TARGET EQUITY MULTIPLE
TARGET IRR
MINIMUM INVESTMENT
NOW
ACCEPTING NEW PARTNERS
Photographs are for conceptual purposes only. Existing and completed construction on the subject site is not expressed or implied.
No Fees !
Kona Development Partners (the Manager) will not charge the numerous fees typically associated with a private equity investment. These fees add-up quickly, do not advance the project, and can adversely affect investment returns. In addition, since these fees are not tied to the Manager's performance, they create a direct conflict between the Investors and Manager's interests when charged. The Manager will profit in the same manner as the investors, from its prorata share of cash distributions based on equity owned by the Manager; and only after Investors have received their initial capital contributions. An investment truly alongside the developer with protection of Investors principal a priority.
FAQs
This is an opportunity for individual accredited investors to make a passive investment into the Fund. An investment into the Fund represents an early equity stake in the entire The Kona Estates at Opihihali project; a 324 acre luxury residential development on the Kona Coast of Hawaii. You are investing alongside of and shoulder-to-shoulder with the developer, not a middleman or fund-to-fund position. Benefits are being able to fully take advantage of long-term capital gains, favorable taxation, and depreciation.
There is also a clear advantage for Active Investors interested in Direct Ownership of Real Estate within the development at this time. Investors will not only receive the prorata share of equity associated with their capital contribution, but also the opportunity to purchase a homesite/home at starting prices prior to the public Pre-Sale offering.
Key Deal Points
- Your Investment is Immediately Backed by Free & Clear Real Estate - The acquisition of the 324 acres of oceanfront property has already been completed using private equity funds raised in Fund I.
- No Leverage is being used for Infrastructure or Acquisition – The Manager has been patient in its pursuit of this project, tactful in structuring the offer, and successful in its negotiation of favorable acquisition terms. As a result, the Manager does not anticipate needing to use senior debt to finance the infrastructure. The acquisition has already been completed and the 324 acre asset is unencumbered.
- International Demand & Notoriety – The allure of Hawaii and its popularity stretches the globe. Simply put, it’s a bucket list item for most everyone to visit Hawaii. Its geographical position is ideal for relatively easy access from the entire Pacific Rim. More than 10MM people visit per year, spend $16B per year, and those figures are increasing 5% per year on average; it’s inevitable that demand in the Hawaiian real estate market will continue to increase while availability continues to decrease.
- Exotic Tropical Island with US Market Security & Legal System Certainty – Although there are many exotic tropical island destinations around the world that affluent people could invest in, call home, and/or have a vacation home, the unstable market conditions and uncertain legal systems of foreign island nations create high levels of risk for such investments. However, Hawaii has a long proven real estate market that has continually appreciated and always emerged from economic downturns. Combined with the security and certainty of the US legal system, Hawaii real estate stands above all other exotic tropical island destination investments.
- Dependency upon Debt Mitigated and the Requirement of a Large-Scale Exit Event Eliminated; while Upside Potential is Preserved – The Fund will not depend on large-scale senior debt to complete acquisition, large-scale refinance debt during the investment cycle, or a large institutional purchase event to exit (all of these scenario are very common with most CRE private equity deals). Due to the disciplined selection of property and favorable acquisition terms negotiated, the Fund will be able to complete infrastructure, acquisition, and amenities construction through this current offering of equity that will NOT dilute first round investors. This capital structure in combination with the unrivaled Upside Potential and High Returns often realized in ground-up Development projects (versus value-add, core, and core-plus profiles) is a highly attractive proposition.
- Sponsor/Manager/Developer takes No Fees from the Fund – The Manager will not charge any acquisition, disposition, asset/fund management, financing, property management, or construction management fees. In addition, the Manager will not begin receiving its prorata share of distributions until 100% of investors initial capital investment has been returned. When we say you are investing alongside, shoulder-to-shoulder with the Sponsor/Manager and interests are aligned, we are serious!
