Cash Flow Capital

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Historic Seaport Inn, Key West Florida

Key Highlights

Purchase Price $2.7M
Minimum Investment $50,000
Annualized Return 23%
Target IRR 21%
Term 5 Years
Type 506c (Accredited Investors Only)
Anticipated Equity Multiple 2.5x
Projected Cash On Cash Return 17%

Documents

Investor Summary

Pro Forma

Private Placement Memorandum (PPM)

Operating Agreement

Property Videos

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Property Description

Property Address: 329 William Street, Key West, FL. 33040

Year Built: 1938

Condition: Excellent (per Monroe County Assessor)

Walk Score: 95 - “Walker’s Paradise”

Bike Score: 100 - “Biker’s Paradise”

Property Details

We recently hired an inspector with 30+ years of Florida Keys specific experience to complete a full inspection of the subject property.  After investing virtually an entire day in, on, under and around the property he came to the following conclusions:

The roof is relatively new and most major systems have been recently replaced, so the property has very little deferred maintenance.  We will be making interior improvements, replacing a stairway, painting both the exterior and interior of the property with little to no interruption of occupancy during the spring of 2022.  

Each room will be redecorated to appeal to our future guests and designed to garner a higher rental income for our investors.  The landscaping, pool area and other common areas will be tastefully updated to bring the property into a Class A type property within the first year.

Everything you need is easily within walking distance —an abundance of famous bars and restaurants... Eaton Street Seafood Market & Restaurant is literally next door... So you can buy fresh seafood, and bring it back to enjoy in your room or by the private pool and tiki bar.

It’s just a 2-minute walk to Pepe’s Cafe, one of the oldest restaurants on the island... BO's Fish Wagon, where Jimmy Buffett and the Coral Reefers used to hang out is literally at the other end of the street, less than a block away... The Waterfront Brewery... The Historic Seaport Waterfront... Conch Republic Seafood & Bar... Jimmy Buffett’s recording studio... Harpoon Harry’s... The Ferry Terminal... City Parking Garage... All within two blocks.

And it’s just a few blocks from Duval Street, the epicenter of Key West’s famous party atmosphere, where all the festivals... scavenger hunts... Fantasy Fest, Singers and Songwriters Festival, Meeting Of The Minds for Parrotheads and other events... All within easy walking distance... It’s out of earshot, yet only a block and a half walk from the festivities, if you wish to take part.

Schooner’s Wharf, one of the oldest bars in Key West, where the locals hang out, with happy hour starting at 7am, is right on the waterfront, just a four minute walk away.

Easy access to Eaton Street, a major thoroughfare and direct route to and from the island makes it easy for guests to find —no hunting through remote neighborhoods and back alleys to find the place.

And it’s got a beautiful heated swimming pool and bar right there on site, so guests don’t even need to leave the property if they choose to relax on site.

Historic Designation

In addition to being located in the heart of Key West's "Old Town - Historic Seaport District", its listed in the National Register of Historic Places. 

Sub-Market Fundamentals

Over the last several years, real estate property values in the Florida Keys have grown exponentially. An upcoming moratorium on new housing units in Monroe County means unmatched upside potential with this building because no more can be built when the restrictions take hold.

In Key West, outdoor living is a lifestyle, thanks to the pristine weather that can be enjoyed almost 365 days a year. Couple that with the flexibility to fly in from almost anywhere in the U.S., and you can see why Key West has developed a reputation as America’s vacation paradise.

In 2022, the average occupancy rate in Key West exceeds 90%*, compared to an average 60% nationwide*.

 

* U.S. Hotel Occupancy And Average Daily Rate

Funding

Attractive 75% loan to value financing at a low fixed interest rate provided by a local community bank whose leadership is familiar with the property, its history and market potential. In addition, the long term amortization means reduced risk, lower payments and potentially greater returns to investors.

Acquisition

The property was acquired “off-market” at a price estimated to be significantly below appraised value.

Underwriting

The project is underwritten by a local community bank that understands the property and its market potential and consequently believes in the deal. Unlike large banks, the president and underwriting team are already familiar with the asset, its history, and its performance ability.

