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Earl Rudder Way

7,316 Views | 42 Replies | Last: 8 days ago by Red Pear Realty
Red Pear Realty
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Some of y'all may know that in addition to brokerage, I have a background in development and since leaving the corporate world, I've been syndicating build for rent development deals with partners around Houston. If you aren't familiar, "syndication" is just a fancy word for "Jamie does the development work, and finds capital partners to fund part or a majority of the deal". Well, just got our replat a week or two ago, so its time to share.

What the deal currently looks like:


This one is special for several reasons:

1. We named our street after Earl Rudder. Earl Rudder Way has a pretty good ring to it, right?

2. We partnered with another group to make this even possible. I'm a big believer in "Win-WIn" scenarios, and this one is the epitome of that. Without getting creative, we would each have ended up with 2+ less lots per. Because we worked together, we each got more lots, and each lot was bigger. I'm not sure the COH has even seen a deal like this one before. Very, very rare if so.

3. My clients who look for homes in shared driveway communities often complain about a lack of parking and a lack of yard space. This deal solved both of those problems. In addition to 6 common parking spaces for the community, each home will have a garage that can accommodate two F-150's and an additional dedicated parallel parking space for a total of three dedicated parking spaces per unit. And finally, I'm pretty excited about our yard space. It's definitely bigger than average, and coupled with the porch we have planned, I know will be a big selling point for the community. Folks are not going to feel crammed in here.

4. I started working with an awesome Aggie architect who I met right here on TexAgs. He has brought some great perspectives to this project, and I'm excited to do more deals with him and the rest of the team in the future.

5. Several of our investors are actually folks from right here on TexAgs, which is pretty cool as well. I'm legally not allowed to solicit investors publicly, so please note that this is not a solicitation for funds.
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MS08
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27.5' x 61' lot size?
Red Pear Realty
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Fairly typical for infill developments in Houston. What is not typical though, is that we can accommodate a dedicated third parking space and a larger than average back yard space for each home. I actually couldn't find a true sales or rent comp for what we have planned. I think I looked through something like 700 comps when I ran my analysis. So these should rent well. Right now I'm projecting we will end up somewhere right around the "1% rule", if you are familiar with that.
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MS08
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Yes, familiar with 1% rule. And very difficult to find (right now) compared to 3-4 years ago.

What is the product type/size (sqft) and story count?
oldarmy76
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Will that be built as an alley loaded product facing away from pae or do homes face the pae?

I'm assuming a detached product? If so, what are side setbacks?

On a closer look, based on the setback line only showing up on corner lots…I'm guessing attached?

Congrats on getting the replat done!
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Single family detached, 3 story, just under 2,200 SF. It's very similar to a lot of product you see, but the little details here and there really make a difference, and that is thanks to our architect partner on the deal.
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Red Pear Realty
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oldarmy76 said:

Will that be built as an alley loaded product facing away from pae or do homes face the pae?

I'm assuming a detached product? If so, what are side setbacks?

On a closer look, based on the setback line only showing up on corner lots…I'm guessing attached?

Congrats on getting the replat done!


Thank you! It was a process for sure. There were aspects where the city was very frustrating but also other aspects where they were actually very accommodating and helpful. I'm sure they said t he same about us, ha!

We intend to face them toward the PAE. In addition to the garage we are planning a sidewalk that leads to a "front door" on the side of the home.

Detached. One wall will basically back up to the property line and therefore must be a firewall. But then that leaves a decent chunk on the other side of the house for the walkway. And the corner lots we had to massage a bit accordingly.
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harrierdoc
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I cannot imagine a home being built on a lot that size. Do you have an example of a similar development you can share?
Red Pear Realty
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Sure! This one is located directly behind our development and just delivered last year. Click this link to see a Google Street View.

Also, here is an active development site pretty similar to ours. Similar location/neighborhood (but not exactly the same), similar concept, similar design, etc. These homes are being sold for the mid-$500,000 price range and are smaller than ours, less shared parking, do not have the dedicated third parking space that ours have, and I cannot see the yard setup. And while their lots are larger than ours, they also include the shared driveway, so they are actually smaller also.

This is a floorpan of the unit linked above. Ours will be similar, but I would say better. But this should give you an idea of the product we have envisioned.



Receiving our replat was a big milestone. We took our dirt that was worth something like $30 per square foot and made it worth I'd say at least $60 dollars per square foot. A 100% (unrealized) return isn't too shabby! And we aren't done yet. My goal is to not only build this specific project, but continue building a portfolio of these.
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Diggity
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they're detached townhomes. There are tens of thousands of them built all around the city.
Houstonag
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They need to consider an elevator. Knees
dallasiteinsa02
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Houstonag said:

They need to consider an elevator. Knees
You don't put elevators in rental property.
Red Pear Realty
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Our typical tenant demographic is younger with good knees, ha! Generally, who we are targeting is younger, white collar professionals who are tired of apartment living but not yet ready to buy a home of their own.