- Sponsor/Manager/Developer Track Record – With a specific concentration in destination real estate, the Sponsor/Manager/Developer has a track record that accounts for nearly $1B in real estate sales via development, value-add, and opportunistic project profiles.
- Rolling Exit & Deal Flexibility – Distributable cash is created, and the deal is exited over the investment cycle with each single-family residence or estate homesite sale. The deal does not depend on institutional capital markets during operations or a large institutional buyer for an exit event. The Manager can control the pace of the project, guard against temporary downturns, and take advantage of market surges over the investment cycle. This type of flexibility puts the Fund in the best possible position to achieve projected returns while mitigating risk associated with market fluctuation.
Accredited Investors that want a portion of their portfolio positioned to potentially realize higher returns while having the added security of ownership in a real estate asset. This will be a passive investment that frees you from the hassles, many of the risks, and all the liability of an active real estate investment, while allowing you to take advantage of the taxation and depreciation benefits of a real estate.
Also, Active Real Estate Investors whom want to leverage the Matching Funds Real Estate Credit Certificate and secure a homesite/home at starting prices prior to the public Pre-Sale offering.
We continue to make progress and will soon update you on some exciting developments including the commencement of site work on the property and the completion of the conceptual design of the resort clubhouse.
But in this update, we thought it would be nice to recap our achievements thus far that were realized leading up to and during the A-Class Pre Development Round of funding.
- In 2018 the principals began research on the subject property and engaged with the representatives of the selling entities.
- After additional research and general feasibility study the principals’ negotiated terms and conditions and executed an LOI to purchase with the sellers.
- The principals hired a land planning consultant, engineering firm, and archeological experts which would become the first members of our on-island development team. A more intensive feasibility study and due diligence was conducted.
- With favorable outcomes on all reports and after a deep analysis, the principals executed a PSA with each of the two sellers in 2019.
- The management entity and Fund I were created, and the Fund was registered with the SEC who approved its Form D in late 2019.
- The on-island development team was expanded to include land planner, engineer, surveyor, biologist, archeologist, and community relations director.
- Although the COVID crisis began to severely affect the flow of incoming investor capital in early 2020, our investor relations and marketing team pressed forward and made respectable gains while most business retracted, remained stagnant, or ceased operations altogether.
- The creation and release of our Matching Funds Real Estate Credit Certificate was a great success.
- In 2021 we significantly increased the rate at which we were raising capital and reclaimed time lost during the most difficult period of the COVID crisis.
- Our architect completed and we release conceptual design of the secure gate house entryway, retail outlets, and welcome center.
- We fully completed acquisition of our 324 acres nearly one-year ahead of the contract terms.
- We hired our future Real Estate Broker of Record and Sales Director, Tom Horvath.
- Funds were earmarked for our commercial water well construction in 2022
- An initial grubbing and grading (site work) permit was applied for and obtained. This work began in February 2022.
- After funding and closing the A-Class round, we transitioned to our new investor portal.
- Working closely with our securities law firm, we established The Kona Estates Fund II, LLC, registered the company with the SEC, and received our Form D Exemption allowing us to enter 2022 with a B-Class Equity Offering, our Primary Round of Funding.
Several of our A-Class Fund I investors have already taken positions in Fund II as well. New investors are coming to us with the understanding that our offering and capital structure provide an excellent refuge from the current hyper-inflation occurring in the market today.
We thank our current investors for their partnership and encourage those prospective investors that have been following our progress to Schedule a Call and take the next step.
Yes, Schedule a Call, receive the protected area password, and Create an Account in the Investor Portal for 24/7 access to the Private Placement Memorandum (PPM), Operating Agreement, Subscription Documents, Investor Suitability Questionnaire, and the Sponsor/Manager/Developer Track Record. You will also begin receiving information about the investment opportunity via our email updates and have access to a Principal of the Fund and/or the Senior Investor Relations Consultant to address any unanswered questions.
After investing, the Investor Portal becomes the place to receive account statements, progress updates, monitor investment performance, receive your annual K-1, provide and/or update information on where to receive distributions, and ongoing communication from Kona Development Partners.
