Company Description
Goodegg Growth Fund III Investment Opportunity
Note: Investments will be taken on a first-funded basis.
Welcome
Hello there! On behalf of the entire Goodegg Investments team, we’re glad you’re here, and we’re excited to share with you our latest investment opportunity – Goodegg Growth Fund III.
Goodegg Growth Fund III is your opportunity to invest alongside us in the Crowne Club Apartments – a 250-unit class B+ multifamily asset built in 1995 and located in an affluent submarket of Winston-Salem, North Carolina.
Crowne Club offers significant untapped potential via a proven value-add opportunity (more details down below).
Goodegg Growth Fund III is open to all investors – whether you’re accredited or not – with a minimum investment of $10,000.
The goal for Goodegg Growth Fund III is to provide you an opportunity to invest in a strong value-add multifamily asset in a solid growth market.
The Opportunity
Goodegg Growth Fund III gives you the opportunity to invest in a beautiful Class B+ asset in a key growth market with significant opportunity to add value throughout the life of the project.
Click here to listen in to the Goodegg Growth Fund III investor webinar
✅ $196 Rent Premiums
The upside potential at Crowne Club is still largely untapped. Through upgrading the 62 Classic Units and 56 Partial Renovation Units, we can capture an average rent premium of $196/unit, unlocking the property’s full potential and generating over $630,000 in additional annual revenue.
✅ Proven Value Add
A significant number of the units have already been renovated, either fully or partially, and are successfully achieving average rent premiums of $237 above Classic Units. On top of that, the majority of leases turn over in prime leasing months, allowing us to optimize the renovation process.
✅ Low Cost Per Door
We are purchasing the property for $152k per door, which is a 16.23% discount to recent trades in the past three years. This excellent basis will provide a solid footing for potential cap rate compression as interest rates are expected to drop.
Investment Snapshot & Projected Returns
Goodegg Growth Fund III is open to all investors, with the following projected returns:
Goodegg Growth Fund III
Minimum
$10,000
Preferred Return
7%
LP / GP Split
70 / 30*
IRR
12 - 15%
Avg Annual Return
16 - 20%
Equity Multiple
1.7x - 1.9x
Distributions
Quarterly
*Up to 13% IRR, then 50 / 50 thereafter
* Please Note: These are projected returns only and may differ from actual returns.
Why We Love This Asset
Crowne Club is a hidden gem that offers significant upside potential. The seller is the original developer from 1995, and they have kept the property in tip-top shape, with very little deferred maintenance.
On top of that, because the seller has been under a corporate mandate that caps all rent increases at 6% per year, there are many residents whose rents are held artificially low. This gives us a tremendous opportunity to bring rents up to market.
Why Winston-Salem
This asset is located minutes from the Atrium Health Wake Forest Baptist Medical Center (19,000+ jobs) in an affluent submarket of Winston-Salem, NC. Built in 1995, the property has a proven track record of strong demand and stable occupancy, averaging 96% occupancy over the last 12 months and 70% renewal rate over the last 3 months.
Anchored by Wake Forest University and several large banking and medical employers, Winston-Salem offers an affordable cost of living and strong job growth, which have led to low unemployment and strong net migration rates. Combined with limited new supply (only 3 market-rate apartment communities slated in the entire Winston-Salem market over the next 24 months), this provides the ideal scenario for us to realize strong rent growth as demand continues to climb.
Learn More: Winston-Salem Market Spotlight
Strong Track Record Of Success
At Goodegg Investments, we’re extremely proud of our strong track record and our commitment to maintaining the highest standards when it comes to managing the assets in our portfolio.
While past performance is not indicative of future results, it can certainly give you important info about the strength of the operating team and their ability to deliver on projected returns.
Over the last 5 years, we’ve completed 40+ commercial real estate syndications across over 8,000 multifamily units valued at $1.4B+. Further, we’ve successfully exited 20 of those deals while delivering exceptional returns to our investors.
To learn more about the assets in our overall portfolio, visit the Portfolio page on our website.
FAQs
When will my original investment amount be returned?
