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Memorandum
In this Memorandum, ‘‘NEM, LLC,’’ the “Company,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our,’’ refer to NEM, LLC, unless the context otherwise requires. Unless otherwise indicated, the term ‘‘fiscal year’’ refers to our fiscal year ending December 31, 2018. Unless otherwise indicated, the term ‘‘Notes’’ refers to offering of the Company’s Notes.
This Memorandum, and any supplement to this Memorandum include “forward-looking statements.” To the extent that the information presented in this Memorandum discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.” Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the “Risk Factors” section and the “Management’s Discussion and Analysis of Financial Position and Results of Operations” section in this Memorandum.
This summary only highlights selected information contained in greater detail elsewhere in this Memorandum. This summary may not contain all of the information that you should consider before investing in our Notes. You should carefully read the entire Memorandum, including “Risk Factors” beginning on Page 1, and the financial statements, before making an investment decision.
Risk Factors
Investing in our Notes involves a high degree of risk. Prospective investors should carefully consider the risks described below, together with all of the other information included or referred to in this Memorandum, before purchasing Notes. There are numerous and varied risks that may prevent us from achieving our goals. If any of these risks actually occurs, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our Notes, if such a trading market develops, could decline and investors in our Notes could lose all or part of their investment.
Risks Related to our Company
Our success depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if we lose their services.
Our future success heavily depends upon the continued services of our senior executives and other key employees, in particular, Brian Tuttle, our founder. The loss of his services would delay our business operations substantially.
We currently maintain a $5,000,000 key person life insurance policy for Brian Tuttle. If one or more of our senior executives or key employees are unable or unwilling to continue in their present positions, it could disrupt our business operations, and we may not be able to replace them easily or at all. In addition, it is difficult to locate experienced executives in our industry and offer them competitive salaries at this stage in the Company’s development. We may be unable to retain our senior executives and key personnel or attract and retain new senior executives and key personnel in the future, in which case our businesses may be severely disrupted.
Risks Relating to Our Business
We may not be able to sell the undeveloped land we purchase.
We may contract to acquire tracts of raw undeveloped land, re-zone, subdivide and may improve on the land by constructing road access, installing water, sewage and utility lines and may not be able to sell the subdivisions because of market conditions.
The profitability of attempted acquisitions and other real estate investing is uncertain.
We intend to contract to acquire, re-zone, obtain entitlements and develop real estate properties selectively. Land banking, acquisition and development of properties entails risks that investments will fail to perform in accordance with expectations. In undertaking these investments, we will incur certain risks, including the expenditure of funds on, and the devotion of management’s time to, transactions that may not come to fruition. Additional risks inherent in the investments include risks that the properties will not achieve anticipated sales and that estimates of the costs of improvements to bring a property up to standards established for the market position intended for that property may prove inaccurate. Expenses may be greater than anticipated.
Real estate investments are illiquid.
Because real estate investments are relatively illiquid, our ability to vary our portfolio promptly in response to economic or other conditions will be limited. The foregoing and any other factor or event that would impede our ability to respond to adverse changes in the performance of our investments could have an adverse effect on our financial condition and results of operations.
If we purchase or develop assets at a time when the commercial and residential real estate market is experiencing substantial influxes of capital investment and competition for properties, the real estate we purchase or develop may not appreciate or may decrease in value.
The commercial and residential real estate markets are currently experiencing a substantial influx of capital from investors worldwide. This substantial flow of capital, combined with significant competition for real estate, may result in inflated purchase prices for such assets. To the extent we purchase or develop real estate in such an environment, we are subject to the risk that if the real estate market ceases to attract the same level of capital investment in the future as it is currently attracting, or if the number of companies seeking to acquire such assets decreases, our returns will be lower and the value of our assets may not appreciate or may decrease significantly below the amount we paid for or expended in the development of such assets.
We may not make a profit if we sell a property or land banked subdivision.
The prices that we can obtain when we determine to sell a property will depend on many factors that are presently unknown, including the operating history, tax treatment of real estate investments, demographic trends in the area and available financing. There is a risk that we will not realize any significant appreciation on our investment in a property. Accordingly, your ability to recover all or any portion of your investment under such circumstances will depend on the amount of funds so realized and claims to be satisfied therefrom.
Competition with third parties for properties and other investments may result in our paying higher prices for properties which could reduce our profitability and the return on your investment.
