DiversyFund Granito Los Angeles, CA...Granito, LLC JV Investment Vehicle Crowd Investors 7735...
Transcript of DiversyFund Granito Los Angeles, CA...Granito, LLC JV Investment Vehicle Crowd Investors 7735...
DiversyFund Granito Los Angeles, CA
18% Annualized Return18-24 Mo. Investment TermInvestor Priority Protection
Overview2
Luxury Single Family BuildGrowth Investment
Single FamilyLUXURY HOME BUILD
Return PaidUPON SALE OF ASSET
18%*GROWTH TO INVESTORS
18-24 MonthTARGETED INVESTMENT TERM
Project Overview3
A+ LocationCutting Edge FeaturesAwe-Inspiring Aesthetic
“One of Los Angeles’ Most Anticipated Luxury Home Builds of 2017”
• Investment in Luxury Single Family
Ground-Up Design+Build
• 18% Return Per Year to Investors
• Premier Hollywood Hills Location
• Breath-Taking Views of Los Angeles
• 33%ProfitCushion(67%ARV)
• Design-Builder Consistently Produces
100%GrossProfitCushion
7735 Granito DriveLos Angeles, California
Investment Overview4
Targeting High ReturnsPriority ProtectionShort Term Investment
PROJECT
INVESTMENT
Project PhaseAsset TypePlanned BuildingLocationAcreageEntitlementsBuilding Permit
ConstructionLuxury Single Family
14,350 SF HomeHollywood Hills, Los Angeles, CA
1.79AC/77,972SFFully Entitled
Under Final Review
7735 Granito DriveLos Angeles, California
Investor Growth Equity18% Return PaidInvestment TermInvestor Priority ProtectionMin. Investment AmountInvestor Exit
18%* Per YearAccrues Until Exit
Est. 18-24 MonthsYes
$10,000Upon Sale of Asset
FINISHED VALUE@ $2,800 / SF
Investment Protection6
High Profit Margin Market Drop Risk MitigationInvestor Principal Preserved
InvestorPrincipal
Construction Loan& Deferred
Land Payment
33% Equity Cushion
67%
51%
100%
SIGNIFICANT RISK MITIGATION
• DuetoLargeProfitMargin:
Even if market drops 33% below the projected sales price, investor principal would remain preserved.
The Roman James Advantage7
Consistient Premium ExitsA-List Clientele
• SUPPLY CONSTRAINT: Severe Supply Constraint for Los Angeles Luxury Above $30M+
- High-End Buyers Are Market Immune Due to Established Wealth
• PREMIUM EXIT PRICE: RomanJames(RJDB)ProductConsistentlyReceivesPremiumPricing
- RJDB Homes Come Fully Furnished with Furniture and Art
- This Furnishing Strategy Obtains Premium Sales Prices
• RECORD EXITS: Last 2 RJDB Properties Have Set Price Per SF Records in Beverly Hills
-SoldHillcrestFor$70MinBiddingWarBetweenJay-Z/BeyonceandMinecraftFounder
-RJDBistheDesign-BuilderBehindthe$250Million924BelAirRoadListing
• A-LIST CLIENTS: BrianWilson(SFGiants),TylerPerry(FilmMogul),JoshAltman(Celeb.Realtor)
• The Granito Drive Investment Will Leverage Roman James’ Outstanding Track Record
Investment Overview8
Mitigated RiskGrowth EquityShort Term Investment
Pre-ConstructionEntitlement Construction Sale of Asset
Project PhaseCurrent Phase
Project Architect + Builder9
Highly Sought AfterStunning ModernArchitectural Design
Roman James Design Build is one of the most sought after Joint Venture Building Partners for Residential Single Family Luxury Custom Home Development in California.
Considered the ultimate tri-fecta in the industry, Roman personally designs and oversees all architecture,floorplans,exteriorelevations,permitsand engineering, interior design, pool and landscape AVandisalsoistheManagingPartner/GeneralContractor for all projects under one roof.
