Q1 DLP Capital Advisors Recap · 2017-04-18 · Q1 2017 Market Review Q1 of 2017 was a very strong...
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Q1 DLP Capital Advisors Recap Q1 2017 Recap Q1 was the best Quarter to date for DLP Capital Advisors in just about every metric you could want to evaluate success upon. Some of the key highlights include: · Exceeding Return Targets for all of DLP Capital’s Funds include breaking the best Quarter in Fund history for the DLP Fixed Fund I · The Launch of the DLP Equity Fund II, LLC & over $1,300,000 raised in the last few weeks of the Quarter. · Record breaking loan funding Quarter with 62 loans Funded for over $13,000,000. · First North Carolina property acquired- 128 Unit “Cardinal” apartment community · Barry DeGroot – General Council for DLP became a partner at DLP Capital Advisors · DLP Capital Advisors successfully took over Fund Administration for the DLP Lending Fund LLC · Key Hires: Carlos Chirino, Senior Acquisition & Project Leader; Fred Slayton, Investor Success Manager- Direct Lending Partner; Funding Specialists Brent Parker, Bert Watson, Craig Yarnell, and Brion Yarnell; Senior Underwriter Matt Petraglia · Nearly $13,000,000 of capital invested into the DLP Funds by 37 new investors and 30 repeat investors. This was the biggest capital raising Quarter in DLP Capital’s History. Q1 Fund Performance • 15.56% annualized net return to investors in the DLP Fixed Fund • 14.93% annualized net return to investors in the DLP Lending Fund • 12.28% annualized net return to investors in the DLP Income & Growth Fund • 9% Annualized Preferred Return for 2016 achieved & distributed to investors in the DLP Equity Fund I, LP • Fixed Returns paid to all investors ranging from 6.5% - 12%
Transcript of Q1 DLP Capital Advisors Recap · 2017-04-18 · Q1 2017 Market Review Q1 of 2017 was a very strong...
Q1DLPCapitalAdvisorsRecap
Q12017Recap
Q1wasthebestQuartertodateforDLPCapitalAdvisorsinjustabouteverymetricyoucouldwanttoevaluatesuccessupon.Someofthekeyhighlightsinclude:
· ExceedingReturnTargetsforallofDLPCapital’sFundsincludebreakingthebestQuarterinFundhistoryfortheDLPFixedFundI
· TheLaunchoftheDLPEquityFundII,LLC&over$1,300,000raisedinthelastfewweeksoftheQuarter.
· RecordbreakingloanfundingQuarterwith62loansFundedforover$13,000,000.· FirstNorthCarolinapropertyacquired-128Unit“Cardinal”apartmentcommunity· BarryDeGroot–GeneralCouncilforDLPbecameapartneratDLPCapitalAdvisors· DLPCapitalAdvisorssuccessfullytookoverFundAdministrationfortheDLPLendingFund
LLC· KeyHires:CarlosChirino,SeniorAcquisition&ProjectLeader;FredSlayton,InvestorSuccess
Manager-DirectLendingPartner;FundingSpecialistsBrentParker,BertWatson,CraigYarnell,andBrionYarnell;SeniorUnderwriterMattPetraglia
· Nearly$13,000,000ofcapitalinvestedintotheDLPFundsby37newinvestorsand30repeatinvestors.ThiswasthebiggestcapitalraisingQuarterinDLPCapital’sHistory.