We compete with many other entities engaged in real estate investment activities, including individuals, corporations, banks, REITs, national and international homebuilders, and real estate limited partnerships, many of which have greater resources than we do. Some of these investors may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase. Any such increase would result in increased demand for these assets and increased prices. If competitive pressures cause us to pay higher prices for properties, our ultimate profitability may be reduced and the value of our properties may not appreciate or may decrease significantly below the amount paid for such properties. At the time, we elect to dispose of one or more of our properties, we will be in competition with sellers of similar properties to locate suitable purchasers, which may result in us receiving lower proceeds from the disposal or result in us not being able to dispose of the property due to the lack of an acceptable return.
The Company may not be able to effectively control the timing and costs relating to the re-zoning, subdivision, or improvements on properties, which may adversely affect the Company’s investing results and its ability to repay the holders of Notes.
Nearly all of the properties to be acquired by the Company will require some level of re-zoning, obtaining entitlements, and/or construction of improvements immediately upon their acquisition or in the future. The Company may acquire land for improvement only to discover that the land may require extensive investment such as wetland delineation and/or environmental remediation.
Risks Associated with Debt Financing
We are likely to obtain additional mortgage indebtedness and other borrowings, which increases our risk of loss due to potential foreclosure.
We plan to obtain long-term financing that may be secured by properties we acquire. In some instances, we may acquire our properties by financing a portion of the price of the properties and mortgaging or pledging some or all of the properties as security for that debt. We may also incur mortgage debt on properties that we already own in order to obtain funds to acquire additional properties, to fund property improvements and other capital expenditures, to make distributions, and for other purposes. We, however, can give you no assurance that we will be able to obtain such borrowings on satisfactory terms.
High mortgage rates or changes in underwriting standards may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flows from investing and the amount of cash distributions we can make.
If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of properties. If we place mortgage debt on a property, we run the risk of being unable to refinance part or all of the property when the debt becomes due or of being unable to refinance on favorable terms. If interest rates are higher when we refinance a property, our income could be reduced. We may be unable to refinance or may only be able to partly refinance properties if underwriting standards, including loan to value ratios and yield requirements, among other requirements, are stricter than when we originally financed the properties. If any of these events occur, our cash flow could be reduced and/or we might have to pay down existing mortgages. This, in turn, would reduce cash available for distribution to our shareholders, could cause us to require additional capital, and may hinder our ability to raise capital by issuing more shares or by borrowing more money.
We have broad authority to incur debt and high debt levels could hinder our ability to repay the Notes.
Our Articles of Organization and our Operating Agreement do not limit us from incurring debt. High debt levels would cause us to incur higher interest charges and higher debt service payments and may also be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to repay the Notes.
We may never have a public market for our Notes or may never trade on a recognized exchange. Therefore, you may be unable to liquidate your investment.
There is no established public trading market for our securities. The Notes are not and have not been listed or quoted on any exchange or quotation system.
For as long as we are an “emerging growth company,” we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, which apply to some other public companies.
Risks Relating to this Offering
Early Redemption.
At any time prior to the Maturity Date, the Company reserves the right, in its sole discretion, to repurchase all or any part of the Notes at 100% of the then-outstanding principal amount plus interest accrued to the date of repurchase.
Our Offering is being conducted on a “best efforts” basis and does not require a minimum amount to be raised. As a result, we may not be able to raise enough funds to fully implement our business plan and our investors may lose their entire investment.
The Offering is on a “best efforts” basis and does not require a minimum amount to be raised. If we are not able to raise sufficient funds, we may not be able to fund our operations as planned, and our growth opportunities may be materially adversely affected. This could increase the likelihood that an investor may lose their entire investment.
We have broad discretion in how we use the net proceeds of this Offering and we may not use these proceeds effectively or in ways with which you agree.
Our management will have broad discretion as to the application of the net proceeds of this Offering and could use them for purposes other than those contemplated at the time of this Offering. Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management may use the net proceeds for corporate purposes that may not increase the market price of our Notes.
We estimate our total Offering costs to be $500,000.
Plan of Distribution
We are offering a maximum of 700 Notes on a no minimum, “best efforts” basis, at $50,000 per Note. We will sell the Notes ourselves and may in the future plan to utilize underwriters or pay commissions. We will be selling our Notes using our best efforts and no one has agreed to buy any of our Notes. This Memorandum permits our officers and directors to sell the Notes directly to the public, with no commission or other remuneration payable to them for any Notes they may sell. There is no plan or arrangement to enter into any contracts or agreements to sell the
Notes with a broker or dealer but we reserve the right to do so. Our officers and directors will sell the Notes and intend to offer them to friends, family members and business acquaintances. There is no minimum amount of Notes that must be sold. Therefore, no money raised from the sale of our Notes will go into escrow, trust or the like.
