There is an extreme shortage of new for-sale housing in Los Angeles. There are currently no actively selling new townhome competitors in the San Fernando Valley, and only one detached. A declining supply of land available for new home development, combined with rapid new home sales, and a lack of political will to approve new home communities, has resulted in the number of active new home communities in Los Angeles plunging to one of the lowest levels in the past 30 years There are now just 76 active projects in the county, down 56% from the average since 1994 (174).
There is a high demand for modern new construction housing in Los Angeles. The market is clearly under-supplied relative to historical levels and can support new projects such as the Valley Villas coming to market. Valley Villas will provide much needed affordably priced homes to a very supply-constrained market.
The project Sponsor has a very strong 26-year track record, building and selling over 2,500 homes with a total sales value of nearly $1.4 billion and returning an average 22% annualized return to its investors.
Co-Founded in 1996 by Lance and Sadie Williams. Williams Communities and Williams Homes (collectively “Williams”) primary focus is the development and sale of single-family attached and detached homes in communities targeted to entry-level, move-up, and luxury homebuyers in California, Idaho, Texas, and Montana. Williams consistently lands in the top ten most active for-sale homebuilders in its established markets. Over the past quarter century, Lance Williams has come to be recognized as a leader in the housing industry in the West. Williams formed WH Valley Villas 58 LLC, a new single-purpose entity (the "Company"). The Company currently owns the land. The Operating Agreement will be amended and restated to include the investors admitted through the subject capital raise. Williams Communities, LLC, a California limited liability company (the "Manager") will manage the Company. Lance K. Williams is the Chief Executive Officer of Williams Communities, LLC. Mr. Williams, in addition to the individuals listed in the management profile herein, will be responsible for managing the day-to-day business of the Company. In 2021 Williams delivered 398 homes for nearly $300 million in revenue with an average sales price of $760,000. Over its twenty-five-year history, Williams has delivered over 2,500 homes in 60 communities worth in excess of $1.3 billion and currently has in process or under construction over 3,300 homes with a completed value of approximately $2.2 billion. Williams has a perfect record of project completion. Williams has historically capitalized its projects with traditional commercial bank financing, institutional equity, and high net worth individual equity.
To date, Williams’ equity partners have invested over $400 million in Williams projects with completed projects having averaged a 23% annualized internal rate of return and a 1.4 multiple.https://www.williamshomes.com/
Lance Williams has been in the construction industry for more than 35 years. Founding the company that bears his name alongside housing legend Ray Watt in 1996, Mr. Williams' experience encompasses all disciplines of residential real estate. Mr. Williams is widely recognized as a housing industry leader in the West. As Chairman and CEO, Mr. Williams has directly overseen the acquisition, entitlement, financing, construction, sales, and delivery of over 2,500 homes in 55 communities, worth in excess of $1.3 billion, and currently has in development or under construction an additional 30 projects for 3,500 plus homes with a completed value of approximately $2.2 billion. Prior to founding Williams Homes, Inc., Mr.Williams was employed by Watt Housing Corporation and Beazer Homes, Inc. where he served in multiple management roles. Mr.Williams received his bachelor's degree in Finance, Real Estate, and Law from California Polytechnic University, Pomona in 1990. Mr. Williams is a licensed real estate broker, general contractor, and jet pilot. Mr. Williams is an active member of the California Building Industry Association, where he has acted in a variety of functions including serving as chair of the government affairs committee as well as on the board of directors of the Los Angeles/Ventura chapter of the BIA. Through the years, he has shared his expertise by serving on multiple industry boards, chairing committees, and guest speaking, in addition to lending his time and efforts to many worthy community endeavors. Mr. Williams has also been recognized by his alma mater as distinguished alumni for outstanding early career success and outstanding entrepreneurship.
