Retreat @ Lake Noire

Twenty tiny cabins all tricked out. On a lake. Unplugged.

Investor Guide
This developer is raising funds to build 20 cabins as a short-term stay retreat on a 15-acre site, in the City of Oakwood Texas - Lake Noire Retreat.  The project site is rural and just a short drive from four major cities. Construction on the project is underway and sustainable development practices including energy efficient features and solar power will be used. Investors will receive an 8% preferred return and a 60% profit share on project return with an anticipated refinancing or sale event in year five.
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About the Vision

We’re planning to build a retreat right outside Dallas, with 20 tiny luxury cabins on a wooded 15-acre site with a lake.

The Retreat at Lake Noire (“the Project”) located in Oakwood, Texas will be designed as luxury modern accommodations with cabins nestled along the banks of a private man-made lake called “Lake Noire.” The retreat will be the perfect getaway from the busyness of life while offering recreational activities on the lake and throughout the private/gated community. Sustainable features including community solar and groundwater wells are planned to serve each cabin as well.

The City of Oakwood, Texas is a serene town just an hour and twenty minutes south of Downtown Dallas. This small town offers the perfect location for a getaway retreat with its rolling hills and scenic greenery. Though far from city life, Oakwood still offers the conveniences necessary for a comfortable stay. This includes convenience stores, grocery stores, local restaurants, and taverns.

The 20 luxury tiny cabins will come in two floor plans, each designed with luxury, comfort and functionality in mind, and each including a small bathroom, a kitchenette, sleeping areas and a porch. Additionally, using a combination of energy efficient features, including solar power, spray foam insulation (R37-40), radiant roof barriers, energy efficient windows and 2 x 6 exterior framing envelope, the developer plans to reduce the average utility cost of short term rentals by roughly 75%. Each unit will be rented at an average nightly rate of $160 per night. This will allow complete affordability for travelers who are looking to escape city life and plug in to nature.

Fire pits are planned for the cabins, each of which will be fully equipped with hot water heaters, HVAC systems, pots, pans and linens. Community-wide amenities will include boating, kayaking and fishing on the existing three-acre lake (Lake Noire), private walking trails and a community recreational center for guests to enjoy. 

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About "The Noire"
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About the Project

The project site, located at 1548 US Highway 84 Oakwood, Texas, is a heavily-treed 14.88 acre site in a primarily rural area, right off the main highway of the City. There are four existing structures, one of which will be retained as a visitor’s center. No zoning or public hearings are necessary for the development to proceed.

The Company is planning to build two cabin types, one-story frame structures on concrete slab foundations, with a variety of materials in elevation and  pitched metal roofs.   
The Noire, a 144 square feet farmhouse style cabin, will have an open concept plan with windows that will allow residents to enjoy the great outdoors from the cabin’s interior. A loft space will provide a comfortable sleeping area for up to two guests. 

The Luxe, a 289 square feet modern A-Frame style cabin, will offer a private bedroom plus an open loft space to sleep up to four guests. The private porch area will offer additional space to enjoy the outdoors. 
It is estimated that each cabin will cost approximately $47,000 to build.

Nightly rental rates have been set based on a market analysis which compared similar developments around Texas, and are expected to average $155 per night for the Noire and $175 per night for the Luxe.  Rates will fluctuate with the seasons. The table below provides the rates of our three top competitors.

Location Weekday Rate Weekend Rate Average Rate
Getaway House $139/night $224/night $181.50/night
GlampingHub $173/night $197/night $185/night
Tiny Home Vacations $59/night $129/night $94/night

The property was purchased in the fall of 2021 by Lake Noire Legacy Holdings, LLC (the “Company”) and will be developed and managed by the Company. Total construction and development costs are expected to be around $2.04 million, with construction beginning in the first quarter of 2022 and ending in the second quarter of 2023.

The project team includes:

Developer. Scottie Smith  – Oakwood Legacy Holdings, LLC 
Construction management. Quincy Wright – My Wright Group 
Architect. RW Studio Design  
General Contractor. 903 Outdoor Services 
Title Company. Community National Title     
Solar Partner. Sunrun Solar Group 

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About the Change

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About the market

Oakwood, Texas is located 90 miles south of Dallas, Texas and is roughly a two-hour drive away from four of Texas’ major cities - Dallas, Waco, Houston and Fort Worth. Featuring rolling hills and home to a number of Post Oak Trees, this small yet serene town is close enough to a major city to make a weekend away exploring nature easily possible.

The rural cabin getaway market has continued to see a surge since the start of the Pandemic and based on industry trends, it is likely that it will continue to do so. According to Mashvisor, “In early October, my team took an in-depth look at the performance of Airbnb rentals across the U.S. market. By September, the short-term rentals industry was already in a recovery mode, at least at the national level. Airbnb data from more than 300 U.S. cities revealed a 13% increase in occupancy rate between March and September 2020. We were once again reminded of the key role of location in real estate ...”