No securities are being sold for the account of security holders; all net proceeds of this Offering will go to the Company.
Use of Proceeds to Issuer
We estimate that, at a per Note price of $50,000, the net proceeds from the sale of the 700 Notes in this Offering will be approximately $34,500,000 (the “Nets Proceeds”), after deducting the estimated Offering expenses of approximately $500,000.
We will utilize the Net Proceeds from this Offering to acquire additional properties, pay expenses in connection with the rezoning and subdivision of our properties, salaries for the team, operational costs, refinancing of existing Guarantor or Affiliates’ debt at a lower interest rate, marketing for our products, and other operating expenses.
The following table below sets forth the uses of proceeds assuming the sale of 25%, 50%, 75% and 100% of the Notes offered for sale in this Offering by the Company.
The Company
BUSINESS
Overview and Corporate History
NEM, LLC was formed as a limited liability company under the laws of the State of Florida on January 17, 2013. Our principal office is located at 961 Hillsboro Mile, Hillsboro Beach, Florida 33062.
Our Sponsor is an internally managed real estate company engaged in the real estate investment business. Our Sponsor searches the markets of central and south Florida for tracts of raw, undeveloped land in various stages of development to purchase. Our Sponsor also acquires tracts of distressed land (i.e. environmental issues, difficult rezoning issues, difficult sellers, wetland issues, or small and fragmented pieces).
The Sponsor utilizes its 18 years of experience and proven team of consultants to remedy any existing land issues and then “up-zone” the property to its highest and best use. For example, we may take agricultural land and rezone it for residential or commercial use. Another scenario may include acquiring 4 to 5 smaller parcels and assembling them into a larger single property before again “up-zoning” the property to a higher density or commercial use.
The “up-zoned” land is then typically sold to national or regional home builders such as K. Hovnanian, Meritage Homes, Inc., D.R. Horton Inc., Royal Oak Homes and other companies (collectively, “Home Builders”).
We are a development stage company, and we expect to use substantially all of the net proceeds from this Offering to engage in land banking and real estate investment described hereinabove.
We will either develop such properties ourselves or will designate them for outright sale to Home Builders, Apartment Builders or Commercial Builders. We intend to conduct our operations in such a way that we and our subsidiaries are not required to register as an investment company under the Investment Company Act of 1940, as amended, or the 1940 Act.
We plan to initially focus our efforts on central and south Florida, particularly in markets we believe will experience demographic changes making investment favorable. We expect to build a high-quality portfolio intended to generate current income and to provide capital preservation, capital appreciation and portfolio diversification. The Company will hold title to its acquired properties through related entities that operate as wholly-owned or wholly-controlled subsidiaries of the Company.
NEM, LLC is a limited liability company, used for the distinct purpose of using the proceeds from this Offering to invest. This Offering will be guaranteed by all of the Sponsor’s current operating Affiliates who have vast experience in acquiring and developing land in central and south Florida. These companies are operated by the same Management team that will be managing the Company.
Historical Performance of Management Team
Our Senior Manager, Brian Tuttle has been in the land investment and land development business since 2000. Mr. Tuttle acquired his first property by borrowing $200,000 from an investor and consolidating four parcels of land. Mr. Tuttle obtained options to acquire these four properties. Mr. Tuttle rezoned 80% of the land for residential use and 20% for commercial use before selling the four parcels, yielding a $2,000,000 profit. Mr. Tuttle then reinvested the profits from the aforementioned transaction to obtain contracts on numerous other properties and repeated the process over and over again. The chart below shows completed deals and their respective gross profits since 2000. Exhibit “G” shows each site plan associated with these transactions.
COMPLETED LAND DEALS BY VARIOUS AFFILIATES
During the Great Recession from 2007 through 2012, Mr. Tuttle did not do any land development deals as the chart above shows. Mr. Tuttle restarted his land development ventures in 2012 and has since completed five large deals. Currently, he is working on 15 more projects (shown below).
