Confidential Investment Summary CarPICWash 4
Past performance is not indicative of comparable future results. Given the inherent volatility of the securities markets, it should not be assumed that investors will experience returns comparable to those shown here. Market and economic conditions may change in the future producing materially different results than those shown here. All investments have inherent risks.
Information in these materials about the Manager, its affiliates and their personnel and affiliates and the historical performance of portfolios it has managed has been supplied by the Manager to provide prospective investors with information as to its general portfolio management experience and may not be viewed as a promise or indicator of the Issuer’s future results. Such information and its limitations are discussed further in the sections of these materials in which such information is presented. Past performance of indices or asset classes does not represent actual returns or volatility of actual accounts or investment managers and should not be viewed as indicative of future results. The comparisons herein of the performances of the market indicators, benchmarks or indices may not be meaningful since the constitution and risks associated with each market indicator, benchmark, or index may be significantly different. Accordingly, no representation or warranty is made to the sufficiency, relevance, important, appropriateness, completeness, or comprehensiveness of the market data, information, or summaries contained herein for any specific purpose.
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Forward-looking information contained in these materials is subject to certain inherent limitations. Such information is information that is not purely historical in nature and may include, among other things, expected structural features, anticipated ratings, proposed or target portfolio composition, proposed diversification or sector investment, specific investment strategies and forecasts of future market or economic conditions. The forward-looking information contained herein is based upon certain assumptions, which are unlikely to be consistent with, and may differ materially from, actual events and conditions. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results will vary and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes. These materials may also contain historical market data; however, historical market trends are not reliable indicators of future market behavior.
All
The following materials present information regarding a proposed creation of a special purpose vehicle (the “Issuer”) which would offer securities (the “Securities”) to finance its acquisition of a portfolio of financial assets to be selected and managed by the portfolio manager referred to herein (the “Manager”). These materials have been prepared to provide preliminary information about the Issuer and the transactions described herein to a limited number of potential underwriters of the Securities for the sole purpose of assisting them to determine whether they have an interest in underwriting the Securities.
This document is confidential and may not be reproduced or redistributed. The information presented herein has been prepared for informational purposes only and is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or fund interest or any financial instrument and is not to be considered investment advice. This presentation is for institutional use only and is not to be distributed to any party other than its intended recipient.
DAN HANDFORD Managing dan@passiveinvesting.com404-316-8550Partner DANNY RANDAZZO Managing danny@passiveinvesting.com248-931-2528Partner BRANDON ABBOTT Managing brandon@passiveinvesting.com864-270-4190Partner CAMERON BROOM Car Wash Managing cameron@passiveinvesting.com803-206-3859Partner
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The following information is an investment summary provided to prospective investors and others. This information is not an offering to sell either a security or a solicitation to sell a security. At the request of a recipient, the Company will provide a private placement memorandum, subscription agreement and the Limited Liability Company Operating Agreement. The Managing Member in no way guarantees the projections contained herein. Real estate values, income, expenses and development costs are all affected by a multitude of forces outside the Managing Member’s control. This investment is illiquid and only those persons that are able and willing to risk their entire investment should participate. Please consult your attorney, CPA and/or professional financial advisor regarding the suitability of an investment by you.
Institutional Quality Investment
Table of Contents Investment Summary 6 Property Profiles 12 Express Car Washes 22 PassiveInvesting.com 28
Investment Summary >>>
The PassiveInvesting.com Team has identified the three express car wash locations for the PIC Car Wash 4 portfolio for Theacquisition.PICCar Wash 4 portfolio consists of three tunnel car washes along the east coast of the United States. The portfolio of sites includes Colonial Express Car Wash located in Fort Myers, Florida; Standard Express Wash located in Newberry, SC, a suburb of Columbia, SC; and the third site is Top Notch Express Wash, located in the heart of the Columbia, SC MSA. Each location benefits from high traffic counts, high residential density and desirable locations. We invite you to invest alongside us for this exciting new acquisition. This offering is a 506(c) and is open to accredited investors only. An accredited investor has either a net worth of $1 million, not including their primary residence, OR an annual income of $200,000 (or $300,000 if married) for the last two years and you have a reasonable expectation that it will continue. Investment Summary Week of August 30th: Colonial Express Car Wash Week of September 5th: Top Notch Express Wash Week of October 3rd: Standard Express ClosingWashTimeline
StructureWaterfall 10% True Preferred (no GP catch up) 60% to a 20% IRR then; 40% to a 30% IRR then; 10% Thereafter PARTNERSHIP STRUCTURE Targeted Returns and Equity Structure10% (withoutCash-on-Cashsaleproceeds) 16.9-19.0% IRR Range 20.3-23.9% Annualized Return Range (with sale proceeds) PROJECTED TARGET LP RETURNS* Year 1 Year 2 Year 3 Year 4 Year 5 7.3% 8.2% 10.2% 11.1% 13.3% *Based on 5 year hold for Limited Partner Investment **Projected cash on cash returns are based on projected assumptions for these properties ANNUAL CASH ON CASH PROJECTIONS** GENERAL PARTNER LIMITEDDEBTPARTNER$11,825,000$13,813,000 Ownership40%Ownership60% | 9
REBRANDING
Upon acquisition, our marketing team will rebrand all three locations with new signage using the new logo below. In addition, this logo will be used for the website, social media channels and any other additional marketing campaigns.
