Property Details
Below Market Rents  Repositioning Opportunity  NOI Growth 
Asset Profile
Value Add

LURIN: Rosemont Vista Del Sol Apartments (Dallas-Plano, TX)

Plano, TX

Multi-Family Property
LURIN Dallas, TX
LURIN
  • IRR 33%
  • Equity Multiple 3.3x
  • Hold Period 5Y
  • Minimum Investment $50K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 10.5% Y3.5
  • First Distribution Mar 2025
  • Distribution Frequency Quarterly
  • Co-Investment 5% ($572K)
  • Preferred Return 9%
  • Investor Profit Share See Financials
  • Asset Profile Value Add
  • Loan-to-Value 71%
  • Current Occupancy 95%

About this Property

"A distressed asset purchased at a discount, Rosemont Vista Del Sol is a Class-C apartment community located in Plano, a prestigious suburb of Dallas, TX, the 4th largest MSA in the country."

- Jon Venetos, LURIN

Property Address 3500 Hillridge Dr.
# of Units 266
Square Footage 254,824 sq. ft.
Year Built 1970
Year Renovated N/A
Current Occupancy 95%
Market Occupancy 94%
Current Average Rent $1,256
Average Market Rent $1,597
Acquisition Price $51,100,000
Price/SF $200
Stabilized Loan to Value 66.9%(1)
(1) Month 32 stabilized

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

 

Why are you buying this property?

Jon Venetos LURIN: "This acquisition represents an opportunity to acquire a workforce housing apartment community in Plano, TX, a premiere suburb of Dallas. The property will represent LURIN’s 13th transaction in the Dallas Fort Worth metroplex. LURIN will use its in-house operations and construction teams to implement its business plan to transform the asset into a desirable class-B property through an extensive value-add strategy. By strategically repositioning the property, LURIN will market the property’s desirable location to nationally ranked schools and extensive employment opportunities to bring rents and occupancy in-line with properties of similar vintage in the immediate sub-market."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN: "Distressed Asset with a Stressed Partnership at a Discounted Purchase Price:"

  1. "Stressed Partnership: By way of background, Rosemont Vista del Sol was purchased in 2018 as an asset within a larger portfolio, with Bel Air as the Sponsor and Investcorp as the Capital Partner. During the first three years of ownership, Bel Air was unable to reposition the asset because the Sponsor did not account for the necessary capital improvements needed to drive the turnaround. During its stewardship, very little renovation or general improvement were accomplished. As such, Investcorp replaced Bel Air with TitanCorp (its internal operator). TitanCorp also underperformed for many of the same reasons, which were further exacerbated given Rosemont was the only asset they managed within a thousand miles. Unwilling to invest meaningful dollars into the property, Investcorp instead chose to list the property for sale in early 2022."
  2. "Discounted Purchase Price: LURIN originally underwrote the deal when Rosemont was first marketed for sale, attracted to Rosemont due to its location and significant underperformance; however, LURIN ultimately passed on the opportunity due to the “whisper number” exceeding its underwritten value. Rosemont was awarded to another buyer at ~$54.5M or ~$204,900/unit. Unfortunately, the potential buyer was unable to perform and Investcorp directed the broker to quickly secure another buyer. LURIN was one of the first calls and was onsite with acquisitions, operations and construction the same day and provided an LOI with aggressive terms shortly thereafter. This ultimately led to LURIN being awarded the deal at a $3.4M discount ($51.1M purchase price or approximately $192,102/unit)."
  3. "Affordable, Family-Oriented Property with Accessibility to Top School District: The property is in a prime location for families seeking affordable housing in one of the best school districts in the country. It is also situated within minutes from high-paying and stable employment opportunities in the nearby area. In addition, the substitution factor to purchasing a single-family home has become extremely challenging for buyers in the DFW market due to pandemic driven valuations and the recent move in mortgage rates to almost 6%."
  4. "Proven Track Record in DFW: LURIN currently owns 6 properties in DFW and is under-contract to acquire 2 additional properties in May/June (totaling 1,482 units). LURIN has consistently recorded significant rental premiums using its in-house construction and management teams, which are further supported by their corporate headquarters being located in Dallas. Recently, LURIN exited four DFW assets, generating an average net IRR of 29% and 2.1x equity multiple."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s business plan will be to transform the asset into a desirable Class-B property and improve on-site operations with its in-house operations and construction teams. LURIN’s renovation strategy will be focused on three key areas; i) interior upgrades, ii) exterior improvements / curing deferred maintenance, and iii) adding amenities."

"LURIN believes its value-add investment will yield an average rental increase of $340 per month per unit. LURIN will be using its in-house construction teams for both interior and exterior renovations and is planning to invest $9.3M into Rosemont."