Project Architect + Builder10
Prominent DesignerInternational Recognition
Included in the impressive portfolio of Roman James Design Build are several estates, such as the famed Fischer Residence of Coto De Caza along with what is commonly referred to as the “Best Home” in the Strand at Headlands in Dana Point. It is in this private ocean front development, where Raw Land Home Sites sold for up to Eighteen Million Dollars ($18,000,000.00)andsomeofthemostprominentarchitects in the world have showcased their talents. Roman has also consulted on several incredible projects around the world as well as within the United States with projects including various mega casinos in Las Vegas, NV.
Project Architect + Builder11
Record-Setting High End Luxury Homes
Comingoffofanimpressive2014whereRomanJamesDesign Build was tasked to take the lead to design and build1181NHillcrestRdinBeverlyHills,CAand9380Sierra Mar in Hollywood Hills famed Bird Streets of Los Angeles, CA. Both homes built on speculation sold in 2014 in excess of $3,150 per square foot smashing not only the highest per square foot sales record in Los Angeles but also the highest recorded sales in the historyofBeverlyHills,70Million($70,000,000.00)USDollars.
Project Architect + Builder12
California’s MostCoveted Real Estate
Both Hillcrest and Sierra Mar homes spent very little time on the international stage before being snatched up by European buyers Markus Peerson of “Minecraft” fame and Reinout Oerlemans who created the TV show “The Biggest Loser”. But not before catching the eye of many Billionaires andAlisterssuchasJayZandBeyoncewhoreportedlycamewithstrongoffers.NootherArchitectorBuilderhas accomplished such a feat in any year. Roman James set both records in the same year setting an unbelievable bar and securing Roman James as one of the highest paid Designer/Buildersintheworld.
Currentprojectstobedeliveredinlate2015,2016and2017includesomeofthemostexcitingcontemporaryhomes on the best view lots in Los Angeles. Roman James Design Build’s portfolio will continue to inspire and excite the luxury building industry of California’s most coveted real estate.
Roman James Comparables13
Record-SettingRecently Developed
Address 9380SierraMar,LosAngeles,CA90069Neighborhood Beverly Hills
Bedrooms 5Bathrooms 6
Square Footage 6,000
Price Per Sq. Ft. $3,167
Sale Price $19,000,000
Roman James Comparables14
Record-SettingRecently Developed
Address 1181N.HillcrestRd,BeverlyHills,CA90210Neighborhood Beverly Hills
Bedrooms 8Bathrooms 15
Square Footage 22,500
Price Per Sq. Ft. $3,111
Sale Price $70,000,000
Sales Comparables15
Healthy Price BufferProtecting Investor Principal
Address 1201 Laurel Way 300 Delfern Dr. 1510 Loma Vista 1520 Gilcrest Dr.BeverlyHills,CA90210 LosAngeles,CA90077 BeverlyHills,CA90210 BeverlyHills,CA90210
Closing Date 1/06/2017 4/21/2017 1/20/2017 3/31/2017Neighborhood Beverly Hills Holmby Hills Beverly Hills Beverly Hills
Built 2014 1938 1960 1996New Construction Yes No No No
Bedrooms 6 11 5 6Bathrooms 10 14 6 7
Architectural Style Contemporary Georgian Revival Modern ContemporarySquare Footage 11,200 14,905 3,364 13,858
Price Per Sq. Ft. $2,946 $2,737 $5,351 $2,778
Sale Price $33,000,000 $40,800,000 $18,000,000 $38,500,000
Sales Comparables16
Healthy Price BufferProtecting Investor Principal
Address 1187N.HillcrestRd. 355 S. Mapleton Dr. 410 Dabney Lane 911TioneRd.BeverlyHills,CA90210 LosAngeles,CA90024 BeverlyHills,CA90210 LosAngeles,CA90077
Closing Date 2/09/2017 4/21/2017 4/26/2017 1/03/2017Neighborhood Beverly Hills Holmby Hills Beverly Hills Bel Air
Built 1970 1939 1958 1961New Construction No No No No
