Cheney Park Commons - Phase I
Our investment market is income-producing multi-plex rentals in the town of Cheney, Washington. We currently have a 2.5-acre site with approved zoning rights and infrastructure secured to build a phased 81-unit multiplex planned unit development, that is the basis of this current offering. This will be a private equity offering backed by property title of ownership.
The ECP Purchase Agreement was executed May 1, 2017 to purchase the Cheney Park Real Estate Project for a set price of six hundred thousand dollars. The titled tenants to the property were Paul and Linda Bondo doing business as (DBA) PITA, LLC which has been merged with ECP. The current and historic use of the properties has been family rental units of five homes. ECP has engaged the city in the zoning and development and work to complete the planned unit development of three stages of multifamily units on the 2.5-acre site, for a total of approximately 81 Multifamily rental units.
Equilus Capital Partners, LLC funds projects using LLC membership funds to purchase income-producing Real Property. As equity investment capital becomes available, these funds are applied to a prequalified multiplex real estate purchase. These units are then marketed, rented, and maintained by Equilus Capital Partners, LLC. The project’s underlying assets are owned entirely by the Partnerships LLC multiplex real estate membership base. Equilus Capital Partners, LLC maintains the property and grounds maintenance. Rental income or dividends are issued quarterly to the unit investment members. (See attached pro forma). This current opportunity of equity funding is for $4 million, which is expected to build and manage 36 multiplex rental units. In time, additional funding is planned to continue growing the project portfolio if additional rental units are in demand.
ECP has purchased the properties from Pita LLC. Paul and Linda Bondo have reserved the right to participate in an equity position with ECP on a fair market value basis. ECP may use an institutional financing thru an or association lender (the “Lender”), at fixed-rate, interest-only nonrecourse loan for the construction portion of the project if necessary. The loans have interest rates that range from 4.5% to 6.0% per annum. The terms of the Loans provide terms for prepayment, contain non-recourse carve-outs and defeasance provisions, and may provide for other restrictions. The loans are planned to be paid in full at the completion of each multifamily unit.
For each $40,000.00 unit subscribed to Equilus Capital Partners, LLC, the investor will own one membership unit or approximately 1% ownership in the Capital Partnership, LLC. Cheney Park Project Phase I. All monies will be applied directly to a title ownership interest via the LLC Partnership. Initial funds will be held in interest-bearing equity trust funds until new projects are moved out of the construction planning phase into the construction or income phase. Annual profits, losses, and distributions are passed through to the membership base for as long as there are operating projects in the members LLC portfolio. Most projects in the portfolio are planned on a basis of 4-10 years, at which time the LLC may sell the multiplex unit for an appreciated asset return of capital.
Based on the all-inclusive cost of $600,000 for the purchase of the properties, $4.125 Million for site construction and buildout of phase 1, Building A with 32 multi-family units, the properties as a group are projected to provide an aggregate annual cash flow yield of approximately 8.42 % the first year following the acquisition by ECP of the beneficial ownership interests in the Property Partnership. The aggregate annual cash-flow yield is expected to increase on an annual basis from $483,040 in year two to $560,326 in year ten based on contractual lease terms and fixed-rate projection of 2% annually. Projected aggregate first-year net cash from operations of the Properties is estimated to be approximately $336,878. These projections are net total of any debt service, total annual Administrative Fees to the Fiduciary Manager of $9264 and total projected Administration and Property expenses of $146,162, which includes an annual fee to the Fiduciary Trustee.
Cheney Park Commons - Phase I
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