Property Details
Asset Profile
Value Add

Sunset Hills Apartments

Henderson, NV

Multi-Family Property

Only 8 spots left to invest

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Rincon Partners, LLC Phoenix, AZ
Rincon Partners, LLC
Targets
  • IRR 19%
  • Equity Multiple 1.7x
  • Hold Period 3Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 0.8%
  • Stabilized Cash on Cash 9.9% in Y3
  • First Distribution Mar 2020
  • Distribution Frequency Quarterly
  • Co-Investment 42.3%
  • Preferred Return 9%
  • Investor Profit Share 70%
  • Asset Profile Value Add
  • Loan-to-Value 78%
  • Current Occupancy 95%

About this Property

Rincon Partners is pleased to offer RealCrowd investors the opportunity to invest in Sunset Hills Apartments, a 120-unit, Class B apartment community in Henderson, Nevada, for $17,800,000. The property was built in 1988 and consists of 120, 960-square foot 2 bedroom - 2 bath units. Each unit includes a large kitchen and in-unit full-size washer and dryer. Current ownership completed over $900,000 in capital expenditures, including the renovation and upgrade of 55 unit interiors and the fitness center, pool, clubhouse, exterior paint, roofs, and parking areas.

Rincon’s business plan includes further renovation of the 55 seller renovated units and a full renovation of the remaining 65 unit interiors to bring all units to a higher-end profile in order to further attract the affluent demographic renting in Henderson.

Key Points

  • A Top National Market: Las Vegas MSA is ranked #1 in 2018 rent growth at 7.9% and is ranked #9 in job growth in 2018 according to according to Yardi Matrix.
  • Excellent Sub-Market: The property is located in the Henderson submarket of Las Vegas, which is one of the MSA’s top performing submarkets (average asking rents are more than 10% above the metro average) according to CoStar and the second largest city in Nevada.
  • Attractive Basis: At a purchase price of $17,800,000 ($148,333/unit), the property is being acquired at just over $150 per square foot (which the sponsor believes is well below replacement cost) and has almost 50% of its units renovated. When compared to the competitive set of Rincon’s property sales comparables, the average price per unit is $160,000, about 8% more than Sunset Hills, and all of the comparable properties were unrenovated, or just began renovation at time of sale.
  • Reposition the Property from a Class B to Class B+: Rincon’s renovation plan includes a complete unit interior renovation program, which consists of new quartz or granite countertops, cabinet doors and hardware, new stainless steel appliances, new faux-wood flooring, new paint scheme, as well as other modern interior changes. Rincon also plans to upgrade the landscaping, pool and other areas, and add a package locker system.Rincon also plans to upgrade the landscaping, pool and other areas, and add a package locker system and has $12,000 budgeted towards any asset preservation items that current ownership did not complete.
  • In-place Rents are Below Market: Rincon believes it can capture rental upside from existing below-market rents. Based on its comparable rent analysis, the current in-place renovated rents at the Property are approximately 25%+ below renovated properties of similar vintage.
  • Affordable Renovated Rents: Rincon Partners is underwriting renovated rents that account for less than 21% of the median household income, while all recent deliveries to the submarket with similar levels of upgrades are surpassing 27% of that same income level.By completing the remaining 65 unit interiors to a higher spec than current ownership, Rincon is underwriting rents that are still 12% below comparable renovated properties of similar vintage.
  • Proforma Rents Below Comparable Properties: Rincon is underwriting proforma renovated rents that are 12% below its comparable renovated properties of similar vintage.
  • Short-term Hold Period: Target completion of the renovation, re-leasing the renovated units and stabilization of the Property is within two years and selling the Property within three years.
  • Significant Sponsor Co-Investment: Rincon expects to invest at least 40% of the equity in the project.

Offered By

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Assets Under
Management

Currently
$138.8MM less than 10 assets
Exited
$18.27MM less than 10 assets
Portfolio LTV
N/R  
Historical
Realized Returns

Total IRR
24%  
Equity Multiple
1.7x  
Annual Cash
N/R  
Years Of
Experience

As Principals
30+ years  
In Business
4 years  
Size
9 Staff  
* All information is reported by Rincon Partners, LLC as of 1/10/2019.
Assets Under
Management

Currently
$138.8MM less than 10 assets
Exited
$18.27MM less than 10 assets
Portfolio LTV
N/R  
Historical
Returns

Total IRR
24%  
Equity Multiple
1.7x  
Annual Cash
N/R  
Years Of
Experience

As Principals
30+ years  
In Business
4 years  
Size
9 Staff  
* All information is reported by Rincon Partners, LLC as of 1/10/2019.

Financials

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Offering Financial

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Location Details

Henderson, NV

Sunset Hills is located within the Henderson submarket of Las Vegas, one of the MSA’s top performing submarkets (average asking rents are more than 10% above the metro average) and the second largest city in Nevada. The Property has convenient access to the entire Las Vegas Valley via the I- 215 Beltway that provides easy access to McCarran International Airport (under 10 minutes) and the world-famous “Strip” (15-20 minutes). The submarket has seen an influx of Class-A product due to its proximity to the Beltway and despite average asking rents at $1,425/month for all units types the submarket has experienced a healthy 6.1% rent growth year-over-year. Our direct Class-A 2x2 comparable properties are asking nearly $2,000/month, approximately $750/month above Sunset Hills’ pro forma renovated rents.

Documents

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Offering Agreement Documents

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