Q1FundPerformance
• 15.56%annualizednetreturntoinvestorsintheDLPFixedFund • 14.93%annualizednetreturntoinvestorsintheDLPLendingFund • 12.28%annualizednetreturntoinvestorsintheDLPIncome&GrowthFund • 9%AnnualizedPreferredReturnfor2016achieved&distributedtoinvestorsintheDLPEquity
FundI,LP • FixedReturnspaidtoallinvestorsrangingfrom6.5%-12%
Q12017MarketReview
Q1of2017wasaverystrongmarketonmanyfronts.Firstofall,realestateisamarketlikemostdrivenbysupplyanddemand.ThesupplyinQ1wasabout2.5monthsofhomesonthemarket.Thisis40%+lessthan1yearago,whichwasatthetime,thelowestinrecordedLehighValleyhistory!Thislackofsupplyhaslimitedhomessalestoremainnearlyflatwith2016intermsofnumberofhomessold(1430in2017vs1420in2016).Homepricesgrewsignificantly–up5.78%fromQ1of2016.Homepricegrowthbasedonsquarefootagethoughwasnearlyflatwith206.Inaddition,thepaceofsalescontinuestobeverystrong.Homessoldata17%fasterrateinQ12017vs2016,withanaveragetimetosellofjust64days.
InLehighValley: 2017Q1 %Change YTD %Change Numberofhomesales 1,430 +.01% 1,430 +.01% Averagehomesaleprice $197,492 +5.78% $197,492 +5.78% Averagepersq.ft. $101.48 +.005% $101.48 +.005%
Q4RehabFundingMarketRecap
Therehabmarketisverystrong.Tampa;Jacksonville;andOrlandoarerankedas3ofthetop10marketsinthecountryforrenovations,andare3ofthemarketsDirectLendingPartner/DLPCapitalactivelyisfundingloans.ThroughoutthemarketsDLPCapitalislendinginthevolumeofinvestmenttransactionsbeingdoneareverystrong,anditremainsamarketstillfilledwithopportunity,despitecontinuedvolumeofcompetitionamongsthomeflippers.Withthestrengthofmosthomemarkets&thespeedhomesaresellingin(oftenwithin3-5weeks),itremainsanexcellenttimetosellrenovatedhomesandminimizeriskofholdingontothepropertyforlongerthantargetedtimeframes.
Q12017RealEstateMarketOutlook
WeexpecttoseeacontinuedrecordlowinventoryavailablehomesintheLehighValley,aswellasmostmarketstheDLPInvestorsand/orlendsin.Inaddition,weexpecttoseeQ22017overQ22016salesgrowthof3-5%alongwithhomepricegrowthof4-7%Q1overQ1.Overallfor2017weareexpectingrecordsettingsalesvolume(3-5%over2016)and4-6%increaseinhomevaluesthroughtheLehighValley.Asfortherentalmarketweexpectrentstoincrease3-5%Q22017overQ22016.,alongwithcontinuedstrongoccupancylevels&rentaldemand.Lastly,weexpectinterestratestostayclosetowheretheyaretoday(High4stolow5s).Weareinaverystrongmarketonboththehomesaleaswellasrentalmarkets.Supplyanddemandisverymuchworkingininvestorsfavoronboththesales&rentalfronts.
OverallMarketExpectationsComparedtoQ1
Sale Supply Prices Interest RentalOccupancy Rent
Volume Rates Price Q2DLPCapitalAdvisorsOutlook
Q2issettobeanotherverystrongquarterforDLPCapitalAdvisors.
DLPCapitalAdvisorsisraisingcapitalandgrowingtheDLPLendingFund;theDLPIncome&GrowthFund;andthenewDLPEquityFundII,LLC.Inaddition,theDLPFixedFundIILLC,anoteonlyofferingwillbeliveduringQ2aswell
DLPCapitalexpectstoachieveourtargetedreturnsinallfiveofourFundsinQ2:
• LendingFund(11+%) • FixedFund(11+%) • Income&GrowthFund(11+%) • EquityFundI(22-25%annualaverageoverthe5-7yearFund) • EquityFundII(17%annualaverageoverthe8-10yearFundw/8-9%distributedannually,paid
quarterly)
DLPCapitalexpectstoraiseabout$12,500,000innewcapital,including$5,000,000intotheNewDLPEquityFundII&$2,500,000intothenewDLPFixedFundII,LLC
DLPexpectstoacquireover500apartmentunitsandhomesinQ1aswellasoriginatemorethan25LinesofCreditand75Loanstorealestateinvestors.Thisisexpectedtobethebiggestquartertodateforbothacquisitionsandlending.
