CI: What is your estimated revenue growth rate from Year 1 to Year 5?
Pete: We intend to be operational and start paying back investors in 3 to 5 years. We already have had gun parts manufacturer request short term 1 to 3 year lease space for 2018 so we may be able to start paying back investors this coming year.
CI: What will be your three largest annual expenses?
Pete: Rehabilitation of the roof, electrical system upgrade, and structural repairs. All expected to be one- time expenses.
CI: At what occupancy rate do you become profitable?
Pete: Since we are expecting only to operate triple net leases we could be profitable by leasing only 10 to 20% of the building. If we're fully funded, 500 N 3rd St, LLC will be 100% debt free. We only need one to be profitable.
CI: What are your estimated profit margins?
Pete: We intent to fully pay investors back in 2 years after we are fully operational with a grower / processor under current regulations.
CI: What would be investors exit strategy if they invest in 500 North 3RD St., LLC?
Pete: Our exit strategy would be to sell the building to pay investors back, yet we have very little debt and wouldn’t think that be a likely strategy. If we are fully funded we could hold the building for 5 years vacant with no lease income and still wouldn’t expect that we would run out of funds, our cost to hold the building vacant is expected to be under $80,000 a year. If we really need to, we could probably operate at $30,000 a year just to hold the building after it has been repaired.
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