Park City, Utah has a great need for affordable housing for teachers, police officers and firefighters. But just like most expensive areas, getting the permits and entitlements to build can be very costly.
One of Real Wealth Network’s developer partners, ALG, has spent 9 years trying to entitle land in Park City, and has finally received approvals to build 97 residential units. There are no other projects of this kind in the area!
This project is comprised of two separate investments:
RWN Discovery LLC – The Private Loan
This phase is sold out. Investors in this phase are loaning $6,000,000 to secure our rights to the property. For this they will be entitled to 15% interest for the time their funds are tied up (No profit split for this phase). The loan is estimated to be paid off in 3 – 6 months, but the developers have up to a year repay. Once the loan is paid off investors have the option to exit the project or stay in and convert to equity partners. At that time they will be entitled to a 15% preferred return and a 15% pro rata profit to be split based on equity contributions with RWN Discovery II.
RWN Discovery II LLC – The Equity Only Phase
Investors in this project are raising the remaining capital needed to get to $8,200,000 total between the two entities. For this they will be entitled to 15% preferred return and a 15% pro rata profit to be split based on equity contributions with RWN Discovery I.
At this time we estimate initially invested capital will be returned in 3 years, followed by preferred return & profit split at the end of the project.
Why Do We Like Park City?
This land is very close to world class ski resorts and Salt Lake City, one of the fastest growing metros in the U.S.
Source Pop growth: https://www.forbes.com/pictures/mlj45hfdf/5-salt-lake-city/#140c08bf6142
Source Job growth: http://archive.sltrib.com/article.php?id=4889622&itype=CMSID
This is an equity participation in a residential, new construction, real estate development (“Property’). The total anticipated to be raised is $8,200,000. The Property is a 69 acre parcel of land located near Park City, Utah. Twenty two acres will be developed with 97 single family residences; 67 will be market rate and 30 will be affordable pursuant to the restrictions of the final development permit. The remaining acreage will remain open space.
Our development partners are experienced real estate developers who have been working for many years to secure the necessary permits to begin this development – which they now have! Resumes of the developers and the final permit letter are below.
RWN Discovery II LLC will provide the initial equity investment for Discovery Ridge LLC (owner of the Property). Previously RWN Discovery LLC (an affiliate) provided a loan to Discovery Ridge LLC in order to acquire clear title to the Property. Equity proceeds from RWN Discovery II will be used to pay down the Note held by RWN Discovery LLC , as well as continue the entitlement process, and begin the development of the Property. When the Note is redeemed, members of RWN Discovery LLC will have the opportunity to convert to equity and will share similar interests as the investor members of RWN Discovery II, LLC. Discovery Ridge LLC anticipates obtaining construction financing for the development.
The development is anticipated to break ground April 2018 (Subject to weather) and to take about 3 years.
Investors in RWN Discovery II, will receive a annual, non-cumulative, 15% preferred return as well as a pro rata portion of the remaining profits after successful development of the Property and sale of all the homes. Fifteen percent (15%) of remaining profits after the completion of the project and sale of all the homes will be distributed to RWN Discovery II and RWN Discovery pro rata with their equity investments.
A Note about Timelines: This timeline is an estimate based on the information available. Delays are an inherent and fairly common risk associated with any real estate investment, but particularly for a new development venture. The management team does it’s best to estimate a timeline for these projects but there are a lot of factors outside their control that can affect that timeline (Federal/State/Municipal regulatory bodies, contractors, weather, personnel changes, etc). This is something that is discussed in the PPM in the risks section.
View the camera link to the Discovery Ridge Park City project here:
$8,200,000 total between the two phases
Initial Estimated Timeline:
Private Lending: 6 months – 1 year
Equity Phase: 2 – 3 years
As soon as fully subscribed
RWN Discovery LLC (Private Loan Phase):
- Investors will be secured as note holders in 1st lien position at a 60% LTV, earning 15% interest per annum (Not compounded)
- No profit split
- After 6-12 months, investors have the option to convert into equity or exit, same terms as RWN Discovery II LLC Investors
RWN Discovery II LLC (Equity Only Phase)
- 15% preferred return and a 15% pro rata split of the remaining profit to be split with RWN Discovery II investors.
RWN Discovery II LLC (Equity Only Phase):
- 15% preferred return and a 15% pro rata split of the remaining profit.
Investor Suitability Standards
- Open to Accredited* & 35 Non-Accredited** Investors
- No 3rd party verification required
*Accredited Investors must meet ONE of the following criteria.
- Annual income of $200K+ for an individual for each of the last two years
- Income of $300K+ for a married couple for each of the last two years
- Net worth over $1M excluding your primary residence.
**Non-Accredited investors must meet ONE of the following criteria:
- Income of $100,000 or more for an individual for each of the last two years
- Income of $200K for a couple for each of the last two years
- Net worth over $350K excluding your primary residence.
