MCFARLIN ACCESS FUND

  • Summary

    Summary

  • Strategy

    Strategy

  • Diligence

    Diligence

  • Team

    Team

  • Record

    Track Record

McFarlin Access Fund LLC

Investment Overview

  • Summary

    Summary

    Fund Overview

  • Strategy

    Strategy

    Distressed Senior Living Loans

  • Diligence

    Due Diligence

    Independent 3rd Party Fund Diligence Report

  • Our Team

    Team

    Real estate professionals with 56+ years of experience

  • Track Record

    Track Record

    McFarlin Historical IRR over 28%

Investment Summary

Fund Type

fund

Senior Living Loans

Targeted Return

20%+

Distributions

Quarterly, as applicable

Min. Fund Investment

$25,000

Expected Close Date

March. 5, 2021

Limited spots available to invest

Investment Closed

  • McFarlin Summary


  • Investor Review

McFarlin Investment Overview

McFarlin Opportunistic Senior Living Fund I, LP (“McFarlin” or “McFarlin Fund”) is seeking to raise $100 million of which $54 million has already been committed. McFarlin seeks to generate superior returns by acquiring poorly positioned, overleveraged or undercapitalized senior living assets that provide an opportunity for acquisition at a steep discount to cost creating wide margins of safety for investors. McFarlin believes that by buying small, single assets and pooling them, a 15%+ premium can be achieved by institutionalizing the assets. McFarlin is targeting an annualized IRR of 20%+ and has historically generated a 28% net IRR for their investors. McFarlin is managed by McFarlin Group which is investing $5 million into McFarlin Fund.

  • Performance

    28% Net IRR on Realized Investments
    2.25x Equity Multiple of Realized Investments
    McFarlin Fund is targeting a 20%+ IRR

  • Experience

    Over 56 Years of Real Estate Investing Experience in Senior Living by Committee Members
    10 McFarlin Corporate Employees
    McFarlin Group is investing $5 million into McFarlin Fund

  • Investments

    McFarlin Group is Investing $5 million
    into McFarlin Fund
    Over $100 million of Equity Raised to date
    $2 Billion in Total Value of Completed Transactions by Principals

McFarlin Access Fund LLC

McFarlin Access Fund LLC (the “Access Fund”) is raising capital to invest in McFarlin Opportunistic Senior Living Fund I, LP (“McFarlin Fund”). 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 McFarlin Fund. Since the Access Fund will aggregate a several million dollar investment amount, the Access Fund has been able to negotiate to receive a 12% preferred return, as compared to direct investors into McFarlin at the $500,000 minimum investment level who will only receive a 10% preferred return. In addition, the Access Fund has negotiated a reduced annual management fee from 2% to 1% charged by McFarlin Fund. Distributions are not expected until after the third year with the majority of the 20%+ IRR to be received from McFarlin Fund to be generated from sales of properties.

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Key Considerations

  • Access to an Institutional Fund - The Access Fund provides individual investors with access to the institutional McFarlin Fund with a $25,000 minimum investment, as compared to a $500,000 minimum investment directly into McFarlin Fund. The Access Fund also receives a higher preferred return and lower fees from McFarlin.
  • 20%+ Targeted Return - McFarlin is targeting an annualized return of 20%+. The Access Fund has negotiated to receive a 12% preferred return from McFarlin, as compared to a 10% preferred return for direct investors into McFarlin. In addition, the annual management fee for the Access Fund is reduced from 2% to 1%.
  • Experience - McFarlin is a highly experienced investment manager with over 56 years of combined experience in over $2 billion of completed transactions. McFarlin Group is investing $5 million into McFarlin Fund.
  • Proven Track Record - McFarlin executives have garnered a 28% net IRR on realized senior living investments.
  • Attractive Investment Niche - McFarlin makes opportunistic senior living investments that are currently poorly positioned, overleveraged or undercapitalized and can be acquired at a steep discount to cost.

