Plan of Action (The "Why")

The "WHY" of Real Estate Investment™

InvestNow LLC, a California limited liability company founded in 2021 by Jennifer L. Mitchell, MBA, Realtor and Property Management Master (PMM) and Theodore N. Deuel, MBA, Realtor, CIM, and CIPS (Founders and Sponsors). InvestNow focuses on real estate property investing involving the purchase, ownership, management of rental, and sale of real estate for profit.

Real estate investing provides a range of alternative investments to individuals through the professional real estate practitioner’s knowledge of others. Real estate investing allows the investor to diversify the investor’s portfolio to hedge against a cyclic change in the stock market, economy (inflation), and bank and government-based investments. By acquiring real estate, the investor has access to the historically higher returns, safety, and tax benefits of commercial real estate without the hassle of the day-to-day management issues- a passive investment. Further, the investor can pool its funds with others in syndication, then own and operate the property for the benefit of the investors.

We intend to select residential income property in the middle market space- purchasing undervalued mixed-use multi-family and single-family rental communities in the range of $10 to $50M – located in the western states. In addition, we intend to select investments that do not meet the investment requirements of the institutional investor or the small investment group:

Investment Description

The goal is to purchase an existing low vacancy, undervalued, mixed-use multi-family- garden type – residential complex containing two (2) to fifty (50) apartment units in high-growth and high-value fluent geographical areas. The complex consists of low rise apartment building(s) with landscaped grounds. The apartment buildings are two stories adjacent to courtyards open at one end. Each apartment unit has its entrance, or a few apartment units share a small foyer or stairwell at each building entrance. The apartments are to be furnished by the tenant. The common area contains laundry facilities accessible to all tenants. The age of the apartment complex will range from 5 years to 25 years. Depending on the building date, utilities such as water, heating, air conditioning, and electricity may be communal in the building (billed as part of the monthly rent). Or the utilities are separate for each apartment and billed separately to each tenant (referred to as individual metering). Telephone service, cable television, and Internet are the tenant’s responsibility and shall bill by the provider of such service separately from the monthly apartment rent. The landlord is to provide the standard form of the lease agreement to rent or lease the apartment unit for one (1) year, then the tenant enters into a new lease, including the changes (increases) in the rent amount.

Real Estate Investment Retirement Program

InvestNow’s real estate investment program employs the funds from qualified individuals to invest in income rental property located in the Western United States. The investor selects the investment holding period, wherein the individual will obtain annual cash flow and tax-deferred capital appreciation. The investor, at his election, can receive growth of his invested capital (asset growth) on a tax-deferred or tax-free basis over the years – possibly up to 30 years. The objective of the retirement program is a hedge against inflation and long-term capital growth for retirement.

The Sponsors Program

The Sponsors will select a series of qualified real estate income rental projects for the investor’s consideration. Each project will have an investment period between 5 to 10 years to maximize the growth of profits (by timing the sale of the project as determined by favorable market conditions). After each investment period, the investor may elect to have his initial investment capital and the tax-deferred profits reinvested in the subsequent income-producing project(s) offered by the Sponsors. Or the investor may elect to have the balance of the cash flow, and the investor’s net proceeds disbursed to the IRA account of the investors. The investor’s investment period could be limited to 5 years or 30 years.

Financial Structure

Each project is financially structured to maximize the investor’s long-term capital growth for retirement and minimize risk. The investors shall receive a preferred cash flow from rental income (tenant leases after expenses and reserves). In addition, each project will be leveraged by non-Recourse financing not to exceed 60% of the project’s total purchase price.

Professionally Management

We believe that property management is for the experienced professional third-party manager devoted to only property management. Our 30 years of local experience have shown that properties manager-managed by inexperienced Sponsors have substantial property deferred maintenance, which requires a reduction in the exit sale prices to compensate for the repair cost at closing.

Investment Retirement Program Advantages

The Sponsors have a detailed investor selection process requiring the investor to be an accredited Investor or a licensed real estate full-time practitioner with job experience in real estate practice and investments. An accredited investor is an individual who meets the guidelines and requirements of income and net worth based on the Securities and Exchange Commission (SEC) regulations. The SEC requirement is to ensure protection for all investors. To be classified as an accredited investor, the investor(s) must satisfy at least one of the following:

Have an annual income of $200,000, or joint income of $300,000, for each of the last two years,
Have a net worth exceeding $1,000,000 without accounting for your primary home.
Some licensed professionals are accredited.