Raised in a real estate development family, (Sadie’s grandfather was legendary real estate developer Ray Watt) Sadie went to work for Watt Companies where she developed robust marketing and public relations experience. Sadie left the corporate world to lovingly raise her children. It was Sadie’s passion for creativity that drove her back into homebuilding. Sadie created Williams Homes’ first in-house design team, which spearheads home design, product development, and model merchandising. Over the past ten years, Sadie has overseen 60+ sales office and model home installations. Furthermore, Sadie brings her decades of industry knowledge and insight to the Board of Directors for Watt Ventures and Williams Homes. Sadie Williams is the Product Development Director, but more than that she exudes grace, grit, and the heart of Williams Homes.
Mr. Klein originally joined Williams in 2004 as the SVP of Finance and Operations. In 2009, Mr. Klein relocated to the east coast where he spent over ten years in both consulting and private equity, including the completion of several real estate and real estate service company transactions. In 2019, Mr. Klein moved to Austin, Texas and began consulting for Williams on land acquisition efforts, and rejoined Williams in 2020 as the Texas Division President. During his original tenure with Williams, Mr. Klein oversaw acquisition, development, construction, and financing alongside Mr. Williams and he will perform the same functions for the Texas Division while building a physical base of operations for Williams in Texas. In 2021, Mr. Klein took on the role of Chief Financial Officer in addition to his Texas Division President position. Mr. Klein received his bachelor’s degree in Finance, Real Estate and Law from California State Polytechnic University, Pomona in 1993 and his master’s degree in Business Administration from the University of Texas at Austin in 1999.
Mr. Little joined the Williams team in 2021 as the Division President of Idaho. Dave brings extensive experience and a proven track record in leading operations, finance, sales and marketing, customer service, and land acquisition. Mr. Little is an expert in presenting and negotiating with land developers, city leaders, and school districts. Prior to joining Williams Homes, Mr. Little most recently developed a 24.5 million cubic yard master plan named “Skyline” which included a two-acre rec center and 12 models within four communities in 18 months. Skyline was recognized as Master Plan Community of the Year at the 2019 So Cal Awards. Prior to joining Williams, Mr. Little lead the accounting, finance, and accounts payable teams over four Pardee Home divisions. Dave was the VP of Finance at Richmond American Homes and Director of Financial Reporting at Shea Homes.
As both the Chief Marketing Officer and Southern California Division President of Williams Homes, Daniel Faina provides strategic leadership and plays an integral role in all aspects of operations within Williams Homes' growing portfolio of communities including acquisitions, design, and development. During his tenure at Williams, Dan has played an active part in the development of numerous communities in Southern and Central Coast California, Idaho, Montana, and now in Northern California and Texas. Along with Williams Homes’ executive management team, Dan is continually expanding and redefining the company’s business plan to satisfy everchanging homebuyer demands and market opportunities. He bases the foundation of each new community on the company’s mission statement, which is a commitment to building communities and creating homes with a family approach. In his current role as well as throughout his history at the company, Dan has taken part in developing the right people, processes, and technology to deliver the highest level of quality, reliability, and attainability for Williams’ homeowners. Dan joined Williams Homes in 2007 and has served as Southern California Division President since 2019 after serving as Vice President of Sales and Marketing. He is passionate about sharing his industry insights and expertise through his involvement with the Building Industry Association of Southern California, the Greater Sales and Marketing Council, local chambers of commerce, advisory councils, and numerous other industry and community affiliations. Thanks to his strong leadership role at Williams Homes and the industry at large, Dan was recognized in 2018 by Professional Builder magazine in its annual list of 40 Under 40 Superstars in the homebuilding industry. Dan and his family reside in Santa Clarita, California.
Mr. Ouellette joined the Williams team in 2014, and recently transitioned from the role of Chief Financial Officer. Mr. Ouellette leads the team on land acquisitions, financing, and property dispositions. Mr. Ouellette has been in the home building industry for the last 35 years working for public and private homebuilders and focused on bringing together land and capital. He’s held leadership roles in both finance and land acquisition at KB Home, Richmond American, and Larwin Company. Prior to Williams Homes, Mr. Ouellette was Vice President of Land Acquisition for KB Home. During his most recent and prior association with KB Home, Mr. Ouellette led the company to acquire enough land and lots to maintain KB Home’s market dominance in Los Angeles County. Mr. Ouellette is a CPA (license status inactive) and a real estate broker with extensive experience financing private homebuilding operations and orchestrating land deals. Mr. Ouellette’s prior employment and consulting experience includes project management, entitlement preservation, strategic land positioning, distressed land acquisition, and project financing.