Lastly,DLPCapitalwillberollinganewinvestorportalwithdrasticallyimprovedininvestorreporting;portfolioanalysis;andtheabilitytoseeallofyourDLPInvestmentsinonelogin.Thiswillbeincrediblypowerful,andwillalsoallowforanewautomatedinvestmentprocess,wereinvestorscaninvestthroughthesystematanytimeontheirown.
CommonlyAskedQuestions
WhydopeoplecometoDLPCapitalAdvisorsforloansinsteadofbanks?Manyreasons,threeofthebiggestreasonsare:First,banksarelimitedonlendingon“speculative”realestateIE.realestatenotleased..Second,regulationsmaketheprocessofborrowingthroughabankextremelyslow,itcancommonlytake12-15weekstocloseacommercialloan..Third,webringagreatdealofvaluetoborrowersthroughourextensiveexperience,knowledge;andresources.Weteachthem,guidethem,andprovideresourcesthatabanksimplycan’toffer
Youcharge12-15%interestrates.Doesthatmeantheloansyoufundarehighrisk?
Weunderwriteourborrowerssimilarlytothatofmostbanks,butwithevendeeperanalysisontheasset&theabilitytonothavetogetdistracted&worryabout“redtape”orsillyregulations.Inunderwritingourborrowers,weusebackgroundchecks,creditchecks,bankstatements,taxreturnscashflowanalysis,andwhatwebelievetobe“commonsense.”Inadditionweinspecteveryproperty;hire3rdpartyappraisers;doourowninternalevaluationonthevalue;evaluatethescopeofwork;thebudget;etc.Ouraverageborrowerhasanetworthofmorethan$1million,over$100,000inthebank,andovera650creditscore.
WhatarethetaxbenefitsofEquityFundII?
DLPEquityFundIIhassomegreattaxshelters.Forexample,ifyouinvested$250,000intheFundandreceivedan8%annualreturnof$20,000,mostofthat$20,000wouldbeshelteredfromtax.Weestimatethat,atmost,you’llbetaxedon$2000-$4000ofthatamountbecauseofdepreciation.AttheendoftheFundwhenwesellofftheproperties,you’llbetaxedatlongtermcapitalgains,whichiscurrentlyroughlyhalfofwhatmarginaltaxbracketsareformostinvestors.Plus,youwereearningreturnsforeachofthoseyears.
DoestheminimuminvestmentamounthavetobewithinasingleFund?
InvestmentsacrossmultipleFundsand/ormultipleaccounts(forspouses,familymembers,etc.)arecountedcollectivelytowardtheminimuminvestment.
Howdoyouverifythatyouareanaccreditedinvestor?
Fourways:1)aletterfromanadvisor(attorney;Accountant;FinancialAdvisor)statingthatyouareaccredited;2)acopyofyourtaxreturnshowingtherequiredAdjustedGrossIncome(AGI)of$200,000foranindividualor$300,000foramarriedcouple;3)Brokerage/Accountantstatementsshowingtherequiredassets;or4)filloutapersonalfinancialstatement.
DLPCapitalAdvisorsEquityInvestmentCaseStudy:
Property:VillagesatRankin,aDreamLiveProsperCommunity
Location:Greensboro,NC
Units:128Units
InvestmentDescription:VillagesatRankinis128-unitCardinalcommunityof1storyapartmenthomes.Thepropertywascapitalstarved&poorlymanagedoverthepastnumberofyears.TheoperatingpartnerpassedawayleavingaCaliforniacapitalpartnerlefttomanagethepropertyfromafar.DLPnegotiatedgreattermsonthepurchase&hasexpectationsofmaximizingtheinvestment&drasticallyimprovingcashflow&creatingsignificantequityinthepropertyviastrongleasing&effectivemanagementalongwithcapitalimprovementsincludingrenovatingasignificantnumberoftheunitsinadditiontoexteriorrepairs&cleanup.ThepropertyislocatedthecityofGreensboro,NorthCarolina.Greensboroisagrowingareathatisreinventingitselffromthetextileandfurnituremanufacturingdaysofthepast.Newcompaniesaremovingintothearea,suchasRalphLauren,HondaAircraft,TIMCO,andmanyothertransportation,logistic,aviation,andhightechcompanies.
