Project Sun God

919 Paseo Del Pueblo Sur  Taos County, NM 87571

Min. Invest
$25,000
Target Hold
60 mo
Annualized Returns
12.00%
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Project Summary

Project Sun God takes advantage of the popular nationwide trend in converting old and run-down motels into mid-century modern affordable apartment housing. The Sun God motel is currently a boarded-up 64-unit motel and we plan to rehabilitate the property into a 44-unit apartment complex with 20 one-bedroom units and 24 studio units. The one-bedroom units will comprise two motel units combined with new bath/kitchen features, while the studio units will add kitchenettes. The primary goal for the finished property is to hold for a minimum of 5 years as a cash-flow asset during the potential recession, though we will also list the property for a quick sale immediately following rehab completion since the local housing shortage could bring a premium price. Gross rent is projected to be $43K per month. ARV (as repaired value) is projected to be $5.6M in one year and $6.7M in 5-7 years, based on a conservative 6% cap rate.  IRR is projected to be 11.867%

[This project is for accredited investors only. If you're not accredited, contact me through the website]

Investment Type Equity
Term 60 Months
Raise Amount $950,000
IRR 11.87%

Why Invest?

The sponsor is paying a 6% preferred interest paid quarterly for the duration of the holding period, and will share 20% of the net profit upon resale for an IRR of 11.867%. The sponsor has three powerful benefits to secure profit for investors: (1) The Project Framework (see the video) that is used to start, manage, and disposition all rehab projects, safeguarding investor capital in the process; (2) almost 30 years of experience with over $30M in project value; (3) and a fully transparent track record on the website.

The Sun God project has particularly strong upside. We are acquiring the property at 25% of ARV (After Repair Value). After the rehab our LTV (loan to value) will be 53%, leaving plenty of equity cushion and profit potential. Rental income is virtually guaranteed since there is a waiting list for affordable housing over 150-strong. We plan to begin pre-leasing marketing immediately after acquisition. We expect to be fully leased before the rehab is complete.

The converted Sun God Apartments will hold several advantages over other local apartments. (1) It is iconic in name and is considered a historic part of the Taos culture, though it is not on a historic registry; (2) It is centrally located on the main street of Taos, Paseo Del Pueblo Sur, and is conveniently close to the tourist destinations and businesses where many of the people who would rent would be employed; and (3) It is on the main bus route in Taos. In fact, there is a northbound bus stop right in front of the Sun God and a southbound bus stop right across the street, convenient if residents do not have private transportation.

As with all of the sponsor’s development projects, the two main goals of the rehab project are (1) provide a satisfactory ROI for investors, and (2) fund the nonprofit Healing Sanctuary wellness center. Investors’ share of net profit is expected to be $650K, when combined with the annual 6% APR, yields a 2.1x multiple on the initial investment capital.

 

Who is Jeffrey Poston

Why Invest with Jeffrey Poston?

Project Sun God LLC

Total Capital & Debt Req’d

$3,000,000

Debt Raised to Date

$2,050,000 or 68%

Investor Capital Req’d

$950,000 or 32%

Yr-7 Sales Price

$6.7M at 6% cap rate and 35% expense ratio

Gross Rent

$43,200 per month

Investor Returns

First, investors receive 6% preferred interest paid quarterly. In addition, investors will share in 20% of net profit, yielding a total estimated 2.1x multiple

Financial Sources

Private Investors $950,000
Commercial Lender $2,050,000

Financial Uses

Acquisition $1,400,000
Rehab $1,200,000
Holding Costs and Overhead $400,000

Documentation


Property Summary


Like many iconic motels on historic Route 66, the Sun God motel fell into disrepair over the past few years, despite its iconic status. Our plan is to honor the architectural design history of the iconic Sun God motel, converting the property into one-bedroom and studio apartments to provide housing opportunities for residents, while adding some new updated design and apartment amenities.

