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1031 crowd funding physical location

1031CF Portfolio 5 DST

An assisted living and memory care portfolio
located in Lake City and Palm Coast, Florida.

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1031 crowd funding physical location

1031CF Portfolio 5 DST

1031CF Portfolio 5 DST is a 114-unit assisted living and memory care portfolio. The portfolio consists of two Facilities in Lake City and Palm Coast, Florida, with a combined occupancy of 87.8%.1 Currently, Florida has the highest percentage of senior citizens in the United States, with over 20% of the population being 65 years and older.2 This investment opportunity seeks to provide investors with monthly cash distributions and potential upside appreciation.3

Offering Overview

5.75%

Current Cash Flow

All Cash

Loan-to-Value

$25k

Minimum Investment

5-7 yrs

Estimated Hold Period4

An investment in 1031CF Portfolio 5 DST involves a substantial degree of risk and investors could lose some or all of their investment. There can be no assurance that any of these objectives will be met. The ability of the DST to make distributions to its investors will depend solely on the cash flows generated by the Facilities, which are not certain and can be affected by changes in occupancy, rents, management costs or other expenses. Any reduction in the actual or projected cash flows would negatively impact the returns received by an investor and/or the price for which the DST will be able to sell the Facilities. Current cash flow is calculated based on current occupancy and operating history of the Facilities at or immediately preceding the date of the Private Placement Memorandum (“PPM”). There can be no assurance that cash flows generated by the Facilities will be sufficient to provide investors in 1031CF Portfolio 5 DST with anticipated distributions.

Drone shot of the Gold Choice physical location

Established Operator

Gold Choice Senior Communities is a Deltona, Florida-based regional owner/operator of Assisted Living and Memory Care communities with four facilities all located in Florida. At Gold Coast communities, seniors have access to indoor and outdoor quality monitoring programs, a designated care team, and other lifestyle programs to ensure seniors are healthy and engaged. Residents at Gold Choice participate in life enrichment programs that encourage brain stimulation, physical activity, entertainment, and participation. Residents at Gold Choice are encouraged to spend quality time with their families, continue their interests, and participate in on-site activities. The communities’ memory care program offers a fully trained care team ready to support the unique needs of residents living with Alzheimer’s and other types of dementia.

woman in wheelchair and younger woman under a cherry blossom tree

Growing Healthcare Demand

The aging of the baby boom generation could fuel more than a 50 percent increase in the number of Americans ages 65 and older requiring nursing home care, to about 1.9 million in 2030 from 1.2 million in 2017.5 Demand for elder care will also be driven by a steep rise in the number of Americans living with Alzheimer’s disease, which could more than double by 2050 to 13.8 million, from 5.8 million today.6

Sunset

Beautiful Locations

Lake City, FL, nestled in Columbia County, is celebrated for its splendid climate, welcoming residents, and prime fishing opportunities. Serving as the county’s heart, this city lies within the expansive Jacksonville metropolitan zone. Among its cherished epithets are “The Gateway to Florida” and “The World’s Freshwater Fishing Capital.” Tracing its roots to the 19th century, Lake City was established in 1832 and became an official city in 1859. A hub of activity and history, Lake City offers a balanced blend of relaxation and excitement. Whether you’re seeking a peaceful retreat for your golden years or a lively setting for family life, Lake City welcomes you with open arms.

Incorporated in 1999, Palm Coast stands as one of Florida’s newest cities. This Floridian gem is cradled amidst 70 miles of both saltwater and freshwater canals, adjacent to the Intracoastal Waterway, and is merely a stone’s throw away from the mesmerizing vistas of the Atlantic Ocean beaches. In Palm Coast, quality of life is held in the highest regard. Its lively atmosphere seamlessly merges with the pristine natural surroundings. Dotted with ancient oaks, lofty pines, and native flora, the city’s parks and pathways radiate the majestic beauty intrinsic to the Florida landscape.

