Advice on Florida investment prospectus

6 Replies

Hello everyone!

I recently have gotten the opportunity to invest in a development project in Championsgate Florida. As I really do not know the area I am looking to my fellow biggerpockets friends to help me evaluate the deal.

The project is called Champions Vue Apartments and is located close to the Omni Orlando Resort in Championsgate. It is a 15 building, 326 apartment project - and the strategy is to build, lease the properties and sell it to an institutional investor once the buildings are fully leased (5% vacancy).

The whole process is estimated to take three to four years from building starts until entire property is sold.

SunPark Developers are the developers, and also the ones guaranteeing for the mortgage (80 % of the entire building costs). The contractor is Robert B. Kennedy INC, and the rental management company is Lincoln Property Company (they are also the ones providing the numbers for expected rental income).

The estimated costs are 44,5 MILL USD, where 20 % is investment money and 80 % is financed by mortgage with a 6,5 % interest rate.

Once build and rented they are budgeting with a total income of 4,989,000 USD - and a total expense of 1,830,000 USD. This gives a positive cash flow of 450,000 USD after mortgage and all expenses is paid.

The monthly rental price per sqft. is 1,3 USD. They are expecting a yield of 5,5 % once sold.

The customer target is residents working in the surrounding area. I have the entire financial prospectus, but firstly I wanted som initial feedback if anyone knows the area or have done similar deals.

The developers are expecting a healthy 18% IRR.

I have no experience with any deal close to that magnitute but I have a couple of properties near Championsgate in Davenport, FL. The area is certainly growing but it's a bit of a commute to Orlando.

Is this from a Crowdfunding site? This comes down to your trust with the developer and their ability to perform. Also, Central Florida is a hot market right now and probably still will be in three years but who knows.

Zach Evanish

It is not a crowdfunding site - but a Norwegian company in collaboration with an American developer (SunPark Developers). I am offered stocks in the Norwegian company, whose whole purpose is this deal. I am secure with the Norwegian company being professional - I am just not familiar with the american developer (or the area for that sake).

I'm an investment agent in Orlando.  That area is very popular and continues to grow.  I have a lot of my investors buying out there as short term rentals.  Also, it's a good school district and located right off I4 which will take you straight to the attractions, Daytona Beach or all the way to the Gulf Coast.  Champions Gate is considered Osceola county, just a couple of miles from the Orange county line.  Whatever is built in Champions Gate has a history of selling or renting quickly.  Sounds like a wonderful opportunity.  Best of luck!

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@Karl Sivert Skatland , this sounds like a good opportunity. That is indeed a growing area of Davenport and it is convenient to Central Florida's artery, I-4. However, I don't know how much money you're considering putting at risk...so you may want to fly down here and meet those people face-to-face and take an actual look at what's being proposed. Multi-family assets are in red hot demand here because the population growth (and percentage of renters) is showing no sign of slowing down anytime soon. Many large assets close to Orlando are being sold at 3-5 CAPs and the buyers are betting on being able to increase the rents. 

Also wouldn't hurt to cross-check the corporate registration documents on the state's website: http://dos.myflorida.com/sunbiz/

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