Happenings in Key West

Beginning in 2023, a moratorium on all new home building applications in Monroe County, in which Key West is located, will take effect. This limit on the number of available homes in the face of ever increasing housing demand is likely to result in an explosive upward price trend over the next few years.

And for those who live in or visit Key West, there’s always something to do. The local Chamber of Commerce sponsors and facilitates events on a daily basis, creating an ongoing allure for out-of-towners and “conchs” (the term for long-time locals, pronounced “conks”) alike.

In short, we expect a major shortage of inventory in the face of strong demand, resulting in a supply-demand imbalance strongly in our favor.

 Business Plan

The strategy for capital growth in the project is threefold:

  1. Acquire the asset off market at below estimated value
  2. Implement a light cosmetic makeover themed as a nautical guesthouse with high quality, period-specific furnishing etc.
  3. Change of use to conform with local regulations, thus allowing the property to be marketed to its fullest potential

With an astonishing array of arts, cultural, educational and entertainment events happening every day of the year in Key West, vacation visits are a regular and highly popular occurrence.

Yet across Key West, demand exceeds the number of available units for rent.  This means virtually no vacancy and higher vacation rental rates.

In order to comply with local regulations and licensing requirements we will be operating Seaport in as (2) Licensed Nightly Vacation Rentals and (4) 28 day+ vacation rentals.

Decor and furnishings will be upgraded to create a nostalgic “captain’s quarters” feel, with brass fixtures, varnished wood surfaces and turn of the century Victorian colors. The pool area will be enhanced with a tiki bar, featuring luxurious finishes.

When you consider extremely high demand for vacation rentals on the island you have a formula for consistently improved cash flow and increased overall equity in the property.

In addition, and perhaps most importantly, the major value-add will be upgrading the marketing and operations. Under current management, the property is not currently seen on AirBNB, VRBO or most other websites.   

The current pricing structure is not dynamic, instead it is only adjusted seasonally which means the current rents are significantly under market rates. In order to enhance profitability, we’ll deploy dynamic pricing that adapts to market fluctuations in real-time (monitored by a well trained and experienced management team)— meaning far less to zero money left on the table, as is the case under current management.

Post Acquisition Expectations

Monthly Reports

  • Video walkthroughs of the property showing conditions, improvements and expectations going forward

Quarterly Analysis

  • Monthly newsletter breaking down revenues, expenses, capital improvements and other relevant information of interest to our partners

Distributions

  • Quarterly distributions begin in the following quarter once the property attains positive cash flow.

Communication

  • We strive to keep communication channels open at all times. To the greatest extent possible, Limited Partners will have direct access to General Partners Tyler Sheff and Mike Marino.

Key Highlights

Purchase Price $2.7M
Minimum Investment $50,000
Targeted Annualized Return 23%
Target IRR 21%
Term 5 Years
Type 506c (Accredited Investors Only)
Anticipated Equity Multiple 2.5x
Projected Cash on Cash Return 16%

Actual results may differ from projections.

Property Description

Property Address: 329 William Street, Key West, FL. 33040

Year Built: 1938

Condition: Excellent (per Monroe County Assessor)

Walk Score: 95 - “Walker’s Paradise”

Bike Score: 100 - “Biker’s Paradise”

Documents

Investor Summary

Pro Forma

Private Placement Memorandum (PPM)

Operating Agreement

Property Videos

View

Location

At 329 William Street, the property location is truly a walker’s (and biker’s) paradise!

Project Timeline

Key West Cash Flow Project Timeline

This is not an offer; offers will be made only by means of the Regulation D Offering Documents (available at https://keywestcashflow.com/register) which may be updated or amended from time-to-time with the most recent Offering Circular or Offering Documents. The Regulation D offering under Rule 506(c) is for accredited investors only. Past performance is not an indication of future results. Investing involves risk and may result in partial or total loss. Prospective investors should consider carefully investment objectives, risks, charges and expenses, and should consult with a tax, legal and/or financial adviser before making any investment decision. For additional information, visit https://keywestcashflow.com/compliance/