The mission of Veterans Villa is to provide workforce housing, offices for small businesses owned by veterans and enriched services and programs for Veterans through a supportive and sensitive community.

1575655939 kim kuhle
Kim J Kuhle, General Partner

Financial Summary

Fundraise Summary

Security Type Common equity
Investor Eligibility Accredited Investors
Minimum Investment $25,000
% Offered 95.00%
Voting Rights Limited
Dividend At General Partner's discretion

Offering Materials

There are no offering materials available for this business. Check back soon.

Financials

Funding Plans & History

Additional Funding Uses for capital raised outside of this Offering

Total start-up requirements (including legal costs, architectural and related expenses) comes to $12,800,000 for the acquisition of 90 apartments, 50 garages and 4 acres of land and $1,000,000 for the development of the Veterans Villa Opportunity Fund LP.  A total of $5,000,000 will be used to improve the complex and increase asset value for the investors.  $1,000,000 will be spent renovating apartments.  $2,600,000 will be used to construct the eight office small business center.  $1,400,000 will be used to construct a 5,000 square foot clubhouse, physical therapy area and kitchen. 

The costs of the housing and the small business apartments are to be financed partially by the Qualified Opportunity Zone (QOZ) equity investment of $5,200,000. The total debt financing package includes a bank loan of $4,400,000 from UMB and a $3.2 million TIF/PACE loan.   The General Partner will apply for $3.2 million in Tax Increment Financing and PACE financing to help make the project financially feasible.   The PACE financing helps the financing work because it is based on a 20 year repayment schedule.  There are additional "financed startup costs" of $1,000,000.   This is paid for through an interest only bridge loan from UMB during construction of the clubhouse and business offices; the down payment for the total UMB financing package is 20% of the $7,600,000 loan package.  The General Partner will apply for grants from the Federal Home Loan Bank and the Department of Energy to reduce costs of construction and equipment.

Pitch Deck

Pitch Deck

Q&A

Describe the property

My goal is to design, build and grow a supportive community for veterans. 

Specifically, I plan to:

  1. Renovate 90 units of housing for veterans to make them handicapped accessible on the 4 acre site,
  2. Build a 15,000 square foot structure, which will be used for a clubhouse ($1.6 million) and co-working space/offices ($2.4 million) for veteran owned small businesses. 
  3. Rework the garages and the solar panels to allow for the clubhouse, sufficient covered parking and increased use of solar panels throughout the structures.  
  4. Provide supportive services.
  5. Connect the housing, clubhouse and business offices with state of the art fiber optics.
  6. Integrate an arboretum in the clubhouse plan to allow for improved meeting conditions and indoor gardening.   

The services will be designed to meet different needs and will range from art classes to group recreation activities to access to therapy (physical and psychological).  The list of supportive services that I will provide on-the Spring Manor site is long.  For example, Dr. Andy Shim, College of Saint Mary's, will send his PhD students over to assist veterans with physical and occupational therapy. 

In addition, to renovating housing for veterans, I will employ energy efficient design techniques.  This design will help reduce harm to the environment and reduce costs.   

To achieve the goal of building a Veteran community, I have worked with Vandenack Weaver Law Firm to develop and register a Qualified Opportunity Zone Fund.   This fund provides investors a way to use capital gains tax obligations for impact investing in  a targeted low income community.   The location of the property is in a Qualified Opportunity Zone.   I am hoping to gather investors who are interested in investing in the QOZ Fund, earning a positive rate of return and helping veterans. 

My plan is to continue the current use of the facility as it is now and slowly fill vacancies with veterans.  In other words, the investors will be able to receive profits from the rents when they invest.  More profit will be available for the investor after the small business offices are built.   

------

The product offered by Veterans' Villa is 4 two story apartment buildings (850 to 1,000 sq.ft.) and 5 town houses, offering safe, sanitary and affordable housing and 8 offices (1,200 sq. ft.) for veteran owned businesses and Veteran support programs.   Social services will include organized recreational activities, classes, gardening, artwork and group exercise.   The apartment buildings will be surrounded by courtyards, picnic areas and benches.   The campus will offer a clubhouse, commercial kitchen, conference room and co-working space.  While the public will not be excluded, Veterans will be encouraged to live at the housing development.   The other product offered is quality, accessible office space for four businesses that can be helpful for Veterans of all ages and backgrounds.   These services include small business assistance, wiring suitable for a software development company, infrastructure for healthcare service and a professional office suitable for lawyers, therapists and accountants.   The College of St. Mary's has offered to send PhD students to the site to offer physical and occupational therapy.   The healthcare service option will include visits by Visiting Nurses Association and other medical professionals.   The Clubhouse will also offer coffee service to encourage fellowship.   Business assistance counseling will be offered on-site by volunteer business executives.  Access to financial advice and technical assistance will be provided by local volunteer bankers.

What is the composition of your current team?

The management team includes Kim Kuhle, the on-site paid resident and Lund Company apartment managers.   The advisory board includes the members of the investment QOZ Fund.  The team includes professionals from Bricker Accounting, Peters Architecture, Leuder Construction and Vandenack Weaver Law.

There are currently 2 employees of Veterans' Villa, a paid resident coordinator and the resource manager. The growth of the company will be determined by how accurately and efficiently the company is able to implement the facets of this business plan.  Each member of the Veterans' Villa team is highly valued; everyone is expected to have opinions, as it is a team that will make this company excel. It is the mission of the company to employ people who are committed to a high standard of excellence, who thrive on a team atmosphere, and who have outstanding customer service skills. This idealism is represented by the current staff, and will continue to be the guideline by which new team members are hired.

Provide an overview of the target market

The apartment complex is currently fully rented. Veterans will be moved into apartments when renters leave. It is located in the Qualified Opportunity Zone, which offers various types of capital gains deferral, reduction and avoidance for the investor. Veterans Villa provides a safe home for 90 veteran families, helps launch an entrepreneurial community for veteran owned businesses and, therefore, provides a model for financing other veteran owned mixed use facilities. This provides marketing for Veterans Villa through various channels, including developers, social service agencies and veterans groups. The staff is knowledgeable, friendly and customer service oriented. A psychologist and therapist will be encouraged to rent the business offices. One veteran who became a therapist has already expressed interest in renting an office. The Omaha Metro Statistical area, including Council Bluffs, Bellevue, Elkhorn, Papillion and LaVista, is home to 400,000 veterans of all ages. This is partially due to the quality of life in Omaha as well as the location of the Strategic Air Command. After rehabilitation of the housing units, the rental units for housing and for offices will be virtually new. The equipment will be new. The broad band internet service is top notch quality. The ambiance, clean and new, will provide an inviting environment. This will encourage tenants to stay. Veterans Villa management has clear vision for meeting the needs of the market.

Veterans' Villa focuses on providing housing services to Veterans in Omaha, Nebraska; hosting small businesses, started and owned by Veterans; and providing social services to Veterans and their families. The focus of the service is to provide as many services to Veterans of all ages, to the extent access to service can be made in a financially feasible way. The area is appropriate for Veterans age - 25 to 80 - seeking higher education, trade skills and new business startups. The central accessibility through Interstate I-80 allows for visits by Veterans age 55 to 75 seeking fellowship and services. Bankers will be encouraged to visit the Veterans’ Center to deliver small business seminars as well as counseling for personal financial assistance and budgeting. Bankers will assist Veterans to help them build their credit, buy cars, save for retirement and strive to purchase a home with the help of specialized lending programs for bankers. The rental units are expected to be rented at a level of 96% occupancy. The surrounding area has an occupancy level of 95%, but Veterans Villa provides a service that creates an extra incentive to rent and stay. Interviews with leaders in the Veterans' assistance industry report a need for housing for Veterans. This housing category targets the level of financial investment that is considered less than 80% of area median income. Veterans Assistance experts from the government report that the need for Veterans assistance services is great. The need for specialized services for Veterans in central Omaha is great because most of the programs are operated in downtown Omaha and in Bellevue.

What market(s) are you in?

Veterans' Villa focuses on providing housing services to Veterans in Omaha, Nebraska; hosting small businesses, started and owned by Veterans; and providing social services to Veterans and their families.   The focus of the service is to provide as many services to Veterans of all ages, to the extent access to service can be made in a financially feasible way.   The area is appropriate for Veterans age - 25 to 80 - seeking higher education, trade skills and new business startups.   The central accessibility through Interstate I-80 allows for visits by Veterans age 55 to 75 seeking fellowship and services.   Bankers will be encouraged to visit the Veterans’ Center to deliver small business seminars as well as counseling for personal financial assistance and budgeting.  Bankers will assist Veterans to help them build their credit, buy cars, save for retirement and strive to purchase a home with the help of specialized lending programs for bankers.   The rental units are expected to be rented at a level of 96% occupancy.  The surrounding area has an occupancy level of 95%, but Veterans Villa provides a service that creates an extra incentive to rent and stay.  Interviews with leaders in the Veterans' assistance industry report a need for housing for Veterans.    This housing category targets the level of financial investment that is considered less than 80% of area median income.   Veterans Assistance experts from the government report that the need for Veterans assistance services is great.  The need for specialized services for Veterans in central Omaha is great because most of the programs are operated in downtown Omaha and in Bellevue. 

The Veterans Villa will provide a safe place to live for Veterans, many of whom have been forever changed since the attack on the World Trade Center and Pentagon on 9/11/01 and desire a sense of security.   This can be found through a sense of shared space and fellowship that can be found in neighbors with common backgrounds.  Demographics are favorable for multifamily landlords—more than 20% of the population in Omaha is 20–34 years old. This cohort is considered one of the prime renting cohorts, and with more and more baby boomers retiring, demand could increase significantly over the next several years. As a result, rent growth in Omaha has been relatively healthy, with moderate, positive growth from 2013-17. Strong income growth in the metro has supported rent increases, which totaled more than 10% since 2010. The 4% increase in median household income here was among the strongest in the country. Additionally, census data shows increases in the number of households making over $100,000, as well 25-35 year olds with a bachelor’s degree or higher. While income growth has slowed near 2% in 2018, Omaha’s median income outpaced the nation’s by more than 5%. Demand has been constant in both the Elkhorn/Gretna and Downtown Omaha Submarkets, which post the highest rents in the metro at $960/unit and $877/unit, respectively. As more and more apartment conversions come to fruition, landlords could benefit as demand persists.