We are projecting to hold this asset for 5 years, so you should expect to have your money invested for the full 5 years. Please note that this is an illiquid investment, meaning that we won't be able to return your original investment amount until we sell the asset around the 5-year mark.
We intend to sell within 5 years, and you would get your original investment back at that time, upon sale, plus a portion of the proceeds. Cash flow returns are paid out quarterly during the 5-year hold time.
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Will I receive a minimum cash flow distribution return every quarter?
There is a preferred return of 7% annually (paid out quarterly, which comes out to about 1.75% per quarter), which is the same for everyone, as there's only one investment class in this fund.
A preferred return of 7% means that the first 7% of all returns go 100% to the limited partner passive investors (that's you!). The general partners (that's us) don't get any of that first 7%.
While this is not a guaranteed return, it's about as close as you can get to a guarantee. Plus, it ensures a good alignment of interest between LPs (limited partners) and GPs (general partners).
If we don't have enough cash flow to pay out the 7% pref, that 7% would accrue, and as soon as we have enough cash flow, you would receive the amount you've accrued.
Please note that, in the first couple of years of the investment, as we focus more heavily on renovations and stabilization, cash flow distributions will be lower than 7%. However, as mentioned above, you will be accruing that 7% throughout the investment, no matter what.
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How does Goodegg Growth Fund III compare to other investment offerings?
The general investment structure for each investor is very similar to that of our current and previous offerings. As an investor, you can expect to receive a preferred return, plus a percentage share of cash flow going forward.
The main distinction is that, unlike our accredited investor only offerings, Goodegg Growth Fund III is open to all investors – whether you’re accredited or not – at a minimum investment of $10,000. This structure allows as many people as possible to participate in and benefit from this opportunity.
Please also note that the projected returns for Goodegg Growth Fund III are identical to the Class B returns for Goodegg Wealth Fund II (which is only open to accredited investors at a $50k minimum).
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Who will be the interested buyer(s) for this asset after the hold period?
As with our prior investments, there are two types of buyers who will be attracted to the Crowne Club Apartments after the hold period and once we execute on the business plan – (1) other private syndication groups like ours and (2) institutional buyers.
Having multiple exit strategies and multiple potential buyer groups in mind from the start of the project means that we know exactly what our end goal is and thus can execute on the business plan efficiently. Further, it gives us maximum flexibility while minimizing risk.
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What type of financing are we getting on Goodegg Growth Fund III?
The financing we plan on putting in place features a loan-to-cost of 64%, a fixed interest rate of 6.0%, 3 years of interest only, and amortization of 30 years.
This fixed interest rate is critical in the current economic climate and limits our risk of further interest rate increases, which have negatively affected many commercial real estate properties in recent months.
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Is this investment eligible for 1031 exchange?
No. This investment is not set up to take funds from a 1031 exchange.
If you are considering selling your property, it might help to know that, with the strong year 1 depreciation, the tax shelter you could get from selling a property outright and investing those funds into an opportunity like this one could help to significantly offset your tax liability.
Of course, we highly recommend you consult your own CPA to discuss your specific situation.
All that being said, if you are currently in the middle of a 1031 exchange and looking to place your funds, please let us know, and we can help point you in the right direction.
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What is the expected depreciation on this deal?
While we don’t yet have the exact depreciation numbers yet, we do plan to do a cost segregation study, and we anticipate significant year 1 losses. We will share those numbers as soon as we can upon closing of the assets.
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Will distributions take place on a monthly or quarterly basis, and when will they start?
Distributions will be quarterly. More specifics around timing will be shared once we close on the asset.
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What type of communication will take place with investors throughout this investment?
As soon as your investment is approved, you'll receive confirmation of your investment.
We will keep you in the loop as we move through the acquisition process. Once we close on the asset, you’ll hear from us immediately.
After that, you can expect to receive monthly updates from us, along with quarterly financials.
Ready To Invest?
Thank you again for your time in reviewing this opportunity and your consideration for investing alongside us in Goodegg Growth Fund III.
If you'd invest, go ahead and click the "Invest Now" button to get the process started.
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We look forward to a very fruitful, impactful, and sunny-side-up partnership together!
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