The Great Game of Real Estate is a Title III - Regulation Crowdfunding Campaign and is actively accepting investments.
$250.00 minimum investment

The Great Game of Real Estate

Renovating Older Apartment Buildings

Small OPO
Canyon Lake, CA
Real Estate
Accepting International Investment
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The Object of the Game Increase owner equity above the inflation rate using a leveraged return, compounded annually

Rules of the Game                                          The intelligent use of inflation, leverage, compound interest, 1031 tax-deferred exchanges and green retrofits

Strategy


Renovate older apartment buildings (the game piece) to reduce and then produce electricity at 1/3 the cost of the utility companies, all while charging the tenants a competitive utility rate. We believe this will create an additional profit for shareholders, which may be used to exchange up to ever larger buildings.


Summary


Games are fun to play, and in the best games you learn something. This is a game of mental skill in which the outcome is not determined by chance. We believe our key to winning will be in managing and increasing our resources while simultaneously providing shareholders a quarterly score card so they can following along.

 

It is often said that "those who wish to invest wisely invariably turn to real estate..."

-Steve Nauert

CEO The Great Game of Real Estate

Note: This offering will fund the expense of a larger, future Private Placement offering and will not be allocated towards the immediate execution of this business plan. The future offering will be based on The Great Game of Real Estate business plan presented here. 

The Game Board


When investing in Apartment Buildings you need to know where you are in the market cycle. In an up market, the trick is not to overpay. In down markets, you are buying cash flow and earnings to keep your returns high while waiting for another up market.

Purchase "A Fraction of the Action"

 

  • $10 /share of Series A Preferred Stock│When you invest you are betting the company’s future value will exceed $500k.
  • Minimum Investment: $250  (25 shares of Series A Preferred Stock)
  • Dividends: The payment of dividends on the Preferred  Shares will be determined by the overall Company's performance; reviewed by the management and approved by the Board of Directors. We believe our dividend will be at least 5% before EBITA.
  • Private Placement Offering: The COMPANY intends to use initial capital raised to finance a Private Placement Offering Memorandum (PPOM). We intend to raise $1,000,000, with proceeds of capital raised to be used for the acquisition of properties and additional funding process. Thereafter, the management intends to raise, thru multiple private placement memorandums, up to $10,000,000.  


We Will Use These Apartment Building Valuation Formulas

These are industry standard valuation formulas showing positive results. Rents and operating income can also decrease, resulting in a loss.

Take the INVESTOR POP QUIZ! You will enjoy analyzing the quarterly reports more.

Score Card #1  

The Gross Rent Multiplier
 Annual rental income multiplied by a factor is an indicator of the value of an apartment building. EXAMPLE:
$18,000 x a 10 GRM = $180,000.

Score Card #2 

Net Operating Income

The "NOI" is cash flow after expenses. Generally, a bank will loan 70% of the NOI. EXAMPLE: NOI of $18,000 x .70% = $12,475 / 12 months = $1,039 payment @5% = $193,500 in loan proceeds.

Score Card #3

Capitalization Rate 

Shows the potential rate of return on a real estate investment. EXAMPLE: $18,000 / 8% cap rate =$225,000 value.

Compound Interest and Leverage Can Increase Returns

From Walter Isaacson's Biography


Einstein wanted to divorce his first wife, and he tells her he'll give her the Nobel prize money when he wins. She takes a week to calculate the odds and consult other scientists, but she is a good scientist herself and she takes the bet. He didn't win until 1921, but he did give her the money, and she purchased three apartment buildings in Zurich. Why: Rent increases compound along with inflation. Apartments shelter and defer this compounding equity from annual taxation, accelerating returns. 

Definition of compound interest 


Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

Leverage is the Use of Borrowed Money to Improve Returns


Leverage is neither inherently good nor bad. Leverage amplifies the good or bad effects of income generation and productivity of the assets in which we will invest. 

