GMS-LOC Investor Opportunity
The Future of Midwestern Modular Manufacturing
George Modular Solutions (GMS) and the Minneapolis Manufacturing Plant was the brainchild of Devean George, a well-known local developer. His idea was for an innovative solution to his development projects, that would also positively impact his hometown of Northern Minneapolis by providing housing and jobs to the local community.
This Modular Manufacturing Facility will build components for commercial building projects that will innovate the construction process and help solve the nation-wide affordable housing crisis. With Projects already on order throughout the Midwest and Canada (Homes, Apartments, Hotels, Offices, etc.), this facility will create living space modules, building products and components in a controlled factory environment – sheltered from the open-air environment. These components will then be hauled to project sites for reassembly, helping to reduce costs, decrease construction time and improve quality.
It’s a nearly $40M dollar project with overwhelming support from the City of Minneapolis, The Mayor’s Office; The State of Minnesota and local philanthropies eager to upgrade the city’s reputation, following the George Floyd protests. With government expedites and funding from New Market Tax Credits this facility will be an integral part of the cities resolve and position as the future hub for a revolution in building and construction innovation.
The Future of Midwestern Modular Manufacturing
This Modular Manufacturing Facility located in Minneapolis will build components for commercial building projects throughout the Midwest and Canada (Homes, Apartments, Offices, Hotels, etc.). Building products and components are manufactured in a controlled factory environment. These components will then be hauled to project sites for reassembly, helping to reduce costs, decrease construction time and improve quality.
The Future of Midwestern Modular Manufacturing
This Modular Manufacturing Facility located in Minneapolis will build components for commercial building projects throughout the Midwest and Canada (Homes, Apartments, Offices, Hotels, etc.). Building products and components are manufactured in a controlled factory environment. These components will then be hauled to project sites for reassembly, helping to reduce costs, decrease construction time and improve quality.
It’s a nearly $40M dollar project funded by new market tax credits with overwhelming support from the City of Minneapolis, The Mayor’s Office and The State of Minnesota.
This plant will create 300+ high paying jobs ($31+/hr) in an underserved community in North Minneapolis within its first three years of operation.
This project will provide support to individuals that encounter challenges in life, assisting with a new career path and opportunities for growth in the construction industry. It will be a transformational development for North Minneapolis, the Midwest and Canada by producing jobs, eliminating barriers to construction, reducing greenhouse emissions, and being great stewards of the community(s).
It’s a nearly $40M dollar project funded by new market tax credits with overwhelming support from the City of Minneapolis, The Mayor’s Office and The State of Minnesota.
This plant will create 300+ high paying jobs ($31+/hr) in an underserved community in North Minneapolis within its first three years of operation. This project will provide support to individuals that encounter challenges in life, assisting with a new career path and opportunities for growth in the construction industry. It will be a transformational development for North Minneapolis, the Midwest and Canada by producing jobs, eliminating barriers to construction, reducing greenhouse emissions, and being great stewards of the community(s).
Benefits of Steel Modular Construction
• Ability to Design Taller Buildings and Add Density
• Speed to Market – 30% to 50% Reduction in Construction Time
• Consistent Quality – Manufacture in Climate Controlled Environment
• Less Disruption – Shorter and Quieter Worksites
• Healthier Work Environment
How Investors Can Participate?
This nearly $40MM dollar New Market Tax Credit Project is fully funded. No equity assistance is required.
Where investment opportunity exists is in providing funds in the range of $2MM to $6MM for securing a line of credit (LOC) with terms and conditions prearranged with a Family Office (High Net Worth Investors Fund). The LOC Lender will give GMS a rolling line of credit to be used on the factory project as well as future developments (which the factory produces building materials for).
The Line of Credit is important during Year 2, as the project accomplishes milestones and waits for government funds to arrive (see Year 2 Proforma). The LOC prevents any possible layoffs while waiting for government funds and ensures smooth operations as there’s an abundant pipeline of orders (see Pipeline section below). This LOC helps with continuity of operations to maintain relationships with customers, suppliers and trained employees.
The LOC amount will be 4 times the dollars held in a “hold only account” owned only by the investor, that no one else can access. Investors Funds will be held in the account for no less than 12 months and no more than 18 months for underwriting purposes (the seasoning period). These are on paper only funds (never to be touched or spent). These funds will sit in the “hold only account” owned and controlled by the investor.
