Background:
A large homebuilder was seeking was seeking a capital partner to help make their balance sheet lighter. We stepped in and successfully closed on these lots within three months, providing the builder with capital while securing an attractive asset in affordable, well-located communities. The lots were fully entitled, and in a proven sub-market.

Key Benefits:

• Purchase of Phase 2 Onwards:
  Phase 1 is on the ground, where much of the critical infrastructure has already been laid down. The builder had already completed significant offsite work, including roads, utilities, and other infrastructure, reducing the capital expenditure risk on our part.
• Strong Valuation and Location:
  The lots are in affordable, well proven up communities in excellent locations across Central Texas, and we bought them with no mark-up from the builder
• Structured Takedown Schedule:
  The builder has committed to a 5-period takedown schedule over 4 years, ensuring a steady flow of lot purchases and maintaining ongoing cash flow throughout the life of the project.
• Builder Commitment:
  The builder has backed the deal with a substantial upfront non-refundable deposit, further de-risking the project by ensuring their vested interest in executing the purchase plan

Deal Summary:
With a deep understanding of the Central Texas market, we identified this opportunity as a low-risk alternative to traditional private credit, asset-backed securities, and high-yield bonds, offering superior returns with a strong buyer. A key factor in our decision was the strong valuation and existing infrastructure. If the builder walked away, we were confident in our ability to sell the lots quickly given the entitlements.

The investment provides a 14% annualized yield and a 15% IRR, with monthly distributions generated through a well-structured financing and buyback arrangement. The builder’s 5-period takedown schedule ensures consistent income over the next 4 years, making this a highly attractive opportunity for risk-adjusted returns.