An 1831 acre master planned community surrounding the brand new Texas A&M University San Antonio (TAMUS) has been tied up in litigation for 7 years. The lawsuit is now settled, and the property can finally be developed with much needed student housing, the town center, single family residential and industrial.
A colleague of Kathy Fettke’s, Daniel Medina, was able to tie up this unique property for $26.6 million through his company SALandpartners, LLC (SAL). We are very please to announce that he has come to Real Wealth Network for funding!
A 2015 appraisal shows the property’s value at $60M. Daniel has already received an offer for $43 million to close on January 15 if he decides to go with a quick flip. Other offers have come in much, much higher, but could extend the return of capital to potentially a year or so.
This is a very fast moving project.
The first $13M needs to be in by December 21st, 2017.
The second $13.5M tranche will be needed by June of 2018 (unless the property in flipped before then. In that case, the 2nd tranche will not be needed.)
Real Wealth Network already raised over $8M in commitments in just a few days and expects to raise the remaining $5M this week. The difference will be paid by Daniel’s group.
The initial $13M tranche will be in the form of a note, lent to the current owner in 1st position at 10% interest for a 6 month term with a title policy in place. This will enforce SAL’s option to purchase, and secures RWN investor funds at a very low LTV.
Once SAL exercises its option, the note holders will convert to equity investors, and their preferred return will increase to 20%, with a one year pre-payment penalty. (For example, if SAL exercises its option and resells the property to the $43M buyer in January, investors would still receive the full 20% ROI. A $100,000 investment would yield $20,000 in a matter of months.)
However, if SAL holds out for a higher bid, the sale could take 6-12 months, in which case RWN investors would still earn that 20%. if the sale happens after March 31, 2018, RWN investors would earn an additional 5% of profit.
Profits will be taxed as either ordinary income, interest income or long-term capital gain.
Minimum Investment: $100,000
Term: 10% loan that converts to 20% preferred return
Accredited Investors Only (no 3rd party verification needed)
Initial Estimated Timeline:
1 years, possibily shorter
December 19, 2017
- The initial $13M tranche will be in the form of a note, lent to the current owner in 1st position at 10% interest for a 6 month term.
- Once SAL exercises its option, the note holders will convert to equity investors, and their preferred return will increase to 20%, with a one year pre-payment penalty.
Investor Suitability Standards:
Only Open to Accredited Investors (No need to 3rd party verification)
Accredited Investor must me ONE of these criteria.
- Income of $200K or more for an individual for each of the last two years
- Income of $300K for a couple for each of the last two years
- Net worth over $1M excluding your primary residence (learn how to calculate your networth here:
- Funds are not liquid and could be tied up for an estimated 12-24 months.
- Unforeseen circumstances could arise, delaying the project
- A recession could slow economic growth nationally and/or regionally. However, there is so much interest in this property, we do not see this as a real risk. Investor funds are secured at a 25% LTV in 1st position
- Texas A&M - Executed LLC Agreement
- Texas A&M - Subscription Agreement
- Texas A&M - Executive Summary
- Texas A&M - Phase 1 Environmental Assessment
- Texas A&M - Approved City Ordinance
- Texas A&M - Verano Master Development Patter Plan
- Texas A&M - Promissory Note
- Texas A&M - Deed of Trust, Land
- Texas A&M - Deed of Trust, Brazos
- Texas A&M - Option Agreement
- Texas A&M - Final Tax Increment Reinvestment Zone (TIRZ)
- Texas A&M - Verano Land Group (VLG) Appraisal
- Texas A&M - Master Planned Development Opportunity