How I Underwrote a $35M BTR in Florence, SC.

I underwrote a $35M BTR duplex in Florence, SC.

The homes ship pre-built and get assembled on-site.

- 184 units, 92 Class A duplexes
- 900 sf units, $1,625 target rent
- Entitlements approved, civil drawings done
- Senior debt: $31.3M, 87.5% LTC
- Construction rate: 9%
- Raising $4.25M in LP equity
- GP co-investing $224K alongside
- Target: 27.8% IRR, 3.33x equity multiple
- 5-year hold

This is a ground-up rental community using prefab steel duplexes to cut construction costs, in a city that says it's short thousands of rental units.

To fund deals like this, I ask 4 questions:

1) What stage of risk are we in?

- Pre-construction, entitlements done
- 24-month build timeline
- First units deliver month 10
- Full stabilisation by month 38

2) What makes the location work?

- City study calls for ~3,500 more rental units
- Two nearby BTR comps run 95%+ occupancy
- $1.6B battery plant adding local jobs

3) How is the downside protected?

- Rent underwritten below current comps
- Yield-on-cost beats assumed exit cap
- LP capital projected to return even in downside case

4) Can we control the exit?

- Straight sale planned at month 60
- Breaks even on value up to 6.5% exit cap
- No signed buyer or forward sale in place
- Exit depends on market conditions in 2031

Biggest risk is construction execution. One overseas factory must deliver 8x modules a month, and there's no finished comparable project yet.

My verdict:

Weak fit for Private Credit
Weak fit for Institutions
Strong fit for Family Offices

If you allocate to real assets, let's connect 👋