EX1A-13 TST WTRS 8 v451953_ex13-2.htm EXHIBIT 13.2

Exhibit 13.2

 

HomeUnion Initial Public Offering November 2016

 

 

Copyright 2016 HomeUnion, All Rights Reserved Disclaimers 2 The information contained herein is provided solely for the purpose of acquainting the reader with HomeUnion Holdings, Inc.(The “company” or “we”) and its executive personnel, and to solicit any indication of interest in a public offering of securities by the company. It is not an offer to sell nor is it a solicitation of any offer to buy any securities and conveys no right, title or interest in the company or the products of its business activities. IMPORTANT: An offering statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become qualified. These securities may not be sold nor may offers be accepted prior to the time the offering statement becomes qualified. A cop y of the preliminary offering circular included in the offering statement can be accessed to this link: https:// www.sec.gov/Archives/edgar/data/1639241/000114420416128633/v450473_partiiandiii.htm . You can also obtain a copy of the preliminary offering circular by contacting our underwriter in the offering, B. Riley & Co., Attn: Michael Guzman, 111000 Santa Monica Blvd., Suite #800, Los Angeles, CA – 90025 or by calling 1 - 310 - 966 - 1444, fax 1 - 310 - 966 - 1448 or emailing to mguzman@brileyco.com . No money or other consideration is being solicited in connection this meeting and presentation, and if sent in response, will no t b e accepted. No offer to buy the securities can be accepted and no part of the purchase price can be received until an offering statement on Form 1 - A is qualified pursuant to R egulation A of the securities act of 1933, as amended, and any such offer may be withdrawn or revoked, without obligation or commitment of any k ind , at any time before notice of its acceptance given after the qualification date. Any person’s indication of interest in the meeting involves no obligation or commitment of any kind. The information contained herein is confidential and strictly proprietary. By accepting this document, the recipient agrees not to reproduce its contents nor disclose or distribute same to any person or entity without the expressed prior consent of the company. This presentation does not purpor t t o be all - inclusive or to contain all of the information you or any prospective investor may desire. You should make your own decision on whether this investment oppo rtu nity meets your investment objectives and risk tolerance level. Any person considering entering into a proposed transaction should seek its own independ ent financial and legal advice. Forward Looking Statements This presentation contains forward - looking statements that are based on our management’s belief and assumptions and on informati on currently available to our management. Although we believe that the expectations reflected in these forward - looking statements are reasonable, these state ments involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels or performance or achievements expressed or imp lied by these forward - looking statements. Accordingly, you should not place undue reliance on these statements. Forward - looking statements in this presentat ion include, but are not limited to, statements relating to our projected financial performance and forecast and our strategies to expand our operations, and our ability to successfully launch and market our products. These forward looking statements are subject to various risk factors that may cause actual results to differ m ate rially from our current expectations. We have no current intention of updating the forward - looking statements contained in this presentation except to the extent requ ired by law. You should therefore not rely on these forward - looking statements as representing our views as of any date subsequent to the date of this presentati on.

 

 

Initial Public Offering Transaction Summary Copyright 2016 HomeUnion, All Rights Reserved 3 Issuer HomeUnion, Inc. Listing / Ticker NASDAQ / HMU Raise Amount $25 million Over-Allotment 15% Price Range TBA Shares Offered TBA Use of Proceeds Support growth in business by scaling technology, investing in marketing and operational capablities, and funding working capital / debt repayment Bookrunner B. Riley & Co. Co-Manager Feltl and Company DSP Manager / Selling Group Member Fidelity Capital Markets Expected Pricing Date November 17, 2016

 

 

Management Team Copyright 2016 HomeUnion, All Rights Reserved 4 Don Ganguly - Chief Executive Officer – Nexgenix (co - founder, co - CEO), Equinox (founder, CEO) - acquired by i - flex/Oracle – Education: BS Engineering - IIT, MBA – Wharton – Housing Wire Vanguard Award Winner 2015 Vivek Pendharkar - Chief Development Officer – Hewlett - Packard, Intel, VuCast , Kasenna , Cypress Semi, Lara Networks – Education: BS Engineering - BITS Pilani , MS Engineering - Virginia Tech, SEP - Stanford GSB Geri Brewster – Chief Compliance and Risk Officer – Toyota Financial Services, Fleetgistics , GB Consulting, Voss Cook & Thiel – Education: BS Political Science and JD – West Virginia University Joe Barr, PhD - Chief Analytics Officer – ID Analytics, Lifelock , Chi Analytics, Pro Logic, ABN Amro – Education – BA, MS, PhD Mathematics – Haifa University, Florida State University and University of New Mexico Presenters Chiranjib Pal “CP” - Chief Financial Officer – Oracle, Equinox (founding team), SBI Capital Markets, Nexgenix , TCS – Education : BS Engineering, MBA – Indian Institute of Management