Track Record - Completed Deals
|Property||City, State||Asset Type||Initial Funding Date||Final Distribution Date||Investor Equity||Investor Returns||Equity Multiple||IRR|
|Righetti Arroyos 53||San Luis Obispo, CA||MU||1/1/2020||6/1/2022||$9,800,000||$4,167,064||1.43||22%|
|Righetti SLO43||San Luis Obispo, CA||MU||12/1/2019||4/1/2022||$6,000,000||$2,264,890||1.38||13%|
|Willson 16||Bozeman, MT||LUX||6/1/2018||4/1/2022||$2,700,000||$421,875||1.16||4%|
|Righetti SLO86||San Luis Obispo, CA||MU||6/1/2018||9/1/2021||$10,084,000||$6,836,925||1.68||26%|
|Hermitage||Los Angeles, CA||MU||8/1/2019||12/1/2021||$5,000,000||$2,673,000||1.53||28%|
|Arroyos @ Righetti||San Luis Obispo, CA||MU||8/1/2018||12/1/2021||$12,200,000||$4,109,000||1.34||38%|
|Paseos @ Righetti||San Luis Obispo, CA||MU||3/1/2018||9/1/2021||$13,000,000||$5,191,000||1.40||24%|
|24 on Centre||Los Angeles, CA||MU||1/1/2017||1/1/2021||$3,600,000||-||1.00||0%|
|Cobalt 12||Los Angeles, CA||EL||8/1/2019||11/1/2021||$1,800,000||$835,678||1.46||28%|
|Tovara West||Los Angeles, CA||EL||12/1/2016||10/1/2020||$10,250,000||$4,923,624||1.48||12%|
|Rosewood||Santa Paula, CA||EL||9/1/2018||9/1/2020||$5,000,000||$1,990,000||1.40||28%|
|Falcon Heights Encore||Lompoc, CA||MU||8/1/2018||3/1/2020||$3,500,000||$985,814||1.28||15%|
|The Farm||Ventura, CA||EL & MU||1/1/2014||10/1/2019||$20,500,000||$8,226,000||1.40||16%|
|Palmilla||Los Angeles, CA||MU||5/1/2017||9/1/2019||$2,000,000||$423,000||1.14||6%|
|Pacific Villas||Baldwin Park, CA||MU||1/1/2017||9/1/2019||$7,730,000||$3,112,000||1.40||19%|
|Echo 24||Los Angeles, CA||MU||11/1/2014||9/1/2019||$2,950,000||$966,200||1.33||19%|
|Bridewell||Los Angeles, CA||MU||4/1/2016||7/1/2019||$1,850,000||-||1.00||0%|
|Cielo||Los Angeles, CA||EL||10/1/2016||3/1/2019||$2,660,000||$1,236,000||1.46||19%|
|Indigo||Baldwin Park, CA||MU||6/1/2015||3/1/2019||$7,290,000||$3,520,000||1.48||16%|
|Tovara East||Los Angeles, CA||EL||8/1/2014||9/1/2018||$6,525,000||$2,898,000||1.44||15%|
|Reseda Ranch||Los Angeles, CA||MU||12/1/2014||3/1/2019||$1,200,000||$532,000||1.44||9%|
|Phantom Trail||Santa Clarita, CA||MU||4/1/2014||9/1/2017||$3,359,000||$2,755,000||1.82||29%|
|Arbor Ridge||Paso Robles||EL||12/1/2014||10/1/2017||$1,800,000||$322,000||1.18||7%|
|La Barranca||Ventura, CA||LUX||1/1/2013||9/1/2017||$3,600,000||($453,000)||0.87||-12%|
|Country Ridge||Calabasas, CA||LUX||6/1/2013||9/1/2017||$11,259,000||($220,000)||0.98||-2%|
|Trestles||Santa Clarita, CA||EL||5/1/2013||10/1/2017||$9,770,000||$8,474,000||1.87||21%|
|Agave||Los Angeles, CA||MU||3/1/2013||7/1/2017||$10,000,000||$6,031,000||1.60||28%|
|Savannah||Simi Valley, CA||EL||4/1/2013||12/1/2016||$4,100,000||$3,750,000||1.91||23%|
|Falcon Heights||Lompoc, CA||MU||12/1/2013||6/1/2016||$4,000,000||$813,000||1.20||11%|
