Dear Invesotrs,
We are now at a special time. First and foremost, we hope that our investors are staying healthy and strong at home! Families and health are the first priority. Like many of you, most of our colleagues are working from home, which is new, but we find works very well for our business model. Our management team based in Metro New York is working at home using Zoom to simulate what we do in the New York office. Our property management team in Atlanta drives across the city to inspect new acquisitions and puts on the digital locks for rental on the doors, which enables tenants for 24/7 self-tour without actual meeting with our property managers. House repair and maintenance have remained in working order as it’s classified as essential business. Our local repair folks have been keeping busy with all repair requests in a timely manner. Thanks to the technology and hard-working property management team allowing our business to remain as intact as possible. However, our acquisitions paces of Fund II have slowed down due to the lack of financing as most lenders temporarily suspended issuing new loans including our long-lasting relationship lenders. We do believe the capital market will resume and pick up once a clearer economic view emerges from a better-contained situation of Covid-19.
C-Star SFR portfolios are well-positioned even facing a potential economic downturn. Our investment strategy focuses on the mid-end single-family rental houses which are designed for middle-class household income for tenants with stable jobs on payrolls. Out of the 47 properties within Fund I and Fund II, 95% of the current tenants are working for government agencies, healthcare, education industries, and professional services at lower risks of losing regular income. We have received full payments for each month of the first quarter. Until the time we sent out this letter, we have received all full rents of April as well! One tenant who didn’t pay the rent on time had made it up on April 14. All the late fees are waived to correspond to the difficult time we ever had collaboratively. We have made the first quarterly distribution to Fund I investors today, representing $0.5 annualized dividend per unit to the investors. We anticipate there might be people moving from high-end rentals to mid-end rentals due to the financial difficulties and moving from multifamily dwellings in the city to suburban areas as seeking less population density and infection risks. We are seeing these actually happening in the last two weeks. For the seven rental properties we listed during the last two weeks, the average time between renovation completed and the lease signed is 8 days. The average time between renovation completed and the tenant move-in date is 20 days. The rental markets for Single-family houses are Hot Hot Hot!
2020 is a difficult year, it’s also a year for us to thrive from a reflection of our investment strategy and business model not only pursuing a growth during an appreciation period but also sustainability in a difficult economy. We believe our investment strategies, market selection, investment targeting, and tenant screening have been well-positioned and benefited from our dedicated professional management. The mid-end single-family rental sector in Atlanta is indeed one of the safest out there. We will continue to monitor the market, be cautious and fully prepared for any changes that might happen. At the same time, you can count on us to collect the rents and look for the best interest during this unprecedented time.
Please don’t hesitate to reach out to us if you have any questions.
Keep healthy and stay strong!
李雪莹, Sherry Li C-Star CEO 首席执行官
About C-Star
C-Star is a real estate investment management firm primarily in the Single Family Rental sector. It was founded in February 2018 and headquartered in New York.
C-Star successfully closed and fully deployed Fund I in June 2019 and aggregated a $5.7 million portfolio. It contains 36 assets located in 9 counties of Atlanta MSA. C-Star SFR Fund I has achieved a portfolio of 100% leased rate, 7.7% capitalization rate, 7.8% current year Cash-On Cash and 21.1% projected 3-year IRR.
In July 2019, C-Star launched Fund II and targets to raise $20 million USD of equity for investments in Atlanta and Triangle Charlotte MSA. C-Star SFR Fund II has made meaningful progress on fund raising, acquisition, financing and asset management ever since inception in October 2019. By the end of March, SFR Fund II has raised $7.12 million on equity and has closed 8 acquisitions of single-family homes in Atlanta mero area. 7 of 8 homes have been leased quickly after closing with an average lease-up period 8 days. The average time between renovation completed and the tenant move-in date is 20 days. The rent-price-ratio is 10.7%.
Investment Stretagy of Fund II：
Key Terms of Fund II:
- Minimum Capital Commitment: $100,000
- Investment Term: 3 year +1 year +1 year
- Distribution：Initially 5% – 6% increase annually, distributed quarterly
- Target IRR: 18% – 20% gross
- Acquisition Fee: 2% of Purchase Price
- Asset Management Fee: 25bps on AUM annually
Note: C-Star SFR Fund II has filed with the United States Securities and Exchange Commission (“SEC”) under Regulation D 506(c). www.sec.gov.
Investor Relations Contact
Lin Li
C-Star SFR Advisors
Tel: +1 (917) 755-5198
www.c-star.co
500 7th Ave, New York 10018