Bedrooms 25 6 5 15Bathrooms 10 5 6.5 12
Architectural Style Moorish Colonial Mid-Century ContemporarySquare Footage 18,000 6,055 6,200 4.008
Price Per Sq. Ft. $3,611 $2,936 $2,539 $5,204
Sale Price $65,000,000 $18,800,000 $16,300,000 $25,700,000
Neighboring Property17
New MarketComparable$3,500 / SF
Sale of Neighboring Property, 1 ElectraAnnounced on September 20, 2017• $35.7MillionSalesPrice• 10,000 SF Home • Price/SF:$3,570• Buyer is Doing a Tear-Down
At this Current Market Price:• InvestorIRR:41%• InvestorCashMultiple:2X
Investor Return Scenarios: High to Low Cases
Exit Price Price/SFExit Price Relative to
Current Market Investor IRR Investor ROIInvestor Cash
MultipleLow Case $33,005,000 $2,300 -34% 21% 46% 1.46XMid Case $40,180,000 $2,800 -20% 30% 68% 1.68XHigh Case $50,225,000 $3,500 Based on current market 41% 99% 1.99X
*PleaseseeProjectionsDisclaimeronthefinalpageofthispackage
Financial Overview18
ProjectSources & Uses
PROFORMA USESRevenue 40,180,000$ LandLessBrokerFee 4.5% (1,808,100) PropertyAcquisition $7,200,000NetRevenue 38,371,900ConstructionDebtPayoff (18,000,000) ConstructionCostsToComplete
ConstructionCosts 11,405,000GrossProfit 20,371,900 RomanJamesDesign+Build+GCFee 1,575,000LandOwnerDeferredPayment (2,500,000) SoftCosts 1,145,000PreferredEquityPrincipalPayoff (6,254,427) Furnishings 650,000PreferredEquityInterest 18% (2,251,594) Development 600,000TotalPayouttoPreferredEquityInvestors (8,506,021) FinancingCostsRepaymentofSponsorEquity (1,000,000) ConstructionLoanInterest 1,869,427SponsorEquityInterest 18% (360,000) LoanOriginationFees 3.00% 540,000NetProfit 8,005,879 Title,Escrow,Legal&FundControlFees 1.50% 270,000
OfferingCosts(Legal,Compliance,etc.) 75,000RomanJamesProfitSplit 10% 800,588 TOTALCOSTS $25,254,427LandOwnerProfitSplit 45% 3,602,646Developer(DiversyFund)ProfitSplit 45% 3,602,646
SOURCESREVENUEASSUMPTIONS ConstructionLoan $18,000,000Sq.Ft. 14,350 PreferredEquityPhase1 $6,254,427Priceperfoot $2,800 SponsorEquity $1,000,000ExitSalesPrice $40,180,000
*PleaseseeProjectionsDisclaimeronthefinalpageofthispackage
Break Even Analysis19
Significant Cushion in PricingProtecting Investor Principal
Exit price would need to drop over 33% from the
targetsalespriceof$2,800/SFdownto$1,865/SF
before Investors would lose any principal.
Pro-Forma Sales Price of $40.1Misbasedoffof
$2,800/SF from recent luxury market comparables
and a competing, nearly completed 10,000 SF luxury
property two streets over that has turned down two
offersfor$2,800/SF.
Roman James projects have sold for $3,150/SF
duetofurnishing/designpremium,whichwould
represent a Pro-Forma Sales Price of $45.2M
HealthyPriceBuffer
Investment Structure20
Crowdfunding Real EstateOwnership Protection
DiversyFund Granito, LLC
JV Investment Vehicle
Crowd Investors
Property7735 GranitoLos Angeles, CA
• Investors Own Shares in the DiversyFund Investment Vehicle
• Owns the Property
• Building a Multi-Million Dollar Luxury Asset
What Am I Investing In?
InvestorFundsAreUsedTo:
Granito NK, LLC
JointVenture
- Acquire Prime Hollywood Hills Land - Close Construction Loan
Investment Overview21
Growth EquityExplained
18% GROWTH INVESTMENTGrowth Investment?
How Does it Work?
• Our 18% Growth Equity with Priority Protection combines the BEST OF BOTH debtandequitycharacteristics:Debt-LikeProtection; Equity-Like Returns.
• Growth Equity pays out a “deferred” return at the end of the investment period, similar to accrued interest so you receive one larger payment at the end of the investment term when the Property sells.
Advantage• Because your interest accrues during the
investment term, we can pay a higher annualized return to you.