DEALS CURRENTLY UNDER CONTRACT BY THE VARIOUS AFFILIATES
Exhibit “H” shows the site plan associated with each deal above. The two charts shown above illustrate what a tremendous track record the Management Team has had in the land assemblage and development business. To the best of Issuer’s knowledge, no other private individual has assembled, rezoned, and sold more land in the South Florida market than the Management Team. Many of these deals were conducted with high net worth partners who received generous profits shares. One of the goals of this Offering is to provide land development opportunities for smaller “retail” investors, usually accessible only by high net-worth individuals.
The Sponsor, by way of NEM, LLC, has identified numerous new opportunities to purchase, assemble, and rezone property. Another goal of the Offering is for the Sponsor to substantially increase the portfolio by initiating and completing new transactions and by developing some of the apartment sites and commercial sites currently under contract or owned by affiliates.
Our Competitive Strengths
We believe that the experience of our Managers combined with our specific investment strategies distinguish us from other real estate companies.
§ Experienced and Dedicated Management Team. The Company intends to maintain a committed management team with experience in all phases of commercial and residential real estate investment, management and disposition.
§ Strategy of Opportunistic Investing. We have an extensive deal flow network in target markets due to long-standing relationships with brokers and lenders.
Target Markets
The target market is central and south Florida. South Florida is very land constrained therefore any properties there which can be up-zoned have the potential of generating substantial profits. The Central Florida residential market is the largest in Florida, with over 13,000 new homes being built annually. The demand for “up-zoned” property in central Florida will only continue to increase due to the large absorption rates of new homes
If Management discovers additional markets which present an opportunity to purchase real property in accordance with the Company’s business and purpose, Management, in its sole and absolute discretion, may pursue such projects. Management will have complete discretion in the types of commercial and residential properties to be engaged by the Company. Consequently, investors in this Offering will be dependent upon the ability of Management to select properties that have the most potential to generate profits.
Industry Overview
Residential housing is the largest real estate asset class in the United States with approximately $20 trillion in assets, according to the December 2014 Federal Reserve Flow of Funds release. Single-family homes currently comprise approximately one-third of all residential housing. The Company’s goal is to acquire and aggregate tracts of raw undeveloped land, and subdivide the lots to sell to Home Builders. In addition, the Company will engage in development and/or acquisition, management and operation or sale of any class of income producing commercial and residential real estate. The target market is the central Florida and south Florida.
The U.S. housing market enjoyed nearly a decade of strong home price appreciation from the late 1990s through June 2006. Due to excessive lending at subpar underwriting standards, a significant home price correction occurred from late 2006 through early 2012. As measured by the S&P Case Shiller U.S. National Home Price Index, the peak occurred in June 2006 (189.93) and reached a low in March 2012 (124.2) — a decrease of 35%. As of July 2017, home prices throughout the nation have increased substantially, having recovered almost all their value. The aforementioned index has increased 5.94% over the last 12 months.
The U.S. creates significantly more households each year than new homes being built. In 2016, the U.S. was building six new homes for every 10 new households created. This trend has continued into 2017 and is expected to continue into 2018 and beyond. While the increase of residential units will generally start to reduce this deficit, the backlog and need for new residential units, especially in high demand markets like south Florida, will continue for years to come.
State of Florida Economic Outlook
Most population experts and data show that around 1,000 people move to Florida each and every day. This makes Florida either the second or third fastest growing state in the union. This population growth creates a need for new housing. With a shortage of developable land in the south Florida markets, any land that can be developed goes for a premium.
Florida’s economy will exceed one trillion dollars in 2018. If Florida was a country, it would have the 16th largest economy in the world. With its large influx of new residents, theme park attractions, and warm climate, Florida continues to be a highly sought after state to reside. With the changes in the federal tax code, particularly in its limitation of state and local deductions, Florida (with no state income tax) should expect to become an even more desirable place to live.
Market Opportunity
The economic outlook described above presents a ripe opportunity for our business to seize upon. The Company believes that recent corrections in the national, regional and local residential markets are healthy, and in many cases, overdue. Over the course of the past several months, the Company has noticed that residential consumers have begun to explore the development of market-appropriate product with realistic absorption projections and expectations of realizable upside upon completion of their project, being completed in one to three years. The southeastern region, for example, is experiencing a critical lack of new housing product that is affordable to the bulk of the urban workforce.
Investment Objectives
Our primary investment objectives include:
– Maximizing the capital gains of our properties;
– Preserving and protecting capital contribution and;
– Achieving long-term capital appreciation through increases in the value of our company.