Market Activity /  Competition / Consumer Price Index

Market Activity and Sizing


Per The Green Resource Council of the National Association of Realtors; retrofit and renovation comprises a large percentage of all construction projects in the United States, with an increased emphasis on energy efficiency. We believe older apartment buildings are ripe for energy efficient retrofits. The Green Resource Council states that "the older the building, the less likely it is up to current building codes and standards... Water heaters and appliances that are more than 10 years old are close to the end of their useful lives." Many older buildings also have faulty plumbing, thin insulation, numerous air leaks, aged landscaping and expensive water heating equipment. We believe these energy guzzlers can be profitably retrofitted. Add free Wi-Fi and we have stepped into the modern age.


Competition


We anticipate that there will be a sizable amount of competition from both single owner investment firms to large construction companies. Energy efficiency will be our company's competitive advantage. Our companys revenues can change depending on the general economic climate of the real estate industry, however, we believe  the highly recurring nature of our rental income streams will ensure that the business is able to maintain profitability and a positive cash flow at all times.

The annual Consumer Price Index growth trend averages 2% to 3% every year. Source: U.S. Bureau of Labor Statistics. The CPI includes rents

"Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth."


Theodore Roosevelt

Two Different Apartment Building Outcomes

In 2001, my partners and I purchased a 20 unit “fixer” for $360,000 located at 725-729 Sanford Ave. Wilmington, CA, 90744. Three partners contributed $18,500 each, and I contributed my commission, making an 18% down payment. Using a professional management company, “Sanford” began to throw off $2,000 per month, which we received for 80% of our holding period. We re-financed in 2003 and took out $80,000 split four ways. We then sold Sanford on 11/30/04 for $1,040,000. Each partner made $139,826 on the sale, plus the $20,000 in re-finance proceeds, plus dividends. I write about this transaction in my Blog Post


Please Note: Past performance is not indicative of future results. 

Not Every Building Is a Success 


In 2008 our partnership purchased a 13 unit building located at 222 N. Effie in Fresno. Unfortunately, the management company had allowed an alleged Bulldog Gang member to move into the building. He proceeded, with baseball bat in hand, to notify all the tenants to move out, which they promptly did. He then started to vandalize the vacant units. Windows were broken, holes kicked in walls, and toilets torn out. We had vandal insurance. They gave us a check for $32,000. We proceeded to fix the units up during the day, but then our gang member and his friends would destroy all the repairs each night. We were unable move the gang member out. Per our court settlement, he could stay at a reduced rental rate until he was satisfied with the condition of the building. We finally stopped making the repairs, along with the mortgage payments. Sadly, the lender foreclosed. Lesson learned: location, location, location. Blog Post.

 

Please Note: Past performance is not indicative of future results. 

Our Mission Statement

We spend ninety percent of our lives in buildings. It follows that the buildings where we spend our lives have an enormous impact on what we do, how we feel, who we are, and who we become. Creating perfect places is our motivation: improving building technology to improve peoples lives. The company will be creating a boutique apartment brand focused on lush exterior landscaping and energy efficiency. Advances in technology and the proliferation of connected devices and sensors are driving a new era of smart buildings and their management. Retrofitting older buildings, we enable lifetime efficiency from design through integration, combined with our management, asset and energy performance services, ensuring productivity and comfort for occupants.

Green Benefit 


Per the U.S. Energy Information Administration, Californians consume an average of 562 kilowatt hours of electricity per month, and it takes 1.2 lbs. of coal to produce 1 kWh. In our example: 562 kWh x 10 units = 5,620 kWh x 12 months = 67,440 kWh x 1.2 lbs. coal per kWh = 80,928 lbs. coal per year we believe we can save in our example, after a Green Retrofit.  

How We Reduce An Apartment Building's Utility Cost By 2/3rds

First, We Reduce the Utility Bill

We replace the house water heater with a solar water heater, add insulation, seal air leaks, add LED lighting, and replace the old appliances with Energy Star Rated appliances: A Green Retrofit.


