Knowledge/Experience with Cope Equities in DFW Area?
Anyone invest with these builders or thoughts about doing so? They are currently offering 14% up to 20% on a particular project they are working on. If it sounds to good to be true.......or opportunity knocks?
From Cope Equities:
"This project is already begun – no risk of it not starting – it already started, a $44 million dollar project ($29 million in costs, approximately). We did not fund the last few million of the raise, so we are allowing the final slots to come in at up to 20% APR, fixed annual simple deferred return (deferred means you get all of your interest earnings at the end when we repay your principal – and that happens when we finish building and then sell the apartment complex).
This asset is our safest MF asset, in my opinion, BECAUSE the project is backed not just by our equity in the apartments – but by our equity in the entire 54-acre land development.
There is $15 MILLION of equity there – meaning of course that the project is worth (apartments and surrounding land) $15 million more than what we owe to ALL banks and investors involved in the project. So your investment will be covered by millions and millions of dollars worth of equity based on recent appraisals."
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I am in the DFW area and met them in person. They are legit and nice enough seasoned builders. With that said, I don't love multi-family housing right now and it is far outside of the metroplex. When I met them the offering was less favorable. Naturally, at least for me, it raises a yellow flag that they increased it this late into the offering. It was a pass for me but that is just me.
Thanks for your insight, John. Do you mind sharing why you aren't loving multi-family right now? Is it just in this particular area, in Texas, or more generally? Is the area they are building in not set to grow? How far is the developement from the metroplex, and what is road access between the two like? Is the fact that the investment will be backed by the apartments and 54 acres of land a reason to have confidence in the project? As you can tell, I've not invested in this type of real estate before- haha- I don't know what I don't know.
