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Carolina Forest

PASSCO

Investment Highlights

Overview

The offering will purchase a Class A apartment complex in Myrtle Beach, South Carolina. The Property was built in 2017 and has 305-units.

  • Year 1 Cash Flow 5.15%
  • Initial Occupancy 98.01%
  • Est. Time Horizon None
  • Yr 1. Cap Rate to Investors 5.34%
  • Investor Purchase Price $55,800,000
  • Total Offering Size $24,900,000

Loan Information

The loan is on a 10-year term; 5 years will be interest-only payments. (*Loan documents are not final.)

  • Yr. 1 DSCR 1.97
  • Loan-to-Value 55.38%
  • Hold Period DSCR 1.89

Key Benefits

The CAP rate is relatively good for investors on a new property: 5.34%.

The area's population growth is outpacing the national average.

Key Risks

Rents are at the hight of the market; income may suffer if an economic downturn requires rents to be lowered.

The Sponsor has set an aggressive 2.5% growth projection for the duration of the holding.

The use of returns does not check out; the sponsor may have left out some of their fees.

There is a discrepancy between the incoming and outgoing cash flow and the cash flow being advertised.

The management team has poor online reviews.

The analysis is based on the PPM; additional research is needed.

About PASSCO

According to the sponsor's website: "Since 1998, Passco Companies, LLC has operated throughout all market conditions and cycles. The company has acquired over $4 billion in multifamily and commercial real estate in the United States. Since its inception, Passco Companies has become a recognized provider of investment opportunities in real estate projects.

Passco Companies is directed by a team of dedicated senior real estate professionals whose experience in the business averages 34 years, and who, collectively, have acquired over $30 billion in investment real estate projects."