The amount to be used in the underwriting process for the line of credit is a range of $2MM to $6MM.
Ownership position in cashflows of the factory depend on the liquid dollar amount verified. While funds are sitting in the “hold only account” they earn the investor an 8 percent interest rate. After the underwriting period is concluded, the funds are returned to the investor by the bank.
The Investor(s) will have the following ownership of the net cash flows from the factory:
5% for $2MM (Estimated range of $500k - $2.6MM from years 3-5)
8% for $3MM (Estimated range of $800k - $4.16MM from years 3-5)
10% for $4MM (Estimated range of $1MM - $5.2MM from years 3-5)
12% for $5MM (Estimated range of $1.2MM - $6.2MM from years 3-5)
15% for $6MM (Estimated range of $1.5MM - $7.8MM from years 3-5)
Operation:
Our Facility (Commencing January 2024):
In January 2024, George Modular was positioned to acquire an 83,000 sq. ft. facility in the heart ofNorth Minneapolis, MN. This facility is earmarked for a transformation into a state-of-the-art manufacturing plant, reflecting our commitment to innovation and growth.
Our People (February 2024 to January 2025):
From February 2024 to January 2025, we aim to onboard 166 new employees. Our partnership with trade unions extends beyond employment, emphasising the enhancement of the On-The-JobTraining (OJT) program and providing educational opportunities. This underscores our commitment to skill development and community enrichment.
Our Product (Begins January 2025):
Commencing January 2025, our steel volumetric modular facility begins ramping up to full production. Engineered for efficiency and strength, our modules present a cutting-edge solution,contributing to the creation of modern and resilient building projects, marking significant strides in the evolution of construction solutions.
Story Behind GMS
In 2019, a study on modular manufacturing, conducted in collaboration with the Northside Job Creation Team (NJCT) and the University of Minnesota's Carlson School of Management, provided crucial insights. This research emphasised that when situated in urban cores, modular manufacturing has the potential to offer living-wage employment opportunities to the community while addressing the housing crisis. Expanding upon the findings of the 2019 study, the George Modular Solutions project is committed to bolstering the community by offering manufacturing and construction opportunities to individuals who are frequently marginalized or excluded from such opportunities.
In this pursuit, we honor the legacy of "Paying it Forward," empowering communities and paving the way for a brighter future.
We actively promote community participation in the construction of homes for the community, pledging to bring about profound change in North Minneapolis and across the entire state of Minnesota. GMS is committed to showcasing the advantages of modular construction, which include speed, quality, and cost-effectiveness. Achieving rapid time-to-market is essential for meeting the pressing needs of affordable housing, and we will accomplish this through our state-of-the-art facility. Our strategic location ensures that our team members have the convenience of easy access through public transportation, an extensive interstate network, railroad access, and pedestrian-friendly infrastructure, enhancing our efficiency and accessibility for all stakeholders involved.
Pro-Forma
Year 1
Critical Details:
• Construction Phase
• Majority of expenses are:
- Build out & construction
- Sales & Marketing
- Engineering
• Ramp up toward manufacturing operations
Year 2
Critical Details:
• Average 1.4 modules/day
• Important Year for Line of
Credit
The Line of Credit is important
during this time (as the project
accomplishes milestones and
waits for government funds to
arrive)
The Line of Credit prevents any
possible layoffs while waiting
for government funds.
It helps with continuity of
operations to maintain
relationships with customers,
suppliers and trained
employees.
Year 3
Critical Details:
• Year of Profits:
- Projected 10M+
• Working only 1 shift.
• Increasing sales per quarter.
• Fully trained & experienced work-force by year's end.
• Steady operations with increasing efficiencies.
Year 4
Critical Details:
• Critical Mass.
• 2nd Work Shift Begins.
• Fully trained work-force assisting new trainees.
• Increasing sales per quarter.
• Growing deliveries of finished products.
• Improving operations with increasing efficiencies & profits.
• Profits Projected $25M+.
Year 5
Critical Details:
• Fully Operational.
• 2 consistent work shifts.
• Steady sales growth.
• Growing deliveries of finished products.
• Max operational efficiencies & profits.
