Alto Townhomes

Min. Invest
$66,000
Target Hold
6 mo
Annualized Returns
27.00%
100% Funded
Alto Townhomes Pic.PNG

Alto Townhomes Pic.PNG

Executive Summary

Overview. Four Arrow Funding, Inc. (the “Issuer”), an affiliate of Chesterfield Faring, Ltd. (“CFL”) is making a $450,000 Preferred Equity financing (the “Preferred Equity” or “PE”) that will be secured by a preferred membership interest (the “Interest”) in The Alto Townhouses on Hall LLC (the “Borrower”) secured by 3911 North Hall Street, Dallas, Texas 75219 (the “Property”). The development of the Property is twenty (20) townhouses with fourteen (14) townhouses under construction in Phase 1. The balance will be developed upon completion of Phase 1. The Borrower is a repeat borrower of the Issuer. The Property was inspected by the Issuer on July 11, 2019.


Economics of the Project. The gross sellout is estimated at $11.62 million at a cost basis of $8.80 million (less $1.1 million of selling costs) for a net profit of approximately $1.7 million. The Borrower should realize a net profit close to 170% on their invested common equity. Each townhouse will contain an average space of 1,968 SF at an average sales price of $295 PSF or a gross price of $580,625 per townhouse multiplied by 20 townhouses equaling the gross sellout of $10.95 million. The $450,000 PE is subordinated to a $7.3 million first mortgage construction loan but superior in preference to a $964,000 million common equity investment from the Borrower. We, as the PE investors, have a 2:1 ratio of common equity monies subordinated to our PE investment. This reduces our risk profile. The chart to the right shows the Sources & Use of Funds including the PE at 89.05% ($450,000) of the capital stack with 10.95% subordinated ($964,006) and 67.52% of the property value.


The Developer/ Borrower. Dooley Developments is the developer of this project. In 2010, Colin Dooley formed Dooley Developments USA, LLC (the “Developer”). Colin is 34 years old. His father was an architect. He received a Business Management Degree from University of Queensland, Australia.
The Developer finished three (3) projects so far including Lancaster Grove, Waterford Townhomes, & Skyline Terraces. The Developer specializes in affordable and modern housing designs in attractive community developments.

Investment Type Preferred Equity
Term 6 Months
Raise Amount $396,000

Prefferred Equity Terms

Prefferred Equity Terms

The Issuer is offering six (6) loan participation units (“Units”) at $75,000 each totaling $450,000 to you as loan participants (“Participants”). The term of the Units is six (6) months. The base interest rate for the Units is twenty four percent (24.0%) per annum. The interest is prepaid in the amount of $54,000 or $9,000 per Unit, for a net investment of $396,000 or $66,000 per Unit for a $75,000 face amount. Calculated on an annualized basis, the total return is 27.27% for the six (6) month term to the Participants.

Financial Sources

Senior Bank Loan $7,390,691
Preferred Equity $450,000
Common Equity $964,006

Financial Uses

Land Acquisition $2,400,000
Hard Costs $5,184,287
Soft Costs $1,220,410

Dallas Market

The Dallas/Fort Worth metropolitan area is the fourth largest metropolitan area in the United States and is currently the fastest growing metropolitan area in the nation. In March 2019, Dallas-Fort Worth-Arlington, TX had a population of 7.6M people with a median age of 34.9 and a median household income of $67,382. North Central Texas Council of Governments projections indicate that an 9 million people will call the area home by 2030. Much of the explosive growth is occurring within fringe communities—communities situated along the edges of the developed/urbanized metropolitan area. Between 2016 and 2017 the population of Dallas-Fort Worth-Arlington, TX grew from 7.23M to 7.4M, a 2.32% increase and its median household income grew from $63,812 to $67,382, a 5.59% increase.
2018-2019, the Dallas-Fort Worth-Arlington employment base increased by 96,000. The unemployment rate remained stable at 3.5% at the close of Q1 2019. Out of the 96,000 jobs added, 21% (20,522 jobs) can be attributed to the industrial sector, which is comprised of goods producing and trade, transportation, and utilities. The trade, transportation, and utilities category accounts for 61% of the entire industrial sector and is the leading indicator for industrial space demand. Texas employment expanded an annualized 2.1 percent in May, following upwardly revised growth of 3.1 percent in April. The Dallas Fed’s Texas Employment Forecast predicts 2.3 percent job growth in 2019 (December/December), with an 80 percent confidence band of 1.4 percent to 3.2 percent.


Dallas/Fort Worth growth can also been see as inventory is expanded at a strong clip over the past four quarters, particular in the northern suburbs and urban core of Dallas. Nine suburbs in Dallas gained more than 1,000 new apartments and approximately 2,000 apartments in the Fort Worth area. Currently, apartment rents are increasing at an average effective rent year over year of 4.5%


Submarket. Bryan Place began as a “stylish downtown neighborhood in the shadow of skyscrapers”. Housing around 600 families, Bryan place is a .6 mile by .3-mile rectangle just outside of Downtown Dallas. The average home price in the area is roughly $225,000 and expectations are that trends are to follow the rest of Dallas in reference to home appreciation. While there aren’t any large corporations within Bryan Place, it’s among the most sought-after real estate due to its proximity to the rest of Dallas.