We will also seek to realize growth in the value of our investments and to optimize the timing of our sales objectives.
However, we cannot assure you that we will attain these objectives or that the value of our investments will not decrease. We have not established a specific policy regarding the relative priority of these investment objectives.
Investment Criteria
We believe the most important criteria for evaluating the markets in which we intend to invest substantial capital include:
– Historic and projected population growth;
– Markets with historically growing numbers of a qualified and affordable workforce;
– Projected employment growth;
– Markets with high levels of insured populations; and
– Stable household income and general economic stability.
The markets in which we invest may not meet all of these criteria and the relative importance that we assign to any one or more of these criteria may differ from market to market or change as general economic and real estate market conditions evolve. We may also consider additional important criteria in the future.
Due Diligence Process
We will consider a number of factors in evaluating whether to acquire a particular asset, including: difficulty in rezoning; geographic location; environmental issues; condition of the asset; historical performance; potential for capital appreciation; potential for economic growth in the area where the asset is located; presence of existing and potential competition; prospects for liquidity through sale, financing or refinancing of the assets; and tax considerations. Because the factors considered, including the specific weight we place on each factor, vary for each potential investment, we will not assign a specific weight or level of importance to any particular factor. Our obligation to close on the purchase of any investment generally will be conditioned upon the delivery and verification of certain documents from the seller, including, where available and appropriate: plans and specifications; environmental reports; surveys; evidence of marketable title subject to any liens and encumbrances as are acceptable to the Company; and title and liability insurance policies.
Acquisition of Properties
The Company intends to acquire raw land and residential properties primarily through foreclosure sales, bank owned real estate, purchase transactions constituting a short sale (a transaction where the purchase price is less than the secured indebtedness on the property), and distressed sale transactions. Raw land will be acquired by identifying potential growth and making acquisitions prior to on-rush of development. The number of raw land and residential properties that may be available from all of the foregoing sources will vary from time to time, depending on numerous factors including, without limitation: trends in delinquent mortgages and foreclosure sales in a given area, extent to which banks may or may not aggressively seek to sell owned real estate (typically acquired through foreclosure on a delinquent mortgage), quantity of buyers seeking to purchase distressed properties, trends impacting values of residential properties, and other factors beyond the control of the Company.
Government Regulation
Our business is subject to many laws and governmental regulations. Changes in these laws and regulations, or their interpretation by agencies and courts, occur frequently.
Investment Company Act of 1940
We intend to conduct our operations so that we are not required to register as an investment company under the Investment Company Act of 1940, as amended, or the 1940 Act.
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real property may be held liable for the costs of removing or remediating hazardous or toxic substances. These laws often impose clean-up responsibility and liability without regard to whether the owner or operator was responsible for, or even knew of, the presence of the hazardous or toxic substances. The costs of investigating, removing or remediating these substances may be substantial, and the presence of these substances may adversely affect our ability to rent or sell the property or to borrow using the property as collateral, potentially exposing us to liability resulting from any release of or exposure to these substances. If we arrange for the disposal or treatment of hazardous or toxic substances at another location, we may be liable for the costs of removing or remediating these substances at the disposal or treatment facility, whether or not the facility is owned or operated by us. We may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site that we own or operate. Certain environmental laws also impose liability in connection with the handling of or exposure to asbestos-containing materials, pursuant to which third parties may seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials and other hazardous or toxic substances.
Other Regulations
The properties we acquire likely will be subject to various federal, state and local regulatory requirements such as zoning as well as state and local fire and life safety requirements. Failure to comply with these requirements could result in the imposition of fines by governmental authorities or awards of damages to private litigants. We generally will acquire properties that are in material compliance with all regulatory requirements. However, there can be no assurance that these requirements will not be changed or that new requirements will not be imposed which would require significant unanticipated expenditures by us, which could have an adverse effect on our financial condition and results of operations.
Our Growth Strategy
The Company will seek to continue its acquisition strategy upon completion of this Offering. The timing of commencement of operations may be influenced by the relative success of this Offering. We may not raise sufficient proceeds through this Offering in order to fully execute our business plans.
Operational Plan
For the land rezoning and sale business:
Over the next twelve months, the Company intends to focus on acquiring tracts of raw land for land banking and other commercial and residential properties for development using the proceeds of this Offering.
