GEORGIA 607 PORTFOLIO
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A MULTIFAMILY INVESTMENT OPPORTUNITY
8%
PREFERRED ANNUAL RETURN
23%
IRR
2.21x
EQUITY MULTIPLE
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CONFIDENTIAL INVESTMENT SUMMARY
DISCLAIMER
The following information is an investment summary provided to prospective investors and others. This information is not an offering to sell a security or a solicitation to sell a security. At the request of a recipient, the Company will provide a private placement memorandum, subscription agreement and the Limited Liability Company Operating Agreement. The Managing Member in no way guarantees the projections contained herein. Real estate values, income, expenses and development costs are all affected by a multitude of forces outside the Managing Member’s control. This investment is illiquid and only those persons that are able and willing to risk their entire investment should participate. Please consult your attorney, CPA and/or professional financial advisor regarding the suitability of an investment by you. (Español)
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01
THE TEAM
THE ASSET MANAGEMENT TEAM
The Sponsor is DMMD. Founded by Duamel Vellon and Myron McNeil, they are experienced multifamily owners and operators with multifamily assets in Central and North Florida, and in South Georgia. Their goal is to preserve the asset and increase its value over time through innovative management techniques, while generating and increasing the asset's income.
It is a common misconception that operators of apartment buildings merely collect rent, manage the property manager and sign leases. In reality, the operation of an apartment building is far more complex. Our team creates and executes an elaborate Business Plan, custom tailored to each property. We work hand-in-hand with the property management team to provide cutting edge technology to the leasing mechanism and also are very hands-on in the construction and renovation of the assets.
For this project, we will have an FULL-TIME staff member placed in Albany to serve as Asset Manager. This person has nearly 20-years experience in property management and their duties include consistent evaluation of the property performance. We are also placing a full-time Construction Manager to ensure timely completion by contractors.
Please note, this is not a heavy lift project. This is an operations and management stabilization project.
Our focus will be to consistently evaluate the property in light of the real estate market, forecast its potential for the future and execute the Business Plan to maximize the building's potential market value. All this while remaining flexible to the demands of the ever-changing real estate market and maximizing returns for our investors.
Director of Asset Management
DMMD Team
Ten15 Capital
Director of Operations
DMMD Team
American Commodity Investment Group
02
THE STRATEGY
Investment Opportunity
We are excited to announce that Ten15 Capital is in partnership again with American Commodity Investment Group! Together, we are pleased to present the opportunity to participate in the following four-property portfolio package in Albany, Georgia:
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The Village, a 100-unit, value-add apartment complex with a pool, fitness center and laundry facility
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Nottingham, a 146-unit, value-add apartment complex with two pools, playground and laundry facility
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Nottingham North, a 161-unit, value-add apartment complex with a pool, tennis court, playground and laundry facility
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2415, a 200-unit, value-add apartment complex with a playground and a laundry facility
We are investing our family's capital in this opportunity.
We are offering an opportunity to partner with us on these great communities, a Class B, garden-style apartment community in a thriving B-Class neighborhood with all of your favorite retailers, such as Starbucks, Chipotle, Aspen Dental & Lowe's.
More than 50% of the units have been completely renovated!
The opportunity of acquiring this asset will allow qualified investors to take advantage of the last year of 100% Bonus Depreciation, We have also programmed in a cash-out refinance and we will enjoy strong cash flow.
With the uncertain times, we are excited to provide our partners the opportunity to hedge against inflation, a looming recession and protect their wealth in an income-producing hard asset.
1031 Exchanges, Self Directed IRA's, Solo 401k are all welcome!!
This is a 506(c) offering, available to accredited investors only.
The Market
There is not another city that can offer big city amenities while providing the comforts of a small town like the City of Albany. Albany is beautifully positioned on the banks of the Flint River. Incorporated in 1838, Nelson Tift founded the city and named it after the capital of New York. It is the hub of Southwest Georgia for culture, shopping, education, healthcare, and recreation. Albany is a great place to live, work and play.
