Hamilton Point Wilcox Apartments

Hamilton Point Wilcox Apartments

[This offering is fully subscribed. This is provided as an example of one of the offerings our affiliates have recommended to clients in the past.]

Description:

Wilcox Apartments is a 81-unit class B apartment property located in Middletown, CT. It was purchased at $63,000 per unit below the approximate replacement cost. The property was acquired for $5,960,000, with a mortgage in the amount of $3,4000,000, and $2,560,000 of equity (57% LTV). The property was converted from a factor in 1989. The conversion required all new electric, plumbing, and heating work, and was accompanied by the new construction of an additional 24-unit wing. The units were well maintened, and underwent several capital improvements in the year leading up to the investment offering, which included major reroofing, aluminum-cladding window frames, repainting of hallways, doorways, and common areas, recarpeting of common areas, lighting upgrades, leasing office renovation, and new signage. The average unit is 1,044 square feet. The mix includes a variety of floor plans, including loft and townhouse models. Ameneties include furnished kitchens, valuted ceilings, walk-in closets, and patios. In Q2 2012, the multifamily vacancy rate in the area was 2%. Population growth has been on an upward trend, growing 16.9% from 1990 to 2010.


Tax-Benefits:

The investment was structured as a Delaware Statutory Trust (DST) designed to qualify as a replacement property in a 1031 exchange. Depending on each investor's tax basis at the time of invesment, many investors were also able to utilize depreciation to defer the taxes on a portion of the income derived from the investment.


Goals:

  1. Consistent cash flow, collateralized by value-oriented multifamily asset.
  2. Capital gains tax deferral as a 1031 replacement property option.
  3. An option for income-tax deferral via depreciation.
  4. Potential long-term upside, either due to a sale or to increasing rental income.


Status:

Investment performance has been consistent with projections up to the present, providing steady cash flow for 1031 and cash investors. Individual investors in the program have been able to avail themselves of the income-tax deferral gained through the depreciation allowed for commercial real estate.


Cash Flow:

Year20122013
Projected7.75%7.75%
Actual7.75%7.75%
Variance0.00%0.00%


[Past performance does not guarantee future results. This offering’s results are not necessarily indicative of future recommended offerings. Real Estate Investing is subject to risk, including, but not limited to potential disruptions in cash flow, loss of principal, illiquidity, etc.]

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