Pintar Investment Company
Pintar Investment Company ("PIC"), based in San Juan Capistrano, California, is a fully integrated residential real estate firm. PIC has expertise in real estate investment management, acquisition, disposition, development and redevelopment of both residential and commercial projects throughout the United States. Since its inception, PIC has invested over $1 billion in single family residential homes.
PIC's executive team has over 50 years of combined real estate development and investment experience and has produced more than $10 billion of real estate transactional volume since 1993.
Prior to founding Pintar, Jeff was the National Retail Partner and member of the Investment Committee at Panattoni Development Company Inc. During Jeff's tenure at Panattoni, the company developed and delivered over 40 million square feet of new commercial projects valued in excess of $5 billion.
Jeff began his real estate career with CB Richard Ellis and became one of the nation's leading revenue producers for the firm receiving Circle of Excellence awards in 1996 - 2003. In 1999 Jeff moved to Australia where he sat on the Asia Pacific Senior Leadership Board which oversaw the regions 20 offices and Retail Business Line.
John is responsible for all operational aspects of the organization, acquisitions, disposition, and management of funds. Before joining Pintar in 2009, John was president and owner of JT Investment Properties in Los Angeles, specializing in the acquisition and disposition of trustee sale single family residences throughout Southern California.
Prior to joining J.T. Investment Properties, John was a Vice President at DC Commercial in Century City for five years, specializing in the acquisition and sale of retail and office properties in Los Angeles County.
Founded in 2009, Pintar Investment Company is an experienced private real estate investment company which has acquired over 6,000 single family residential homes at a total cost of over $1 billion.
In this transaction, RealtyMogul.com investors will invest in Realty Mogul 44, LLC. Realty Mogul 44, LLC will subsequently invest directly into the PICR Fund III, L.P. (the "Fund"). The Fund is open-ended and plans to acquire existing single family residential homes ("SFRHs") under both "rent and hold" and "fix and flip" strategies.
RM investors will invest into the Fund with an anticipated hold period of approximately two and a half (2.5) years. In this transaction, Realty Mogul investors will invest in Realty Mogul 44, LLC. Realty Mogul 44, LLC will invest in a new class of interests in the Fund.
The Fund will be "semi-blind," as it currently holds SFRH assets but is also expected to purchase new SFRH assets during the life of the RM investment in the Fund. However, Realty Mogul 44, LLC will have no input on future acquisitions or dispositions made by the Fund. The photos above are of representative of SFRHs which have been acquired by the Fund and are intended to serve as examples of the types of SFRHs the Fund may acquire during the hold period.
PICR Fund III, L.P.
PICR Fund III, L.P. (the "Fund") was founded effective July 1, 2015, and is a continuation of Pintar Investment Company’s ("Sponsor") two previously existing funds, Pintar Investment Company Residential, L.P. ("PICR") and Dhandho Residential Rental Fund ("Dhandho"), which date back to 2010 and 2012, respectively.
PICR, which was founded in 2010, was the Sponsor's first investment vehicle for which they acted as the principal (as opposed to acquiring homes for institutional clients). PICR’s focus was primarily on "fix and flip" SFRHs. Examples of SFRHs bought and sold under the "fix and flip" strategy by the Fund can be seen below.
- Distressed short sale purchase of a 1978 vintage, fire-damaged, four bedroom, two bathroom home in San Diego
- Remodeled all bathrooms in the home and replaced all window and appliances, while repairing any structural fire damage
- Master bedroom was reconfigured to maximize space and increase ceiling height
- Painted and landscaped the property and refinished the pool in the backyard
- Sponsor completed the renovation for approximately $36,000, but estimates retail cost for the repairs to be in excess of $70,000
- Renovation took seven weeks to complete and the property was sold within 161 days of its purchase for a $59,000 gross profit and 9.2% unlevered gross return
- Probate sale purchase of a 1978 vintage, three bedroom, two bathroom San Diego home which had fallen into complete disrepair with serious foundational and structural issues
- Added a new master suite and completely remodeled the kitchen and living room areas
- Installed larger windows in the rear of the home to accentuate the mountain view from the living room, dining room and kitchen
- Replaced the roof and several structural supports of the home
- Sponsor completed renovation for less than $49,000, but estimates retail cost for the repairs to be in excess of $100,000
- Renovation took five weeks to complete and the property was sold within 150 days of its purchase for a $49,000 gross profit and 10.91% unlevered gross return
Note: The above case studies were provided to Realty Mogul by the General Partner of the Fund, and Realty Mogul has not confirmed the information herein.