 

  1. As of July 2023 Appraisals.

  2. https://www.consumeraffairs.com/homeowners/elderly-population-by-state.html

  3. There can be no assurance that any of these objectives will be met. The ability of 1031CF Portfolio 5 DST to make distributions to its investors will depend solely on cash flows generated by the Facilities, which are not certain. Any reductions in the actual or projected cash flows from the Facilities would negatively impact the returns received by an investor in 1031CF Portfolio 5 DST and/or the price for which 1031CF Portfolio 5 DST will be able to sell the Facilities.

  4. Estimated hold periods are based on current cash flow and historical cap rates and the Trustee makes no guarantee that this estimate can be achieved.  The anticipated holding period of the Properties is subject to the sole discretion of the Signatory Trustee based on market conditions at the time; provided, however, that the Trust is required to hold the Properties for a minimum of one (1) year after the date of the admittance of the last Investor to the Trust. The Investors will not be entitled to approve a sale of the Properties.

  5. PRB analysis of data from the U.S. Census Bureau, American Community Survey and Population Projections. https://www.prb.org/resources/fact-sheet-aging-in-the-united-states/

  6. Alzheimer’s Association, 2019 Alzheimer’s Disease Facts and Figures (2019)

This material is designed for marketing purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities. The securities offered pursuant to the PPM have not been registered under the Securities Act or any applicable state securities laws. Neither the SEC nor any state regulatory authority has passed upon the adequacy or accuracy of the information contained herein or endorsed the merits of this offering. Information contained herein is subject to change and is qualified in its entirety by the PPM. Investment in 1031CF Portfolio 5 DST is limited to Accredited Investors (as such term is defined in Rule 501(a) of Regulation D).

 

An investment in 1031CF Portfolio 5 DST is subject to various risks, which risks are set forth more specifically in the PPM and include the following (capitalized terms used but not defined herein have the meanings set forth in the PPM):

Risks relating to the Facilities and the Properties:

  • Decreases in occupancy rates or the use of concessions to attract residents could adversely impact 1031CF Portfolio 5 DST’s ability to provide a return to investors;
  • Assisted living and memory care communities, such as the Facilities, are subject to significant government regulations, as well as established industry standards, customs and practices;
  • The Facilities will face competition to attract residents and to attract and retain qualified personnel; and
  • There are risks relating to the physical condition of the Improvements and the restrictions on 1031CF Portfolio 5 DST’s ability to make material modifications to the Improvements.

 

Real Estate Risks:

  • Because the acquisition of the Facilities and the Properties will be 1031CF Portfolio 5 DST’s only investment, the ability of 1031CF Portfolio 5 DST to provide returns to its investors will be entirely dependent on the performance of the Facilities;
  • Fluctuations in vacancy rates, residency rates and operating expenses (including utilities, taxes and insurance) could materially and adversely affect the performance of the Facilities;
  • Fluctuations in real estate financing could affect the ability of 1031CF Portfolio 5 DST to sell the Facilities and the Properties in the future;
  • An investment in 1031CF Portfolio 5 DST, the Facilities and the Properties is speculative and involves a substantial degree of risk;
  • There can be no assurance that cash flow or profits will be generated by the Facilities; and
  • Delays in the ultimate sale of the Facilities by 1031CF Portfolio 5 DST may negatively impact returns to investors.

 

Risks Relating to the Structure of 1031CF Portfolio 5 DST:

  • Investors will have very limited control over their investment in 1031CF Portfolio 5 DST, the Facilities and the Properties;
  • The trustees of 1031CF Portfolio 5 DST have limited fiduciary duties to investors; and
  • The Signatory Trustee, which has sole responsibility for the management of 1031CF Portfolio 5 DST, is wholly-owned by the Sponsor, which may lead to a conflict of interest. 

