Private Market Multifamily Investment Offering Targeting An 18.6% IRR

A new private market equity investment opportunity is available for prospective investors this week. 

The Aspire Apartments offering is an investment in a 335-unit multifamily community in a growing submarket of San Antonio, Texas. Located in the Inspiration Hills neighborhood, the property was acquired at an advantageous cost of $25.55 million and has a target internal rate of return of 18.6%. 

San Antonio has been targeted by offering sponsor Lone Star Capital because of the market is strong and growing. The population of San Antonio has grown to over 1.5 million largely because of the economic growth bringing jobs to the area. The diverse economy coupled with the influx of people moving there has driven demand for multifamily housing, which is expected to reduce the overall risk associated with the investment. 

The sellers of the property completed $5 million in renovations since 2018, including the addition of some of the best in-house amenities within the submarket. The upgrade allowed the apartment community to maintain a 94% occupancy rate while increasing lease rates and improving cash flow. With the comprehensive value-adding project completed, only minor enhancements will be made to the property, allowing Lone Star Capital to avoid a major improvement package that would otherwise increase overall costs. 

The offering comes with built-in value for Lone Star Capital and investors, including a unique nonprofit partnership that will result in a 50% property tax exemption. Aside from the minor unit upgrades that are expected to improve cash flow and overall property value, a bulk Wi-Fi package will be implemented that is projected to net $35 per unit per month in additional income.

•  Minimum investment: $35,000
• Target internal rate of return (IRR): 18.6%
• Target equity multiple: 2.19x
• Target cash yield: 7.6%
• Target investment term: five years

Lone Star Capital is a Houston-based real estate investment firm that has acquired over $500 million in assets since its inception in 2018. The group focuses on blue-collar workforce housing in Texas, including in the Dallas, San Antonio and Dallas submarkets that offer favorable growth and risk-adjusted returns. 

The Aspire Apartments offering is available to prospective investors on the RealtyMogul platform for a minimum contribution of $35,000. 

Photo courtesy of RealtyMogul