Team

1575655939 kim kuhle

Kim J Kuhle

CEO

• 30 years of Economic Development Finance experience, including 20 years of banking. www.capitalconsultingcompany.com Founder of Opportunity Zone, LLC

• 20 years of service as Founding Board Member, Treasurer, Secretary and Loan Committee Member on a Midwest Housing Development Fund, five years serving as Treasurer of NeighborWorks Home Solutions, Pioneer and Economic Development Manager for Ponca Housing Authority.

1575656404 mvandenack

Mary Vandenack, Owner Vandenack Weaver

Service Provider

Tax and Real Estate Attorney

Missing

Aundrea Bricker

Service Provider

CPA

1575656461 mjv 1

Michael Weaver, Owner Vandenack Weaver

Service Provider

Tax and Real Estate Attorney

Missing

Kathy Hall

Service Provider

Marketing

1575656404 lund john

John Lund

Service Provider

Lund Company, Real Estate Company Management

1575656404 greg key 700x622

Greg Key

Service Provider

Lueder Construction Company

1575656405 scasper

Spencer Casper

Service Provider

Sage Capital, Broker and Advisor for TIF/PACE Application

1575656528 aaron 1

Aaron Moser

Service Provider

Sage Capital, Broker and Advisor for TIF/PACE Application

1575656405 don web

Don Peters

Service Provider

Architect

1575656405 jamespiepervandenackweaver

Jim Pieper

Service Provider

Economic Development Lawyer, Advisor for TIF/PACE Application

1575656405 monte 1

Monte Schatz

Service Provider

Attorney, Fund Advisor

About Veterans Villa

Entity Veterans Villa Opportunity Fund LP
Entity Type LP
State Organized Nebraska
Founded March 2019
Employees 1
Website

Headquarters

Company Updates

This business has no updates at this time. Check back soon!

Discussion

No comments yet.Be the first to get the conversation going.

Risks & Disclosures

Limited operating history

The Company was formed in March 2019 and has no previous operating history or past financial information. While the Property has generated historical rental income and the Company plans to engage an experienced property management firm to undertake management functions, the Company will be taking ownership of the Property after the Offering and has plans to invest in new construction of small business offices, a physical therapy area and a clubhouse in addition to substantial renovations as part of its re-branding of the Property. The Company plans to generate revenue from only one real estate property. Due to the Company's lack of operating history and the development status of the Project, the Company is unable to forecast its income with any assurance of accuracy. Therefore, we cannot provide any assurance that the Company will be able to achieve projected income levels or projected equity distributions to Investors.

Unpredictability of future revenues; Potential fluctuation in operating results

Because the Company has no operating history, the ability to forecast revenues is limited. The Company's future financial performance and operating results may vary significantly from projected amounts and fluctuate substantially from quarter to quarter due to a number of factors, many of which are likely to be outside of the Company's control. These factors, each of which could adversely affect results of operations, include:

  • Unexpected expenditures for maintenance and other expenses;
  • Lease price reductions by the Company or its competitors or changes in how rent is priced;
  • A tenant may terminate a lease early;
  • Collection of rent may occur in a subsequent year than the year projected due to the requirement or the failure of a tenant to make rent payments when due;
  • Actual expenses could be in excess of projected expenses;
  • The Company may not be able to sell the Property at a price that is above its purchase and development costs;
  • Changes in the demand for or supply of competitive properties;
  • Environmental controls and other governmentally imposed restrictions;
  • Changes in state or local tax rates and assessments;
  • Changes in general or local economic conditions and acts of God or other calamities;
  • The Company's ability to attract, train and retain qualified personnel;
  • Change in federal or state laws and regulations;
  • Loss of key business partners.
The projections of the Company's future expenses are based upon assumptions as to future events and conditions, which the Company believes to be reasonable, but which are inherently uncertain and unpredictable. The Company's assumptions may prove to be incomplete or incorrect, and unanticipated events and circumstances may occur. Due to these uncertainties and the other risks outlined herein, the actual results of the Company's future operations can be expected to be different from those projected, and such differences may have a material adverse effect on the Company's prospects, business or financial condition. Any projections that were prepared or provided by the Company were not prepared with a view toward public disclosure or complying with the published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projected financial information. Under no circumstances should such information be construed to represent or predict that the Company is likely to achieve any particular results.

The Company's management will have broad discretion in use of proceeds

The Company has preliminarily designated the use of the proceeds from this Offering for the purchase and renovation of the Property, the construction of small business offices, a physical therapy area and a clubhouse on the Property, general working capital purposes and other necessary expenditures as determined in the discretion of management. Accordingly, the Company's management will have significant flexibility and broad discretion in applying the proceeds of the Offering, subject to the 90% Requirement for investing in "qualified opportunity zone property." The failure of management to apply these funds effectively could have a material adverse effect on the Company's business, results of operations, prospects, and financial condition.

No assurances of sufficient financing; Additional capital may be required

Although the Company believes the proceeds of this Offering, along with other planned financings, will provide adequate funding to develop and successfully support its business plans, there can be no assurances that such funds will be adequate. If the Company's cash requirements exceed current expectations, the Company may need to raise additional equity or debt capital, beyond what is being sought with current efforts. There can be no assurance that adequate additional financing on acceptable terms will be available when needed. The unavailability of sufficient financing when needed would have a material adverse effect on the Company and could require the Company to terminate its operations. The Company is looking to raise $7,600,000 in additional senior debt financing for the Project outside of this Offering. If the Company's gross proceeds from this Offering and the additional debt financing do not cover estimated Project costs, completion of the Project may be delayed indefinitely, jeopardizing the Company's ability to make interest payments and repay principal on the debt financings, and the likelihood of Investors receiving any return on an investment.

Existing and potential litigation

Although management is unaware of any threatened or pending litigation against the Company or management, there can be no assurance that future claims will not be asserted and that, even if without merit, the cost to defend against such claims would not be significant, thus having a material adverse effect on the Company's business, financial condition and results of operations. The Company has never filed any lawsuit against any other person or entity, or been the subject of a lawsuit.

Control of the Company

The General Partner will have sole management authority over the business and affairs of the Company, regardless of the opposition of Investors to pursue an alternate course of action. Investors will have no right to vote with respect to the management or to participate in any decision regarding management of the Company's business, other than the limited rights afforded to Investors under the Limited Partnership Agreement. On matters subject to a limited partner vote, the Investors will represent a minority interest in the Company and may be overruled by the majority holding a majority in interest of the outstanding units of the Company.

The Company is obligated to indemnify its management

The General Partner owes certain duties to the Company they serve in connection with the use of its assets. The General Partner is a fiduciary, and as such is under obligations of trust and confidence to the Company and owners to act in good faith and for the interest of the Company and its owners, with due care and diligence. Notwithstanding the foregoing, the Company is obligated to indemnify the General Partner for actions or omissions to act by the General Partner on behalf of the Company that are authorized under the Limited Partnership Agreement of the Company. In addition, the General Partner may be entitled to advancement of expenses they may incur associated with or in defense of charges, claims or legal action arising from such person's position as an officer of the Company, which could result in a decrease in the assets available for Investors in certain circumstances. The assets of the Company will be available to satisfy these indemnification obligations. Such obligations will survive dissolution of the Company. There are very limited circumstances under which the General Partner can be held liable to the Company. Accordingly, it may be very difficult for the Company or any Investor to pursue any form of action against the General Partner.

Limited ability to protect intellectual property rights

The Company has plans to apply for intellectual property protection through certain trademarks. Failure to adequately protect its intellectual property from current competitors or new entrants to the market could have a material adverse effect on the Company's business, operating results, and financial condition. Additionally, the Company may become subject to third-party claims that it infringed upon their proprietary rights or trademarks. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against the Company or the payment of damages by the Company.

No audited financial statements

The Company has not yet sought to have its financial information audited by an independent certified public accountant and there is no assurance that it will do so in the future. All financial information provided in the Offering Materials has been prepared by the Company's management team and has not been reviewed or compiled by an independent accounting firm.

The Company may not obtain sufficient insurance coverage

The cost of insurance policies maintained by the Company to protect the Company's business and assets could increase in the future. In addition, some types of losses, such as losses resulting from natural disasters, generally are not insured because they are uninsurable or it is not economically practical to obtain insurance to cover them. Moreover, insurers recently have become more reluctant to insure against these types of events. Should an uninsured loss or a loss in excess of insured limits occur, this could have a material adverse effect on the Company's business, results of operations and financial condition.

Continuity of the manager

The Company relies exclusively on the expertise and experience of the General Partner. The loss of the General Partner, whether by death, disability, or through some other cause, could materially and adversely affect the development of the Property, and the Company's business, financial condition, and operations. There can be no assurance that the Company would be able to attract additional qualified managers. The failure to attract and retain a successor manager could materially and adversely affect the Company's business, financial condition and results of operations.

General real estate industry risks

The Company will be subject to all the risks inherent in developing and investing in real estate assets. A major risk of owning real estate is the possibility that the Property will not generate sufficient rental income or other income to meet expenses, including debt service or other required payments, or will decrease in value. Additional risks may include, without limitation, general and local economic and social conditions, the supply and demand for comparable properties, energy shortages and costs, declines in neighborhood property values, changes in tax, zoning, building, environmental and other applicable laws, real property tax rates, changes in interest rates and the availability of mortgage funds which may render the sale of properties difficult or unattractive. Such risks also include fluctuations in operating expenses which could adversely affect the value of the Property. These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development activities once undertaken, any of which could have an adverse effect on the Company.