"The business plan calls for a full rehab of 240-unit interiors of the asset, upon which time LURIN plans to continue to operate the asset and distribute funds back to investors. The estimated timeline for this is planned to be between 24 and 27 months into the project lifecycle. It is LURIN's intention to refinance the asset between month 30 and 33 which will yield in a tax-free distribution of LP capital, assuming normal market conditions. After the refinancing, LURIN intends to continue to cash flow the asset, making quarterly distributions to investors until full monetization, which is expected by month 60."

"It is LURIN’S intention to pursue a refinancing of the asset between month 30 and 33. The refinancing will result in a tax-free distribution of LP capital, assuming normal market conditions. Post the refinancing, LURIN intends to continue to cash flow the asset, making quarterly distributions to investors until full monetization, which is expected by month 60."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: “There are a number of potential operational risks associated with this investment, including but not limited to: i) expiration of leases, ii) lease termination and tenant defaults, iii) due diligence may not reveal all property conditions, iv) unexpected delays in construction, v) financing and refinancing risk, vi) general local market risk for Dallas-Plano, TX. Additional risks for this investment include an unforeseen material event such as a global pandemic."

"Part of LURIN's integrated platform is a dedicated Risk Management Team. The Risk Management Team focuses on mitigating risk at a corporate and property level. With regard to interest rate risk, LURIN buys an interest rate cap hedge for each property. LURIN also insures each property beyond what the lender requires to ensure our coverage is the best possible from all angles, not just wind, named storms, and flood. As such, LURIN will also add Business Interruption insurance, which includes covid related mitigation. LURIN also utilizes an umbrella policy which allows for flexibility on cost vs. coverage.”

 

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

About this Property

"A distressed asset purchased at a discount, Rosemont Vista Del Sol is a Class-C apartment community located in Plano, a prestigious suburb of Dallas, TX, the 4th largest MSA in the country."

- Jon Venetos, LURIN

Property Address 3500 Hillridge Dr.
# of Units 266
Square Footage 254,824 sq. ft.
Year Built 1970
Year Renovated N/A
Current Occupancy 95%
Market Occupancy 94%
Current Average Rent $1,256
Average Market Rent $1,597
Acquisition Price $51,100,000
Price/SF $200
Stabilized Loan to Value 66.9%(1)
(1) Month 32 stabilized

Top Questions

All answers are provided by the sponsor, LURIN, or its representatives.

 

Why are you buying this property?

Jon Venetos LURIN: "This acquisition represents an opportunity to acquire a workforce housing apartment community in Plano, TX, a premiere suburb of Dallas. The property will represent LURIN’s 13th transaction in the Dallas Fort Worth metroplex. LURIN will use its in-house operations and construction teams to implement its business plan to transform the asset into a desirable class-B property through an extensive value-add strategy. By strategically repositioning the property, LURIN will market the property’s desirable location to nationally ranked schools and extensive employment opportunities to bring rents and occupancy in-line with properties of similar vintage in the immediate sub-market."

 

What are the most important aspects of this investment opportunity for the investors?

Jon Venetos, LURIN: "Distressed Asset with a Stressed Partnership at a Discounted Purchase Price:"

  1. "Stressed Partnership: By way of background, Rosemont Vista del Sol was purchased in 2018 as an asset within a larger portfolio, with Bel Air as the Sponsor and Investcorp as the Capital Partner. During the first three years of ownership, Bel Air was unable to reposition the asset because the Sponsor did not account for the necessary capital improvements needed to drive the turnaround. During its stewardship, very little renovation or general improvement were accomplished. As such, Investcorp replaced Bel Air with TitanCorp (its internal operator). TitanCorp also underperformed for many of the same reasons, which were further exacerbated given Rosemont was the only asset they managed within a thousand miles. Unwilling to invest meaningful dollars into the property, Investcorp instead chose to list the property for sale in early 2022."
  2. "Discounted Purchase Price: LURIN originally underwrote the deal when Rosemont was first marketed for sale, attracted to Rosemont due to its location and significant underperformance; however, LURIN ultimately passed on the opportunity due to the “whisper number” exceeding its underwritten value. Rosemont was awarded to another buyer at ~$54.5M or ~$204,900/unit. Unfortunately, the potential buyer was unable to perform and Investcorp directed the broker to quickly secure another buyer. LURIN was one of the first calls and was onsite with acquisitions, operations and construction the same day and provided an LOI with aggressive terms shortly thereafter. This ultimately led to LURIN being awarded the deal at a $3.4M discount ($51.1M purchase price or approximately $192,102/unit)."
  3. "Affordable, Family-Oriented Property with Accessibility to Top School District: The property is in a prime location for families seeking affordable housing in one of the best school districts in the country. It is also situated within minutes from high-paying and stable employment opportunities in the nearby area. In addition, the substitution factor to purchasing a single-family home has become extremely challenging for buyers in the DFW market due to pandemic driven valuations and the recent move in mortgage rates to almost 6%."
  4. "Proven Track Record in DFW: LURIN currently owns 6 properties in DFW and is under-contract to acquire 2 additional properties in May/June (totaling 1,482 units). LURIN has consistently recorded significant rental premiums using its in-house construction and management teams, which are further supported by their corporate headquarters being located in Dallas. Recently, LURIN exited four DFW assets, generating an average net IRR of 29% and 2.1x equity multiple."

