Joint Venture Investment Opportunity

I. Executive Overview

A. Project Identity

Walnut Hills / Cedar Knob Nexus is a 153-acre controlled mountain basin development located on the Highlands–Cashiers Plateau in Western North Carolina. The property spans from a protected interior basin at approximately 2,600 feet in elevation to the summit of Cedar Knob at approximately 4,100 feet. This topography creates a rare, naturally segmented environment that supports development, conservation, privacy, and long-term destination value simultaneously.

The project is designed as a hybrid destination resort, combining high-end mountain real estate, retained income-producing hospitality assets, conservation-protected land, and a production-oriented creative campus. It is not a speculative land play and not a sell-out subdivision. It is a long-hold, value-compounding asset.

B. Investment Thesis

The core investment thesis is simple:

• The project is entering at a predevelopment inflection point, where infrastructure, entitlements, and planning are largely complete, but the market has not yet priced in finished resort value.
• Capital deployed at this stage captures value created by construction efficiency, scarcity, and repositioning rather than relying on appreciation alone.
• The strategy intentionally combines cash-flow floor assets, capital-generating resale assets, and non-replicable conservation assets to reduce downside risk while preserving significant upside.
• The long-term objective is to transition Walnut Hills from land + buildings into a recognized destination resort and cultural asset, with valuation characteristics that exceed conventional mountain real estate.

C. Why This Is Not a Typical Vacation Rental Project

• Core assets are retained, not sold
• Rental income is structured to support DSCR-based refinancing
• Adjacent parcel acquisition is planned to create a true resort core
• Conservation acreage is treated as a value driver, not excess land
• Creative production and intellectual property generate demand rather than speculative rent assumptions

The result is an asset that behaves more like a resort campus and less like a collection of short-term rentals.

II. Joint Venture Structure

A. Capital Structure

The joint venture includes a strategic capital partner contributing $1.5 million at the project level. This capital is structured to earn a 12% simple annual return, accrued and paid at the time of refinance or syndication.

The anticipated repayment window is 12 to 24 months, aligned with the completion of early construction phases and income stabilization.

B. Equity Participation

In addition to the capital contribution, the JV partner acquires a 10% equity interest in the project for $65,000. This equity represents permanent ownership and is not extinguished upon repayment of capital.

This structure intentionally separates capital protection from long-term upside participation.

C. Optional Legacy Estate Lot

The JV partner has the option to acquire Lot 32 at its current tax-assessed value of $66,790. This lot is reserved for personal family use and is excluded from rental income, resale programs, and DSCR calculations.

D. Capital Priority

• Principal and accrued return are repaid before equity distributions
• Capital functions as bridge-style protection within the JV
• Equity upside remains intact after repayment

III. Development Strategy

A. Sell-to-Fund / Retain-to-Scale Model

The development strategy intentionally uses selective resale to fund long-term retained assets. Five signature homes are built and sold to generate reinvestment capital. All hospitality-oriented assets are retained for income and valuation. Profits are recycled internally rather than distributed. This approach reduces dilution, accelerates development, and strengthens the balance sheet.

B. Phasing Logic

• Phase 1: Build and sell five signature sustainable homes
• Phase 2: Construct rental cottages and ridgetop lodges to establish DSCR income
• Phase 3: Refinance or syndicate to repay JV capital
• Phase 4: Acquire adjacent parcels and develop resort core amenities
• Phase 5: Long-term stabilization and expansion

IV. Signature Resale Homes (Capital Engine)

Five Sustainable Hempcrete Hybrid Earthship homes will be constructed on Lots 3, 6, 11, 24, and 37. These homes are not entry-level product. They are designed as state-of-the-art, high-performance residences featuring:

• Hempcrete hybrid construction
• Earthship-inspired energy and thermal systems
• Custom architecture
• Long-term durability and efficiency

Total resale build area is approximately 14,000 square feet. Although underwriting assumes conservative sale pricing, these homes are expected to command significantly higher prices due to quality, sustainability, and association with the resort.

Projected net profit is approximately $225 per square foot, or ~$3.15 million total, fully reinvested into the project.

V. Retained Income-Producing Assets

VI. Income & DSCR Analysis

Under conservative assumptions:

• Cottage income: ~$312,000 annually
• Lodge income: ~$832,000 annually

Total underwritten rental income is approximately $1.14 million per year, excluding production fees and event income. Using a conservative 7.5%–8.5% cap rate, this supports a DSCR-based valuation floor of approximately $13–15 million.

VII. Construction Economics & Margin

The project benefits from vertical integration, material sourcing, and workshop-assisted construction.

• Bottom-end construction basis: ~$600 per square foot
• Realistic replacement value: ~$900 per square foot
• High-side production-grade value: ~$1,200 per square foot
• Comparable plateau builds are currently reaching ~$1,500 per square foot

These assumptions reinforce conservative underwriting while preserving meaningful upside.

VIII. Asset Valuation Framework

Lodges (6,000 sq ft each)

Cottages (1,050 sq ft each)

Land & Infrastructure

• Roads, wells, utilities, septic approvals
• Conservative value: ~$3.5–4.5M

IX. Conservation & Scarcity Assets

A. 22 Acres of Greenspace

These acres are permanently dedicated to open space, trails, buffers, and viewsheds. They increase privacy, exclusivity, and long-term appeal of the resort while enhancing valuation of all built assets.

B. Cedar Knob – 111-Acre S2G2 Mountain (“The Gem”)

This mountain is conservation-grade land with a rare ecological rating. It is not monetized through development but provides scarcity, legacy value, and landmark positioning.

X. Resort Expansion Acquisition Strategy

The project includes a defined strategy to acquire adjacent parcels in order to:

• Create a centralized resort core
• Develop clubhouse, wellness, and event facilities
• Expand trail networks and guest circulation

This step transforms the project from premium rentals into a true destination resort.

XI. Intellectual Property & Cultural Value Engine

Creative production, film, music, and narrative-driven IP operate as economic demand generators, not speculative real estate value. The project positions the land as a biocultural destination, aligning conservation, storytelling, and creative output to elevate global recognition and long-term valuation.

XII. All-In Valuation Scenarios

• Conservative: ~$23–29M
• Realistic: ~$33–36M
• High-side: ~$45M+

XIII. Exit & Upside Pathways

• Refinance or syndication repays JV capital
• Equity retained long-term
• Cash flow, appreciation, and optional expansion

XIV. Closing Summary

Walnut Hills / Cedar Knob Nexus is designed as a long-term, destination-grade asset that combines income stability, capital efficiency, conservation, and cultural gravity. Early-stage participation captures value created by execution, scarcity, and repositioning rather than relying on market appreciation alone.

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