Defaults by tenants

In the event that a tenant defaults on a lease, the Property may become partially vacant, and the Company may be unable either to re-lease the Property for the rent due under the lease or to re-lease the Property without incurring additional expenditures relating to the Property. In addition, the Company could experience delays in enforcing its rights against, and collecting rents and other expenses due from the tenant. Any delay or substantial expenditures the Company experiences in re-leasing the Property, or any difficulty in re-leasing the Property at acceptable rates, may reduce the cash available to make distributions to limited partners of the Company.

No purchase agreement in place

While the Company does currently have a purchase agreement in place with the seller of the Property, it is set to expire on January 27th, 2020. After the expiration date, the seller will have the ability to market the Property and theoretically could find a buyer other than the Company. The Company and the seller are working in good faith to allow for the Company to complete this Offering prior to the expiration date of the purchase agreement in order to close on the Property. If the seller identifies and comes to an agreement with a buyer other than the Company prior to the successful close of the Offering, the Property may not be available for sale and this investment opportunity may no longer available to Investors.

Environmental liabilities

Federal, state and local laws may impose liability on a property owner for releases, or the otherwise improper presence on the premises, of hazardous substances without regard to fault or knowledge of the presence of such substances. A property owner may be held liable for environmental releases of such substances that occurred before it acquired title and that are not discovered until after it sells the property. If any hazardous substances are found at any time on or around the Property, the Company may be held liable for all cleanup costs, fines, penalties and other costs regardless of whether it owned the Property when the releases occurred or the hazardous substances were discovered.

Potential for harmful air quality issues

Litigation and concern about indoor exposure to certain types of toxic molds has been increasing as the public becomes aware that exposure to mold can cause a variety of health problems and symptoms, including allergic reactions. Toxic molds can be found almost anywhere; they can grow on virtually any organic substance, as long as moisture and oxygen are present. Molds can grow on wood, paper, carpet, foods and insulation. When excessive moisture accumulates in buildings or on building materials, mold growth will often occur, particularly if the moisture problem remains undiscovered or unaddressed. It is impossible to eliminate all mold and mold spores in the indoor environment. In connection with the Property, the difficulty in discovering indoor toxic-mold growth could lead to an increased risk of lawsuits by affected persons and the risk that the cost to remediate toxic mold will exceed the value of the Property.

Impact of government regulation

Government authorities at all levels are actively involved in the promulgation and enforcement of regulations relating to land use and zoning restrictions, environmental protection and safety and other matters affecting the ownership, use and operation of the Property. Regulations may be promulgated which could have the effect of restricting or curtailing usages of existing structures, or requiring that such structures be renovated or altered in some manner. The enforcement of such regulations could have the effect of increasing the expenses, and lowering the income or rate of return, as well as adversely affecting the value, of the Property owned by the Company.

Compliance with the federal and state disability laws

While the Company believes that the Property will comply with the Americans with Disabilities Act of 1990 (the "ADA") and state disability laws (collectively with the ADA, "Disability Laws"), it does not plan to perform a complete audit for compliance with the Disability Laws. Consequently, there can be no assurance that Disability Law violations do not or will not exist at the Property. The Company may be required to pay for improvements to effect compliance with the Disability Laws. Under the Disability Laws, public accommodations must meet certain federal and state requirements related to access and use by disabled persons. The Disability Laws could require removal of access barriers at significant cost, and could result in the imposition of fines by the federal government or an award of damages to private litigants. State and federal laws in this area are constantly evolving, and could evolve to place a greater cost or burden on the Company as the owner of the Property.

Title and survey matters

The Property is subject to various matters affecting title, including but not limited to, zoning ordinances, building codes and the matters set forth on the title commitments and surveys. Such matters may include, for example, easements, declarations, restrictions and other limitations on the right of the Company to use the Property. In addition, other issues that are not disclosed by the title commitments or the surveys may affect title. In connection with the acquisition of the Property, the Company will obtain title insurance. In the event that a known or new matter arises with respect to any of the Property, however, there is no guaranty that the title insurance will sufficiently protect the Company against all title issues affecting the Property, that the title company will pay any claim, that the title insurance is sufficient to cover any damages, or that the Company will not incur costs in making a title insurance claim.

Sale of the Property

The proceeds realized from a potential sale of the Property will be distributed to the Company and then by the Company among the Investors in accordance with their respective ownership, but only after payment of the Senior Loans (and any other loans) and satisfaction of the claims of other third-party creditors. The ability of any Investor to recover all or any portion of its investment will, accordingly, depend on the amount of net proceeds realized from such sale and the amount of claims to be satisfied therefrom. There can be no assurance that the Investors will receive any proceeds from sale of the Property.

Competition from other properties

The Property competes with similar companies and properties in the Omaha, Nebraska market. If competitors build new facilities that compete with the Property or offer space at rental rates below the rental rates charged at the Property, the Property may lose potential tenants and the Company may be pressured to discount rental rates to retain tenants. The Property will also experience competition for new Property investments from individuals, corporations and other entities engaged in real estate investment activities. Other properties and real estate investments may be more attractive than the Property. The Company has no ability to accurately predict the competitive market in the area of the Property and an increase in competition could have a materially adverse effect on the Company's prospects, business, operating results, and financial condition.

Dependence on a single income producing asset

The Property is expected to be, for the foreseeable future, the Company's only asset. As a result, the Company will not have diversified sources of revenue. The prospects of the Company depend upon the Property maintaining its occupancy, rental, and resale value or increasing in such value. The typical risks relating to an investment in real estate will apply to the Project, the Property and its ability to meet debt service obligations. These include, but are not limited to:

  • Changes in the general economic climate and market conditions of the United States and Omaha, Nebraska;
  • Changes in the occupancy or rental rates of the Property;
  • A failure to lease the Property in accordance with the projected leasing schedule;
  • Limited availability of mortgage funds or fluctuations in interest rates which may render the sale and refinancing of the Property difficult;
  • Unanticipated increases in real estate taxes and other operating expenses;
  • Competition from other similar housing and commercial properties;
  • Environmental considerations;
  • Zoning laws and other governmental rules and policies; and
  • Uninsured losses including possible acts of terrorism or natural disasters.

Due to the lack of diversification, any one or more of the preceding factors could materially adversely affect the value of the Property. If the value of the Property were to decrease and the Company were to choose to sell the Property, liquidate and distribute its remaining assets after paying other creditors senior to the Investors in the Units, Investors might not recover the amount of their investment, if Investors were to receive any funds at all.

Investments in property requiring substantial construction carry significant risks

Because the Property requires substantial construction efforts, there are additional risks relating to the nature of such construction efforts. Construction risks include, but are not limited to, the timeliness of the project's completion, the integrity of appraisal values, and the length of the ultimate construction process. If construction work is not completed (due to contractor abandonment, unsatisfactory work performance, or various other factors) and all available financing has already been expended, then in the event of a default the Company may in some instances borrow significant additional funds to complete the construction work. Any such investment could potentially require that it be repaid by the Company prior to the Investors being paid back on their investment; in such event, the ability of the Investors to realize on their investment would be materially adversely affected. Default risk also exists where it takes the Developer longer than anticipated either to construct the Property. Investments involving properties with such development or significant rehabilitation business plans have an increased risk of failure.

The Units are offered on a best efforts basis

The Units are being offered by the Company on a best efforts basis as specified herein. The Company will begin using the net proceeds of the Offering immediately. To the extent that the Company does not raise the full $5,200,000 amount that it is seeking in this Offering, some or all of the business objectives and financial forecasts of the Company may be delayed and/or unfilled. There can be no assurances that the Company will raise the full amount of $5,200,000 sought through this Offering.

No market; Lack of liquidity

There currently is no public or other trading market for the Units being offered or any other securities of the Company and there can be no assurance that any market may ever exist for the Units being offered or any other securities of the Company. If a public market does develop, factors such as competitors' announcements about performance, failure to meet securities analysts' expectations, changes in laws, government regulatory action, and market conditions for the industry in which the Company operates in general could harm the price of the Company's publicly traded securities. The Company has no obligation to register the Units being offered or any other securities under the Securities Act or any state securities laws. Investors should be prepared to hold their Units for an indefinite period.

Restrictions on transferability

The Units offered by the Company have not been registered under the Securities Act, nor any applicable state securities laws, in reliance on the exemption from registration in Securities Act Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. As a result, the Units are subject to restrictions on transferability and resale and may not be transferred or resold by any Investor In addition, there is no market for the Units being offered and the Company does not expect that any market will be developed in the foreseeable future.

Investors may not receive a return of their investment amounts and there is no guarantee of return

The only source of funds for the repayment of the Investors' investment amounts and a return on such investment amounts is the Company's operations. The return to Investors and the future value of the investment will depend on a number of factors which cannot be predicted at this time and which may be beyond the control of the Company. These include the general, local, and industry-related economic conditions. In the event that the Company does not generate sufficient revenues from operations, the Investors may not receive any return at all and may lose a substantial portion (or possibly all) of their investment amounts. Neither the Company nor the Placement Agent makes any representations or warranties with respect to any return on an investment in the Company. There can be no assurance that an Investor will receive any return on an investment in the Company or realize any profits on such Investor's investment in the Company.

The Company may cause a limited partner to incur tax liability without making any cash distributions to its limited partners

Each Limited Partner is required to report on his, her or its federal income tax return such Limited Partner's allocable share (usually as determined by the Partnership Agreement) of the income, gain, loss and deductions of the Company whether or not any actual cash distribution is made to such Limited Partner during such Limited Partner's taxable year. Prior to the disposition of the Units, a Limited Partner will only be allowed to use such Limited Partner's share of the Company's losses, if any, to offset income from other passive activities or to carry over the losses (subject to any adjustments) to apply against passive income or gains in future years. To the extent the Company does not distribute cash in an amount sufficient to enable a Limited Partner to satisfy the tax obligation attributable to such Limited Partner's share of the Company's taxable income or capital gain for a given year, the Limited Partner will have to pay the tax attributable to such Limited Partner's share of such taxable income or capital gain using other sources of cash. In addition, a Limited Partner may experience a gain resulting from the disposition of such Limited Partner's Units or from a disposition by the Company of some or all of its assets (whether by sale, exchange, forfeiture or foreclosure) even though no cash (or an amount of cash less than the amount of tax) is realized on the disposition. In such circumstances the affected Limited Partner may experience an out of pocket cost to the extent that the tax on such gain exceeds the cash, if any, realized.

