The RLE Limited Partnership (LP), a Nevada-based entity, leverages a debt-free “Build to Rent” strategy to develop Short-Term Rental (STR) and Meetings, Incentives, Conferences, and Exhibitions (MICE) properties in Rocky Ledge Estates. Below is a concise, corrected, and improved response addressing investor demands, incorporating the updates provided, detailed budget, and income projections for a $1.25M investment (6.25% LP stake) or $10M for a 50%.
- Overview: The LP constructs 8 Private Resort Homes (PRHs, 34,400 sq. ft.), 3 Serenity Haven Cottages (SHCs, 3,600 sq. ft.), and 1 Event Center (EC, 5,000 sq. ft.) on 41.5 acres, hosting 128 guests (phase one, scalable to 300 across 16 parcels). Custom-built PRHs use fireproof OmniBlock, metal roofs, radiant floor heating, solar-powered battery systems, and energy-efficient heat pump AC, ensuring durability and low operating costs.
- De-Risking: The LP is raising $10 million by offering 8 partnership shares, each representing a 6.25% stake, priced at $1,250,000 per share. Investors can buy multiple shares or pool resources to purchase a single share. For example, four investors could each contribute $312,500 to collectively acquire one 6.25% share. The structure allows flexibility for individual or group investment to meet the $10 million total raise. Funds held in escrow by Corporate Services of Nevada.
- Debt-free model eliminates mortgage risk, while creating more passive income for K-1 distributions to the 8 LP's and 1 GP(50%).
- Approved subdivision and $3.2M in assets (land: $2.7M at $65K/acre, other: $500K) reduce regulatory hurdles.
- Hostaway Property Management with AI automates reservations, cleaning fees, occupancy tax, damage insurance, and resort fees; Corporate Services of Nevada ensures compliance.
- Mutual approval of labor and onsite manager.
- Reserve funds cover cost overruns, enhancing stability.
- Use of Funds ($10M total raise):
- Construction: $9.48M for 43,000 sq. ft. ($220/sq. ft.):
- PRHs: $3M materials ($375K × 8), $1M labor ($125K × 8).
- SHCs: $600K materials ($200K × 3), $375K labor ($125K × 3).
- EC: $300K materials, $125K labor.
- Furnishings: $1.035M for STR readiness.
- Reserve: Balance (~$–515K, adjusted for total budget) for contingencies.
- Management: $250K GP salary ($20K/month), $210K other labor.
- Projected Upside (for $1.25M SDIRA, 6.25% stake):
- Tax Savings: Bonus Depreciation (approved law) allows 100% expensing of $1.25M for improvements, yielding $462,500 in year-one tax savings (37% bracket) per LP. The operating agreement ensures 100% depreciation passes to the 8 LPs, not the GP (whose land is non-depreciable). Additional deductions: $600K/year (property taxes: $8,679, utilities, insurance, 10% management fee).
- STRs: At $250/night/family, 8 PRHs generate $56K/week ($7K × 8). At 70% occupancy (48 weeks), revenue is $1.8816M; at $350/night, revenue rises to $2.688M. After $600K expenses, year-one K-1 profit is $80,100 (6.25% stake) at $250/night, or $197,000 at $350/night, tax-free in SDIRA.
- EC: $396K/year from weddings/company events, boosting total income.
- Year Two: $600K from development division (16 vacant parcels as potential contracts).
- Property Management: 10% fee on area-wide STR revenue (16 parcels).
- Equity: $6.41M total ($16.41M perceived value: $14.4M PRHs, $825K SHCs, $1.185M EC, less $10M cost), or $400,625 for 6.25% stake.
- Lifestyle: 112,000 Luxury Home Exchange Points ($112K value, two weeks free vacations), 90% discounted world travel, deductible business travel expenses.
- Legacy: Family office with stock ownership, scalable to 300 guests, ensuring 100-year wealth transfer.
- Operator: The GP, a 50% owner with $250K salary, splits 50% of profits with their family, aligning incentives for STR/MICE success. The operating agreement ensures transparency, with LPs receiving 100% Bonus Depreciation.
- Objections Handled:
- Illiquidity: K-1 profits ($80,100–$197,000/year) provide cash flow; operating agreement governs exits.
- Market Risk: Unique location, MICE demand ($1.1T market, 7% CAGR), and $250–$350/night pricing (average $2,300/week/family of four) ensure competitiveness. Scalability to 300 guests mitigates downturns.
- Construction Risk: 12-month timeline, $220/sq. ft. cost, and reserve funds address overruns. Fireproof, energy-efficient design lowers maintenance.
- Tax Risk: Bonus Depreciation is law; if it expires post-2025, deductions shift to 27.5 years (~$45K/year/LP), still tax-advantaged.
- Tax Urgency: Bonus Depreciation ($462,500/LP) may expire post-2025, reducing to ~$45K/year over 27.5 years.
- Market Advantage: First-mover status in a unique, approved subdivision. STR/MICE demand (7% growth) favors early entry.
- Limited Spots: $10M raise limits LP stakes (8 at $1.25M); phase one’s 128-guest capacity is now-or-never before scaling to 300.
- Economic Context: Inflation (2.4–3% in 2025) underscores the need for debt-free, income-producing assets with tax benefits.
Rocky Ledge Estates provides a uniquely de‑risked, debt‑free Build‑to‑Rent model that blends the energy of short‑term rentals with the steadiness of event‑space revenue. The capital structure, strong reserve policy and automated management keep operational risk low, while the GP’s skin‑in‑the‑game aligns interests with the limited partners. Numbers show substantial tax savings, solid revenue projections and a reasonable valuation for a $1.25 M (6.25 %) investment.
If this sounds like a fit, ask for the operating agreement and cash‑flow model and move quickly to lock in a spot before the Bonus Depreciation deadline passes. The massive tax deductions could pay your capital gain tax from a Crypto or stock sale.