Taos, like many tourist-driven municipalities, has the challenge of a serious affordable housing shortage. It is this demand for housing that drives cap rates lower and that secures higher exit value for investors. Since it requires a lot more capital to upgrade a historic hotel than it does to build a new one, many iconic motels have lost substantial business to the lure of Airbnb. Recently, a growing segment of city governments, nonprofit organizations, and developers have been reclaiming these structures to transform old and run-down motels into apartments and condos to meet the growing needs for housing. 

The Sun God rehab will provide opportunities to work with regional artisans to incorporate design details representative of local culture. We’ll also contribute construction jobs and property management jobs to the local economy by hiring local workers.

Address Property Type Units Buildings Avg. Unit Size
919 Paseo Del Pueblo Sur
Taos County, NM 87571
Multi Family 44 4 400

Red Hot Tourism, Extreme Shortage of Affordable Housing

Turning old motels into housing can add inventory to markets where there simply aren't enough homes to meet demand. The ski town of Taos is one such market with a significant shortage of affordable housing. The town’s federal affordable housing unit has a waiting list just for one-bedroom apartment homes of 158 names. It takes less than a week to fill market-rate vacancies in the red-hot rental market in Taos.

Some successful examples of old or run-down motels converted from temporary to permanent housing include:

  • HotelVQ in downtown Denver
  • Luna Lodge in ABQ, NM
  • The House, Eagle, Colorado

Converting run-down motels into permanent housing is an appealingly affordable option for developers as well as tenants. It is America’s hottest hotel trend and many municipalities are leveraging older motels to rehab into affordable micro apartment housing. Run-down motels are becoming cool condos and affordable apartments.

Like other iconic motels on historic Route 66, the Sun God fell into disrepair over the past few years, despite its iconic status. It takes a lot more capital to upgrade a historic hotel than it does to build a new one, and many iconic motels have lost substantial business to the lure of Airbnb. Recently, a growing segment of city governments, nonprofit organizations, and developers have been reclaiming these structures to transform old and run-down motels into apartments and condos to meet the growing needs for housing. 

It is this high demand for affordable housing that drives cap rates lower and that secures higher exit value for investors. Our plan is to honor the architectural design history of the iconic Sun God and rehab the property with the same look and feel as it appeared originally. We’ll convert the property into one-bedroom and studio apartments to provide housing opportunities for residents, while adding some new updated design and apartment amenities.

The converted Sun God Apartments will hold several advantages over other apartments. (1) It is iconic in name and is considered a historic part of the Taos culture, though it is not on a historic registry. (2) It is centrally located on the main street of Taos, Paseo Del Pueblo Sur, and is conveniently close to the tourist destinations and businesses where many of the people who would rent would be employed. (3) It is on the main bus route in Taos. In fact, there is a northbound bus stop right in front of the Sun God and a southbound bus stop right across the street, convenient if residents do not have private transportation.

The Sun God renovation may also meet the desired need many urbanites have for a vacation destination/timeshare. Depending on ski season vacancies, a portion of the rooms may be used for high-revenue "ski season" extended-stay lodging. We may also dedicate some of the rooms for low-income affordable housing in partnership with local housing authority.

Of course, the Sun God rehab construction project will also contribute to the local economy by hiring local talent for the architectural and design tasks, construction and landscaping work crews, and property management team.

Contact Sponsor

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CERTAIN INFORMATION REGARDING THIS OFFERING

THESE UNITS ARE BEING OFFERED WITHOUT REGISTRATION UNDER ANY FEDERAL OR STATE SECURITIES LAWS, BUT ARE BEING OFFERED UNDER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER COMPARABLE EXEMPTIONS UNDER VARIOUS STATE SECURITIES LAWS. HOWEVER, THE SECURITIES AND EXCHANGE COMMISSION (“COMMISSION”) HAS NOT DETERMINED THAT THESE UNITS ARE EXEMPT FROM REGISTRATION. THESE UNITS HAVE NOT BEEN REVIEWED, APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY, ADEQUACY, COMPLETENESS OR MERITS OF THIS MEMORANDUM, AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL TO, OR A SOLICITATION OF AN OFFER TO BUY FROM, NOR SHALL ANY OF THE UNITS BE OFFERED OR SOLD TO, ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION, PURCHASE, OR SALE IS UNLAWFUL OR UNAUTHORIZED UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.

