ABOUT ~ Assisted Living of America LLC& MCB Equity Capital

We are currently in our 31st year of marrying our vested clients with “wholesale” (direct new construction, “out of the ground”) investment projects and extraordinary returns.  These “wholesale” projects have MUCH less risk than “retail” projects (“wholesale” versus “retail” to be explained).  We are not what you call a typical crowdfunding, REIT, or SOP equity capital investment operation that you are probably used to dealing with; i.e., where you will see a myriad of various different “offerings”; i.e., self-storage, multi-family, office buildings, shopping centers, etc..  No, probably the best description of our operation would be the term “boutique”; which we are not necessarily fond of, but seems to get the point across.  We concentrate on one project at a time.  We do a thorough in-house vetting of each project as though we were investing in the project ourselves; which most times we do and is the case with this project.  This is not what you will find in most investment equity fund operations.

Most crowdfunding or equity capital type operations advertise whatever real estate investment projects they can to pass along to potential investors which beats the general “smell test”.  These firms derive 100% of their income from fees charged to the investor and Principal.  Therefore, these firms are motivated solely by the number of “deals” they can post on their website; they DO NOT have any “skin in the game”, which is contrary to the benefit of the client, we do.  The more deals, the more they make in profits.  We do NOT charge any fee’s; NONE.  Our sole motivation is being able to find and invest in these projects ourselves; but we can’t afford to control 100% of these projects by ourselves so, we have spent over 30 years cultivating a solid group of investors to be “co-investors” with us.  95% of our business has been limited to our private clientele dating back to 1989, and has done extremely well within those parameters.  Over time, our projects have grown in monetary size which sometimes overwhelms the ability of our close knit group to absorb the entire equity stake in the proposed project.  When this happens, we will “go public” with thesepremium investment projects.  We retain a100% equity position in these projects for ourselves or we don’t invest; i.e., in house.  It is extremely important that we have some income statement control in order to protect our and our clients best interest.

We have dealt with this Principal several times; our last encounter involved the sale in June 2020 of a previous “Wholesale” project we were involved which was built in 1997.  The project, over 23 years, delivered an average “Wholesale” distribution of 52% per year

DISCLOSURE:

The principal, Assisted Living of America LLC, and individual principal participants; i.e., accountant, architect, Michael C. Brown, Ltd. employees, etc. are cumulatively contributing $4,650,000 to the project.

The Project by Assisted Living of America LLC (The Principal):

Sixteen (16) Assisted Living facilities; development, construction, direct ownership and operation.Virginia/North Carolina region.

The principal, Assisted Living of America LLC is presenting a truly unique concept to our investors.  They have developed a common facility plan footprint in which they will build in 16 major metro localities throughout Virginia and North Carolina.  This will provide for extraordinary efficiencies across the board from development and construction to assisted living facility employees being able to switch localities and immediately know the facility.  This will also provide cost efficiencies in constructing the newer facilities; i.e., as each facility is built, more is known about the intricacies of the building itself, waste is eliminated.

Unlike most multiple facility projects, the Principal plans to “keep” the original investors involved with ALL 16 assisted living facilities.  What are we talking about?  Quite honestly, in significant projects of this caliber, Principals usually “kick” investors to the curb in projects where there are multiple projects; i.e., due to the success of the first project, it enables the Principal to continue without the “help” of the original investors; i.e, the amount of equity generated from a successful first project allows for the Principal to “go it alone” for the remaining projects.  This is not the case for Assisted Living of America LLC; which is the main reason we wish to be involved in this project.

What are they talking about?

Once the first facility is constructed and stabilized, the valuation explodes to over $90,000,000 from a cost of around $30,000,000.  This generates equity of over $60,000,000; more than enough equity for the Principal to build out the remaining 15 facilities on their own.  ALA LLC is not going to do this to their investors;  NOTE: ALA LLC plans to return ALL of the investors original investment upon stabilization of the first facility via refinancing (approximately 2½ years from deposit in 2021), and use the equity to start the next 7 facilities.  Once those 7 facilities are completed, their equity appreciation through stabilization will support the construction of the remaining 8 assisted living facilities for a total of 16 facilities.

