San Antonio, TX 78233, US
Investor Returns
Palace Way R. E. Developments
The company was set up and designed to syndicate, develop, and manage new real estate (R.E.) developments of Manufactured Housing Parks and light industrial Warehouse Business Parks in High growth areas of Texas. The projects are designed for long term hold (7 to 10-years) to produce above average returns to investors from rental income and capital gains appreciation while mitigating risk.
Palace Way Opportunity Zone Fund: (QOZ Fund) (SEC Reg-D, 506-C)
This investment fund invests in opportunity zone projects located in Texas. Accredited investors can invest capital gains funds to achieve tax deferrals, a reduction in taxes owed if investment is held for 5-years, and any new earnings from the investment is tax free after 10-years. The fund invests in new real estate development projects.
The fund invests in multiple projects including the projects developed by Palace Way Management LLC.
Fund Quick Fact:
· $15,000,000 fund.
· 15.5% targeted return
· 8% preferred rate
· Minimum investment $25,000
· 2% annual management fee
· No retained interest by fund managers.
· 10-year hold
Manufactured Home Parks (SEC Reg-D, 506-C)
The company was set up to syndicate, develop, and manage new Manufactured Housing Parks in high growth areas of Texas. The parks are designed as 5-star land lease communities at a size of 200 spaces or more, with a full array of amenities. Projects are meant to be held long term (10-years) to produce above average returns for investors from operating income and capital gains appreciation while mitigating risk.
Quick Facts
· 15% targeted returns.
· Minimum investment $25,000.
· 7 to 10-year hold.
· 8% preferred rate.
· 50% participation after preferred is paid.
· We estimate that 61% of all cash flow and gains will be paid to investors over the life of investment.
· Current Project is a qualified OZ project.
Warehouse Business Parks (SEC Reg-D, 506-C)
The company was set up to syndicate, develop, and manage new Light Industrial Warehouse Business Parks in high growth areas of Texas. The parks 12 to 25-Acre Warehouse Business Rental Project: These parks are designed for small businesses needing 4,000 to 10,000 square foot warehouse type buildings on 1/2-acre fenced lots. Projects are meant to be held long term (7 to 10-years) to produce above average returns for investors from operating income and capital gains appreciation while mitigating risk.
Quick Facts
· 15.5% targeted returns.
· Minimum investment $25,000.
· 7 to 10-year hold. 10-yrs. OZ Funds
· 8% preferred rate. *
· 50% participation after preferred is paid.
· We estimate that 61% of all cash flow and gains will be paid to investors over the life of investment.
· Current Project is a qualified OZ project.
Notes new real estate development projects and investors returns.
*The preferred rates of returns accrue to the investors account from 1st day of month following deposit.
Because these are new developments there is no income until the projects are built and leased. There-fore the preferred rates of returns accrue to investors accounts until the projects start cash following.
Comparing investment funds to Developer/syndicator investments
What attracts investors to new real estate development is that the total return to investors is often greater then investing in an asset that has been developed and leased up. This is true because the investor is buying into an asset at the cost of building level Vs investing in an asset purchased at market prices.
Even though the profit (cash flow) split with a developer/syndicator is greater than the split with a investment fund the overall return to the investors is often greater with the developer/syndicator over the life of the investment.
A typical developer will spend 18 to 36-months and many tens of thousands of dollars getting a project to the point where investors are invited in. They typically have few fees to charge against the investors funds and only make money from the project after the preferred rate is paid and the project is profitable. At that time, their split (retained interest) is often larger than an investment funds’. Investment Funds may have many types of fees being charged; fees are charged against revenue regardless of profits. Fees can have a large impact on total investment returns over time.
Retained interest: When comparing the retained interest of an investment fund, (typically 15 to 30%) to a developer’s retained interest (typically 40 to 50%) it is best practice to compare all the fees being charged and the targeted return expected.
Jim E. Glasgow
210-413-7230 7-1-2020
This is not an offer to sell or a solicitation of any offer to buy any securities. Offers are made only by Prospectus or Private Placement Memorandum, or other offering materials. To obtain further information, you must complete our investor questionnaire and meet the suitability standards required by law. Some opportunities are only available to accredited investors.
