The Opportunity

Turning One Property Into Two

12% Annual Interest | 6% Minimum Return | 12-Month Term | Secured by Real Estate

We’re buying a property in Lebanon for $205,000, splitting the oversized 0.27-acre lot into two parcels, selling the existing home, and building a new home on the second parcel.

The opportunity exists because the sellers are up against a reverse-1031 deadline. They’ve already purchased their replacement property and need this one sold. After years of tenants, an eviction, and deferred maintenance, they’re ready to move on and sell as-is.

The property was originally listed on April 29 and fell out of contract twice. The most recent buyer attempted to renegotiate shortly before closing and ultimately walked. We made our offer after it returned to market June 28 and went under contract July 31 at a price that reflects both the property’s condition and the seller’s need for certainty.

Our plan is straightforward:

Buy one property → Create two parcels → Sell two homes

• Exit #1: Lightly repair the existing 1920 home and target a resale of approximately $240,000.

• Exit #2: Build a new 3-bedroom, 2-bath HiLine home on the second parcel and target a resale of approximately $380,000.

Rather than relying on market appreciation to create the return, the plan is to manufacture value through the partition, repairs, and new construction.

The Investment

We’re raising private debt to help fund the acquisition, improvements, construction, and holding costs.

What a $50,000 Loan Could Return

At the projected 12-month hold: $50,000 invested → $6,000 interest → $56,000 total repayment

If the loan is repaid in less than six months, the investor still receives the 6% minimum return.

For example, if we’re able to repay the loan after four months, a $50,000 investor would still receive $3,000 in interest, rather than the $2,000 earned over four months at a 12% annual rate.

The investor provides the capital. We handle the acquisition, partition, repairs, construction, financing, project management, and sale.

Key Dates

We've Done Each Piece Before

We’ve never executed this exact business plan before, but we've executed each piece of it.

Lot Partition @ Thornton Lake: We successfully completed the process of dividing an existing property into separate legal parcels.

Light-Touch Rehab & Resale @ 1020 16th Ave and others: Buying properties that need work, making the improvements necessary to make them financeable and marketable, and reselling them is a strategy we’ve used repeatedly.

HiLine New Construction @ Airport Lane: We’ve already worked with HiLine Homes to take a property through the site-preparation and new-construction process.

361 N 3rd St: This project combines those three strategies: Partition + Rehab + New Construction. The combination is new. The individual plays aren't.

Why We Like the Deal

We don’t want the success of an investment to depend primarily on predicting where real estate prices will go next. We prefer opportunities where we have multiple ways to create value ourselves. At 361 N 3rd, there are three:

1. The Acquisition: We’re purchasing the property for $205,000 from a motivated seller who values certainty and timing.

2. The Partition: The existing 0.27-acre parcel is large enough to pursue a partition into two legal lots, creating a second buildable parcel from land already included in our purchase.

3. The Execution: We’ll make targeted repairs to the existing house rather than pursue a full remodel, then construct a new HiLine home on the second parcel.

The projected result is two separate saleable properties with combined target resale values of approximately:

Existing Home: $240,000
New Home: $380,000
Combined: $620,000

Business Plan

Phase 1: Create the Second Parcel & Sell the Existing Home

Our first objective is to complete the partition and sell the existing house. The planned process:

1. Meet with the City of Lebanon before closing to confirm zoning and the feasibility of a partition. — DONE

2.  Engage the surveyor and land-use consultant.

3. Submit the Type II partition application.

4. Complete any required easements, right-of-way work, or utility requirements.

5. Record the final plat with Linn County.

6. Complete targeted repairs to the existing home.

7. List and sell the existing home.

We’re targeting approximately three months for Phase 1.

The existing home isn’t intended to become a high-end remodel. The objective is to address the items necessary to make it lendable, presentable, and marketable, while avoiding improvements that are unlikely to produce a corresponding increase in value.