Dhandho, which was founded in 2012, was the Sponsor’s second investment vehicle for which they acted as the principal. Dhandho’s focus is on "buy and hold" SFRHs. The historical returns for both PICR and Dhandho may be found in each of the Fund's last three quarterly investor letters, which are included on the right hand side of the Financials tab. Please note that returns from these investor letters are not net of all fees due to investors in Realty Mogul 44, LLC.
Merging these two existing funds together into the Fund has generated current cash flow to the Fund's existing investors. Investors in Realty Mogul 44, LLC could benefit from receiving current cash flow as the majority of existing equity within the fund is already placed. This is anticipated to increase cash yields during the typically low-yield investment period of the Fund.
The investment focus of the Fund is to maintain and grow both Dhandho and PICR funds within PICR Fund III. While the Fund's portfolio is currently fairly balanced between the two investment strategies (in terms of dollars invested), should SFRH values trend downwards during the investment lifetime then assets which were originally bought under the "fix and flip" strategy may instead be held for cash flow in the "buy and hold" strategy until such time as market conditions allow for more favorable disposition of the assets.
RealtyMogul.com ("RM") has worked with Pintar Investment Company ("PIC" or "Sponsor") to offer a new class of interests within Pintar Residential Fund III (the "Fund" or "Pintar Fund"), a national single family residential home ("SFRH") fund. The investment objective is to acquire, add value, and either hold the homes for long-term rental income cash flow, or sell them for current appreciation realization.
This transaction presents the opportunity to invest in SFRHs with a Sponsor who has previously invested over $1 billion in over 6,000 SFRHs on behalf of institutional clients and private investors. The Sponsor is personally invested in the current fund and RM investors are being offered a new class of interests that will enable investing a minimum of $25,000 (the minimum in the Fund today for a non-RM investor is $500,000) and on different terms. For further detail on the new class of interests refer to the FAQ section of this offering.
A brief summary of the Fund's approximate portfolio allocations as of March 9, 2016 is as follows:
|% of Total
|% of Value /
# of SFRHs
(Buy and Hold)
|% of Value /
# of SFRHs
(Fix and Flip)
|Greater Southern CA
|49%||34% / 105||15% / 15||$270,000|
|Las Vegas area||23%||19% / 68||4% / 10||$195,000|
|San Diego area||27%||0% / 0||27% / 43||$416,000|
|Georgia||1%||1% / 9||0% / 0||$79,000|
|Totals||100%||57% / 182||43% / 68||$265,700|
Not applicable for SFRHs across multiple markets.
The Fund currently owns SFRHs throughout Southern CA, as well as in Las Vegas, NV and Georgia, and is anticipated to look to continue acquiring SFRHs in the Western United States. Additionally, the Sponsor is not geographically limited in which markets it may acquire properties and has stated that it could potentially consider expanding its geographic focus in the future.
In Southern California and Nevada, the Fund pursues both "buy and hold" and "fix and flip" strategies. The Sponsor views the economics of these markets as currently favorable to both strategies. The assets which the Fund owns in GA are all held in the "buy and hold" strategy.