PurchasePrice:$5,050,000
TotalCosts:$6,050,000
CapitalInvestment:$2,767,500
UnitBreakdown:
FinancialOverview:
CashonCashReturn(Year1):10.38%,nettoinvestors
TotalSevenYearProjectReturn:40.20%AnnualizedIRR
*Thesenumbersareestimatedandsimplifiedforexamplepurposes.
DLPCapitalAdvisorsLoanInvestmentCaseStudy:
LoanAmount:$68,000
Value:$140,000
LoantoValue:48.57%
LoantoCost:76.16%
BorrowerCreditScore:728
BorrowerExperienceLevel:TheBorrowerisanexperiencedrealestateinvestorthathascompletedmultiplesuccessfulflipswithDLPinthepast2years
BorrowerNetWorth:$450,000
InterestRate:13.20%
LengthofLoan:6months
ResultofLoan:TheBorrowerwasabletosuccessfullycompletetherenovationstothepropertyandlistitforsale.Fourmonthsafterclosingtheloan,theBorrowersoldthepropertyforthe$140,000appraisedARVoftheproperty.
BEFORE AFTER
CurrentOfferings:
DLPCapitalAdvisorsiscurrentlyacceptinginvestorsintotheDLPLendingFund,LLC,DLPIncome&GrowthFundI,LLC,andDLPEquityFundIILLCaswellasNoteHolders.
ThetargetedreturnsforequityinvestorsintheDLPLendingFund&DLPIncome&GrowthFundare11+%.
ThetargetedoverallreturnintheDLPEquityFundII,LLCis17%,with8-9%annualreturngeneratedduringoperationsfromrent;andtheremainingprofitsdistributeduponthesaleoftheproperties.
TheFIXEDreturnstonoteholdersare6.5-10%.
DLPEquityFundII,LLC
ThisisforAccreditedInvestorsonly*.
DLPEquityFundIIisdesignedtoprovideinvestorswithapassive,limitedpartnershipinthecoreofDLPCapitalAdvisors’directinvestmentactivities.TheFundfocusesoninvestingprimarilyintostabilizedandvalueaddmulti-familyproperties,primarily50-300unitapartmentcommunities.Inaddition,theFundinvestsintosinglefamilyrentalsandotherincomeproducingrealestate.TheFundleveragesDLP’sinhousepropertymanagementandconstruction/maintenancedivisionstomaximizethevalueandcashflowoftheassetsundermanagement.TheFundhasa10yearinvestingperspective,focusedongeneratingdoubledigitassetlevelcashflow,increasingassetvalueandprovidingataxsheltertoinvestors.
DLPLendingFund,LLCEquityOffering
ThisisforAccreditedInvestorsonly*.TheDLPLendingFundlendsshort-term,highyieldcapitaltorealestateinvestors,thusprovidingstrong,consistent,andpredictablereturns.Thefunddoesnotownrealestatedirectly,butinsteadlendscapitaltorealestateinvestors.ThisFundisahybridfund,havingbothEquityandDebtinvestmentoptions.Theunderwriting,funding,andloanmanagementisperformedandmanagedthroughDirectLendingPartnerLLC.DirectLendingPartnerhasathoroughunderwritingprocesstomakesureloansareonlymadetoborrowersthathaveahighprobabilityofsuccesswiththeproject/propertyandtheabilitytorefinancethepropertyifneeded.LoanservicingisperformedbyFCILoanServicing.
DLPIncome&GrowthFundI,LLC
ThisisforAccreditedInvestorsonly*.
