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RealSource Investors and Friends,
We are nearing the final allocation for the Summerwood Cove recapitalization and wanted to provide one last opportunity to review the Executive Summary and offering materials.
RealSource has owned and operated Summerwood Cove since 2014. We are now recapitalizing the asset to pursue the next phase of the business plan as Dallas supply pressures begin to ease, operations transition to Tipton Property Management, and targeted capital improvements are implemented.
Summerwood Cove is a 452-unit garden-style multifamily community built in 1982 and located at 9821 Summerwood Circle in Dallas, Texas, with access to I-635 and US-75. The property sits on 18.4 acres and includes two pools, a fitness center, and a substantial base of classic-condition units.
The investment is based on several key factors:
Attractive recapitalization basis. The recapitalization basis is approximately $71,000 per unit, compared to a submarket comparable sales range of approximately $90,000 to $141,000 per unit. We believe this basis creates a meaningful discount to comparable properties and provides an attractive starting point for the business plan.
Potential operating upside. Tipton Property Management has sourced a new insurance policy estimated at approximately $912 per unit annually, compared to approximately $1,400 per unit reflected in the 2025 financials used to establish the recapitalization basis. If achieved and maintained, this reduction would represent approximately $220,000 of potential annual NOI improvement. Since Tipton took over 6-months ago, the expense reductions are already succeeding.
Property tax appeal opportunity. Our Texas property tax attorney currently estimates that the 2025 and 2026 appeals could reduce the assessed value from the 2025 assessment of approximately $45 million to a range of approximately $35 million to $38 million. These appeals remain subject to final resolution, but they may provide additional upside if successful.
Existing long-term debt. The existing fixed-rate debt does not mature until March 2032, reducing near-term refinancing pressure during the projected hold period and providing the partnership with additional flexibility if market conditions delay an optimal exit.
Classic-unit rent gap. Approximately 98% of the units remain in classic condition. This creates a clear value-add opportunity through phased renovations, light interior upgrades, and operational improvements.
Targeted capital plan. The $2.65 million capital program prioritizes high-ROI utility efficiency projects, followed by curb appeal, exterior improvements, and phased interior upgrades. Planned utility projects include LED lighting, low-flow fixtures, submetering, and upgraded boilers. Interior improvements include light upgrades targeting approximately $55 per month in rent premiums and select full-level renovations targeting approximately $140 per month.
Management transition. The transition to Tipton Property Management, a Texas-based operator managing approximately 20,000 units, is expected to bring stronger local execution, vendor relationships, and tighter cost controls to the property.
The Executive Summary includes the full business plan, projected returns, underwriting assumptions, market context, capital plan, risk factors, and offering details.
We are currently at approximately 90% allocation, with approximately $350,000 in remaining availability. Please let us know if you would like to review the Executive Summary or schedule a call with our team before the remaining allocation is filled.
As with all private real estate investments, projected returns are not guaranteed. Actual results may vary based on market conditions, execution, operating performance, tax appeal outcomes, financing terms, exit timing, and other risks described in the offering materials.
Best,
RealSource
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