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Principal Balance $13,813,000 Loan to Value 65% Loan Type Bank Interest Rate 5.5% Term (Years) 5 Fixed or Adjustable Fixed Amortizing Period (Years) 20-25 Years DEBT FINANCING* *Subject to change before closing | 11
Property Profiles >>>
PURCHASE PRICE HOLD TIME PROPERTIES MEMBERSHIPSEXISTING CARPERWASHESDAY $21,250,225 5+ Years 3 2,000+ 770+ PIC CAR WASH 4 PORTFOLIO 1 1 2 3 2 3 14 |
T-12 Year 1 Year 2 Year 3 Year 4 Year 5 INCOME Total Revenue $2,228,320 $2,898,303 $3,197,428 $3,485,105 $3,769,548 $4,029,481 Membership Revenue $1,045,432 $1,140,135 $1,444,069 $1,665,084 $1,881,387 $2,021,356 EFFECTIVE GROSS INCOME $3,273,752 $4,038,438 $4,641,497 $5,150,188 $5,650,935 $6,050,837 YoY Increase 23% 15% 11% 10% 7% OPERATING EXPENSES Advertisements & Promotions $48,742 $74,461 $75,465 $77,352 $79,285 $81,268 Chemical Supplies $280,779 $256,587 $299,344 $334,306 $368,657 $394,615 Customer Claims $26,827 $42,998 $43,578 $44,667 $45,784 $46,928 Insurance $32,996 $60,500 $61,316 $62,849 $64,420 $66,031 Labor $675,374 $815,360 $826,360 $847,019 $868,194 $889,899 Legal + Professional Fees $40,382 $41,392 $41,950 $42,999 $44,074 $45,176 Licenses, Dues & Sales Taxes $49,327 $50,560 $51,242 $52,523 $53,836 $55,182 Miscellaneous $46,240 $47,396 $48,035 $49,236 $50,467 $51,729 Repair and Maintenance $26,827 $34,998 $35,470 $36,357 $37,265 $38,197 Management Fee $0 $403,844 $464,150 $515,019 $565,094 $605,084 Property Taxes $101,178 $117,526 $119,111 $122,089 $125,141 $128,270 Bank & Credit Card Fees $56,401 $90,865 $104,434 $115,879 $127,146 $136,144 Utilities $286,399 $337,597 $394,389 $440,548 $485,951 $520,428 TOTAL OPERATING EXPENSES $1,671,472 $2,374,082 $2,564,844 $2,740,842 $2,915,316 $3,058,950 % of EGI 51% 59% 55% 53% 52% 51% NET OPERATING INCOME $1,602,280 $1,664,356 $2,076,654 $2,409,346 $2,735,620 $2,991,887 YoY Increase 4% 25% 16% 14% 9% Portfolio Pro Forma Projections | 15
Colonial Express Car Wash 11021 Colonial Blvd | Fort Myers, FL>>>>>>1 Brand new, unopened site 1.61 Acre ConstructionSite completed in 2022 19 Vacuums / 2 Pay Stations 26,500 Vehicles Pass Per Day 154 Foot Tunnel About Fort Myers, Florida Colonial Express Car Wash is located in the heart of Fort Myers, Florida, a city known for its beautiful beaches, pristine golf courses and thriving retail environment. Since 2010, the Fort Myers population has grown by an astounding 55.46%. In addition, the job market in Lee County is also experiencing significant growth, growing by more than 16.9% since 2014. Colonialof $62,746 MEDIAN HOUSEHOLD INCOME 38,167 NUMBER OF HOUSEHOLDS 105,772 TOTAL POPULATION 29% HAVE BACHELOR’S DEGREE +MILES5WITHIN 16 |
• Fort Myers Ranks #1 as the Fastest Growing City in the Entire US - WalletHub • Fort Myers ranked #1 in Most Popular Cities for the holidays by Sperling’s Best Places. • Cape Coral-Fort Myers ranked #8 in Best Cities for Teleworking - Small Metro Areas by Forbes Magazine • Fort Myers and Sanibel Island are #1 on the list for the 7 Best Beach Destinations in the US by Smarter Travel. • The City of Fort Myers Ranked a Top Place to Live in Florida by US News and World Report. • Fort Myers Ranked #2 Best Places to Retire in the Country - US News & World Report • In 2018, WalletHub ranked Fort Myers as the #10 Best small city in the US (out of 1,200 small-sized cities) to start a business. • US News and World Report ranked Fort Myers the #8 safest place to live in the US. Fort Myers Awards and Accolades | 17
