Flywheel Equity's Two Massive Exits and Two New Acquisitions

Flywheel Equity Investor Newsletter, July 2022



Our apologies for not being more consistent with these updates. The best excuse I can muster is that we've been very busy evolving and growing our commercial portfolio.

Read on to see how our first storage acquisition of the year is doing, the details of our latest storage acquisition in July, and the two hugely successful multifamily exits we recently completed.

The Storage Room is Outperforming

You may remember The Storage Room in Greenville SC as the first storage opportunity we brought to investors back in January:

After the closing in late February we now have several months of operational experience under our belt.

We're happy to report we are already hitting our year 2 profitability projections, having increased revenue by 45% in the four months since our purchase. The facility continues to lease well, even in an area with other larger competitors.

There are still some physical improvements left to do, as well as some ongoing operational adjustments, so our goal is to continue this upward revenue momentum through the end of the year. This work, plus our growing experience in the sub-market, has us excited for what the future holds at The Storage Room.

Our successes at The Storage Room has only increased our commitment to the asset class... which is why we're excited to announce another more recent acquisition in the storage space...

We've Closed on Sunrise Self Storage in NC

We have focused the majority of our acquisition efforts, in both multifamily and storage, on the I-85 corridor between Raleigh NC and Greenville SC. One specific area we have a lot of experience with is the Burlington/Mebane area of NC having purchased (and sold) the Vance St. apartments in Mebane and still managing the Morris Manor apartments in nearby Greensboro.

After witnessing the accelerating growth and development of the Mebane area we made it one of our focuses when looking for storage acquisitions and were fortunate enough to find an owner ready to sell - meet Sunrise Self Storage.

Sunrise meets our purchase criteria almost perfectly. It is a value-add opportunity with no marketing, below market rents, and elevated expenses. It, additionally, has the opportunity to add more units at very low cost (the existing foundation is already in place, it just needs the structure built on top which saves a meaningful amount of the construction cost).

Sunrise was acquired using 1031 funds so it was not open to investors (sorry!). However, we see it as an important addition to our management portfolio that will give us additional experience – putting us in a better position to manage your next storage investment with us.

We will keep you informed of our progress at this property as well as we implement our business plan. It's going to be a busy summer at the property!

SOLD! 160%+ IRR, Oh My!

Flywheel Equity and its managing partners made the decision at the end of 2021 to list two of our multifamily properties for sale (Vance St. in Mebane and Saddlebrook in Fayetteville) and both were successfully exited in Q1 of this year.

The results were... well, they speak for themselves:

Vance St. exited with a 164.6% IRR (annualized) and 6.25 equity multiple after only two years of ownership. It truly was a best case scenario that benefitted from a strong multifamily market, forced appreciation, favorable local demographic trends, and the power of sub-institutional scale investing.

Frankly, Vance St. was a homerun I don't think I will ever have the opportunity to match the rest of my career.

Saddlebrook, while not sporting the gaudy numbers of Vance St., was also an unquestionable homerun. We exited with a 52.1% IRR (annualized) and 2.51 equity multiple after only two years. We executed our business plan to a "T", had a strong property management group, and benefitted from a perfectly timed market exit.

Both these transactions were brokered by Ryan Gavigan and team and Marcus & Millichap. We were very happy with the quality of buyer they were able to bring us, as well as the smooth nature of both transactions. Thank you (other) Ryan!

These two properties were the first ones we took full-cycle and represent an important milestone for any management group. We were glad they turned out so well for our investors and look forward to being held to this very high standard going forward.

Thank you! You have been added to our mailing list and will be immediately sent our multifamily investor resources listed below as well as next steps to become a Flywheel investor.

If you are ready to invest, please schedule an introductory call so we can send you investment opportunities as they arise.
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