Investors and Colleagues,

This is a difficult environment for investors who rely on income from their investment or deposit accounts. Have you seen the interest rates banks are paying on CD’s or savings accounts? Last month, a number of large banks announced plans to start charging customers a fee just to maintain checking accounts.

Yields on 10-year treasuries are now below 2%, and if you’re investing in 5-year municipal bonds, you’re likely getting less than 1% on your money. So for investors who need just $50,000 in annual income, a balance of $2.5 million to $5 million is required to generate this kind of yield.

The low interest rates are no accident. The Federal Reserve is pushing interest rates lower intentionally – in an effort to force investors into more risky positions. The rationale is that if investors put money into corporate bonds, equities, or other high-yielding securities, the capital will help to stimulate the economy and help support the recovery.

A discussion of fed policy is beyond the scope of this letter today (but if you want to know my thoughts on this, shoot me an email or feel free to give me a call). Today, we’re going to talk about what Ashford Capital is doing to offer clients a better alternative for investment yield.

An Attractive “Preferred Rate Of Return”

Since we understand the need our clients have to generate income from their investments, Ashford Capital has constructed our programs to offer an attractive preferred rate of return for our investors.

This means that when you invest in an Ashford Capital deal, the clock immediately begins ticking and your interest starts accruing right away. We pay our investors a 15% annualized rate of return, regardless of the profit on the actual transaction.

Here’s how the deal works for a typical investor:

Let’s say you invest $100,000 in the Ivey Estates deal I mentioned a couple weeks ago. If you remember, our cost per lot is roughly $33k and our conservative expectation is to sell these lots in 12-14 months at $75k each.

For simplicity sake, let’s assume that we meet our goal in 12 months. As an investor, you would receive your payment from three sources:

• First, you would receive your initial $100k back

• Second, you would receive your 15% preferred rate of return ($15,000)

• Finally, you would receive 60% of the remaining revenue with Ashford Capital taking 40%. In this example, the profit sharing portion would be $40,846 (netting out all fees & expenses)

So in this case, the total gain on a $100k investment would be $55,846 ($15,000 from the preferred rate of return, plus the $40,846 profit split). That’s a 55.8% return in just 12 months!

Why Offer a Preferred Rate?

A number of investors have asked me why Ashford Capital would offer a preferred rate of return in addition to a profit split. After all, most investment firms would offer one or the other – but not both sources of income.

From my perspective, this arrangement makes perfect sense. When we set up this structure, I wanted to make sure that Ashford Capital’s interests were aligned with our clients. For our clients, the very best outcome is for us to buy and sell properties with a very attractive profit – in the shortest amount of time possible.

The preferred rate of return starts the clock ticking for us as a company. We realize that we’re on the hook the moment we receive your investment – and we want to offer you a profit as quickly as possible. So the preferred rate of return simply adds incentive for us to get deals done in a short period of time.

The profit split is obvious – we want to make money only when our customers make money. So we benefit when you as an investor makes money. If you aren’t successful, then we’re not going to do well. But if you realize a strong profit, we’re going to succeed alongside our investors.

In today’s low-yield environment, we think a 15% preferred rate of return is very competitive. When you add on the 60% profit split, we think the opportunity becomes even better!

I would love to sit down with you and discuss how we can help you generate yield – and strong returns from your investment capital. Please give me a call so we can schedule a time to grab some coffee or share lunch. I think you’ll be excited about the opportunities we have on the docket right now.

Wishing you every success,

Matt

Matthew J. Riedemann
Founder, President, & Managing Director

Ashford Capital Partners
678-231-4579
[email protected]

Investors and Colleagues,

Every now and then, an opportunity emerges with the potential to define a company – or change the course of an investor’s account…

Today, I want to introduce you to one particular deal that perfectly represents the investment approach that Ashford Capital stands for.

This model investment will give you a better picture for exactly what we look for when buying property, and for a short time, we are still accepting investors who want to participate in the Ivey Estates property in beautiful Cobb County, Georgia.

When searching for real estate opportunities in the Atlanta market, there are two variables that are crucial in deciding whether to invest or not:

1: Location

Of course we all know that location is the most important variable for real estate investment, but at Ashford Capital, we have perfected our location analysis down to a science.

When we look at the location of a property we have a proprietary method for analyzing the supply and demand metrics for real estate in the area, the employment opportunities for potential residents, reasonable price expectations for selling the property to a developer, and a timeline for when the investment opportunity will be completed and investors paid.

It’s a rigorous process, but one that has helped us to be involved with only the most promising locations in the growing Atlanta real estate market.

In the Atlanta real estate market, builders typically invest in projects when there is less than six months worth of inventory currently on the market. This ensures that when they are ready to sell the homes that are being built, the market demand for these new locations will be strong.

For the Ivey Estates development, our research indicates that there is a 5-month supply in the $225k to $325k price range – perfect for attracting builders to the market.

While we have confidence in our proprietary location analysis, it is helpful to note that a number of national builders including Beazer Homes, Ashton Woods, and John Wieland Homes are actively building out properties in the same area as our Ivey Estates project. In fact, John Wieland is developing three different locations within a 2 mile radius of our property!

2: Price

Our goal is to generate the very best returns for our investors – and since our interests are aligned with our investors, Ashford Capital makes the best profit when our investors are paid well.

For this reason, we’re only interested in purchasing properties at an extreme discount to “fair value.” When we are able to pick up attractive properties at a distressed price, our transactions are completed more quickly, at a higher rate of return for us and for our investors.

We have negotiated a price of $495,000 for the Ivey Estates property – and this price represents the cost for 15 lots. These are premium developed lots which already have access to utilities and are builder-ready.