 

What is your investment strategy/business plan?

Jon Venetos, LURIN: "LURIN’s business plan will be to transform the asset into a desirable Class-B property and improve on-site operations with its in-house operations and construction teams. LURIN’s renovation strategy will be focused on three key areas; i) interior upgrades, ii) exterior improvements / curing deferred maintenance, and iii) adding amenities."

"LURIN believes its value-add investment will yield an average rental increase of $340 per month per unit. LURIN will be using its in-house construction teams for both interior and exterior renovations and is planning to invest $9.3M into Rosemont."

"The business plan calls for a full rehab of 240-unit interiors of the asset, upon which time LURIN plans to continue to operate the asset and distribute funds back to investors. The estimated timeline for this is planned to be between 24 and 27 months into the project lifecycle. It is LURIN's intention to refinance the asset between month 30 and 33 which will yield in a tax-free distribution of LP capital, assuming normal market conditions. After the refinancing, LURIN intends to continue to cash flow the asset, making quarterly distributions to investors until full monetization, which is expected by month 60."

"It is LURIN’S intention to pursue a refinancing of the asset between month 30 and 33. The refinancing will result in a tax-free distribution of LP capital, assuming normal market conditions. Post the refinancing, LURIN intends to continue to cash flow the asset, making quarterly distributions to investors until full monetization, which is expected by month 60."

 

What are the risks and how are you mitigating those risks?

Jon Venetos, LURIN: “There are a number of potential operational risks associated with this investment, including but not limited to: i) expiration of leases, ii) lease termination and tenant defaults, iii) due diligence may not reveal all property conditions, iv) unexpected delays in construction, v) financing and refinancing risk, vi) general local market risk for Dallas-Plano, TX. Additional risks for this investment include an unforeseen material event such as a global pandemic."

"Part of LURIN's integrated platform is a dedicated Risk Management Team. The Risk Management Team focuses on mitigating risk at a corporate and property level. With regard to interest rate risk, LURIN buys an interest rate cap hedge for each property. LURIN also insures each property beyond what the lender requires to ensure our coverage is the best possible from all angles, not just wind, named storms, and flood. As such, LURIN will also add Business Interruption insurance, which includes covid related mitigation. LURIN also utilizes an umbrella policy which allows for flexibility on cost vs. coverage.”

 

NOTE: All answers provided by the sponsor, LURIN, or its representatives.

Offered By

LURIN

LURIN

Dallas, TX

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Assets Under
Management

Currently
$2.1B 30+ assets
Exited
$735MM 10+ assets
Portfolio LTV
59%  
Historical
Realized Returns

Total IRR
40%  
Equity Multiple
2.1x  
Annual Cash
N/R  
Years Of
Experience

As Principals
5+ years  
In Business
7 years  
Size
90 Staff * Dedicated investor relations
* All information is reported by LURIN as of 6/14/2022.
Assets Under
Management

Currently
$2.1B 30+ assets
Exited
$735MM 10+ assets
Portfolio LTV
59%  
Historical
Returns

Total IRR
40%  
Equity Multiple
2.1x  
Annual Cash
N/R  
Years Of
Experience

As Principals
5+ years  
In Business
7 years  
Size
90 Staff * Dedicated investor relations
* All information is reported by LURIN as of 6/14/2022.

Financials

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Offering Financial

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Location Details

Plano, TX

Jon Venetos, LURIN: “Robust population growth over the past decade has increased DFW’s population to more than 7.5M people. Currently the 4th largest MSA in the United States, the DFW metroplex ranked 1st in the country in population growth from 2010-2020 (1.3M residents added) and 1st in population growth in 2020 (98,000 residents added). The population growth in the metroplex shows no signs of slowing, as the region continues to grow by 2,800 people each week. The DFW population is projected to grow by another 2.6M (up to 10M people) by 2030, at which point it will become the 3rd largest MSA in the country, behind only Los Angeles and New York City."

"The property is in a prime location for families seeking affordable housing in one of the best school districts in the country. It is also situated within minutes from high-paying and stable employment opportunities in the nearby area. In addition, the substitution factor to purchasing a single-family home has become extremely challenging for buyers in the DFW market due to pandemic driven valuations and the recent move in mortgage rates to almost 6%.”

"Plano is the fourth largest city in the DFW Metroplex with over 287,000 residents, and it is approximately 20 miles north of downtown Dallas (20-30 min by car). The city benefits from a variety of strong demographic metrics and favorable accolades including:"

  • "$95,602 median household income"
  • "$47,840 per capita income"
  • "$320,100 median home value"
  • "57% of Plano adults have attained a bachelor’s degree or higher"
  • "#9 Best City to Live in America (Niche)"

Documents

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Offering Agreement Documents

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