Sutter Ranch Apartments

Houston, TX

First come, first-served basis

Open to cash and IRA/401k investors

228-unit B+-class asset built in 1995.
Individually metered for electricity; individual HVACs and hot water heaters.
Attractive unit mix of 1, 2, 3, and 4-bedroom units.
958 average sq ft per unit; range from 645
(1-bedroom) to 1,326 sq ft (4-bedroom).
All units have washer/dryer hookups, but only 20 units currently have the appliances.
Full amenities — swimming pool, clubhouse, business center, fitness center, picnic areas with barbecues, a playground, a sport court, and access control gates.
Buildings have brick and hardi-plank exteriors, as well as sloped shingle roofs.

The lead operators have been GPs in 1,000+ units and own ~700 units together, including a 260+ unit property in Houston, only one mile from Sutter Ranch. One lead operator lives in Houston.
The Houston MSA has the highest projected population growth of any city in the nation between 2020 and 2025, along with strong economic growth and a diverse employment base.
The property is located in the Brookhollow/Inwood submarket of North Houston, 20 miles Northwest of downtown, near several major area employers, including Amazon and Coca-Cola.
The submarket has had strong, continued rental growth through COVID-19.
Not in a 100 or 500-year flood plain and has never flooded.

Positioned for long-term hold and cashflow with conservative underwriting.
Planned holding time: 5 years.
Conduct cost segregation study to take maximum depreciation as early as possible.
Best-in-class property management company has operated in Houston for over 30 years.
Conduct value-add work within 2 years of purchase:

Class A Limited Partner: Preferred treatment — paid before both Class B Limited Partners and General Partners

Minimum investment: $100,000
Cash flow distributions: 10% annual preferred cash on cash returns – paid monthly
Equity at sale: None. At sale, investors’ initial investment capital is returned to them, along with their share of cash flow due.
Does not share in depreciation.
This class is the least susceptible to economic uncertainty and has the highest expected returns from cashflow, but has no opportunity for equity growth.

Class B Limited Partner

Minimum investment: $50,000
Cash flow distributions: 7% annual preferred cash on cash return – paid quarterly. Above the 7% threshold, cash flow is split 70/30 with the GPs (70% to Class B investors, 30% to GPs).
Equity at Sale: At sale, investors’ initial investment capital is returned to them. Remaining equity left after costs of sale are split 70/30 with the GPs up to a 15% IRR threshold. Above 15% IRR, funds are split 60/40 with the GPs.
Shares in depreciation with GPs.
This payment structure aligns the GPs’ interests with the passive investors’. The GPs don’t earn returns unless the property performs well enough to make the minimum distributions to the passive investors, and the better the property performs after that, the more the GPs can earn.

GPs’/Sponsors’ Fees

Acquisition Fee: A one-time fee of 2% of the purchase price, paid upon acquisition, for the costs and effort expended identifying, securing, financing, and structuring the deal.
Asset Management Fee: The asset managers will receive a monthly payment of 2% of total monthly income for their efforts managing the property management and the investment overall.
Refinance/Disposition Fee: None.

Cash investment in your name (single or joint)
Cash investment through an entity (e.g., trust, LLC, or S-corp)
Investment through a self-directed retirement account (e.g., SD-IRA, Solo 401k, etc.)

A natural person with an income exceeding $200,000 in each of the two most recent years (or joint income of $300,000).
A natural person who has an individual or joint net worth exceeding $1 million, excluding their primary residence, at time of investments.
An entity with over $5 million in assets, or in which all owners are accredited using the criteria above.
Possess a Series 7, 65, or 82 securities license or other verifiable professional credentials that qualify you as an accredited investor.