How you make money
Equity growth
Build 95 townhomes, sell them out over a two-year cycle
Capital funds land, horizontal work, and vertical construction of five townhome types. Returns come from selling all 95 units into a supply-constrained market, then retiring debt and distributing proceeds.
1.59x
Equity multiple
20%
Projected IRR
24 mo
Hold period
Sale
Exit strategy
Cash flow
8% LP-first preferred return accrued on invested capital
The waterfall returns LP capital in full, then pays an 8% cumulative preferred return, then a 55/45 LP-favored split to the first hurdle before the GP earns meaningful promote.
Quarterly
Distributions
How the deal works
Basalt Creek is a 95-unit for-sale townhome development on 9.3 acres in Tualatin, Oregon. The sponsor self-performs land development and vertical construction, eliminating a markup layer. Construction is phased at two townhomes per week (an average of eight per month) with a roughly five-month build cycle, sold concurrently. The waterfall returns LP capital first, then an 8% preferred, then a 55/45 LP-favored split.
Tualatin prices rose 13.1% last year with homes selling in 22 days
The submarket has robust population growth, median household income of $110,000 to $125,000, and chronically limited new inventory. Five townhome product types span price-sensitive and move-up buyers to broaden absorption.
Self-performing builder eliminates a markup layer on construction
Summit 7 runs its own land development, owns the excavation, and builds with in-house crews through Summit 7 Construction, self-performing since 2015. Vertical construction is fixed at $250 per square foot with a 5% contingency and a fully funded interest and fee reserve.
LP capital returned in full before the GP earns any promote
Capital flows in strict order: full return of LP equity, then an 8% cumulative preferred return, then a 55/45 LP-favored split to the first 20% IRR hurdle. Beyond that hurdle, the split flips to 45/55 GP-favored -- never a flat 50/50. The GP co-invests alongside LPs.
Sell out all 95 units by mid-2028, retire debt, distribute proceeds
Land closes July 2026 with the AD&C loan funded and GP equity contributed. Lot development runs through April 2027, vertical starts phase in alongside an active sales program, and final sellout is targeted for June 2028 with debt fully retired.
About the sponsor
$500M+
under management
30+ yrs
in Pacific NW real estate
Self-performed
land dev + construction
A vertically integrated Pacific Northwest residential land developer and homebuilder.
Ken Allen
Founding Partner
30+ years in real estate acquisition, development, and homebuilding. Leads Summit 7's investor relations.
Kathy Heitman-Allen
Founding Member
Co-founded Summit 7 Capital. Partner in the firm's development and investment strategy.
What you should know
What should I weigh?+
- Returns depend on selling 95 units at projected prices; slower absorption or price softening would reduce proceeds.
- Development carries construction, permitting, and cost-overrun risk despite fixed PSF pricing and contingencies.
- This is an illiquid investment with no distributions until capital is returned at sellout.
- Projected IRR is a target, not a guarantee, and all figures are subject to the offering documents.
What is the project timeline?+
Land close in July 2026, lot development through April 2027, phased vertical construction at two units per week (an average of eight units per month) with a roughly five-month build cycle, concurrent sales, and final sellout targeted for June 2028.
How is the sponsor's interest aligned?+
The GP co-invests its own capital alongside LPs, and the waterfall returns LP capital and the 8% preferred before the GP earns any meaningful promote.
What does the builder control directly?+
Summit 7 is vertically integrated, self-performing land development, excavation, and vertical construction in-house since 2015, with direct control over schedule, quality, and cost.
Are these investments IRA/401(k) eligible?+
Yes — Basalt Creek Living is eligible for investment through an IRA or 401(k).
How often are distributions paid?+
Distributions are paid quarterly, after project revenue has been realized.