McFarlin Service Partners


  • Fund Administrator


  • Fund Counsel


  • Fund Auditor


  • Real Estate Counsel


  • Custodian Bank

Access Fund Service Provider


  • Administrative, Tax and Accounting Services

Why Invest Through a Fund

  • FAVORABLE FINANCING

    McFarlin 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, McFarlin will review every aspect and decision related to the acquisition, finance and ongoing operations of the properties.

  • PRUDENT DIVERSIFICATION

    At completion, the Fund will own a diversified group of assets.

  • PROVEN TRACK RECORD

    CityVest searches for institutional investment managers who have a strong historical track record with IRR returns well over 10%.

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.

McFarlin Overview & Strategy

The objective of the Fund is to acquire, improve, and manage senior living assets in the United States. The Fund intends to invest in value-add, non-performing, under-performing, and defaulted debt where the Investment Manager can identify an upside resulting from the Investment Manager’s value-add approach, combined with improved property management efficiencies, implementing capital improvement plans, and from acquiring at a substantial discount to cost. The Fund anticipates it will hold each investment for a period of at least four years, with an emphasis on generating long-term returns by substantially enhancing property values and aggregating the properties upon sale.

Fund Objectives

  • Acquire Distressed Senior Living Assets (Non-performing Loans And Properties) across the U.S.
  • Add Value over 4 Year Period (Cap. Ex, Occupancy, Revpar)
  • Aggregate Properties for Institutional Exit (15% Premium)
  • Target Fund Returns in Excess Of 20%+ IRR

Key Differentiators

  • Distress Has Occurred - We Are Capitalizing On An Actual Opportunity Set Now
  • No Fund Ramp-up Considerations
  • Covid-19 Is Creating New Deal Flow In Addition To The Over-supply
  • Multi-disciplined Approach
  • Vertically Integrated Firm, Owners, Operators & Developers
  • Proven Track Record, Average Realized IRR Of 28% For Prior Deals (Based On 10% Pref. & 80/20 Split)
  • Unique Network For Deal Sourcing

McFarlin Fund Timeline

The Fund Timeline is estimated at less than seven years, but will likely occur faster.

  • Disciplined Approach

    • Utilize fundamental real estate and real asset analysis and research along with proprietary analysis.
    • Multidisciplinary approach.
    • Invest funds over 18-24 months
  • Deep Value Acquisitions

    • Identify deep-discounted acquisitions
    • Acquire NPL’s from lenders and pursue DIL or Foreclosure
    • Speed and certainty of execution
    • Focus on intrinsic value to create wide margins of investor safety
  • Add Property Level Value

    • Capital improvement
    • Occupancy
    • Change operator
    • Shore up clinical operations (care)
    • New working capital
    • Investment in marketing initiatives
  • Divestiture

    • 4 -5 year asset hold period
    • Portfolio exit (15% premium)
    • Exit and close the fund within 6-7 years

Summary of Fund Investment Criteria

McFarlin invests in high-quality distressed senior housing real estate assets in primary and secondary markets nationwide. Investment opportunities are sourced utilizing a network of relationships built by the firm’s executives. Each investment opportunity is thoroughly analyzed and submitted to McFarlin’s Investment Committee for unanimous approval prior to issuing commitment.

  • Asset Criteria

    Business Plan
    Identifying, evaluating, acquiring and overseeing seniors housing

    Product Type
    Senior Housing

    Property Quality
    Distressed opportunities

    Location Quality
    A to B- submarkets

  • Financial Criteria

    Projected Hold Period
    72 to 84 Months (6 to 7 Years)

    Targeted McFarlin Return
    20%+ IRR (subject to hold period)

    Targeted McFarlin Equity Multiple
    2.25× (subject to hold duration)

  • Debt Criteria

    Loan Term
    6 to 10 Years (contingent upon business plan and featuring exit optionality)

    Loan-to-Value
    50% to 85% of acquisition price

    Loan-to-Cost
    50% to 80% of total capitalization

    Fund-Level Leverage
    None

HOW IS YIELD GENERATED?