THE STATEMENTS MADE HEREIN ARE MADE AS OF THE DATE ON THE COVER OF THIS OFFERING MEMORANDUM. THIS OFFERING MEMORANDUM CONSTITUTES AN INVITATION TO THE PROSPECTIVE INVESTOR TO SUBMIT AN OFFER TO SUBSCRIBE. NO PERSON MAY PURCHASE THE UNITS OFFERED HEREBY EXCEPT PURSUANT TO AN EXECUTED SUBSCRIPTION AGREEMENT IN THE FORM PRESCRIBED BY THE FUND, AND THEN ONLY FROM A PERSON TO WHOM THE FUND OR ITS DESIGNATED AGENT HAS DELIVERED A COPY OF THIS OFFERING MEMORANDUM.

THESE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY THE FUND. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THERE IS CURRENTLY NO PUBLIC MARKET FOR THESE UNITS.

IN MAKING A DECISION TO PURCHASE UNITS HEREUNDER, PROSPECTIVE INVESTORS MUST CONDUCT THEIR OWN INDEPENDENT INVESTIGATION OF THE FUND AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, AND ARE ENCOURAGED TO CONSULT WITH THEIR ADVISORS AS THEY WILL BE REQUIRED TO REPRESENT THAT THEY ARE ABLE TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT AND THAT THEY ARE FAMILLIAR WITH AND UNDERSTAND THE FUNDAMENTAL RISKS AND TERMS OF THIS OFFERING.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION WITH RESPECT TO THE OFFERING OF THE UNITS WHICH IS NOT CONTAINED OR REFERENCED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. POTENTIAL INVESTORS MAY, IF THEY SO DESIRE, MAKE INQUIRIES OF THE FUND WITH RESPECT TO THE FUND’S BUSINESS OR ANY OTHER MATTERS SET FORTH HEREIN, AND MAY OBTAIN ANY ADDITIONAL INFORMATION WHICH SUCH PERSON DEEMS TO BE NECESSARY IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION CONTAINED IN THIS MEMORANDUM (TO THE EXTENT THAT THE FUND POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE).

May 28 2020

Confidential Offering Memorandum: Poston Investment Collective LLC

PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO CONSTRUE ANY CONTENTS OF THIS OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS, AS CONSTITUTING INVESTMENT, LEGAL OR TAX ADVICE; RATHER THEY SHOULD CONSULT THEIR OWN ADVISORS OR COUNSEL WITH THE CAPACITY TO ADVISE AND PROTECT THEIR INTEREST IN CONNECTION WITH ALL MATTERS CONCERNING THIS OFFERING MEMORANDUM.

THIS OFFERING MEMORANDUM DOES NOT KNOWINGLY CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT A MATERIAL FACT, AND ANY SUCH MISSTATEMENT OR OMISSION IS DONE WITHOUT THE KNOWLEDGE OF THE PREPARERS OF THIS DOCUMENT OR THE FUND. AS SUCH THE FUND BELIEVES THAT THIS OFFERING MEMORANDUM CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF ALL MATTERS, DOCUMENTS AND CIRCUMSTANCES MATERIAL TO THIS OFFERING. WHILE THE DATA AND STATEMENTS CONTAINED HEREIN ARE BASED UPON INFORMATION BELIEVED TO BE RELIABLE, NO WARRANTY CAN BE MADE AS TO THE ACCURACY OF SUCH INFORMATION OR THAT CIRCUMSTANCES HAVE NOT CHANGED SINCE THE DATE SUCH INFORMATION WAS SUPPLIED. THIS MEMORANDUM CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF DOCUMENTS RELATING TO THE BUSINESS OF THE FUND AND THE UNITS OFFERED HEREBY, AS WELL AS SUMMARIES OF VARIOUS PROVISIONS OF RELEVANT STATUTES AND REGULATIONS. SUCH SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS, STATUTES AND REGULATIONS.