KCAP ACCESS FUND

  • Summary

    Summary

  • Strategy

    Strategy

  • Diligence

    Diligence

  • Team

    Team

  • Record

    Track Record

  • Terms

    Terms

  • Documents

    Documents

  • Closed

KCAP Access Fund LLC

Investment Overview

  • Summary

    Summary

    Fund Overview

  • Strategy

    Strategy

    Investing in Multi-Family Property

  • Diligence

    Due Diligence

    Independent 3rd Party Fund Diligence Report

  • Our Team

    Team

    Real estate professionals with 100 years of experience

  • Track Record

    Track Record

    Historical IRR over 20%

  • Terms

    Terms

    Summary of Investment Terms

  • Documents

    Documents

    Executive Summary, Presentation, PPM ...

Investment Summary

Fund Type

fund

Multi-Family Property

Targeted Return

25%+ Net

Distributions

Quarterly

Min. Fund Investment

$25,000

Hard Close Date

Dec 27th, 2021 or 99 Investors

Limited spots available to invest


  • KCAP Multi-Family Investment Offering


  • KeyCity Capital and The State of the Financial Markets


  • Core Inflation - What Does The Future Look Like


  • Current Rental Rates


  • KeyCity Investment Strategy

KCAP Investment Overview

KCAP RE Fund III, LLC (“KCAP” or “KCAP Fund”) is seeking to raise $50 million to acquire “affordable” rental single family homes and apartment communities that are primarily Class B and C value-add properties. KCAP intends to renovate and stabilize each of the properties acquired within the first couple of years following acquisition. Following each asset’s stabilization, KCAP intends to realize an increase in the value in approximately 3 to 5 years. KCAP is targeting investor level returns of 25%. KCAP has already raised $45 million in the KCAP Fund and utilized $22 million to acquire over $80 million of assets in a 6 property acquisition in Memphis. That acquisition is targeting a 31% IRR and has a projected stabilized cash-on-cash return over 20%. KCAP is managed by KeyCity Capital, which has achieved a 23% average IRR on properties that have been realized.


  • Performance

    23% Average IRR on Realized Investments
    1.7x Average Cash Multiple on Realized Investments
    Zero Investment Losses in 13 Years

  • Experience

    Over 100 Years of Investing Experience
    Over 70 Team Members
    Vertically Integrated Operator

  • Investments

    Over $400 million in Assets Under management
    2,000+ Units Under Management
    8 Real Estate Private Equity Funds

KCAP Access Fund LLC

KCAP Access Fund LLC (the “Access Fund”) is raising capital to invest in KCAP RE Fund III, LLC (“KCAP Fund”) which is described above. The Access Fund is raising capital through a “feeder fund” structure called an access fund by aggregating up to 100 investors at a minimum investment of $25,000 each and will invest the capital into KCAP Fund. Since the Access Fund will aggregate several million dollars, the Access Fund has been able to negotiate to receive a 12% preferred return, as compared to direct investors into KCAP who will only receive an 8% preferred return.

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Key Considerations

  • Proven Track Record – KCAP is managed by KeyCity Capital, which has achieved a 23% average IRR and a 1.7x Equity Multiple on realized multifamily investments.
  • Strong Targeted Return – KCAP is targeting an annualized net return of 25%.
  • Higher Negotiated Returns - The Access Fund has negotiated to receive a 12% preferred return from KCAP, as compared to an 8% preferred return for direct investors into KCAP.
  • Attractive Investment Niche – KeyCity Capital has proven that its Class B and C multifamily value-add acquisition strategy generates above average investment returns with low market risk and strong cash flow.
  • Experience – KCAP has a highly experienced investment management team with over 100 years of combined experience with assets under management of approximately $400 million. KeyCity Capital is a vertically integrated real estate property acquisition and management.
  • Skin-in-the-Game – KeyCity Capital will invest $2.5 million in the fund.

KCAP Service Partners


  • Fund Administrator


  • Legal Counsel


  • Auditor

Access Fund Service Provider


  • Tax and Accounting Services

Why Invest Through a Fund

  • FAVORABLE FINANCING

    KCAP will take advantage of a historically low interest rates and favorable financing terms at a time when basic SFR investment fundamentals are showing continued strength.

  • INSTITUTIONAL OVERSIGHT

    As an institutional investment manager, KCAP will review every aspect and decision related to the acquisition, finance and ongoing operations of the properties.

  • PRUDENT DIVERSIFICATION

    At completion, KCAP will own Multi-Family properties.

  • PROVEN TRACK RECORD

    CityVest searches for institutional investment managers who have a strong historical track record with IRR returns well over 20%.

Why Real Estate?

  • Diversification

    Real estate investments are considered a non-correlated alternative asset class.

  • Cash Flow & Appreciation

    Stabilized real estate generally benefits from regular and predictable cash flow.

  • Low Interest Rate

    Historically low interest rates may allow real estate to generate higher cash flows.

  • Income Tax Treatment

    Ordinary income can be minimized through the use of an accelerated depreciation strategy that may generate passive losses.

  • Hedge Against Inflation

    Rents, land values and replacement costs typically move upward with inflation.

  • Multiple Exit Strategies

    Real estate assets can be disposed of through individual or portfolio liquidations, asset refinancing, mergers, or a “roll up” through a portfolio capitalization.

KPAC OVERVIEW & STRATEGY

KCAP RE FUND III is a diversified real estate equity fund for the acquisition and management of “affordable” rental home and apartment communities consisting of primarily Class B value-add properties. The fund will maximize liquidity with quarterly distributions and equity returns in a tax-advantaged fund structure leveraging KeyCity Capital’s proven affordable residential real estate equity investment strategy.

Target Market Criteria

Workforce Single & Multifamily Housing

Landlord Friendly States

Four Legs to Each Local Economy

  • Higher Education
  • Major Medical
  • Strong Financial Market
  • Diversity of Employers

Vertically Integrated with Construction & Property Management

KCAP RE FUND III Highlights


Geographic Target Criteria Defined

KeyCity Capital created a Geographical Target Criteria using the same formula that small and regional banks use when targeting locations for branch cities and locations.

  • Higher Education Institutions

    Markets with higher education create a stable, secure, and appreciating economy with a diverse workforce from the jobs needed to service the educational community. The key to investing in this kind of market is to expand acquisitions to include student, workforce, and affordable housing.

  • Major Medical Facilities and Hospitals

    Markets with major medical facilities and hospitals, specifically those with residency programs, create consistent growth and robust medical economies which attract a diverse workforce. Thus, leading to a constant demand for affordable housing.

  • Financial or Banking Market

    Strong financial and banking markets possess both target criteria #1 and #2 and a small regional bank with local headquarters. Markets with these characteristics create a consistent financial structure and produce long-term consistency, growth, and infrastructure when vested heavily into a market.

  • Diversity of Employers

    We avoid markets where there is economic dependence on a single employer or a specific industry segment.

  • Market Growth

    Consists of the following three factors:
      ● Incomes are growing
      ● Jobs are growing
      ● People are moving into the market growing the population


Why B & C Class Properties

KCAP targets acquisitions in the B & C class market for the following reasons:

  • Largest demand product with the lowest supply
  • Nearly 70% of the U.S. population does not or cannot own their own home, and that continues to grow
  • Demand has outpaced supply by nearly 30% since the 1970s
  • We focus on providing a product for this market segment which creates the strongest market protection
  • In a recession, those occupying the A class product will relocate to B and C products
  • In a strong market the working class predominantly occupies the B and C products

Target Investment Markets:
Southern States

KCAP targets acquisitions in the B & C class
market for the following reasons:

  • Strong demand
  • Strong job growth
  • Strong population growth
  • Landlord friendly laws & regulations
  • Tax favorable states

KeyCity Capital Investment Markets

RENT AND PROPERTY VALUE INCREASES


Market Opportunities

This is one of the greatest windows of opportunity in our lifetime to invest in residential assets serving the unmet need for affordable housing across the nation.

