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Pintar Investment Company 2015 Investor Conference | Investing in Single Family Homes while Compounding Wealth | Thursday, 29 January 2015

Final -- Pintar Investment Company

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Page 1: Final -- Pintar Investment Company

Pintar Investment Company2015 Investor Conference

| Investing in Single Family Homes while Compounding Wealth |

Thursday, 29 January 2015

Page 2: Final -- Pintar Investment Company

Single Family Residential Investment Leader

Topics Slide

Pintar Investment Company Overview 3

2014 Year In Review 7

2015 & Beyond Opportunities 13

PICR Fund III 34

Investment Terms and Disclaimers 41

Contact Information 46

Table of Contents

Page 3: Final -- Pintar Investment Company

Company Overview

3

History • Founded in 2008• Invested Over $800M in 4,000 homes in

past few years on behalf of institutional and private investors

Why Us? • We’ve consistently outperformed major market indices over the past six years

• Vertically Integrated Services – Vertical RE• Scale delivers operational efficiencies• Alignment of interest – All partners have

skin in the game

Partnerships • Institutional investors we have provided our vertically integrated services to include:• Colony American Homes• Progress Residential• KKR / Beazer Pre-Owned Homes

StrategicRelationships

San DiegoFlip Profit: $33,628

Spring ValleyFlip Profit: $27,971

La MesaFlip Profit: $50,345

San DiegoFlip Profit: $50,548

Page 4: Final -- Pintar Investment Company

Pintar Investment Co./Vertical RE Platform

Delivering consistent service across multiple markets through a vertically integrated services platform.

4

1

2

3

45

6

7

Strategic real estate investment

advisory services

Property

Management/Leasing

Mortgage Lending Services

Analytical & Valuation

Services

Escrow/Title Services Construction Management &

Maintenance

Brokerage operations

Page 5: Final -- Pintar Investment Company

It’s All About That Yield!

Average Annual Cash on Cash of 8.4% since Inception.

5

Avg. Quarterly Cash-on-Cash Distribution

Avg. Quarterly Unrealized Gain

CAGR Growth

PICR 1.9% 8.6% 29.2%

Dhandho 1.8% 12.6% 37.2%

Combined 2.0% 10.1% 32.5%$104,175.48

$107,322.75

$109,893.12

$112,241.50

$114,027.08

$114,027.08

$116,784.37

$117,243.57

$118,306.84

$120,175.99

$121,333.41

$101,906.85

$103,195.51

$103,869.76

$104,760.81

$110,437.07

$111,167.88

$111,957.33

$112,990.71

$116,379.06

$118,115.44

$119,572.21

$90,000

$95,000

$100,000

$105,000

$110,000

$115,000

$120,000

$125,000

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

Cash on Cash Compounded Return$100,000 Initial Equity Investment

PICR Dhandho

Page 6: Final -- Pintar Investment Company

It’s All About That Yield!

Average Annual Cash on Cash of 8.4% since Inception.

6$116,788.64

$131,964.60

$145,701.25

$152,580.13

$159,174.91

$165,225.98

$171,715.41

$177,899.06

$191,301.72

$205,742.62

$215,433.31

$101,906.85

$112,753.58

$120,748.06

$134,406.21

$156,143.25

$172,387.86

$191,305.15

$213,176.83

$230,652.01

$245,486.62

$258,052.82

$115,512.19

$130,263.90

$143,181.98

$151,179.72

$161,795.27

$170,856.80

$181,260.00

$192,954.96

$207,649.23

$222,207.07

$232,761.54

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

Cash on Cash and Unrealized Combined Compounded Return$100,000 Initial Equity Investment

PICR Dhandho Combined Fund

The compound annual growth rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period.The formula for CAGR is:

CAGR = ( EV / BV)1 / n - 1EV = Investment's ending value

BV = Investment's beginning valuen = Number of periods (months, years, etc.)

