Town & Country is offering up a 25% equity interest in the Mountain View Development Project for an initial $100K investment on a total commitment of $1.25M. Investors will have no development responsibilities, but will share in the profits from sale proceeds. A minimum investment of $50,000.00 is required.

Additional funds will be drawn on a traunch schedule as milestones are reached. Funds will be invested directly into the project thus further mitigating risk while enhancing the value of the underlying property and approved project as a whole.

Funds will be used for general contract expenses, as well as soft costs related to engineering, architectural and fees incurred during the environmental review and approval processes.  A portion of the initial investment will also be used for site improvements including the renovation of the existing home.

All equity investment proceeds will be subject to a periodic audit review. The sponsor will also offer the first investor(s) a personal promissory note equaling 5% of the non-refundable $187K deposit. Thereafter, investors will have an exit option which will require a 30 day notice for the full return of principle subject to the performance and discretion of the sponsor.

Equity distributions will take place at each closing with the Mortgage holder getting paid first on each "lot" closing, followed by the net equity distribution of proceeds. The same applies when houses are sold where any construction financing will get paid first followed by the net equity distribution. Since this is where the bulk of the profits will come from in year 2 and 3, the investor(s) will not see any significant return in year 1.

This first round equaling 25% includes 10% reserves which this sponsor feels is sufficient when factoring in the following:

1.       Non-equity contributions from the site contractor

2.       The sale / refinancing of the renovated home

3.       FAA grant money

4.       Possible bonding of escrow land and home deposits

5.       Earned equity from the "as is" and "approved" appraised value

6.       Earned equity from approvals

Should this initial offering prove insufficient, a second offering out of the remaining 75% equity may take place.

Financial Summary

Management and its outside Consultant have diligently prepared Cash Flow Projections and Forecasts using current market values and NOT SPECULATIVE "TRENDING" to effect projected income. Naturally, unforeseen expenses, difficulties, and delays frequently encountered in operations could hinder the Company from executing its business strategy.  These include general economic and business conditions.

Total projected Mountain View revenue for the three years is roughly $35 million, with total cost of revenue of $18 million.  G & A expenses for the three years are $900,000, leaving net income of $16.85 million before income taxes and other non-cash items. Attributing to the significant projected returns is Towne & Countys functioning as both the Builder and Developer.

Projected return is 337% over a three-year period based on 75% of plan. Distributions of earnings will happen at the earliest possible time depending upon a number of factors, including then-current sales trends, and the amount of capital needed for the company to meet its building program obligations, payoffs of land loans, etc.

A certain level of cash is necessary to maintain the proper amount of working capital for company operations, regardless of the Companys profitability.  There will usually be differences between forecast and actual results because of material events not occurring as expected.

The Company's ability to operate successfully will depend upon a number of factors, including; the availability of adequate financing; competitive factors; and delays resulting from acts of nature.

Financial Projections

Use of Proceeds

The project will formally commence upon placement of the first $100,000 of the $1.25MM equity interest offered. This will be applied as part of a 5% non-refundable contract payment. An additional 85K, which represents the balance of the non-refundable contract payment will be made six months from the projects commencement. Both of these contract payments will be applied as part of the 20% contract deposit. The remaining 15% totaling $555K will be paid at closing when approvals are in place within 12 months. During months 1-12, an additional $260K will be expensed for engineering, architectural, renovations and other G&A related expenses required to obtain approvals.

By applying equity toward the purchase and expenses related to obtaining approvals, the value of the project when it is approved will increase by up to $2 MM. Additionally, by renovating the existing home, this will serve as an additional source of reserve equity and can be either refinanced or sold. Finally, escrow deposits will be taken on lots which will further enhance the value of the approved development plan.

During this same period the FAA will provide grant money up to $250K for improvements to the airstrip and related infrastructure. The site contractors have agreed execute up to $500K worth of work to the roads and other site infrastructure until the construction financing drawn on when the approvals are in place.

Finally, we anticipate the certified appraisal to be higher than the purchase price which will provide a beneficial equity position. Should it be necessary, a closing can arranged prior to obtaining approvals.

Development Plan

Meetings have been held with all key regulatory agencies, town counsel members, contractors and vendors. All parties have indicated that approvals can be obtained within 12 months based on our 40 home / 75 condo plan. With the due diligence completed, the project will commence immediately upon placement of the first $100,000.

Concurrent with the commencement of the project, engineering and architectural work, certain infrastructure improvements, as well as the renovation of the existing home will commence. While escrow deposits will be taken for proposed sub-divided lots, no homes or condominiums will be built or sold during year one.

The benefit of this approach is that we will not have to service any debt during the approval process and therefore avoid the risk of default while improving the value of the development plan.

All homes and condominiums will be built using "System-built" technology, which allows structural components, walls and floors to be constructed in quality-controlled factory settings, then transported to a site and assembled there by a builder, usually in only days vs. weeks or months.  What makes panelized homes unique is the use of Structurally Insulated Panels, better known as "SIP."  A SIP is a section of high-performance rigid foam, sandwiched between two structural skins of oriented strand board (OSB), which can be used for floors, walls and roofs in residential and commercial buildings.

While the total development is expected to take no longer than three years, fractional-share condominiums are to be sold at four shares per condominium unit. It is important to note that our projections reflect that probably not all condominiums will be sold by the end of the third year. In other words, there will be additional remaining fractional or whole shares to be sold after the end of year three.

Risk Factors

While certain provisions will be made to secure a portion of the equity, there is always the risk that for some unknown reason approvals may not be obtained even though all indications are otherwise. Additionally, other issues can arise in the course of conducting business which may impede our efforts.

Real Estate has proven to be more risk tolerant than many types of investments and, while all members of the development team have extensive experience, projects of this type require careful consideration prior to making any investment and individual investors should consult with their financial and legal advisors.

Exit Strategy

Exit strategies within the outlined timeline of approximately three years are many.

Chief among these would be the construction and sales of homes and condominiums according to plan with a prorate distribution of equity.

Second would be the re-sale of the individual land parcels if no construction were to take place, including the possible sale of the private airport, which has an estimated value of roughly $1.5 million to the FAA or pilot group, as well as the existing home.

The third would be to re-sell the permitted developments to outside investors groups, either or in whole or in part in the course of executing the plan.

Conclusion

Towne & Country is poised to make Mountain View one of the most exciting and compelling real estate investment opportunities anywhere in the region.

The time is ideal for this project. The pieces are in place, including the market demand, lack of viable competition, construction techniques, location, and pricing. The potential income from these projects could result in a significant return on investment for the savvy investor.

Please contact Mark Kenny 800-310-9490 or mark.kenny@tncgroupe.com to obtain additional details regarding this project.