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500 N 3rd St,. LLC

Real Estate Investment For The Cannabis Industry (125,796 Sq. Ft.)
INVEST

61dd06hh

Time left to invest

28% funded

min$25k

max$1070k

funding goal 

Reg CF

exemption used 

$2,500,000

pre money valuation 

$250.00

min investment 

$7,000

amount raised 

8

investors 


Security Type
Revenue Participation Rights
Return Multiple: 3X
($1,000 invested to return $3,000)
Revenue Split: 50%
(50% of gross revenues to be paid until 3X)

Pitch

Who are we

500 N 3rd St., LLC is a real estate holding company who is actively seeking investors for our 125,797 square foot building, formerly a textile mill which is intended to be repurposed as the real estate facility for legal medical marijuana grower(s) and is located at 500 N 3rd St. Reading PA 19601.  

 

500 N 3rd St has low debt but still needs your investment to achieve their goals of providing the largest premium indoor grow space on the east coast.

 

500 N 3rd St., LLC set up a legal real estate holding company that intends to lease space to a medical marijuana grower/processor.  This allows you to legally invest in our company and profit from the growing trends of a legal marijuana business in Pennsylvania.

 

According to ArcView Market Research, the medical marijuana market in Pennsylvania will become one of the largest in the country, with sales expected to reach $980 million by 2020, according to Washington, D.C.-based New Frontier.

 

The new Medical Marijuana Program legalizes indoor cultivation and fabrication of medical marijuana products, which opens new business opportunities and revenue streams.

 

500 N 3RD ST addresses new entrants and small business needs for indoor cultivation space with a 125,796 sq. ft. property in Reading, Pennsylvania.

 

Combining our passion for the industry and a strong background in real estate we intend to become the largest medical marijuana grow real estate developer on the East Coast.

 

Source: http://www.thecannabist.co/2016/06/22/pennsylvania-medical-marijuana-business/56703/

 

Problem

Until recently the possession and use of medical marijuana were illegal, leaving thousands of patients without treatment alternatives. On April 17, 2016, Pennsylvania joins the other states and signs into law the new Medical Marijuana Program and makes medical marijuana legal.

 

The Program will provide access to medical marijuana available as pills, oil, topical applications, tinctures for patients with 17 medical conditions. Pennsylvania has the broadest set of laws and most comprehensive list of approved medical conditions for the first round in a medical marijuana program in any state.  It is also expected that in 2018 the Pennsylvania Department of Health with further loosen regulations and may include flower (bud) and Pennsylvania is expected to have a full Adult Use marijuana program in 2 to 3 years.

 

As part of the implementation process, Pennsylvania’s Department of Health awarded 12 licenses to grow medical marijuana in warehouses, in secure indoor growing facilities. It is expected that 13 more licenses will be awarded in 2018. It is also expected that full adult use will be passed in 2 to 3 more years in Pennsylvania, furthering the need for large warehouse space. 

 

The state law requires the marijuana be grown indoors and includes electronic locking systems, electronic surveillance and other features deemed required by the Department of Health.

 

Since estimated upfront costs for growers and processors are expected to reach $10 million many new entrants and small businesses will consider renting a growing facility space instead of building their own.

Solution

The regulations in Pennsylvania are prohibitive in allowing entry-level investors to profit from legal medical marijuana in Pennsylvania. 500 N 3rd St., LLC’s solution is to allow accredited and entry-level investors the opportunity to invest by having you invest in our real estate.   As a real estate investment, any investor can buy units of our 125,796 square foot building and look to profit from the success of the company and medical marijuana in Pennsylvania. 

 

This is legal at the State and Federal level.  This is the first and maybe the only opportunity of its kind in Pennsylvania.

 

500 N 3rd St is ready to be brought to the required standards and to be leased to growers and processors. To ensure proper rehabilitation and operations we partner with consultants and growers from other states with extensive experience in the industry.

 

500 N 3RD ST is located in a strategic zone, favorable for approval. Officials from the local municipality state they will support the development of our business looking forward to the increase in job creation and the tax revenue it will generate.

 

You can be a part of our success!

 

 

The location is acceptable for any type of Cannabis operator.

 

 

Achievement & Traction

 

Peter has succeeded in everything he does and wishes to bring is hard work to help you get a great return on your investment.  His success includes the following. Top 10 in the Nation with Internet Sales with Honda, Top Real Estate Agent in every category, Trustee with RPAC, 11 Years’ experience helping investors.

 

We already have had offers to purchase and building a space at 500 N 3rd St. 