Albany has developed a diversified industrial economy, which includes Proctor & Gamble, MillerCoors, and Mars Chocolate North America. The healthcare and education systems along with the Marine Corps Logistics Base Albany are the largest employers. Manufacturing, transportation, tourism and retail trade are also important foundations of Albany's economy. The city acts as a center for commerce in Southwest Georgia.
Exceptional healthcare is available on two campuses of Phoebe Putney Memorial Hospital, which was included on Georgia Trend’s 2014 list of top teaching hospitals. Both full-service facilities have served residents in Albany and Southwest Georgia for more than a century.
03
OVERVIEW
THE PLAN
Years 1
Renovate & Reposition
Year 2:
Stabilize & Refinance
Years 3-5:
Enjoy Cash Flow
Month 13:
Distributions Begin
*Any accrued preferred payments will be caught up on the refi
timelines
Legal Docs Due:
September 9, 2022
Funds Due:
September 16, 2022
Closing Date:
September 23, 2022
Total Raise:
$22M
projected returns
$100k Minimum Investments
(Lesser investments will be considered on a case by case basis)
2.21x Equity Multiple
23.65% IRR
8% Preferred Return
Cash Out Refi Year 2
75% Capital Return (Projected)
CAPEX PLAN
$3.5M Renovation Budget
Value Add
Interior renovations
Pool upgrades
Privacy & security improvements
Landscaping enhancement
Deferred Maintenance
Roof repairs
Asphalt restriping
10% Contingency
The Village
The Village is one of the premier properties in the City of Albany.
The Village Apartments is a 100-unit garden style apartment community with beautiful landscaping and courtyards. Built in 1973, it has nearly $1M invested of repairs and renovations by Seller since 2019. Some of these include exterior paint, resurface of the pool, renovation of the leasing office and unit upgrades.
Amenities include a recreational swimming pool, office and leasing building, laundry facility, fitness center and a courtyard.
As of July, there were a total of 51 units renovated with vinyl plank flooring, two-tone paint, new countertops and appliances. The units are all townhouse style apartments and very spacious.
The unit mix is:
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76 units 2-bedrooms
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24 units 3-bedrooms
Nottingham
Nottingham Apartments is a spacious 146-unit garden style apartment community built in 1969. There has been over $1M invested of repairs and renovations by Seller, which include exterior painting, dog park, playground and unit interiors.
Amenities include two recreational swimming pools, office and leasing building, laundry facility, clubhouse and a courtyard.
As of July, there were a total of 62 units renovated with vinyl plank flooring, two-tone paint, new countertops and appliances. The units are all townhouse style apartments and are all very spacious.
The unit mix is:
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25 units 1-bedrooms
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39 units 2-bedrooms
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82 units 3-bedrooms
Nottingham North
Nottingham North Apartments is a spacious 161-unit garden style apartment community built in 1973. There has been over $1M invested of repairs and renovations by Seller, which include exterior painting, dog park, playground and unit interiors.
Amenities include a recreational swimming pool, office and leasing building, laundry facility, clubhouse and a courtyard.
As of July, there were a total of 82 units renovated with vinyl plank flooring, two-tone paint, new countertops and appliances. The units are a combination of flats and townhouse style apartments and are all very spacious.
The unit mix is:
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26 units 1-bedrooms
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96 units 2-bedrooms
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39 units 3-bedrooms
2415 West
2415 West Luxury Apartments is a spacious 200-unit garden style apartment community built in 1970. There has been over $500k invested of repairs and renovations by Seller, which include exterior painting, dog park, playground and unit interiors.
Amenities include a recreational office and leasing building, laundry facility, clubhouse and a courtyard.
As of July, there were a total of 151 units renovated with vinyl plank flooring, two-tone paint, new countertops and appliances. The units are a combination of flats and townhouse style apartments and are all very spacious.