Purchase price of the Units may not reflect the value of the Units

The offering price of the Units has been established by the management of the Company and is not necessarily indicative of the value of the Units or the Company's asset value, net worth, or other criteria of value. There can be no assurance that this price accurately reflects the current value of the Units.

Potential for dilution

The issuance or sale of additional Units or other equity securities of the Company in connection with acquisitions, additional rounds of equity financing or the issuance of incentive shares of the Company to employees or others will have a dilutive effect on existing Shareholders of the Company. As a result, the percentage ownership of a Shareholder and/or such Shareholder's economic interest in the Company may be reduced in the future. In addition, subsequent investors may demand and receive terms and rights more favorable than the terms of the Units in this Offering.

Investor's ability to withdraw their capital contributions is limited

Limited Partners may not withdraw their capital contributions, except upon dissolution of the Company or as otherwise provided in the Company's Partnership Agreement or as required by Nebraska state law. Otherwise, Members will be entitled to receive a return of their capital contributions only through distributions in accordance with the Partnership Agreement. The only sources of funds for the repayment of Limited Partners' capital contributions is from revenue received from the operations of the Company or through the sale or acquisition of the Company. In the event that the Company does not generate sufficient cash flow, the Limited Partners will not receive a return of their capital contributions.

Senior debt obligations of the Company

The Company is planning to secure a loan from UMB Bank ($4,400,000) and additional financing through the use of tax-increment financing via the City of Omaha under the Nebraska Community Development Law ("TIF") and the use of property-assessed clean energy financing under the Nebraska Property Assessed Clean Energy Act ("PACE") (collectively, $3,200,000) (the "Senior Lenders", and the "Senior Loans", respectively), which impose certain conditions on the Company. Any Senior Loan documents will likely contain various representations, covenants (affirmative and negative) and other provisions. Participation in governmentally sponsored redevelopment programs such as TIF and PACE also entail statutory and regulatory restrictions on the use of the Property. Such restrictions, while relatively common in today's real estate financing market, increase the risks of an investment in the Company. If the Company fails to satisfy the covenants, the Senior Lender may declare the Senior Loan in default, in which case, Investors could lose their entire investment in the Company.

The terms of the Units may be amended without the consent of the Investor

Any term of the Units may be amended or waived with the written consent of the General Partner and Investors representing more than fifty percent (50%) of the ownership in the Company. Such an amendment would be effective to, and binding against all Investors in the Units. As such, the Investor should be aware that it is possible for the Units to be amended without their consent.

No analysis has been done of potential state or local tax consequences

Investors should consider potential state and local tax consequences of an investment in the Units and they are urged to consult their own tax advisor to determine the state and local income tax consequences of investing in the Units. Depending upon applicable state and local laws, tax benefits that are available for federal income tax purposes may not be available to Investors for state and local income tax purposes. The Offering Materials make no attempt to summarize the state and local tax consequences to potential investors.

General tax considerations

Investors in the Units are urged to consult their tax advisors concerning the federal, state, local and foreign income tax consequences of acquiring, owning, and disposing of, the Units as well as the application of state, local and foreign income and other tax laws. Any federal tax discussion contained in these Offering Materials, including any attachments, was written in connection with the Offering of the Units by the Company, and is not intended or written to be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government. Nothing in these Offering Materials shall be deemed tax or legal advice by the Company or its partners. The tax-related information herein summarizes certain material U.S. federal income tax aspects of the purchase and ownership of the Units. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), the regulations thereunder, published administrative rulings, and judicial decisions in effect on the date of the Offering Materials. No assurance can be given that future legislative or administrative changes or court decisions, including changes in the taxation of capital gains invested in Qualified Opportunity Funds, will not significantly modify the statements expressed in these Offering Materials. Any such changes may or may not be retroactive with respect to transactions completed prior to the effective dates of such changes. The tax-related information herein is a general discussion of U.S. federal income tax consequences of investing in Units by individuals and does not purport to deal with all federal income tax consequences applicable thereto or the federal income tax consequences applicable to all categories of Investors, some of which may be subject to special rules (e.g., Investors who do not reside in or citizens of the U.S.). This discussion is not intended as a substitute for careful tax planning. Any federal tax discussion contained in these Offering Materials, including any attachments, was written in connection with the offering of Units by the Company, and is not intended or written to be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government. Investors are urged to consult their own tax advisors, lawyers, or accountants with specific reference to their own tax situations.

Tax treatment of Investors in the Units

The Company will be classified as a partnership for federal tax purposes. The Company itself will not be subject to federal income tax, although it is possible that the Company would be subject to income tax in one or more state or local tax jurisdictions. Instead, each Limited Partner will be required to report on such Limited Partner's own income tax return the Limited Partner's share of the Company's income, gains, losses, deductions, tax credits, and tax preferences. In determining the federal income tax liability of a Limited Partner as a consequence of the Limited Partner's investment in the Company, the following principles will apply in the order summarized below: (a) The allocation provisions contained in the Limited Partnership Agreement will determine each Limited Partner's share of the items of profits and losses of the Company for tax purposes to the extent that such allocations have substantial economic effect or are otherwise in accordance with the Limited Partner's investment in the Company; (b) Each Limited Partner's tax basis in the Limited Partner's Units must equal or exceed the amount of losses allocated to the Limited Partner, net of profits so allocated, and cash distributed to such Limited Partner; and (c) Each Limited Partner's amount "at risk" in the Limited Partner's Units must equal or exceed the amount of losses allocated to the Limited Partner, net of profits so allocated, and cash distributed to the Limited Partner. In addition to and after satisfying the foregoing principles, the ability of a specific Limited Partner to take advantage of any losses or deductions allocated to the Limited Partner with respect to such Limited Partner's Units may be limited by the passive loss and passive credit limitations described in the "Limitations on Losses from Passive Activities" section. Cash or other property received by a Limited Partner from the Company generally will not cause recognition of income for tax purposes by the Limited Partner but will reduce such Limited Partner's basis and amount "at-risk" in the Limited Partner's Units by the cash or the Company's basis in other property received by the Limited Partner. A distribution of cash and generally marketable securities in excess of a Limited Partner's adjusted basis in the Limited Partner's Units prior to the distribution will result in the recognition of taxable income to the extent of the excess. Any such taxable income generally will be treated as capital gain. Each Limited Partner will be allocated a share of profits and/or losses for tax purposes. It is possible that the Company will not be able to distribute sufficient funds to the Limited Partners to enable them to meet their tax obligations attributable to profits for tax purposes.

Tax basis for the Units

A Limited Partner's tax basis for the Limited Partner's Units generally will be equal to the Limited Partner's Capital Contribution plus the Limited Partner's share of the Company's liabilities. From time to time, such tax basis will be (a) increased by the amount of profits for tax purposes allocated to the Limited Partner, and (b) decreased by distributions and the amount of losses for tax purposes allocated to the Limited Partner, and (c) increased or decreased by changes in liabilities. Each Limited Partner may deduct, on the Limited Partner's own federal income tax return, the Limited Partner's share of the Company's losses for tax purposes, if any, to the extent that the Limited Partner has tax basis in the Limited Partner's Units, subject to other limitations discussed in this section. Any tax losses in excess of a Limited Partner's tax basis may be carried over indefinitely and may be deducted in future years to the extent otherwise allowable and to the extent that the Limited Partner's basis has increased above zero. See "Tax Treatment of Holders of Units ," "Application of At-Risk Limitations" and "Limitations on Losses from Passive Activities" for other limitations on the amount of losses that may be claimed by an investor in the Units.

Application of at-risk limitations

Code Section 465 provides that the amount of any losses (otherwise allowable for the year in question) that may be deducted by an individual or a "closely held corporation" (i.e., generally a C corporation in which five or fewer shareholders directly or indirectly own more than 50% of the stock) other than a leasing company, in connection with activities that are part of a trade or business or that are engaged in for the production of income, cannot exceed the aggregate amount with respect to which such taxpayer is "at risk" in such activity at the close of the tax year. In the case of a partnership engaged in such activities, the limitations apply to each partner who is an individual, trust, estate or "closely held corporation." A Limited Partner generally will be considered "at risk" to the extent of the cash and adjusted basis of other property contributed to the Company, as well as any liabilities with respect to which such Limited Partner is personally liable for payment from the Limited Partner's assets. If at the end of a taxable year a Limited Partner's amount "at risk" has been reduced below zero, the deficit amount "at risk" is recaptured and must be included in gross income in that year. The amount recaptured is treated in future years as if it were a deduction suspended by the "at risk" provisions. To the extent that a Limited Partner's amount "at risk" is increased above zero in a subsequent year, this additional deduction may be allowable at such time.