 

As you will see; the annual cash returns are extraordinary and the equity payout is obscene, but this is able to occur when one can leverage 1 investment and receive 16 returns.  This Is only possible due to the overall structure of this particular project; i.e., building 16 identical projects within close geographical distance, using only ONE equity investment; i.e, the investors are not required to invest capital 16 times for 16 facilities.  No, they are investing only once, in the first facility; but, receiving the returns from 16 facilities.  This is possible only because the first facility generates an incredible amount of equity once it leases up.  This abundant equity provides enough capital to return the investors original contributiononce the first facility is built AND, satisfy the equity requirement to build the next 7 facilities.  And once the 7 facilities are completed, their equity will provide for the last 8 facilities to be built.  Thus, all the investors will received returns on 16 facilities for the price of building one facility.  This is how such overabundant returns can be achieved.

Anticipated Distributions of a $150,000 investment (1% equity position; 16 Facilities):

Original investor principal is returned as of December 31, 2022 to June 30, 2023.

ANNUAL DISTRIBUTIONS

  • 2021 – $10,800 distribution; 7.2%(*)
  • 2022; $10,800 distribution; 7.2%(*)
  • 2023; $57,000 38%; Facility #1
  • 2024; $256,500, 38%; Facility #1 and fractional results Facilities #2-#8.
  • 2025; $456,000; Facilities #1-#8
  • 2026; $912,000, Facilities #1-#16

(*) Preferred return during development & construction phases.

Please note:  There is NOdistribution appreciation considered for any “50 unit” expansions which may take place in any of the facilities.  All facilities will have the flexibility to construct (1) or (2) 50 unit expansion wings; i.e., 50 or 100 units in addition to the original 175 +/- unit facility.  The principal feels strongly that every facility will initiate such expansions to take place during their ownership.

January 1, 2026; 5-6 years after funding.  SALE of facilities portfolio can be realized from December 31, 2025 and afterwards.  Portfolio sale shall be controlled BY the investors, NOT the principals.

  • EQUITY PAYOUT upon final sale of facility portfolio:

$11,340,000 per $150,000 invested will be realized

We wish we could sit here and put on an extravagant dog and pony show espousing big words describing the intricacies of this investment but this is simple in so many ways.  Wall Street likes to use made up acronyms that make them seem like geniuses; etc..  All Wall Street is good for is taking your money.  They have to make up gambling “investments” like CDO’s, SWAPS, MBS’s.  First, what are the main factors of an investment of any kind that drives the end product of which you are interested; i.e., RETURNS.  Pure and simple.So, you have the “educated guess” of the project returns for each investment.  Then, you have the actual “investment”; i.e., what is the actual “item” that will produce the ever important “Returns”.  This is where the rubber meets the road and it’s our job to determine whether or not a project has the merit to involve our clients.  We DO NOT involve ourselves in “Retail” investment projects; i.e., buying an apartment building at a 5.5% cap rate, or say a self-storage complex for a 6% cap, etc..  Granted, solid investments over the long haul but they will not make a person wealthy.  Those kinds of investments are for CD investors looking for a better than average savings account return.  Quite honestly, the risk involved for the return is SIGNIFICANTLY higher than we will ever advise our clients; it’s for suckers.  Now, a lot of very smart people will tell you that these types of investments are “backbone”, “safe” investments and we won’t argue with them.  What we will argue; why should we pay for the milk “retail” when I can buy the cow which makes the milk?  Plus, the cow we buy has an interchangeable spigot that gives off plain milk, chocolate, strawberry, etc., you get the picture.  We want to place our clients into projects that we buy “wholesale”; i.e., we don’t want to buy a project from the entity that built the self storage complex; we want to own it for what it cost to build it.  This lowers our risk tenfold and increases our returns fivefold.  This is what we mean when we say “wholesale”; investing in a project/investment for what it originallycosts to generate the returns.  This is significant; e.g.,

Project X (Retail)Purchase Assisted Living project at “Retail”:

Cost to purchase:  $93,000,000
Generates; $5,600,000 cash before debt service
Investor contribution:  $18,600,000 (20%)
Debt:  $74,400,000 (80%)
Interest carry:  $3,720,000
Net Cash for Distribution:  $1,880,000
Purchased at:  6.0% cap rate and is 15 years old
Methods to increase return:    Increase rents, risk losing tenants
Reduce expenses, risk losing tenants,
Risks to return:  Repair and maintenance of a 15 year old complex.
Equity return:  Using original purchase value for simplicity.

