Highlights
- Immediate fixed interest return of 8% APR over 3 years
- Potential tax benefits from pass-through depreciation losses
- Substantial renovations expected to drive rental increase of $200/unit
- Quick return of capital to investors; refinancing expected after 3 years
- Winston-Salem home prices have appreciated 38% since 2000
- Experienced sponsor who has done $30 million+ in deals
Property
The Residences at Diamond Ridge is an apartment complex located just 1.25 miles from downtown Winston-Salem, North Carolina. Although the complex is fully leased, there is an opportunity to renovate and add long-term value to the property by doing significant interior and exterior renovations and increasing rents to market levels.
The property consists of 336 units averaging 852 square feet and currently has three playgrounds, a soccer field, a leasing office, and a non-functioning swimming pool, all which DeRosa Group plans to renovate to maximize the value of the property.
Business plan
The business plan for The Residences at Diamond Ridge consists of six steps towards profitability:
1. Renovations to improve the curb appeal and attractiveness of the property including:
- Adding three new playground sets onsite
- Painting all buildings
- Creating a community space: repairing the pool and extending the deck to add a basketball court, picnic tables, dog park, grilling area, and gym
- Implementing a targeted security and safety improvement plan
2. Interior Unit Renovations
- Updating the interiors of each unit to meet resident demand and raise rents to market, resulting in an anticipated average rental increase of $140 per unit.
3. New Management
- Bring best-in-class local property management systems and processes, while increasing onsite staff
Sponsor
The DeRosa Group is a family-owned business headquartered in Trenton, New Jersey. Matt and Liz started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia. Since then, the DeRosa Group has completed over $30 million in real estate transactions involving private capital including fix and flips, single family home rentals, mixed use buildings, apartment buildings, office buildings, and tax lien investments.
DeRosa Group is a developer and owner of commercial and residential property with a mission to “transform lives through real estate.” DeRosa is a people-focused, boutique development company who is proud of their proven track record of providing safe, profitable investment opportunities. DeRosa allows…
Offering
We are offering up to 1,070 Class A Membership Interests (the " Class A Interests") at $1,000 per Class A Interest. Class A Interest holders will receive an 8% annual preferred return for a period of 3 years at which point we intend to redeem the interests using proceeds from a refinancing of the property.
Financial Overview
Sources and Uses |
|
| Property Purchase Price | $18,500,000 |
| Renovation Costs | $4,500,000 |
| Financing & Soft Costs | $1,190,000 |
| Total Use of Funds | $24,190,000 |
| Class A Equity | $2,000,000 |
| Class B Equity | $9,240,000 |
| Senior Mortgage | $12,950,000 |
| Total Source of Funds | $24,190,000 |
Cash Flow to Class A Members
Projected Returns
The return will be a fixed interest return of 8% APR for 3 years. The capital will be returned at the end of 3 years
Location
Winston-Salem, North Carolina which has seen great growth in recent years spurred by Wake Forest University, the health and technology sectors. Diamond Ridge is located just 1.25 miles from downtown Winston-Salem’s employment and entertainment hub, and is a quick ten-minute drive from two of the region’s most prominent medical centers, several universities, and prime retail shopping.
A Growing City
Employment growth in Winston-Salem has transformed the city into the third largest urban area in North Carolina with a total population of over 650,000 individuals. Downtown Winston-Salem has been the benefactor of nearly $2B Public and Private investment, specifically in the area known as the Innovation Quarter.
With 20 Regional Hospitals, over 20