Page 7: Final -- Pintar Investment Company

Densities of Properties Deliver Operational Savings

Vertical RE platform has created operational efficiencies through increased regional densities.

7

Page 9: Final -- Pintar Investment Company

Sample Renovation: 403 Vista Grande, Newport Beach

9

Front House Living Room

Kitchen Backyard

Purchase Price: $800,000 Renovation Cost: $67,481 Sale Price: $990,000 Loan Proceed: $250,000

Investor Profit: $43,793 Annualized Unlevered ROE: 13% Annualized Levered ROE: 18%

Page 10: Final -- Pintar Investment Company

Sample Renovation: 4680 Edenvale Way, La Mesa

10

Front House Living Room

Kitchen Backyard

Purchase Price: $437,000 Renovation Cost: $55,178 Sale Price: $569,900 Loan Proceed: $218,500

Investor Profit: $36,965 Annualized Unlevered ROE: 47% Annualized Levered ROE: 83%

Page 11: Final -- Pintar Investment Company

Sample Renovation: 4570 Miami Way, San Diego

11

Front House Living Room

Kitchen Bathroom

Purchase Price: $395,000 Renovation Cost: $52,571 Resale Value: $525,000 Loan Proceed: $198,579

Investor Profit: $36,805 Annualized Unlevered ROE: 56% Annualized Levered ROE: 100%

Page 12: Final -- Pintar Investment Company

Sample Renovation: 14506 Kittery St., Poway

12

Patio Backyard

Living Room Dining Room

Purchase Price: $375,000 Renovation Cost: $63,562 Sale Price: $455,000 Loan Proceed: $189,676

Investor Profit: -$12,156 Annualized Unlevered ROE: -7% Annualized Levered ROE: -12%

Page 14: Final -- Pintar Investment Company

2014 Market Drivers

• Employment increased on average by 241K per month which is 47K more per month than last year

• The Unemployment rate moved from where it was at the beginning of the year at 6.6% to 5.8%

• US GDP for 2014 will likely be close to 3% with inflation close to 1%

• We saw a 50% decline in the price of oil, based predominantly on a new supply, into the busiest retail period of the year

• Geopolitical tensions rose, yet remain contained (e.g. Russia/Ukraine, ISIS…)

• China exceeded expectations posting a strong performance despite declining GDP

• The Federal Reserve ended Quantitative Easing and members indicated a 2015 rate increase – The real estate market didn’t even blink

14Source: J.P. Morgan – 2015 Economic & Market Outlook; Jan 2015

The housing market appears to have stabilized and is growing at a measured pace. Consumer sentiment and spending have been on an upward trajectory.

Page 15: Final -- Pintar Investment Company

US GDP & The Consumer

Lower household debt and improving consumer confidence are driving economic growth.

15Source: BEA; FactSet; JP. Morgan Asset Management

90% increase in sales over

bottom

20% drop in expenses

Page 16: Final -- Pintar Investment Company

Households in The United States are Deleveraging

The US is entering 2015 with a substantially improved debt profile relative to key developed and emerging market countries.

16Source: Investment Strategy Group, BIS, Datastream, IMF

Page 17: Final -- Pintar Investment Company

Investing in Single Family Homes

The best risk adjusted investment opportunity in real estate.

17

“Single Family Homes – I would load up on them…it is a very attractive asset class now.”

- Warren Buffet(When asked by CNBC where he would invest in 2010)

Operational efficiencies drive higher returns to our investors

“I still believe investing in single family homes is a great value investment opportunity.”

- Warren Buffet(When asked by Jeff Pintar at a luncheon event in

April 2014)

Page 18: Final -- Pintar Investment Company

Historical affordability is driving home price appreciation creating wealth

While mortgage payments haven’t changed significantly, sales prices have increased 45.8% in the past 14 years.

