Multifamily Real Estate Investment Offering Targeting A 21.2% IRR

A private market offering for a build-for-rent townhome development is available to investors looking to add a real estate asset to their portfolio.

Townhomes at the Trail includes developing 103 Class A townhomes in the Detroit suburb of West Bloomfield, Michigan. The build-for-rent strategy involves developing a condominium community for renting rather than selling the completed properties. The townhomes will have two-car garages, modern finishes and a community fitness center and private pool.

The project site was acquired for $1.97 million and has received the entitlements required to begin construction in January. Following a 20-month construction timeline, the development is expected to reach stabilization in December 2024.

According to U.S. Census Bureau data, West Bloomfield has an affluent demographic with a median household income of $121,282. The Detroit metropolitan area has 5,700 units under construction as of November 2023, according to CoStar. The positive economic environment coupled with a limited and strained supply within the submarket is expected to generate strong demand for completed units.

• Minimum investment: $35,000
• Target internal rate of return (IRR): 21.2%
• Target equity multiple: 1.79x
• Target cash yield: 6.8%
• Target investment term: 36 months

The sponsor of the investment offering, Ivanhoe-Jacobson Group, is a partnership between Ivanhoe Cos. and S.R. Jacobson Development which both have extensive track records of completing successful development projects. Ivanhoe Cos. has constructed over 10,000 single-family and multifamily units across 80 projects while managing thousands of apartments. 

S.R. Jacobson Development has become one of the most accomplished development firms in the Midwest over its 45-year history. The company has a portfolio of nearly 3,900 apartment and rental townhome residences, including 1,253 units completed in Michigan and Illinois in the last two years. The investment offering is available on the RealtyMogul platform for a minimum investment of $35,000.

View more private market real estate investments on Benzinga’s Real Estate Offering Screener.

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Image: Courtesy of RealtyMogul