Black Swan Advisors - Black Swan Liquidity Fund 1


ARIZONA MARICOPA CALIFORNIA LOS ANGELES ORANGE RIVERSIDE SAN BERNARDINO SAN DIEGO VENTURA NEVADA CLARK OREGON WASHINGTON PROPRIETARY HOMEBUILDER REPORTS CURRENT HOUSING MARKET RESEARCH BUSINESS PLAN OBJECTIVES CAPITALIZATION ORGANIZATION MEMBERSHIP DISCLOSURE MANAGEMENT
	Business Plan Objectives Black Swan Liquidity Fund 1(BSLF 1) has been organized to invest in/take advantage of distressed pricing of real estate assets in the late 2008/2009 worldwide liquidity crisis. This distressed pricing reflects a substantial re pricing of risk around the globe. As the central banks insert liquidity to avoid a market meltdown, they are setting the stage for some dramatic inflation in the years ahead, which will benefit real estate. BSLF 1 has determined that a smaller residential asset strategy is the safest at this time, with increases in the scale of investments as a general economic recovery becomes clearer. BSLF 1 will keep its maximum investment at $5 million, with most investments in the $1 to $ 2 million range. BSLF 1 feels that this asset range will allow it to achieve early returns of 30% + at the asset level. There will be no land investments unless there is an opportunity for changed land use without significant time or market risk. To carry out this strategy BSLF 1 will be buying assets from financial institutions, both defaulted notes and REO. Early investments will be made in only the 5 western states of California, Arizona, Nevada, Oregon, and Washington, staying in the high job growth submarkets. This substantial distressed pricing will last for only a limited time, as new investors will enter the market and drive up prices. Therefore, BSLF 1 intends to stay fully invested for only approximately 3 years, and then disinvest so that the fund substantially completes its strategy by the end of the 5th year. BSLF 1 feels that the substantial financial distress of late 2008 will result in significant government intervention, especially from the newly elected Democratic congress and Presidency. Thus far over $2 Trillion in worldwide liquidity has been added to help the financial sector in particular. As has been the pattern over the last 50 years, Democrats are expected to use the US housing industry to help revive the economy as a whole. They will likely do this through direct aid to homeowners, provide incentives to buy new homes, and add more assistance to the mortgage market. All of these activities should return liquidity to the residential real estate market and provide a substantial lift to asset prices. Given the need to revive the US economy quickly, programs can be expected to yield results by mid 2009.