18Source: Current Population Survey/Housing Vacancy Survey, Series H-111, US. Census Bureau, Washington, DC

2000 2014

Existing Home Sales 5.2M 5.1M

New Home Sales 880k 445k

Mortgage Rates 8.00% 3.85%

Avg. Mortgage Payment* $1,187/mo $1,217/mo

Sales Price $142k $207k

Population 282M 319M

* Based on 360 months loan term with 12% down payment

1.2% property taxes, $800 home insurance

Page 19: Final -- Pintar Investment Company

Low Rates Push Up Home Prices

The historical average spread between the Federal Fund rate and the 30 year-mortgage rate is 3.06%. As of July 2014, the spread has widened to 4.05%.

19Source: Economic data by The Federal Reserve Bank of Saint Louis

0.00

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Home Price v.s. Interest Rates

Average Home Price Index Federal Fund Rate 30 Year Mortgage Rate

Page 20: Final -- Pintar Investment Company

Median Age of Homeowners Has Increased to 44

Aside from the increase in median age of homeowners the average gross household income of homeowners has increased to $85,500. This is above the income of most recent college

graduates, average at $45,473.

20

2010 Profile 2011 Profile 2012 Profile 2013 Profile 2014 Profile

Median Age 39 45 42 42 44

Gross HH

Income

$72,200 $80,900 $78,600 $83,300 $84,500

Household

Composition

58% married

couples,

20% single

females, 12%

single males,

8% unmarried

couples

64% married

couples,

18% single

females,

10% single

males,

7% unmarried

couples

65% married

couples,

16% single

females,

9% single

males,

8% unmarried

couples

66% married

couples,

16% single

females,

9% single

males,

7% unmarried

couples

65% married

couples, 16%

single females,

9% single

males, 8%

unmarried

couples

Children in

Home

35% 36% 41% 40% 35%

Own a 2nd

Home

14% 19% 19% 19% 21%

Source: 2014 Profile of Home Buyers and Sellers, National Association of RealtorsApril 2014 Salary Survey, National Association of Colleges and Employers

Page 21: Final -- Pintar Investment Company

Availability of Credit

21

Pendulums have swung too far in both directions.

2005

WTF? Helicopter Ben can’t qualify

for a loan!

No-doc mortgage loan

-- even a monkey could get a loan! 2014

Page 22: Final -- Pintar Investment Company

Despite Lack of Credit, Current Stock of Homes on Market is 72% Below the 42 Year Avg.

The current housing shortage in Southern California will continue to push home prices higher.

22

Source: Buiding Market Intelligence, Issued on January 2015 by John Burns Real Estate Consulting Source: Buiding Market Intelligence, Issued on January 2015 by John Burns Real Estate Consulting

Source: Building Market Intelligence, Issued on January 2015 by John Burns Real Estate Consulting

Page 23: Final -- Pintar Investment Company

Widening Gap: Population Growth vs. Housing Starts

On average, population growth has been 4.7x new single home construction over the past 6 years from 2008 – 2014.

23Source: Economic Data by The Federal Reserve Bank of Saint Louis

New SHF Construction Population Growth Population Growth over

(units) (person) New SHF Construction

2008 622 thousand 2.8 million 4.5x

2009 445 thousand 2.7 million 6.0x

2010 471 thousand 2.4 million 5.0x

2011 431 thousand 2.2 million 5.1x

2012 535 thousand 2.2 million 4.1x

2013 618 thousand 2.2 million 3.6x

2014 677 thousand 3.1 million 4.6x

Year

Page 24: Final -- Pintar Investment Company

Widening Gap: Population Growth vs. Housing Starts

On average, population growth has been 4.7x new single home construction over the past 6 years from 2008 – 2014.

24Source: Economic Data by The Federal Reserve Bank of Saint Louis

0

500

1000

1500

2000

2500

0

50

100

150

200

250

300

350

Housing Starts (Thousand U

nits)To

tal U

.S. P

opul

atio

n (M

illio

n)

U.S. Population Grows Faster than Housing Starts

Population Housing Starts - Single Family

Housing Starts - Multi-Family Total Housing Starts

Page 25: Final -- Pintar Investment Company

Housing Shortage

The bubble in homeownership has been completely reversed. Household formation has been trending upward while new construction starts have been lagging.

