q3 dlp capital advisors recapdlp capital expects to raise about $6,000,000 of new capital, primarily...
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DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
Q3 DLP Capital Advisors Recap
Q3 was an excellent quarter for DLP Capital Advisors.
Some of the highlights of the quarter:
Investor Informational Dinner was held on July 28th at Blue Grill house
Quarterly Investor Dinner was held July 30th at the Saucon Valley Country Club
First Florida Investment dinner was held on September 22nd at the Palencia Country Club
Originated 29 private loans to investors
Acquired 17 properties for just over $10,000,000.
Investor Logins rolled out to all investors in July
New website launched! DLPCapitaladvisors.com
Investor Information Portal Set up: http://dlpcapitaladvisors.com/portal/
Enter:DreamLiveProsper
Audited Financials Complete for the DLP Lending Fund
Over $8,000,000 of new capital invested with DLP Capital Advisors
15 New Investors made investments
19 existing investors made additional investments
Q3 Fund Performance
14.17% annualized net return to investors in the DLP Fixed Fund
14.87% annualized net return to investors in the DLP Lending Fund
13.02% annualized net return to investors in the DLP Income & Growth Fund
10.1% annualized net return to all FIXED return investors
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
Q3 2016 Market Review
Within the Lehigh Valley, the center of the “DLP investment world,” the market was overall very strong.
There was a 3.5% decrease in sales volume, but homes are sold 12.7% faster year over year. In addition,
the List to Sale ratio increased from 97.16% to 97.62%. We believe the only reason sales were down in
Q3 year over year, was the incredibly low inventory. The Lehigh Valley has the lowest number of homes
on the market, again, in over a decade with less than 3.5 months of inventory. Most exciting of all,
home prices were up nearly 5% year over year, bringing prices from being flat for the year compared to
2015, to now being up nearly 2%.
In Lehigh Valley: 2016 Q3 % Change YTD % Change
Number of home sales 2,113 -3.5% 5,750 +6.68%
Average home sale price $216,584 +4.95% $199,625 +1.93%
Average per sq. ft. $112.98 +4.2% $109.24 +1.53%
Q3 Rehab Funding Market Recap
The rehab market during the 3rd quarter had a solid quarter once again. The volume of on market
distress deals continue to decrease, but the opportunities are still available, although a great percentage
of deals are off market. Despite deals being harder to find, the positive news is that homes are selling
much faster and easier decreasing risk for the borrower and the lender, as well as increasing profits for
the borrower.
Q4 2016 Real Estate Market Outlook
We expect the low inventory levels of the real estate market to continue to slow sales growth over the
course of the 4th quarter. We expect flat sales in Q4 compared to Q4 2015 due to the low inventory. We
do expect to see continued price growth in Q4, with an expectation of 4-6% increase year over year.
Although the low inventory levels will hamper home sales, it will conversely help the residential
investment market as the previously distressed properties are being brought on the market. Also aiding
the investment market has been the consistently low vacancy rates in the area, which are expected to
continue through the quarter. As renovation of the distressed properties is completed, investors are
able to successfully lease/stabilize the property in a shortened amount of time.
Overall Market Expectations Compared to Q3:
Sale Volume
Supply Prices Interest Rates
Rental Occupancy
Rent Price
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
Q4 DLP Capital Advisors Outlook
Q4 is set to be a very strong quarter for DLP Capital Advisors.
DLP Capital Advisors is raising capital and growing the DLP Lending Fund and the DLP Income & Growth
Fund; and is in the process of either launching the DLP Equity Fund II, LLC or re-opening DLP Equity Fund
in Q4.
DLP Capital expects to achieve our targeted returns in all four of our Funds in Q4:
Lending Fund (11-16%)
Fixed Fund (11-14%)
Income & Growth Fund (11-18%)
Equity Fund (22-25% annual average over the 5-7 year Fund)
DLP Capital expects to raise about $6,000,000 of new capital, primarily into the DLP Lending Fund; DLP
Income & Growth Fund; and the New DLP Equity Fund II, LLC/DLP Equity Fund I, LP in Q4.
DLP expects to acquire over 400 apartments and houses in Q4 as well as originate more than 40 loans to
real estate investors. This is expected to be the biggest quarter to date for both acquisitions and
lending.