  • Acquisition Costs

    Low Acquisition Costs Create Upside In Sales Proceeds (I.e. Buy For $.50 And Sell For $1 Vs. Buy For $1 And Sell For $2)

  • Occupancy

    Increasing Occupancy Over 4-5 Year Period (Baby Boomers Will Turn 80 In 2026 When We Expect To Be Selling)

  • Aggregation Of Properties

    Through Aggregation Of Properties And Sold In One Or More Institutional Sale Portfolios

  • Loans And Foreclosing

    Purchasing Loans And Foreclosing To Own (Creates Wide Margins Of Investor Safety; Projects Overbuilt/over Levered)

  • Operations And Manager

    Operations And Manager Change (Properties May Be Operated By Underperforming On Mom/pop Operators)

DISTRESS IN SENIOR LIVING SUMMARY

McFarlin has been acquiring and developing assisted living and memory care since 2001 and as Principals since 2008. During the last five years, we have seen the construction of new assisted living and memory care (Alzheimer’s) properties explode. This generally occurred towards the end of the Great Recession. As the number of new entrants into senior living increased, supply exploded and an imbalance of supply and demand was created in many markets across the U.S. Sponsor believes that this imbalance is, and will continue to produce a significant amount of defaulted debt and value-add acquisition opportunities for licensed assisted living and memory care properties. The introduction of COVID-19 will create additional distress in the market.


Senior Living Units Under Construction

Units Under Construction and Construction as Percent of Inventory | Primary Markets | 4Q2005 - 3Q2019

  • Construction

    Building At 8%+ Of Total Supply From 2015-2019

  • Boom

    Construciton Boom Starts In 2013

  • Inventory

    Many New Entrants Into The Space – Too Much Emphasis On 65+ And Baby Boom Population

  • Occupancy

    Occupancy Declines As Construction Increases

Source: NIC Map Data Service

Building Wealth In Real Estate - CityVest

Occupancy by Property Type in Primary Markets

IL: Independent Living
AL: Assisted Living/Memory Care (Alzheimer’s)
NC: Nursing Care
Source: NIC Map Data Service

Source of Distress in Senior Living Industry (Pre-Pandemic)

  • In recent years, the anticipated demand from the large and influential baby boomer age cohort has led to the increase in supply at colossal levels. Builders of assisted living overestimated the current demand and timing for assisted living properties. The oldest baby boomer turned 74 years old on January 1, 2020 and is seven to eight years away from the need for assisted living. 
  • NIC data shows that senior living supply is up more than 120,000 units (18% of total supply) since 2015. 
  • Assisted living occupancy nationally was at 85.4% in Q32019. This is the lowest level since NIC began reporting occupancy in 2005. 
  • In markets where there is excess supply, we are seeing occupancy compression and loan delinquencies.

Senior Living Long-Term Demographic Demand

Projected Annual Seniors Housing New Inventory Needed–Age 80+*
United States | 2018 – 2040

* To calculate the number of age 80+ households, a conversion ratio of 1.43 people per household wasapplied.
• Highest point of annual construction was 45,000 units in 2018
• Estimate that there will need to be approximately 880,000 additional units of inventory that will be needed to serve senior households over the age of 80 from 2020 to 2030.

Despite Temporary Distress
Senior Demographics are Favorable

  • Assisted living and Alzheimer’s care is need-driven as seniors age and need both housing and care services.
  • Industry demographics and demand trends are extremely favorable. Unprecedented in U.S. history.
  • Business has two components: real estate and operations:

    • Each of these pieces, standing alone, has proven to be profitable and recession-resistant;
    • Together, they create a winning combination for investors and the residents.
  • Seniors housing resiliency was evident during the recent Great Recession (2007-2009) when seniors housing and care properties outperformed other commercial real estate property type in terms of investment return, rent growth, and loan performance.
  • Much of the strength of the investment performance of seniors housing properties can be attributed to relatively steady leasing trends when compared to other real estate property types, especially during the recent recessionary period.
Building Wealth In Real Estate - CityVest