Yes. This is a Regulation D Rule 506(c) offering available to Accredited Investors only.
What is an Accredited Investor? In the context of a natural person, an accredited investor includes anyone who:
- earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
- has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold based on joint income for the years during which the person was married and based on individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
- any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
- any entity in which all the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, enough knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
We have focused on destination oceanfront real estate almost exclusively for 40 years. From identifying and securing property for ground-up development to executing the highly specialized sales and marketing programs necessary for the project’s success; this is what we do, this is what we know.
Hawaii has international appeal and notoriety. Its breathtaking scenery, abundant resources, beautiful culture, and perfect weather continually attract investors and new residents from around the globe. It’s 10MM visitors, spending $16B per year helps fuel the real estate investment market as well. Hawaii has the highest median home price of any state at $618K, low housing supply, and obviously minimal land for continued development. When considering its limited habitable areas, protected zones, and that it’s the 7th smallest US state; it’s easy to see that supply and demand will continue to favor those in a position to profit from Hawaii real estate.
As for the Kona Coast specifically, it’s the last remaining area in Hawaii where luxury, privacy, and exclusivity can be brought to market at sale prices that will appeal to a large market segment. The Kona Estates at Opihihali will offer real estate buyers’ estate homesites, with luxury custom homes, and unobstructed panoramic views of the Pacific, in an exclusive community at very competitive price points.
Yes! And most of these developments are sold-out or selling the last of their real estate inventory at very high price points. The few developments that are midstream in their sales cycles have current market values and/or recent comparable sales at price points significantly higher than the anticipated pre-sale price points of The Kona Estates. Although there is very little competition on the Kona Coast for a project with our level of exclusivity regardless of sale prices, this will give us a clear advantage in the marketplace once we begin real estate sales.
For a list of Comparable Developments on the Kona Coast. Please click below to Schedule a Call and gain access to the Comparables page.
We currently support personal accounts, investment accounts, retirement accounts, joint accounts, and certain entity accounts (Trusts, Limited Liability Companies, Limited Partnerships, C Corporations, and S Corporations). Please be aware the Accreditation requirement for an entity is greater than that for an individual. Please see FAQ “Am I an Accredited Investor?”. For more information on IRA accounts, see “Can I invest through my IRA?”.
Investing as an individual
Investing Jointly
Investing from a Retirement Account
Investing as an Entity
Invest from a Trust
Investing from a Brokerage Account
Yes, but it must be a Self-Directed IRA and with a custodian that has approved the Alternative Investment. If your IRA is not already Self-Directed and with a Trust type Custodian that allows Alternative Investments, we can recommend one for you and/or provide a list for your review. We can help guide you through the process of transferring an existing IRA or rolling-over most types of retirement accounts to a Self-Directed IRA with a Trust Custodian.
Once your Self-Directed IRA is set-up and funded, we can assist you through the remainder of the process by communicating directly with your Custodian representative.
Yes, and for all the right reasons! Both The Kona Estates Fund II, LLC (TKEF I) and REITs generate investment returns through real estate. However, we differ in the following ways.
An investment in TKEF II makes you a partner of the fund and a partial owner of the entire The Kona Estates at Opihihali 324-acre project. You are investing alongside the developer and positioned to fully take advantage of long-term capital gains, favorable taxation, and depreciation.
When investing in a REIT you will not have direct ownership of a real estate asset, the interests of the REIT manager and the REITs investors will not always be aligned, REIT management fees are often significant and not tied to performance, and you will likely be exposed to higher tax rates.
Compare & Contrast
The Kona Estates Fund I, LLC (TKEF I) vs. Other CRE Private Equity Funds vs. Typical REITs
The Manager anticipates quarterly distributions to begin within 2 years and for the initial capital investment (principal) to be returned within 18 months of the first distribution. The entire investment cycle is being projected over seven years. It is possible that distributions could occur earlier and that the total investment cycle could be shortened depending on the pace of development and real estate sales.