 

We already have prospective tenants awaiting license approvals.   He has also worked with 2 companies that won a license in Pennsylvania Reboot Integrative Wellness Center, and Keystone Shops.  We will still continue to seek short-term, or long-term tenants that meet the needs of 500 N 3rd St., LLC investors. We had already had offers to lease “as-is” for $1,070,000 yearly Triple-Net, and purchase offers. 

 

We also had got offers for partial building short-term leases out of the target market.  All have been refused already, 500 N 3rd St., LLC intends to find a better fit to the business model to pay back investors quickly.

 

Market

 

It is anticipated that our market will grow by 100% in 2018 due to increase license approvals.  Pennsylvania also is anticipated to go full adult recreation in the next 3 to 5 years could increase market demand by several thousand percent, as the Pennsylvania market with our population is over 2x Colorado.  (Colorado 5.5M Vs Pennsylvania 12.7M)  Many online poles have stated Pennsylvania residents are at 52% to 92% for some form of legalization indicating a positive opinion of our chances of business being successful in Pennsylvania.

 

It is also expected that in 2018 the Pennsylvania Department of Health with further loosen regulations and may include flower (bud) and Pennsylvania is expected to have a full Adult Use marijuana program in 2 to 3 years.  Ian Laird, the co-founder of New Leaf Data Services LLC, said, “The evolution or rollback of prohibition is inevitable. It’s not like it stopped anyone from getting it.”  The market is expected to triple by 2021 this may include legalization federally creating 150,000 new jobs and seeing more revenue than the NLF.

https://www.inquisitr.com/4667846/the-legal-cannabis-market-is-predicted-to-triple-in-size-by-2021/

Competition

 

Many other competitors do exist. But, there is a shortage of good locations, because not any location could be used by a Medical Marijuana grower/processor in Pennsylvania.   We do have the advantage of our facility a 125,796 square foot building, if we were operational today we would have the largest medical marijuana facility on the east coast.  

 

Medical Marijuana and the future of Adult Use legalization in Pennsylvania only make 500 N 3rd St’s building more valuable over time.

 

 Also, there is room for many medical marijuana grower/processors in Pennsylvania and our property is strategically located in an area already agreeable to medical marijuana.  Although our target market is a medical marijuana grower/processor if we needed to we can lease out of the market segment to return a profit to the company and investors.

 

Most of our competitors will not have a large facility or a premium location. We do.

 

 

Business Model

 

We will lease the facility on a triple-net lease  (where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three "nets") on the property in addition to any normal fees that are expected under the agreement (rent, utilities, etc.)

 

.

 

We intend to follow the best practices to ensure our tenants remain successful by understanding the medical marijuana regulations in Pennsylvania.  We also are ensured that the local municipality will approve growers permit at our location.

 

We have also partners and consulted with many active successful medical marijuana based companies to help ensure successful operations. In short, so much due diligence and constant education on the next best practice will help users remain successful.

 

The model for success is very simple.  We only will make a total of 4,280 units available at $250 for a total of $1,070,000. That amount will allow us to make repairs, manage, pay taxes, pay utilities, and maintain the property.  We still expect to have short-term leases if we cannot obtain a lease with a grower processor in 2018.  

 

WHY INVEST IN US?

 

With the capital investment, we anticipate that will be able to generate good revenues by leasing the space for $30 dollars a square foot to a legal medical marijuana grower/processor.  

125,796 square foot x $30 = $3,773,880 per year.

This yearly income will allow us to pay back investors quickly.  

 

Each revenue share purchased at $250 is expected to pay 3X return so the return to investors. 

 

Our revenue share agreement states a minimum of 50% of the yearly revenues is to be paid to investors. This makes it possible to pay investors back in 2 years or less if/when full occupancy. 

 

The total amount maximum we are allowing for investors is 4,280 units or $1,070,000.  Fully leased to a medical marijuana grower /processor we expect a $3,773,880 per year income investors receive $1,886,940 half of the first yearly income and $1,323,060 the second year for a total return on investment of $3,210,000.

 

If/when realized, 3X is a good return.

 

Your investment is also protected 500 N 3rd St can’t sell or lease the building without paying investors back per the revenue share agreement.  If we do decide to sell, you would get a lump sum payment, not yearly return based on the lease income.