Our officers and directors will meet with property owners, brokers, consultants and advisors in the real estate industry to locate raw land and other properties which meet the Company’s profile.
We may engage other consultants to conduct initial due diligence with respect to properties which may be of interest to the Company. Our initial focus will be to acquire properties located in central and south Florida.
Our founder, Brian Tuttle, intends to reach out to his current network to continue searching for appropriate properties. Mr. Tuttle has a network that includes real estate brokers, commercial and residential real estate owners, management companies, real estate operators, title companies, and escrow companies. Mr. Tuttle believes that by utilizing his current network, he will be able to identify and monetize appropriate properties. We hope to finance acquisition costs mostly with the sale of the Notes.
Once opportunities are identified and under contract or purchased, the company will use its team of experienced consultants to rezone and up-zone the properties to their maximum value. Once rezoned/up-zoned, these properties will be marketed to national and regional Home Builders to maximize profits.
Patents and Trademarks
We have no patents or trademarks.
Employees
As of August, 2018, the Company has no full-time employees. We provide various information about the Management of the Company.
Biographies of the Management Team of NEM, LLC.
Brian Tuttle has time and time again worked against adversity to achieve success. Mr. Tuttle worked as an automobile mechanic as he put himself through the police academy. He then worked at the Palmetto Police department as a road deputy for three years before deciding to continue his education. Mr. Tuttle graduated from the University of South Florida in 1986 with an Industrial Engineering Degree. He was the only student from his graduating class to be hired by IBM in Boca Raton where he worked for three years.
Mr. Tuttle made the bold decision to leave IBM to start his own business, a landscaping and lawn maintenance company he built over 11 years into a multimillion dollar enterprise by servicing new home builders. Mr. Tuttle soon recognized a need of his new home builder customer base for developable land.
In 2000, he completed his first land development rezoning deal. Since then, Mr. Tuttle has purchased over 100 properties to develop and substantially increase their value. The work completed on these properties included consolidating lots, curing environmental issues, and rezoning. Mr. Tuttle has sold more than 190 million dollars’ worth of redeveloped land and has an additional 160 million dollars of property under contract now. There are currently offers and contracts pending on over 40 million dollars more in land purchases and acquisitions. Mr. Tuttle’s basic business plan is to buy raw land which is under-zoned, fragmented, has difficult sellers, complex entitlement issues, or severe environmental issues. Mr. Tuttle then works with his experienced team of consultants to fix these issues, increasing the value of the land before selling the land to national or regional home builders at a much increased price.
Michael Tuttle graduated high school in 2009 and then went to Finland for 12 months to serve in the Military as a combat medic for their defense force. Shortly thereafter he majored in Applied Science at the Finnish Community College. When Michael returned to the United States he worked as an armed guard. Mr. Tuttle started a landscaping company that worked directly with lenders to maintain REO properties. This company was responsible for managing 25 to 30 lawns per day. Later, Mr. Tuttle accepted a position in North Dakota working as a fuel fracking specialist for Thomas Petroleum. His responsibilities included managing the fueling operations for the fracking sites and training new employees, putting in a minimum of 100 hours per week.
In 2013, Mr. Tuttle returned to work with the family business, acquiring and developing properties. His first project was the management of a 187-acre site comprised of four parcels, made up of a land fill, horse barn, storage yard for off road construction equipment, and a wetland area. The properties were acquired for 11 million dollars. The decision was then made to invest eight million dollars into the property as well as rezone and change the entitlements, allowing the property to ultimately be sold for over 50 million dollars.
Mr. Tuttle has been personally involved with over 70 million dollars in closings and more than 50 million dollars of properties under contract for purchase. Currently, Mr. Tuttle’s main focus is the second phase of a successful project in Parkland. He is personally overseeing the initial stages of development from clearing, de-mucking, bringing in clean fill and getting the property ready to sell to a national developer.
Mr. Tuttle’s training has equipped him with the skills necessary to rezone and entitle projects to maximize profitability. He and his family are also overseeing the building and management of a 450,000 sq. ft. lifestyle center in Royal Palm Beach along with many other properties they have and are currently acquiring to rezone for residential and commercial buyers. Chris and Michael have been personally involved with over $70 million in closings and over $50 million under contract for purchase.
Chris DeBehnke graduated from four years of Bible College where he realized a passion of his and became involved in a state-wide youth ministry camp for over 11 years.
