Silversmith Creek Apartments 140 Units, Jacksonville FL (16.03.2018)

  • United States (USA)
Property Description

 7211 Crane Ave, Jacksonville Florida, USA, 140 Units. Invested 2018 March 16 and sold on July 5, 2022. Investors received a 102% return within four years, with a total 190% return expected after loan repayment. This outcome demonstrates resilience and adaptability in navigating today’s uncertain real estate market.


The sale of Silversmith Creek Apartments has been successfully completed despite highly unstable market conditions. The ongoing market volatility, triggered by sharp Federal Reserve interest rate hikes, has significantly impacted the multifamily real estate sector. These changes have caused many buyers to face major alterations to their loan terms, negatively affecting cash flow and investment returns.

Challenges During the Transaction

  • Market Shifts: Rising interest rates have led to increased financing costs, causing property valuations in Sunbelt markets to drop by 5-15%.
  • Buyers’ Financing Issues: The buyer’s primary lender reduced the loan amount, while their preferred equity partner withdrew from the deal. This created a funding gap just days before the scheduled closing.
  • Seller’s Dilemma: Sellers had to choose between keeping the non-refundable escrow deposit ($300,000) and holding the property or accommodating the buyer to finalize the sale.

Negotiation Strategy

To ensure the deal closed, the sellers agreed to a $1 million price reduction, lowering the sale price from $22 million to $21 million. They also extended a short-term loan of $2.5 million to the buyer and invested $1 million as limited partners in the new ownership structure. These steps enabled the buyer to complete the transaction.

Returns for Investors

Despite market challenges, the sale yielded impressive returns:

  • Immediate Payout: Investors will receive approximately a 102% return on their original investment within four years, compared to the initially projected 83% over five years.
  • Additional Payout: After the $2.5 million loan is repaid, investors will receive an additional distribution, bringing the total return to 190% (2.9x equity multiple).
  • Continued Ownership: Investors retain a stake in the new ownership structure, benefiting from future distributions.

Market Outlook and Conclusion

The decision to sell now was deemed optimal to capitalize on current market conditions and minimize future uncertainties. This transaction highlights the significant challenges in today’s real estate environment and underscores the importance of strategic flexibility. Despite turbulent conditions, the outcome delivered substantial returns for investors, demonstrating the importance of adaptability in navigating volatile markets.


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Infinite Returns: A Victory for Silversmith Creek Investors

The successful conclusion of the Silversmith Creek Apartments transaction marks a significant win for investors. The buyers fulfilled their commitment to raise the $2.5 million bridge loan within the 90-day deadline, allowing for distributions to commence this week. Investors can expect their funds by Friday, October 7th.

Transition to Passive Investment

While the original sponsors have transitioned out of active management, they remain involved as passive investors with a $1 million stake alongside the new buyers. Updates on the property will now be shared every 3–6 months based on information provided by the new owners, with ongoing distributions to follow. Despite the reduced update frequency, the sponsors remain available to address investor questions as needed.

Infinite Returns: A New Chapter for Investors

The transition ushers in an exciting milestone: the $1 million reinvestment now represents pure profit, translating to an infinite return for existing investors. For those continuing with the deal, this reinvestment resets the return calculation and solidifies a favorable position moving forward. For example:

  • $12,000 Initial Investment → New investment value: $3,299.51
  • $50,000 Initial Investment → New investment value: $13,747.95
  • $100,000 Initial Investment → New investment value: $27,495.91

This reinvestment provides long-term growth potential with no further capital at risk.

Tax Advantages and Depreciation Benefits

In addition to financial returns, investors will benefit from significant depreciation benefits. The buyers have allocated the full depreciation on the $3.5 million short-term loan back to the sellers, boosting tax efficiency. These benefits will be reflected in upcoming K-1 statements, enhancing the overall value of the investment.

Final Thoughts

This successful outcome underscores the value of strong partnerships and the sponsors’ ability to navigate challenges effectively. The results speak for themselves: robust distributions, tax advantages, and a seamless transition to passive investment. Congratulations to all Silversmith Creek investors on an exceptional achievement and continued success in this next chapter!



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  • Investment Type Onetime
  • Profit 8 - 25%
  • Profit Schedule Onetime
  • Profit Back 1825 days after investment
  • Capital Back Yes
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