Dothan, AL 5 Portfolio Investment

WE CLOSED

This is an off-market opportunity for a portfolio of 262 units in Dothan, AL. The properties are located within 5-miles of each other, optimizing the advantage of economies of scale.

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WHY WE LIKE THIS DEAL

Offering snapshot:

Our Ideal Criteria: We never recommend a deal that we aren’t investing in ourselves. We invest alongside our partners. As stewards of your capital, we’re primarily looking at the following criteria when vetting properties to see if they would be a good fit for our investors; Properties often in south-eastern states (such as FL, GA, TN, AL, MS, AR) with MSAs that have not yet peaked, but have ample room to grow, solid working class job bases and economies, landlord friendly environments and positive population and job growth. Deals that are conservatively underwritten. This means large contingency reserves, significant buffers for any capital improvement projects, ample expense growth factored in and modest rent growth. Breakeven rents and occupancy levels that allow plenty of downside protection so that the deal can cashflow even with significant negative headwinds. We expect a deal to meet it’s return specifications even in the event of cap rates moving unfavorably during the entire lifespan of the deal. Class B/C Units: 150-400 Opportunity: Value add/hybrid (value add + cashflow) Projected Returns: 10%+ cash on cash, 15%+ IRR, plus bonus depreciation tax benefits and re-fi/return of capital often in year 2/3. We expect all good deals to have a ‘preferred’ return such that LPs are paid first – this guarantees alignment of interests with GPs. After preferred return is paid, we typically expect a 70% share to go to LPs. Properties in need of some TLC/renovations, such that the delta between current and market rents is meaningful and there are opportunities to add amenities and make cost-effective improvements to units/property. Properties that have not yet implemented extended revenue streams such as RUBS (Ratio Utility Billing System), water billback, fee-based storage, etc.

KEY DEAL POINTS

Investment profile VALUE ADD + HYBRID	Sponsor experience HYBRID	Property type Multi-Family
IRR 15%*	Equity Multiple 2.0x ($100K Investment -> $200K Total Returns)*	Cash on Cash 10%*
Investment Period 6 years	Cost Segregation Bonus Depreciation (62% in year 1, 94% total)	Funds Due May 20, 2022
​Investors / GP Split 70/30	Preferred Return 8%	Total Return 100%

* Asterisk denotes a targeted metric (click to learn more). All targeted returns are stated in net-to-investor terms (i.e. net of fees and promote), provided by the sponsor, and subject to change.

This is a market we’ve invested in previously, are currently exceeding expectations in and are still finding great value to be had. The combined metropolitan statistical area has a population of over 150k and serves as the main transportation and commercial hub for a significant part of southeastern Alabama, southwest Georgia and nearby portions of the Florida panhandle. Roofstock called AL one of the top seven most landlord friendly states for the past several years. Both residential and multifamily housing in Dothan are experiencing high demand and limited availability. There are several highly rated schools and the Milken Institute called it one of the Best Performing Small Cities of 2021. We have an existing and excellent relationship with David Shores of Multi-South Management Services who is managing several of our other profitable properties in this region and who has a great deal of local expertise and relationships.

A few examples of the attractive demographics in Dothan, AL, include;

· Rents have grown by over 25% in the last five years and there is still room for growth.

· Median household income within 1 mile of Barstone is $61,060

· Median single family home value within 1 mile of Barstone is $186,026

· 40.8% of Dothan residents are renters, compared to 31.2% at the state level and 36% nationwide

· See chart below showing Dothan’s historical unemployment rate;