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Reward Big...

Risk Wise,

The Prospects

Applying our metrics to the Midwest market reveals several promising opportunities for further evaluation. We are continually analyzing market conditions and risk factors to identify the most promising investment opportunities that align with our strategic objectives.

Number of Markets

Total number of Midwest ZCTAs (Zip Code Tabulation Areas)

Primary Metrics

  • Population Between 5,000 And 30,000

  • Positive 3-yr Population Growth

  • Median Income > State Median Income

  • Vacancy Rate < 5%

  • Apartment Per Capita Ratio < 10%

  • Strong Municipal Incentives (TIF, Free Land)

  • Population Density In The Middle Fifty

  • Proximity To Larger Metro

  • Legacy Anchor Institute (Hospital, Manufacturer)

Secondary Metrics

Resultant

Target Markets identified to date within the Midwest

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8,097

137+

Gating Criteria II

Gating Criteria I

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Capital Stack

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Common Equity

  • 10% to 20% of Project Value

  • Participation in the Promote

  • $50k Minimum Commitment

  • ​Tax Benefits From Ownership

Preferred Equity

  • 5% to 10% of Project Value

  • Preferred Return + Promote

  • Higher Monthly Cash Flow

  • $100k Minimum Commitment

  • Tax Benefits From Ownership

Senior Debt

  • 75% to 80% of Project Value

  • Fixed Interest & Principle

  • First to Receive Payments

  • Senior Loan Terms
    • 18-month IO​​

    • 25-year Amortization at Stabilized

    • DSCR Minimum of 1.15​

Risk Profiles

Pro Forma Variable Sensitivity

Significance During Project Progression

Explanation

Exit Cap

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Valuation is the ratio of NOI to cap rate. If cap rates rise, the asset value will decrease meaning less proceeds at refinance.

Stabilization Rate

External factors predominantly drive the demand for housing. Regulation, education, and labor force can negatively impact the image of a community.

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Monthly Rents

Changes in market conditions or a need for higher concessions can manipulate the average monthly rents comparative to how a deal was underwritten.

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Lease-up Rate

The speed at which units are rented impacts monthly investor payments. Property Management is responsible for providing accurate estimates.

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Occupancy Permit

Poor project management, procurement gaps, and lengthy inspection lead times are the primary causes for buildings not opening on time.

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Construction Costs

Inclement weather, and unforeseen soil conditions are most problematic in the early stages of construction but decline as buildings go vertical.

Investor Advantages

Multifamily assets have consistently outperformed traditional asset classes such as equities, bonds, and commercial real estate sectors. With a historically high Sharpe ratio, often exceeding that of stocks and other real estate categories, investments in multifamily assets offers a compelling balance of return and stability.

Stronger Risk-Adjusted Returns

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During economic downturns, the essential nature of housing helps multifamily real estate maintain strong cash flows and preserve capital. Unlike equities which are prone to high volatility, multifamily assets benefit from steady rental income, strong occupancy rates, and resilient demand driven by demographic trends. Compared to bonds which are more susceptible to inflationary devaluation, multifamily assets can generate rising income and appreciate in value.

Hedge Against Inflation

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