 

 

Copyright 2016 HomeUnion, All Rights Reserved 5 “If I had a way of buying a couple hundred thousand single - family homes and if I had a way of managing them, I would load - up on them.” - Warren Buffet (2012)

 

 

HomeUnion: “You Invest, We do the Rest” Copyright 2016 HomeUnion, All Rights Reserved 6 HomeUnion is a Real Estate Investment Marketplace that Offers Users an End - to - End Solution for Researching, Acquiring, Managing and Tracking Their Curated Real Estate Portfolios in a Trusted and Hands - Free Manner SELECT ACQUIRE MANAGE SELL • Preference Based • Risk Analysis • Curated Properties • Right Bid • Inspection • Insurance • Financing • Renovation • Prequalified Renters • Maintenance • Revenue Mgmt . • Market Research • Trade Investment Property on HomeUnion

 

 

Key Investment Highlights Copyright 2016 HomeUnion, All Rights Reserved 7 ▪ 666 rental properties acquired, $76 million in real estate value transacted and $51 million in assets under management nationwide since inception (as of Sep. 2016) ▪ Average of 2.1 properties transacted and $238,000 invested per user through the platform ▪ Approximately $40 million of capital invested to date in building out the HomeUnion platform ▪ Significant automation intelligence throughout the entire user experience ▪ Unique underwriting model leveraging Big Data analytics and local market employees ▪ Real estate licenses in 13 states, Mortgage broker licenses in 13 states ▪ Sustainable lead in building performance track - record ▪ Only solution in the marketplace with end - to - end, turnkey functionality covering every aspect of rental property sourcing, acquisition and management ▪ Users own the title to the underlying real estate, unlike REITs and Mutual Funds ▪ Recommendation engine matches assets on the platform to unique user preferences ▪ Advanced reporting tools for significantly streamlined property and tax management ▪ Approximately $54 billion rental market TAM primed for disruption ▪ Growing demand for rental properties with additional 13 million rental households projected by 2030 ▪ Acquisition and rental model validated by the likes of Colony Capital and Blackstone ▪ Low - cost financing available for residential real estate investors ▪ Multiple revenue sources: transaction fees, real estate and mortgage brokerage fees , recurring revenue from assets under management ▪ Growth in AUM drives significant economies of scale in property management services ▪ $12 million of transaction bookings in Sep. alone, highest in Company history ▪ 263% year - over - year growth in closed transaction volume in 1H 2016 ▪ Anticipating cash - flow break - even in Q2 2018 Proven Business Model High Barriers to Entry Unique Value Proposition for Users Attractive Industry Dynamics Scalable Model & S trong Momentum

 

 

Scalable, Multi - Pronged Revenue Model Copyright 2016 HomeUnion, All Rights Reserved 8 Transaction Revenues Recurring Property Mgmt. Revenues ~ 5 - 6% of Transaction Value ~ 1% of AUM + Property Acquisition Fee Real Estate Brokerage Fee Mortgage Referral / Brokerage TRANSACTION & ASSET MANAGEMENT POTENTIAL FOR MULTIPLE INVESTMENTS ONGOING REFERRAL OPPORTUNITIES • Average User Today Purchases approximately 2.1 Properties on HU Platform • Recurring Revenue Increases Customer Value Over Time

 

 

Residential Real Estate Investing is Already a BIG BUSINESS Copyright 2016 HomeUnion, All Rights Reserved ANNUAL ASSET MANAGEMENT FEES ANNUAL TRANSACTION FEES $14 BILLION $40 BILLION MARKET SIZE $54 BILLION 9 TAM Sources : Investment properties: 23 Million 1 - 4 Units: NMHC. Annual Transactions: NAR Apartment Buildings: NMHC and CoStar Group, Inc. Annual Apartment Transactions: CoStar Group, Inc. 420,000 APARTMENT BUILDINGS 16,900 ANNUAL TRANSACTIONS MULTI - FAMILY HOMES ANNUAL TRANSACTIONS 1 MILLION SINGLE FAMILY 110 MILLION INVESTMENT PROPERTIES 18 MILLION + Several Drivers in Place to Expand Market Size in Coming Years ~ 70% ~ 30%