The unit mix is:
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56 units 1-bedrooms
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112 units 2-bedrooms
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32 units 3-bedrooms
04
THE THESIS
What We Like About Georgia 607 Portfolio
Top 5 Reasons
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Excellent location near all the coffee shops, restaurants and retail
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Market is at maximum occupancy (none of the comps had vacancy)
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A whopping 34% under market rents, conservatively
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Management play, our strength (not a heavy capex intensive project)
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Strong South Georgia submarket with strong employers and fundamentals
Positive Leading Market Indicators
Contrary to lagging indicators such as CoStar reports, the apparent population loss is a phantom metric due to lack of available housing for new households. Our team has been present at the market monthly since February to fully understand the big disparity in the population figures. For example, the neighboring Lee County has seen a population boom of 9% during the same period that Albany showed a loss. Our research determined that the only new construction built to absorb the new households was in this neighboring market. This indicator proves the confidence in filling the newly renovated units with quality residents at our subject properties. Furthermore, each of the properties is currently hosting a wait list for units.
Below Market Rents
The current average in-place rent across floor plans is more than $250 below market for similar units. With updated apartments, we will achieve rent premiums at our pro-forma.
Property & Operations
The property amenities and curb appeal could use improvements. The property is in an ideal location and has the ability to attract a higher quality tenant profile. With our proven Business Plan, we will add new landscaping elements, security gate & camera, new property management and overall freshen up of the property.
Renovate Interiors
The Seller has undergone very nice renovations on 50% of the units across the portfolio. There is an opportunity to continue to improve the units with vinyl plank floors, modern two-tone paint scheme and updated lighting. We will replace the remaining HVAC units and kitchen appliances.
Positive Market Fundamentals
Albany consistently indicates positive market indicators such as 96% occupancy across the main comparable properties (on our in-person research, none of the comparable properties had any available units). Thriving off of a host of employers in medical (such as Phoebe Putney Research Hospital), educational (such as Albany State University), and manufacturing industries (such as Procter & Gamble, Miller Coors Molsen and Georgia-Pacific Lumber), Albany has entered an economic expansion phase.
05
THE FINANCIALS
UNIT MIX
607 Total Units
107- 1 Bedroom
323- 2 Bedroom
177- 3 Bedroom
50% Unit Interiors Renovated 2019- 2022
PURCHASE
Purchase Price:
$47.25M
Price Per Door:
$77,842k
Projected Rent Growth:
34%
mortgage
Bridge Debt Year 1-2:
Transition and Stabilization
Refinance End of Year 2:
6% Interest Rate
10-Year Term
30-Year Amortization
Interest Only 2 Years
FINANCIALS
IRR:
23.65%
Preferred Return:
8%
Average Annual Return: 19.2%
LP Position:
70%
5-Year Pro-Forma
Capital Stack
Splits (Excess Cash Flow & Equity Share On Sale)
Partner Returns
8% Preferred Based On $100k Investment
The Comparable Properties
06
THE WEBINAR
Frequently Asked Questions (FAQ)
How and when will distributions be made? We will pay distributions quarterly, in the month following the end of the quarter. Payments will only be made via ACH direct deposit to the bank account you provide to us upon committing your investment. Distributions start at the end of the 4th quarter of ownership to allow for the execution of the Business Plan.
When is the first distribution? The preferred returns will not start being distributed until month 13 of ownership, paid on the 20th of that month and will follow quarterly. This gives management an opportunity to settle in, assess the operations, ensure the property is cash flowing, and pay investors with the operating cash flow.
Is the General Partnership team investing any of their own money? Yes. The GP team is investing a minimum of 10% of the required raise of their own funds into this deal.
Will you be doing a cost segregation study that includes bonus depreciation? Yes, we will be performing a cost segregation study to maximize the depreciation and bonus depreciation for the 2022 tax year. The projected tax dollar benefits to be captured looks to be an estimated 50-60% of your total investment amount. For example, if you invested $100,000, you could potentially have $50,000 o $60,000 of passive paper losses on your 2022 K-1 statement. Consult your CPA on how this could affect your taxes.
Can I invest less than $100,000? At this point in time, investment amounts less than $100,000 will be considered on a case-by-case basis.