Rural and coastal destinations are expected to remain as prime destinations during and after the pandemic ends. In the spring of  2020, with the onset of the pandemic, short-term rentals were badly impacted with significant declines in both occupancy rates and – consequently – rental income. The declines were most pronounced in larger cities most affected by the pandemic, such as Seattle, New York, Los Angeles, and others. However, by the fall of 2020  the market had begun to recover, driven by no end in sight to the pandemic. This highlights the resilience of the short-term rental market.

Locations off the beaten path are expected to remain popular, especially in the first two quarters of  2022. VRBO reports that 61% of US families are seeking to visit an outdoor destination rather than an urban one. Travelers are likely to continue to prefer lesser-known destinations to avoid crowds until the pandemic winds down. With each new Covid-19 variant, there are signs that this trend may continue well into the future.

It might come as a surprise but the average nightly rate of rural cabins actually increased during the Pandemic. While hosts initially decreased their nightly rates by almost 60% at the beginning of the pandemic, this changed in June 2020. Initially, with lower occupancy rates VBRO offerings increased in price, as landlords struggled  to keep their income steady. According to VRCO, the average nightly rate in the US reached its peak at $202.50 in July of 2020, but still continued to be higher for the rest of 2020 compared to 2019.

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About "the Luxe"
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About the developer

Scottie Smith II, is the developer and manager of the Project. Scottie is CEO of Scottie Smith & Associates (SSA), and a licensed broker, developer, author and entrepreneur based in Dallas, Texas.  He is a veteran in the real estate industry, with 15 years of experience, and has helped thousands of people nationwide through his sales and real estate development activities. Scottie has been featured on Black Enterprise, Fox News, Forbes and more as a real estate subject-matter expert. His recently released book, “From Decision to Close", provides a practical, no-nonsense guide to homeownership.Scottie’s journey in real estate began when he purchased his first home and rented spare rooms to friends during his freshman year of college. This sparked his interest. At 19 he got his real estate license. By the time he was 21, he had invested in multiple properties and had numerous tenants.

In 2011, Scottie founded SSA, a real estate brokerage, with just one other agent. The company has grown more than 200% yearly with new agents continuing to join the team making SSA one of the fastest growing independent real estate brokerages in Texas. He and his team of experts have brokered millions of dollars in sales helping people across the country experience the dream of homeownership.

Scottie also served as a Board Trustee for the Atlantic Housing Foundation for ten years, where he was a member of the Investment Committee helping to underwrite, review and approve more than $500 Million in affordable housing projects in several states. This includes the acquisition and renovation of 300 affordable units in Fort Worth, the redevelopment of 250 affordable housing units in Lewisville, and a 32-unit townhome development in South Dallas.

In addition to his thriving brokerage firm, Scottie provides training courses through Lone Star Real Estate Academy, a real estate school he founded in 2015. He also works with underserved entrepreneurs by creating the HUB Space, a non-profit formed to support minority-owned startups. Because of his commitment to the area, Mr. Smith has been appointed by City Councilman Adam Bazaldua to the South Dallas Area Planning Task force, where he has been tasked with creating a 20 year area development plan for South Dallas/Fair Park.

Scottie has been recognized by the National Association of Realtors Magazine as one of the Top 30 brokers under 30, and by the mayor of Denton, Texas as a leader in providing public housing. He was also presented with the Quest for Success Award, Entrepreneur of the Year Award in 2015 by the Dallas Black Chamber of Commerce, recognized and inducted into the Forbes Real Estate in 2018.  

Scottie has made a lifelong commitment to use his passion for real estate to provide an avenue that helps people in his community and will continue to keep his goal in the forefront. He is a graduate of the University of Notre Dame, a father of two and brother of twelve. 

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About the finances

Total acquisition and development costs of approximately $2.04 million will be financed with debt, sponsor equity and equity raised through this offering. Of the $1,295,000 in equity being raised, the developer is planning to contribute $205,000 in land and defer a portion of the developer fee. $250,000 is needed in pre-development costs.

The financing assumptions to purchase and develop the project are as follows:

Project costs  
Land + infrastructure $318,800
Direct construction costs $920,751
Indirect construction costs $56,129
Furnishing/equipment $43,200
Marketing $50,000
Reserves $506,077
Developer fee $83,516
General contingency $25,000
Fees + other $35,022
Total project costs $2,038.495
Sources  
Bank loan $743,500
Developer equity $205,000
Deferred developer fee $19,995
Small Change investors $1,070,000
Total sources $2,038,495

You can download a more detailed development budget here.