|Oakridge||Santa Clarita, CA||LUX||12/1/2013||3/1/2016||$5,820,000||$3,013,000||1.52||26%|
|Parkland Cottages||Santa Maria, CA||EL||11/1/2013||3/1/2016||$1,500,000||$586,000||1.39||18%|
|Terraces||Agoura Hills, CA||MU||3/1/2013||11/1/2015||$8,393,000||$1,816,000||1.22||13%|
|Valle Di Oro||Santa Clarita, CA||EL||7/1/2012||2/1/2015||$5,000,000||$4,707,738||1.94||41%|
|Park 9||Los Angeles, CA||MU||6/1/2012||7/1/2014||$1,700,000||$826,792||1.49||21%|
|Ridgeview||Santa Paula, CA||MU||9/1/2011||7/1/2014||$3,650,000||$3,049,562||1.84||29%|
|Oak Haven||Fillmore, CA||EL||7/1/2011||5/1/2014||$1,550,000||$849,397||1.55||18%|
|Lone Hill||San Dimas, CA||MU||7/1/2011||4/1/2014||$7,160,000||$1,619,000||1.23||14%|
|Olive Glen||Los Angeles, CA||EL||5/1/2011||10/1/2013||$8,631,000||$3,725,000||1.43||36%|
|Falcon Ridge||Barstow, CA||EL||5/1/2010||9/1/2014||$800,000||$832,511||2.04||21%|
|Chapel Lane||Ventura, CA||EL||1/1/2010||5/1/2012||$1,500,000||$395,880||1.26||11%|
|Rosa De Castilla & Hidden Creek||MU||7/1/2009||10/1/2011||$1,800,000||$1,545,000||1.86||37%|
|Solstice||Santa Clarita, CA||EL||11/1/2006||6/1/2011||$1,100,000||($912,500)||0.17||-83%|
|Stratara||Santa Clarita, CA||EL||8/1/2005||10/1/2008||$2,250,000||$100,000||1.04||2%|
|Bella Vida||Santa Clarita, CA||MU||5/1/2005||6/1/2007||$1,900,000||$723,629||1.38||22%|
|Sonrisa||Santa Clarita, CA||EL||5/1/2004||7/1/2006||$1,650,000||$1,126,804||1.68||47%|
|Big Sky Ranch||Santa Clarita, CA||MU||8/1/2002||8/1/2003||$800,000||$435,491||1.54||69%|
|Apple Street||Santa Clarita, CA||EL||8/1/2002||12/1/2003||$500,000||$755,324||2.51||123%|
|Walnut Street||Santa Clarita, CA||EL||9/1/2001||12/1/2002||$200,000||$215,264||2.08||80%|
|Elliott Lane||Santa Clarita, CA||MU||6/1/1999||2/1/2001||$400,000||$68,099||1.17||10%|
|Town & Country||Santa Clarita, CA||MU||2/1/1997||12/1/1998||$850,000||$323,302||1.38||19%|
|Lola Lane||Santa Clarita, CA||MU||3/1/1996||7/1/1997||$460,000||$451,269||1.98||63%|
Track Record - Ongoing Deals
|Active Project||Location||Project Completion||Homes||Revenue|
|Valley Villas||Los Angeles, CA||2025||58||$37,100,000|
|Floating Feather||Eagle, ID||2025||139||$129,000,000|
|Highland Meadows II||East Helena, MT||2024||59||$28,400,000|
|Copper Ridge 54||Billings, MT||2023||54||$27,200,000|
|Plaza Del Amo||Torrance, CA||2023||39||$31,500,000|
|Park Place||Santa Clarita, CA||2026||492||$338,000,000|
|Copper Ridge||Billings, MT||2025||217||$86,300,000|
|Star 203||Star, ID||2025||203||$101,800,000|
|San Luis Ranch Lofts||San Luis Obispo, CA||2024||120||$49,600,000|
|Palo Verde||La Quinta, CA||2024||37||$35,600,000|
|Campanile||Cathedral City, CA||2024||141||$84,600,000|
|Williams Ranch||Santa Clarita, CA||2024||497||$440,400,000|
|Point Happy||La Quinta, CA||2023||29||$25,500,000|
|San Luis Ranch Heirloom||San Luis Obispo, CA||2023||83||$56,200,000|