 

Risks Relating to Private Offering and Lack of Liquidity:

  • An Interest in 1031CF Portfolio 5 DST is not freely transferable and an investor must bear the economic risk of his, her or its investment for an indefinite period of time;
  • There will be no market for Interests in 1031CF Portfolio 5 DST and an investor cannot expect to be able to liquidate his, her or its investment in the case of an emergency; and
  • The offering of Interests in 1031CF Portfolio 5 DST will not be registered with, or reviewed by, the SEC or any state securities agency.
  • The Offering is sponsored by 1031 CF Properties, LLC, a limited liability company established to manage DSTs.  1031 CF Properties, LLC is controlled by 1031 Crowdfunding, LLC, which in turn is controlled by Edward Fernandez, who is also a Registered Representative of Capulent, LLC, a FINRA member broker-dealer. The Sponsor, the Depositor, the Master Tenant, the Signatory Trustee and their Affiliates will receive fees and compensation from (1) the Offering, (2) the operation of the Properties, and (3) managing the Trust, all as described in the Memorandum. Please refer to “Risk Factors”, “Compensation of the Sponsor and its Affiliates”, “Conflicts of Interest” and “Estimated Use of Proceeds” in the Memorandum for additional information.”

 

Risks Relating to the Management of the Facilities:

  • 1031CF Portfolio 5 DST will rely on Avista Senior Living, LLC (the “Property Manager”) to manage the operations of the Facilities;
  • 1031CF Portfolio 5 MT LLC (the “Master Tenant”), which will lease the Facilities and the Properties from 1031CF Portfolio 5 DST, have limited operating history; and
  • The Master Tenant is an Affiliate of the Sponsor and its principals. As such, this may lead to conflict of interests between their various roles as owners or officers of the Sponsor, the Depositor, the Master Tenant and the Signatory Trustee, including conflicts with investors regarding decisions related to the Master Leases and the Properties. 

 

Tax Risks: 

An investment in 1031CF Portfolio 5 DST entails substantial federal income tax risks, some of which are described in the PPM, including risks related to the treatment of the Interests for Internal Revenue Code Section 1031 (“Section 1031”) exchange purposes.

The foregoing is merely an overview of the risks inherent in an investment in 1031CF Portfolio 5 DST. The risks associated with an investment in 1031CF Portfolio 5 DST are more fully described in the “Risk Factors” section of the PPM. Prospective investors are advised to review the PPM in its entirety and consult with their own legal, tax, financial and business advisors prior to investing.

Offers and sales of Interests will be made on a “best efforts” basis by broker-dealers who are members of the Financial Industry Regulatory Authority, Inc., including Capulent LLC, a California limited liability company (the “Dealer-Manager”), which will act as the managing broker-dealer for the offering described herein. The Dealer-Manager will receive (i) Selling Commissions equal to five percent (5%) of the Offering Proceeds, (ii) a Placement Fee in an amount equal to one percent (1%) of the Offering Proceeds, (iii) a Wholesaling Fee in an amount equal to one percent (1%) of the Offering Proceeds, and (iv) a Due Diligence Allowance of up to one percent (1%) of the Offering Proceeds; provided, however, under no circumstances will the total Selling Expenses, which includes the Selling Commissions, Placement Fee, Wholesaling Fee, Due Diligence Allowance and Dealer-Manager Fee (described below), exceed nine percent (9%) of the gross equity proceeds of the Offering. The Dealer-Manager may reallow the Selling Commissions, Placement Fee, Wholesaling Fee and Due Diligence Allowance to other broker-dealers engaged by the Dealer-Manager for the Offering and to registered representatives of the Dealer-Manager, some of whom are principals and associates of 1031 Crowdfunding, which in turn controls the Sponsor and the Signatory Trustee. The Dealer-Manager will receive a Dealer-Manager Fee in an amount of up to one percent (1%) of the Offering Proceeds.

This material is designed for marketing purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities. The securities offered pursuant to the PPM have not been registered under the Securities Act or any applicable state securities laws. Neither the SEC nor any state regulatory authority has passed upon the adequacy or accuracy of the information contained herein or endorsed the merits of this offering. Information contained herein is subject to change and is qualified in its entirety by the PPM. Investment in 1031CF Portfolio 5 DST is limited to Accredited Investors (as such term is defined in Rule 501(a) of Regulation D).