  • Housing prices and rents continue to climb upward due to limited inventory and low interest rates. Our Rents increased 10% year-over-year between 2020 and 2021.
  • Demand for affordable housing remains at an all-time high in our target markets while supply and inventory levels are at all-time lows.
  • Housing supply remains constrained as demand grows in our target markets due to population shifts as a result of Covid and other structural economic changes in the northeast and upper midwest markets.
  • Nearly all new housing constructed are Class A assets outside of the affordability range for a large percentage of renters and home buyers.
  • Single family and apartment rental occupancy is at record highs.
  • Over the past decade, home ownership has declined from 69% to 61%.
  • The largest growth in rentership demand comes from baby boomers.
  • New market segments, like “build-for-rent”, have contributed to rentership.
  • Societal changes, like shorter duration of employment and people living longer, are additional demand drivers.
  • COVID-19 lead to population shifts benefiting our target markets.

KCAP Due Diligence Process

Disciplined Buying

  • The demand for workforce housing communities is at all time highs. Investors have been paying premiums for performing assets. KCAP targets properties that either have below market rents or significant deferred maintenance.
  • KCAP's disciplined buying strategy and stringent underwriting requirements allow them to create a value add spread of nearly thirty percent within six months of acquisition on every property they acquire.
  • KCAP's underwriting standards support a stabilized cap rate of 8% which is at least 2% higher than market values ( 25%+ average acquisition discount to market value)
  • We use conservative assumptions
    • Current property portfolio
    • Principal experience
    • Manager/GP Co-investment
    • Property sales/dispositions
    • Principal succession
    • Background check/review

Long Term Non-Recourse Debt Financing

  • KeyCity Capital is conservative on debt (under 75% of value)
  • Average Loan to Value of approximately 62% across KeyCity Capital’s portfolio
  • Non-recourse financing
  • 30 year terms with 7-12 years fixed
Building Wealth In Real Estate - CityVest

KEYCITY PROPERTY MANAGEMENT

KeyCity Property Management is committed to making the rental process easy every step of the way for our tenants. All our properties are well-maintained and designed with their client’s satisfaction in mind. KeyCity currently manages over 2,000 units in Texas, Florida, Colorado, Arkansas, and Ohio.

KeyCity Property Management Services

The Director of Property Management, Carey Erff, brings to KeyCity Capital over 15 years of multi-family property management experience, overseeing portfolios in excess of 3,000 units. Carey’s passion for developing people and teams is instrumental as the Property Management division of KeyCity Capital continues to grow.

  • Market Evaluation

    KeyCity carefully assesses properties and evaluates the market to determine a competitive rental rate used in broad marketing awareness to draw in quality tenants.

  • Applicant Screening

    Tenant selection is one of KeyCity’s most important duties. Each prospective tenant must complete their detailed application.

  • Property Advertising

    Property assessment and market evaluation to determine a competitive rental rate.

  • Rent
    Collection

    KeyCity offers tenants an easy way to pay rent through their tenant portal.


  • Tenant Relations

    KeyCity understands vacancies can be expensive, so they value tenant relationships to retain great tenants.

  • Maintenance

    Tenants can submit maintenance requests through the tenant portal, and KeyCity provides a 24/7 emergency maintenance number.

  • Financial Reports

    KeyCity uses proprietary software to produce detailed monthly and annual statements to keep tabs on their clients’ investments.

KCAP Due Diligence Report

Prepared By: Buttonwood Investment Services LLC - December 7, 2021

Building Wealth In Real Estate - CityVest

CityVest requires that all Investment Fund Managers/General Partners meet certain minimum criteria when being considered for inclusion on the CityVest platform. Buttonwood Investment Services LLC has been engaged by CityVest to conduct a third party due diligence verification on the following aspects of the investment fund manager:

  • Current property portfolio
  • Principal experience
  • Manager/GP Co-investment
  • Property sales/dispositions
  • Principal succession
  • Background check/review

Buttonwood has verified the due diligence information and below is a review of the findings.

Building Wealth In Real Estate - CityVest

KeyCity Capital
1209 S White Chapel Blvd
Suite 180
Southlake, TX 76092

www.keycitycapital.com

Real Estate Acquisition Experience

Buttonwood has verified that the Fund Principals have a minimum level of $50 million of combined lifetime acquisition cost as a General Partner or Managing Member of an entity that owns real estate. Applicable experience includes those situations where the Principals had equity invested and at risk in the project(s) and day-to-day involvement in the management and ownership of the project(s).

Criteria Has Been Met

Current Portfolio Value:

$149,500,000

Value of Property Dispositions:

$16,800,000

Failed Project Investor Equity Lost:

$0

Real Estate Principal Experience

Buttonwood has verified that the Fund Principals have a minimum level of combined lifetime experience in the real estate field. The Combined Minimum Principal Experience is 15 Years and a Principal is defined as someone who was a General Partner or Managing Member of an ownership entity with real cash equity invested, and at risk, in the project and with day-to-day involvement in ownership.

48+ Years Combined

True Principal Experience

48+ Years

Investment Fund Governance

Buttonwood has verified that the Investment Fund Governance follows the highest level of fidiciary standards by utilizing an independant audiotr as well as a third-party fund administrator.

Criteria Has Been Met

Fund Auditor: Deloitte
Fund Level Audit Services of the Fund and Fund Investments

Validated

Fund Administrator: Sanne
Fund Admin, Investor Services, Compliance, Sanne Dashboard

Validated

Key-Man Succession Insurance

Buttonwood has verified that the Fund maintains a “key man” insurance policy on at least one or more key members of Manager/General Partner management. This requirement is in place to ensure that the Managing entity has the financial resources to maintain operations in the event that a key Principal is incapacitated.

Policies must have the following provisions:
• The policy names the Manager/General Partner or the underlying project entity as the entity to be paid upon exercise of the policy.
• The policy has a minimum coverage amount of $1 Million.

Criteria is Pending

Policy Payable Party

Pending
Policy is in process

Policy Coverage

Pending
Policy is in process

Manager/General Partner Co-Investment

Buttonwood has verified that the Fund Partners invests in the funds they are offering alongside their investors.

Investment requirements include:
• An investment of at least 2.50% of the total targeted raise amount; or
• A minimum investment of $500,000.

Criteria Has Been Met

Manager Co-investment

Validated

Manager Co-investment Amount

$4,000,000

Public Information Search

Buttonwood has reviewed publicly available information sources to confirm management identity and claims. Further, this review is conducted to help identify any objectionable material that may demonstrate character issues or that may impact the Manager’s ability to successfully manage real estate assets.

Criteria Has Been Met

Adverse Reporting/Articles/Findings

Web search for relevant news articles and reporting on any sponsor or manager activities that may impact or inform their ability to manage real estate.

None Reported

Adverse Social Media Profiles

Search of common social media platforms for profiles that contain offensive content or material relevant to ones moral turpitude.

None Reported

LinkedIn Search

Search of LinkedIn to confirm professional experience conforms with reported experience.

Validated

FINRA Broker-Check

Buttonwood has reviewed FINRA databases to confirm that all Principals are screened to identify any past disciplinary actions related to employment at brokerage firms.