|San Luis Ranch Fig||San Luis Obispo, CA||2023||80||$50,300,000|
|Bridger Heights||Belgrade, MT||2023||72||$26,300,000|
|Bridger Vale||Bozeman, MT||2023||20||$27,600,000|
|Magnolia Village||Lincoln, CA||2023||32||$15,000,000|
|High Sierra||Billings, MT||2022||60||$16,000,000|
|Highland Meadows||East Helena, MT||2022||34||$12,600,000|
|West Winds||Bozeman, MT||2022||42||$21,400,000|
This is a rare opportunity to build and sell 58 market-rate, single-family attached homes with no entitlement risk in the City of Los Angeles, California. The Project has all required entitlements. The plan approvals are in-process, and development is expected to begin in the third quarter of 2022. The Property is owned by the Company, and financing has been arranged and recorded with Farmers and Merchants bank to fund the remaining development and construction costs.
The land plan includes fifty-eight two and three-story attached condominium homes. The final subdivision map is being processed with the City, and the final improvement plans are in plan check. The architectural plans have begun, and the homes will be permit-ready in approximately six months when the site improvements are nearing completion.
|Total||Per Unit||Percent||Per Sq. Ft.|
|House Square Footage||81,101||1,398|
|Net Sales Revenues||$36,808,500||$634,629||100.0%||$453.86|
|Engineering, Consultants & Permits||$839,247||$14,470||2.3%||$10.35|
|Direct Construction Costs||$11,167,401||$192,541||30.3%||$137.70|
|Architecture and Engineering||$454,400||$7,834||1.2%||$5.60|
|Indirects and Onsite Supervision||$1,148,531||$19,802||3.1%||$14.16|
|Legal, DRE, HOA||$154,407||$2,662||0.4%||$1.90|
|General and Administrative||$1,472,340||$25,385||4.0%||$18.15|
|Sales Office Maintenance/Salary||$166,081||$2,863||0.5%||$2.05|
|Total Project Costs||$31,296,711||$539,598||85.0%||$385.90|
|Profit Before Preferred Return||$5,511,789||$95,031||15.0%||$67.96|
|Net Profit after Preferred Return||$4,319,191||$74,469||11.7%||$53.26|
|Total Project Costs||$31,296,711||$539,598||85.0%||$385.90|
|Less Comm., Closing Costs, Wty., Commit.||($1,314,097)||($22,657)||-3.6%||($16.20)|
|Less Costs Funded From Proceeds/Loan||($4,829,119)||($83,261)||-13.1%||($59.54)|
|Less Member Equity||($8,500,000)||($146,552)||-23.1%||($104.81)|
|Total Loan Request||$16,653,495||$287,129||45.2%||$205.34|
This is a rare opportunity to build and sell 58 market-rate, single-family attached homes with no entitlement risk in the City of Los Angeles, California. The Project has all required entitlements. The plan approvals are in-process, and development is expected to begin in the third quarter of 2022. The Property is owned by Williams Homes, and financing has been arranged and recorded with Farmers and Merchants bank to fund the remaining development and construction costs.