Sale value:                              $93,000,000
LESS Debt:                             (74,400,000)
$18,600,000
LESS Contribution:     ($18,600,000)
NET TO INVESTORS:                       $0
Average cash on cash return over 5 years: approximately 10.1%
Equity to distribute: $0.00

Project X (Wholesale)

Build Assisted Living project at COST “Wholesale”:
Cost to build:  $32,500,000
Value:  $93,000,000
Generates; $5,600,000 cash before interest
Investor contribution:  $6,000,000
Debt:  $26,500,000
Interest Carry:  $1,325,000
Net Cash for Distribution:  $4,275,000
Methods to increase return:    Not necessary
Risks to return:  None; new complex
Time before stabilization/Not being able to lease new facility.

Sale value:                   $93,000,000
LESS Debt:                    (26,500,000)
GROSS EQUITY:                 $66,500,000
LESS  InvestorContribution:  ($6,000,000)
NET TO INVESTORS:           $60,500,000

RETURNS

  • Equity to distribute: $60,500,000 OR 10x equity return
  • Average YEARLY cash on cash return over 5 years: approximately 71.3%

As you can see, the payoff for just a “little” bit of elbow grease in “stabilizing” the project has an incredible effect on the returns. I wish I could tell you this is brain surgery; BUT IT ISN’T. It’s literally a matter of “this or that one”; it’s truly THAT SIMPLE. The hard part is finding these kinds of returns the average investor can “get in” on the ground floor; i.e., the construction level is the key aspect of this investing. It’s difficult, as most Principals do not open their doors to these types of projects. Fortunately for us, sometimes the bill is just too high and they need outside help to make it go forward; this is when we get involved.

The “risk” of project success is the real concern when assessing the value of these projects; i.e, “wholesale” versus “retail” acquisitions. As an investor, in both cases the project is valued at $93,000,000; would you rather your investment carry debt of $74,400,000 or $26,500,000? This is obviously a rhetorical question and you understand the SIGNIFICANT difference between the two investments. This is how we look out for our investors.

Granted, the investor has absolutely NO liability for the debt involved BUT, wouldn’t you rather be vested in a project that has a value to debt of 26% versus 80%? Again, rhetorical. But, this is what we search out for our clients.

We feel like we give the “average” guy access to investments that are accessible only to “the rich”. How do you think rich people got rich??? They were able to invest in “primary” or “wholesale” investment projects like this one. PERIOD; again, it’s NOT brain surgery. It is possible to find “Retail” investments all day long, they’re a dime a dozen. But, a “Wholesale” project is a rare commodity indeed; they just don’t come out on the open market. You don’t have to believe what we’re writing here; go see. See how many “Retail” acquisitions you can find versus out of the ground “Wholesale” projects; it’s at least 100 to 1, if that. Also, retaining 100% control is extremely important as the distribution and equity appreciation can be heavily manipulated against the investors if you don’t retain 100% control.

As previously stated, our investor space is limited as most of this project is being funded by the Principal and our seasoned/vested investors. We have raised nearly 80% of our goal. In the event you choose to invest in the Assisted Living of America LLC multi-facility project, you will become a vested member with our company and will receive, only if you so desire, notifications of our future projects. As previously disclosed, we are not the typical equity investment capital operation. We only present ONE project at a time and we vet each investment as though we are investing in the project ourselves; which most times we are involved. With that said, we currently disclose that we have invested in 84% (16 of 19) of the projects we have raised equity capital. This project will raise our equity participation to 85% (17 of 20) of the projects presented to our investors. We hope you will join us in making Assisted Living of America LLC a major player in the Senior Living sector within the Virginia/North Carolina corridor. Thank you for your time.

Please understand that we will be giving our investor family, who have been investing in our offerings since 1989, seniority. The longer the investor has been with us, the higher their seniority. We ask only that you notify us of your possible interest to invest and the approximate amount you wish to invest ($25,000 minimum increments) in the Assisted Living of America LLC portfolio of facilities. This will give us an idea when we’ll need to shut down our capital raise activities. There is no need to send money to save a spot; we don’t work that way and besides, it’s not how things are done. Once you submit your application of interest, your place in line is established. If you decide to move forward, the final transaction will be handled through your and our attorneys. There is still a significant amount of paperwork and disclosure involved before we become partners.

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