No Actions

SEC Filings

Buttonwood has reviewed all filings made by the manager to the SEC. The Securities and Exchange Commission (SEC) requires certain financial statements and other formal documents to be submitted to them regularly. Public companies, certain company insiders–which the SEC defines as officers, directors, major stockholders, and employees of a public company–and broker-dealers are required by the SEC to make regular filings. Financial professionals and investors rely on the information that the SEC makes public in order to make prudent decisions when they are evaluating a company for investment purposes.

None Reported

Management Background Review

Buttonwood conducted a background search on the primary principals of the Manager/General Partner as well as on the primary entities. This background check is designed to reveal liens, claims, judgements, bankruptcies, criminal convictions, lawsuits, etc.

No Issues Found

Lawsuits

See Note 1

Other Legal Matters Current or Pending

None Reported

Criminal Filings and Convictions

None Reported

Judgements and claims

None Reported

Bankruptcies

None Reported

Liens (greater than $10,000)

None Reported

UCC Defaults

None Reported

Buttonwood Diligence Disclaimer

Note 1: KeyCity is currently involved in a lawsuit pertaining to alleged violations of do-not-call list solicitation laws as well as violations of State of Texas regulations pertaining to the registrations required for businesses that solicit via phone. The Plaintiff in this matter has alleged that: i)KeyCity contacted her directly without her express written consent, ii) KeyCity’s phone solicitations were in violation of do-not-call list laws, and iii) KeyCity was not in possession of the appropriate State of Texas registration certificates when the alleged solicitationswere being made.On the surface this matter would appear to be somewhat innocuousand unrelated to KeyCity’s core real estate business. However, the Plaintiff asserts that KeyCity committed similar violations with hundreds, possibly thousands of individuals, with each violation carrying a minimum fine of $500-$5,000 depending on the nature of the infraction. The Plaintiff haspushed for class action status for this case. This matter is set for trial in early 2023. However, there is a notable possibility that this matter will be resolved viasettlement or mediation prior to trial.

This above Due Diligence Report including all information disclosed (“Report”) by Buttonwood Investment Services LLC is intended to be used for informational and discussion purposes only. Furthermore, this Report is not intended to cover all facets of the due diligence process that a potential investor may require and this Report is not designed to replace those due diligence efforts. This Report is simply designed to provide basic summary information pertaining to a Manager or General Partner and it should be noted that Buttonwood Investment Services is not involved in any decisions made by CityVest Capital Inc or the individual investor and makes no recommendations regarding specific investment opportunities. This report has been prepared for and is to be used exclusively by CityVest Capital Inc., unless as otherwise specifically indicated in the report.

KCAP Fund Management Team

KCAP has assembled a team of motivated real estate professionals with a combined 100+ years.

  • Tie Lasater

    Tie Lasater

    Chief Executive Officer

  • Charlie Dombek

    Charlie Dombek

    President & Chief Client Officer

  • Boone Lasater

    Boone Lasater

    Chief Operating Officer

  • Leigh Archer

    Leigh Archer

    Chief Acquisitions Officer

Chief Executive Officer

Tie Lasater is the CEO and a Managing Partner at KeyCity Capital and is an internationally renowned speaker on real estate, finance, leadership, and entrepreneurship. He has ten companies and has established himself as a successful, knowledgable, well-to-do real estate investor and entrepreneur. In addition, Tie has business interests in over seven countries, three continents and has clients worldwide. He and his partners have acquired hundreds of millions in properties across the United States.

Throughout his career, Tie has spoken on stages worldwide and partnered with and brought together some of the most influential business leaders, investors, and celebrities, including Mel Gibson, Kathy Ireland, Michael Irvin, Vanilla Ice, Randi Zuckerberg, and Bruce Buffer. Celebrity Apprentice Judge, George Ross, has described Tie as "The person you want to be involved with if you are looking to build a successful real estate business."

Tie graduated from Abilene Christian University with a B.S. and M.B.A. in Accounting. He began his career at KPMG International in the audit and compliance division, focusing on private equity. After his time at KMPG, Tie served as the Controller and CFO at a private equity firm before starting his own private equity company with his brother, Boone Lasater.

President & Chief Client Officer

Charlie Dombek is a managing partner at KeyCity Capital, serving as the President and Chief Client Officer. He manages the firm's asset-backed lending and currency trading platforms and is responsible for raising capital for the firm's real estate and alternative investment funds. Charlie also founded the firm's currency trading platform, which has consistently generated a fixed 20% annualized return to its clients.

Charlie graduated from Virginia Tech University with a B.S. in Accounting and received his M.B.A. from the College of William and Mary. He began his career at Ernst and Young (EY) and was a practicing Certified Public Accountant (CPA) for more than 20 years.

Charlie is one of the foremost authorities on domestic and international tax planning and mitigation. He is also the founder of XWealth Strategies. This advisory firm accelerates how the mass affluent grow their wealth by engineering tax-efficient investment strategies and improving investment performance through access to passive real estate and alternative investments. His clients include family offices, professional athletes, entertainers, and highly successful healthcare professionals.

Chief Operating Officer

Boone Lasater is the Chief Operating Officer and a managing partner of KeyCity Capital. He has over 13 years of real estate, accounting, and private equity experience and has closed more than 1,000 real estate transactions, totaling over $250M.

After graduating with a B.S. in accounting from Tarleton State University, Boone spent six years as a public tax and audit accountant. He then transitioned into private equity, where he worked as the Assistant Controller for a PE Oil and Gas firm before starting his own private equity company with his brother, Tie Lasater. Boone and his partners at KeyCity Capital were inducted into the Rich Dad Hall of Fame sponsored by Robert Kiyosaki and were recognized as a Top 100 Real Estate Investment Firm by Entrepreneur Magazine.

Chief Acquisitions Officer

Leigh Archer is one of the managing partners and the Chief Acquisitions Officer of KeyCity Capital. He is passionate about real estate and has been involved in multiple real estate capacities for the past twelve years, including real estate brokerage, agency management, and investing. Throughout his career, Leigh has transacted over $250 Million of real estate for multi-family and single-family properties. He also ran a brokerage that transacted just under $480 Million in volume. Additionally, he owned a title company, served as the Vice President of Keller Williams Realty in Amarillo, and was the CEO of Keller Williams Realty in Denver. While at Keller Williams, Leigh managed nearly 150 real estate agents at its peak and coached people on how to build businesses within real estate.

Leigh graduated with a B.A. in Business Administration from Tarleton State University. He is trilingual, and his background in international business and consulting has trained him to approach business and life with a broad global perspective. Leigh focuses his ability for growth within KeyCity Capital around property acquisitions systems, process, and market analysis and development.

  • Mark Mize

    Mark Mize

    Chief Financial Officer

  • Ryan Nanney

    Ryan Nanney

    Corporate Controller

  • Meliea Ware

    Meliea Ware

    SVP of Operations

  • Meg Dubbs

    Meg Dubbs

    Creative & Marketing Director

Chief Financial Officer

Mark serves as KeyCity Capital's Chief Financial Officer. He brings vast financial experience to KeyCity Capital, focused on creating and building companies. Mark has over 25 years of experience in accounting, auditing, financial reporting, and corporate finance, and he specializes in corporate accounting, capital structure refinancing, valuation, and financial analysis. Having served as the CFO at both public and private companies, Mark is a highly renowned financial accounting and reporting executive and has a strong background in leading a company's financial operations. His leadership illustrates extensive experience in upstream, midstream, and downstream with proficiency and expertise in internal accounting control, financial reporting, and compliance.