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Investor Tutorial

CERTAIN INFORMATION REGARDING THIS OFFERING

THESE UNITS ARE BEING OFFERED WITHOUT REGISTRATION UNDER ANY FEDERAL OR STATE SECURITIES LAWS, BUT ARE BEING OFFERED UNDER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER COMPARABLE EXEMPTIONS UNDER VARIOUS STATE SECURITIES LAWS. HOWEVER, THE SECURITIES AND EXCHANGE COMMISSION (“COMMISSION”) HAS NOT DETERMINED THAT THESE UNITS ARE EXEMPT FROM REGISTRATION. THESE UNITS HAVE NOT BEEN REVIEWED, APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY, ADEQUACY, COMPLETENESS OR MERITS OF THIS MEMORANDUM, AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL TO, OR A SOLICITATION OF AN OFFER TO BUY FROM, NOR SHALL ANY OF THE UNITS BE OFFERED OR SOLD TO, ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION, PURCHASE, OR SALE IS UNLAWFUL OR UNAUTHORIZED UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.

THE STATEMENTS MADE HEREIN ARE MADE AS OF THE DATE ON THE COVER OF THIS OFFERING MEMORANDUM. THIS OFFERING MEMORANDUM CONSTITUTES AN INVITATION TO THE PROSPECTIVE INVESTOR TO SUBMIT AN OFFER TO SUBSCRIBE. NO PERSON MAY PURCHASE THE UNITS OFFERED HEREBY EXCEPT PURSUANT TO AN EXECUTED SUBSCRIPTION AGREEMENT IN THE FORM PRESCRIBED BY THE FUND, AND THEN ONLY FROM A PERSON TO WHOM THE FUND OR ITS DESIGNATED AGENT HAS DELIVERED A COPY OF THIS OFFERING MEMORANDUM.

THESE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY THE FUND. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THERE IS CURRENTLY NO PUBLIC MARKET FOR THESE UNITS.

IN MAKING A DECISION TO PURCHASE UNITS HEREUNDER, PROSPECTIVE INVESTORS MUST CONDUCT THEIR OWN INDEPENDENT INVESTIGATION OF THE FUND AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, AND ARE ENCOURAGED TO CONSULT WITH THEIR ADVISORS AS THEY WILL BE REQUIRED TO REPRESENT THAT THEY ARE ABLE TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT AND THAT THEY ARE FAMILLIAR WITH AND UNDERSTAND THE FUNDAMENTAL RISKS AND TERMS OF THIS OFFERING.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION WITH RESPECT TO THE OFFERING OF THE UNITS WHICH IS NOT CONTAINED OR REFERENCED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. POTENTIAL INVESTORS MAY, IF THEY SO DESIRE, MAKE INQUIRIES OF THE FUND WITH RESPECT TO THE FUND’S BUSINESS OR ANY OTHER MATTERS SET FORTH HEREIN, AND MAY OBTAIN ANY ADDITIONAL INFORMATION WHICH SUCH PERSON DEEMS TO BE NECESSARY IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION CONTAINED IN THIS MEMORANDUM (TO THE EXTENT THAT THE FUND POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE).

August 12 2020

Confidential Offering Memorandum: Four Arrow Funding, Inc

PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO CONSTRUE ANY CONTENTS OF THIS OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS, AS CONSTITUTING INVESTMENT, LEGAL OR TAX ADVICE; RATHER THEY SHOULD CONSULT THEIR OWN ADVISORS OR COUNSEL WITH THE CAPACITY TO ADVISE AND PROTECT THEIR INTEREST IN CONNECTION WITH ALL MATTERS CONCERNING THIS OFFERING MEMORANDUM.

THIS OFFERING MEMORANDUM DOES NOT KNOWINGLY CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT A MATERIAL FACT, AND ANY SUCH MISSTATEMENT OR OMISSION IS DONE WITHOUT THE KNOWLEDGE OF THE PREPARERS OF THIS DOCUMENT OR THE FUND. AS SUCH THE FUND BELIEVES THAT THIS OFFERING MEMORANDUM CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF ALL MATTERS, DOCUMENTS AND CIRCUMSTANCES MATERIAL TO THIS OFFERING. WHILE THE DATA AND STATEMENTS CONTAINED HEREIN ARE BASED UPON INFORMATION BELIEVED TO BE RELIABLE, NO WARRANTY CAN BE MADE AS TO THE ACCURACY OF SUCH INFORMATION OR THAT CIRCUMSTANCES HAVE NOT CHANGED SINCE THE DATE SUCH INFORMATION WAS SUPPLIED. THIS MEMORANDUM CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF DOCUMENTS RELATING TO THE BUSINESS OF THE FUND AND THE UNITS OFFERED HEREBY, AS WELL AS SUMMARIES OF VARIOUS PROVISIONS OF RELEVANT STATUTES AND REGULATIONS. SUCH SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS, STATUTES AND REGULATIONS.