During the real estate crisis, Chris established a maintenance company specialized in maintaining the premises of REO properties in Palm Beach County for Bank of America. Mr. DeBehnke obtained an opportunity with Nozzle Nolen Pest Control, where he climbed the ranks, ultimately being given the responsibility of maintaining all community association clients of their Lake Worth office, covering territory in Boca Raton, South Palm Beach and Manalapan. Mr. DeBehnke had a lawn and ornamental route and was able to solely maintain and flourish this route.
One of Mr. DeBehnke’s strength is implementing operational processes which directly contribute to a company’s successfully meeting established goals. In early 2013, Mr. DeBehnke started working for the family business where his first project was to manage a 187-acre site comprised of four parcels. The four parcels included land used for a land fill, a horse barn, storage yard for off-road construction equipment, and a wetland area. Mr. DeBehnke’s experience and established skill set allowed him to create a Remedial Action Plan which was successfully carried out and, as a result, the project was completed on time. These properties were initially purchased for $11 million while another eight million dollars was invested into the property. The property was also rezoned and the entitlements changed, leading to the ultimate sale of the property for over $50 million. Chris and Michael have been personally involved with over $70 million in closings and over $50 million under contract for purchase.
Currently, Mr. DeBehnke’s main project is establishing the infrastructure of Tuttle Royale, a $500 million-dollar project in its early stages. Tuttle Royale is a 202 acre project situated in Royal Palm Beach Florida that will include over 1,300 residential units, a 1,500-student charter school and 400,000 square feet for a Lifestyle and Activity Center. Mr. DeBehnke is always up for a challenge and the opportunity to work on complicated deals. Whether it is working with a difficult seller, environmental issue, or fragmented parcels, Mr. DeBehnke will go the extra mile to assure each property’s potential is being maximized.
Nicole DeBehnke’s first role in real estate was as property manager for a private investor for three years where she helped oversee the acquisition and management of 40 rental homes. During this time, she also started two businesses, an apparel company called “I Heart Line” and a lawn maintenance company with her husband called “De Bella Property MGMT.” Mrs. DeBehnke and her husband contracted with lenders to maintain REO properties.
All the while, Mrs. DeBehnke continued to volunteer in her local church as well as work with the family’s real estate business, assisting with various land development matters. She also started and sold a successful salon and skin spa located in east Boca Raton. This salon was recognized by the Boca Raton Chamber of Commerce as “Best New Salon of 2017.”
Mrs. DeBehnke’s primary focus now is securing high-end tenants for Tuttle Royale, the family’s 450,000 sq. ft. Lifestyle Center located in Royal Palm Beach.
GENERAL TERMS OF THE NOTES
The Company will be issuing the Notes in the form provided in Exhibit “C” which is incorporated by reference herein. Each Note will be guaranteed by the Guarantor. The aggregate total of principal of the Notes shall not exceed the net worth of the Guarantors. The Notes will be issued in denominations of $50,000 each and shall bear an interest rate of 10% per annum and shall have a maturity date of five years. The Company will not be penalized for full or partial prepayment for the amounts due under the Notes.
Legal Proceedings
There are no legal actions against the Company or any of the Affiliates.
Description of Property.
The Company does not currently own any real or personal property.
TABLE OF OWNERSHIP
| TUTTLE FAMILY TRUST | 90.00 % | $900.00 |
| BRIAN TUTTLE | 3.75 % | $3.75 |
| MICHAEL TUTTLE | 2.5 % | $2.50 |
| MERJA KOSKINEN | 1.25 % | $1.25 |
| NICOLE DEBEHNKE | 2.5 % | $2.5 |
| Total: | 100% | $1,000.00 |
MANAGEMENT’S DISCUSSION AND ANALYSIS
Corporate Governance
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.
Committees of the Board
Our Company does not currently have nominating, compensation, audit committees or committees performing similar functions. Our Company also does not have a written nominating, compensation or audit committee charter. Our Management believes that it is not necessary to have such committees at this time because the Director(s) can adequately perform the functions of such committees.
Involvement in Certain Legal Proceedings
Our Management has not been involved in any of the following events during the past ten (10) years:
1. bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:(i) Any Federal or State securities or commodities law or regulation; or(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self- regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Independence of Directors
We are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.
Code of Ethics
We have not adopted a formal Code of Ethics. The Board of Directors has evaluated the business of the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules of fiduciary duty, federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take action to adopt a formal Code of Ethics.