STANDARD EXPRESS WASH 2959 Main St. | Newberry, SC2>>>>>> Built and opened in 2020 1.83 Acre Site 1,000+ memberships 12 Vacuums / 2 Pay Stations 10,000 Vehicles Pass Per Day 80 Foot Conveyor / 50 Foot Tunnel About Newberry, South Carolina Standard Express Wash is located in the scenic Columbia, SC suburb of Newberry, SC. Newberry is a town rich in history and known for its rural beauty and small town charm. It is home to Newberry College, a liberal arts school that was ranked #11 in Best Colleges South. Standard Express Wash is the only express car wash in Newberry County leaving little to no competition in this market. Standardof $39,107 MEDIAN HOUSEHOLD INCOME 6,539 NUMBER OF HOUSEHOLDS 17,583 TOTAL POPULATION 16% HAVE BACHELOR’S DEGREE +MILES5WITHIN 18 |
Newberry County encompasses part of Lake Murray, a 50,000-acre freshwater lake with ~650 miles of shoreline. Named one of The 10 Best Places to Live and Boat by Boating Magazine, Lake Murray is renowned for its recreational activities, such as boating, fishing and water sports. The lake is home to many fish species including largemouth bass, striped bass, bluegill, catfish and more. At least 149 bird species have been observed and recorded at Lake Murray as well. Known as “the Jewel of South Carolina” visitors come from all over to experience the beauty that lies in Newberry County’s Lake Murray.
Newberry College is situated in downtown Newberry, SC and is a private institution with roughly 1,250 students. The college is a member of the Division II level of the National Collegiate Athletic Association (NCAA), primarily competing in the South Atlantic Conference (SAC) since the 1996–97 academic year. The music program at Newberry College has a history in vocal and instrumental performance dating back over 100 years and a jazz band and marching band in existence since 1956. U.S News and World Report named Newberry College the one of the top five best value colleges in the South and one of the top ten for social mobility in 2021.
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TOP NOTCH EXPRESS WASH 8209 Two Notch Rd | Columbia, SC3>>>>>> Built and opened in 2020 2.96 Acre Site 1,000+ memberships 19 Vacuums / 2 Pay Stations 25,000 Vehicles Pass Per Day 183 Foot Tunnel About Columbia, South Carolina Top Notch Express Wash is located in the heart of Columbia, SC, which is the capital of South Carolina. Columbia is the home of the University of South Carolina’s main campus, Fort Jackson Army Base and an abundance of other recreational and educational amenities. Top Notch Express will be the 8th Columbia express car wash for PassiveInvesting.com. NotchTopof $53,362 MEDIAN HOUSEHOLD INCOME 43,717 NUMBER OF HOUSEHOLDS 108,768 TOTAL POPULATION 36% HAVE BACHELOR’S DEGREE +MILES5WITHIN 20 |
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The University of South Carolina is situated in downtown Columbia, SC and is a public institution. It has a total undergraduate enrollment of 27,270 (fall 2020), and the campus size is 444 acres. University of South Carolina’s ranking in the 2022 edition of Best Colleges is National Universities is #117. The University of South Carolina also offers graduate programs, including the well-regarded Darla Moore School of Business, a law school, medical school, engineering school and College of Education. The Columbia campus is the flagship location of the University of South Carolina system where the school runs a variety of research centers. Columbia, SC is proud to be the home of Fort Jackson, the largest and most active Initial Entry Training Center in the U.S. Army, training 50 percent of all Soldiers and 60 percent of the women entering the Army each year. Created in 1917, Fort Jackson is named for Andrew Jackson, a United States Army General and the seventh President of the United States. The fort has a significant economic impact on the local area and providing the US Army with new soldiers is the post’s primary mission. The base encompasses 52,000 acres and over 12,000 military families make Fort Jackson their home. In addition, close to 3,500 civilians are also employed by Fort Jackson.
