Accepting $15,000 - $500,000 investments
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Accepting $15,000 - $500,000 investments
Invest in a Fund that will own a portfolio of single family rental (SFR) properties primarily located in key U.S. geographies including Atlanta, GA, Dallas, TX and Charlotte, NC, among others. The target markets are expected to benefit from strong demographics, employment fundamentals and favorable supply-demand dynamics due to the current affordable housing shortages across the country.
Years of modest construction of new homes has tightened housing supply in the U.S., while affordability constraints have prevented a large portion of Americans from home ownership. SFRs can offer a cost-effective solution to those seeking a suburban lifestyle with the space to raise a family and to accommodate remote working needs. COVID-19 has accelerated the “suburban-migration” phenomenon; however, even before the pandemic began, institutional capital began to shift into the space due to favorable long-term economic trends.
As of February 28, 2022, the Fund owns a pool of homes and by March 31, 2022 the Fund is expected to have acquired 179 properties for approximately $52.3M. Over the next one month, the Fund will seek to purchase another ~$19M of undervalued properties priced between $200K and $300K in the target markets, to bring the total portfolio value to ~$71M. Following the stabilization of each property, it is expected that rents will be brought in line with respective market prices, and increase by at least 3% per year. Investors are also expected to benefit from capital appreciation at time of sale.
The offering is expected to provide investors a targeted net annualized return of 12-14%, with an annualized ~5.5% being distributed quarterly as current income. The balance of the returns are expected to be achieved via appreciation of the properties at time of sale. Since this is an equity investment, there is potential for returns to be above or below the target range. The Fund has 27-months remaining with the option for two 12-month extensions.
• Unrelated business taxable income (UBTI) is income earned by a tax-exempt entity that is not related to their exempt purpose. UBTI tends to be generated when a tax-exempt entity becomes an owner (in part or full) of a business (such as a limited partnership). LPs may generate taxable income in a retirement account if the partnership borrows money. As such, this offering is not available to pension plans, defined benefit plans, defined contribution plans, retirement plans, IRAs, 401(k) and 403(b) funds, and funds comprised of these plans and funds.
Please refer to the Private Placement Memorandum in the Documents section for more details about this offering.
Where does Yieldstreet lie in terms of priority?
Purchases of homes will occur on an ongoing basis and Yieldstreet will provide 100% of the equity. As of March 7, 2022, the Fund owns a pool of homes and by the end Q1 2022 is expected to have provided $15.7M of the equity upon the closing of a total of seventeen portfolio of homes. The anticipated total $21M equity position is junior to the anticipated ~$50M of senior debt expected to be associated with the portfolio upon full funding. The senior debt has been provided by an insurance provider.
How do I get paid?
Over the life of the investment, investors are expected to receive a target net annualized return of 12% - 14%. This expected return is net of Yieldstreet’s management fee, fund expenses and annual flat expenses as further described in the Private Placement Memorandum. Investors are expected to receive cash flows from two sources: ~5.5% of annualized income from property rents, expected to be paid quarterly following the stabilization of the portfolio which is expected to be in 8 months time, and the balance of the returns are expected to be achieved via appreciation at time of sale of the properties, which is anticipated to be within 27-months.
What is the collateral underlying the transaction?
As of February 28, 2022, the Fund owns a pool of homes and by March 31, 2022 the Fund is expected to have acquired 179 properties for approximately $52.3M. Over the next one month, the Fund will seek to purchase another ~$19M of undervalued properties priced between $200K and $300K in the target markets, to bring the total portfolio value to ~$71M.
The Originator will select properties based primarily on two factors: economic expectations for the regions where the properties are being acquired and factors specific to the properties that are being acquired.
The first step in identifying attractive SFR properties is to select the general location based on expected rental growth and home price appreciation over the coming years. The target markets identified have strong fundamentals, such as rising rents, growing populations, and a shortage of affordable housing stock.
The Originator also aims to purchase properties that are currently leased below-market. Following acquisition, the Originator intends to perform light renovation work where needed so that rents can be maximized before seeking to sell the portfolio of homes to a larger institutional investor.
Ann'l management fee
Target ann'l net return
12% - 14%
Inv share in excess profits
Target equity multiple
1.2x - 1.3x
Target ann'l cash yield
Ann'l flat expense
Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.