New England Home Fund II Boston, MA

New England Home Fund II Boston, MA

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Investment Summary
RealtyShares is excited to offer an equity investment in a single-family home fund in the New Haven, CT and Boston, MA markets. RealtyShares investors will be members of RealtyShares 236, LLC. The Fund will be a new LLC that will be jointly owned by Alliance Realty Capital (“Sponsor” or “Alliance”) and RealtyShares 236, LLC for the purpose of purchasing, renovating, leasing up, and/or exiting single-family home properties located in New Haven, CT and Boston, MA. RealtyShares 236, LLC will provide an estimated $1,500,000 of capital to the Fund and up to $2,000,000 and Alliance will make available to the Fund its existing third party line of credit which will increase the purchasing power of the Fund. Alliance will act as the Manager of the Fund and will be solely responsible for all operations and decisions concerning property purchases, renovations, and rental/stabilization efforts. This will be the Sponsor’s fifth deal on the RealtyShares platform and the Sponsor’s second fund on the RealtyShares platform.

RealtyShares 236, LLC investors are projected to receive a 13.5% annualized preferred return (net of all fees) paid monthly on the RealtyShares investment from properties purchased and exited in the Fund.

For details on completed projects, please see the Documents tab.

INVESTMENT TYPE

Single-Family Fund

TERM

30 Months

INVESTMENT TYPE

Preferred Equity

ANNUALIZED MONTHLY
CASH RETURN

13.5%

Investment Timelines
June 2016:
Alliance Realty Capital plans to put properties under contract in the name of the Fund and will begin closing on those properties. The Fund will target to purchase approximately of 1-3 properties per month with the aim of acquiring approximately 60+ properties over the lifetime of the fund.June 2016-July 2016:
Construction on the properties is planned to begin. Renovations normally take 75-120 days.

September 2016:
Renovated properties are targeted to be listed for rent and/or for sale, and starting in August, the first properties are targeted to be rented.

Ongoing:
The Fund will aim to continue to purchase, renovate, rent and transfer/exit properties and will aim to liquidate within a 30 month period. Upon liquidation, all properties in the Fund are targeted to be sold or refinanced and the principal investment is planned to be returned to investors.

Investment Highlights and Risk Mitigants
This is an investment opportunity to participate in a diversified investment fund that will purchase single-family homes in New Haven, CT and Boston, MA.

  • Experienced Sponsor with Strong Track Record: The Sponsor of the Fund, Alliance Realty Capital, has successfully delivered over 250 renovated and newly constructed homes. Within the past 9 months, Alliance has facilitated over 50 transactions within this asset class.
  • Top-tier Markets/Sub-Markets: The properties to be purchased by the Fund will be located in the Boston, MA and New Haven, CT markets.
  • Vertically Integrated Management: Alliance Realty Capital is a vertically integrated team with expertise in acquisitions, title, construction, development, leasing and sales. All aspects of the operation from acquisition to disposition, leasing and property management are done in house.
  • Corporate Guaranty: Alliance is providing a corporate guaranty on RealtyShares capital and returns. RealtyShares has reviewed the company’s financial statement and confirmed that the Sponsor has over $1.8 million in cash.
Location Highlights
Alliance Realty Capital is based in Branford, CT, and has an office in Boston, MA. All homes to be purchased by the Fund will be located in the New Haven, Connecticut and Boston, Massachusetts areas. Below are a few location highlights:

  • According to Zillow, the median home value in New Haven, CT is $151,200, and the median home value in Boston, MA is $480,000.
  • According to ERSI, the current population of New Haven, CT is 129,779, and the current population of Boston, MA is 645,966. According to ESRI, New Haven’s median household income is $36,196, and the median house income of Boston is $53,583.
  • Companies headquartered in New Haven, CT include Edible Arrangements, NewAlliance Bank, Pendulum Press, and Vion Pharmaceuticals. It is also home to Yale University. Companies headquartered in Boston, MA include Bain, Gillette, Boston Properties, John Hancock Financial, J.M. Forbes and Co., and Liberty Mutual.
  • Trivia: When Boston was all farmland, the farmers took their cows to the wide open grasses to feed. Legend states that Boston’s crooked streets were originally cow paths from the open farmlands to the “Common.” Ralph Waldo Emerson is even credited with saying: “We say the cows laid out Boston. Well there are worse surveyors.”
Risk Disclosures
Each prospective investor in this investment opportunity may review the operating agreement and subscription agreement for RealtyShares 236, LLC (see the “Documents” tab) before investing and may consult appropriate legal, tax, and investment advisors. A draft version of the Fund’s operating agreement will be made available upon request. Please note that RealtyShares is not serving as your fiduciary or advisor with respect to this opportunity. Below are risks associated with this investment that should be carefully reviewed prior to any investment in this opportunity:

  • Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated,” “projected”, “forecasted”, “estimated”, “prospective”, “believes,” “expects,” ”plans” “future” “intends,”, “should,” “can”, “could”, “might”, “potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements. Similarly, the financial forecasts contained herein and in and any other offering materials are based on numerous assumptions. Although these assumptions are believed to be reasonable, they are all subject to uncertainty.
  • The transferability of membership interests in the Company is restricted both by the operating agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the investment interests and none is expected to be available in the future. Moreover, the estimated Property holding period described herein is only a projection, and there can be no assurance when or if an investment may be liquidated. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
  • RealtyShares 236, LLC will be investing in CTMA ARC Fund II, LLC (the “Fund”). The Fund’s economic performance and value, and thus the value of investors’ investment, is subject to various risks associated with the property. Investors will be relying solely on the manager of the Fund for the execution of its business plan. While the manager of the Fund has significant operating experience, the Fund itself was recently formed and has no significant operating history or record of performance. The investment of the RealtyShares 236, LLC in the Fund will be subject to, among other things, the Fund’s operating agreement, which provides RealtyShares 236, LLC with little or no control over the management of the Fund. A draft version of the Fund operating agreement can be made available upon request.
  • The preferred equity interest in the Fund will not be participating in any appreciation of the Property’s value; the returns on such investment are limited to the stated return rates. Such returns are expected to be treated as ordinary income; investors should not expect any advantageous tax treatment with respect to their investment. In addition, although there is a defined maturity date for the preferred equity investment in the Fund, there can be no assurance that the investment will be liquidated at or promptly after such maturity date.
  • Real estate markets are affected by many factors, such as general economic conditions, supply and demand for real estate investments, interest rates, the availability of financing, and other factors, all of which are beyond the control of both the Company and the Target. The Property’s economic performance and value, and thus the value of investors’ investment in the Target, is subject to such risks, as well as the risk that the Property fails to generate revenues sufficient to meet its operating expenses, including debt service. While the Sponsor believes that the projected rental rates and ultimate sales price are reasonable relative to comparable properties in the market, there can be no assurance that such rental rates can be realized or that when the Sponsor attempts to sell the Property that investor sentiment will be favorable or that purchase financing to a buyer will be readily available.

This investment has a high degree of risk, and there can be no assurances that all or any of the assumptions described herein will be true or that an investment’s actual performance will bear any relation to these hypothetical illustrations. The above is not intended to be a full review of all the risks of this investment. For a more comprehensive discussion, please review the risk factors described in Exhibit A in the Subscription Agreement for RealtyShares 236, LLC, which can be found in the Documents tab. The information provided regarding this offering has been prepared by the Company based upon information provided by the Sponsor, and the Sponsor bears responsibility for nearly all of the information provided herein. Neither NCPS nor RealtyShares has reviewed the material for accuracy and makes no representation or warranty about the truthfulness of the Sponsor’s statements or representations contained herein.