The above presentation is based upon information supplied by the Sponsor. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 44, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
Below is the Fund's approximate balance sheet as of March 9, 2016:
|Cash and Current Assets||$1.1 million|
|"Fix and Flip" Non-Current Assets||$25.1 million|
|"Rent and Hold" Non-Current Assets||$32.9 million|
|Total Assets||$59.1 million|
|Equity and Liabilities|
|Existing Realty Mogul 44, LLC Equity||$1.6 million|
|Existing Sponsor Equity||$8.0 million|
|Existing Other Limited Partner Equity||$18.1 million|
|Existing Liabilities||$31.4 million|
|Total Equity and Liabilities||$59.1 million|
For "buy and hold" assets, the debt financing terms are as follows:
- Rate: 3.75%
- Amortization: None - Full-term interest only
- Leverage Limit: 50% of appraised value, on a property by property basis
- Personal Guarantee: Jeff Pintar, CEO of the Fund
For "fix and flip" assets, the debt financing terms are as follows:
- Rate: 5.50%
- Amortization: None - Full-term interest only
- Leverage Limit: 60% of purchase price, on a property by property basis
- Personal Guarantee: Jeff Pintar, CEO of the Fund
Realty Mogul 63, LLC contributions are projected to earn a 6.0% cumulative, annualized preferred return. On a quarterly basis, after investors Realty Mogul 63, LLC and other investors in the fund receive a 6.0% cumulative, annualized preferred return, the general partner of the Fund is paid an asset management fee equivalent to 0.50% of portfolio value, annualized. Remaining proceeds are anticipated to then be split 70% to Realty Mogul 63, LLC and other investors in the Fund and 30% to the Sponsor. It is also important to note that the manager of Realty Mogul 63, LLC is expected to receive a portion of the general partner of the Fund's split of distributions, and investors in Realty Mogul 63, LLC will be subject to additional fees other than those charged by the Fund. For a full explanation of fees payable by investors in Realty Mogul 63, LLC, please refer to the Investor Document Package attached to this offering.
The general partner of the Fund is expected to make distributions to Realty Mogul 63, LLC as follows:
Order of Distributions to Realty Mogul 63, LLC (Operating Income)
- First, to investors in the Fund (including Realty Mogul 63, LLC), until investors have received a six percent (6.0%) cumulative, preferred annualized return,
- Second, one hundred percent (100%) to the Sponsor until the Sponsor has received an asset management fee equal to 0.50% of portfolio value, annualized, and
- Finally, seventy percent (70%) to investors in the Fund and thirty percent (30%) to the general partner of the Fund thereafter.
For investments made prior to the beginning of any given fiscal quarter year, such investments will be due a fixed rate of return of 6.0% per annum, until such time as a new fiscal quarter begins and such contributions are converted to equity contributions, per the Fund's PPM.
Distributions from operating income are projected to occur on a quarterly basis, with the first distribution expected to occur in September of 2016. However, these distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:
|Type of Fee||Amount of Fee||Received By||Paid From||Notes|
|Broker-Dealer Fee||4.0% of Realty Mogul Equity Raise||North Capital (1)||Fund Available Cash||Expense is capitalized in Fund. RM investors pay a pro rata percentage of fee based off of total equity invested in the Fund.|
|Acquisition Fee||0.50% of purchase price||General Partner of the Fund||Fund Available Cash||Paid upon acquisition on a property-by-property basis|
|Financing Fee||0.50% of purchase price||General Partner of the Fund||Fund Available Cash||Paid upon acquisition on a property-by-property basis|
|Property Management Fee||7.00% of gross rental income||Non-affiliated third parties||Fund Available Cash||Paid Quarterly|
|Asset Management Fee||0.50% of total value of the Fund, per annum||General Partner of the Fund||Fund Available Cash||Paid quarterly. Fund value is fixed annually for the calculation of the fee at the end of the second quarter. Asset management fee is not paid for the quarter until after investors in the fund receive a 6.0% preferred return, annualized. If there is a quarterly distribution of less than 6.0% annualized, the balance will accrue to investors capital balance and be paid before any profit split in subsequent quarters.|
|Management and Administrative Fee||2.0% of investment assets in Realty Mogul 44, LLC, per annum||RM Manager, LLC||Distributable Cash||RM Manager, LLC is the Manager of Realty Mogul 44, LLC and a wholly owned subsidiary of Realty Mogul, Co. (2)|
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.
(2) Fees may be deferred to reduce impact to investor distributions.