100K Investment Example• Today:Invest100K• During2YrInvestmentTerm:18%Interest
Accrues – No Payments During• Endof2YrsWhenPropertySells:You
areRepaidYour100Kplus36KinAccruedInterest(18%for2Yrs)
Is it Secured Against the Property?• Yes. For each property, we form a new
single asset LLC and our 18% Growth Investors receive direct ownership in that LLC, which in turn owns the actual real estate asset.
When Do I Start Earning Interest?• An investor’s 18% growth equity starts
accruing the day that the investor’s funds clearcompliance(typically10days).
Priority Protection22
Targeting High Returns Mitigated Investor Risk
*Our JV Partner sold the Land to the JV and agreed to defer 2.5M of the Land Purchase PriceUntilthePropertySellsin2Years(SeeFinancialOverviewonnextpage)
DeveloperProfit
Capital +18%/Yr
Construction Loan& Deferred
Land Payment*
DeveloperEquity/ProfitsPaid LAST
DiversyFund InvestorsPaid 2ND
Construction Debt andDeferred Land PaymentPaid 1ST
GIVING INVESTORS PRIORITY IN PAY OUTCAPITAL STACK
• Upon sale of the Property, the proceeds from the Sale will be distributed in the order noted at right.
• DiversyFund Investors are paid back their capital plus their 18% per year BEFORE the Developer receives any dollars from the Sale.
• This “Priority Protection” helps to PROTECT our DiversyFund Investors by mitigating their risk in the event the Sale price is less than anticipated.
Market Summary23
Los Angeles, CA2016 Luxury SnapshotStrong Performance Indicators
YoY Price Growth:
Avg. Days on Market:
Population:
Population Growth:
21.5%
97
3,971,883
0.94%
Los Angeles Luxury Single Family4thQuarter2016Trends
ReportMethodology:http://www.millersamuel.com/research-reports/methodology
Los Angeles Market24
Increased Sales for 2017Q1 Outpaces All of Last Year
HighEndLuxuryHomeSalesJanuary-May2017
2016 2017Q1 Pending$5M+ 187 202 83$10M+ 58 73 20$20M+ 8 13 -$30M+ 1 11 -
Price Growth:
Avg. Days on Market:
Pocket Listings
16.9%
67
32.9%
Location Highlights25
Metro Los AngelesLarge LotNear World-Class Amenities
• Property is perched above Nichols Canyon in Hollywood Hills, one of the world’s top luxury real estate markets.
• The lot is in a premier location, close to many of the famous Hollywood and Beverly Hills retail, restaurants, pubs, museums, cultural centers, theatres, wine bars and eateries.
• The Hollywood Hills location is a highly exclusive neighborhood, home to many celebrities and CEOs.
• Location boasts highly sought after expansive views of greater Los Angeles and beyond.
• LowDensity:3,063peoplepersquaremile,amongthelowestdensities for the city of Los Angeles.
• HighEarners:2,349householdswithincomesof$125,000andup.
Development Company28
Strong Track RecordMarket ExpertiseInvestor Loyalty
DiversyFund is a leading real estate crowdfunding investmentplatform that has funded over $100 million in real estateinvestments. Unlike competing sites, Diversyfund develops all of its projects itself for maximum quality control for its investors. The Company focuses exclusively on California real estate inprimary markets such as Los Angeles, San Francisco, San Diegoand Orange County.
Over 65% of DiversyFund’s investors reinvest with the firm.Traditionally, DiversyFund has focused on multi-million dollarresidential investments in California’s gateway cities.DiversyFund is now offering commercial real estate investments such as multi-family and mixed use.
CALIFORNIAINVESTMENT FOCUS
65% REINVESTRATE AMONG INVESTORS
$100 MILLIONIN REAL ESTATE TRANSACTIONS
TheDifference29
In-House DevelopmentNo Fees for InvestorsMarket Experience
WE ACT AS THE DEVELOPER NO SELLING COMMISSION. NO SERVICING FEES
TRANSPARENCY AND MONTHLY REPORTING
WE ONLY INVEST IN MARKETS WE KNOW
• Rather than rely on third party developers, we take full accountability and develop the project ourselves.
• We see the project through from start to finish.
• We own an in-house Construction Division to maximize quality control and cost oversight.