25

Page 26: Final -- Pintar Investment Company

Current Value Still Below Replacement Cost

Cost of Build Dhandho

Average Size of New Home

2,500 sq. ft. Average Rental Home Size

1698 sq. ft.

Entitlement Fee $10/sq. ft. Average FMV $178,000

Architectural Fee $20/sq. ft. Cost Per Square Foot $105

Permit/Fee $10/sq. ft. Average Basis of Portfolio

$153,000

Holding Cost $5/sq. ft. Basis Per Square Foot $90

Hard Cost $55/sq. ft. Avg. Cost per Sq. Ft. 90.28

Total Cost(Excluding Land)

$100/sq. ft. Current Value as % of Intrinsic Value

117%

26

Page 27: Final -- Pintar Investment Company

Supply & Demand Imbalance

Housing shortage is expected to continue due to a lack of new home construction.

27

Up to 5 million homeowners who lost their homes to foreclosure since the real estate crash are now renters

Landlords are getting a boost from some of the 75 million millennials – 18 to 34 year olds – who are starting out as renters rather than buyers

Rents on all single-family homes are expected to rise 5% while multifamily units are expected to climb 3.5% in 2015

The U.S. rental-vacancy rate fell to 7.4% in Q3 2014, below 8%. The vacancy rate is below 5% in some states includingCalifornia, Nevada, and Arizona

Availability of credit is still a challenge

Source: Washington Post – December 19, 2014http://washpost.bloomberg.com/Story?docId=1376-NGN6FC6K50Y401-2GLUOSDA5R4U1OP5SGUDJUDH18

Page 28: Final -- Pintar Investment Company

Suburban Population Growth Outpacing New Supply

Buoyed by affordability and supply constraints, suburban markets displayed impressive rent growth in 2014. Suburban markets are teed up for continued outperformance.

28

* OC Register, Joel Kotkin, Don’t Bash The Burbs, Dec 2014**Frank Magid Associates, Why America’s Young Restless Will Abandon Cities for Suburbs*** Business Insider, Americans Are Still Moving to The Suburbs, Andy Kiersz, Feb 2014

2020

Population of Inland Empire grew from 265k in 1945 to 4.25M in 2014*

2014

Population of Inland Empire could pass San Francisco and

Boston*

20102000

From 2010-13, the suburbs added 5.4M people, while the core cities have added 1.5M*

The 35 - 44 age group grew 12% in suburban areas while dropping 22.7% in

the core cities – representing ~1.8M expansion in the suburbs while losing

1.3M in the core cities**

The 35-44 age group grows fastest, over 10%, in Las Vegas, Riverside- San Bernardino, San

Antonio, Houston**

***

Page 29: Final -- Pintar Investment Company

America is Undergoing a Shift in Demographics

There are more than 75M Millennials, which make up 25% of the U.S. Population. 50% of Millennials are single and the majority of them make less than $40K per year.

29

6.2% 6.4% 6.4% 6.6%7.1%

13.7%

12.6%13.4%

6.8%5.9%

8.6%

4.3%

2.0%

0

5

10

15

20

25

30

35

40

45

50

<5

5-9

10

-14

15

-19

20

-24

25

-34

35

-44

45

-54

55

-59

60

-64

65

-74

75

-84

>8

5

Po

pu

lati

on

(M

illi

on

)

Age Group

U.S Demographics by Age Groups

Source: U.S. Census Bureau, Population Division Source: 2014 Millenials Survey, California Association Of Realtors

Source: 2014 Millenials Survey, California Association of Realtors

They are all renters!

Page 30: Final -- Pintar Investment Company

Down Payment: The Biggest Obstacle for Buyers

63% of young renters have an insufficient amount of cash to put up the minimal 5% down payment in order to obtain a mortgage.