Target resale: $240,000

Phase 2: Build & Sell the New Home

Once the partition creates the second legal parcel, we’ll begin construction. We’ve engaged HiLine Homes under a fixed-price contract for their Plan 984.  The home will include:

• 3 bedrooms

• 2 bathrooms

• Just under 1,000 square feet

• Single-car garage

Our responsibilities outside HiLine’s base construction contract include site preparation, utilities, grading, driveway, appliances, landscaping, and final finishing. Once complete, we’ll list the new home for sale.

Target resale: $380,000

We are underwriting approximately 9 months for Phase 2, resulting in a total projected project duration of approximately 12 months.

Budget

How This Deal Could Go Wrong

Every real estate project has risks. The question isn’t whether risks exist; it’s whether we’ve identified the important ones and have a reasonable plan for dealing with them.

1. The Lot Split Is Delayed or Denied

This is the most important risk in the project. The business plan depends on successfully creating the second parcel.

How we’re addressing it:

• Pre-application meeting with the City completed before closing, confirming the proposed partition is feasible.

• Written confirmation rather than relying on a verbal opinion.

• Surveyor engaged from the beginning.

• City has quoted approximately four weeks; we’re underwriting eight.

• If the process moves materially beyond our underwriting, we’ll evaluate selling the property whole rather than allowing holding costs to accumulate indefinitely.

2. A Partition Delay Pushes Back Everything Else

The phases are sequential. We can’t begin construction on a parcel that doesn’t legally exist yet. A partition delay therefore affects both Phase 1 and the construction timeline.

How we’re addressing it:

• Partition timeline underwritten at approximately twice the City’s quoted timeline.

• HiLine knows the lot is still in process.

• Investor-note maturity includes additional time beyond the optimistic construction schedule.

3. The Existing House Has Hidden Problems

It’s a 1920 home. Older houses can reveal issues once work begins.

How we’re addressing it:

• Deliberately limited rehab scope.

• Contingency and reserves.

• The strategy doesn’t depend on producing a fully remodeled house or achieving a premium resale price.

4. New Construction Costs More or Takes Longer

Ground-up construction introduces weather, permitting, subcontractor, and material risks.

How we’re addressing it:

• Fixed-price HiLine contract for the base home.

• Our variable exposure is concentrated primarily in site preparation, finishing, and holding costs.

• Separate contingency for work outside the HiLine contract.

• Schedule designed around the expected construction window.

5. Lebanon’s Housing Market Weakens

We’re selling two homes in the same market, so a downturn could affect both exits.

How we’re addressing it:

• Resale values are based on current comparable sales rather than assumed appreciation.

• The two properties target different buyers and different price points.

• The existing home is expected to sell before the new home comes to market.

• Either property can potentially be held as a rental if selling conditions become unattractive.

6. A Buyer’s Financing Falls Apart

Two property sales create two opportunities for buyer financing to fail.

How we’re addressing it:

• Require lender pre-approval before accepting an offer.

• Build buyer and agent interest before listing.

• Maintain enough flexibility in our schedule so that a single failed closing doesn’t immediately create a maturity problem.

7. The Project Takes Longer Than Expected

Most of the risks above eventually become holding-cost risks.

How we’re addressing it:

• Holding costs are based on our padded timeline rather than our best-case timeline.

• Dedicated reserves are included in the capital structure.

• If a property isn’t selling on schedule, we’ll revisit pricing rather than simply waiting for the market to come to us.

Phase 1 Financials

Phase 2 Financials

Next Steps

Critical Dates

How To Invest In Phase 1

We are currently accepting investor notes for the first phase of the project. An additional capital round of approximately $162,000 is anticipated in roughly three months to fund Phase 2.

Reserve an Allocation

Let James or Lawrence know the amount you’d like to invest. We’ll confirm availability, prepare the promissory note for your review, and send the wiring instructions. No funds are sent until the note documents are complete.

The promissory note will have the following terms:

• Loan Amount: Minimum of $50,000

• Interest Rate: 12% annual, minimum of 6%

• Payments: A single payment shall be made on the date of resale on or before the expiration date.

• Loan Length: 1 year

• Deed of Trust Security: 361 N 3rd St, Lebanon OR

• Guarantors: James Furlo and Lawrence Potts

• City and State of Execution: Lebanon, OR 

Thank you for taking the time to view this investment offering