Commonly Asked Questions
Q: Why do flippers borrow from you if rates at banks are lower?
A: Securing funding through banks is often a challenge for flippers since banks typically only fund 75% of
the purchase price of a property, while the borrower needs money to cover the purchase AND rehab.
Direct Lending Partner uses a common sense approach in addition to the same underwriting standards
banks follow to grant loans based on the speculative value of the property after repairs. Also, the typical
loan duration for Direct Lending Partner is only 6 months, so higher interest rates aren’t a big factor for
borrowers.
Q: Can interest be compounded?
A: Investors have the option of taking monthly distributions or letting interest compound and grow. You
can switch at any time and/or do a combination (e.g, take a $1000 distribution each month and allow
the remainder of your returns to compound).
Q: Are there any hidden fees in your stated return rates?
A: Our return rates indicate exactly what you will earn, with no hidden costs. DLP Capital Advisors takes
care of any fees.
Q: If I invest in more than one Fund, does the minimum investment apply to each account?
A: Investments are considered collectively, so you can split your minimum investments between
accounts (e.g., $100,000 in a Note Fund and $150, 000 in an Equity Fund to satisfy a $250,000 minimum
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
investment requirement in the Equity Fund). Combined investments also count toward investment
thresholds for Return Rates.
DLP Capital Advisors Equity Investment Case Study:
Property: Kensington Cottages
Location: Orlando, Florida
Units: 170 Units
Description: Located within 9 miles of Downtown Orlando, which is home to Universal Studios, Amway Center, and many government offices. Orlando is one of the top performing apartment markets in the country. For Q3 2015, Orlando recorded average occupancy of 95.7% and average rents of $1,070, which represents a 5.1% increase in rents year over year. According to MPF Research, Central Florida is projected to experience as much as 5% growth in rent each year for the next 3 years.
Purchase Price: $7,345,000
Equity Investment: $2,000,000
Unit Breakdown:
Financial Overview:
Cash on Cash Return (Year 1): 12.48%, net to investors
Five Year Project Return: 29.93%, net to investors
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
DLP Capital Advisors Loan Investment Case Study:
Loan Amount: $115,000
Value: $205,000
Loan to Value: 56.10%
Loan to Cost: 72.76%
Borrower Credit Score: 800
Borrower Experience Level: The Borrower is an experienced real estate investor that completed three real estate flips so far in 2016. The average profit per flip was $38k.
Borrower Net Worth: $1,874,000 (including $427,000 in liquid securities)
Interest Rate: 13.20%
Length of Loan: 6 months
Result of Loan: The property was successfully renovated and is listed for sale. Only three and a half
months have passed from the time the loan was approved to the property being fully renovated a listed
for re-sale. The property is listed for sale at a $15k premium to the appraised value, which coincides
with the current market comps.
Current Offerings:
DLP Capital Advisors is currently accepting Equity investors into the DLP Lending Fund, LLC; DLP Income
& Growth Fund I, LLC; and the DLP Equity Fund II, LLC, as well as Note Holders.
The targeted returns for equity investors are 11-20%.
The FIXED returns to note holders are 7-10%.
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
DLP Lending Fund, LLC Equity Offering
This is for Accredited Investors only*. The DLP Lending Fund lends short-term, high yield capital to real estate investors, thus providing strong, consistent, and predictable returns. The fund does not own real estate directly, but instead lends capital to real estate investors. This Fund is a hybrid fund, having both Equity and Debt investment options. The underwriting, funding, and loan management is performed and managed through Direct Lending Partner LLC. Direct Lending Partner has a thorough underwriting process to make sure loans are only made to borrowers that have a high probability of success with the project/property and the ability to refinance the property if needed. Loan servicing is performed by FCI Loan Servicing.
DLP Income & Growth Fund I, LLC
This is for Accredited Investors only*. The DLP Income & Growth Fund I, LLC is an Opportunity Fund that invests into a range of real estate backed investment opportunities including rehab/private loans to real estate investors; loans to affiliates of DLP Capital Advisors; investments into the DLP Fixed and Lending Funds; preferred equity investments and partnerships; non performing notes; and investments into other real estate backed investment funds and opportunities. The focus of the Fund is to produce superior returns by having the flexibility to capitalize on market opportunities and inefficiencies, while mitigating risk through diversification and strong asset and borrower underwriting.