30

Estimated Upfront Cash

Needed to Purchase a Home

2014 Sta rte r Home Price :

$292,700**3.50% 5% 10% 20%

Down Payment 10,245$ 14,635$ 29,270$ 58,540$

Closing Costs**

Cash Reserve (0-6 months)

Estimated Minimum T ota l

Upfront Cash12,647$ 17,037$ 31,672$ 60,942$

$2,402

$0-$4,458

Down Payment (% of Home Price )

“It takes an average of 12.5 years to save up a 20% down payment – the usual requirement by banks – with the current personal savings rate of 5.6%”, according to a new research by real-

estate firm RealtyTrac.

**Source: National Housing Survey, Fannie Mae

Page 31: Final -- Pintar Investment Company

Declining Homeownership Rate Implies Rental Stability

In Q3 2014, renter household growth = 1,239,314 vs. Owner Household Growth = -683,239

31Source: Residential Vacancies and Homeownership in the First Quarter 2014, U.S. Census Bureau, April 29, 2014

Census Bureau; John Burns Real Estate Consulting LLC (Data: 2014 Q3; Pub. 12/14)

Page 32: Final -- Pintar Investment Company

SFR Rentals are 11.2% of the U.S Housing Stock

U.S. Homeownership peaked at 69% in Q4 2004. Since then, it’s been steadily declining. Each % point decline represents a change in the living situation of ~1.1 million people.

32

Renter-Occuppied: 42.5 Million

32%

Owner-Occupied: 76.9 Million

58%

Vacant: 13.9 Million

10%

U.S Housing Stock Totals:~133M Units Or $20.2 Trillion Market

Single-Family 14.9

Million35%

2 to 9 Units 7.7 Million30%

5 or More Units 17.9

Million30%

Mobile Homes 1.9

Million5%

What Type of Structure Do Renter Households Live in?

*JBREC (U.S. Housing Analysis & Forecast Report), Q3 2014.

* *

Page 33: Final -- Pintar Investment Company

The Western Region has the Largest Renter Base in the United States

Lower homeownership rate implies a higher renter base in the Western Region of the United States.

33Source: Current Population Survey/Housing Vacancy Survey, Series H-111, US. Census Bureau, Washington, DC

Page 34: Final -- Pintar Investment Company

Consistent Rent Growth Despite Economic Uncertainty

Despite ongoing economic uncertainty, rent has consistently grown an average 5.7% annually since 2001.

34

5.7% Average Annual Rent Growth

Source: Residential Vacancies and Homeownership in the First Quarter 2014, U.S. Census Bureau, April 29, 2014

Page 35: Final -- Pintar Investment Company

PICR Fund IIICompounding Wealth Along with Predictable, Consistent, Out

Sized Risk Adjusted Yields

Page 36: Final -- Pintar Investment Company

PICR Fund III Pro-Forma Performance

36

0%

10%

20%

30%

40%

50%

60%

70%

80%

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

PICR Fund IIIPro-Forma Performance

Equity Investment Total Outstanding Debt Proceed Total Flip Distributed

Total Rental Distributed Total Unrealized Gain Compounded all In Return

Compounded Cash on Cash Return

Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16

Monthly Cash on Cash ROE 0.31% 0.78% 0.85% 2.98% 1.60% 2.74% 2.77% 5.28%

Monthly Unrealized Return % 0.00% 2.50% 0.00% 2.50% 0.00% 2.50% 0.00% 2.50%

Monthly Total Return 0.31% 3.28% 0.85% 5.48% 1.60% 5.24% 2.77% 7.78%

Compounded Cash on Cash Return 0.77% 4.29% 11.39% 19.77% 24.53% 33.05% 44.56% 57.02%

Compounded Unrealized 4.03% 6.53% 6.53% 9.03% 9.03% 11.53% 11.53% 14.03%

Compounded all In Return 4.81% 10.82% 17.92% 28.81% 33.56% 44.58% 56.09% 71.05%

Page 37: Final -- Pintar Investment Company

Pintar Fund Restructuring – Current Structure

37

PIC (GP)

PICR Investors

Dhandho Investors

PICR, LPDhandho,

LP

Pros Alignment of Interests Liquidity Low Fees

Cons Inconsistent Deal Flow Short-term Capital Gain Rate Lumpy Returns

Pros Alignment of Interest Low Fees Consistent Cash Flow Wealth Creation Long-term Capital Gain Rate

Cons Liquidity

Current Investors invest in PICR Fund and Dhandho Fund separately.