Rising Population of Age 85+
from 2020 to 2032

ANTICIPATED GEOGRAPHY FOCUS AND OUR PRIOR EXPERIENCE

McFarlin has developed or acquired deals as Principal investors in six states as represented by numbers in the map below. Prior to McFarlin, our people have similar experience (not in a Principal investor role) working in over 25 states. Our geographic footprint for the Fund will be coast-to-coast, however, we believe there will be concentration of distressed loan sales in markets that were overbuilt prior to COVID-19 and will experience the greatest challenges due to the effects of COVID on the business. These markets include the “Sunbelt States” comprising the southern tier of the United States, including the states of Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi, New Mexico, South Carolina, Texas, roughly two-thirds of California (up to Greater Sacramento), Colorado, South Carolina and Nevada. These states are outlined in orange.


    • 1. Orchard Park of Murphy
    • 2. Orchard Park of McKinney
    • 3. River Point of Kerrville
    • 4. Orchard Park of Odessa
    • 5. Orchard Park of Kyle
    • 6. Orchard Park of Victory
    • 7. Orchard Park of Southfork
    • 8. The Heritage of Westover Hills
    • 9. The Heritage at Twin Creeks
    • 10. The Aspens at Bedford Falls
    • 11. Birmingham Healthcare Center
    • 12. The Aspens at Mariposa Point
    • 13. Mariposa Point of Gilbert
    • 14. Mariposa Point of Surprise
    • 15. Mariposa Point of Mesa
    • 16. The Heritage at Hunter Chase
    • 17. The Heritage at Marietta
    • 18. Ivy of McKinney
    • 19. The Heritage at Twin Creeks
    • 20. Mariposa Point at Algodon Center
    • 21. 2 Chabot Street
    • 22. Autumn Leaves of Memorial City

McFarlin Due Diligence Report

Prepared By: Buttonwood Investment Services LLC - December 16, 2020

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

The McFarlin Group
3392 Medical Center Drive
Suite 1700
McKinney, TX 75069
469.619.5386

https://mcfarlin-group.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:

$169,145,468

Value of Property Dispositions:

$201,820,000

Failed Project Investor Equity Lost:

$3,683,000

Failed Project Investor Equity Lost % of Total Dispositions:

1.82%

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.

56 Years Combined

True Principal Experience

56 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

Validated

Fund Administrator

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 Has Been Met

Policy Payable Party

McFarlin Opportunistic
Senior Living Fund I, LP

Policy Coverage

$1 million

Manager 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

$5.0 million up to
10.0% of capital raised

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

None Reported

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

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.

McFarlin Fund Management Team

McFarlin has assembled a team of motivated real estate professionals with a combined 56+ years. McFarlin principals have $2 Billion in total value of completed transactions by principals, generating a realized IRR of 28%** with equity multiple of 2.25x.

  • Matt Johnson

    Matt Johnson

    Managing Director and Investment Committee Member

  • Josh Rosen

    Josh Rosen

    Managing Director and Investment Committee Member

  • Heather Logan

    Heather Logan

    Chief Financial Officer and Investment Committee Member

  • Laurie Stump

    Laurie Stump

    Turnaround Specialist

Chief Executive Officer & Managing Principal

Matt has two decades of experience in senior living creating value in senior living investments and acquiring and building senior living communities. Matt currently focuses on identifying acquisition opportunities, building internal infrastructure while the company grows and driving value in the portfolio. Prior to forming McFarlin Group in 2008, Matt was a Vice President with a large, Texas-based senior living developer and operator. From 2001 to 2003 Matt was a Regional Marketing Manager responsible for marketing and initial leasing to residents for various senior living projects across the United States.

From 2003 to 2008 Matt led the planning, financing and structuring of senior living projects, coordinated and directed development and construction activities, and coordinated preopening and fill-up operational activities. Matt has had overall responsibility for senior living projects with project budgets ranging from approximately $10 million to $240 million. Matt has overseen the acquisition, planning and development of over 40 senior living projects in 14 states with total debt exceeding $650 million.

