How I calculated the Return on Investment for Rocky Ledge Estates:

Let’s begin with the facts...All real estate is location, location, location and the fundamental rule is that you make your profit when you buy, not when you sell.

People from all over the world travel to the Pit River Valley to experience the magic of Burney Falls. When you hear the sound, breath the mist, and take the hike around the area you will agree with Theodore Roosevelt that it is the 8th Wonder of the World. When he rode his horse there in 1909, it looked the same as it does today. Created over 1 million years ago, layered volcanic rock retains rainwater and snow melt, which forms a large underground reservoir.100 million gallons of water each and every day flow out of the tiny lava tubes that serve as a filter that controls the flow. No where else in the world is there a waterfall that is as consistent and beautiful.Now imagine staying at our place and riding your horse or eBike with your support group to experience the wonder.

With over five million people within a enjoyable drive away, and the Reno International Airport only 2.5 hours to our south, our location is not only easy to get to, it is a beautiful trip! And if you have a plane, you can land only 17 minutes away.

Now let’s talk about why Short-term Rentals are ideal for our family wealth strategy and what makes RLE so special. The passive income and ROI is amazing but the benefits from being a business owner that can barter to travel the world may be the top advantage for us! We need 1530 families per year to max out reservations. We will actively market to corporate retreats and wedding each year.

Our subdivision is ideal with large estate parcels on paved streets with direct access from Highway 299 and Shasta Trinity National Forest in our backyard. Our purpose built concrete new construction homes are energy efficient, soundproof, and fireproof. With our metal roofs we can sustain winds of 170 MPH. With four equal luxury suites that share a private courtyard and their kids have bunk beds and their own bathroom just off the gourmet kitchen.

Imagine gated estates with a large porto couture, ADA compliant with radiant floor heating and stained concrete floors. Our Private Resort Homes are designed for family fun and we invite you to take the deep dive into all our eco-friendly technologies that will provide years of comfort to crowds of visitors. Our staff do all the work for us. The onsite concierge lives in a Serenity Haven Cottage that we provide as part of their compensation package. The “resort fee” covers their expenses.

Now picture eight Private Resort Homes. We can accommodate the reservation request eight times before we suggest another date! Each family pays less and gets more value. When someone discovers our nightly rate of only $250 for 4300 sq./ft gated estate in our location, they get excited. And when we explain that they can invite three other families to join them and they all sleep in equal luxury king suites with their own private baths, while they split the costs of the occupancy tax, cleaning fee, resort fee, and insurance, we have a motivated guest!

Monthly operating income is based on an Average Daily Rate of $8,000. That is $1,000 per night for each of our eight estate parcels. Each of our families pays only $250 per night compared to the $309 per night for the traditional 3/2 STR on a small tact lot. Plus, all vacations are better with our support groups/loved one!

Our Event Center is where they gather for games, meetings, celebrations, and fun. Imagine miniature golf, pickleball, basketball, water park, horses, and much more. Each group pays a fee of only $450 for the week. That is $112 per family, or $16 per day! Our business earns up to $172K income. This pays our staff when they host our guests. The merchandise and catering services are added charges.

We collect a cleaning fee of $350 per week. This can generate up to $537K to pay our contracted house cleaners.

Shasta County collects a 10% occupancy tax. So each family pays only $175 while our business pays over $250,000 per year!

The damage insurance will cover up to $3,500 in damages in case the guest breaks a window. With concrete walls and floors, and are built to last, but being self insured will likely create additional profits for our family businesses.

Property Management uses Hostaway Cloud based software with the latest technology including AI with automated booking reservations, emails, SMS, and links to every online service.

Now let’s talk about CapEx: The cap rate is determined by the ratio of the net operating income (NOI) and the purchase price of the property. The net operating income is defined as the rental income minus the operating expenses.

Cap Rate = ($1,500,000/$10,000,000)x100% = CAP Rate -15

$56,000 x 48 = $2,688,000 x 70% = $1,881,600

Since our Limited Partnership is formed by RLE LLC contributing the parcels and business plan, and they are the General Partner, our Limited Partner contributes $500,000 cash and then provides the construction capital to open the business. The budget is up to $10M and 100% of all profit will be applied to the pay off of the loan before the two families split the profits with each other. The Corporation that Manages the business is in California and the General Partner and all business expenses are paid by our CPA. So the RLE LLC hypothecates the parcels to the LP and operates as a holding company that pays the $800 annual fee. The management company records the loss from construction and issues a K-1 to the two partners. Once open, the income pays off the loan before the passive income is reported on the partners tax returns.

My intention is to comply with the IRS rules to qualify as a “Real Estate Professional” and operate our family business. My family and I are now able to deduct the business related expenses as we promote our business that uses real estate to generate passive income while we market to families, companies, churches, clubs, and when we travel on business trips, we take the deductions before we pay income tax.

The onsite concierge services will do all of the heavy lifting while our business pays our heirs for sales and marketing expenses and provides corporate benefits. Please talk to your CPA to develop your own strategy. With a separate K-1 we are both independent and with the operating agreement our families will work with the company CPA and the concierge for any special request. They will say “Yes” if our rules allow it.

It will be up to each individual partner to create their trust for generational wealth. The LP will operate for generations. The management will create the reserves to replace worn items and we will manage it using the APP on our smartphone. We will have images and videos of before and after each rental and Hostaway actively captures the Five-Star reviews and sends all the data to the partners and the accounting to our CPA. An APP on our smartphones provides daily updates so all our heirs can stay connected and help max out our bookings each year.

Our independent family business pays for our board of advisors to meet for board meetings. Their salaries and benefits are deducted prior to the annual tax return for the business. Every moment spent at Rocky Ledge Estates is a step towards a brighter, wealthier future for you and your family. Make the decision today and embrace a lifetime of luxury and adventure.