Express Car Washes >>>
10. The desire for convenience extends to location. The growth of the industry is making car washes more convenient to find. Greater penetration and visibility triggers both the rational and emotional desire to have their vehicle look its best.
4. The health of the U.S. economy is huge. The confluence of record-low unemployment, strong consumer confidence and a 40-year-high in new vehicle sales were instrumental.
2. Home washing declined in popularity. The fact is, we live a world where convenience and quality are paramount. This is clearly evidenced as at-home washing (DIY) declined dramatically, from 54% in 2016 to 42% in 2019. Car washes could not be more on-trend.
7. The passion for a clean car is rational and logical. 59% of Americans believe that washing a vehicle is an important and necessary part of routine maintenance. It protects the value of their vehicle, prevents rusting and is part of regular vehicle maintenance.
8. But even more so, the deepest passion lives in the heart. 86% say that “a clean vehicle makes me feel good” while 78% see it as “a good reflection on me.”
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3. The desire for convenience and quality reached an all-time high among past-year car wash consumers. 77.5% chose a PRO wash most often while DIY most often declined to just 22.5%. This increase in the mix of PRO most often versus DIY most often is in sharp contrast with the mix just three years ago.
1. 83% of Americans who own or lease a vehicle used a Professional Car Wash (PRO) at least once in the past year. This is the highest percentage of PRO washers since the ICA conducted its first U.S. Consumer Study in 1996.
10 REASONS CAR WASHES ARE BOOMING
6. New vehicle owners are passionate about keeping their new vehicle looking new. 57% of new vehicle owners (3 years old or newer) wash their vehicles at a car wash once a month or more often compared to 44% of owners of vehicles more than 10 years old.
5. Car wash price/value is both fair and reasonable. Only 23% of all consumers expressed any dissatisfaction with the price paid per wash.
9. The love of a clean car is fueling unlimited wash programs. 14% of consumers claim to be members. The upside potential to drive membership is huge and another reason to be buoyed.
CAR WASHES BY THE NUMBERS $33B+ CAR WASH INDUSTRY GLOBAL NET WORTH 51% OF CONSUMERS PREFER EXPRESS CAR WASHES OVER SELF SERVICE & FULL SERVICE 38 GALLONS OF WATER TO WASH A SINGLE CAR 14% OF CAR WASH CONSUMERS HAVE MEMBERSHIPS 43% OF THE TOTAL CAR WASH REVENUE COMES FROM THE UNITED STATES 13 CAR WASHES PER YEAR IS AVERAGE FOR AMERICANS 3.9% PROJECTED CAGR BETWEEN 2021-2028 220,000+ FULL & PART-TIME CAR WASH EMPLOYEES ACROSS THE GLOBE 72% OF DRIVERS IN THE UNITED STATES USE CAR WASHES 29,000 EXPRESS CAR WASHES IN THE UNITED STATES 40-60% PROFIT MARGINS FOR EXPRESS CAR WASH OWNERSHIP 15% OWNED BY COMPANIES WITH FIVE OR MORE LOCATIONS *Source: DetailProPOS, Matthews Real Estate Investment Services, International Car Wash Association 26 |
In-Bay Automatic Self-Service
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3 MAJOR CAR WASH TYPES
Express
There are three major car wash types: express tunnels, roll-over/in-bay automatic, and self-service. The express car wash tunnels offer the most profit potential with easier scalability due to the lower maintenance and lower payroll burden. There is also an opportunity to convert existing self-service or roll-over/in-bay automatic facilities into the express car wash model.
Express car washes are the most discussed, touted about, and fastest growing segment of the car wash industry. These are tunnel washes which use conveyor or belt equipment to move the vehicle through the machinery throughout the car washing process. Of the tunnel models, expresses are the most automated (and often completely automated). These washes feature automatic teller / pay machines and very few employees present. This type of wash is typically the lowest ticket price of the tunnel car washes. In terms of interior cleaning, many express washes offer free vacuums, but there is no employee on site that will perform any sort of interior clean for the client. If the interior is going to be cleaned at a true express tunnel wash, it will be cleaned by the client.