Limitations on losses from passive activities

The following is a general discussion of certain limitations on losses from passive activities, applicable to individual and other non-corporate investors. However, the manner in which the limitations on losses from passive activities will apply to any particular Limited Partner may differ because they are applied at the Limited Partner (rather than the Company) level and will depend on the particular circumstances of each Limited Partner. Each potential investor is strongly advised to consult its own tax advisor regarding the effect of the limitation on the allowance of passive losses on its specific situation. Code Section 469 imposes limits on the ability of taxpayers to use losses and tax credits from certain "passive activities" to offset taxable income and tax liability arising from non-passive sources. A passive activity generally includes (a) one which involves the conduct of a trade or business in which the taxpayer does not materially participate, or (b) any rental activity. A Limited Partner generally will be treated as materially participating in the Company's activities if the Limited Partner is involved in the operations of the Company on a regular, continuous and substantial basis. Code Section 469 and the regulations thereunder contain specific provisions that further clarify the definition "material participation." To the extent a Limited Partner is considered a limited partner for tax purposes, Code Section 469 provides that such Limited Partner generally will be deemed not to materially participate in the Company's activities, subject to certain exceptions. Because the determination of whether a Limited Partner will be treated as a limited partner and application of the other material participation standards for tax purposes will depend upon the unique circumstances of each Limited Partner, each Limited Partner must consult its own tax advisor regarding whether the Limited Partner will be treated as materially participating in the activities of the Company. To the extent that a Limited Partner's aggregate losses from all passive activities exceed the Limited Partner's aggregate income from all such activities in a given taxable year, the Limited Partner has a "passive activity loss" for such year. Such a loss may be carried forward to successive taxable years until fully utilized against income from passive activities in such years; however, such losses may not be carried back to prior years. When a Limited Partner disposes of the Limited Partner's entire interest in a passive activity in a transaction in which all of the gain or loss realized on such disposition is recognized, any loss from that activity that was disallowed by these passive loss rules will cease to be treated as a passive loss and any loss on such disposition will not be treated as arising from a passive activity.

Sales or exchanges of the Units

A Limited Partner may not be able to sell the Limited Partner's Units because it is not anticipated that a public trading market in the Units will develop. Any gain realized with respect to a sale of Units by a Limited Partner who holds such Units as a capital asset generally will be capital gain, except to the extent the gain is allocable to "unrealized receivables" or "inventory items" as such terms are defined in Code Section 751. See, however, "Limitations on Losses from Passive Activities" regarding the allowance of previously suspended passive activity losses and passive activity credits upon the disposition of all of a Limited Partner's Units.

Dissolution and liquidation of the Company

Generally, upon liquidation or dissolution of the Company, a Limited Partner will recognize income only to the extent that the sum of the cash and marketable securities (subject to certain exceptions set forth in Code Section 731) distributed to the Limited Partner and the Limited Partner's proportionate share of any then existing liabilities of the Company which are deemed relieved, including nonrecourse liabilities, exceeds the Limited Partner's adjusted basis in the Limited Partner's Units at the time of distribution.

Elections

The Code permits an entity taxed as a partnership to elect to adjust the basis of the entity's property on the transfer of an interest in such entity by sale or exchange or on the death of a person who holds an interest in such entity and on the distribution of property by the entity to a person (referred to as a "Section 754 election"). The general effect of such an election by the Company is that transferees of Units are treated, for purposes of depreciation and taxable gain, as though they had acquired a direct interest in the Company's assets. The Company intends to make a Section 754 election where such election is, in the General Partners' opinion, beneficial to the Limited Partners. The Company also may make various elections for federal income tax reporting purposes that could result in various items of income, gain, loss, deduction or credit being treated differently for tax purposes than for accounting purposes.

Company tax returns and tax information

The Code requires that the tax treatment of the Company items be determined at the Company level, rather than in separate proceedings with the Limited Partners. Thus, the availability and amount of tax deductions taken by the Company will depend not only on the general legal principles discussed herein, but also upon various determinations of the General Partner. Such determinations are subject to challenge by the IRS on factual or other grounds.

Under the procedures described above, each Limited Partner is required to treat Company items on the Limited Partner's return consistently with the treatment on the Company's return. Where such treatment is inconsistent, a statement must be filed by the Limited Partner identifying the inconsistency. If the consistency requirement is not satisfied, the IRS may assess a deficiency against the Limited Partner before audit proceedings are completed at the Company level.

Under the Code, a Limited Partner of the Company is to be designated as the "partnership representative." The General Partner is designated in the Limited Partnership Agreement at the Partnership Representative and, to the extent that a Designated Individual is required, such Designated Individual shall be Kim Kuhle. The Partnership Representative is responsible for protecting the interests of the Company in the audit process. For example, the Partnership Representative is given the right, on behalf of the Company, to determine whether to challenge a final partnership administrative adjustment proposed by the IRS by initiating an action in the Tax Court, a federal district court, or the Claims Court. If the Partnership Representative determines not to challenge such administrative adjustment, a notice member or a notice group (as defined in the Code) may challenge it.

The Partnership Representative will have the authority and the responsibilities delegated and imposed under the Code. The Code gives the Partnership Representative the discretion to file suit in the Tax Court, a federal district court, or the Claims Court. Thus it is possible, although unlikely, that Limited Partners might be obligated to pay their shares of a tax deficiency prior to final judicial review in order for the Company to gain access to a forum believed to be more favorable to its position.

The procedures regarding the audit of limited partnerships are complex and cannot be described completely herein. Each Limited Partner is urged to seek the advice of his individual tax advisor with respect to those audit provisions.

Net investment income tax

Certain U.S. Investors that are individuals, estates or trusts will be subject to a 3.8% tax on all or a portion of their "net investment income," which may include all or a portion of their income and net gains from the disposition of the Units. If you are a U.S. Investor that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the net investment income tax to your income.

An investment in the Units is speculative and involves a high degree of risk

An investment in the Company should not be made by persons unable to bear the risk of loss of their entire investment or by persons who may have a need for liquidity from their investment. In making an investment decision, you must rely on your examination of the Company and the terms of the Offering, including the merits and the risks involved. Like all investments, an investment in the Company involves the risk of the loss of capital, and the Units should not be purchased by anyone who cannot afford the loss of his, her or its entire investment. Investors must be prepared to bear the economic risk of an investment in the Company for an indefinite period of time and be able to withstand a total loss of their investment. Investors are encouraged to consult their own investment or tax advisors, accountants, legal counsel, or other advisors to determine whether an investment in the Units is appropriate.

The Units have not been registered under the Securities Act

The Units offered by the Company have not been registered under the Securities Act, nor any applicable state securities laws, in reliance on the exemption from registration in Securities Act Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. The investment contemplated by the Units has not been recommended, approved, or disapproved by the SEC, or any state securities commission, or other regulatory authority, nor have any of these authorities passed upon or endorsed the merits of this Offering or the accuracy, completeness, or adequacy of the Offering Materials. Any representation to the contrary is a criminal offense.

Investors will be subject to certain suitability requirements

The Units will not be sold to an Investor until such Investor delivers an executed representation, as contained in the Qualified Investor Questionnaire and Subscription Agreement, that he, she or it is a Qualified Investor and meets certain standards, including providing sufficient evidence to verify that he, she or it is an Accredited Investor. Persons who are not Qualified Investors are not permitted to invest. The fact that a person is a Qualified Investor represents the minimum suitability requirement for an Investor, and compliance with such standards does not necessarily indicate that this would be a suitable investment for such person.

There is no market for the Units and no such market is expected to develop

The Units are subject to restrictions on transferability and resale and may not be transferred or resold by any Investor Investors may be required to bear the financial risks of the investment in the Company for an indefinite period of time. Persons who desire liquidity from this investment should not invest.

The Company will have the right to refuse any subscription in its sole discretion

The Company will have the right to refuse any subscription in its sole discretion and for any reason (or no reason), including the Company's belief that an Investor does not meet the applicable suitability requirements or that exemptions from the registration requirements of any applicable jurisdiction are not available with respect to the issuance of the Units to any Investor under this Offering. The Company may make or cause to be made such further inquiry and obtain such additional information as it deems appropriate with regard to the suitability of Investors. The Company reserves the right to modify the suitability standards with respect to certain Investors in order to comply with any applicable state or local laws, rules, regulations or otherwise.

The information presented in the Offering Materials was prepared by the Company and contains "forward-looking" statements

The Offering Materials (together with any amendments or supplements and any other information that may be furnished by the Company) includes or may include certain forward-looking statements, estimates, and projections with respect to the Company's anticipated future performance. Examples of forward-looking statements include statements regarding the Company's future sales, purchase orders, financial results, operating results, acquisitions, business and monetization strategies, projected costs, revenues, products, competitive positions and plans and objectives of management for future operations. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "would," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements, estimates, and projections are not guarantees of future performance and reflect various assumptions of the Company's management that may or may not prove correct and involve various risks and uncertainties over which the Company may have no influence or control. No independent party has verified or confirmed the reasonableness of the assumptions that form the basis of the forecasts. These and many other factors could affect the Company's future financial and operating results, and could cause actual results to differ materially from expectations based on forward-looking statements made in the Offering Materials or elsewhere by the Company (or on its behalf). The likelihood of the Company's success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with renovating and growing a real estate property. There can be no assurance that the Company will generate any particular level of revenue or will be able to continue to operate profitably. The Placement Agent expressly disclaims any representation or warranty regarding involvement in or responsibility for any forward looking statements contained in the Offering Materials.

Only the Offering Materials may be relied upon in connection with this Offering

Only the information expressly set forth in the Offering Materials or contained in documents furnished by the Company upon request may be relied upon in connection with this Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Materials and, if given or made, such information or representations must not be relied upon. Access to the Offering Materials at this time does not imply that information therein is correct as of any time subsequent to this date.

The Offering Materials do not purport to be all-inclusive

The Offering Materials provided to Investors do not purport to be all-inclusive or contain all of the information that you may desire in investigating the Company. You must rely on your own examination of the Company and the terms of the Offering, including the merits and risks involved in making an investment in the Units. Prior to making an investment decision, you should consult your own counsel, accountants, and other advisors and carefully review and consider all of the Offering Materials provided and the other information that you acquire. You should not construe any statements made in the Offering Materials provided as investment, tax or legal advice.

The Company reserves the right to reject some or all of any prospective investment

The offer of the Units by the Company is subject to prior sale and certain other conditions. The Company reserves the right, in the Company's sole discretion and for any reason, to withdraw, cancel, or modify the Offering and to accept or reject some or all of any prospective investment. The Company will have no liability to any Investor in the event that the Company takes any of these actions.