|Unit Type||# of Units||Avg SF/Unit||$ / Unit||$ / SF||$ / Unit||$ / SF||% of Total|
|Address||9516 Corterra Ln, Panorama City, CA 91402||9037 Noble Ave
North Hills, CA 91343
|19535 Cardin Pl, Northridge, CA 91324||9850 N Lassen Ct, North Hills, CA 91343||19509 Astor Pl, Northridge, CA 91324||Average||9433 Sepulveda Blvd, North Hills, CA 91343 (Subject)|
|# of Units||1||1||1||1||1||1||58|
|Average Unit Size||1805 SF||1750 SF||1188 SF||1811 SF||1645 SF||1,640 SF||1398 SF|
|Building Size||1,805 SF||1,750 SF||1,188 SF||1,811 SF||1,645 SF||1,640 SF||1,398 SF|
|Distance from subject||0.9 mi||1 mile||6.1 mi||0.7 mi||6.1 mi||3.5 mi|
Positive Location / Site & Market Attributes:
- Great regional location. Valley Villas is located just east of the I-405 fwy and minutes from the I-5 and 118 fwys, providing access to the major employment centers throughout the region. Major film studios such as Warner Bros. Studio and Walt Disney Studios are within a 15-minute drive and Downtown Los Angeles is about ±25 – 30 minutes away.
- Proximate to numerous services and amenities. Valley Villas is within a short drive to several big box retailers and two large chain grocery stores. A new shopping center, Olivo at Mission Hills (Target, 24 Hour Fitness, etc.), is located just one mile north of the site. Cal State Northridge is just 3 miles west of the site. The attended elementary and middle schools are within walking distance.
- Affordable price points. Recommended total prices range from $552K to $707K, averaging $632K. The median home price in Los Angeles County is $865K; so the Valley Villas average price is 27% below the County. In addition, recommended prices are well below the FHA loan limit ($970,800). Valley Villas will likely offer the most affordable new homes in the San Fernando Valley.
- COVID-19 has increased the demand for new housing. More people are working from home, home-schooling, or housing extended family. Many households living in apartments are reassessing their current living situation. Households who otherwise were not in the market for a new home are now deciding to move, increasing the demand for new construction homes.
- New home sales are strong in the region. After a COVID-related sharp drop in sales in March and April 2020, sales in Los Angeles have been consistently above the long-term average for the market. The average new home sales rate during the first three months of 2022 is 3.5/mo, which is slightly below 2021 and similar to 2017 – 2018. The only new home competitor, Corterra, is averaging 4.8 sales/mo at a much higher average price point than Valley Villas ($865K vs. $632K).
San Fernando Valley New Townhomes
Limited new home competition. There are currently no actively selling new townhome competitors in the San Fernando Valley, and only one detached. A declining supply of land available for new home development, combined with rapid new home sales, and a lack of political will to approve new home communities, has resulted in the number of active new home communities in Los Angeles plunging to one of the lowest levels in the past 30+ years. There are now just 76 active projects in the county, down 56% from the average since 1994 (174). The market is clearly under-supplied relative to historical levels and can support new projects such as the Valley Villas coming to market. Valley Villas will provide much needed affordably priced homes to a very supply constrained market.
|Sources of Funds||$ Amount||$/Unit|
|GP Investor Equity(1)||$5,500,000||$94,828|
|LP Investor Equity||$3,000,000||$51,724|
|Total Sources of Funds||$31,296,711||$539,598|
|Uses of Funds||$ Amount||$/Unit|
|Land Acquisition Price||$7,250,000||$125,000|
|Hard Cost Contingency||$474,918||$8,188|
|Soft Cost Contingency||$535,098||$9,226|
|G & A Costs||$1,472,340||$25,385|
|Financing Costs Interest||$676,478||$11,663|
|Other Costs - Marketing & Sales||$1,607,093||$27,709|
|Total Uses of Funds||$31,296,711||$539,598|
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
The expected terms of the debt financing are as follows:
- Lender: Farmers & Merchants Bank
- Term: 3 Years
- Loan-to-Cost: 55.0%
- Estimated Proceeds: $16,653,495
- Interest Type: Fixed
- Annual Interest Rate: 4.50%
- Interest-Only Period: 3 Years
- Amortization: None
- Prepayment Terms: Repaid at par from each home closing.
