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Houston, Texas - Multi Family
Offering short link
Raise Details
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Gross Offering$750,000 USD
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Available Units10.00
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Minimum Investment$75,000 USD
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Maximum Investment$750,000 USD
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Open DateSep 01,2018
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Closing DateNov 01,2019
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Investment TypePreferred Equity
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Maturity6 months
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Real Estate UseResidential
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Maturity End Date
Type
| Type | Number of Units | Available Units | Cost per Unit | Gross Offering | Annual Yield | Term |
|---|---|---|---|---|---|---|
| Preferred Equity | 10.00 | 10.00 | $75,000.00 USD | $750,000.00 USD | 24.00% | 6 months |
| Totals | 10.00 | 10.00 | $750,000.00 USD |
Executive Summary
EXECUTIVE SUMMARY
Overview.
Four Arrow Funding, Inc. (the “Issuer”) is making a $875,000 preferred equity investment (“PE”) to a newly formed limited liability LLC (the “Borrower”) formed by Vinod Kulhari, Erin Hudson, and Cynthia Manno (the “Guarantor(s)”). The PE is secured by 300 Victoria Drive and 4635 Werner Street, Houston, TX (the “Properties”). The Properties are comprised of two (2) multifamily projects containing a total of 104 units that are substantially occupied. The Properties are “C” Class properties in a B-market. The Borrower intends to upgrade to a solid “B” rating to increase rents and NOI substantially to a $750,000 annual NOI upon stabilization. The approximate cost (the “Cost”) of the Properties is $6.5 million. Upon stabilization, the $6.5 million Cost will convert to a $8.2 million valuation (the “Value”). See the next page for details. The location is the northwest corridor. The Issuer is an affiliate of Chesterfield Faring Ltd (“CFL”).
Capital Structure. The Properties will be secured by first mortgage loans (the “Loan(s)”) of $4.7 million. The purchase price is $5.2 million. With approximately $1.0 million for value add improvements plus $300,000 in closing costs, the total acquisition cost is $6.5 million. The Borrower will have $1.0 million of common equity (“CE”) invested in the Properties. The PE has $1.0 million of CE subordinated to the PE. The Loan is 71.48% Loan to Cost. The PE including the Loan is a 84.79% Loan/PE to Cost and 67.99% Loan to Value upon stabilization. The Value of the Properties must decrease by over 32.01% before you as investors (the “Investors”) would have any risk of principal loss.
PE Participations. The Issuer provides PE loan participations to its Investors. The Issuer is offering ten (10) units (the “Units”) at $75,000 each totaling $750,000. The repayment will be $84,000 per Unit or a gross of $840,000 at the end of the six (6) month term (the “Term”) for a profit of $9,000 per Unit. Predicated on the Term, the annualized return is 24.0%. CFL is purchasing a $35,000 unit totaling $875,000 for the gross PE issuance. The Borrower may extend through two (2) six (6) month extensions for $25,000 in cash each plus adding $75,000 for each extension to the face amount of the PE. The Investors will receive Units from the Issuer secured by the PE that the Issuer makes to the Borrower. See the PE Loan Participation agreement for more details and risk factors.
Collateral Held. The Collateral includes a secondary assignment of the LLC membership interests. If and upon a Maturity Date default, if any, FAF has right to sweep net cash flow to repay full balance until paid in full. The Guarantor will: i) guarantee the Loan, & ii) pledge assignments of the interests in the Properties.
The Properties. 300 Victoria Drive. This Property is a 68-unit, 85% occupied "C" class apartment community. 4635 Werner Street. This Property is a 36-unit, 89% occupied “C” class apartment community located close to 300 Victoria Drive. Both Properties are located in Independence Heights area of near Northwest Houston. It is located approximately 1.5 miles outside Loop 610 and
Highlights
- Preferred Equity
Comments
- There are no Comments for this Offering.