Welcome! Wells Street Capital LLC Who We Are Eric Dantzler Experienced Real Estate Developer for 20+ years Nigam Shah Real Estate Investor & Deal Manager Sheila Dantzler Expert Real Estate Broker & Luxury Interior Designer Wendy Onofre Real Estate Attorney: Finance, Acquisition, and Construction Bronzeville New Development Fund About Bronzeville Bronzeville, known historically as the “Black Metropolis” is just 10 minutes south of downtown, bordering Lake Michigan to the east. Bronzeville is currently one of 10 priority communities selected as part of the city’s INVEST South/West strategy, a $750 million campaign to spur investment in South and West side neighborhoods. The median sale price for a single family in Bronzeville in Mar 2022 was $517,500 , compared to the median sale price of $320,000 across all of Chicago. Out of 82 homes sold in the last 6 months, 17 were new construction. Sold in the last 3 months 5 bed/4.5 bath SFR 3358 S. Calumet Ave Sold: $825,000 3 bed/2.5 bath Condo 50 E 26th St #404 Sold: $630,000 9 bed/6 bath Multi-Family 4917 S Champlain Ave Sold: $1,025,000 It’s not just Residential 449-51 E. 47th St Legacy District: $19.2mm Mixed-Use It’s not just Residential 43rd & Calumet: 99 residential units The City of Chicago is helping Bronzeville has an endless list of incentive programs and economic revitalization funding that can be applied directly to new construction opportunities. While not a comprehensive list, we utilize every Economic Development Initiative in the following list to save costs, and have experience in applying these from past projects. Riverfront Improvement Fund Small Business Improvement Fund (SBIF) Small Business Loan Program Special Service Area (SSA) Streamlined TIF Tax Increment Financing (TIF) Riverfront Improvement Fund City Lots for Working Families Parade of Homes Enterprise Zone Program Neighborhood Opportunity Fund Tax-Increment Financing (TIF) Opportunity Zone Fund Chicago Recovery Grant New Markets Tax Credits Neighborhood Business Development Centers Negotiated Sales Program Landmark Designation Industrial Development Revenue Bonds Fund Structure “ I would love to invest in Bronzeville, but how would I? Definitions & Roles “ General Partner” (GP) or “Sponsor” = Wells Street Capital (Us) “ Limited Partner” (LP) = Passive Investor (You) ---- “ Preferred Equity” → Limited Partners “ Common Equity ” → General Partner (Us) ---- “Preferred Return” = % return after stabilization “ Carry ” = % of profits left after distributed to LPs “ Target Investor IRR ” = Your annual anticipated rate of return “ Hold Period ” = Minimum Investment Timeline “ Hurdle Rate ” = Minimum Rate of Return “ Target Cash Distribution” = Anticipated % Cash-on-Cash Return per Year, or “Dividends” Funding Model 1. There will be a “raise” for a particular asset (land or property) and the construction / renovation. 2. LPs will have a prorated stake into the project for their investment amount. 3. Each project will have its own fund, and own Limited Liability Corporation structure. 4. Each project will have its own: a. Target Investor IRR b. Target Cash Distribution c. Hold Period d. Minimum Investment 5. Post-stabilization, the payout will begin in a waterfall: a. Limited Partners (LPs), or the Investors will have first position , meaning the first to receive their profit share. b. General Partner (us, the “sponsors”) will have last position, and will only receive a profit share once all LPs have their shares secured. c. In some instances, there will be a “ Preferred Partner ” who decides to fund over 50% of the project. In such a case, the “Preferred Partner” will assume first position, and LPs will assume second position. Funding Model (cont’d) Quarterly Payout Returns STRUCTURE 1: General Partner (50%) to Limited Partners (50%) after a 8% annual preferred return to Limited Partners STRUCTURE 2: General Partner (75%) to Limited Partners (25%) after a 10% annual preferred return to Limited Partners STRUCTURE 3: General Partner will keep all net profit after distributing a 12% annual preferred return to Limited Partners All Preferred Partners will get the same annual preferred return as the Limited Partners. Funding Model (cont’d) 8% + 50% DISTRIBUTIONS TO EQUITY Preferred Partner 8% + 50% Limited Partner 50% General Partner (Us) Structure 1 Example Bronzeville Renovation Fund Renovation Opportunities Bronzeville boasts of elegant historic greystones built before the turn of the 1900s before the Great Migration. Built in the Romanesque Revival style, these greystones feature dramatic front gables, rough limestone, arched windows, and short columns. Many of these greystones are distressed and boarded up. Renovation Opportunities Home sales in Bronzeville have jumped since the pandemic as the South Side community’s affordability and proximity to the Loop gave buyers incentives to come to the district. The median price of homes sold in the neighborhood was $550,000 in the first 11 months of 2021, according to the Chicago Association of Realtors. That compares with $318,000, the median price of houses sold across the city in the same period (a 54% difference). The BRRRR Model We buy the asset under market value by revealing value-add opportunities. We renovate the asset to the high-end luxury standard we are known for. We stabilize the assets with high-quality tenants and ROI-maximizing leases. We re-appraise and refinance the asset with one of our many financial partners. We walk away with maximum money out of the deal to use for the next one. Buy Renovate Rent Refinance Repeat Overall Capitalization Model Endless Rehab Opportunities in Bronzeville