- Extension Requirements: One-year extension available. Must have no defaults and pay fee.
(1) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt.
Williams Homes intends to make distributions as follows:
- First, to the Members, pro rata, based on their respective unreturned Capital Contributions until fully paid and returned;
- Second, to the Members, pro rata, based on their respective Capital Contributions, the Preferred Return thereon until said Preferred Return is fully paid;
- Third, the remaining Distributable Cash shall be distributed as follows:
- Fifty percent (50%) to the Members, pro rata, based on their respective Percentage Interests; and
- Fifty percent (50%) to the Manager.
"Preferred Return" shall mean and refer to a return of ten percent (10%) per annum, cumulative but not compounded, on unreturned Capital Contributions from the date on which the Capital Contributions are funded.
Williams Homes intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).
Distributions are expected to start in August 2023 and are projected to continue on a monthly basis thereafter. Distributions are at the discretion of Williams Homes, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Williams Homes will receive a promoted/carried interest as indicated above.
|Project-Level Cash Flows|
|Year 0||Year 1||Year 2|
|Net Cash Flow||($8,500,000)||$2,337,976||$11,673,814|
|RM Platform Investor-Level Cash Flows¹|
|Year 0||Year 1||Year 2|
|Net Cash Flow||($3,000,000)||$788,978||$3,276,835|
|RM Platform Investor-Level Cash Flows - Hypothetical $50,000 Investment¹|
|Year 0||Year 1||Year 2|
|Net Cash Flow||($50,000)||$13,150||$54,614|
(1) RM Technologies, LLC and its affiliates do not provide any assurance of returns. Returns presented are net of all fees. Please carefully review the Fees and Disclaimers sections below for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.
Certain fees and compensation will be paid over the life of the transaction; please refer to Williams Homes' materials for details. The following fees and compensation will be paid(1)(2):
|Type of Fee||Amount of Fee||Received By||Paid From|
|G&A Fee||4.0% of Gross Revenue||Williams Homes||Upfront Capitalization|
|Sales Commission Fee||1.5% of Gross Revenue||Williams Homes||Closing Proceeds|
|Warranty Fee||1.0% of Gross Revenue||Williams Homes||Closing Proceeds|
|Technology Solution Licensing Fee(2)||Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution||RM Technologies, LLC||
Capitalization (at Sponsor’s discretion)
|Type of Fee||Amount of Fee||Received By||Paid From|
|Administration Solution Licensing Fee(2)||Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of RM Technologies’ Administration Solution||RM Technologies, LLC||Cash Flow|
(1) Fees may be deferred to reduce impact to investor distributions.
(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
Sponsor’s Projects and Targets
*Assumptions and projections included in the information on this Page, including pro forma projections (collectively “Projections”) were provided by the Sponsor or an affiliate thereof and are not reflective of the position or opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates. RM Technologies, LLC and its affiliates do not provide any assurance of returns or the accuracy or reasonableness of the Projections provided by the Sponsor or its affiliates. There can be no assurance that the Sponsor’s methodology used for calculating any Projections, including Target IRR, Target Annualized Cash-on-Cash Return, and Target Equity Multiple (“Targets”), are appropriate or adequate. The Sponsor’s Projections and Targets are hypothetical, are not based on actual investment results, and are presented solely for the purpose of providing insight into the Sponsor’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Sponsor’s performance. The Sponsor’s Projections and Targets are not a predictor, projection or guarantee of future performance. There can be no assurance that the Sponsor’s Projections or Targets will be met or that the Sponsor will be successful in meeting these Projections and Targets. Projections and Target returns should not be used as a primary basis for an investor’s decision to invest.
