We acquired a 96 unit apartment building in Anderson, Indiana. This property was very difficult to manage due to its age. A gas pipe broke overnight and tenants were forced to vacate, leaving the property 100% unoccupied. The city made many demands for reconstruction that were out of budget and would not have pencilled. After negotiating a $1M reduction to the loan amount, we were able to sell the building. Investors received 65% of their capital. Lesson: Older properties need a large amount of reserves on hand for repairs and maintenance.
The debt fund holds a note in 1st position against the Challenge Dairy commercial building in Dublin, California. Investors are anticipating a 9.5% return. They are earning half their interest (5%) in quarterly payments and the remaining amount when the rents are increased and the property is refinanced or sold.
We acquired 153 acres of raw land in Belgrade, near Bozeman, Montana. Our plan was approved for 601 lots in 2018. Sales have been ahead of schedule as housing inventory is low in Bozeman and more people moved to remote locations due to Covid-19. Higher interest rates have slowed sales a bit, but we anticipated that and have plenty of reserves on hand. Investors are expecting a 15% preferred return plus a share of profits.
We acquired 69 acres of entitled land near Park City, Utah, just 25 minutes from the Salt Lake City airport. 22 acres will be developed with 97 residences. The remaining acreage will remain open space. Horizontal construction began in 2018, and the townhomes in Phase I are sold out. Phase II and III are currently being sold.
We acquired 21 acres of land, walking distance from the State Capitol Building and downtown Carson City, NV with the intention of building detached townhomes. Our map was approved for 149 homes in 2019. COVID-19 shutdowns have delayed construction, but it has opened up now. Demand for these homes has been strong as they are being offered at the median home price of the area, and there is currently a shortage of homes. Investors are expecting a 15% preferred return plus share of profits.
We invested in an eco-friendly residential community and spa retreat center on 800 acres near one of the fastest growing cities in Costa Rica. A new international airport is slated for development within 20 miles of the property.
The land is entitled, earth work has begun, a luxury “glamping” site is in operations, and home lots are being sold. This project has been delayed due to COVID shutdowns. On a positive note, demand for sustainable, off-grid living in nature has increased in 2020.
We acquired bank-owned land with 4200 residential lots for $16M in 2013. This same land had been in escrow for $160M in 2006. The project has been renamed the Mirada, with the golf course redesigned as a Crystal Lagoon feature. We have already sold several bulk lots to national builders and are in contract for several more large lot sales as this is the fastest growing metro area in the U.S.