Prior to KeyCity Capital, Mark held numerous influential positions across various companies. His career began at PricewaterhouseCoopers as part of their audit team. He later became the Director of Financial Reporting at Cabot Oil & Gas and then to Petrohawk Energy as the EVP, CFO, and Treasurer. While at Petrohawk, Mark helped grow the company from a $50 Million investment to a corporate divestiture of $15 Billion cash in just seven years. After Petrohawk, he founded Halcon Resources and served as the EVP, CFO, and Treasurer. Throughout his time at Falcon, he executed a reverse merger with Ram Energy, led a complete restructuring of the management team, successfully transitioned the company to the NYSE, and led teams who raised over $6 Billion in capital for multiple transactions. Mark was also a consultant for RPA Advisors focusing on financial and turnaround advisory services, enterprise valuation, restructuring, mergers and acquisitions, business plan analysis, and liquidity forecasting.

Corporate Controller

Ryan has over ten years of experience in real estate and property management accounting, five of which he served as a corporate controller. Through his experience, Ryan has proven to be well-versed in operating company accounting. He is passionate about building a solid accounting structure and takes pride in focusing on attention to detail to ensure he and his team produce clean and timely financials and quality data. As KeyCity Capital grows, Ryan strives to strengthen the company's financial team while building upon himself by improving his leadership skills and industry expertise.

Ryan holds an M.B.A from The University of Texas at Arlington and completed his undergraduate studies at the University of Texas at Austin.

SVP of Operations

Meliea holds a B.A. in Psychology from West Texas A&M University and has over 14 years of management experience, seven of those being in the real estate industry. Her degree in Psychology gives her a unique perspective and the ability to manage and encourage others to reach their highest potential. She is goal-driven in both her personal and professional life and has a passion for helping her clients achieve their dreams through the powerful medium of investing. Her business and real estate background, combined with her strong leadership skills, enable her to integrate and grow KeyCity Capital to even higher achievement levels.

Creative & Marketing Director

Meg has over 25 years of experience in the design and marketing industry. Design, Marketing, and Business have provided a multitude of opportunities and experiences, contributing to her ongoing growth and expertise in the cross-disciplinary fields of marketing and creative development. Completing a Master's in Design Management through Savannah College of Art and Design enhanced her practice of interdisciplinary collaboration and the integration of tangible design thinking in all levels of strategy, planning, creative problem-solving, design management, collaboration, and teamwork.

  • Carey Erff, JD

    Carey Erff, JD

    Director of Property Management

  • Stephen Patterson

    Stephen Patterson

    Director of Investor Success

  • Mandy Danish

    Mandy Danish

    Investor Relations Manager

  • Justine Segura

    Justine Segura

    Investor Coordinator

Director of Property Management

Carey is a licensed attorney with over 15 years of experience in multi-family property management, overseeing portfolios with more than 3,000 units. Carey's passion for developing people and teams is instrumental as the Property Management division of KeyCity Capital grows. She likes to challenge herself both mentally and physically, most recently by training for a triathlon.

Carey graduated from Lebanon Valley College in Annville, Pennsylvania, with a B.S. in Business Administration and Accounting. She then went on to receive her Juris Doctorate from Texas A&M School of Law.

Director of Investor Success

Stephen has over 25 years of experience in both public and private finance and administration. Throughout this time, he worked as a public administrator, was on the Board of Directors for a private operating foundation, served as a board member of the County Economic Development Corporation, and has been on numerous civic boards focused on improving communities at large. Stephen has also taught graduate-level courses at the collegiate level developing the next generation of leaders.

His client relationship experience includes purchasing and refinancing municipal bonds and projects for public and county entities. In addition, Stephen has built a successful practice as a financial advisor working with individuals and families to help better their financial lives.

Stephen is well educated and has received numerous degrees across various fields of study. He holds a degree in Finance from Arkansas University, a Master's degree and a degree in Education with a minor in Mathematics from Lamar University, and a doctorate from Stephen F. Austin State University. Stephen also recently completed a competitive post-doctoral fellowship at Columbia University in New York City.

Investor Relations Manager

Mandy has over ten years of experience in marketing and investor relations management. She has a demonstrated history of excellent client relations and providing effective solutions that produce immediate impact and positive results.

At KeyCity Capital, Mandy oversees the capital team’s workflow by maintaining the pipeline and all capital tracking and ensuring a smooth and effective onboarding process for investors. She is the primary point of contact for investors, family offices, and RIAs and is committed to nurturing and developing these relationships.

She is a dynamic and energetic team player with a strong professional drive to accomplish goals. She is committed to using her knowledge and experience to support KeyCity Capital and its clients.

Investor Coordinator

Justine has been with us for over two years and has continued to grow within the company as we grow exponentially. Her focus within KeyCity Capital lies in her ability to make sure the investors have a smooth onboarding experience.

Part of her responsibilities consists of assisting the investor in getting paired with a new custodian and transferring them from one to another. She stays with the investor during the whole process, all the way through until they have successfully onboarded and can start earning the returns on their investments. Justine’s extraordinary nurturing and problem-solving skills stem from being a hardworking, loving mother of two wonderful children.

History of KeyCity Capital

  • 2021

    In early 2020, KeyCity Capital diversified its investment opportunities and launched two new real estate investment funds, and one asset backed lending fund. Became one of nine private equity firms to close on a $100 million single placement in the past two years. Assets under management grew to over $400 million. Grew to 70 members with three office locations.

  • 2020

    In early 2020, KeyCity Capital diversified its investment opportunities and launched two new real estate investment funds, and one asset backed lending fund. Assets under management grew to over $350 million. Acquired their first commercial office building which houses the main corporate office in Southlake, Texas. Grew to 25 members with three office locations.

  • 2019

    KeyCity Capital continued its massive trajectory. Acquiring more than 225 properties. KeyCity Capital increased its multifamily portfolio to six properties. Added its first six full-time employee. Launched its own Property Management Company.

  • 2018

    KeyCity Capital was founded by Tie, Boone, and Leigh. Launch of its first $5 million private equity fund. Acquired over 100 homes in under 90 days, plus two more multifamily properties. Future partner, Charlie Dombek, began lending his private capital in the entertainment industry.

  • 2012-2017

    From 2012-2016, Tie and Boone Lasater became full time real estate investors. Partnered with close inner-circle investors. Founded a construction company to perform the renovation and maintenance of the entire portfolio. Leigh became CEO of a high-end real estate brokerage growing his skills for targeting both marketed and off-market properties. In 2017, the brothers purchased, rehabbed, & sold 14 properties and acquired their first two multifamily properties.

  • 2004-2011

    Beginning in 2004, Tie and Boone Lasater, the Managing Partners of KeyCity, engaged in multiple real estate and alternative investment opportunities: running successful real estate brokerages, accounting practices, and consulting firms while simultaneously building a real estate portfolio brothers, Tie and Boone Lasater grew their personal real estate portfolio and began raising capital from private investors providing high returns on specific projects. Zero principal investment loses in 13 years.


KCAP Track Record

This Track Record page includes the following sections: Realized / Sold Properties Previously Acquired by the Manager; Properties Previously Acquired by the Manager that have not yet been Realized or Sold; Currently Owned Assets by KCAP Fund; Case Studies of Previously Acquired Individual Properties;

Realized / Sold Properties

The following chart of properties that have been previously acquired by the Manager since 1998 and subsequently sold or realized by 2021. The aggregate purchase price for the properties was $62 million and the aggregate sale price was $111 million. The average IRR was approximately 67% and the equity multiple was 4x. The properties are predominately in Los Angeles.

KCAP Properties

Assets Already Acquired by KCAP Fund

KCAP has utilizied $22 million of its Fund capital in a portfolio acquisition comprising 6 different multifamily property communities (“M6” or the “Portfolio”) made up of 1,240 apartment units in Memphis, Tennessee. KeyCity Capital partnered its equity with Arbor Realty Trust's senior financing to complete the $82 million purchase and the $14 million capital expenditure plan to upgrade the properties. This portfolio of properties is a mixture of B and C Class workforce housing units with the potential to become upper B Class with the business plan and market growth.

