Three and a half years into a 24 month deal, and it's another 20% or I'm diluted

The structure you are describing is a standard rescue class, and it comes down to two things you can actually price.

First, the new money is buying a 12% preferred return standing ahead of $2.4m of existing equity on return of capital. So the question is not the headline rate. It is what the property has to sell for before the new class is fully paid and dollars start reaching the old class. Take the current land basis plus accrued fees plus the new raise plus the 12% compounding over your best guess of remaining timeline, then compare that to a defensible entitled pad value. If the gap is thin, the new money is the deal and the old units are an option.

Second, the dilution factor. 1.00 to 0.63 on non-participants only matters against a residual that exists. Run the same sale price through both branches: fund $15,000 and hold 1.00 plus the senior 12% strip, or fund nothing and hold 0.63 of whatever is left after the senior strip clears. Do it at three sale prices, including one where the rezone fails and the land trades as ag.

The assumption doing the most work is the remaining timeline. Utility moratoria vary by jurisdiction in how they are lifted and how long capacity expansions take, so get something in writing from the county or the sponsor's civil engineer rather than the sponsor's narrative.

Whether the amendment can subordinate your accrued pref depends on the consent provisions in your specific agreement and on how state LLC law treats that class of change, which differs by state. Have counsel read it.

The line that stands out to me is the reserve. Raw land with no income means every dollar of taxes, mowing, fencing and consultant invoices comes out of a pot that was sized for 24 months. You are at 42.

So ask for the forward budget month by month, not annually. If $15,000 pro rata across everyone is $480k and the annual carry is $150k, that new money is funding roughly three years of standing still. That is a completely different pitch from funding an entitlement push, and the sponsor should be able to show you which one it is on one page.

Trellis is asking the right thing. If the raise mostly funds carry, you are paying 12% preferred to somebody for the privilege of paying property taxes on land that may never rezone.

Before the math, I would want the sponsor's other deals. Portal sponsors rarely have one problem in isolation. Pull every offering they have listed on that platform and any other, then find investors in the older ones. Two calls usually tells you whether this is a county problem or a sponsor problem.

Specific asks I would put in one email and require written answers to:

How much of the original $2.4m went to fees and soft costs before closing.

What the asset management fee will be charged on after the new class comes in, original invested capital or total including new.

Who is subscribing to the new class, and whether the sponsor or its affiliates are taking any of it. If the sponsor is funding a chunk at 12% senior, they are lending to their own deal ahead of you, and that changes how you read the whole notice.

How many of the 40 or so existing investors have already committed. Undersubscribed rescue rounds tend to come back a second time on worse terms.

I built this exact table for a stalled land deal I looked at last year, so here is how I would lay yours out.

Call the current all-in basis $2.4m equity less fees, say $2.15m into the land and soft costs, plus roughly $190k of carry already spent. New raise at 20% is $480k. Senior class accrues 12%. If it takes three more years, the senior strip needs about $674k at exit before a dollar reaches the old units. Your accrued 8% on $75,000 is around $22k by now, assuming simple accrual and assuming it survives.

Now branch it at three sale prices.

Entitled pad sale at $4.2m: senior takes $674k, remaining $3.53m clears original capital and some pref. Funding gets you roughly 1.00 of that residual plus your share of the senior strip. Not funding gets you 0.63 of the residual. On my arithmetic the funding branch is worth something like $95k to $105k on $90k in, and the dilution branch is worth around $60k on $75k in.

Sale at $3.0m: senior clears, original capital comes back partially. Funding roughly returns your money. Dilution loses about a third.

Rezone fails, ag sale at $1.6m: senior clears, the old class gets close to nothing either way. Your extra $15,000 mostly comes back through the senior position, which is the only reason to fund.

So the honest framing is that you are being asked to buy into a small senior loan against land you already own a piece of. Price it as a new deal at today's basis with today's timeline. If you would not lend $15,000 at 12% against that land with no independent appraisal and no county timeline, the fact that you already have $75,000 in it is not a reason to.

The number that decides it is the entitled value, and nobody in your update letters has updated that in three years.

Windlass's table is fine, but the variable I would push on is the team. Three continuances is not a county problem, that is usually nobody working the room. Did this sponsor ever have a land use attorney and a municipal consultant on retainer, or did they file and wait? 1.5% a year on invested capital for three years of shorter and shorter update letters!

If they cannot name the person who has actually sat with the planning staff, the new $480k buys the same execution that produced the last three years.

I would not add money to a deal that has missed by twenty months and cannot tell me when the sewer hold lifts. Take the dilution.

Verity, that skips the part where the $15,000 goes in senior. Orchard's fresh dollar has better priority than his old dollars do, which is the one attractive thing in the notice.

What I would test is whether the senior really is senior. Ask whether the new class sits ahead of the sponsor's accrued and unpaid asset management fees, and ahead of any affiliate loans already on the books. I looked at a rescue round where the new money was described as first in the waterfall and the sponsor had $130k of deferred fees sitting above the entire equity stack in a different section. Same document, two different orders of operation.

Also worth comparing against your alternative use for $15,000. If you can buy a similar piece of ground yourself at today's price without a sponsor and without a moratorium, funding the call is the expensive version of that.

Two questions I would want answered before the deadline, and I would ask them in writing so the answers exist later.

What happens if the round is undersubscribed. Does the sponsor scale the plan down, come back for a second call, or sell the land as ag. A rescue round that only gets half funded is usually the worst outcome for everyone, because the carry keeps running and the senior clock keeps ticking.

Second, how long is the deadline. Fourteen day windows on a document you have not seen in redline are common on portals, and I would ask for an extension in plain terms. If they refuse to give you two extra weeks to have counsel read an amendment that resets your priority, that tells you something on its own.

Following my own advice from earlier, I went and looked at how the last stalled portal deal I was in handled this. Sponsor called 25%, about 60% of investors funded, and the shortfall got covered by an affiliate of the sponsor at the same 12% plus a 2% funding fee. That affiliate ended up controlling the exit decision because the senior class had a consent right on any sale below a threshold.

Orchard, ask whether the new class gets consent rights, voting rights, or a say on the sale price. That is usually buried in the term sheet as one line about "major decisions." If the senior class controls when the land sells, everything downstream of it is a passenger.

On the moratorium itself. Sewer connection holds get lifted when a plant expansion or a lift station upgrade gets funded and permitted, and that is a capital budget process, not a favor anyone can grant you. Go find the utility's capital improvement plan and the board minutes. They are usually public and they will name the project and the expected in service date, which is the only timeline that matters to your spreadsheet. How that hold interacts with a rezone approval varies by state and even by county, since some jurisdictions will rezone with a condition that no building permits issue until capacity exists.

If the plant expansion is not funded, add three years to whatever the sponsor told you. If it is funded and under construction, the story changes and $15,000 senior at 12% starts looking reasonable.

Also check whether the 140 acres could be sold to a builder as unentitled ground with a rezone contingency. Some builders will take that risk at a discount, and a $2.6m exit today may beat a $4.2m exit in four years once you run the carry and the senior strip.

The part that lands here is that the sponsor kept collecting 1.5% while the updates got shorter, and my own decisions are much smaller than that. I would want fee language tied to something happening.