• Profits Projected $52M+.
Once GMS has established a track record; client base; and reputation for providing value. New Market Expansion will Commence.
The Future of Midwestern Modular Manufacturing
The investment opportunity that exists is in securement of a line of credit with terms and conditions prearranged. The LOC Lender will give GMS a rolling line of credit for the factory project as well as future developments (in which the factory produces the building materials). The LOC amount will be 4 times the dollars held in escrow.
The Future of Midwestern Modular Manufacturing
The investment opportunity that exists is in securement of a line of credit with terms and conditions prearranged. The LOC Lender will give GMS a rolling line of credit for the factory project as well as future developments (in which the factory produces the building materials). The LOC amount will be 4 times the dollars held in escrow.
1. Range of Investment:
A. $2M - $6M – For underwriting of LOC
2. Investment Returns:
A. $2,000,000 = 5% of net profits (See Year by Year Pro Forma Profits)
B. $3,000,000 = 8% of net profits (See Year by Year Pro Forma Profits)
C. $4,000,000 = 10% of net profits (See Year by Year Pro Forma Profits)
D. $5,000,000 = 12% of net profits (See Year by Year Pro Forma Profits)
E. $6,000,000 = 15% of net profits (See Year by Year Pro Forma Profits)
Investor funds will be held in a hold only account for no less than 12 months and no more than 18 months. These are on paper only funds (never to be touched or spent). Funds will season for 12-18 months for underwriting purposes for the LOC.
NOTE: While funds are sitting in the account they earn the investor an 8 percent interest including all holding costs (to be paid monthly to the investor).
1. Range of Investment:
A. $2M - $6M – For underwriting of LOC
2. Investment Returns:
A. $2,000,000 = 5% of net profits (See Year by Year Pro Forma Profits)
B. $3,000,000 = 8% of net profits (See Year by Year Pro Forma Profits)
C. $4,000,000 = 10% of net profits (See Year by Year Pro Forma Profits)
D. $5,000,000 = 12% of net profits (See Year by Year Pro Forma Profits)
E. $6,000,000 = 15% of net profits (See Year by Year Pro Forma Profits)
Investor funds will be held in a hold only account for no less than 12 months and no more than 18 months. These are on paper only funds (never to be touched or spent). Funds will season for 12-18 months for underwriting purposes for the LOC.
NOTE: While funds are sitting in the account they earn the investor an 8 percent interest including all holding costs (to be paid monthly to the investor).
Why This Factory Will Succeed! • Pipeline of Orders:
• All George Group North Local Projects • currently totaling nearly 1000 living units.
• All City of Minneapolis Public Housing Projects - no less than 100 lots at a time.
• All United Properties developments within the 600 mile service radius of the factory (United is an arm of the multi-billion dollar Pohlad Group).
• State of Minnesota Public Housing - $10-$20M Worth of Projects Annually
Marriot Properties Corporate Projects within 600 mile service radius.
• Veterans Administration – Midwestern Housing for Vets.
• Large Developer out of St. Louis.
• Large Developer out of Ohio.
• Several Minneapolis Developers.
90% of all needs for these development projects will be manufactured by this plant.
All of these organizations have provided or will provide letters of support for the work to be done by this factory
Project Pipeline:
Upper Harbor Terminal-Multifamily:
• Developers–United Properties/George Group North
• Project Scope–312 Living Units (600 Modular Units)
• Timing–Production January 2025–November 2025
• Value-$39.7M
The Miller-Multifamily:
• Developers–New Africa CDC
• Project Scope–91 Living Units (233 Modular Units)
• Timing–Production December 2025–March 2026
• Value-$15.4M
MPHA–Scattered Site:
• Developers-Minneapolis Public Housing Authority
• Project Scope–55 Living Units (165 Modular Units)
• Timing–Production April 2026–June 2026
• Value-$10.9M
What’s the Next Step?
1. Provide Confirmation of Funds (either A or B):
A. Provide financial statement(s) showing available funds(bank statement, credit line, etc.).
B. Letter from accountant or attorney certifying the investor(s) has liquid funds available.
2. Sign partnership agreement documents.
3. Move funds into designated Hold Only Account.
4. Periodic updates as underwriting and project proceed.
Start Making a Positive Impact Today!
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