I was speaking with a client who moved in from Philadelphia the other day, and she was saying they build these same floor plans there but as a triplex. No parking. Pretty crazy.
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malenurse
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Quote:

Generally, who we are targeting is younger, white collar professionals who are tired of apartment living but can't buy their own home because chinese investors are buying everything for cash.
FIFY
The last thing I want to do is hurt you. But, it's still on the list.
agnerd
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Dang, that's efficient. Where's your detention? Underneath the driveway with a pump?
Red Pear Realty
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Thank you! And username checks out! I nerd out on this stuff too. We are installing a 96" detention pipe under the driveway with a pump as well. Mega bucks for that pipe!!!
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Red Pear Realty
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It's a really big problem. I am legitimately scared for the future of our children and their children. Their ability to create and grow wealth in ways that we have done will be greatly diminished.
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Red Pear Luke (BCS)
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Red Pear Realty said:

Thank you! And username checks out! I nerd out on this stuff too. We are installing a 96" detention pipe under the driveway with a pump as well. Mega bucks for that pipe!!!
Jamie - in the event of disposition with the property - are you going to have an HOA or any type of owners association set up for the deal? Or is it going to be considered as purpose built "Multifamily". Just curious what happens if someone comes along to try and buy but wants to sell them as one-offs.
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MAS444
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I remember this deal. What do you projected numbers look like?
Red Pear Realty
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Great question. HOA is in the initial steps of being created by our attorney as we speak. Basically, everything we are doing is in preparation of long term hold, but giving ourselves the flexibility to sell one or more of the units at any time if we choose to do that. That's why we replatted the way we did - so we could sell individual units if we chose to do so.
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Red Pear Realty
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MAS444 said:

I remember this deal. What do you projected numbers look like?

We originally underwrote:

  • 10 year hold
  • 27.49% IRR
  • 8.56x Equity Multiple
  • 7.93% stabilized cash on cash dividend

It's definitely possible to beat this given our progress and the current market.

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BoDog
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Red Pear,

Can you message me an investor prospectus, etc or something similar specific to this project?
Mas89
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Red Pear Realty said:

Thank you! And username checks out! I nerd out on this stuff too. We are installing a 96" detention pipe under the driveway with a pump as well. Mega bucks for that pipe!!!
Wow. I assume this is common for detention but I've never heard of it. Is the pipe steel, concrete or plastic? Is it set in stabilized sand? And where does the pump send the water? Interested in this design.
MS08
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BoDog said:

Red Pear,

Can you message me an investor prospectus, etc or something similar specific to this project?


Would enjoy seeing what the opportunity looks like as well.
RGRAg1/75
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Same request as BoDog.
Red Pear Realty
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For some reason, my PM's aren't working. My cell and email is in my profile. Can YOY shoot me a text or email?
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
94chem
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harrierdoc said:

I cannot imagine a home being built on a lot that size. Do you have an example of a similar development you can share?



Have you ever visited a city?
94chem,
That, sir, was the greatest post in the history of TexAgs. I salute you. -- Dough
RGRAg1/75
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Red Pear Realty said:

For some reason, my PM's aren't working. My cell and email is in my profile. Can YOY shoot me a text or email?

Sent that email. Crickets so far.
Red Pear Realty
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RGRAg1/75 said:

Red Pear Realty said:

For some reason, my PM's aren't working. My cell and email is in my profile. Can YOY shoot me a text or email?

Sent that email. Crickets so far.

I just sent a reply your way. Apologies, I was on a family vacation for the last 10 days or so and just got back to Houston. Happy to discuss at your convenience.

Jamie
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RGRAg1/75
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NWE
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I'm in how do I sign up
Red Pear Realty
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This investment is fully funded but shoot me an email or text (contact info is in my profile) and let's talk!
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Ag2000
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Mas89 said:

Red Pear Realty said:

Thank you! And username checks out! I nerd out on this stuff too. We are installing a 96" detention pipe under the driveway with a pump as well. Mega bucks for that pipe!!!
Wow. I assume this is common for detention but I've never heard of it. Is the pipe steel, concrete or plastic? Is it set in stabilized sand? And where does the pump send the water? Interested in this design.
Pretty typical for infill development, as it's not cheap! Most systems use a plastic (HDPE or similar) pipe that is bedded in stabilized sand. There are other products out there that my firm specs based on site specifics.

Typically, the pump will connect to the receiving public storm sewer system that the run off was already draining too. (Or ditch, stream, whatever). There is a portion of the detention system that needs to be gravity flow and not dependent on the pump, though.

(Note, we are not the engineer on this deal…but could be on the next one. )
Red Pear Realty
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We broke ground back in July. Some progress pics below. Megan and I took the two youngest girls down to the site yesterday to help show the scale yesterday after dropping the oldest off at school. There will be two rows of detention pipe almost all the way down the length of the site. Progress!







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Diggity
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looks great Jamie!

I would suggest not using Midway's contractor for the retention setup though
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