Letter To Potential Investors

Letter To Potential Investors

Jim Glasgow
3419 Northeast Parkway, Suite 201
San Antonio, Texas 78218
Tel: 210-829-7531 ext 1382
Fax 210-829-1482
E-mail jglasgow@patiostore.com

Investors Name
Street Address
City, State, Zip 000000

A SELF-STORAGE INVESTMENT OPPORTUNITY

Dear Investor;

I am writing to you to acquaint you with an investment opportunity in a limited partnership, to be known as 410E / Rigsby Self Storage LP., which will develop a self-storage facility on the east side of San Antonio, Texas.

Since the start of the self-storage industry in the early 1970's the self-storage business has grown into one of the most profitable real estate based businesses. A mature self-storage property can generate cash-on-cash returns approaching 18% annually.

In my opinion an investment in the securities of 410E / Rigsby Self Storage LP., can be considered a conservative business risk, a rare opportunity to join other investors to develop a profitable self-storage facility. As General Partner, I am of the opinion that the minimum return (on capital invested) over five years will be 75%, and the maximum total return upon sale of the property could be as high as 150%.

Jim Glasgow as General Partner

I will act as General Partner. During the past twenty-five years I was in the portable storage building business and during that time I monitored the self-storage industry as a competitor. The past two years I have been researching the self-storage industry with the intent of developing a facility. I commissioned an independent feasibility study to determine the feasibility of constructing a facility on the east side of San Antonio. With that study's positive indication for the profitable development of a self-storage property I have decided to proceed with development. I have chosen a Limited Partnership as the best method to raise the needed equity capital.

My Personal Investment

In addition to acting as General Partner I will also be participating as a limited partner with a equity investment of $200,000.

75% to 150% Profit Potential

Each Limited Partner will receive an accrued preferred simple interest of 8% annually on the capital invested. After payment of debt service and payment to the partners of accrued preferred interest, the Limited Partners will receive 50% of the quarterly net operating profits. Upon the sale of the facility the investors will receive from the net sales proceeds after settlement of any outstanding partnership obligations, their initial capital investment returned, then any accrued interest due to their account, and then 50% of the remaining sale profits.

The General partner is of the opinion that the minimum expected return to investors should be 75% over five years, with the potential that the total return could be as high as 150% of the invested capital.

Investment Units Being Offered.

Twenty-five (25) investment units are being sold at $20,000 per investment unit to raise $500,000 in equity. Approximately 50% of the units are spoken for at this time.
The balance of the property and development cost will be borrowed funds with the note being signed by the General Partner.

This letter is not an offer to sell securities; the offer is made only in the offering prospectus.

Risk and Taxes

All investments contain risk and you may want to consult you CPA or other adviser as to suitability of this investment for your individual situation. It is my understanding that losses from depreciation can only be used to offset profits from other passive investments, that distributions from limited partnership profits are considered passive income and profits upon the sale of the facility will be treated as long-term capital gains.

I'm Sure You Have Questions?

I would be pleased to meet with you to answer your questions, review the Feasibility Study, the Limited Partnership Agreement, the Conscription Agreement, the Prospectus, and/or my Resume. You can contact me by phone, E-mail, fax or I can meet with you in person at my office or any place you prefer. Please feel free to contact me concerning copies of any of the documents mentioned.

What Do I Do Now?

If you feel this investment might be right for you please call me for a copy of the Limited Partnership Agreement.
The sale of the partnership units will close on September 15th or earlier if all twenty-five (25) unites are conscripted.
After you have read the Limited Partnership Agreement and you wish to invest, sign the Subscription Agreement and the Partnership Agreement. Forward them to my attention with a check for the Units desired or a note giving the date when you will be sending the check. Once your subscription is accepted you will receive an Affidavit of Payment of Capital along with executed copies of the agreements. When the Partnership's application is filed with the state you will get a Certificate of Partnership.

I look forward to a mutually rewarding investment experience with you.

Sincerely yours

Jim E. Glasgow Sr.