Matt holds a Bachelor of Business Administration with a double major in Finance and Real Estate Finance from Southern Methodist University. Matt was named an Ernst & Young 2015 Entrepreneur of the Year finalist. Matt is an active member of the Dallas Chapter of YPO.

Managing Director and Investment Committee Member

Mr. Rosen has been in the senior living industry for nearly a decade. Mr. Rosen joined McFarlin Group shortly after its formation in 2008 and has been responsible for the development, financing, and operations of more than $200 million in senior living real estate. Mr. Rosen focuses on structuring the financing for acquisitions and new developments, leading new development and renovation projects, and assisting in overseeing operations at its managed communities. Prior to joining McFarlin Group, he was with a Texas-based senior living developer and was responsible for business and development planning, strategic planning, and financial advisory services for not-for- profit senior living providers.

Mr. Rosen received his Bachelor of Business Administration in Finance, Magna Cum Laude, from Texas A&M University in 2004.

Chief Financial Officer and Investment Committee Member

Heather has over 20 years of experience in financial and operations management of senior living communities. Heather is currently the COO and CFO for McFarlin Group and Surpass Senior Living where she oversees all financial aspects of the business and its managed communities. Heather’s early senior living experience from 2001 to 2007 included the oversight of the accounting and financial reporting functions of senior living properties nationally where she led a team of accountants that provided controller/CFO functions for senior living communities.

Her responsibilities included the analysis of operating results, projection of future performance, and compliance with regulatory reporting requirements. From 2007 to 2010 Heather was a corporate specialist for financially complex and operationally challenged senior living communities. Additional experience includes the development of policies and procedures, the implementation of accounting systems, the reporting of monthly financial outcomes, the development of annual budgets and long-term forecasts, the creation of real-time key indicator analyses and financial reports, and the coordination of annual audits.

Heather received her Bachelor of Science degree in accounting from the University of North Texas and is an active licensed CPA.

Advisory Board/Counsel

Laurie has twenty years’ experience working in senior living. Laurie started out her career as a caregiver at an assisted living community and quickly moved into a leadership role as a Resident Care Coordinator where she oversaw direct care for all residents.

Laurie later held roles as Director of Memory Care overseeing all memory care (Alzheimer’s) care and program delivery to residents and Executive Director overseeing all aspects of community operations. More recently, Laurie has assumed a role of distressed asset intervention where she turns around underperforming communities. Laurie has built some amazing teams throughout her career and has had the privilege of mentoring caregivers through nursing school. Building strong teams, taking on challenges and serving residents is Laurie’s passion.

  • Austin Farco

    Austin Farco

    Analyst

  • Stacey Fischer

    Stacey Fischer

    Sales & Marketing Specialist

  • Jeff Miller

    Jeff Miller

    Marketing

Analyst

Austin joined the McFarlin Group companies in July 2017 and initially served as Corporate Business Office Manager overseeing payroll, accounts payable and accounts receivable. Austin has since moved into an Analyst position. Austin received his Bachelors of Arts in Criminology from The University of Oklahoma. Austin is an avid sports fan and enjoys attending games in his free time.

Sales & Marketing Specialist

Stacey Fischer began her career in the senior living industry in 2009. She has dedicated over a decade of her professional life to help enrich our senior’s lives. Her compassion and willingness to be a resource for the elderly led her to a varied career that includes hospice care, senior referral and placement and business development. These experiences brought her to work at Mariposa Point Mesa as the Director of Sales and Marketing in 2018, where she could use her these skills to an even greater degree in her role. The opportunities to serve families in a new way has been refreshing and inspiring to Stacey. Earlier this year in 2020, Stacey accepted the opportunity lead the Surpass Sales and Marketing department in all the communities across the country. Team, family, “Can Do” and “Find a Way” are not just words to Stacey- they are a part of her life philosophy and value system. She leads with energy and compassion and that always willing to help spirit.