Source: Build it Green.org

We Then Add Solar Panels

The levelized cost of solar is now less expensive than the price of electricity. This savings, combined with preferential green financing, increases our profit spread.


Source: Energy Innovation.org

Lush Landscaping

We will spend some of the savings on lush landscaping and wi-fi connectivity. Our advertisements for tenants: "Free Utilities, Free Wi-Fi".

Low Carbon Footprint Living

Our tenants will pay a premium for our low-carbon footprint lifestyle. They can move in by doing nothing more than hooking up to the house wi-fi. 

Example: Utility Savings After Green Retrofit

This scenario is hypothetical and a best case scenario. There is a lot of potential to a Green Retrofit, but not all outcomes have a positive result.

What Happens When the Rent is Raised $100?

This scenario is hypothetical and the best case scenario. Not all rent increase have a positive result. Tenants can also move out.

1. The Landlord has an extra $100.00 to spend every month.


2. The landlord's net worth has increased by $12,000. Formula: Using a 10 Gross Rent Multiplier: 10 GRM x $1,200 = $12,000. 


3. The landlord can borrow, tax deferred, $13,000. The $13,000 is a loan and not income. It will be paid off at the sale of the building as a capital gain. Formula: 70% of $100 = $70.00 loan payment @ 5% = $13,000. 


Plus, the Landlord is already thinking about another $100 rent increase next year...

The Tenant


She is worried! Now she has to earn an EXTRA $100 every month! On top of this, inflation is creeping right along at about 3%, which is reflected in all of her bills. She is falling behind. Who can keep working this hard? Look at the cumulative Inflation rate chart. 

Cumulative inflation is the inflation rate increasing  by successive additions. The United States went off of the gold standard in 1971 when President Nixon announced that the U.S. dollar would no longer be convertible into gold.     


Source: U.S. Bureau of Labor Statistics

On the Fence About Investing?

I hesitate to make a list

Of countless transactions I have missed;

Bonanzas that were in my grip-

I watched them through my fingers slip;

The windfalls which I should have bought

Were lost because I over thought:

I thought of this, I thought of that,

I could have sworn I smelled a rat,

And while I thought things over twice,

Another grabbed them at the price.

It seems I always hesitate,
Then make my mind up much too late.
A very cautious man am I
And that is why I never buy.

At times a teardrop drowns my eye
For deals I had, but did not buy;
And now life's saddest words I pen-
"If only I'd invest NOW...and then!"


Anonymous

Invest now - It is as easy as putting pen to paper, and you are in the Game!  

Offering Summary

Maximum 10,700 shares of Series A Preferred Stock ($107,000)

Minimum 1,000 shares of Series A Preferred Stock ($10,000)

Company
The Green Retrofit d/b/a The Great Game of Real Estate
 

Corporate Address
23010 Compass Drive Canyon Lake CA. 92587
 

Description of Business
Acquire older apartment buildings, then make energy efficient upgrades
 

Type of Security Offered
Series A Preferred Stock (the "Securities")
 
Purchase Price of Security Offered
$10.00
 

Minimum Investment Amount (per investor) 
$250











Irregular Use of Proceeds

The Company will not incur any irregular use of proceeds.

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Most recent fiscal year-end:
Prior fiscal year-end:
Total Assets
$4,000.00 USD
$0.00 USD
Cash And Cash Equivalents
$4,000.00 USD
$0.00 USD
Accounts Receivable
$0.00 USD
$0.00 USD
Short Term Debt
$0.00 USD
$0.00 USD
Long Term Debt
$0.00 USD
$0.00 USD
Revenues And Sales
$0.00 USD
$0.00 USD
Costs Of Goods Sold
$0.00 USD
$0.00 USD
Taxes Paid
$0.00 USD
$0.00 USD
Net Income
$0.00 USD
$0.00 USD

Risks

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.


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