STRICTLY CONFIDENTIAL
FAQ
Do you have a Cap Rate for this property? 1. This property isn’t designed as a rental, but we’ve analyzed potential exit strategies. If the market shifts, we estimate rental rates slightly over $1.40 per square foot for living space, excluding the garage, which can also be rented separately. Across four floor plans, we project an average cap rate of 5.5%, with smaller units yielding higher returns. Note: Short-term rentals will not be allowed in this community. a. What contingency is there for this project? 2. We’ve built a 10% contingency into the budget and a 25% buffer on the timeline, exceeding the typical 5-7% for a $60M project. These contingencies account for the unique challenges of our first for-sale strategy and incorporate advanced construction methodologies to minimize risks of defects post-completion. a. When will building permits for the barndominiums be pulled? 3. We expect to pull building permits within nine months, with our internal proforma extending that timeline to 12 months to allow for potential delays. a. Is the gym and pool included in the first phase? 4. Yes, Phase I includes the gym and mass grading plan for the barndominiums, along with all necessary infrastructure, landscaping, and some offsite improvements. a. Do you provide regular investor reports? 5. Absolutely. We use Juniper Square for investor tracking and reporting, offering access through our website to all signed documents, updates, and tax documents. Investors receive monthly email and video updates from various team members, including myself. We also provide 24/7 site access via an IBeam live camera for full transparency. a. When will Phase II start? 6. Phase II will begin immediately after we receive the necessary approvals. There is no need to wait for the Certificate of Occupancy (CofO) from Phase I before starting. a. Who is the point of contact for investors once the contract is underway? 7. Investors can contact Breanna, our controller, at the main office or directly to Ryan Garland or Paul Healey. They are typically on site daily and available to meet as needed. a. Are there any liquidated damages investors should be aware of? 8. We haven’t encountered issues that would lead to liquidated damages. Our use of all cash or minimal debt reduces project risk. We mitigate construction costs and labor risks by aligning with demand and building in phases, ensuring a solid financial foundation. a. What are the HOA fees for the barndominiums? 9. Depending on the floor plan, we aim to keep HOA fees around or under $100 per unit. The developer funds the HOA’s operating capital, which is similar to our current practices. a. Who will manage the HOA after sales, and what are the memberships? 10. Paradyme will continue to manage the HOA. We maintain strict standards, allowing only specific trades into the community for repairs and prioritizing security. Our management style is approachable, ensuring smooth operations without unnecessary bureaucracy. a. What are the expected operating costs for the HOA? 11. Operating costs will adjust as phases are completed and units are sold. The community center’s income is a backstop to cover any cost overruns, providing additional financial security for the HOA. a.
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