The above presentation is based upon information supplied by the Sponsor or others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 44, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
General Risks of Investment in the Fund per the General Partner of the Fund
Cash flow will be derived from the resale of properties and/or rental payments. Payments to investors will be contingent on the Fund’s successful operation; therefore, the economic success of an investment in the Fund will depend directly upon the resale market and/or lease(s). A failure to sell a property and/or a vacancy by a tenant that is not replaced or is replaced at less attractive terms can adversely affect operating results or render the sale or refinancing of the Fund difficult or unattractive. No assurance can be given as to the accuracy of certain assumptions related to the future sale and/or occupancy of the properties within the Fund by tenants or the ability of such tenants’ to pay rents or costs for the properties within the Fund, as these matters will depend on events and factors possibly beyond the control of the limited liability company members. Such factors include continued validity and enforceability of the leases in the event a tenant defaults thereunder, the financial resources of the tenant, adverse change in local population trends, market conditions, neighborhood property values, local economic and social conditions, supply and demand for property similar to the properties within the Fund, competition from similar properties, environmental hazards and liabilities caused by third parties, interest rates and real estate tax rates and assessments, governmental rules, regulations and fiscal policies, zoning restrictions, the enactment of unfavorable environmental or hazardous material laws, labor and material costs, uninsured losses, effects or inflation and other risks.
Review of Fund PPM
Before making any investment decision, potential investors in Realty Mogul 44, LLC should carefully review the Confidential Private Placement Memorandum of the Fund ("PPM"), including but not limited to the Risk Factor section and all exhibits of the PPM. The PPM contains additional risk factors and information regarding the Fund that are not contained herein. Note that RM investors will be purchasing a separate and distinct class of interests from those held by existing investors in the Fund. The issuance of the new class of interests is subject to certain approval rights held by existing investors, and details of the rights and preferences of holders of the new class of interests will be shared with RM investors prior to the funding as a supplement to the existing PPM.
Investing in an Existing Fund
If the valuation method used to determine the value of the existing assets in the Fund overstates the value of the existing assets in the Fund, then new investments into the Fund would suffer immediate dilution (or decrease in value) of their interests. Under the “fix and flip" strategy assets are held at acquisition cost until disposed of. Under the “buy and hold" strategy the Fund obtains a “Brokers Opinion of Value” (BOV) report quarterly to set property values, and on an annual basis the properties held under the "buy and hold" strategy receive a full appraisal. The most recent of this quarterly BOV or appraisal is used for valuation. This brief summary of the valuation methods is not intended to be a substitute for the description of the valuation methods used as described in the PPM. Any potential investors should review the valuation sections of the PPM prior to making an investment decision. To the extent the current valuation of the Fund's existing assets differs from actual market value upon Realty Mogul 44, LLC's investment, investors in Realty Mogul 44, LLC could experience dilution or a decrease in value of their investment.
The loans being used to acquire SFRHs by the Fund are interest-only, which means that there will be no reduction in the principal balance during the hold-period.
Market and Asset Class Concentration Risk
While the general partner of the Fund's stated objective is to assemble a diversified portfolio, there can be no assurances that the Fund will not be subject to substantial market concentration risk. The real estate market generally, and the Fund's strategy in particular, may result in certain opportunities representing an outsized proportion of the total fund. For instance, approximately 23% of the Fund's existing portfolio consists of properties in Las Vegas, Nevada, a market that was significantly hit during the downturn. The success or failure of this market, and other transactions, may have a correspondingly outsized effect on the rates of return for investors in Realty Mogul 44, LLC. Additionally, there can be no assurances regarding the extent of any correlation among all or any set of the Fund’s acquisitions.
General Economic and Market Risks for Residential Real Estate
While the Fund has conducted significant research to attempt to accurately predict projected rental rates and sales prices of the Fund’s assets in the future, the projections may not be accurate and may be materially lower than projected based on a number of factors including future economic conditions and the interest rates available for the assets. The real estate market is affected by many other factors, such as general economic conditions, the availability of financing and other factors, including supply and demand for real estate investments, all of which are beyond the control of the Fund.