Page 38: Final -- Pintar Investment Company

Pintar Fund Restructuring – Final Structure

38

PIC (GP)Investors (LP)

PICR, LPDhandho,

LP

PICR Fund III, LP

PICR Fund III

Alignment of Interest

Low Fees

Liquidity

Wealth Creation

Long-term Capital Rate

Consistent Predictable Cash Flow

1. Formation of Master Fund, LP

2. Investors contribute PICR, LP interests and Dhandho, LP interests to Master Fund, LP

3. In exchange for contributed LP interests, investors receive Master Fund, LP interests

Page 39: Final -- Pintar Investment Company

PICR Fund III Structure

PICR Fund III provides investors better return with lower fee cost structure.

39

PICR Dhandho PICR Fund III

GP Promote 70% / 30% 70% / 30% 70% / 30%

Preferred Return 6% 8% 6%

Asset Management

Fee

0% 1% 0.5%

Acquisition Fee 0% 1% 0.5%

Disposition Fee 0% 1% 0.5%

Loan Fee 0% 1% 0.5%

Redemption Rights Annual 5 Years Annual

* All fees to GP After Investors Receive Preferred Return

Page 41: Final -- Pintar Investment Company

Overview of Key Offering Terms of Fund

41

Fund Name: PICR Residential Fund III

Manager: PIC LLC

Preferred Return: Investors earn an 6% preferred return on their invested balance. If

our quarterly cash distribution is less than 6%, the balance will

accrue to their capital balance and will be paid before any profit split

Minimum Investment: $250,000 or other amount at the discretion of the manager

Redemption Rights: Annual Redemption Rights

Asset Management Fee: 0.5% per annum

Profit Splits: 70% to Investors and 30% to Manager after the 6% preferred return

Distributions: Quarterly

Target Leverage: Not to exceed 60% of value

Target Returns: The fund expects to deliver in excess of 20% IRR to investors after all

fees and expenses

Page 42: Final -- Pintar Investment Company

Other Investment Considerations

42

Alignment of Interest/Co-Investment

• The principals of PIC have substantially invested all of their capital alongside of our investors

Debt Guarantee

• PIC will provide any and all necessary guarantees required for any debt financing

Diversification

• The Fund will diversify its investments across many properties in various markets

Internal Controls/Risk Management

• The principals of the Fund are accustomed to maintaining a high level of internal controls, financial accounting and risk management analysis through their many years of experience in the real estate industry

Reporting

• PIC has a web based reporting system that allows investors 24/7 access to all information on every property, the Fund’s balance sheet, or any other relative information

Page 43: Final -- Pintar Investment Company

Investing in Our Funds Has Risks – Please Review

43

Your potential interest in this investment opportunity (your “Interest”) is speculative and involves risk.

You should carefully read this memorandum and, if one has been provided, review the proforma for the Interest (“Proforma”), including the assumptions thereto, before purchasing the Interest. The Proforma consists of “forward–looking:” statements that are based on various assumptions regarding future operation and management of the Subject Project, such as renovations, marketing and certain budgeted expenditures. These forward-looking statements may not accurately predict future events or the actual performance of the Subject Project. It is possible that you could incur a complete loss of your investment and you should be able to financially bear such a loss. In addition, any projections and representations written or oral, which do not conform to those contained in the investment proposal must be disregarded.