 

 

Lack of Data and Out - of - Market Investment Services Create Barriers to Investor Participation Copyright 2016 HomeUnion, All Rights Reserved National Property - Level Data • Renter Due Diligence • Property Maintenance • Market Intelligence • Eviction • Pricing • Risk Assessment • Est. Performance • Rental History • Due Diligence • Insurance • Inspection(s) • Loan Streamlined Process to Acquire Properties Trusted Options for Remote Management Efficient Sales Process for Investment • Pricing • Listing • Negotiations SUBOPTIMAL LOCAL INVESTMENTS + + + = 10 × × × × Lack of National Level Information, Analytics and Remotely Delivered Services Previously Limited Most Investors to Suboptimal Local Investments

 

 

HomeUnion’s Technology Powered Real Estate Investment Marketplace Copyright 2016 HomeUnion, All Rights Reserved Retail Investors High Net Worth Investors International Investors IRA Investors DEMAND SUPPLY Single Family Rentals Vacation Rentals Short Term Rentals Multi - Family Rentals SERVICES SERVICES Property Maintenance Revenue Management Portfolio Reporting Financial Analysis Asset Based Loans Conforming Loans IRA Loans Property Management Platform Lending Platform Property Selection, Acquisition & Trading Platform Supply Management Platform Investment Marketplace 11

 

 

Copyright 2016 HomeUnion, All Rights Reserved 12 Unique Underwriting Model Built on Big Data Analytics and Local Market HomeUnion Employees Proprietary Investment Algorithms Local Infrastructure in Each Market 110,000,000 PROPERTIES (SFR) 200,000 NEIGHBORHOODS Curated Properties Over 50 Metrics Analyzed Price Rent Transactions Crime Schools Population Employers Credit Construction Income Local Experts Validate Data Science Operating in 18 Markets Drives Decisions on When and Where to Invest as well as Expected Yield and Growth • Perform Market Diligence • Negotiate Transactions • Conduct Property Appraisals • Verify Bid Ranges • Arrange for Inspections & Insurance • Manage Closing Process

 

 

HomeUnion Solution Tailors Property Portfolios to Align with Users’ Financial Goals Investor Identified Objectives Risk Investment Yield Growth Timeline $$$ 15 Years 30 Years Curated Property Portfolio Matched to Investor Objectives v t Analytics Evaluate Each Curated Property to Align with Specific Financial Goals Copyright 2016 HomeUnion, All Rights Reserved 13

 

 

All Homes Renovated to Meet HomeUnion Home Quality Standard Copyright 2016 HomeUnion, All Rights Reserved 14 Branded Quality Standard Minimizes Need for Ongoing Investment in the Property and Increases Renter Loyalty

 

 

Copyright 2016 HomeUnion, All Rights Reserved 15 End - to - End Property Management Service Enables Investors to Remain “Hands - Free” Advertising of rental property Screening of tenants based on ability to pay, past history and a background check Analysis of optimal rental payments using our proprietary rent valuation models Preparation and negotiation of lease Coordination and communication w ith tenants On - going repair, maintenance and upgrades of Collection of rental payments Lease renewals and rent escalations per market conditions High Quality Property Management Services Deliver Enhanced Returns for Investors

 

 

Users Receive Streamlined Reports and Market Research S ervices Copyright 2016 HomeUnion, All Rights Reserved 16 Real - Time Property Performance Analysis and Quarterly Market Research Reports Create Full Transparency on Investment Returns and Market Outlook

 

 

HomeUnion’s User Profile and Target Market Copyright 2016 HomeUnion, All Rights Reserved Power Elite: The wealthiest households in the US, living in the most exclusive neighborhoods. Market Size: 6.13%, 7.7 M Flourishing Families: Affluent, middle - aged families and couples earning prosperous incomes and living very comfortable, active lifestyles Market Size: 4.42%, 5.6 million Promising Families: Young couples with children in starter homes living child - centered lifestyles Market Size: 3.36%, 4.2 million Booming With Confidence: Prosperous, established couples in their peak earning years living in suburban homes Market Size: 5.34%, 6.7 million Suburban Style: Middle - aged, ethnically - mixed suburban families and couples earning upscale incomes Market Size: 5.02%, 6.3 million 71% of HomeUnion u sers fall within one of five segments that collectively account for 30 million (1 ) US households (1) Experian. HomeUnion User Segmentation 17 Power Elite 32% Flourishing Families 22% Promising Families 7% Suburban Style 5% Booming w Confidence 5% Other 29%