KCAP Properties

Memphis falls within KeyCity Capital's four main target market criteria: universities, major medical, strong financial market, and diversity of employers. Therefore, making the city an ideal location to invest in real estate - specifically workforce housing. Each property in the M6 Portfolio is conveniently located near major highways, local shopping, dining, and entertainment and is close to the largest employers in Memphis. The local universities employ over 41,000. There are 5 major hospitals employing over 20,000. There are 730 bank branches. The St. Jude’s Research center, along with major employers like UPS, FedEx, and Amazon are within very close proximity.

The M6 Portfolio is located in the heart of workforce Memphis and more specifically centrally located to the up-and-coming area known as Germantown. The migration trend to Tennessee and, more specifically, Memphis is due to central logistics locations exploding. Amazon, St. Jude’s, and FedEx are all growing at a rapid pace and creating significant job growth, therefore, we are on the front end of huge opportunity.

The business plan for the properties has four components - improving the operating efficiency, extending the existing Property Tax PILOT Program, implementing a crime mitigation program, and continuing the seller's renovation program, which includes repairs and upgrades to the interior and exterior of each building.

Once renovations are complete, KeyCity Capital anticipates achieving average rent premiums of approximately $150-$250/unit per month to bring the properties in line with comparable renovated complexes in the area. The PILOT Tax Program, which locks property taxes for the next ten years at historical rates, is a huge benefit to our company and our investors. It adds a 2% increase to net cash flows, which has a significant impact on our investors in return.

Current Fund Performance

KCAP RE Fund III


Prior Fund Performance


Tie Lasater, CEO of KeyCIty, describing the Memphis 6 Acquisition




KCAP ACQUISITION SUMMARY

The Portfolio is 95.5% occupied with stable cash flow; however, there is significant value add opportunity through four primary sources.

  • The first opportunity is to increase the existing below market rents (decreasing the loss to lease) and improve the operating efficiency through economies of scale in management and staffing. The Portfolio currently averages $0.67 PSF effective rent, while comparable properties average $0.73% PSF (8.7% below market).
  • The second opportunity is to continue the seller’s renovation and upgrade program. The seller has started the implementation of a solid value-add strategy, but plenty of rental upside remains for KeyCity Capital. Upon closing, KeyCity Capital intends to continue the renovation program, which is discussed in further detail on the business plan slide. Once the renovations are complete, KeyCity Capital anticipates achieving average rent premiums of approximately $150-$250/unit per month, which will bring the individual Properties in-line with comparable renovated complexes in the sub-market. KeyCity Capital has engaged Heritage Construction & Consulting to handle the redevelopment work and KeyCity’s Property Management arm to handle the day-to-day operations for the apartments. KeyCity Capital has extensive experience in value-add apartment ownership similar to those in the Portfolio.
  • The third opportunity includes extending an existing Property Tax PILOT Program which freezes the current appraised value, resulting in additional cash flow. The PILOT Program benefits two of the Properties in the Portfolio, Pinebrook Pointe and Grahamwood Place.
  • Finally, KeyCity Capital will implement a crime mitigation program to ensure the Properties offer a safe, peaceful, and enjoyable living experience. The program consists of evicting problematic tenants, training staff to work proactively with law enforcement, offering discounted rent to police officers who will patrol the Properties when they are off duty, create police substations, as well as improving lighting and installing security cameras.

Over the next 5 years, as KeyCity Capital renovates and raises rents across the Portfolio the Stabilized NOI will produce an 8.6% Cap Rate and a DSCR of 1.9x (assuming a 3.95% interest rate on a bridge facility.) Assuming an exit cap rate of 5.5% and utilizing Stabilized NOI, the Portfolio value at reversion or refinance is conservatively estimated at $128,145,900 which results in a 67% LTV, resulting in a 16.0% annual cash-on-cash return on the $12,616,000 capital investment.

Building Wealth In Real Estate - CityVest Building Wealth In Real Estate - CityVest

Income & Expense "Stabilized" NOI


Current M6 Properties that are part of KCAP Fund

The Park

Memphis, Tennessee

fund

Investment Summary

The Park is a 157-unit complex located at 3350 Hickory Hill Road, Memphis, Tennessee 38115. The Park is located just minutes from Bill Morris Parkway (TN-385) which connects to I-240 and I-269, the cities two interstate loops. The location also offers proximity to various shopping, dining, and entertainment options, such as Oak Court Mall, Hickory Ridge Mall, Checkers, Krystal, Leonard’s Pit Barbecue, A & J’s Catfish Station Memphis, and The Links at Fox Meadows. The Property, built in 1973, is a well-maintained, 95% occupied asset, with unit amenities that include high speed internet, wash/dryer hookups, stove, dishwashers, and refrigerators. The Property benefits from community amenities such as a laundry facility, swimming pool, and a playground.

Currently, the rental rates are on the lower side of the competition in the submarket ($0.70 PSF avg. rents vs. market rents at $0.84 PSF), but the operations have been consistent. The Sponsor intends to fully renovate the 2 Bed/1 Bath (1,134 SF), 2 Bed/2 Bath (1,022SF) and 3 Bed/2 Bath (1,534 SF) units in anticipation of generating monthly rent premiums of $170, $191 and $256, respectively. For the remaining classic units, the Sponsor will seek to renew current residents at market rent and proactively burn off loss to lease.

Investment Summary

Location

Memphis, TN

Purchase Price

$10,380,000

Construction Cost:

$1,540,000

Total Acquisition Costs:

$12,650,000

As Is Rent

$1,330,836

As Is Income

$628,948

Stabilized Rent

$1,512,588

Stabilized Income

$881,205

Assett Class

Multi-Family Housing

Occupancy

95%

Year Built

1973

# of Units

157

Avg Unit Size

969 SF

Projected IRR

25%


(*) Fund returns and yields are not guaranteed.

(1) Return Projections based on 5-year hold period and drawn from sponsor’s proforma model.

(2) IRR & Equity Multiple metrics are calculated gross of any fund-level promote or management fees.

The Square

Memphis, Tennessee

fund

Investment Summary

The Square is a 124-unit complex located at 6082 Knightsbridge Drive, Memphis, Tennessee 38115. The Property is located within walking distance of the previously mentioned “The Park” and therefore benefits from the same access and shopping/ dining/entertainment options. The Square is a well-maintained, 96% occupied asset, with unit amenities that include high speed internet, wash/dryer hookups, stove, dishwashers, and refrigerators. Units are some of the most spacious in the submarket averaging over 1,600 SF with large kitchens, family rooms and dens on the ground floor. Each unit is served by an appealing, ground floor entry. In addition, each unit includes a covered patio and outdoor storage spaces that are unique in the competitive set. The Property benefits from community amenities such as a club house, swimming pool, playground, and covered parking.

The Square has tremendous value add potential as it has the lowest rents in the submarket with average PSF rents of just $0.58 PSF. The Sponsor intends to fully renovate the 4 Bed/ 2.5 Bath (1,600 SF) units in anticipation of generating monthly rent premiums of $241. For the remaining classic units, the Sponsor will provide a lighter upgrade in the form of new black appliances and lighting in order to bring the rent for those units in line with market rates upon lease renewal.

Investment Summary

Location

Memphis, TN

Purcahse Price

$8,200,000

Construction Cost:

$2,010,000

Total Acquisition Costs:

$10,810,000

As Is Rent

$1,372,164

As Is Income

$705,811

Stabilized Rent

$1,614,651

Stabilized Income

$970,530

Assett Class

Multi-Family Housing

Occupancy

96%

Year Built

1975

# of Units

129

Avg Unit Size

1,600 SF

Projected IRR

25%


(*) Fund returns and yields are not guaranteed.