Stacey and her husband Scott married in 2015 and they enjoy a wonderful blended family of 14! She loves to spend time with her family and travel with Scott when they can get away. Stacey has had a lifelong love for her hometown, three time Super Bowl Champions, the Denver Broncos.

Marketing

Jeff joined the McFarlin Group companies in April 2018 as a Marketing and Graphic Design Associate. After graduating with a BFA in Graphic Design from Kansas State University, he relocated to Dallas, TX to join the McFarlin Group. In his free time, Jeff enjoys playing guitar, going to concerts, and watching sports.

Organizational Chart

Organizational Chart

Proven Track Record

McFarlin Group has achieved a Realized IRR of 28% Net to the Investor and a Realized Cash Multiple of 2.25x Net to Investor. One property resulted in a complete loss of equity.

McFarlin Properties

(1) Birmingham Health care Center actual IRR is 2760% and actual cash multiple is 3.70x.
(2) A fire sale and seeded the Opportunistic strategy.
(3) Sold at Certificate of Occupancy

McFarlin Properties

McFarlin Properties

AUTUMN LEAVES OF MEMORIAL CITY

West Houston, Texas

fund

Investment Summary

Autumn Leaves of Memorial City, built in 2012, is a 42-unit memory care community located in Houston, Texas at 1725 Eldridge Parkway. Autumn Leaves of Memorial City is managed by Surpass Senior Living. McFarlin Group, LLC (“MFG” or the “Sponsor”) purchased the non-performing loan for a 42 unit memory care facility (46 bed with 50 total licensed beds) in West Houston, TX (the “Property”) for 46% of the current par balance. The Sponsor closed on June 6, 2020. The Property was built and completed in 2012. Occupancy as of June 30 was 76%, up from 67% as of March 31, 2020. The project is a single story 26,308 square feet structure with 42 units serving 46 residents (although licensed for up to 50 residents in companion rooms). The site area is 2.61 acres.

SALE ASSUMPTIONS

  • Address: 1725 Eldridge Pkwy, Houston, TX 77077
  • Type: Memory Care Facility
  • Gross Building Area: 26,308
  • Number of Stories: 1 Story
  • Number of Buildings: 1 Building
  • Years Built/Renovated: 2012
  • Acres: 2.61
  • Total Parking Spaces: 37
  • Occupancy (as of 6-30-20): 76%

Investment Summary

Location

West Houston, TX

Loan Amount (Existing)

$8,754,757

Acquisition Price

$4,000,000 (46% of Par)

Total Budget/Funding

$5,545,000

Closed

June 5, 2020

Seller

Origin Bank

Percentage Debt

Value-Add

LP Return (Unlevered & Net) Est.

20% IRR Unlevered
1.9x Cash Multiple

Sponsor

McFarlin Group

Sponsor Co-Investment

10% Pari-passu

Sold

November 30th, 2020


(*) Fund returns and yields are not guaranteed.

(1) Includes accrued late fees and penalties as of June 5, 2020

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2 CHABOT STREET

Westbrook, Massachusetts

fund

Investment Summary

McFarlin Group, LLC (“MFG” or the “Sponsor”) is under contract to purchase a recently vacated Medical Office Building located at 2 Chabot St. Westbrook, ME (the “MOB Property”). On August 7, 2007, Morgan Stanley provided PRT, LLC (“Borrower”) with a $5,140,000 secured first mortgage loan with a Personal Guaranty.

The Loan bore a fixed rate of interest at 6.25% with a 300-month amortization schedule. The Loan matured on August 8, 2017 and carries a current unpaid principal balance (“UPB”) of $3,976,849 ($135.63 PSF) as of May 2020. LNR Partners, LLC took over as the special servicer on April 11, 2017 because of debt service problems and an ensuing maturity default.

The Notice of Default (“NOD”) was sent to the Borrower on September 12, 2017 due to failure to pay the full balance at the maturity date on August 8, 2017. A pre-negotiation letter (“PNL Agreement”) was sent to the Borrower on April 11, 2017 to begin negotiating potential modifications to the Loan. The Loan is Nonperforming and is currently in maturity default. The current unpaid principal balance as of May 1, 2020 is approximately $3,976,849 ($135.63 PSF). The loan carries a personal guaranty.