• By doing the development in-house, we are paid the developer fee at the project level, which means we don’t need to charge fees on your investment.
• You keep 100% of your investment return.
• Our Investors receive detailed monthly constructionandfinancialupdates.
• We post monthly construction photos on social media so you can see your capital at work as the project gets built.
• Other sites invest in markets across the nation, relying on third party market reports.
• We only invest in markets where we have personal,first-handexpertise.
Floor Plan32
First Floor
UP
DINING
BOTTOMOF
GARAGE
RECREATIONALROOM
BAR
BUTLER'SPANTRY
LIVING
PANTRY
DOWNSTAIRSMASTERCLOSET
THEATRE
MECHANICAL
DISPLAY
BEDROOM
POWDER
MECH
ELEVATOR
FORMALLIVING
UP
KITCHEN
BEDROOM
JACUZZI
MECH
LAUNDRY
UP
POOL DECK
DECKDECK
FIRST FLOOR PLAN 1Scale: 1/8"=1'-0"
NORTH ARROW
N
Pro
jec
t:
8383 WILSHIRE BLVD, 8TH FLOORBEVERLY HILLS, CA 90211B-953964 310-295-2281
JOB • •••
DWG OF:
Date - Publish:
SHEET:
Date
201505-7735
Reason
DA
TER
EV.
BYFo
rR
EASO
N
7735
W G
RA
NIT
O D
RIV
ELo
s A
ng
ele
s, C
alif
orn
ia,
9004
6
DOWN
FOYER
MASTER BED
ELEVATOR
DRIVEWAY
GARAGE
MASTERBATH
CLOSET
BED 1 BED 2 BED 3
HALLWAY
BATH 1 BATH 2
BATH 3
DOWN
SECOND FLOOR PLAN 1Scale: 1/8"=1'-0"
NORTH ARROW
N
Pro
jec
t:
8383 WILSHIRE BLVD, 8TH FLOORBEVERLY HILLS, CA 90211B-953964 310-295-2281
JOB • •••
DWG OF:
Date - Publish:
SHEET:
Date
201505-7735
Reason
DA
TER
EV.
BYFo
rR
EASO
N
7735
W G
RA
NIT
O D
RIV
ELo
s A
ng
ele
s, C
alif
orn
ia,
9004
6
Floor Plan33
Second Floor
DRIVEWAY
ROOF PLAN 1Scale: 1/8"=1'-0"
NORTH ARROW
N
Pro
jec
t:
8383 WILSHIRE BLVD, 8TH FLOORBEVERLY HILLS, CA 90211B-953964 310-295-2281
JOB • •••
DWG OF:
Date - Publish:
SHEET:
Date
201505-7735
Reason
DA
TER
EV.
BYFo
rR
EASO
N
7735
W G
RA
NIT
O D
RIV
ELo
s A
ng
ele
s, C
alif
orn
ia,
9004
6
Floor Plan34
Roof
Development Team36
Real Estate ExpertiseWall Street Experience
Mr. Cecilio is a founder at DiversyFund, Inc. and acting CEO. Prior to thelaunchofDiversyFund,Inc.in2016,Mr.Ceciliowasthefounderand CEO of a real estate private money lender platform, California Coastal Funding Group, Inc., for 11 years. Mr. Cecilio has worked in the real estate industry for nearly 20 years. Over the course of hiscareer,Mr.Ceciliohasparticipatedinthedevelopmentand/orunderwriting of over 1,000 single family residences in California as either a joint venture equity partner, lender or sponsor.
Since 1997, Mr. Cecilio has financed nearly $500 million of realestate assets, having raised over $100 million in debt or equity for real estate transactions in the last three years, and has developed andmanagedover$25millionofresidentialproperty(renovationsandground-up).Mr.Cecilioalsomanagesarealestatediversifiedbridge loan fund that pre-funds many of the transactions later sold on the DiversyFund investor platform and has averaged double-digitreturns(nettoinvestors)overthelastfouryears.Mr.CecilioisanavidfitnesscompetitorandisagraduateoftheUniversityofColorado at Boulder.
