Buying the Block in Historic - 5th Ward Houston

THE OPPORTUNITY

3204 Lyons Avenue LLC is offering the opportunity to invest in a cash-flowing portfolio of residential and commercial property on Lyons Avenue in Houston's historic 5th Ward.  This corridor was once a thriving black business district.  Long term residents refer to it as the Black Wall Street of Houston.  

Everything has a life cycle, including a neighborhood; what's old will eventually be reborn.  Thankfully, we no longer have to sit on the sidelines as our communities are gentrified.  We can participate in the revitalization and preserve the heritage created by existing residents.  The majority of the tenants in this real estate portfolio are single adults and seniors that would eventually be displaced with the continued gentrification of the neighborhood. 

The Founder / CEO of 3204 Lyons Avenue LLC, Christopher Senegal, has been a real estate investor and developer for over a decade. 

He started his business, Invictus Properties, in 2008. His focus is now changing the narrative of gentrification through redevelopment that balances the opportunity to attract high-income people (originally from the community) out of the suburbs while ensuring existing residents are not displaced in the process.

In 2013 he bought a block of partially abandoned, drug-infested property and cleaned it up.  Now he is building 14 new construction townhomes on that property.  As a real estate social media influencer and advocate, he has successfully attracted young black professional buyers to be homeowners in the project. (http://LibertySquare.info)

The opportunity you are evaluating today allows you to invest in a historically black neighborhood that is revitalizing with or without us.  It also serves the purpose of allowing those that have few housing options to stay in their existing homes.  We can prevent them from being casualties of the normal gentrification narrative.  By taking over this portfolio of property from retiring landlords, we prevent it from being sold to someone who's sole intent is to remove the tenants, then build high dollar real estate.

ABOUT THE PORTFOLIO

RESIDENTIAL TENANTS

There are six(6) - 2 bed /1 bath homes and twelve(12) - 1 bed 1 bath homes.  Most tenants have been here for a decade or more, and hope that they do not have to move.   There are also two commercial buildings on the property with one existing tenant.

By acquiring this portfolio, we can ensure their long term stability as the community around them revitalizes.  Rents range from $550 - $800 per month on the residential side.  The one occupied commercial tenant pays $1300 per month.  Total revenues are $13k per month as is.  

Considering the age of these properties, they are in pristine condition.  The current owners have taken great pride in keeping the place up.  In fact, their son is one of the tenants that will remain on sight.  The plumbing and roofs have were replaced in the past ten years.  The parking lots were asphalted as well.  The tenants pay their utilities, and the houses have low maintenance window units for air conditioning and heating.  The maintenance man stays on-site and performs work in exchange for a discounted rent rate of $200 per month.  Lyons Ave will hire a seasoned property management company to oversee the rentals.

The neighborhood is an older, predominantly African American neighborhood located in both a TIRZ and Opportunity Zone.  Within the same block is a recently redeveloped office complex that houses both the State Senator and the Fifth Ward Community Redevelopment Corporation. 

Across the street from those buildings is the first black movie theater in Houston, The Deluxe Theater, which has recently been renovated into a Performing Arts Hall by Texas Southern University and the Fith Ward CRC. 

A few blocks further down Lyons Avenue is the current Democratic Party Campaign Headquarters.

EXISTING COMMERCIAL PROPERTY

There are two buildings along the commercial street.  One is an older duplex that is not renovated.  The other building is a retail space that currently has one vacant space and one occupied space.

The existing commercial tenant is a barbeque restaurant that employees local youth.  The tenant also has a contract with the Houston Independent School District to provide after school meals to local kids.  The establishment is very well kept.  The staff is friendly, and the food is excellent!  The current revenue generated is $1300 per month.

THE FUTURE POTENTIAL

FILLING THE EMPTY COMMERCIAL SPACE

Owned by a prominent African- American couple who are both pastors and entrepreneurs in Houston, Throughgood Coffee is a staple in a nearby affluent neighborhood called the Heights.  The owners have expressed extreme interest in opening a shop in the vacant commercial space.  Build out of the coffee shop is projected to be between $150k-200k.  There are no coffee shops in Fifth Ward.  Residents, as well as those working in the community, have to traverse miles outside of the neighborhood for breakfast meetings or to enjoy a gourmet cup of Joe.  With this project, we can change that.  The projected rent from this tenant will be $2000 per month.