PassiveInvesting.com >>>
PassiveInvesting.com launched its full service property management firm, HRA management to operate its express car wash locations throughout the United States. It was built with the sole purpose of providing an unparalleled customer experience at each and every car wash under management. HRA has a strategic mission to identify operational inefficiencies upon acquisition and will implement standards and practices to increase revenue and reduce overall costs. HRA Management and PassiveInvesting.com are dedicated to be the leading express car wash provider in the world. ASSETS UNDER MANAGEMENT PROPERTY MARKET ACQUISITION DATE NumberofSites VALUATION PIC Car Wash 1 Fayetteville, NC & Lumberton, NC 22-March 2 $14,500,000 PIC Car Wash 2 Columbia, SC 22-June 7 $27,500,000 PIC Car Wash 3 Edgewood, MD, Norfolk, VA, Virginia Beach, VA, Greer, SC, Myrtle Beach, SC Pending Close 5 $33,800,000 TOTAL 14 $75,800,000 30 |
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Investor Average Annual Return, including disposition – The average return per year including profits from disposition.
Car Wash Investment Terms & Definitions
» Internal Rate of Return (IRR) – The rate of return that would make the present value of future cash flows plus the final market value of an investment opportunity equal the current market price of the investment or opportunity. The higher a project’s internal rate of return, the more desirable it is to undertake the project.
» Cash Flow – Cash generated from the operations of a company, generally defined as revenues less all operating expenses.
» Cash-on-Cash – A rate of return often used in real estate transactions. The calculation determines the cash income on the cash invested.
» Investor Average Annual Return, excluding disposition – The average return per year during the investment hold. This calculation does not include the return of invested capital.
»
» Debt Service Coverage Ratio (DSCR) – It is the multiples of cash flow available to meet annual interest and principal payments on debt. This ratio should ideally be over 1. That would mean the property is generating enough income to pay its debt obligations.
» EBITDA – A measure of company profitability used by investors. It is helpful for comparison of one company to another in the same line of business
» License Plate Reader (LPR) – This system uses high definition cameras and optical character recognition technology to read the characters on a license plate and match the plate to your member database and point-of-sale (POS) system, which holds all of the owner’s pertinent information.
◊ Calculated: Annual Dollar Income Return / Total Equity Invested = Cash-on-Cash
» CAGR – The compound annual growth rate (CAGR) is the annualized average rate of revenue growth between two given years, assuming growth takes place at an exponentially compounded rate
» Return on Equity (ROE) – The amount of net income returned as a percentage of shareholders equity.
» Monthly Recurring Revenue (MRR) – A normalized measure of a business’ predictable revenue that it expects to earn each month
◊ ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder’s Equity
RANDAZZO
DANNY BRANDON ABBOTT CAMERON BROOM
Sponsorship / Management Team The PassiveInvesting.com Team has been investing in commercial real estate assets since 2013 with a portfolio of over $1.2 Billion in acquisitions. MANAGING PARTNERS:
DAN
HANDFORD
DEDICATED TEAM OF EXPERTS SUSIE WHITTINGTON DIRECTOR, HUMAN RESOURCES TAYLOR CU INVESTOR RELATIONS ASSOCIATE MARCO TRIPALO INVESTOR RELATIONS ASSOCIATE RYAN THORSEN ACQUISTIONS ANALYST WHITNEY HUTTEN DIRECTOR, INVESTOR EDUCATION CHRIS NEARY SENIOR ACQUISITIONS ANDREW DAVIS DIRECTOR, INVESTOR RELATIONS MELISSA BROOM DIRECTOR, MARKETING & PR BRIAN BORNHORST DIRECTOR, ASSET MANAGEMENT ERIC FITZGERALD DIRECTOR, ACQUISITIONS TAO BRODY DIRECTOR, FINANCE ED GILMER DIRECTOR, CAPITAL MARKETS WALTER PARKER ACQUISTIONS ASSOCIATE HUBERT YANG ACQUISTIONS ANALYST ALEXANDRA CANN ACQUISTIONS SUPPORT HANNAH ALLISON EVENT MANAGER STACEY FOSTER ADMINISTRATIVE SPECIALIST JD RYE ASSOCIATE CONTROLLER CHRISTINA RUBENSTEIN FINANCE ASSOCIATE NICOLE YEE FINANCE ASSOCIATE MISTY CRAPS INVESTOR RELATIONS SUPPORT ASPEN MORGAN INVESTOR SERVICES SUPPORT EMILY MOONEYHAM INVESTOR SERVICES SUPPORT
RYAN MCKENNA Managing Partner McKenna Capital (847) Ryan@McKennaCapital.com354-9766www.McKennaCapital.comCo-GP