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
DLP Note Offerings
Accredited investors only* DLP offers note (debt) investment options within each of the DLP Funds in additional to on a separately managed account basis. These notes offer 7-10% fixed returns w/ a low LTV. Primarily, the fund’s assets are first position real estate loans. The note investors are in the “first to be paid” position & in effect are in the lowest risk position of all the DLP investment offerings.
* Accredited Investor Definition: For an individual to be considered an accredited investor, he or she must have a net worth of at least one million US dollars, not including the value of one’s primary residence or have income at least $200,000 each year for the last two years (or $300,000 together with his or her spouse if married) and have the expectation to make the same amount this year.
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
News DLP Acquires Kensington
Cottages
DLP successfully completed the
acquisition of the 170 unit multi-
family property known as
Kensington Cottages in Orlando,
FL.
DLP Capital Advisors completes
DLP Lending Fund Audits
We now have the ability to work
with Registered Investment
Advisors (RIAs) to further expand
our investor network!
DLP Capital Welcomes New
Investors!
DLP welcomed 19 new investors in
Q3. Over $8,300,000 was invested
from new and existing investors.
Great Turnout at Investor
Information Dinners in PA & FL
More than 100 people attended our
Investor Information Dinner at Blue
Grillhouse on July 28. We hope
you’ll be joining us for our next
dinner!
We overbooked our first ever
Information Dinner that took place
in St. Augustine, FL at the Palencia
Club and have already started
receiving early registrations for the
next Florida dinner scheduled for
November 10th.
DLP Capital Advisors Welcomes
New Partner/Owner!
Bob Peterson, CFO of DLP Family
Companies has become a Principle
in DLP Capital Advisors as an
owner/partner.
DLP Named Fastest Growing
Companies
DLP is named as one of the Inc.
5000 Fastest Growing companies in
the US for the 4th straight year, #840
in the US & #42 In PA.
DLP Capital Expands Footprint
into Florida
DLP continues to expand its Florida
presence with the purchase of an
office in St. Augustine, just a block
away from the beautiful Palencia
Club.
DLP Acquires 190 units for over
$10,000,000
In the 3rd Quarter, DLP completed
acquisitions totaling 190 units for
over $10,000,000. This was
highlighted by our acquisition of
Kensington Cottages.
Direct Lending Partner has Best
Quarter in History
Direct Lending partner closed 29
loans during the 3rd quarter, marking
its best quarter ever.
Mountain Hollow Estates in Full
Swing
These 139 units of luxury
townhouse apartments is one of
DLP's biggest acquisition to date.
Nestled in Stroud Township, these
units range from 1500 sq. ft. to 2200
sq. ft. and range anywhere from
$1,450/mo to $2,000/mo. 10 units
were complete in Q3 & 35 units
were under construction.
Online Investor Logins for All
Investors
Our investors can now view their
account statements anytime,
24/7/365!
Biggest Acquisition Under
Agreement
DLP is under agreement to purchase
the Styles Portfolio, a 223 unit
portfolio of three communities in
Jacksonville and Tampa. This
would mark DLP’s biggest
acquisition to date!
New Websites
DLP continues to progress in
keeping all Dream Live Prosper
websites fresh and has recently
completed the new branding of
some of our websites including
DLPCapitalAdvisors.com and
DirectLendingPartner.com.
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
DLP Realty Welcomes New Team
Members
Richard Hauler
Coreen Lynch
John Patrick Sullivan
Alex Lopez
Vicky Kemmerer
DLP Property Management
Welcomes New Team Members
Alberto Ortiz
Meghan Jervi
Silvio Maria
DLP Builders Welcomes New
Team Members
John Miller
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
Team Member Spotlight
Bob Peterson Chief Financial Officer
When did you start working at DLP?
Early 2015
What do you find most challenging at DLP?
Keeping pace with our energetic leader.
What is your favorite part about working at DLP?
The positive spirit and like mindedness of the team here at DLP.
What advice do you have for future DLP employee candidates?