 

 

Lending Platform Enhances Full Service Offering for Investors Copyright 2016 HomeUnion, All Rights Reserved 18 LICENSED MORTGAGE BROKERS 13 States END TO END LENDING SERVICE Pre - Qualification t o Close of Escrow FULL SERVICE BROKERAGE Agency Loans Jumbo Loans IRA Account Loans Asset - Based Loans Lending Service Integrated into the Transaction Process with Mortgage Brokers Advising Investors to Ensure Financing Options Meet Investment Objectives

 

 

Strong Trends in Transaction Volumes Copyright 2016 HomeUnion, All Rights Reserved 19 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 Q3-2016 Quarterly Transaction Volume Bookings Closings • $76 million of total transaction volume closed on the HomeUnion platform since inception • Over 84% of booked transactions ultimately close, generally with a two to three month closing cycle

 

 

~95% of Property Acquisitions on Platform Retained as Recurring Management Contracts Copyright 2016 HomeUnion, All Rights Reserved 20 • $51 million in asset under management as of Q3 2016 derived from 441 properties • Expecting significant economies of scale in property management costs as the Company continues to scale 0 50 100 150 200 250 300 350 400 450 500 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 Q3-2016 Properties Under Management Assets Under Management AUM Properties Under Management

 

 

Historical Financial Overview Copyright 2016 HomeUnion, All Rights Reserved 21 • Targeting cash flow break - even in Q2 2018 ($ in thousands) 2015 2016 2014 2015 Closed Transaction Volume 4,620 16,800 4,410 17,710 Assets Under Management 6,070 36,480 2,730 18,970 ($ in thousands) 2015 2016 2014 2015 Transaction Revenues $142 $924 $306 $1,051 Asset Management Revenues 12 287 6 128 Investor Concessions -- (204) -- -- Total Revenue 154 1,007 312 1,179 Operating Expenses 5,340 10,377 5,289 15,181 Operating Loss (5,186) (9,370) (4,977) (14,002) Interest Expense, net (25) (70) (6) (29) Income Tax Provision -- -- (5) (4) Net Loss ($5,211) ($9,440) ($4,988) ($14,035) For the Six Months Ended June 30th, For the Six Months Ended June 30th, For the Year Ended December 31st, For the Year Ended December 31st,

 

 

Revenue Growth Strategy Copyright 2016 HomeUnion, All Rights Reserved 22 Expand Marketing Channels (i.e. Radio, Direct Mail, Online) Expand Locations for Sourcing Properties Offer Additional Multifamily Assets Outreach to International Investors

 

 

Key Investment Highlights Copyright 2016 HomeUnion, All Rights Reserved 23 ▪ 666 rental properties acquired, $76 million in real estate value transacted and $51 million in assets under management nationwide since inception (as of Sep. 2016) ▪ Average of 2.1 properties transacted and $238,000 invested per user through the platform ▪ Approximately $40 million of capital invested to date in building out the HomeUnion platform ▪ Significant automation intelligence throughout the entire user experience ▪ Unique underwriting model leveraging Big Data analytics and local market employees ▪ Real estate licenses in 13 states, Mortgage broker licenses in 13 states ▪ Sustainable lead in building performance track - record ▪ Only solution in the marketplace with end - to - end, turnkey functionality covering every aspect of rental property sourcing, acquisition and management ▪ Users own the title to the underlying real estate, unlike REITs and Mutual Funds ▪ Recommendation engine matches assets on the platform to unique user preferences ▪ Advanced reporting tools for significantly streamlined property and tax management ▪ Approximately $54 billion rental market TAM primed for disruption ▪ Growing demand for rental properties with additional 13 million rental households projected by 2030 ▪ Acquisition and rental model validated by the likes of Colony Capital and Blackstone ▪ Low - cost financing available for residential real estate investors ▪ Multiple revenue sources: transaction fees, real estate and mortgage brokerage fees , recurring revenue from assets under management ▪ Growth in AUM drives significant economies of scale in property management services ▪ $12 million of transaction bookings in Sep. alone, highest in Company history ▪ 263% year - over - year growth in closed transaction volume in 1H 2016 ▪ Anticipating cash - flow break - even in Q2 2018 Proven Business Model High Barriers to Entry Unique Value Proposition for Users Attractive Industry Dynamics Scalable Model & S trong Momentum