SALE ASSUMPTIONS

  • Address: 2 Chabot St, Westbrook, Massachusetts 04092
  • Type: Medical Office Facility
  • Gross Building Area: 29,322
  • Hold Period: 3 Years
  • Sales Cap Rate: 8.25%
  • NOI: $221,466
  • Project IRR: 505%
  • Avg Cash on Cash Return Inc Sale: 62.6%
  • Equity Multiple: 1.57x
  • Sold: November 30, 2020

Investment Summary

Location

Westbrook, MA

Loan Amount (Existing)

$3,976,849¹

Acquisition Price

$575,000 (14% of Par)

Total Budget/Funding

$665,754

Closed

July 31, 2020

Seller

Morgan Stanley

Percentage Debt

0%

LP Return (Unlevered & Net) Est.

505% IRR Unlevered
1.57x Cash Multiple

Sponsor

McFarlin Group

Sponsor Co-Investment

10% Pari-passu


(*) Fund returns and yields are not guaranteed.

(1) Includes accrued late fees and penalties as of May 1, 2020

View Full Details

McFarlin Access Fund LLC

The following McFarlin Access Fund documents are available to view:

  • Investor Document Package McFarlin Access Fund

  • Entity Investor Document Package McFarlin Access Fund

  • McFarlin Wire Instructions

  • Accredited Investor
    Verification Letter

McFarlin Opportunistic Senior Living Fund I, LP Terms

The following McFarlin Fund Documents are available to view:

  • Investor Presentation

    The Presentation provides an overview of McFarlin Opportunistic Senior Living Fund I, LP and investing in Distressed Senior Living Loans.

  • Fund Summary

    This document contains a summary of the McFarlin Opportunistic Senior Living Fund I, LP.

  • Commonly Asked Questions

    This document contains the most commonly asked questions investors have about McFarlin Opportunistic Senior Living Fund I, LP.

  • PPM

    The Private Placement Memorandum (PPM) for prospective investors for the McFarlin Opportunistic Senior Living Fund I, LP.

  • Subscription Agreement

    The Subscription Agreement for prospective investors for the McFarlin Opportunistic Senior Living Fund I, LP.

  • Limited Partnership Agreement

    The Limited Partnership Agreement for the McFarlin Opportunistic Senior Living Fund I, LP.

  • Limited Partnership Agreement Amendment

    The amended and restated Limited Partnership Agreement for the McFarlin Opportunistic Senior Living Fund I, LP.

  • November 2020 Fund Update

    This document contains a short summary update as of November 2020 of the McFarlin Opportunistic Senior Living Fund I, LP.

McFarlin Access Fund LLC Terms

Investment Summary

Fund

McFarlin Access Fund LLC (the “Access Fund”)

Fund Managing Member

CV Manager LLC

Administrative Fee

The Access Fund will pay CV Manager 1.75% of the Access Fund capital per year for administration and information services 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 fixed fee of $50,000 for organizational and formation expenses.

Minimum Investment Amount

$25,000 on a first-come, first-served basis.

Distributions

Quarterly, paid out of distributions as received from McFarlin which is not anticipated during the first 3 years.

Targeted Fund Amount

Estimated $5,000,000

Investment Closing Steps

Initiate your investment by clicking “Invest Now” and follow the instructions which will include:

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 around March 1, 2021.

Closing will occur around March 5,2021.

Term

6 years, plus possible two 1 year extensions.

Fund Administration/Accounting

Assure Services will be paid at closing for accounting, tax and other administration services for the life of the fund. Assure will complete annual financial statement and composite state tax filings.