(1) Return Projections based on 5-year hold period and drawn from sponsor’s proforma model.

(2) IRR & Equity Multiple metrics are calculated gross of any fund-level promote or management fees.

The Pointe

Memphis, Tennessee

fund

Investment Summary

The Pointe is a 93-unit complex located at 3315 Hickory Hill Road, Memphis, Tennessee 38115. The Pointe is a short commute from the 80,000 government and financial jobs located Downtown, the 35,000 jobs in the Memphis Medical Corridor, and the 200,000 distribution jobs near the airport. On a macro level the Memphis economy has re-added nearly all the jobs that were lost in the initial weeks of the pandemic, creating tailwinds for apartment demand and rent increases. The metro’s high-end stock and recently renovated communities are supporting demand and rent increases. Vacancies have steadily compressed and are sitting at the lowest level since 2010. The Property is currently 99% occupied with a unit mix comprised of larger units (2 Bed/1 Bath – 1,292 sf and 3 Bed/2 Bath – 1.575 sf). Unit amenities include high speed internet, wash/dryer hookups, fully equipped kitchen, fireplace, balcony/porch, walk in closets, and storage units. The Property benefits from community amenities such as a courtyard, swimming pool, playground, and barbecue area.

Like The Park and The Square, which are both in walking distance of The Pointe, there is a room to grow rents ($0.58 PSF avg. rent vs $0.84 PSF market). The Sponsor intends to lightly upgrade all unit interiors with new black appliances and lighting fixtures in order to bring the rent for those units in line with market rates upon lease renewal.

Investment Summary

Location

Memphis, TN

Purchase Price

$6,150,000

Construction Cost:

$590,000

Total Acquisition Costs:

$7,150,000

As Is Rent

$1,044,684

As Is Income

$500,911

Stabilized Rent

$1,048,291

Stabilized Income

$529,046

Assett Class

Multi-Family Housing

Occupancy

99%

Year Built

1975

# of Units

93

Avg Unit Size

1,402 SF

Projected IRR

25%


(*) Fund returns and yields are not guaranteed.

(1) Return Projections based on 5-year hold period and drawn from sponsor’s proforma model.

(2) IRR & Equity Multiple metrics are calculated gross of any fund-level promote or management fees.

Pinebrook Pointe

Memphis, Tennessee

fund

Investment Summary

Pinebrook Pointe is a 248-unit complex located at 3541 Mediterranean Drive, Memphis, Tennessee 38118. The Property is strategically located near the intersection of Hwy 78 and Winchester Rd, less than 10 minutes from UPS & FedEx hubs. Highway 78 is the busiest trucking route in the nation, a major driver of workforce housing. The Property, built in 1973 and renovated 2012, has a unit mix comprised of 1 Bed/1 Bath and 2 Bed/2 Bath units averaging 800 SF in size. The unit amenities include high speed internet, wash/dryer connections, full kitchens, private patio & balcony, extra large closets. Furthermore, brand new roofs were installed on all the buildings in 2016. The Property benefits from community amenities such as on-site property management, gated community, swimming pool, and a playground.

The Property currently benefits from a PILOT Program designed to incentivize owners to make substantial renovations and rent to lower income tenants. The abatement, which was extended last year, expires in 2030 and the annual tax payment will increase approximately $3,000 per year until 2030.

No interior unit renovations are planned for this Property as 100% of capex will be going towards deferred maintenance on the exteriors. However, the Sponsor will be bringing all rents up to market upon lease renewal.

Investment Summary

Location

Memphis, TN

Purcahse Price

$16,400,000

Construction Cost:

$2,357,888

Total Acquisition Costs:

$19,890,000

As Is Rent

$1,943,304

As Is Income

$930,827

Stabilized Rent

$2,048,855

Stabilized Income

$1,110,595

Assett Class

Multi-Family Housing

Occupancy

95%

Year Built

1973/2012

# of Units

248

Avg Unit Size

800 SF

Projected IRR

25%


(*) Fund returns and yields are not guaranteed.

(1) Return Projections based on 5-year hold period and drawn from sponsor’s proforma model.

(2) IRR & Equity Multiple metrics are calculated gross of any fund-level promote or management fees.

Grahamwood Place

Memphis, Tennessee

fund

Investment Summary

Grahamwood Place is a 244-unit complex located at 4055 Summer Avenue, Memphis,Tennessee 38112. The Property’s location provides easy access to Interstates 40, 69 and 240 via Highway 79 and Sam Cooper Boulevard. The Property, built in 1969 and renovated in 2012, is a 93% occupied asset. The Property benefits from a balanced unit mix which consists of 1 Bed/1 Bath, 2 Bed/1 Bath, 3Bed /2 Bath units drawing in a variety of resident profiles. Unit amenities include a private patio/balcony, disposals, walk-in closets, window coverings, and shower/tubs. The Property underwent significant roof repair during the renovation in 2012. The Property benefits from community amenities such as a courtyard, swimming pool & sun deck, playground, secure gated access, and a laundry facility.

The Property currently benefits from the same tax abatement program as Pinebrook Pointe, and the annual tax payment is approximately $33,000. The abatement expires in 2022 but can be extended for an additional 10 years. The extension is contingent on meeting the necessary affordability metrics and showing continued renovations to the Property.

The Sponsor intends to lightly upgrade all unit interiors with new black appliances and lighting fixtures in order to bring the rent for those units in line with market rates upon lease renewal.

Investment Summary

Location

Memphis, TN

Purchase Price

$16,130,000

Construction Cost:

$3,160,000

Total Acquisition Costs:

$20,450,000

As Is Rent

$2,071,152

As Is Income

$1,013,518

Stabilized Rent

$2,098,946

Stabilized Income

$1,110,595

Assett Class

Multi-Family Housing

Occupancy

93%

Year Built

1969/2012

# of Units

244

Avg Unit Size

906 SF

Projected IRR

25%


(*) Fund returns and yields are not guaranteed.

(1) Return Projections based on 5-year hold period and drawn from sponsor’s proforma model.

(2) IRR & Equity Multiple metrics are calculated gross of any fund-level promote or management fees.

Emerald Ridge

Memphis, Tennessee

fund

Investment Summary

Emerald Ridge is a 374-unit complex located at 4280 Mount Hood Street, Memphis, Tennessee 38115. The Property is nearby shopping, dining, and entertainment options, such as Hickory Hill Shopping Plaza, Tops Bar-B-Q, East Memphis Pizza & Subs, D & L’s Catfish Shack, The Getaway, and Cromwell Pizza & Deli. The Property is also located just minutes from Interstate 240, allowing residents easy access throughout Memphis.

The Property, built in 1975, is under contract at a purchase price well below replacement cost ($66,115/unit). The Property is a well-maintained, 97% occupied asset, with unit amenities that include high speed internet, wash/dryer hookups, full kitchens, and patios/balconies. The Property benefits from self service laundry, fitness center, swimming pool, playground, on-site property management, club house, activity center, and on-site shopping.

The Sponsor intends to fully renovate the 2 Bed/2 Bath (990 SF) units in anticipation of generating monthly rent premiums of $151. For the remaining classic units, the Sponsor will seek to renew current residents at market rent and proactively burn off loss to lease.

Investment Summary

Location

Memphis, TN

Purcahse Price

$8,200,000

Construction Cost:

$2,010,000

Total Acquisition Costs:

$10,810,000

As Is Rent

$3,167,112

As Is Income

$1,718,552

Stabilized Rent

$3,633,879

Stabilized Income

$2,195,360

Assett Class

Multi-Family Housing

Occupancy

95%

Year Built

1975

# of Units

124

Avg Unit Size

1,600 SF

Projected IRR

25%


(*) Fund returns and yields are not guaranteed.