The terms, conditions and restrictions of the Units are fully set forth in the Limited Partnership Agreement

The terms, conditions and restrictions of the Units are fully set forth in the Limited Partnership Agreement, which you will be required to execute if you decide to invest, the form of which has been provided to you in the Offering Materials section for this Offering on the Company Offering Profile. You should not invest unless you have completely and thoroughly reviewed the provisions of the Limited Partnership Agreement. In the event that any of the terms, conditions, or other provisions of the Limited Partnership Agreement are inconsistent with or contrary to the information provided in the Offering Materials, that agreement will control. Any additional information or representations given or made by the Company in connection with the Offering, whether oral or written, are qualified in their entirety by the information set forth in the Offering Materials, including, but not limited to, the risks of investment.

No solicitation in any state or other jurisdiction in which such solicitation is not authorized

The Offering Materials do not constitute an offer to sell, or a solicitation of an offer to buy, any security in any state or other jurisdiction in which such an offer or solicitation is not authorized. Except as otherwise indicated, the offering materials speak as of the date the Offering was initiated. Neither access to the Offering Materials nor any sale of the Units shall, under any circumstances, create an implication that there has been no change in the Company's affairs from the date the Offering was initiated.

Each investment is subject to the terms and conditions of the Investor Registration Agreement

Each Investor's subscription for and purchase of the Units is governed by, and subject to, the terms and conditions of the Investor Registration Agreement entered into between the Placement Agent and such Investor, including, without limitation, the investment limits established by the Placement Agent for such Investor, the Placement Agent's rights to terminate the offering or any Investor's registration with the Placement Agent.

The Company will be available to you to answer questions and furnish additional information

The Company will make available to you, upon request, copies of material agreements and other documents relating to the Company and will afford you the opportunity to ask questions and receive answers from the Company concerning its business and financial condition. The Company will also provide you an opportunity to meet with representatives of the Company to obtain other additional information.

Securities to be offered to investors

The offering materials being accessed by you (the "Offering Materials") on the Company's profile page (located at https://localstake.com/businesses/veterans-villa) (the "Company Offering Profile") relate to the offer and sale of limited partnership units (collectively, the "Units") in Veterans Villa Opportunity Fund LP, a limited partnership organized in Nebraska (the "Company"). The Company is seeking to raise up to $5,200,000 (the "Offering Amount") from potential investors (each, an "Investor" and collectively, the "Investors") through the offer and sale of the Units. The Company is offering up to 52,000 Units in the Offering, at a price of $100 per Unit. Investors will become Limited Partners of the Company and will have the rights and obligations set forth in the Limited Partnership Agreement, a copy of which is provided in the Offering Materials. For a detailed summary of the Offering and the Units, see the Term Sheet included in the Offering Materials.

The Company has been formed to qualify as a Qualified Opportunity Fund, as such term is defined in Section 1400Z-2(d) of the Internal Revenue Code of 1986, as amended (the "Code"), for the purposes of investing in qualified opportunity zone property, as such term is defined in Section 1400Z-2(d) of the Code. The Company will own an interest in Veterans Villa Operating LLC, a Nebraska limited liability company (the "Project Entity") that plans to purchase real estate located at 3101 S 69th Avenue, Omaha, NE 68106 (the "Property"). The Company intends to develop, through a combination of renovation and new construction, a mixed-use development to be named Veterans Villa on the Property (the "Project"). The Company will be managed by Opportunity Zone, LLC (the "General Partner").

Closing procedures for the Offering

The Offering shall be available to potential Investors until the final closing of the sale and purchase of the Units (the "Final Closing"), which will occur upon the earlier of (i) the date the Company has closed on the purchase and sale of Units for the entire Offering Amount, (ii) 12 months from the date the Offering was initiated, or (iii) the Company terminates the Offering in its sole and absolute discretion (the "Termination Date"). The Units are offered by the Company on a best efforts basis as specified herein. There is no aggregate minimum amount of Units that must be sold in the Offering, and each individual investment transaction will be closed on an Investor-by-Investor basis upon the Company's acceptance of an Subscriber's subscription for the Units by its execution of such Subscriber's Qualified Investor Questionnaire and Subscription Agreement, and counterpart signature page to the Limited Partnership Agreement (collectively, the "Subscription Documents") together with a form of payment as specified on the Localstake Marketplace. There is no provision for the escrow of any part of the proceeds from the sale of the Units prior to the termination of the Offering, and unless a Subscriber cancels their investment commitment in the Units within forty-eight (48) hours after the Company's acceptance of such Subscriber's Subscription Documents by its execution thereof, there will be no refunds of amounts tendered unless the subscription is rejected by the Company. The Company will immediately use the net proceeds of this Offering as such funds are raised.

Certain risks associated with best efforts offerings

There can be no assurances that the Company will raise the entire Offering Amount or the entire amount of any targeted amount of commitments set forth on the Company Offering Profile. Potential investors that have expressed an interest in the Offering and indicated a commitment amount may subsequently cancel their investment commitment, fail to fund all or a portion of their commitment amount, or the Company may reject all or a portion of their commitment amount. Subscribers should not place any reliance on the Company's receipt of commitments in an amount equal to or greater than the targeted minimum amount of commitments set forth on the Company Offering Profile as an indication that the Company has or will receive such amount. Upon a Subscriber's subscription for the Units becoming irrevocable as set forth herein, such Subscriber shall be required to pay his, her or its investment funds to the Company regardless of the amount of Offering proceeds received by the Company as of such date.

The Company's acceptance of investments and cancellations

The Company reserves the right to accept, through execution of a countersignature on the Subscription Documents, an Investor's subscription for Units at any time prior to the Termination Date of the Offering and may reject the Subscription Documents based upon the Company's review thereof for any reason or for no reason. Should the Company receive investment commitments for greater than the Offering Amount, the Company will determine, in its sole discretion, which subscriptions to accept up to the Offering Amount. If the Investor has chosen to transfer their investment funds electronically, these funds will be transferred from their linked bank account as specified on the Company Offering Profile to a deposit account in the name of the Company, forty-eight (48) hours after the Company's acceptance thereof. If the Investor has chosen another form of funds transfer, the Investor will receive a notice containing instructions for transferring funds to the deposit account in the name of the Company. Investors may cancel their investment commitment in the Units, using the methods made available on the Company Offering Profile, and have their investment funds returned (if applicable) for any reason up to forty-eight (48) hours after the Closing applicable to the Investor's investment. If an Investor has not canceled his, her or its investment commitment in the Units prior to such deadline, the Investor's subscription for the Units shall be irrevocable by the Investor, and will be documented through the receipt of an executed copy of the Units, which will also be recorded and maintained on the books of the Company. The Company does not intend to employ the services of a transfer agent.

Securities laws being utilized and investor qualifications

This Offering is made in reliance upon an exemption from registration under the federal Securities Act of 1933, as amended (the "Securities Act") as set forth in Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. Regulation D sets forth certain restrictions as to the nature of purchasers of securities offered pursuant thereto. The Units will be offered and sold only to persons who meet certain qualifications, including, but not limited to, being "accredited investors" ("Accredited Investors") as defined in Rule 501(a) of Regulation D promulgated by the United States Securities and Exchange Commission under the Securities Act, and who provide sufficient evidence to verify that such persons are Accredited Investors (collectively referred to as the "Qualified Investors"). The minimum investment that will be accepted by the Company from a Qualified Investor is $25,000.

Use of proceeds in the Offering

The Company intends to use the net proceeds of this Offering for the purchase and renovation of the Property, the construction of small business offices, a physical therapy area and a clubhouse on the Property, and other necessary expenditures associated with the Project as determined in the discretion of the General Partner, subject to the 90% Requirement for investing in "qualified opportunity zone property," and as explained in further detail on the Funding tab of the Company Offering Profile.

Subscribing for an investment and transferring funds

Investors interested in subscribing for the Units will be required to complete and return to the Company the Subscription Documents, as described herein. Payment of the investment amount is preferred via electronic ACH transfer, but may also be made by check or domestic wire. Instructions for each method of payment will be provided upon investment via the Company Offering Profile.

Fees for placement agent services

As compensation for Localstake Marketplace LLC's services in connection with the Offering, Localstake Marketplace LLC shall be entitled to receive a placement fee paid by the Company (the "Placement Fee"). Below is a breakdown of the Gross Proceeds, estimated Placement Fee and Net Proceeds for the Offering.

  • Gross Proceeds: $5,200,000
  • Estimated Placement Fee: $259,000
  • Net Proceeds: $4,941,000
(1) Estimated placement fee payable by the Company to Localstake Marketplace LLC. The Company will pay a Placement Fee of 5.0% on all Gross Proceeds received by the Company from the sale of the Units in the Offering. The resulting aggregate Placement Fee will be discounted by a $1,000 Offering Preparation fee paid prior to the Offering.

Interest in other businesses

The officers of the General Partner may now serve and may in the future organize and serve as management of other businesses, including those that are now or in the future may be in competition with the Company, or may enter into real estate leases or other transactions. The officers of the General Partner may have legal and financial obligations with respect to these other businesses, which are similar to their obligations to the Company. The amount of compensation payable to the General Partner in connection with the organization and operation of other businesses may exceed that payable in connection with the Company's operations.

Other activities of the officers of the General Partner

The General Partner may sponsor other real estate entities, some of which may compete with the Company. Because of the General Partner's possible future interests in other businesses and the fact that it has also engaged and will continue to engage in other business activities, the General Partner and its officers may have conflicts of interests in allocating their time between our business and other activities in which they are involved. No formal process of resolving any such conflict is in place or planned. Accordingly, all of the General Partner's decisions will be based upon sound business practices, its fiduciary responsibilities to the Investors and our objectives and policies. We believe, however, that the officers of the General Partner have sufficient time and resources to discharge fully and completely their responsibilities to all businesses in which they are involved.

Lack of separate representation

The attorneys, accountants, and other experts who perform services for the Company may perform services for the General Partner and do not represent the Investors. It is anticipated that such representation will continue in the future. Accordingly, Investors should consult with their own counsel for advice concerning a purchase of Units. Attorneys and other professionals representing the General Partner do not represent and shall not be deemed pursuant to provisions of applicable codes of professional responsibility to have represented, or be representing, Investors, in any respect. In the event litigation is commenced against the Company or the General Partner, potential conflicts of interest may occur, and the Investors may have to retain separate counsel in certain circumstances.

