National Diversified Fund 10 LLC (NDF10)

Investment Summary

National Diversified Fund 10 (NDF10)

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Ironton Capital’s 4 Pillars of Diversification

If you want the diversification real estate brings to your overall investment portfolio but don’t have the time for active management, the NDF was specially crafted for you. The NDF helps bridge the gap for the individual investor, enabling you to achieve diversification and earn a financial return with less time spent managing the portfolio.

NDF’s investment strategy is built around Lon Welsh’s four pillars of diversification:

1. Strategy: Investments are balanced between new development and the value-add of existing properties.
2. Geography: Most landlords have no geographic diversity in their portfolio. It’s hard to have active rentals spread across the US. NDF invests in 5-10 states, bringing geographic diversity that few investors have.
3. Asset class: Multi-family real estate traditionally performs best during recessions and times of high inflation. Thus, Fund 9 will include more multifamily than other asset classes. We will also try adding workforce, industrial, self-storage, hospitality, and student housing (depending on the best opportunities).
4. Sponsor: We always work with seasoned, best-in-class operators, taking down great deals and projects.

How will NDF Investments work?

As usual, Lon Welch and the Investment Team will invest with you and use the same strict underwriting methodology they have used for over twenty years. NDF will:

• Make seven to ten investments in 2023-24
• Have a total investment in the $7 to $12 million range
• Target limited partner (LP) returns of 16-20% IRR, with potential upside.

Returns and Timeline

• NDF will mostly provide returns in capital gains, not current income.
  (Please see STI and MTI for our income fund options.)
• Some projects will be completed or refinanced to return initial capital by the end of the third year.
• Most initial investment capital will be returned at the end of the third year.
• The majority of the fund should be invested by year five, although some stragglers may take a year or so to achieve optimal returns.

Investment Size

NDF will generally invest $0.5 to $3.0 million per project. This amount supports both access to premium projects and ample fund diversification. The investment may reach up to $5 million for projects that are a perfect fit.  Several high-return projects have already been identified.

NDF Details & Underwriting

Here are some of the elements we’re seeking. These are common attributes for all asset classes:

• 16-20% net investor IRR, with potential upside.
• We are seeking a cash-on-cash return of 5% or more (not guaranteed):
1. For new builds of any asset class, by the end of year four.
2. For value-adds of any asset class, by the end of year two.

Geographic Focus

• Our primary states are TN, GA, FL, and SC.
• Our secondary states are WA, OR, NV, ID, UT, AZ, CO, TX, KY, TN, NE, KS, WY, CA, OK, MO, MD, LA, MS, MI, OH, IL, IN, WI, MN, PA, NJ, NY, and MA.

Sponsor Attributes

• We prefer sponsors that have fully completed at least four similar projects and will be reusing many members of the team that generated prior success (e.g., property manager, general contractor).
• It’s a bonus if the sponsor has run projects through the previous recession(s).

Project Attributes

• Where practical, we’ll seek projects that can perform asset segmentation to allocate bonus depreciation to investors early in the project’s life.
• Where practical, we’ll prioritize projects that can be refinanced:
1. In value-added projects, that would generally be after renovation and re-leasing are complete.
2. In development projects, that would generally be after completion of construction and initial lease-up and stabilization.
• We seek projects with at least five-year financing (so we can wait out a recession if needed) at a conservative loan to a value of = 75%. 70% and even 65% LTV is preferred but not required.
• The projects should be adequately capitalized to minimize the risk of capital calls mid-project.
• It is acceptable to invest in a single asset or a multiple property fund specializing in a targeted asset class and strategy.
• We’re looking for projects with an overall capitalization between $15 million and $300 million.

Investment-by-Investment Decision

• Subject to availability, LPs agree to participate in the pre-identified projects.
• LPs will be presented with detailed descriptions of the additional (not pre-identified) projects and allowed to participate on a first-come-first-served basis.
• As with all investments, an opportunistic project that does not strictly conform to the above criteria will be presented to LPs for discretionary consideration.

Minimum Investment Amount

The minimum investment amount is $50k.

For any questions

Please click here to schedule your best time to speak with our Investor Relations Team https://irontoncapital.com/booknow