TheDLPIncome&GrowthFundI,LLCisanOpportunityFundthatinvestsintoarangeofrealestatebackedinvestmentopportunitiesincludingrehab/privateloanstorealestateinvestors;loanstoaffiliatesofDLPCapitalAdvisors;investmentsintotheDLPFixedandLendingFunds;preferredequityinvestmentsandpartnerships;nonperformingnotes;andinvestmentsintootherrealestatebackedinvestmentfundsandopportunities.ThefocusoftheFundistoproducesuperiorreturnsbyhavingtheflexibilitytocapitalizeonmarketopportunitiesandinefficiencies,whilemitigatingriskthroughdiversificationandstrongassetandborrowerunderwriting.
DLPNoteOfferings
Accreditedinvestorsonly*DLPoffersnote(debt)investmentoptionswithineachoftheDLPFundsinadditionaltoonaseparatelymanagedaccountbasis.Thesenotesoffer7-10%fixedreturnsw/alowLTV.Primarily,thefund’sassetsarefirstpositionrealestateloans.Thenoteinvestorsareinthe“firsttobepaid”position&ineffectareinthelowestriskpositionofalltheDLPinvestmentofferings.
Update Rate Schedule
Past performance is not a guarantee of future performance.
* Accredited Investor Definition: For an individual to be considered an accredited investor, he or she must have a net worth of at least one million US dollars, not including the value of one’s primary residence or have income at least $200,000 each year for the last two years (or $300,000 together with his or her spouse if married) and have the expectation to make the same amount this year.
DreamLiveProsperNews
DLPRealtyhasBestQ1Ever!
Historically,DLPRealtyhasbestrecordedQ1everhavingsuccessfullyclosed238homesasopposedtoclosing204homesin2016.
DLPCapitalAdvisorsExplodes!
DLPCapitalhitsnewhighseachmonthincludingraisingover$5.9millioninMarchalone,makingthatourbestmonthever!
DLPCapitalWelcomesNewInvestors!
DLPwelcomed37newinvestorsinQ1.Over$12,900,000wasinvestedfromnewandexistinginvestors.
DirectLendingPartnerhasBestQuarterinHistory!
DirectLendingpartnerclosed62loansand17linesofcreditduringthe1stquarter,markingitsbestquarterever!
DLPPropertyManagementHittingAll-TimeHighs
Withover94%effectiveoccupancy,DLPPropertyManagementhadtheirbestmontheverinMarch!WealsoanticipateexplosivegrowthyettocomeinQ2includingpurchasingadditionalrentalunitsinSouthCarolina,Georgia,FloridaandPennsylvania.DLPCapitalContinuesitsExpansionAddingSouthCarolinatotheList!
DuringMarch,DLPsuccessfullycompletedtheacquisitionoftheVillageatGlenhaven,aDreamLiveProsperCommunity.TheVillagesisa201-unit“Cardinal”communitylocatedinGreenwood,SouthCarolina.
DLPEquityFundIIisNowLive!
TheDLPEquityFundIIisnowliveandacceptingcommitments.Wehavealreadyaccepted$1.2Millionintothefundwithanother$1Millionincommitmentssofar!
DLPEquityFundIIisdesignedtoprovideinvestorswithapassive,limitedpartnershipinthecoreofDLPCapitalAdvisors'directinvestmentactivities.TheFundfocusesoninvestingprimarilyintostabilizedandaddvaluetomulti-familyproperties,primarily10-300unitapartmentcommunities.
DirectLendingPartnerExpandstoCovertheEastCoast
DirectLendingPartnerhasjustundergonemassiveexpansion.InadditiontoPennsylvania,NewJerseyandFlorida,wearenowalsolendingtorealestateinvestorsinConnecticut,Delaware,Maryland,Virginia,NorthCarolina,SouthCarolina,Georgia,andWashingtonDC!