No arm's length agreements

Certain agreements and arrangements between the Company and the General Partner and its affiliates are not the result of arm's length negotiations. Any and all agreements entered into by and between the Company, on the one hand, and the General Partner or its affiliates, on the other hand, are not necessarily on terms no less favorable to the Company than we could obtain from unrelated third parties for similar products and services in the same geographical area.

The Opportunity Zones program is newly created and no final regulations have been issued

The Opportunity Zones program is newly created and (although proposed regulations have been issued upon which the Company is relying) no final regulations have been issued. Final regulations, when issued, may impact the Company in unanticipated ways. The Company presently expects to qualify as a Qualified Opportunity Fund and invest the offering proceeds in property defined as "qualified opportunity zone property" to take advantage of the federal tax benefits for the deployment of private capital in economically distressed areas. There are currently no final federal regulations regarding the application of the Opportunity Zones program. While the IRS has provided some guidance and proposed regulations regarding Opportunity Zones program, particularly regarding the certification process for Qualified Opportunity Funds, such as the Company, it is not comprehensive and numerous questions remain. New regulations or pronouncements interpreting or clarifying the Opportunity Zone program may be forthcoming. We cannot predict what impact, if any, such additional guidance may have on the Company's investment strategy but such guidance may make some or all of the Company's planned investment ineligible for the deferral or exclusion of tax benefits and may result in the requirement that an Investor immediately pay taxes on gains that were deferred in expectation that the Company would qualify as an Qualified Opportunity Fund (See "Lack of Guidance").

Opportunity Zone Investment

The Company intends to be treated as a Qualified Opportunity Fund for federal income tax purposes, as defined in Section 1400Z-2(d)(1) of the Code and intends to make investments in "qualified opportunity zone property" in "qualified opportunity zones" (as those terms are discussed below and defined in the Code). A qualified opportunity zone is a population census tract that is a low-income community (as defined in Section 45D(e) of the Code) or certain other census tracts adjacent to a low-income community and which is nominated as a qualified opportunity zone by the chief executive officer of a State or possession of the United States and certified by the United States Department of the Treasury.

Qualified Opportunity Fund

In order to qualify as a Qualified Opportunity Fund, the Company must be organized as a corporation or partnership for purposes of investing in "qualified opportunity zone property" (discussed below) (other than another Qualified Opportunity Fund) and must hold at least 90% of its assets in "qualified opportunity zone property," determined by averaging such property held by the Company on the last day of the first six-month period of the Company's taxable year and on the last day of the Company's taxable year (the "90% Requirement"). The Company expects to certify to the IRS its status as a Qualified Opportunity Fund by completing Form 8996, and attaching Form 8996 to the Company's timely-filed federal income tax return for the taxable year. If the Company, as a Qualified Opportunity Fund, fails to meet the 90% Requirement, the Company will be required to pay a penalty for each month of such failure to the extent the amount of assets held by the Company in qualified opportunity zone property falls below 90% multiplied by the underpayment rate established under Section 6621(a)(2) of the Code for the month, which amount is to be taken into account proportionately as part of the distributive share of each Subscriber of the Company. The underpayment rate for the fourth calendar quarter of 2019 is 5% per annum. It is not clear how these monthly penalty payments will be calculated in light of the fact that the 90% Requirement is calculated twice per year. Also, there can be no assurance that the penalty rate will not increase.

The potential tax benefits of investing in the Company as a Qualified Opportunity Fund are: (1) Initial Gain Deferral: Deferral until December 31, 2026, of federal income tax on an Investor's gain from the sale to, or exchange with, an unrelated person (as defined in Section 1400Z-2(e)(2) of the Code) of any property held by him, her, or it, which is invested in the Company within 180 days of the date the property was sold or exchanged (the "Initial Gain Deferral"); (2) Initial Gain Basis Step-up: An increase in the adjusted basis (and thus a reduction of potential taxable income upon disposition) of the initial gain up to a total of 15% if the Investor holds his, her or its investment in the Company for seven years (the "Initial Gain Basis Step-up"); and (3) Fund Gain Exclusion: The exclusion from federal income tax of any gain on the sale or exchange of the Investor's investment in the Company, if the Investor holds his, her, or its investment in the Company for at least ten years (the "Fund Gain Exclusion").

Elections must be made by each Investor with respect to each of the Initial Gain Deferral (at the time of investment in the Company) and the Company Gain Exclusion (at the time of sale or disposition of the Investor's investment in the Company) in order to take advantage of these benefits. If the Investor's investment in the Company is disposed of prior to December 31, 2026, the Initial Gain Deferral is limited to the period which the Investor held his, her, or its investment in the Company, ending on the date the investment is sold or exchanged. Additionally, if an Investor makes an investment in the Company of amounts which are not eligible for the Initial Gain Deferral (e.g., are in excess of gains from a sale to or exchange with an unrelated person, or are from gains from sales more than 180 days prior to the Investor's investment in the Company) such amounts will be treated as a separate investment to which neither the Initial Gain Deferral, the Initial Gain Basis Step-up nor the Fund Gain Exclusion, will apply.

How the Initial Deferral Gain works

If the Investor elects the Initial Gain Deferral with respect to a qualifying investment in the Company, the Investor need not include in his, her, or its gross income the deferred Initial Gain until the Initial Gain Deferral ends (i.e., December 31, 2026, or the date of the sale or exchange of the investment, if earlier). Upon the expiration of the deferral, the Investor must include in gross income the lesser of the amount of gain subject to the Initial Gain Deferral or the fair market value of the Investor's investment in the Company on the date when the Initial Gain Deferral ends, which amount may be reduced by the Initial Gain Basis Step-up as described below.

How the Initial Gain Basis Step-up works

Pursuant to Section 1400Z-2(b)(2)(B)(i) of the Code, in general, an Investor's basis in his, her, or its investment in the Company is zero, but such basis may be increased by (a) 10% of the gain subject to the Initial Gain Deferral, if the Investor holds his, her, or its investment in the Company for at least five years, and (b) an additional 5% (for an aggregate of 15%) of the gain subject to the Initial Gain Deferral, if the Investor holds his, her, or its investment in the Company for at least seven years. Thus, by way of example, if an Investor (a calendar year taxpayer) has $100,000 of Initial Gain from the sale of property to or exchange of property with an unrelated person on September 1, 2019, and invests that gain in a fund that has qualified as a Qualified Opportunity Fund on December 31, 2019, such Investor need not include the $100,000 of Initial Gain in taxable income in 2019. If the Investor holds its investment in the Company until December 31, 2026, $85,000 of the $100,000 of gain will be includible in such Investor's income for the tax year following the expiration of the deferral and the other $15,000 of gain will remain untaxed, because the Investor will have held his, her, or its investment in the Company for more than seven years. However, if such Investor sells or exchanges its interest in the Company on December 31, 2023 (less than five years from the date of the investment in the Company), such Investor must include in taxable income all $100,000 of the Initial Gain Deferral in 2023. Alternatively, if such Investor sells or exchanges its interest in the Company on December 31, 2025 (more than five years, but less than seven years from the date of the investment in the Company), such Investor must include in taxable income $90,000 of the deferred gain in 2025. In the event the tax rates are different between (a) the year again eligible for the Initial Gain Deferral, and for which an Investor made an election to apply the Initial Gain Deferral, arose and (b) the year when the gain is required to be included in an Investor's gross income, it is unclear which tax rate will apply.

How the Fund Exclusion Gain works

The Fund Gain Exclusion can be realized after ten years. If the Investor elects the Fund Gain Exclusion, the basis of the Investor's investment shall be equal to the fair market value of the Investor's interest in his, her, or its Investment in the Company on the date such interest is sold or exchanged as described in Section 1400Z-2(c) of the Code. Thus, by way of example, if the Investor in the example above regarding how the Initial Gain Deferral works, holds its investment in the Company until January 1, 2030, on which date such Investor sells his, her, or its investment, such Investor's basis in his, her, or its investment in the Company shall be equal to the fair market value of the investment on January 1, 2030. Thus, if such investment is sold for fair market value and the Investor makes an election to apply the Fund Gain Exclusion, any appreciation in value of the Company will be excluded from taxable income (and alternatively, no loss will be recognized). Note, it is somewhat unclear, and there is a conflict between the statutory language, whether an investor is required to sell his or her interest in a Qualified Opportunity Fund in order to be eligible for the Fund Gain Exclusion. Proposed Regulations provide a mechanism by which a fund can sell an investment, or an entity in which the fund invests can sell an investment, and allocate the gain or income from such a sale to the Company's investors such that the Investors can utilize the potential benefits from Section 1400Z-2 of the Code. Such regulations are not final and subject to change. There can be no assurance the Investors will be able to sell their interest in the Company to a buyer interested in the Company's investments or that such a sale by the Investors will result in the most favorable sales price.

Qualified Opportunity Zone Property

The Company must use Investors' investments in the Company to acquire "qualified opportunity zone property," which is: i) "qualified opportunity zone stock," ii) "qualified opportunity zone partnership interest," or iii) "qualified opportunity zone business property." Qualified opportunity zone stock is defined in Section 1400Z-2(d)(2)(B) of the Code as any stock in a domestic corporation if the stock is acquired after 2017 at its original issue solely in exchange for cash, the corporation is a qualified opportunity zone business (or if new, is organized for purposes of being a qualified opportunity zone business) at the time the stock is issued, and during substantially all of the Company's holding period of the stock, the corporation qualifies as a qualified opportunity zone business. A special rule prevents the corporation from redeeming its stock from an investor or a related person and then issuing new stock to an investor for purposes of being qualified opportunity zone stock.