Ask for advice if you are unsure. Communicate with others and ask questions if you need to know how something
should be done. Take advantage of the trainings & learning opportunities; and engulf yourself into the culture. Expect
to work hard & be rewarded for doing so. We look for & reward people with drive; positive attitudes; and Grit.
- - On a more Personal Note - -
What is your favorite quote that you live by?
"Do unto others as you would have them do unto you."
What are the 3 top items on your "Bucket List"?
Visit the Holy Lands in Israel - Scuba diving on the Great Barrier Reef - Catching a 200+lb tuna
What hobbies and/or sports are you involved in?
Reining Horse & Reined Cow horse competition.
What have been the top (3) highlights of your life?
Marriage to my wife of 33 years, the births of my 3 children and the births of my 2 grandchildren.
Tell us (1) random fact about yourself.
I have 4 brothers and 4 sisters.
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
Investor Spotlight
Meet John & Mary Ellen Mirro
What factor helped you most in deciding to invest with us?
"I think the frustration of the market was #1, and looking for something different. When Don came to the
house and we heard about the investment opportunities, it was like it was almost too good to be true; how can we do
that and get that kind of return?? But after the way he explained it and had all the numbers, introduced and told us
about his other investors that basically carry to him to the "enth" decimal point to make sure he's right on. That gave
us the confidence and it didn't take us much longer after that meeting for us to decide that this was the place to do it."
How has investing with DLP changed your overall portfolio?
The change is dramatic. It's not like we were not previously knowledgeable about investing, we were quite
knowledgeable. But the marketplace of traditional investments, whether it be stocks, bonds or cd's or those sorts of
investment vehicles, they never fail to disappoint because they are subject to the varying market conditions and
fluctuations and all the fluidity. So we were looking for something that needed to be different than traditional
opportunities. The other thing is, I was always intrigued by the concept of real estate and never had a real way into it.
All my life I've been intrigued; real estate is a great investment. You have to know how they work and work really hard
and to do a flip you have to work really hard with your hands. Well, you don't have to do that with DLP. It's a passive
type of investment and you don't have to do the hard physical labor yourself.
What would you say to someone considering investing but is still on the fence?
"Do a lot of homework first. Check all the opportunities you can find and then do background checks. Talk to
investors like we did, at the dinners and I don't think you'll be on the fence too long. Between all the people that work
for Don and all investors that are with him and have been with him, you get a sense of confidence in what's going to
be the best thing that ever happened, as far as your investment, and what you've worked so far for." - Mary Ellen
"I would add to that, the way we like to look at it is that it is certainly true, in having been investing with Don,
it truly has changed our lives and changed how we approach every day. Life wasn't that bad before, but the
investment aspect of our life was nothing but endless frustration and a feeling of being exposed to risk. Investing now
is very productive, very profitable and it's very enjoyable. There is no stress. Our level of confidence of Don and DLP
couldn't be higher. We've done all the researching, fact checking and due diligence and we know Don and know the
company. You're not just investing in a great business, but you're investing in an individual in Don who has
tremendous integrity, he's a good family man, a local man. We know Don and have become good friends and
become part of the investment family. There is no transparency. Every quarter there are reports laid out and
produced where you see the fund financial performance. We get the opportunity to see properties ourselves if we'd
like which, sometimes we do. It's all very positive and leaves no doubt whatsoever. We don't have the stress anymore
that we once had. We have a chance to diversify our portfolio because we take advantage of the different kinds of
investments.
We feel totally secure with what we're doing...Don Wenner will never let us down." - John
View the Mirro's testimonial in its entirety by visiting www.DLPCapitalAdvisors.com by
clicking on "Testimonials"
DLP Capital Advisors | 701 W. Broad St., Suite 200, Bethlehem, PA 18018 | dlpcapitaladvisors.com
Management
DLP Capital Advisors, LLC
701 W. Broad St., Suite 200
Bethlehem, PA 18018
www.dlpcapitaladvisors.com
Contact Info
Don Wenner, CEO
Office: (610) 488-2375
Direct: (484) 542-2868
Upcoming Events
Investor Information Dinner
The Palencia Club
St. Augustine, FL
Thursday, November 10th at 6:30pm
Register online at www.DLPCapitalEvent.com
or call
(610) 488-2310