Yes, with a specific concentration in destination real estate, the Sponsor/Manager/Developer has a track record that accounts for nearly $1B in real estate sales. Schedule a Call then Create an Account after speaking with an Investor Relations Consultant for access to the Track Record on The Investment Details page and other pertinent documents that you will need to review prior to making an investment decision.
Early Investors have Class A interest that are Preferred. Current Investors are buying Class B interest that have the same rights as Class A interest. The Manager holds Class C interests and they are subordinate to Class A & B.
The Fund has completed acquisition with private equity funds. The Fund will not depend on refinance debt during the investment cycle or an institutional purchase event to exit (scenarios that are all very common with most CRE private equity deals). Due to the disciplined selection of property and favorable acquisition terms negotiated, the Fund will be able to complete infrastructure and amenities construction with funds from this current offering of equity.
No, your position in the fund is passive and therefore you are not required to be a party to any agreements or contracts. Manager is responsible for any recourse that may occur.
As a partner in the LLC/Fund that will own and develop the project, you will receive a K-1. A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return. A K-1 allows you to fully take advantage of the tax benefits and depreciation of a real estate investment, as opposed to a 1099 that allows the investment entity to reap those benefits rather than you, the individual investor.
Yes. As a result of being in a passive position, not having an active role in management, and the protections provided by our LLC and of the state of Delaware, we believe you are protected from any legal recourse. Schedule a Call and Create an Account to see PPM and Operating Agreement for more details.
You can get started as an investor by Creating an Account in our Investor Portal and making a Pledge. But first, you must Schedule a Call for a brief introduction to our fund and to receive The Investment Details page password.
There is direct communication between you the investor, the Fund Manager, and the Investor Relations department regarding the projects progress during the entire investment cycle. You will also have 24/7 access to your private Investor Portal where you will receive project updates, monitor investment performance, receive quarterly and annual statements, receive year-end K-1's, and be able to update your personal and financial information.
Yes. During the investment subscription process, foreign investors will be asked to complete a Foreign Investor Questionnaire.
To Learn More Contact Us!
- Receive the The Investment Details page password
- Connect with a Principal of the Fund or the Senior Investment Consultant
- Receive Project Updates
Site Map
Contact Us
310-424-9906
Speak to a Live Investor Relations Consultant.
9am-5pm PST Monday-Friday
Investments will be available to Accredited Investors only as described in SEC Rule 501. Offerings have not been approved by the SEC. This is not an offer to sell or a solicitation of any offer to buy any securities in any jurisdiction in which such offer or solicitation, purchase or sale would be unlawful under the securities or other laws of the jurisdiction. Offers are made only by prospectus or other offering materials. To obtain further information, you must complete our investor questionnaire and meet the suitability standards required by law. Plans are preliminary, pending approval, and subject to change without notice. Existing and completed construction on the subject site is not expressed or implied. The project is in a pre-entitlement stage. All photographs, images, and art are conceptual drafts and subject to change. Financial projections and targets are early estimates and subject to change. No guarantees are expressed or implied, there is a risk of loss of capital.
Certain information set forth in this website contains “forward-looking information”, including “future oriented financial information” and “financial outlook”, under applicable securities laws (collectively referred to herein as forward-looking statements). Except for statements of historical fact, information contained herein constitutes forward-looking statements and includes, but is not limited to, the (i) projected financial performance of the Company; (ii) completion of, and the use of proceeds from, the sale of the securities being offered hereunder; (iii) the expected development of the Company’s business, projects and developments; (iv) execution of the Company’s vision and growth strategy, including with respect to future property development and property sales; (v) sources and availability of third-party financing for the Company’s projects; (vi) completion of the Company’s projects that are currently underway, in development or otherwise under consideration; and (vii) future liquidity, working capital, and capital requirements. Forward-looking statements are provided to allow potential investors the opportunity to understand management’s beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment.
These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements.
Although forward-looking statements contained in this website are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.