DiversyFund Granito Los Angeles, CA...Granito, LLC JV Investment Vehicle Crowd Investors 7735...

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DiversyFund Granito Los Angeles, CA 18% Annualized Return 18-24 Mo. Investment Term Investor Priority Protection

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

7735GranitoDrive5

Renderings

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.

Property Location26

Prime CaliforniaReal Estate

Property Location27

Prime CaliforniaReal Estate

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.

7735GranitoDrive30

Renderings

Exterior Elevations31

East and South Elevations

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

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HALLWAY

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BATH 3

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Second Floor

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Floor Plan34

Roof

Site Plan35

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]