- Funds are illiquid and could be tied up for an estimated 30 months.
- Unforeseen circumstances could arise, delaying the project.
- A recession could slow economic growth nationally and/or regionally
- The developer could face personal or health challenges, in which case, Real Wealth Network would take over the project to find a new developer.
- IRA investors should speak with their CPA’s to understand the tax implications of this investment as we believe the equity phase will incur high UBTI taxation for IRA Investors.
- You can learn more about Taxes & IRA’s here: https://www.realwealthnetwork.com/learn/webinar-avoid-double-taxation-within-ira-401k/
Mike has an extensive background in real estate development, particularly in the Park City area. In the early 1970s, Mike had the foresight to acquire several large tracts of land in the Park City, Utah area. He raised enough investor capital to acquire over 700 acres, just before the area took off in popularity.
His group developed Powderwood, a 228-unit condo development at Kimball’s Junction. They also built the Crestview, a 120 unit condominium development, which provided lodging during the 2002 Olympics.
Mike has also been involved with various joint venture and sales arrangements with Wal-Mart, Staples, Best Western Hotels, McDonalds, Arby’s and The Factory Outlet Stores of Park City. He is involved on a daily basis in all aspects of land acquisition, project financing, government approvals, utility infrastructure, development plans and construction.
A native of the Salt Lake Valley he graduated from the University of Utah with Bachelors of Science and a Master’s of Science, including a Certificate in Industrial Relations, degrees all within 5 years.
Mitch has been in the real estate development field for 28 years. In addition to being involved with the Crestview condo development in Park City, he constructed and retro-fitted warehouses to provide housing for 2500 personnel from the FBI, Secret Service, State Dept, Immigration and Naturalization, CIA and U.S. Forest Service.
Mitch has provided housing for special events and workforce housing in the oil, gas, mining and large construction projects. In 2003, he partnered with Target Logistics in Boston Massachusetts, where he oversaw the development, construction, sales and marketing of workforce and special events housing, including the 2003 Harley Davidson 100th Anniversary, 2004 Summer Olympic Games in Athens Greece, and the 2006 Winter Olympics in Torino Italy.
Mitch received a bachelor’s degree in Economics from Weber State University, and went on to earn a master’s degree in Public Administration from Brigham Young University in Salt Lake City, Utah.
Real Wealth Network
Real Wealth Network was founded in 2003. We’re a company known for simplifying the process of passive real estate investing and for helping people secure their money in smart real estate deals. With a strong focus on Single Family Rentals, we started our Syndication department in 2009 and have since raised over $91,000,000 in investor capital spread over 20 unique projects.
You can learn more about our past projects at https://www.realwealthnetwork.com/group-investments/.
Kathy and her husband Rich founded Real Wealth Network in 2003. Kathy specializes in teaching people how build multi-million dollar real estate portfolios through creative finance and planning. She is passionate about researching and then sharing the most important information about real estate, market cycles and the economy. Author of the #1 best seller, Retire Rich with Rentals, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR and CBS MarketWatch.
- Park City Discovery II - Executive Summary
- Park City Discovery II - Private Placement Memorandum (PPM)
- Park City Discovery II - Company Agreement
- Park City Discovery II - Subscription Booklet
- Park City Discovery II - Bad Actor Questionnaire
- Park City Discovery II - Community Property Waiver
- Park City Discovery II - Pro Forma
- Park City Discovery II - W9
- Park City Discovery II - Pro Forma for PPM
Upload Your Documents
Process for investing in RWN Discovery II LLC
Please Note: The Private Loan Phase of this project is fully subscribed. There are only units available in RWN Discovery II LLC, the equity only partnership.
Here is what you’ll need to do move forward with this investment:
- Review the Private Placement Memorandum
- Decide how you plan to fund your investment (personal funds, IRA funds, LLC, etc)
Fill out the subscription booklet and appropriate tax form (W-9 or W8BEN) based on your funding choice
Upload the following three items using the uploader widget below:
- Completed Subscription Booklet (Including supplemental questionnaire if a Non US Investor)
- W-9 or W8BEN
- Government-issued photo ID (e.g., driver’s license, passport)
After you submit your paperwork, wait for our team to review this can take several days as a lot of paperwork is coming in a short amount of time. If we have any questions we will follow up.
Once approved, we will send you the funding instructions for your investment. Send in your funds.
Once your funds have cleared our account, we will send you a countersigned subscription agreement and an email confirmation that funds have been received.
Below is your project update for the RWN Discovery & RWN Discovery II Projects.
Regarding K1 Timing:
Please note the RWN Discovery & RWN Discovery II tax returns are extremely complicated given the recapitalization and entity structure. Our CPAs are working on them as quickly as possible, but their current estimation is that they will not be ready for distribution until late March or Early April.
If you have any questions, please email them to Syndications@realwealthnetwork.com.