like our other properties in Mesa, it is in close proximity to main avenues of travel, shopping, dining, and other activities.
There are 13 studios, 19 one bed/one bath, and 8 two bed/one bath units. We believe this diversity will make the property attractive to many different types of potential renters and translate into high occupancy rates.
Sunset Mesa had been previously owned and managed by one owner for well over a decade. Per our strategic plan, the property is in good shape with few, if any, major CAPEX expenses that don’t drive valuation. Interior upgrades and other targeted improvements such as in-unit washers/dryers and pool upgrades will drive valuations higher per our value add plan.