Mr. Lewis is a co-founder at DiversyFund, Inc. and the Chief Investment Officer.Hewas formerly theheadof therealestateprivateequitydivisionofJFCapital,arealestatedevelopmentfirmbasedoutofSaltLake City, Utah, where he oversaw capital raising, deal structuring and development work for Class A multi-family projects and master-planned residential communities.
Prior to joining JF Capital in 2014, Mr. Lewis worked for nearly ten years on Wall Street as both an investment banker and a corporate lawyer, most recently working as a Managing Director of the Investment BankingDivisionofBrillSecuritieswhereMr.Lewisprovidedfinancialadvisory and capital raising services for high-growth companies and real estate sponsors. Prior to joining Brill Securities in 2010, Mr. Lewis practiced as a corporate attorney at Davis Polk & Wardwell, a Tier 1 ranked Wall Street law firm. His practice included IPO’s,mergers and acquisitions, and commercial real estate, including real estate development work for an $11 billion private equity fund. Over his career, Mr. Lewis has worked on transactions totaling over $41 billion. Mr. Lewis received a BA from Brigham Young University and a JD from Columbia Law School.
CraigCecilio,ChiefExecutiveOfficer&Founder AlanLewis,ChiefInvestmentOfficer&Co-Founder
Disclaimer37
THIS PRESENTATION doesnotconstituteanoffertobuyorsellsecurities. Prospectiveinvestorsshouldnotrelyinwholeorinpartonthispresentation.Anofferingcanonlybemadepursuanttothedeliveryofaprivateplacementmemorandum and receipt of investment related documentation.
Theoffertoinvestinthesecuritiesandthesalethereofhasnotbeenregisteredunderthesecuritiesact,oranystatesecuritiesact.Thesecuritiesarebeingofferedandsold in relianceonexemptions fromtheregistrationrequirementsofsuchacts.Thesecuritiesarebeingofferedandsoldonly tobonafideresidentsofstates inwhichsuchexemption isavailable,whocan meet certain requirements, including net worth and income requirements, and who purchase the securities without a view to distribution or resale. All statements contained herein may constitute “forward-looking statements”. Forward-looking statementsaregenerallyidentifiablebytheuseofthewords“may”,“will”,“should”,“plan”,“expect”,“anticipate”,“estimate”,“believe”, “intend”, “project”, “goal” or “target” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are based on current expectations and involve a number of known and unknown risks, uncertainties and other factors, many of which are beyond the Issuer’s control, that could cause the project’s or its actual results, levelsofactivity,performanceorachievements tobemateriallydifferent fromany future results, levelsofactivity, performance or achievements expressed or implied by such forward-looking statements. No representation is made or assurance given that such statements or views are correct or that the objectives of the Issuer will be achieved. You should not place undue reliance on forward-looking statements and no responsibility is accepted by the Issuer or any of its directors, officers,employees,agentsoradvisersoranyotherperson in respect thereof.The Issuerdoesnotundertake topubliclyupdate or revise any forward-looking statements that may be made herein, whether as a result of new information, future events or otherwise.
Thematerialcontainedinthisdocument isconfidential, furnishedsolelyforthepurposeofconsidering investment inthepropertydescribedhereinandisnottobecopiedand/orusedforanypurposeormadeavailabletoanyotherpersonwithoutthewrittenconsentoftheIssuer.Inacceptingthis,therecipientagreestokeepallmaterialcontainedhereinconfidential.
*Projections Disclaimer: All projections were made based on certain assumptions regarding revenues and costs of the project, among other things, which may not equate to actual results. Although the Manager believes these assumptions to bereasonable,actualresultswilldifferfromtheManager’sassumptionsandrelatedprojectionsandmaydiffermaterially.Aprospectiveinvestor,togetherwithhisorherfinancialandlegaladvisers,shouldindependentlyevaluatethereasonablenessofanyassumptionsorprojectionsandshouldnotplaceundueorsignificantweightonanyprojectionsbytheManageroranyother persons. The securities for this Project are not guaranteed to repay principal or any return and an investor could lose someorallofitsinvestment(seeprivateplacementmemorandumfordetails).
One America Plaza600 W Broadway, Suite 1420San Diego, California 92101
Investor Relations TeamPhone: 858.866.0214E-mail: [email protected]