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May 4, 2015 2:33 EST

16810 Bajio Road – An opportunity to participate in a development and sale of a single-family home

iCrowdNewswire - May 4, 2015

16810 Bajio Road

Encino, CA

 

 

Investment Type

Equity

Market Summary

  • The current population of Encino is 40,848 with the median age of 42
  • Encino’s median household income is $114,177, and the average household net worth is $1,034,084 according to Realtor.com
  • 46% of Encino’s population are long term residents having lived in their homes for more than 5 years according to Realtor.com
About the Sponsor

TriWest Development, LLC (“TriWest”) is a residential real estate investment company focused on value add properties in Los Angeles County. TriWest was formed to take advantage of (i) the strong fundamentals in the coastal Los Angeles residential real estate market, (ii) the lack of supply in high demand, coastal, Los Angeles corridors, and (iii) the arbitrage between prices of financially/physically distressed properties and the ultimate retail value of such properties.

TriWest focuses on mid to high-end markets that have tight supply due to limited new construction or renovation over the past several years. TriWest also capitalizes on dated housing stock that can be transformed into architectural design homes superior to the competition in the marketplace. Upon acquisition, each home is designed to a level of finish to appeal to buyers in each specific location.

TriWest has substantial connections in the Los Angeles County market and utilizes top tier local agents who specialize in certain pockets of Los Angeles County to find investment opportunities. TriWest then underwrites each opportunity internally, walks every potential purchase to estimate amount of rehab needed to reposition the asset and observes the neighborhood and the property’s location on the block (corner lot, alley access, etc.). Upon completion of renovations, TriWest utilizes its team of real estate agents across Los Angeles County to sell the property to an end buyer.

TriWest’s Performance Highlights Include:

  • Strong Track record with over 105 successful purchases and 72 dispositions in the last 30 months;
  • Aggregate Unlevered Annualized return of 29%;
  • Average Investment Cycle of 174 days per property;
  • Established Agent and Contractor Network.
Management Team

The Managing Partners of TriWest include Blake and Bryce Overend and Omar Ivanir. The principals have excellent credit, substantial liquid assets and net worths in excess of $1 Million. Below is additional info on the principals.

 

Blake Overend, Managing Partner

Blake runs operations for TriWest and focuses on evaluation, acquisition, renovation, and re-sale of distressed residential real estate properties. Blake has over six years of experience in buying and selling distressed residential real estate in Los Angeles County and has overseen over 125+ transactions valued at more than $75 million. Blake graduated from the University of Southern California with a BS in business and a concentration in Real Estate Finance and Entrepreneurship.

 

Omer Ivanir, Managing Partner

Omer focuses on deal evaluation, acquisition, financing, and investor relations for TriWest. Omer has been in real estate finance for six years with over $800 million in financings for various real estate projects. Omer graduated from the University of Southern California with a BS in business and a concentration in Real Estate Finance and obtained his Juris Doctor Cum Laude from Loyola Law School.

 

Bryce Overend, Managing Partner

Bryce Overend began his career at George Smith Partners, a real estate investment bank located in Century City, CA with an average annual production of $2 billion in real estate financings per year. Bryce has been in the real estate finance industry for two and a half years with over $150 million in financings for various real estate projects. Bryce graduated from the University of Southern California with a BS in business and a concentration in Corporate and Real Estate Finance.

 
Property Summary

Please see below for a description of the property from the Sponsor, TriWest:

Bajio Road, Encino is another great investment opportunity presented by Triwest Development, LLC. This large upslopeing lot, situated on a private cul de sac protected street, provides the perfect canvas to build a beautiful estate property in one of the hottest markets in Los Angeles. Encino has seen a large increase in the number of sales and desirability of estate properties between $4,000,000-$6,000,000, and currently has one of the biggest demand backlogs in the county. The large price appreciation in surrounding neighborhood such as Brentwood, Pacific Palisades, and Century City has resulted in many buyers going to Encino where they can get more “bang for their buck,” but still be well located to most business centers in Los Angeles.

The house will be a full East Hamptons Cape Cod style, complete with a main living house, full service guest house/pool suite, three car garage, private flat backyard, swimming pool, movie theater, outdoor entertaining area, and everything a buyer will expect for this style estate home. The exterior will be full lath 12″ white siding, black Jeldwin casement fiberglass windows, and white brick accents throughout. The interior will be accented by full height paneling details, wainscoting, french oak whitewashed floors, full glass wine room, Walker Zanger and Anzacs tile/stone materials, full overlay exposed hinged cabinets, and intricate crown molding details. The house’s orientation is about twenty feet above street level, giving it a grand feel that is complimented by its completed flat backyard that buyers in this area are looking for. This will truly be a family’s dream estate home and we expect a quick and easy sale once completed.

An example of the Sponsor’s recent work can be seen here.

