Growing Investor Returns
Projected initial cash flow of 6.35% to investors with an expectation to grow to over 8.0% by year 10.
Property Value-Add Potential
We anticipate investing $230,000 in upgrading the property common area and amenities. There is also potential to fully renovate approximately half of the property’s units over a 4-year period, and we anticipate generating $70 in additional monthly rent per unit on full renovations.
Stable and Growing Market
Rents have grown over 13% over the last 5 years in Pensacola, and occupancy has averaged 96% for Class A and B assets.2 Pensacola is forecasted to have a 12% population increase by 2020.
Conservative Underwriting Assumptions
Year 1 revenue has been conservatively underwritten, with revenues projected to be equal to trailing performances despite anticipated value creation through renovations and management improvements.
Excess Upfront and Ongoing Reserves
The DST has been capitalized with nearly $1.5 million of upfront reserves to complete renovations, perform common area improvements, and provide extra cushion for maintenance items and ongoing replacement reserves. We forecast that we will have set aside over $1.0 million more in replacement reserves than is required by third-party reports over a 10-year period.