DLPRunNews
Markyourcalendars!ThedatehasalreadybeensettoholdourannualDLPRunonSunday,November12th,2017.AllproceedsgototheValleyYouthHouseorganization.Visitwww.DLPRace.comtoday!
TeamMemberSpotlight
Samantha Bruno Fund Accountant
WhendidyoustartworkingatDLP?May2016WhatdoyoufindmostchallengingatDLP?Keepingupwithourastoundinggrowth!WhatisyourfavoritepartaboutworkingatDLP?Yourroleisconstantlyshiftingandchanging.Youtakeonnewresponsibilitiesandfacenewchallengeseveryday-itnevergetsboring,andthat'ssayingsomethingwhenitcomestoaccounting!WhatadvicedoyouhaveforfutureDLPemployeecandidates?Askquestions.Thereisnoshortageofpeoplewillingtoteachyou-youhavetheopportunitytogrowthere.
--OnamorePersonalNote--
Whatisyourfavoritequotethatyouliveby?"Noonecanmakeyoufeelinferiorwithoutyourconsent."Whatarethe3topitemsonyour"BucketList"?Visiteverycontinent,runamarathon,andlearntosail.Whathobbiesand/orsportsareyouinvolvedin?Running,yoga,andpainting.Whathavebeenthetop(3)highlightsofyourlife?Sofar:Adoptingmydogfromtheshelter,spendingayearlivinginAustralia,andthedayImetmyboyfriend,Matt.Tellus(1)randomfactaboutyourself.Ihaveneverknownlifewithoutadog.MyparentshaddogsbeforeIwasborn,andgrowingupwealwayshadtwo.WhenIgrewup,Igotmyown.Ican'timaginenotcominghomeandbeingknockedoverwithkissesatthedoor!
InvestorSpotlight
Dave Froehlich WhenandhowdidyoufirstbecomeinvolvedwithDLP?IheardaboutDLPontheradioon790WAEBforquitesometime;mycuriositypeakedandIfirststoppedinaroundNovemberof2015andspokedirectlywithDonaboutmyoptions. HowhasinvestingwithDLPchangedyouroverallfinancialpicture?It’sbeenagreatpartnershipwithDLP;Ihavemoreflexibilityininvestingratherthangoingintorealestatedirectly,sotherearenoheadachesandI’mdiversified.Idon’twantallofmyeggsinonebasket,soit’sbeenanicealternativetothestockmarket. WhatwouldyousaytosomeoneconsideringinvestingwithDLPbutisstill“onthefence”?ReachouttoDonorLarry-bothareveryaccessibleandthey’llhelpyoulearnabouttheirinvestmenttypesandyourspecificoptions.Also,talktootherinvestors;attendtheinvestordinnersandrubshoulderswithfolksthathavebeenwithDLPlongerthanIhave.TheypassalongtheirexperiencewithDLPtootherpeopletohelpyoufeelmorecomfortable.IwouldhighlyrecommendpeoplefindingoutmoreaboutDLP-they’refullyaccreditedandRIAapproved,andthere’snoreasonwhypeopleshouldn’tatleastlookatit.Idon’tknowofanyotherinvestmentswiththegreatreturnsandsafetyDLPprovides. WhataresomeofyourfinalthoughtsaboutyourexperiencewithDLP?Ilikethatyoucanseemonthlyandquarterlyresultsandreturnsforyouraccountandforallofthefundsoverall.Also,I’mlookingforwardtolearningmoreaboutEquityFundII-itoffersdifferentopportunitiestoparticipateinDLP’srealestateinvestmentsandcanhelpescapesomeofthetaxburdenformanyindividuals.
Management
DLPCapitalAdvisors,LLC701W.BroadSt.,Suite203
Bethlehem,PA18018www.dlpcapitaladvisors.com
ContactInfo
DonWenner,CEOOffice:(610)488-2375Direct:(484)542-2868
Upcoming Events
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Register online at www.DLPCapitalEvent.com
or call
(610) 488-2375
