Key Deal Points

Centra Capital Partners provides the opportunity for accredited investors to make an investment in a 110 lot detached townhome ground up development at the Ramsey Waterfront Village.

Centra Capital Partners is targeting the following projections for this investment:

Preferred Return: 8%

Targeted Equity multiple: 2.23

Targeted IRR: 20.3%

Targeted Investment Period: 6 years

Capitalization

The objective of the project is to develop and build 110 detached townhomes to be sold with a targeted investment period of 6 years. 

The land will be acquired for $737,240 with additional development costs of $5,436,009, including city fees, engineering, utilities, street installation and landscaping, totaling $6,173,249. The total estimated cost of construction is $24,721,261, with an additional G&A expense of $3,231,040.

This will be funded with an equity capital raise of $2,500,000, debt financing of approximately $4,012,612 with an additional line of credit to cover construction costs. The debt will be provided by Bridgewater Bank with terms to repay the entirety of the loan by project completion with a projected 9% interest.

The table below shows the full six year projected distributions of preferred return, return of capital and pro-rata share of 50% of profits.

Total projected investor level IRR over the six year period is 20.3%, projected equity multiple is 2.23x, and projected ROI is 123% - so for every $100,000 invested, we are projecting total returns will be $122,957.

January 23, 2024

Article by Finance & Commerce on the project.

Distribution Waterfall

The projected distributions from net operating proceeds and capital events are structured as follows:

Tier 1:

8% preferred return. Investors to receive their 8% preferred return once cash is available from operations, estimated starting in the second quarter of the second year of the project. 

Tier 2:

Return of capital. 100% of profits pro-rata to Partners until all their capital is returned.

Tier 3:

Sponsor to receive a cumulative distribution of 50% of all amounts distributed of the preferred return as a Catch Up

Tier 4:

Remaining profits to be distributed on a 50/50 split.

In this project, we intend to use bank debt provided by Bridgewater Bank, a regional bank in Minnesota. The General Partner has historically done much of its lending with this bank. 

Development Loan:

We secure a development loan from the bank, which covers 65% of the total cost of the development budget.
The projected interest rate on this loan is 9%.
We repay this loan at closing of each home at 120% of the cost of the lot where the home was built.
This ensures that not only do we cover the loan amount, but we also have some profit margin built into the repayment.

Line of Credit:

In addition to the development loan, we have a revolving line of credit to cover the costs of construction, which allows us to borrow up to 65% of the construction cost. 
The interest rate on the line of credit is also 9%.
We also repay the line of credit upon closing at 100% of the cost to build that home. 
This covers the construction expenses and ensures that the line of credit is repaid in full.

Financial Strategy:

Our financial strategy is to use the development loan to acquire the land and cover initial development costs.
We repay this loan at a profit when we sell a lot.
The revolving line of credit provides flexibility to manage construction expenses.
We repay the line of credit in full when we close on a home. 

Benefits to the Investor:

Our debt structure is designed to provide a buffer for profitability.
Repayment terms ensure that we not only cover the debt but also generate profit.
The use of a line of credit offers flexibility and efficiency in managing construction costs.
By securing loans at reasonable interest rates, we maximize returns for our investors.

Overall, our debt structure is carefully planned to optimize financial efficiency and profitability in our project.

We will be charging a 4% Capital Management Fee on the total amount managed from LPs which is budgeted at $100,000. 

We will also charge an 8% developer fee which is budgeted to $457,278 for the project. 

The total in fees are $557,278.

The Minneapolis-St. Paul single-family housing market has seen incredible growth in recent years, based on a number of compounding factors. 

Recent data from the Minneapolis Area Realtors Association shows the economy is improving, unemployment is falling, and the housing prices are on the rise. The median sales price of a home rose 2.2% in November 2023 compared to the same time in 2022, with 58,366 housing units for sale out of a metro area with nearly 3.7 million people.

According to Redfin, over the past five years home values in Minneapolis have increased by more than 20% and the average number of days a home is on the market is 23. 

These factors, combined with organic population growth in the region, is accelerating demand for high-quality single-family housing. We feel that these demographic trends are likely to drive opportunities for the Project and similar developments throughout the region.

THE LOCATION

The Waterfront Village is in the growing community of Ramsey, only 35 minutes from Minneapolis. The land contains 110 lots to be developed into detached townhomes. This project will be part of the COR, the City of Ramsey’s downtown development. This 300+ acre development is a true, transit oriented and walkable, urban development. The COR is centered on U.S. Highway 10/ U.S. Highway 169 and the Ramsey Northstar Commuter Rail Station. This development with a mix of uses is home to a long list of successful projects including grocery, residential, retail, restaurants, office, recreation, government facilities, and more.

Rum River Central Regional Park

A scenic park featuring a wide variety of activities, such as canoeing/kayaking, cross country skiing, fishing, picnicking, equestrian trails, hiking, and more.

The Draw

This park is about 7 acres, and blends natural and planned open spaces together for a multitude of uses. Featured here is an amphitheater, public art, passive open spaces, walking paths, and scenic overlooks.

Mississippi River Trail

This bicycle route winds over 600 miles along the river to the Iowa border, passing through valleys, bluffs, prairies and woodlands. This is a truly unique way to experience the energy and enchantment of the river!

Northfolk Golf Course

A Scottish links-style 18-hole, par 72 championship golf course for all skill levels. Includes a driving range, practice greens, golf shop, lessons and equipment rental.

Game Fair

The nation’s largest outdoor sporting event, Game Fair is a sporting event for the entire family.  Held in the out-of-doors on 80 beautiful acres of woods and water, Game Fair is an annual tradition for families to come together and enjoy the great outdoors.

We plan to build and sell two different detached townhome models during the development of the Ramsey Waterfront Village.

In order to invest in Waterfront Village you must be an accredited investor as defined by the Securities and Exchange Commission, (SEC), here.

As part of the application process to invest using the secure investor portal, it will require the submission of a third-party verification letter qualifying you as an accredited investor. The SEC requires that we take steps to verify each investor's accreditation status.

These letters can be produced by a registered broker, investment advisor, licensed attorney or certified public accountant.  

If you would like to obtain an accredited investor verification letter by yourself, we recommend the use of VerifyInvestor. 

Select "Verify Yourself" upload the required documents and complete to process to obtain your verification letter that you can upload into your secure investor portal with Centra Capital Partners.

For a short but detailed video on how to proceed through the investment process here at Centra Capital Partners, please click here or watch below