McFarlin Opportunistic Senior Living Fund I, LP Terms

Investment Summary

Targeted Return

20%+ net IRR or 2.0x Equity Multiple (Multiple of Invested Capital)

Preferred Annual Return

Access Fund:
12% Preferred Return with distributions paid quarterly from cash flow

Direct Investors:
10% Preferred Return with distributions paid quarterly from cash flow

Management Fee

Access Fund:
1% Management Fee

Direct Investors:
2% Management Fee for investments up to $5,000,000

Profit Split after Preferred Return

After Preferred Return is achieved: 80% to Investors / 20% to McFarlin Management

Manager Co-Investment

McFarlin Group will invest $5 million into McFarlin Fund.

Fund Term

6 years, plus two possible 1 year extensions.

Minimum Investment

$500,000

Distributions

Distributions are expected on a quarterly basis at the end of the third year out of net cash flow from operations.

Target Fund Size

$100,000,000

Important Disclosure Statement for McFarlin:

An investment in the units of McFarlin 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 McFarlin. For this reason, each prospective subscriber for McFarlin should carefully read McFarlin’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 McFarlin. Only qualified, eligible investors may invest in McFarlin.

McFarlin 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. McFarlin intends to diversify its investments by investing in multiple multifamily residential properties throughout the United States. McFarlin intends to hold approximately 20 properties with no single investment representing more than 20% of McFarlin'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 McFarlin’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 McFarlin makes them, which makes an investment in McFarlin more speculative. The investors must rely on the management of McFarlin and to make all investment decisions. There can be no assurances or guarantees that McFarlin’s investment objectives will be realized or McFarlin’s investment strategy will prove successful.

An investment in McFarlin may be affected by a number of factors beyond the control of the management of McFarlin that will affect the value of McFarlin’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 McFarlin, and natural disasters, most of which are not covered by insurance.

McFarlin will operate in a highly competitive market for investment opportunities. McFarlin's profitability depends, in large part, on the ability to acquire profitable investments. In doing so, McFarlin 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 McFarlin. Poor performance of the investment management in selecting investments for McFarlin, or poor performance of any investment, could adversely affect the profitability of McFarlin and the overall return to the investors.

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

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

The investment manager of McFarlin 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 McFarlin 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 McFarlin’s performance. The General Partner and a majority of Limited Partners may agree to amend the McFarlin Agreement, which could be adverse to some limited partners. It is impossible to predict accurately the results from an investment in the McFarlin 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 McFarlin.

The proposed method of operation of McFarlin creates certain inherent conflicts of interest among the McFarlin, McFarlin, the General Partner and their affiliates. The liability of the investment manager is limited. McFarlin and its affiliates may compete with McFarlin's investments and may provide services to the McFarlin or Property Owners. McFarlin 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. McFarlin's and the investment manager's officers and agents will engage in other management activities. A single legal counsel will represent McFarlin, the investment manager, McFarlin 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 McFarlin'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 McFarlin 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 McFarlin are offered without registration under any securities laws due to a reliance on an available exemption. Although, McFarlin’s offering documents are not reviewed or approved by federal or state regulators, McFarlin must comply with a variety of legal and compliance requirements. Failure to comply with the requirements for a private offering exemption would adversely affect McFarlin. Maintenance of an Investment Company Act exemption may impose limits on McFarlin's operations, and if McFarlin becomes subject to the Act, McFarlin would likely be unable to continue its business.

Prospective investors should be aware that the sole source of cash from which McFarlin will make cash distributions on the Units will be from revenues received from investments made by McFarlin. No assurance can be made that McFarlin 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 McFarlin.

McFarlin’s investment approach has complex tax implications for investors. These ramifications should be reviewed carefully and applied to each investor’s individual circumstances. McFarlin 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 McFarlin with respect to the anticipated future performance of McFarlin. 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 McFarlin 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 McFarlin.

These materials (the “Presentation”) have been provided for informational purposes only and neither constitutes the Memorandum of McFarlin nor provide a comprehensive disclosure of both the terms of investment and risk disclosures associated with an investment in McFarlin. This Presentation is not a complete summary of the terms of McFarlin 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 McFarlin, the Subscription Agreement of McFarlin 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 McFarlin. 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

McFarlin Fund is raising a maximum of $100,000,000