| Min. Invest | IRR | ROI | Equity Multiple | Investor Percentage | Principal Percentage | Accrual | Target Hold |
|---|---|---|---|---|---|---|---|
| $1,000,000 | 19% | 14.00% | 2.20 | 80.00% | 20.00% | 5 % | 36 Months |
Executive Details
**Please Note: This document is for illustrative purposes only and does not constitute an actual offering. It is a sample designed to provide an overview of what a potential offering might entail.**
ESX Family Office ("Sponsor") intends to partner with Liberty Avenue Project Manager, LLC ("Manager") in the acquisition of a 1.66-acre tract (the “Property”) in Sedona, Arizona, and develop a 280+ unit apartment building. In this current challenging market, this property will be acquired at a 30% discount: $7.8M, well below the current appraised value of $11M. Adding to that is the rarity of the deal: A hard money lender took the property back, with tenants onsite and multi-year leases in place, which will cover the debt service on the loan during the hold period.
The Manager knows the Sedona area well, and its intent is to obtain city approvals over the next 2-4 years as construction costs and interest rates reset and stabilize. The land will then be contributed to the construction project at the then-current appraised value at the time of construction. Construction will begin once the project is approved by the city and construction costs and/or interest rates are stable.
ESX is seeking $1,000,000 to pursue this opportunity. The expected LP investor IRR is 18.53%. This deal is subject to a standard promote fee of 20%.
Why this Deal? Several options for ROI:
ROI Scenario #1: Take advantage of tax subsidies in year 1-3 with cost segregation and bonus depreciation potentially enhancing ROI up to 40%-50% the first 2-3 years.
ROI Scenario #2: Sell the land to the new construction deal at $11M-$12.5M (market value)- leading to an ROI of 2-2.5x.
ROI Scenario #3: Option to roll into new 290+ unit multifamily housing at a cost $80M-$90M. Upon complete construction -- reap benefits of additional tax subsidies on phantom depreciation losses enhanced with cost segregation studies.
ROI Scenario #4: Stabilize property and refinance with Fannie or Freddie agency debt- After sale of land: Opportunity to achieve additional new basis of 2x-3x. Reap the benefits of Cash on Cash returns until we sell or refinance to enhance our returns even further.