ADDITIONAL DEVELOPMENT

After filling the vacant commercial space in the existing white building, the focus will shift to the demolition of the brown building and maximizing the use of the commercial frontage to increase commercial rent revenues.  Lyons Ave Renaissance will explore several design concepts with commercial architects to identify the highest and best use.  The team will simultaneously pursue commercial tenants to minimize any time between project completion and tenant occupancy.

The additional commercial space will generate approximately $1 per square foot of rental revenue per month.  A building with 5000 square feet of additional rental space converts to an additional $5000 per month in rental income.

LAND ACQUISITION

In addition to the land that comes with the project portfolio, the company will be aggressively pursuing the acquisition of the adjacent parcels of property.  By acquiring these parcels and expanding the commercial infrastructure, the company can be a tremendous catalyst for returning Lyons Avenue to its previous luster as a thriving business district.

THE REAL ESTATE MARKET

Houston has seen consistent population growth over the last decade, surpassing Chicago.  The neighborhoods within the Hwy 610 Loop with market prices below $350k have seen exceptionally high market demand. Downtown, which is 3 minutes away, also hosts the Astros, and Texans arenas, as well as many other downtown attractions.  5th Ward specifically is a hub of new activity.  Less than one mile from the property is the site of the biggest mixed-use development to be built in Houston (https://www.eastriverhtx.com).  The first phase will be online in 2023 and will be a major catalyst for value appreciation in the local market.

The values of real estate in the area will see significant increases.  This development will be the new point of destination within the city of Houston. 

THE NUMBERS

REVENUE

The current rental income is $13k per month ($156k annually).  By leasing the vacant retail/commercial space to the coffee shop, the rents will increase to $15k per month ($180k annually).  The goal over the next two years is to increase total revenue to $20k per month with the addition of the new commercial building ($240k annually).

EXPENSES

Taxes - $1,145 per month

Common Area Maintenance - $475 per month

Insurance - $850 per month

Management Fees - $2500 per month

Utilities - $50 per month

Average Repairs - $850 per month

TOTAL AVERAGE MONTHLY EXPENSES - $5870 per month 

THE OFFER

3204 Lyons Avenue LLC is raising up to $1,070,000, which is the maximum raise allowed by SEC regulations.  $700k will be allocated toward the acquisition of the rental portfolio.  The remaining funds will be utilized as repair reserves ($25k) as well as, cost of design and improvements to the commercial property ($345k). 

The company is offering shareholders a 40% profit share in this project.  Shareholders will collectively split 40% of profits after expenses, including taxes, insurance, management fees, repairs, and third party services such as accounting.

3204 Lyons Avenue LLC is selling 21,280 shares at $50 per share.  The minimum investment is 5 shares ($250).  The company will retain ownership of 31,920 shares. Dividends will be paid bi-annually to all shareholders.  7 Year Project Valuation $2.9M

We look forward to partnering with you on this venture!

Note:  This project is not affiliated with the Fifth Ward CRC, nor its Lyons Avenue Renaissance Festival.  

SEC Filing

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001796828&owner=exclude&count=40

Offering Memorandum 

https://drive.google.com/file/d/1F8hZQNfA-PdwzCkRSu2B10algsECwATW/view?usp=sharing  

Financial Statement  

https://drive.google.com/file/d/1OvktM71aeHx1PS07uQI5LUkcCWko6Pfz/view?usp=sharing

Pitch Deck 

https://drive.google.com/file/d/1Bu7W7gqXw2YnsfjTeDFuq6nEh6qDtr_h/view?usp=sharing

WE ARE STILL ACCEPTING INVESTORS ABOVE THE MINIMUM GOAL.  THE MAXIMUM AMOUNT IS $1,070,000.00***