 

Team

Peter B Gustis- CEO

Peter was born into a military family which has had long time ownership and still is owners of a family farm and his experience in his parent’s floral business.  He has been an Entrepreneur starting his own company Gustis Snacks which was sold in 2012. He has spent most of his life in professional sales.  He has managed the internet sales departments for Honda and Acura. During that time he turned a virtually unknown department into a sale group that reached top 10 sales numbers in the nation, his first year in management. He then started his own self-employment for the last 11 years in a successful real estate practice, in which he has achieved top sales in every sales category for single agent his last year with Keller Williams Realty.  He is a licensed Insurance Producer.  He has also been involved in many production and manufacturing plants locally, one of which was Craft Maid Kitchens.  He has also been a long-term member of the US Army Reserves.  As an expert, in the real estate, a marketing and sales professional, as well as being a proven successful manager we are sure 500 N 3rd St., LLC is in good hands. With the diverse experience in the commercial real estate the target market, a legal medical marijuana business in Reading Pennsylvania expects to be a good fit. 

 

Kenneth Petrini – CFO / Attorney

Ken is a graduate of the University of Scranton and completed his Doctor of Law in 1982 at The University of Notre Dame Law School.   He had worked 21 years as the VP Tax for Air Products.  He then focused on his own self-employment as a corporate attorney for the past 34 years and is currently focused on this self-employment legal practice,  and 500 N 3rd St., LLC.

 

James V. Bourarouy – Tomasi & Company, LP – CPA

Jim has 20 years of extensive experience in auditing, financial accounting, business consulting, and tax compliance and planning. He graduated from Albright College with a Bachelor’s of Science degree in Accounting.  His experience includes working with clients in industries such as manufacturing/distribution, construction, financial services, professional services, retail, and non-profit. His specialties include employee benefit plan audits and mergers/acquisitions.

He is a member of both the American Institute of Certified Public Accountants (AICPA) and the Pennsylvania Institute of Certified Public Accountants (PICPA).  Jim is actively involved with his church, where he served as Treasurer and an Audit Committee member. He has also served on the Finance Committee of Reading Berks Emergency Shelter and as Treasurer of his homeowners’ association.

 

Use of Funds

 

 

500 N 3rd St., LLC Evaluation and Statements from CEO

 

The spring and summer of 2017 was the start of a busy season for Pennsylvania and the real estate industry. 

 

500 N 3rd St., LLC had planned to lease the building to a single tenant and had a few offered they declined.

 

One offer was for $1,000,000 cash and was open to negotiation.  That offer was declined.

 

Another offer was for $10 per square foot per year starting and $50,000 non-refundable deposit. That was declined, too.

 

Our pre-investor estimate for our primary asset at 500 N 3rd St. is a modest $2,500,000.

 

The initial medical marijuana grower we didn’t accept leasing at $10 per square foot per year would place an evaluation of $12,489,600 Triple net at 10% Cap Rate.

 

500 N 3rd St., LLC intends to surpass this amount with your investment we intend to secure a tenant that will lease at $30 per square foot per year triple net.

 

At $30 per square foot and keeping management fees at a low side the evaluation for this property is $37,235,800.

 

This doesn’t include any additional tenants or company expansion.

 

Your investment is secured by the building.

 

Updates


Q&A


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Nicholas Shook
Nicholas Shook - Investor4 weeks ago
Do you have a grower locked in to use your real estate (like a LOI)? What is the licensing status of said grower?
Peter B Gustis
Peter B Gustis - Issuer    
All Organic Medical Marijuana has a number of experienced growers that are planning to work with them. That is the primary company we are looking to partner with to lease 500 N 3rd St. We are however open to other companies and partnerships. The most profitable partnership possible will create the fastest return for 500 N 3rd St and the investors. All Organic Medical Marijuana is awaiting the 2nd round permits expecting to be this year.

4 weeks ago
Joseph Potts
Joseph Potts - Investora month ago
What happens after the investor receives his 3X investment? Does he continue to receive cash each year (month) after that?
Peter B Gustis
Peter B Gustis - Issuer    
This type of investment is known as revenue share participation. It was done this way to protect entry level investors. Many fear losing money. We are registered with the security and exchange commission so your shares pay out a fixed amount which is up to 3x return on investment. Unlike other investments, We can't sell or make money without paying out the return expected per the agreement. Which is limited to the 3 times return. After that the agreement is over but, I can assure you its very hard to find a bank, or other investment which will be secured with real estate to protect you, and pay 3 times what you put invest in 1 to 4 year (the expected return period).

a month ago
Wayne Matheus
Wayne Matheus - Investor2 months ago
What is your stock symbol
Peter B Gustis
Peter B Gustis - Issuer    
Crowdfunding investments with SEC don't typically have Stock Symbols. We are a start up.

2 months ago

Documents

Form C and Offering Statement View Download
Evaluation Statement from CEO View Download
Frequently Asked Questions View Download
Reviewed Financials View Download

Other Disclosures

Read the Form C filed with the SEC for other important disclosures, like financial statements, Directors, Officers, shareholders with more than 20% of voting rights, and more
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