Gross annual cabin and activity rental income is expected to be approximately $980,000 in the first year of operations, climbing to approximately $1.5 million by the third year, resulting in net operating income of around $500,000.

In the fifth year of operations, the Company plans to refinance the project. You can download further detail on the operational business plan, cash flow and the impact of refinancing here.  

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Key deal points
  • Sustainable development.  Energy efficient features + solar power.
  • Short-term rentals.  Capitalizing on the increase in rural destination rentals.
  • Unplugged & off the grid.  Rural, peaceful and close to nature.
  • Close to major cities. Short drive to four major cities.
  • In progress.  Construction on the project is underway.
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About the offering

The Company is engaged in a Regulation Crowdfunding (Reg CF) offering (the “Offering”) to raise money to build and operate 20 cabins as a short-term stay retreat on a 15-acre site, in the City of Oakwood Texas.

We are trying to raise a maximum of $1,070,000, but we will move forward with the Project and use investor funds if we are able to raise at least $250,000 (the “Target Amount”). If we have not raised at least the Target Amount by April 30 2022, EST (the “Target Date”), we will terminate the Offering and return 100% of their money to anyone who has subscribed.

The minimum you can invest in the Offering is $1,000. Investments above $1,000 may be made in $500 increments (e.g., $1,500 or $2,000, but not $1,136). An investor may cancel his or her commitment up until 11:59 pm on April 28 2022 (i.e., two days before the Target Date). If we have raised at least the Target Amount we might decide to accept the funds and admit investors to the Company before the Target Date; in that case we will notify you and give you the right to cancel.

After we accept the funds and admit investors to the Company, whether on the Target Date or before, we will continue the Offering until we have raised the maximum amount.

Investments under Reg CF are offered by NSSC Funding Portal, LLC, a licensed funding portal. You can download the disclosure packet including Form C here, or view it as registered on the SEC website.

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About the project
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About Investor Return

Under the LLC Agreement, all distributions will be made in the following order of priority, after bank loans have been repaid:

  • First, the Available Cash shall be distributed to the Investor Members until they have received a non-compounding Preferred Return of 8% for the current year.
  • Second, the balance of the Available Cash, if any, shall be distributed to the Investor Members until they have received any shortfall in the Preferred Return for any prior year.
  • Third, the balance of the Available Cash, if any, shall be distributed to the Manager until they have received an asset management fee equal to 4% of the Net Operating Income annually.
  • Fourth, the balance of the Available Cash, if any, shall be distributed:
    • 60 % to the Investor Members; and
    • 40 % to Sponsor as a promoted interest.

Gross annual cabin and activity rental income is expected to be approximately $980,000 in the first year of operations, climbing to approximately $1.5 million by the third year, resulting in net operating income of around $500,000.

In the fifth year of operations, the Company plans to refinance the project. You can download further detail on the operational business plan, cash flow and the impact of refinancing here.

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About the risk

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. 

In making an investment decision, Investors must rely on their own examination of the Companies and the terms of this offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of this offering, nor does it pass upon the accuracy or completeness of any offering document or literature related to this offering. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

There are numerous risks to consider when making an investment such as this one and financial projections are just that - projections. Returns are not guaranteed. Conditions that may affect your investment include unforeseen construction costs, changes in market conditions, and potential disasters that are not covered by insurance. You can download a more expansive list of potential risks here.

COVID19 Disclosure.

To date COVID-19 has had a significant negative impact on the economy overall with regards to increased unemployment, reduced consumer and travel spending, and challenges to hospitality businesses such as hotels and restaurants. The rural redevelopment plan of the Company has not been hindered by COVID-19 but in fact has been reaffirmed by long-term expected changes in market demand. Because of the unprecedented nature of this 100-year event, the Company discloses here both positive and negative potentialities that may result. 

Negative effects 

  • Local Regulations may restrict or prohibit travel to or from other areas while Omicron variant of COVID-19 is studied
  • Restaurants and local amenities may be less available to potential renters encouraging them to stay at their permanent residence.. 
  • People may be less willing to travel by air to remote destinations. 
  • People may be concerned about rental accommodations being fully sanitized before their stay.

Positive effects 

  • Demand for rural real estate rentals has increased and may continue to do so. AirBnB reported a 25% increase in bookings for rural destinations in 2020 over 2019.
  • Demand for rural real estate has also increased and may lead to a higher exit sale price for the Property.
  • As people seek to isolate themselves from urban environments, demand for all types of rural accommodations has increased.
  • Many more people are working from home and may need more space than available in their current primary residence.
  • More responsible travel, such as sustainable travel and eco-tourism, is anticipated in 2021 as a response to Covid-19.
     
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Follow the change.