No Approval, Opinion or Representation, or Warranty by RM Technologies, LLC or it Affiliates
The information on this Page, including the Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”) was provided by the Sponsor or an affiliate thereof. RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor. No part of the information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s Investment Documents. The opinions expressed on this page are solely the opinions of the Sponsor and its affiliates and none of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.
Sponsor’s Information Qualified by Investment Documents
The Information on this Page, including of the principal terms of the Sponsor’s offering, is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete, and each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment. The information on this page should not be used as a primary basis for an investor’s decision to invest. In the event of an inconsistency between the information on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents. The information on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the sole discretion of the Sponsor and its affiliates.
Risk of Investment
This real estate investment is speculative and involves substantial risk. There can be no assurances that all or any of the assumptions will be true or that actual performance will bear any relation to the hypothetical illustrations herein, and no guarantee or representation is made that investment objectives of the Sponsor will be achieved. In the event that actual performance is below the Sponsor’s Targets, your investment could be materially and adversely affected, and there can be no assurance that investors will not suffer significant losses. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Please see the Sponsor’s Investment Documents for additional information, including the Sponsor’s discussion concerning risk factors.
Risk of Forward-Looking Statements
Forward-looking statements are found here and in the applicable Investment Documents and may include words like “expects,” “intends,” “anticipates,” “estimates” and other similar words. These statements are intended to convey the Project Sponsor’s projections or expectations as of the date made. These statements are inherently subject to a variety of risks and uncertainties. Please see the applicable Investment Documents for disclosure relating to forward-looking statements. All forward-looking statements attributable to the Sponsor or its affiliates apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in the Investment Documents. Any financial projections are preliminary and subject to change; the Sponsor undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
Sponsor’s use of Debt
A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. There can be no assurance that the Sponsor will secure debt on the rates and terms noted above, or at all. All of the Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, including but not limited to the annual interest rate and possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account. The use of borrowed money to acquire real estate is referred to as leveraging. Leveraging increases the risk of loss. If the Sponsor were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Sponsor could lose its investment in its property.
In addition, unless the debt provides for a fixed rate of interest during the term of the loan and/or any subsequent extensions, the total amount of interest paid over the term of the debt will increase by the same amount as the related index. For example, if the index rate increases by 0.50% (50 basis points) the interest rate on the loan will increase by the same amount. The amount of such interest rate increases may be capped either by its terms or as the result of the Sponsor entering into an arrangement that caps the interest rate with respect to the debt at a particular rate.
Sponsor’s Offering is Not Registered
The interests offered by the Sponsor will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement.”). In addition, the interests will not be registered under any state securities laws in reliance on exemptions from registration. Such interests are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the RealtyMogul Platform are intended solely for “Accredited Investors,” as that term is defined Rule 501(a) of the Securities Act. Prospective investors must certify that they are Accredited Investors and provide either certain supporting documents or third party verification, and must acknowledge that they have received and read all investment materials.
RM Technologies, LLC Fees and Conflicts
RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based licensing fee for real estate companies and their sponsors to license and use the RM Technologies LLC’s proprietary Platform, including one-time flat licensing fees for its Technology Solution and an ongoing quarterly flat licensing fees for its Administration Solution. An estimate of the Technology Solution licensing fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor. The licensing fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). Additionally, from time to time, employees of RM Technologies, LL C and its affiliates invest in Sponsor’s offering. RM Technologies LLC’s receipt of licensing fees and its employee’s investments in Sponsor’s offering creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
No Investment Advice
RealtyMogul and RM Technologies, LLC are not a registered broker-dealer, investment adviser or crowdfunding portal. Nothing on this Page should not be regarded as investment advice, either on behalf of a particular security or regarding an overall investment strategy, a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised, and we recommend that you consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any real estate investment.
For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.
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