National Diversified Fund 7 (NDF7)

Open for Funding

Investment Summary

Download the NDF8 Overview here>>

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 NDF7 is to help bridge the gap for the individual investor, enabling you to achieve diversification and earn a financial return with less time spent managing the portfolio.

NDF7’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. NDF7 invests in 5-10 states, bringing geographic diversity that few investors have.
3. Asset class: Traditionally, multi-family real estate performs best during recessions and in times of high inflation. Thus, Fund 7 will include more multifamily than other asset classes. We will also try to add industrial, self-storage, hospitality, and student housing (depending on which opportunities are best).
4. Sponsor: We always work with seasoned, best-in-class operators who are taking down great deals and projects.

How will NDF7 investments work?

As usual, Lon will be investing along with you and using the same strict underwriting methodology he has used for the past twenty years. NDF7 will:

+ Make seven to ten investments in 2023-24

+ Have a total investment in the $8 to $20 million range

+ Target limited partner (LP) returns of 14-20% IRR, with potential upside.

Returns and timeline

+ NDF7 will mostly provide returns in the form of 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.

+ At the end of the third year, most initial investment capital will be returned

+ The majority of the fund should be wrapped up by year five, although there may be some stragglers that take a year or so for the most optimal returns.

Investment size

NDF7 will generally invest $0.5 to $3.0 million per project. This amount supports both access to premium projects and ample fund diversification. For projects that are an exceptionally good fit, the investment may reach up to $5 million.  Several high-return projects have already been identified.

NDF7 Detail & Underwriting

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

• 14-20% 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 end of year four.
  2. For value-adds of any asset class, by end of year two.

Geographic focus

• Our primary states are WA, OR, NV, ID, UT, AZ, CO, TX, KY, TN, GA, FL, SC, NC, and VA.
• Our secondary states are 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 an asset segmentation to allocate bonus depreciation to the investors early in the life of the project.
• Where practical, we’ll prioritize projects that can be refinanced:
  1. In value-add 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 that have 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’s acceptable to invest in a single asset or a multiple property fund that specializes 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 will be 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.

National Diversified Fund 7 (NDF7)  Recorded Overview

Watch “Supercharge Your Returns with No Added Risk: An Overview of NDF7.”  The overview dove into three topics:

1. How NDF7 is diversified across geographic locations, asset classes, strategies, and sponsors to reduce risk
2. An overview of NDF7’s seed investments
3. What depreciation is and how it works with passive investments (and supercharge your returns!)

The PPT presentation is downloadable in the document back office after you register with our investment portal by clicking the “Invest in this opportunity” button above.

NEXT STEPS TO RESERVE YOUR SPOT

1. Click the “Invest in this opportunity” button above, and you will reserve your spot.
   • Our team will process your new user account and send you an email to create your password.
2. Complete the accreditation verification process. Choose one option:
   • Email ir@irontoncapital.com a signed letter from your CPA (Download Fillable PDF Template here)OR 
   • Use our third-party verification service, which will automatically notify us when the process is completed.
     Click here to start.
3. After you create your account, we’ll send you the subscription documents for NDF7 for you to review and sign via DocuSign. It may take a few days for us to send you the fund documents.
   

How to use our investor platform

For any questions, please contact

NICK ELDER
Investor Relations Officer
Cell: 412-848-7668
Email: Nick@IrontonCapital.com

RENEE RINI
Accounting Director
Cell: 303-557-7795
Email: Renee.Rini@IrontonCapital.com

Photos