Each potential investor will need to fill out an investor questionnaire to qualify for the Investment opportunity. The Investor Questionnaire is the first requirement to be an investor in the Investor retirement Program. Request the Investor Questionnaire Here (need link).

The Investment Retirement Program aims to obtain maximum growth of invested capital, inflation-protected, on a tax-deferred basis, for years or a period selected by the individual investor.

All investments will be in selected income-producing real property (projects) that will raise the rents annually, thus creating profits each year to minimize the effects of inflation on the initial investor investment. Our objective is first to protect the investors’ return of capital from loss and then the return on capital.

Ownership of leased income property can provide an investor with increased income as rents tend to rise in inflationary periods. The inflation hedging capability of real estate is from the positive relationship between economic growth and the increasing demand for real estate. As a result, the market demand for real estate increases rental rates and property values. The property value trends rise, bypassing the inflation increases to tenants and the inflation influence on capital appreciation. Capital Appreciation is the increase in the asset’s market value over time, realized as profits after sale.

Investment in income-producing real estate properties yields higher returns than other competing investments.

Real estate property is a tangible asset that collateralizes a loan as borrowed capital (debt). Leverage uses borrowed money or debt to increase the potential return of an investment. Leverage works to your advantage when real estate values rise, but it can also lead to losses if values decline. Leverage allows property investors to buy a significant asset with little money and increase their potential return on investment. However, the more debt on a property leveraged, the more the risks of loss. Over a long time, a real estate property will increase in value. InvestNow takes a very conservative approach with a debt leverage- of 60%. The investors will contribute equity capital of 40%. An example of leverage is as follows:

Assume Purchase Price is $1,000,000
Debt at 60% $ 600,000
Investors Capital $ 400,000

The investors will be able to purchase a $1,000,000 property for an Investor Capital of $400,000, creating a Leverage of $1,000,000/400,000 or 2.5X.

All investment properties acquired for the Investment Retirement Program will be located in the Western United States, especially in Southern California and Los Angeles and San Diego counties.

Our 30 years of transactional business created a substantial US and local network of real estate practitioners to target “off-market deals unaware by the general public. We protect all broker commissions.

The project investments are professional managers of the Sponsors and its local-based, San Diego-affiliated operating companies.

The investor will receive the preferred annual income from tenant leases after expenses and reserves. There is an alignment between the Sponsors and investment; a preferred return means that investors get paid before the Sponsors.

Investors will have the right to invest in the series of real estate investment projects offered by Sponsors or opt-out at the end of any investment term. For example, the investor’s investment term could be five(5) to thirty (30) years.

Investors will have an annual right of redemption of their initial invested capital by offering their share interest to the other project investors. The redemption value is between the investors outlined in the Investment Operational Memorandum. The Program also has a repurchase program if the investor’s funds for the emergence or unplanned event.

The Sponsor’s management and risk evaluation is a significant part of the successful real estate investment strategy. Risk occurs at every stage of the investment process. Therefore, we mitigate the expected and typical risks throughout the purchase process. The objective under the Sponsor’s management is to maximize the cash flow and capital appreciation while minimizing risk.

Investments are in the multi-family asset segment (apartments). As a result, demand for rentals has significantly increased with a few new multi-family constructions. Experts agree that multi-family rents will continue to grow, and this trend will accelerate in the future.

Many real estate operators focus on acquisition and asset management, not investor relations. InvestNow is dedicated to investor relationships long term. The investor has access to investor portals for timely financial dashboards, K-1s tax returns, regular current and projected performance communication, and investor questions and responses. Please see the FAQ page (link to) for answers to common questions.

2022 Trends

2022 Emerging Trends in Real Estate®, in the United States published by Urban Land Institute (ULI} and member firms of PricewaterhouseCoopers International Limited (PwC). Emerging Trends in Real Estate is one of the most highly regarded and widely read forecast reports in the real estate industry. Emerging Trends in Real Estatee 2022, undertaken jointly by PwC and the Urban Land Institute, provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada.

Emerging Trends are:

Flexibility and Convenience Will Drive the Next Decade

During the COVID-19 pandemic, people worked and lived differently. The people’s property future expectations dramatically changed the use of properties in the future. As a result, there is a renewed emphasis on work and life balance, convenience, productivity, and time management. Properties (of all types) will need to undergo physical alterations to align their use better, considering increased working and shopping from home. In addition, consumer expectations of traditionally designed spaces have changed. There will be a massive shift in the functionality of houses, apartments, shopping centers, and health care spaces to better align with how they will be used, especially in accommodating increased working and shopping from home. Residential adaptations are going much further than just a home-based workspace and center for shopping. Homes also have become schoolhouses, gyms, and entertainment centers. These multiple uses often conflict with one another-and put a lot more demands on the humble residence. Flexibility and convenience will drive lnvestNow’s decisions in selecting properties and its development project plans.