(1) Return Projections based on 5-year hold period and drawn from sponsor’s proforma model.

(2) IRR & Equity Multiple metrics are calculated gross of any fund-level promote or management fees.

Case Studies of Previously Acquired Individual Properties

Westwood Apartments

Abilene, Texas

fund

Investment Summary

This apartment is located in the McMurry University area and is blocks away from a high school. Its location in Abilene, TX, is excellent. However, there were tenants in the property for up to ten years without ever having experienced a rent increase or executed a new lease.

Strategy

  • Phase I: All remaining tenants executed new leases with market-rate rents. Upgraded ten units to include stainless appliances, granite, vinyl flooring, updated bathrooms and kitchens, and new a/c units.
  • Phase I improvements allowed us to increase rents 10% over what we originally expected.
  • Phase II: Renovations to 18 additional units which is nearing completion in July 2021
  • Phase I and Phase II results will increase the rent from $144,000 at acquisition in November 2019 to $308,280 once completed based on current rents.

Investment Summary

Location

Abilene, TX

Acquisition Price:

$1,050,000

Renovation Costs

$450,000

Value

$2,220,000

Annual Cash Flow

$166,444


Executive Apartments

San Antonio, Texas

fund

Investment Summary

Located in the heart of San Antonio, this property is just minutes away from Interstate 410 and McDermott Freeway and within 3.5 miles of St. Mary's University and the University of Texas Health Science Center San Antonio. Additionally, these apartments offer easy access to the Crossroads Mall, local dining, fantastic schools, and unique entertainment venues.

Strategy

  • Cosmetic market rate upgrades to the units including, flooring, light fixtures, water conservation, new appliances, and countertops.
  • Increased rents to market rate which generated a 23.5% increase in total revenue
  • Minor exterior updates
  • Updated pool

Investment Summary

Location

San Antonio, TX

Acquisition Price:

$3,960,000

Renovation Costs

$821,000

Value

$6,415.000

Annual Cash Flow

$384,901


Pineridge

Gainesville, Florida

fund

Investment Summary

Conveniently located in Gainesville, Florida, Pineridge is minutes from Gainesville Regional Airport, The University of Florida, and the North Florida Regional Medical Center. Additionally, this property is within close proximity to shopping, restaurants, and entertainment.

Strategy

  • Significant increase to gross rent because the majority of the tenants are not on a current lease
  • Average length of occupancy is just over four years
  • Cosmetic market rate upgrades to the units including, flooring, light fixtures, water conservation, new appliances, and countertops
  • Implemented market rate rents which generated a 23.5% increase in total revenue
  • Minor exterior updates

Investment Summary

Location

Gainesville, FL

Acquisition Price:

$4,500,000

Renovation Costs

$698,982

Value

$8,125,574

Annual Cash Flow

$568,790


KCAP Access Fund LLC

The following KCAP Access Fund documents are available to view:

  • Investor Document Package KCAP Access Fund

  • Entity Investor Document Package KCAP Access Fund

  • KCAP Wire Instructions

  • Accredited Investor
    Verification Letter

KCAP RE Fund III Terms

The following KCAP Fund Documents are available to view:

  • Fund Presentation Deck

    The Presentation provides an overview of KCAP Fund and investing in multifamily communities.

  • PPM

    The Private Placement Memorandum (PPM) for prospective investors for the KCAP Fund.

  • Memphis Property Acquisition Deck

    This Presentation provides details about the acquisition of 6 properties in Memphis.

  • Company Agreement

    The Operating Agreement for the KCAP Fund.

KCAP Access Fund LLC Terms

Investment Summary

Fund

KCAP Access Fund LLC (the “Access Fund”)

Fund Managing Member

CV Manager LLC

Access Fund Administrative Fee

The Access Fund will pay CV Manager 1.75% of the Access Fund capital per year for administration and information functions available through the CityVest Investment Dashboard. For investments of $100,000 to $200,000 by an investor, the Administration Fee will be reduced in half in the first year through a rebate of 0.875% back to the investor. For investments over $200,000 by an investor, the Administration Fee will be zero in the first year through a rebate of the full 1.75% fee back to the investor.

Organizational Expenses

The Access Fund will pay CV Manager a one-time fee of $50,000 for organizational and formation expenses.

Minimum Investment Amount

$25,000 minimum investment for up to 99 accredited investors.

Commissions

There are no selling commissions, marketing allowances or broker dealer fees.

Distributions

Quarterly, paid out of distributions as received from KCAP

Targeted Fund Amount

Estimated $3,000,000 to $5,000,000

Investment Closing Steps

You may initiate your investment by clicking “Invest Now” and following the instructions.

Step 1. DocuSign. Documentation through DocuSign should be completed as soon as possible as investments are accepted on a first-come, first-served basis.
Step 2. Accredited Verification form or documents should be sent immediately after DocuSIgn is completed.
Step 3. Wire Transfer can be sent after the DocuSign is completed, and it will be required within 5 days of request, which will occur when 99 investors have subscribed or as late as December 27th.

There is a closing date of December 27th or sooner if the Access Fund reaches 99 investors.

Term

Up to 8 years

Investment Return

The Access Fund has negotiated a side-letter agreement with KCAP Fund to receive a 12% preferred return, followed by 80% of the remaining profit. The Access Fund will then distribute 100% of such amounts received after fees to the Access Fund investors pro rata to their respective capital account.

Fund Administration/Accounting

Accounting, tax and other administration services may be provided by third party providers at the expense of the Access Fund.

KCAP RE Fund III Terms

Investment Summary

Investment Manager

Key City Fund Management LLC("Manager")

Targeted Return

25% Net IRR

Preferred Annual Return

Access Fund:
12% Preferred Return

Direct Investors:
8% Preferred Return

Profit Split Over Preferred Return

80% Investors / 20% KCAP Management

Management Fee

Acquisition Asset Fee: 5% of value
Management: Up to 2% of gross rental income
Disposition Fee: Up to 1% of value

Fund Term

5 years with 3 possible 1 year extensions

Revised Target Fund Size

$50,000,000

Fund Administrator

Sanne Group

Legal Counsel

Mayer Brown LLP

Auditor

Deloitte

Investment Manager Investment:

$2.5 million

Important Disclosure Statement for KCAP:

An investment in the units of KCAP is speculative and risky. No assurance can be given that investors will realize their investment objectives or will realize a substantial return (if any) on their investment. Investors should be able to bear the complete loss of their investment in KCAP. For this reason, each prospective subscriber for KCAP should carefully read KCAP’s Private Placement Memorandum (“Memorandum”) and all Exhibits to the Memorandum. Each prospective subscriber should consult with his attorneys, accountants, and business advisors prior to making an investment in KCAP. Only qualified, eligible investors may invest in KCAP.

KCAP will invest in multifamily, residential real estate, which includes apartment and student housing. As such, investment in the Units does not constitute a diversified investment. KCAP intends to diversify its investments by investing in multiple multifamily residential properties throughout the United States. KCAP intends to hold approximately 20 properties with no single investment representing more than 20% of KCAP's total invested capital. Anticipated portfolio characteristics may differ from actual portfolio holdings. An inability to raise substantial funds in this Offering could also result in substantial limitations on KCAP’s ability to achieve a diversified portfolio of assets.

Because this is a blind pool offering, investors will not have the opportunity to evaluate investments before KCAP makes them, which makes an investment in KCAP more speculative. The investors must rely on the management of KCAP and to make all investment decisions. There can be no assurances or guarantees that KCAP’s investment objectives will be realized or KCAP’s investment strategy will prove successful.