Property Details
Lot Size 29,621 SF
Square Feet 7,800 SF
Beds/Baths 7.0 / 7.5 (w/ 1 half baths)
 
 
18.3%
8.0%
$5,000
Equity
 
Investment Summary

This offering presents investors with an opportunity to participate in a development and sale of a single-family home located in Encino, California, an affluent town situated 20 miles northwest of the Los Angeles CBD. Investors will receive an 8% annualized cash on cash return paid monthly plus a 27.5% profit share upon sale of the property. The Project Sponsor, TriWest Development, is an experienced residential real estate investment company focused on value add properties in Southern CA and has completed over 105 successful purchases and 72 dispositions in the last 30 months. TriWest’s current luxury residential portfolio is valued in excess of $100 million. TriWest Development focuses exclusively on class A residential properties located in the Los Angeles coastal corridor and other select areas of Los Angeles. For details on completed projects, please see the Documents tab.

Investment Type

Residential Rebuild

Term

16 Months

Financial Overview

Investment Type

Preferred Equity

Monthly Cash Return

8%
Annualized

Total Projected IRR

18.3%
Annualized

Equity Multiple

1.24x

Investment Highlights and Risk Mitigants

Investors will be investing in a single purpose entity that will invest in the entity that holds title to 16810 Bajio Road in Encino, CA, a city located along Highway 101, 20 miles northwest of the Los Angeles CBD. Encino is an affluent area bordered to the south by the Santa Monica Mountains National Recreation Area. The project is a residential rebuild and sale project in which the Sponsor will purchase, rebuild and sell the home within a 16-month time period.

  • Highly sought-after neighborhood: Encino boasts high desirability due to its location amidst the Santa Monica Mountains, distance to Downtown Los Angeles, and affluent population. The median home price, rental rate, and household income are all above each’s national average based on U.S. Census.
  • Experienced track record: The Sponsor is an experienced residential real estate investment company focused on value-add properties in Southern CA with a strong track record. The Sponsor has completed over 105 successful purchases and 72 dispositions in the last 30 months. To view past projects completed by the Sponsor, please click here.
  • Favorable transaction structure: The Sponsor will be contributing at least $147,549 (10%) of the required capital for the project, with Genesis Capital contributing $480,000 (33%), and RealtyShares raising up to $842,000. These contributions, as with the contribution of RealtyShares’ Investors will be structured as equity. Investors are projected to receive an 8% cash on cash return (paid monthly) plus 27.5% of the pro-rata profits upon sale of the home in 16 months (above a 9% preferred return). The breakeven value on a per square foot basis to receive the preferred return is $565 PSF, which is almost 15% below the pro forma sale price on a per square foot basis.
  • Seasoned sub-contractors with long-standing relationships: The General Contractor for this build, Yadgir Construction, has substantial experience with TriWest rebuilds of this nature and has led the development on previous RealtyShares offerings including 12090 Chalon Road. The architect for the project is Southern California Architects, an architectural firm focused exclusively on high end developments, which has also collaborated on many TriWest developments and previous RealtyShares offerings including 3043 Greenfield and 1924 Fox Hills.
Location Highlights

The property is located in in Encino within the Los Angeles MSA. Below are a few location highlights:

  • Encino is located 20 miles northwest of the Los Angeles CBD and houses approximately 43,000 residents, according to Realtor.com.
  • The median income in Encino is $114,177, according to Realtor.com and the median home price is $990,428, according to U.S ACS.
  • The subject property is situated within a largely residential area, 20 miles from the Los Angeles CBD. The subject is a few blocks away from the Encino Reservoir and less than 2 miles from Highway 101.
  • Trivia: Encino was the setting for the 1992 comedy film, Encino Man starring Brendan Fraser, and was filmed in just 33 days.
Risk Disclosures

Each prospective investor in this investment opportunity should read the Operating Agreement and Subscription Agreement for RealtyShares 105, LLC before investing and should consult appropriate legal, tax and investment advisors. Please note that RealtyShares is not serving as your fiduciary or advisor with respect to this opportunity. Below are risks associated with this investment that should be carefully reviewed prior to any investment in this opportunity:

  • RealtyShares 105, LLC will be investing in TWD Bajio, LP (“16810 Bajio Road” or the “Property”). Any equity investment in 16810 Bajio Road will be subject to, among other things, the Property’s operating agreement which provides investors with little or no control over the management of 16810 Bajio Road or the Property. A draft version of this 16810 Bajio Road Operating Agreement can be found in Exhibit D to the Subscription Agreement for RealtyShares 105, LLC.
  • The Property’s economic performance and value, and thus the value of investors’ investment in 16810 Bajio Road, is subject to risks associated with the property including the failure of the property to generate net sales proceeds sufficient to meet its debt repayment or preferred return.
  • The Property hold or holding periods described in this deal page are projections only. Although we believe these projections to be reasonable, there can be no assurance when an investment or if an investment will ever be liquidated.
  • The financial forecast contained in this deal page and any other materials to delivered to you are based on numerous assumptions. Although we believe these assumptions to be reasonable, all of these assumptions are subject to uncertainty.
  • Market conditions could reduce the Property’s sales price and actual operating expenses may be higher than projected, thus reducing the distributions to be made to investors. This could result in investors not meeting the projected returns as shown on this deal page.

Please note that this is not an exhaustive list of the risks associated with this investment. For a complete list of risk factors, please review Exhibit A in the Subscription Agreement for RealtyShares 105, LLC, which can be found in the Documents tab.

Contact Information:

Blake Overend
Omer Ivanir
Bryce Overend

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