CHURCHILL AT ST. ANDREWS
CHURCHILL at ST. ANDREWS
132 Units | Columbia, SC | $12,550,000 Purchase Price
Churchill at St. Andrews, a 132 Unit C Class Property, was built in 1972 and is in great condition. This property features large townhomes and garden style apartments and is only 8 miles from Downtown Columbia. Located in the second largest market in South Carolina, Churchill at St. Andrews is in the Lake Murray submarket, one of the most desirable areas in the Columbia MSA. This submarket continues to experience an influx of new residents, driven by the top-rated school district and proximity to well-known established employers
Target Returns for 506 (C) Accredited Investors:
8% annual cash on cash
16% IRR, 18.5% annualized
1.9x Equity Multiple
90% Projected Return in 5 Year
Frequently asked questions
What is the Investment summary?
1972 apartment complex, 132 door C+ class in B- area, value add opportunity
What are the investor returns?
Who can invest?
Accredited investors only
How do I verify Accreditation and when is it due?
What is current occupancy?
95% as on 2/2021
What is current average rent and market rent?
$875 to $927 – with upgrades target rent premium is $155 per unit
What is the hold term, min investment?
What is the total capital raise?
Can you explain the cashflow, when this principal return?
What is the business plan?
Upgrade property exterior and interior + Rebranding
Raise current rents to market average rents
Implement operating efficiencies
Our Goal: Ensure Churchill achieves best in-market rents and attracts high-quality tenants.
Smart Home Features and Upgrades, including Smart Locks, Smart Thermostats, and USB Chargers
Optional in-unit Washer and Dryer Rental Service
Complete Renovation of 88 units: 12 1BR; 46 2BR; & 30 3BR (Floor, counters, cabinet lift, black appliances, lighting etc)
Leasing Office Renovation/Upgrade
Rebranding of Property, i.e Changing of Signage
Improve Exterior Lighting
Improve Pool Area
Add Bike Racks
Add School Bus Wait Area for Kids
What is the average cost of rehab per unit (interior)?
$7.5K ($7K upgrades and $500 smart home)
What deferred maintenance items are identified, Renovation costs – are there any bids from contractors to support the cost for the scope of work proposed?
Drainage issue throughout the property (30K estimates)
1 Roof replacement and minor roof repairs (36K estimated)
1 foundation issue for a building (5K estimated)
Are there any delinquencies?
There is one major delinquency, applied for bankruptcy but got rejected and have given a notice. This one does not fall under COVID eviction memorandum
When will distribution start and what will be the frequency?
3-6 month stabilization Quarterly after that
Who is the previous owner and What is the reason for sale?
They completed their business plan and exiting for realizing profit
What is the entry CAP and what is the Exit CAP?
5.1 and 5.7
Current NOI & Expense Ratios?
NOI: $634,339 T-12 (639K)
Why is expense ratio so high?
This is a typical to expect in this age property
What are the CapEx reserves?
We have accounted for 33K that is $250/unit reserves
What are current amenities?
Swimming pool, community room, laundry facilities, 256 parking spaces
Describe the ownership
Investors 80% and GP 20%, any profits are split that way. With pref 7%, LPs get 7% year by year basis before GP takes any profit, remaining is split 80/20. If there is any deficiency in any year for the 7%, will try to catch up the following year
What is the capital stack?
The capital stack is priority in which the parties involved get paid, first the bank for the loan, then LPs and then GPs
Is there refinance and return of capital?
The current business plan does not plan for refinance. (We have a long term assumable loan that is very low interest)
What type of investment is Churchill?
This is a Value-add Opportunity, also with current occupancy levels, it is cash flowing asset
Cost segregation K1 losses
The k1 losses 60-80% of the investment can be rolled over for passive investors till utilized. To the minimum applied to cashflow of this property will write-off the cashflow year after year (please note some recapture will happen at the end, they need to consult CPA)
Can we get Proforma document or underwriting?
We prefer not to share as this is off market and confidential. Happy to walk through the financials over zoom with an NDA.
Why is turnover zero?
Previous owner accounted turnovers under repairs and maintenance, its underwritten in the same bucket
Will the aluminum wiring be replaced or left as-is?
Aluminum wiring has been remediated with Copper. Property has been thoroughly inspected during pre-access due diligence by the acquisition team lead by our PM group. All quotes are actual quotes from inspections with additional cushion for any surprises. Our income growth projections on proforma are lower than what was proposed by the PM (very reliable company; First Communities management), and our expenses slightly higher. To provide cushion for any surprises
Tenants – who is the current tenant mix?
Most of the Tenants are families with kids in the neighboring schools. There are no USC student on the property. Majority of the tenants have kids and want their children to attend the schools in the area. Median household income on the property is around $51,000 (from the lease audits)
How many of current renters are currently behind on rent under the eviction moratorium?
We have one resident who is very behind. They are going through bankruptcy and are currently being evicted.
Why are real estate property taxes highlighted and showing a big jump?
They are highlighted to show that we have a good understanding of the tax assessment process for Columbia and have anticipated a large tax increase and accounted for it in our plans
What are the down side scenarios?
On your 4 deals, have any sold yet? What is your performance record on those deals? (on actual versus projection….even if they haven’t sold, what is the latest projection versus expectation?)
The only deals that I have sold have been my personal properties which makes it difficult to compare returns because I had refinances, and very long holds. My current properties are on track for ~18% AAR.
Can this property be used in a 1031 Exchange?
The business plan is not to do a 1031 exchange for this property