Our “all-in” cost for this location is $33k per lot – representing a 65% discount to the price a developer paid for the same location just a short time ago. Because of our deep relationships with regional banks and the FDIC, we are typically able to buy properties at a tremendous discount.

With such a steeply discounted purchase, we are able to sell these lots to a builder – at an attractive price – and still make a very healthy return. For the Ivey Estate location, our conservative estimate is a selling price of $75,000 per lot to a builder in 12 – 14 months. Of course our target price is higher, but we want to set your expectations conservatively and if you are surprised, we want it to be a good surprise.

Reserving Slots for First-Time Investors

Because of the special nature of this model investment, I wanted to make sure that the Ivey Estates project is accessible to all of our investors. I’m particularly interested in opening this deal to first-time participants in an Ashford Capital offering.

At Ashford Capital, we understand that traditional investors may not be experienced when it comes to buying residential real estate property. Sometimes participating in a new investment concept is challenging and investors want to start small before allocating a larger portion of their capital down the road.

For this reason, we’ve reserved a few slots in this offering for first-time investors, and for investors with a smaller amount of capital. My hope is that by offering smaller investment opportunities in this model transaction, you will become comfortable with our investment process, and be more willing to discuss additional opportunities once you have recognized an attractive return on this property.

I should mention that with the Ivey Estates offering, you can even use capital from your IRA to invest – which carries its own tax benefits for you.

If you’re interested in participating in this model deal, I would ask you to do two things:

First, go to http://www.youtube.com/watch?v=sTkVCJ0QOns and watch our short video on this property. You can see an aerial picture of the location along with some of the proprietary location metrics that I have mentioned.

Second, give me a call so that we can set up a time to discuss this opportunity. We can sit down and discuss the specifics, you can get a copy of the offering document which details our preferred rate of return and profit sharing arrangement, and best of all it will give us a chance to catch up and discuss your financial future.

Wishing you every success,

Matt

Matthew J. Riedemann
Founder, President, & Managing Director
Ashford Capital Partners

678-231-4579
[email protected]

Think about it for a minute – and be honest with yourself… Are you a short-term trader or a long-term investor?

You might be surprised to hear me say that there’s not a right or a wrong answer to this question. Sure, there are advantages and disadvantages with each approach, but BOTH short-term traders and long-term investors have the potential to make great returns over time.

If you’ve had a discussion with your traditional money manager this month, chances are good that you have sat through the tried and true “in it for the long haul” speech. And for true long-term investors, this is an important concept to keep in mind.

Long-term investors can’t get worried about volatile swings in the market. After all, they’re in it for the long haul. When prices trade lower, it doesn’t matter. They weren’t planning on selling any time soon and in time they expect their positions to rebound.

The luxury of being a long-term investor is that you don’t have to worry about the day-to-day gyrations in the market. You simply have to wait patiently and allow for long-term growth trends to send the value of your investments higher. Of course the downside of being a long-term investor is that you don’t get to take advantage of the “buy-low, sell-high” opportunities in a volatile market.

Short-term traders can either love or hate markets like this. When things are moving rapidly (and in every different direction) there are plenty of chances for short-term traders to make a lot of money. But at the same time there are plenty of opportunities to rack up losses too.

If you’re a short-term trader, you know that the day-to-day action can be a grind. Short-term traders don’t have the luxury of sitting back and patiently watching. But of course a talented trader can make a much higher return buying cheap and selling dear.

The Key is Discipline

As with most business ventures, the key to success (whether investing for the long-term, or actively trading) is developing a disciplined approach. Long-term investors MUST have a rigorous process for identifying strong, valuable investments that they can stick with for years.

Without this detailed analysis, the long-term investor will undoubtedly pick sub-par investments and will ultimately earn a less-than competitive return. But with a rigorous process for identifying quality investments, and the patience to hold on to these investments through the long-term, a disciplined investor can expect to beat the market over time.

Discipline is just as important for short-term traders. Using risk management techniques, stop losses, proper position sizing, and reasonable profit targets ensures that a trader will keep his capital base intact and grind out profits quarter after quarter.

Once again, the key to success is building a disciplined approach – and then sticking with the rules throughout the turbulence.

Ashford Offers the Best of Both Approaches

At Ashford Capital, we incorporate some of the strengths from both long-term investors as well as short-term traders. Our goal is to buy residential real estate at the lowest possible price, and sell to developers at a significant profit.

From a short-term perspective, we’re acutely aware of the day-to-day market dynamics and how they affect real estate prices. When banks are in dire need of capital, we’re able to negotiate tremendous deals – buying distressed properties at fire sale prices. When the FDIC is saddled with a portfolio of illiquid properties, we’re willing to buy – but only at a significant discount.

Looking farther down the road, Ashford can afford to be patient, waiting for the very best opportunity to sell these properties to developers. Since we buy quality locations that will rebound in value quickly, we can be confident in the ultimate value of our locations and ride out a turbulent environment without hitting the panic button and selling.

Does your investment process have the discipline to ride through both good environments as well as rough periods? If not, why not?? In times like this, you owe it to yourself to have a carefully crafted plan and to manage your investments with the utmost care and diligence.

I would love to chat with you one-on-one and see if Ashford Capital can help you work to build a disciplined investment approach. Today’s environment offers tremendous opportunity – but you have to understand how to manage your risk and develop a long-term plan. Let’s have a conversation this week!

Wishing you every success,
Matt

Matthew J. Riedemann
Founder, President, & Managing Director
Ashford Capital Partners

678-231-4579
[email protected]