target
acquisition criteria
Target Acquisition Criteria
Property Size:
5,000 sq. feet, 6+ bedrooms and 4+ bathrooms
Location:
Class A Locations in Phoenix, Scottsdale and Paradise Valley
HOA:
No
Hold Period:
5 years
Price:
$1MM - $5MM
summary of
key terms
investment strategy
PREF will acquire between 50 to 60 luxury, short-term vacation rental properties, anchored in the Phoenix and Scottsdale area, Cabo San Lucas, and other highly desirable destination markets with favorable ROI's.
Target Returns
15% - 20% Net IRR.
Fund Life
5 - 7 years from the final closing.
Target Fund Size
$30 million.
Target Leverage
70% of total committed capital.
Preferred Return
8% per annum, paid guarterly.
Cashflow Distributions
Available cash distributed quarterly.
fund management fee
1.5% management fee.
Fund Administrator
Red Cedar Advisory
value driven portfolio
The Parsons Villas Approach
Investment Property Identification
- Identify luxury, short-term vacation rental properties with a 8-10% cap rate
- Focus Search On Specific Zip Codes Including 85016, 85018, 85253, 85255, 85258, 85259, And 85260
- Further Qualify Properties That Meet The Fund’s Stringent Investment Criteria Parameters
property due dilligence
- Survey each home’s integrity
- Calculate remodeling costs based on desired floorplan, design, and furnishings
- Prepare a detailed project plan with the goal of completing renovations as efficiently as possible
valuation models
- Analyze vacation rental trends and comp rates utilizing recognized yield management cloud-based tools
- Evaluate data for location and consumer demand
- Assess financing options
Basket of 25 to 40 active vacation rental properties that have been evaluated and added to the Fund’s portfolio
- Efficiently remodel homes in accordance with the Fund’s criteria to attempt to maximize short-term vacation rental revenue
- Actively promote the vacation properties through the Management Company’s sophisticated property management systems
transparent
Investment Roadmap
1 property acquisition
Identify property - Negotiate price
- Open escrow
2 Property Remodel
- Light remodel (30-90 days)
- Medium remodel (3 - 6 months)
- Large remodel (6 - 12 months)
3 Management Company Portfolio
- Home entered into Streamline software
- Schedule photos, videos, and matterport
- Create welcome book
4 Distribution Channels
- Home listed on 95+ online travel sites including HomeAway, VBRO, and Booking.com
5 Hold Asset
- 5 years
6 Capital Event
- Refinance
- Retail Sale
- Portfolio Sale
7 Return of Capital
- Endeavour to return 100% of initial investment to investors + 15% - 20% IRR
Exit Strategies Flow Chart
Fund LLC
Acquisition
Renovation
Furnishing
Begin Marketing
Unit
Active
Leased & Managed
Home 1 LLC Home 2 LLC
Home 3 LLC Home 4 LLC
Home 5 LLC
Finance
Buy & Hold
Quick Sale
Begin RefinanceProcess
Final Appraisal &
Underwriting
End Financing
Signed Contract
Closing
Return Investor Equity
through Refinance
(
Y
ear 2-3)
IPO/REIT
Disposition
(After 5+
Y
ears)
Continue to Hold
(5+
Y
ears)
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