Top Markets

Overall Real estate Prospects:

#3 Phoenix
#9 Seattle
#13 San Diego
#16 Orange County
#17 Inland Empire
#19 Los Angeles
#25 Las Vegas

Homebuilding Prospects

#3 Phoenix
#12 Seattle
#16 San Diego
#17 Orange County
#19 Inland Empire
#24 Los Angeles
#19 Las Vegas

Climate Risks

The increasing frequency of natural disasters and more convincing research attributing these events to human-induced climate change raises the alarm for more significant action. Despite Industry participated in environmental accreditation programs and broader environmental, social, and governance (ESG) initiatives and investors have been very slow to incorporate ecological risks into underwriting. However, the growing dangers of climate-related property damage may induce more investors to follow the example of leading institutional investors in factoring market-level climate risk into their decision-making. This conclusion emphasizes the need for investors to consider how climate change might affect the performance of their assets. Likewise, lnvestNow recognizes the need to incorporate climate risk into its strategy. As a result, lnvestNow makes climate considerations a new layer of fiduciary responsibility to their stakeholders and an opportunity to identify markets and assets that will benefit from a changing climate.

Protech and Real Estate as Service (REaaS)

The property technology (proptech) industry has reached a level of acceptance to understand better and manage properties. A new generation of data analytics is promising, allowing companies to use artificial intelligence to identify opportunities proactively rather than sift through deals. Traditionally, the Commercial Real estate Industry (CRE) has addressed issues and opportunities by having many people involved with the problem. However, there needs to be a shift in mindset in how CRE or Sponsor firms engage with tenants, end-users, investors, and developers. Real estate executives should adopt the Real Estate-as-a-Services approach, which combines a strategy, Technology, and data delivery of digital and physical services, not just space to tenants and users. To make the REaaS approach, the Leader should consider a different model that requires advanced technology capabilities to enhance the impact on tenant experiences. To Enable the REaaS operating model, real estate leaders can unlock additional sources of revenue by:

Innovate traditional business offering to augment experience incrementally. Measures include property level-level enhancements, value-added services, or even increasing flexibility with tenants.
Offering additional services, insights, and experiences, such as high-speed connectivity, unique spatial intelligence systems, or customized and scalable infrastructure for digital phones and I-pads and build plug-and-play capabilities.
Partner with PropTech companies to develop software to allow apartment managers to lease units and manage their properties from digital phones and I-pads; and,
Partner with tenants in new ways to enhance the tenant’s experience.

lnvestNow is implementing the Real Estate as a Service revenue model for all its investments.

Multifamily Looks Stronger for Foreseeable Future

According to the Spring 2022 Commercial Investment Real Estate Magazine, the official magazine of the CCIM Institute, one of the most vital CRE sectors in the last two years, multifamily will see continued growth in 2022. Accordingly, to Marcus Millichap’s 2022 forecast, the U.S. will benefit from 1.6 million new households, the same number of constructed residences to be delivered. Moreover, the increase in multifamily demand when single-family dries up due to increased home prices and mortgage rates continued to grow. Furthermore, the resumption of entertainment and nightlife activities in central business districts is a significant pull for potential return to city areas. Additionally, with changing working conditions, potential renters will be looking for spaces for offices and pet-friendly Landlords.

CoreLogic HPI™

Calculates home price trends. The CoreLogic Home Price Insights report features the Home Price Index analysis through March 2022 and forecasts through March 2023.

HPI Top 10 Metros Change

These large cities continued to experience price increases in March, with Phoenix leading the way at 30.4% year over year:

Phoenix 30.4%
Las Vegas 27.4%
San Diego 25.8%
Denver 21.9%
Miami 19.8%
Los Angeles 17.0%
Houston 16.8%
Boston 12.1%
Chicago 11.1%
Washington DC 9.9%

Forecast Prices Nationally

The CoreLogic HPI forecasts that home prices will increase on a month-over-month basis by 1.2% from March 2022 to April 2022 and on a year-over-year basis by 5.9% from March 2022 to March 2023, due in part to rising mortgage rates higher than home prices hampering affordability for some home shoppers. By late April, rates had moved up to more than 5%, a jump of about 30% from last year and a trend that will derail more prospective buyers.