An investment in KCAP may be affected by a number of factors beyond the control of the management of KCAP that will affect the value of KCAP’s investments. These include risks typically associated with investments in residential real estate that produce income such as increased vacancy rates, re-letting risk, or decreased rental rates, adverse changes in general economic conditions or local conditions that may reduce the demand for multifamily residential properties, changes in the demand for or supply of competing properties in an area, unanticipated holding costs, the availability and cost of necessary utilities and services, changes in real estate tax rates and other operating expenses, changes in governmental rules and fiscal policies, changes in zoning and other land use regulations, environmental risks such as mold contamination or environmental claims that could be made against KCAP, and natural disasters, most of which are not covered by insurance.

KCAP will operate in a highly competitive market for investment opportunities. KCAP's profitability depends, in large part, on the ability to acquire profitable investments. In doing so, KCAP will compete with numerous other entities and individuals engaged in real estate investment activities, many of which have greater financial, technical, marketing, and other resources than KCAP. Poor performance of the investment management in selecting investments for KCAP, or poor performance of any investment, could adversely affect the profitability of KCAP and the overall return to the investors.

KCAP may make investments through a joint venture or co-investment arrangement. Such arrangements may be on terms that limit KCAP’s ability to control the investments and to receive returns on those investments.

Adverse economic conditions may adversely affect the ability of KCAP to obtain financing. Unfavorable financing terms or the inability to obtain financing would adversely affect the operating results of KCAP. The high level of leverage on the properties increases the debt service risks and the likelihood of foreclosure. KCAP's borrowing of capital increases the risks of adverse effects on KCAP's financial condition.

The investment manager of KCAP has a limited operating history and track record upon which prospective investors may base an evaluation of its likely performance. Prospective investors should not rely on the past success of the investment manager's affiliates. The success of KCAP is significantly dependent upon the expertise of certain investment or support personnel and any future unavailability of their services could have an adverse impact on the KCAP’s performance. The General Partner and a majority of Limited Partners may agree to amend the KCAP Agreement, which could be adverse to some limited partners. It is impossible to predict accurately the results from an investment in the KCAP because of general risks associated with the complete reliance on the General Partner and its affiliates to identify and negotiate the investments to be acquired by KCAP.

The proposed method of operation of KCAP creates certain inherent conflicts of interest among the KCAP, KCAP, the General Partner and their affiliates. The liability of the investment manager is limited. KCAP and its affiliates may compete with KCAP's investments and may provide services to the KCAP or Property Owners. KCAP may make direct investments in affiliates of the investment manager. The investment manager may have conflicting fiduciary obligations with respect to the allocation of investment opportunities. The investment manager and its affiliates will receive compensation and reimbursements. Certain compensation to the investment manager and its affiliates has not been established by arms-length agreement. KCAP's and the investment manager's officers and agents will engage in other management activities. A single legal counsel will represent KCAP, the investment manager, KCAP and their affiliates.

The investment manager may have conflicting fiduciary obligations when making investments through a joint venture or co-investment with an affiliate of the investment manager. These transactions may not be the result of arm's-length negotiations and may involve conflicts between the KCAP's interests and the interests of the investment manager and its affiliates. The investment manager will use reasonable efforts to ensure that the terms and conditions of such transactions will be no more favorable to the affiliate than could be obtained by arms-length negotiations with an independent third party.

An investment in KCAP is illiquid. No public or other market will develop for the Units. These securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act of 1933, as amended and the applicable State securities laws, pursuant to registration or exemption there from. Prospective investors should be aware that they will be required to bear the financial risks of any investment in these securities for an indefinite period of time.

Units of KCAP are offered without registration under any securities laws due to a reliance on an available exemption. Although, KCAP’s offering documents are not reviewed or approved by federal or state regulators, KCAP must comply with a variety of legal and compliance requirements. Failure to comply with the requirements for a private offering exemption would adversely affect KCAP. Maintenance of an Investment Company Act exemption may impose limits on KCAP's operations, and if KCAP becomes subject to the Act, KCAP would likely be unable to continue its business.

To the extent Fund cash flow permits, the investment manager intends to make monthly distributions to the Limited Partners, however, the investment manager may reinvest all or a portion of proceeds received from CityVest on or before December 31 2020, rather than using such proceeds to make distributions to the Limited Partners. Prospective investors should be aware that the sole source of cash from which KCAP will make cash distributions on the Units will be from revenues received from investments made by KCAP. No assurance can be made that KCAP will receive sufficient return on its investments to enable it to make any distributions to the Limited Partners.

Certain statements included in this presentation constitute "forward-looking statements" and are subject to a number of significant risks and uncertainties. Any such forward-looking statements contained herein should not be relied upon as predictions of future events. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "could" "would likely," "should," "seeks," "approximately," "intends," "plans," "estimates," "anticipates," "continue" or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions. Such forward-looking statements are subject to numerous risks and are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and may not be realized. In that regard, actual results may differ materially from those in forward-looking statements. As a result of the foregoing, no assurances can be or are given as to future results of operations or financial condition of KCAP.

KCAP’s investment approach has complex tax implications for investors. These ramifications should be reviewed carefully and applied to each investor’s individual circumstances. KCAP may involve structures or strategies that may cause delays in important tax information being sent to investors. You should obtain investment and tax advice from your advisers before deciding to invest.

This material includes certain statements, estimates and projections of KCAP with respect to the anticipated future performance of KCAP. Such statements, estimates and projections reflect various assumptions of the investment manager that may or may not prove to be correct, and no assurance can be made that KCAP can or will attain such results. Nothing contained herein is or should be relied on as a promise or representations as to the future performance of KCAP.

These materials (the “Presentation”) have been provided for informational purposes only and neither constitutes the Memorandum of KCAP nor provide a comprehensive disclosure of both the terms of investment and risk disclosures associated with an investment in KCAP. This Presentation is not a complete summary of the terms of KCAP or the background information of persons associated with the Investment Manager and is qualified in its entirety by, and must be read in conjunction with, the more detailed information included in the Memorandum, the governing documents of KCAP, the Subscription Agreement of KCAP and other related documentation.

This Presentation, furnished on a confidential basis to the recipient, is neither an offer to sell nor a solicitation of any offer to buy any securities, investment products or investment advisory services, including units of KCAP. This presentation is not an advertisement and is not intended for public use or distribution and is intended exclusively for the use of the person to whom it has been delivered. An Offer may be made only by means of the Memorandum. This sales literature must be accompanied or preceded by that memorandum and read in conjunction therewith to fully understand the implications and risks of the securities to which it relates.

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Value Add

Risk of Loss
Medium 1
Leverage
60-75% 2
Occupancy Rate
Less than 80% 2
Strategy
Heavy Renovations​/Major Retenanting 2
Stable Tenants
Few​/None 2
Hold Period
1-3 Years 2

1 The Risk of Loss is relative to other investment profiles. There is always a risk of total loss.

2 These are typical attributes for this profile of investment and may or may not represent this particular investment.

Single-Family

A single family residence (SFR) is the most common type of home which is a single family detached, stand-alone structure with its own lot intended for one family.

Target Return (IRR)

The estimated annual return which includes both the annual cashflow and the sale proceeds.

Target Annual Cash

The estimated average percentage annual cash return from the investment.

Estimated Hold

Estimated hold period from investment to realization.

Preferred Return

The preferred return or “pref” is a percentage cumulative return on initial investment that investors must attain prior to the investment manager’s participation in the profits.

Fund Size

Trion Fund is raising a maximum of $20,000,000