You should consider carefully, among other risks, the following risks, and should consult with your own legal, tax, accounting and financial advisors before investing in the Interest. These risk factors, or other events, could cause actual results to differ materially from those discussed in this memorandum.

You should consult with an attorney and a tax advisor prior to purchasing the Interest in order to examine the full extent of any potential tax and legal consequences relating thereto. This memorandum is not intended to provide you with any individual legal or tax advice, nor is it intended to provide an all-inclusive discussion of the possible risks relative to your individual circumstances.

Page 44: Final -- Pintar Investment Company

Risks of Investing in Real Estate

44

General Risks of Investment in the Subject Project

Cash flow will be derived from the resale of properties and/or rental payments. Payments to you will be contingent on the Subject Project’s successful operation; therefore, the economic success of an investment in the Interest will depend directly upon the resale market and/or lease or leases.

A failure to sell a property and/or a vacancy by a tenant that is not replaced or is replaced at less attractive terms can adversely affect operating results or render the sale or refinancing of the Subject Project difficult or unattractive.

No assurance can be given as to the accuracy of certain assumptions related to the future sale and/or occupancy of the Subject Project by tenants or the ability of such tenants’ to pay rents or costs for the Subject Project, as these matters will depend on events and factors possibly beyond the control of the limited liability company members.

Such factors include continued validity and enforceability of the lease in the event a tenant defaults thereunder, the financial resources of the tenant, adverse change in local population trends, market conditions, neighborhood property values, local economic and social conditions, supply and demand for property similar to the Subject Project, competition from similar properties, environmental hazards and liabilities caused by third parties, interest rates and real estate tax rates and assessments, governmental rules, regulations and fiscal policies, zoning restrictions, the enactment of unfavorable environmental or hazardous material laws, labor and material costs, uninsured losses, effects or inflation and other risks.

Page 45: Final -- Pintar Investment Company

Risks of Investing in a Private Offering

45

Sale of Interests

You will be required to represent that you are acquiring the Interest for investment purposes and not with a view to distribution or resale (of your Interest), and that you can bear the economic risk of investment in the Subject Project for an indefinite period of time. This representation is required because the Interest has not been registered under any state “Blue Sky” or securities laws, and cannot be sold unless they are subsequently registered or an exemption from such registration is available. In addition, there is no guarantee that a market will exist for the Interest, and you cannot expect to be able to liquidate your investment in case of an emergency. Further, the sale of the Interest may have adverse federal income tax consequences to you.

Offering Not Registered With Securities and Exchange Commissioner or State Securities Commissions

The Interest will not be registered with the SEC or any state securities commission. The Interest is being offered in reliance upon an exemption from the registration provisions of the Act and state securities laws applicable only to offers and sales to prospective members meeting the suitability requirements set forth herein. Since this is a nonpublic offering and, as such, is not registered under federal or state securities laws, prospective members will not have the benefit of review or comment by the SEC or any state securities commission.

Private Offering Exemption – Compliance with Requirements

The Interest is being offered and will be sold to you in reliance upon a private offering exemption from registration provided in the Act and state securities laws. If Pintar should fail to comply with the requirements of such exemption, you will have the right, if you so desire, to rescind your purchase of the Interest. It is possible that if your rescission succeeds, Pintar may not have sufficient funds to pay for such rescission. Your right to rescission might also fall under applicable state securities or “Blue Sky” laws and regulations in states where the Interest will be offered without registration or qualifications pursuant to a private offering or other exemption.

Page 46: Final -- Pintar Investment Company

Pintar Investment CompanyInvestor Relations

www.pintarinvestmentcompany.com

Kevin SharpInvestor Relations

27372 Calle Arroyo

San Juan Capistrano, CA 92675

Direct/Fax 949.284.0838 | Mobile 949.877.4112

[email protected]

Jeff Pintar CEO

27372 Calle Arroyo

San Juan Capistrano, CA 92675

Office 949.276.4166 | Direct 949.284.0284

[email protected]