Qualified opportunity zone partnership interest is defined in Section 1400Z-2(d)(2)(C) of the Code as any capital or profits interest a domestic partnership (which, by definition, may include a limited liability company) if the partnership interest is acquired after 2017 from the partnership solely in exchange for cash, the partnership is a qualified opportunity zone business (or if new, is organized for purposes of being a qualified opportunity zone business) at the time the partnership interest was issued, and during substantially all of the Company's holding period of the interest, the partnership qualifies as a qualified opportunity zone business. It is intended that the Company's interest in the Project Entity (a limited liability company) will be a "qualified opportunity zone partnership interest" due to the Project Entity's status as a "qualified opportunity zone business."

Qualified opportunity zone business property is defined in Section 1400Z-2(d)(2)(D) of the Code as tangible property used in a trade or business of the Qualified Opportunity Fund if (i) the property was acquired by the Qualified Opportunity Fund by purchase from an unrelated party (as defined in Section 179(d)(2) of the Code) after 2017, (ii) the original use of the property in a qualified opportunity zone commences with the Qualified Opportunity Fund or the Qualified Opportunity Fund substantially improves the property (which essentially requires the Qualified Opportunity Fund to invest more than the purchase price in the improvements), and (iii) during substantially all of the Qualified Opportunity Funds holding period of the property, substantially all of the use of the property was in a qualified opportunity zone (but note that "substantially all" as used for these purposes is not defined in the Code).

Qualified Opportunity Zone Business

A "qualified opportunity zone business" is defined in Section 1400Z-2(d)(3) of the Code as a trade or business in which substantially all (which, pursuant to the proposed regulations, is defined as 70 percent) of the tangible property owned or leased is "qualified opportunity zone property" (described above). Additionally, (1) at least 50% of the trade or business's total gross income must be derived from the active conduct of a qualified business, (2) a substantial portion of the trade or business's intangible property must be used in the active conduct of the business, (3) less than 5% of the trade or business's average unadjusted basis in its property may be nonqualified financial property (which is defined in the Code to include certain types of financial assets and includes cash) and (4) a qualified opportunity zone business cannot include the operation of any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises. It is intended that the Project Entity will be a qualified opportunity zone business that will derive its income from the active conduct of a qualified business and will satisfy the requirement that no less than 70 percent of its tangible property will be qualified opportunity zone business property.

Lack of Guidance

The Opportunity Zone legislation was recently enacted as part of the Tax Cuts and Jobs Act, signed into law on December 22, 2017. At this time, no final regulations have been adopted by the IRS. Although proposed regulations have been issued, there is no way to determine when any regulatory or other administrative guidance may become final or additional guidance be forthcoming or whether any technical corrections may be made by Congress to the statutory language, any of which could materially impact the Company's ability to qualify as Qualified Opportunity Fund, the use the Company may make of funds invested in it, an Investor's ability to qualify for the Initial Gain Deferral, the Initial Gain Basis Step-up or the Fund Gain Exclusion, or other tax consequences to an Investor.

Questions exist with respect to several material aspects of the opportunity zone program due to the lack of final regulations including, but not limited to, (1) whether a taxpayer holding an interest in a Qualified Opportunity Fund may benefit from the Fund Gain Exclusion if assets in a Qualified Opportunity Fund are sold before an Investor sells his, her or its investment in the Company, (2) the definition of "active conduct" of a business for purposes of a qualifying as qualified opportunity zone business, (3) the ability of an established low-income community business to qualify as a qualified opportunity zone business, (4) the meaning of "sale or exchange" for purposes of the end of the Initial Gain Deferral, (5) use of intangible property in the active conduct of a business, (6) clarification on the timing for meeting the 90% Requirement, discussed above, (7) treatment of funds held for construction of real property or for working capital under the nonqualified financial property requirement, (8) the meaning of "substantially" in each place it is used in Section 1400Z-2 of the Code, and (9) if the sale or exchange of property by a partnership that results in a gain eligible for the Initial Gain Deferral may be invested in a Qualified Opportunity Fund only by the partnership, by the partners in such partnership, or by either. Although proposed regulations have addressed many of the foregoing issues, the lack of final guidance regarding material provisions of the legislation means that there is substantial uncertainty regarding how to comply with all of the requirements and that there can be no assurance that the Investors will enjoy the benefits of the Initial Gain Exclusion or the Company Gain Exclusion.

Additionally, if an Investor transfers his, her or its investment in the Company, (i) a subsequent purchaser of that investment will not receive any of the tax benefits with respect to the Company's investment in qualified opportunity zone property, discussed above, and (ii) the opportunity zone tax benefits, discussed above, for which an Investor may qualify may be significantly reduced if such investment is transferred prior to the tenth anniversary of the Investor's acquisition of his, her, or its investment in the Company.

The Company must hold the Property for a minimum ten-year holding period in order for Investors to receive tax benefits

We cannot ensure that the ultimate exit strategy of the Company will result in maximum benefits for Investors. The Company cannot guarantee that there will be a market for Investors to liquidate their investments at the end of the ten-year hold period. If Investors liquidate prior to the end of such ten-year holding period, they may not receive some or all of the tax benefits of investing in Opportunity Zones as described herein.

The Company must have a minimum of 90% of its assets invested in qualified opportunity zone property

A Qualified Opportunity Fund must have a minimum of 90% of its assets invested in qualified opportunity zone property (See "Qualified Opportunity Fund" above). Failure to meet or maintain the 90% Requirement may result in a penalty payable by the Company which shall be taken into account proportionately as part of the distributive share of each Subscriber. The Company may not have sufficient working capital to make such penalty payments at the time they become due or are accrued.

Attempts to qualify with the Opportunity Zone program may cause the General Partner to make decisions that will not maximize investment value or returns

Attempts to qualify with the Opportunity Zone program may cause the General Partner to make decisions that will not maximize investment value or returns. Due to the requirement to comply with the Opportunity Zone criteria, the General Partner may have to make investment decisions that may not maximize investment value or returns in a manner that would otherwise be possible if the Company did not have to comply with the Opportunity Zone criteria. Additionally, because there is a ten-year holding period required to take advantage of the benefits of an investment in an Opportunity Zone fund, it may not be advantageous to liquidate underperforming investments in order to reposition those funds into better performing investments.

Long-term investment

An investment in the Company may be illiquid due to nature of the offering and the ten-year hold period. In order to take advantage of certain tax benefits regarding exclusion of future gain of investing in a Qualified Opportunity Fund, each Investor, must hold his, her or its investment in the Company and the Company must maintain its status as a Qualified Opportunity Fund for more than ten years. This ten-year hold requirement may require sales at inopportune times and may result in less than maximum return on a particular investment. Investors may disagree with the General Partner's timing of liquidation of investments as it may result in their inability to take full advantage of an investment in a qualified Opportunity Zone.

The General Partner has limited experience investing in low-income areas and no experience with the new Opportunity Zones program

The General Partner has limited experience investing in low-income areas and no experience with the new Opportunity Zones program. Although the General Partner has significant experience in real estate investing, it has limited experience investing in low-income areas, which are the target of the new Opportunity Zones program. Further, as the Opportunity Zones program is newly created, the General Partner has no experience investing within this program.

Investors must make appropriate timely investments and elections

Investors must make appropriate timely investments and elections in order to take advantage of the benefits of a Qualified Opportunity Fund. In order for Investors to receive the benefits of investing in this Opportunity Zone Fund, the Investor-taxpayers must make timely investments in the Company and timely elections. Furthermore, any gain deferred by investing in this Opportunity Zone Fund must have been generated from a sale to an unrelated party within 180 days of investment in the Company. The Company has no control over these circumstances and will have to rely on the representations of the Investors.

An investment in the Company involves a high degree of risk, and should be regarded as speculative. Prospective investors should carefully consider these investment risks, among others, in addition to the other information presented in the Offering Materials, in evaluating the Company for investment. The risks listed herein are not a complete list of potential risks facing the Company and it may encounter unexpected risks in the future, which, may adversely affect its performance.

Company Updates

This business has no updates at this time. Check back soon!

Discussion

No comments yet.Be the first to get the conversation going.
Mcafee secure trustmark

Get in touch with customer support:

Important Disclosures: localstake.com is a website owned by Stake Management LLC (“Stake Management”), which licenses SaaS tools and technology to a variety of issuers, broker-dealers, investment advisers, financial institutions and other entities. Stake Management is not a broker dealer, funding portal or investment advisor. The permitted use of Stake Management’s technology should not be interpreted as an endorsement or recommendation of any issuer, offering, or technology licensee. The Localstake Marketplace Platform operates under a technology license from Stake Management.

All offerings of securities are made through Localstake Marketplace, a registered broker dealer and member of FINRA and SIPC. Stake Management and Localstake Marketplace are hereinafter referred to collectively as the "Localstake Marketplace Platform Operators", unless otherwise specified.

The Localstake Marketplace Platform Operators do not provide legal advice, tax advice, or make investment recommendations, and no communication through this website or in any other medium should be construed as such. Investment opportunities posted on this website are private placements. Private placement investments are NOT bank deposits (and thus NOT guaranteed or insured by the FDIC, by a bank, or by any other federal governmental agency), and are NOT guaranteed by the Localstake Marketplace Platform Operators or any of their collective affiliates, owners, managers or members. Private placements of securities such as those displayed on this website MAY lose value. There is NO guarantee of a return on your investment and investors must be able to afford the loss of their entire investment. Neither the Securities and Exchange Commission (SEC) nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through this website. Nothing on this website shall constitute an offer to sell, or a solicitation of an offer to subscribe for or buy, any securities to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful.

Any financial projections or returns shown on the website are illustrative examples only. Any investment information contained herein has been secured from sources the Localstake Marketplace Platform Operators believe are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. Offers to sell by issuers on Localstake Marketplace or the solicitations of offers to buy by investors on Localstake Marketplace, any security are only made through official offering materials that contain important information about risks, fees and expenses. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on this website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help to understand and assess the risks associated with an investment opportunity. Please review the risks of investing in private placements on Localstake Marketplace.