Competitive Housing Alternatives
Properties owned by the Fund will compete with other housing alternatives to attract residents, including apartments, other single family homes, mobile home parks, and condominiums which are available for rent or sale. Operating single family homes as rentals is more capital and management intensive than other alternatives, like apartment buildings. A strategy of rehabbing properties has significant risk as the cost of labor and materials can change, delays may occur and unforeseen changes to the scope of a project or market property values will affect the economics of an investment. Competitive residential housing in a particular area could affect the Fund’s ability to sell its homes, rent its homes for occupancy, and/or to increase or maintain home rental rates.
Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated”, “projected”, “forecasted”, “estimated”, “prospective”, “believes”, “expects”, ”plans”, “future”, “intends”, “should”, “can”, “could”, “might”, “potential”, “continue”, “may”, “will” and similar expressions to identify these forward-looking statements.
Illiquid Investment - Transfer Restrictions & No Public Market
The transferability of membership interests in Realty Mogul 44, LLC are restricted both by the operating agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the investment interests and none is expected to be available in the future. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
Uncertainty Surrounding Future Sales Price
There is risk associated with the Sponsor being unable to sell the SFRHs in the Fund as projected.
Interest Rate Risk
The Federal Reserve has methodically reduced the amount of stimulus it was earlier injecting into the U.S. economy, and has signaled that increases in the federal funds rate may be forthcoming. This could potentially lead to rising interest rates offered by other lenders and could have a negative effect on the future value of the Fund (since higher loan interest rates might mean that potential buyers would face proportionately higher debt service expenses).
Investors will be relying solely on the general partner of the Fund for the execution of its business plan. That general partner in turn may rely on other key personnel with relevant experience and knowledge, including contractors and consultants. The manager and general partners of the Fund have acquired and managed more than $1 billion in over 6,000 single family residential homes on behalf of institutional clients, namely Beazer Pre-Owned Rental Homes, Inc. and Colony American Homes Inc., have approximately $8 million of their own capital invested into the Fund, and Jeff Pintar, the CEO of the general partner, is personally guaranteeing all debt on the properties. Members of the Fund (including Realty Mogul 44, LLC) will agree to indemnify the managers in certain circumstances, which may result in a financial burden if any litigation results from the execution of the business plan. Realty Mogul 44, LLC is investing in the Fund under a different investor class than current investors in the fund, who, although able to liquidate their investments on an annual basis are also required to invest a minimum of $500,000 in the fund; RM Manager, LLC, the manager of Realty Mogul 44, LLC, is expected to be treated as an investment adviser exempt from federal or state registration under this strategy.
Manager of Realty Mogul 44, LLC Will Participate in Sponsors' Promote Interest
The manager of Realty Mogul 44, LLC will be entitled to a participation in the value of any excess distributable cash flow and any appreciation of the Property realized upon its sale. This could lead to a potential conflict of interest between the manager and Realty Mogul 44, LLC. Investors must recognize and agree to waive and bear the risk of this conflict of interest.
The general partner of the Fund cannot offer any assurances that there will be sufficient cash available to make distributions to its members (including Realty Mogul 44, LLC) from either net cash from operations or proceeds from the sale of the asset. The general partner, in its discretion, may retain any portion of such funds in the Fund. However, because the Fund currently has substantial existing assets (in excess of $59 million in holdings), this does provide the Fund with the potential to generate current cash flow for and distributions to its investors. As opposed to investing at the inception of a fund (that has no existing assets) and experiencing cash drag during the initial investment period, Realty Mogul 44, LLC and its investors have the potential to receive current cash flow from their investment.
General Economic and Market Risks
Local conditions in the markets may significantly affect occupancy, rental rates, and the operating performance of each property. These risks include plant closings, industry slowdowns, and other factors that could potentially affect the local economy. Rent control or rent stabilization laws, or other laws regulating single family homes, could also prevent the Fund raising rents or selling homes. Adverse economic conditions such as increases in property taxes, utilities, compensation for on-site associates and routine maintenance could cause an increase in the Fund’s operating expenses, which would negatively affect the fund’s financial performance.
The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Issuer Document Package for a discussion of additional risks.
The above presentation is based upon information supplied by the Sponsor and others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 44, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
(877) 781-7062Contact Investor Relations