The home prices of the ten (10) cities listed above are in the range of:

10-12% Phoenix, Las Vegas, San Diego, Denver, Miami, and Los Angeles.
7-9% Houston, Boston, Chicago, and Washington DC.

Multifamily will see an improvement in demand as the supply of single-family dries up due to increased home prices and mortgage rates continue to grow.

Strategy Our Value

What We Do

lnvestNow makes investments in the middle-market space- acquiring apartments and singlefamily rental communities valued at $15 Million to $SOM in high-value- high-growth markets.

Our Submittal Process

lnvestNow has created an efficient acquisition submission process for potential investment opportunities. Brokers are protected. All submissions are confidential.

Click Here: OWNER AND BROKER SUBMISSIONS

What Type of Properties We Are Selecting?

Multi-family Mixed-Use Properties

25+ units located in urban and suburban high-value communities. I prefer two (2) bedroom two (2) bath townhouses units or garden unit type submissions newer than 1980. Value-added or opportunistic.

Single-Family Rental Properties

lo+units located in urban and suburban high-value communities – built to rent- all homes contiguous operating as one rental community. Value-added or opportunistic.

InvestNow Advantage

Fully integrated platform

The vertically integrated group with the necessary in-house capabilities and expertise to research, source, and select the structure to fund a real estate investment property and asset management to deliver the investors’ essential climate risk-adjusted returns.

National and Local Network

Our robust real ADVANTAGE estate industry is the local and national membership associations, including Urban Land Institute (URL), National Association of Realtors (NRA), CCIM Institute, Certified International Property Specialist (CIPS), Stanford (University) Professional in Real Estate (SPIRE), Keller Williams International Commercial (KWC) and the local Commercial brokerage community of southern Californian and specifically San Diego County.

Underwriting

Our underwriting of an investment is current Technology-enhanced by our engineering (E.E.) and financial (MBA) expertise and abilities, including Financial (Banking) Technology (FinTech), Property Technology (PropTech), and Real Estate as a Service (REaaS). In addition, our approach supports a robust “big data information pipeline II that reduces or adjusts risk with conservative property investment’s underwriting and debt structure over the holding period.

Due Diligence & Acquisition

Our in-house executive team governs all aspects of the syndication formation documents, legal document reviews, title work, operational and physical asset inspections, negotiation of final acquisition documents, debt structure, and the placement of the most favorable investor’s funds. Our executive team also provides its best practice to prepare a detailed financial and business plan to optimize the assets reposition and enhance value creation.

Asset Management

Asset management is the process of planning and controlling the acquisition, operation, maintenance, renewal, and disposal of organizational assets. This process improves the delivery potential of assets and minimizes the costs and risks involved. In addition, adequate maintenance and proper deployment of systems, people, and procedures ensure a positive enhancement of capital over the asset lifecycle. Therefore, Asset Management is one of the essential processes in the investment cycle. lnvestNow assigns a seasoned specialist to supervise property management and execute the investment’s operational enhancements, performance, timely valuation reporting, and investor correspondence.

Real Estate Exit Strategy

Real estate Exit Strategies are revolving plans when the syndicator intends to remove investors from a real estate deal. The decision to implement a sound exit strategy is crucial to success, as the correct approach will ensure maximized profits and minimize risks. The Exit Strategy is set forth during the Due Diligence and Acquisition period. The investment holding period is five (5) to ten (10} years. At the end of five (5) years and every year after that, the syndicator makes a detailed active hold or sells financial analysis to determine the optimum time to take the deposition.

Disclosure Statement

The information contained on this page is for information purposes. It is not an offer to sell or a solicitation to buy any security in any jurisdiction where such an offer or solicitation violates any laws. The price and value of the investments and the income from such investments may fluctuate, and investors may realize losses on these investments, including a loss of principal. We do not provide tax, accounting, or legal advice to our clients and all investors. All are to consult with their tax, accounting, or legal advisers regarding any potential investment. The information and any opinions contained from sources that we consider reliable. We do not represent that such information and opinions are accurate or complete. Clients and all investors thus should not consider it accurate or complete. Past performance is not indicative or a guarantee of future performance. Interested investors should review the Private Placement Memorandum (PPM), and all terms of this page are subject to the terms of the PPM. Projected returns are from various assumptions outlined in the PPM and are subject to risks outlined in the PPM.

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