We have been able to provide early exits for our LPs in the past without any problem but we provide no guarantees. We recommend that when making your decision, you assume you will hold for the 5 year period.

Fluctuating Interest rates are definitely something we’re keeping in mind and rate caps are a potential solution to the problem. We also make sure to have enough in interest reserves to handle increasing rates and plan on converting our floating rate construction loan to fixed rate agency debt upon stabilization. But the best solution for this is our relationship with our lenders and our ability to work with them to come to a solution that works for everyone. We don’t want to foreclose on the property and the bank does not want the headache of managing an unfinished development so I know that we will work together on a solution that benefits all. For labor and material pricing, we have a 15% $3M vertical construction contingency and we buy our materials and labor in bulk for better pricing.

We do plan on refinancing out of the bridge debt for the horizontal infrastructure and may refinance additional investor capital out of the opportunity once we have stabilized the development. This way we return investor capital tax free before we hold until the 5 year period. We did not include refinances in our underwriting projections and do not recommend you take refinances into account when making your decision. Any decisions we make we will keep our passive investors’ best interests at heart.

Our exit strategy is to hold the investment for 5 years. At this point we will either sell or in order to establish a Legacy as is our mission, buy out existing investors who no longer wish to hold to see the profitable cash flow and instead want a capital event, and hold for a longer period of time.

There are 2 development phases that investors can participate in: the horizontal and the vertical development. We are currently raising ~$2M for the horizontal phase with the GP team having already contributed $500k. Once the horizontal phase is complete, we plan on rolling over our equity into the vertical phase at which point we will only need to raise ~$1.5M. By rolling over equity, our investors who invested in the horizontal phase will have a greater piece of the pie and be able to grow their capital at a much higher rate than the investors who join us on the vertical phase. Depending on the climate of the market, both macro and micro, we might not even need to raise for the vertical portion so this opportunity is on a very limited, first come first serve basis to a select group of investors.

There are 2 development phases that investors can participate in: the horizontal and the vertical development. We are currently raising ~$2M for the horizontal phase with the GP team having already contributed $500k. Once the horizontal phase is complete, we plan on rolling over our equity into the vertical phase at which point we will only need to raise ~$1.5M. By rolling over equity, our investors who invested in the horizontal phase will have a greater piece of the pie and be able to grow their capital at a much higher rate than the investors who join us on the vertical phase. Depending on the climate of the market, both macro and micro, we might not even need to raise for the vertical portion so this opportunity is on a very limited, first come first serve basis to a select group of investors.