References available upon request.

cc. file

Enclosures:
1. Prospectus
2. Inscription agreement
3. Resume
4. Referral fax

Web sites (URLS) to articles on self-storage industry

Prospectus

Making of a Real Estate limited partnership

Prospectus 410 / Rigsby Self Storage L.P. 3419 Northeast Pkwy San Antonio, Texas 78218 210-829-7531 ext 1382

Investment Units Being Offered

25 investment units (Units) in 410 / Rigsby Self Storage, LP
A Texas limited partnership (The Partnership) With Jim Glasgow (General Partner) acting as general partner, to be formed for the purpose of acquiring, developing, owning, renting, maintaining, and or holding as an investment a self storage facility of at least 45,000 square feet to be constructed on property fronting Loop 410 East, in San Antonio, Texas

Price Per Limited Partnership Investment Unit $20,000
There will be no sales commission
Total Subscription $500,000

This limited partnership shall begin the day the certificate of the limited partnership is duly filed and shall continue until September 15th 2011 then terminated in accordance with the limited partnership agreement.

Appropriateness of Investment

These Units should be purchased only for long-term investments. Units are not freely transferable. No market exists for the Units or is expected to develop in the future. Premature sale of these securities is not advised.

Terms of offering

Minimum inscription: is $20,000 or one unit, in cash on subscription or before September 15Th 2004, The General Partner reserves the right to make final determination of the issuance of all units. Offering to terminate on or before September 15th 2004, (extendible up to 60 days).

The general Partner shall hold subscription proceeds in trust via an escrow account until Partnership is activated. In the event that a minimum of $400,000 is not subscribed, The General Partner shall have the option to purchase the remaining Units of the partnership for his own account, with the right to re-sell same, or the General Partner may terminate the offering and return the invested money to the subscribers without interest.

Return to limited partner

Each partner shall have a capital account maintained on the books of the partnership that includes invested capital plus 8% preferred simple accrued interest, minus that partner's allocations of net loss and share of distributions. Net income and net loss shall be allocated as follows:
a. Net operating income after payment of mortgage note or note interest (NOI) shall be first applied towards the limited partners 8% preferred simple accrued interest on their capital contribution.
b. Secondly, any monthly NOI in excess to payment of "a" above will be split evenly between the general partners (50%) and the limited partners (50%) to be distributed based on the limited partners prorated share of capital contribution.
c. Upon dissolution of the partnership, the capital account of the partners shall be returned to them.

Upon sale of the partnerships assets the net proceeds will be distributed as follows:
a. First to pay off all of the partnerships mortgages, debts and outstanding expenses.
b. Then to pay any expenses related to the disposal of the partnerships assets and dissolution of the partnership. c. Then return of the limited partner's original capital investment.
d. Then to payment of any fees due general partners under this agreement.
e. Then to bring current any interest owed to the limited partners.
f. The balance of the proceeds and any reserve account balance will be divided equally between the general partner (50%) and the limited partners (50%) based on their prorated capital contribution.

Re financing

Upon re financing for other than facility expansion of the partnerships assets, the net proceeds after cost of re financing will be distributed as follows:
a. To bring current any accrued interest owed to the limited partners.
b. Then return of the partner's original capital contributions.
c. Then to payment of any fees due the general partners under this agreement.
d. The balance of the proceeds will be divided equally between the general partners (50%) and the limited partners (50%) based on their prorated capital contribution.

Further Accessments

Further assessments are possible but not contemplated.

Distribution

Distribution and sales of Units will only be made through Jim Glasgow G.P. 3419 Northeast Pkwy San Antonio, Texas 78218 210-829-1482 ext 1382

Depreciation Method

The General Partner shall have the right to select the depreciation method most suitable to Partnership objectives. It is probable that the Partnership will use component depreciation to accelerate depreciation.

Leverage

The acquisition of the partnership property and development of improvements will be on 70% to 75% loan to 30% to 25% equity basis. The General Partner will sign the note(s).
The General Partner may elect to finance the partnerships assets during the term of the partnership to construct phase two or to return a portion of the limited partners contribution to the partner. The use of financing "leverage" could/would increase the rate of return on capital invested.

LOOP 410 East Self Storage

The Loop 410 / Rigsby Self Storage facility will be located between Hwy 10 east and Hwy 87 (Rigsby) along Loop 410E on the west side of the highway.

Feasibility Study

A self-storage market analysis and feasibility study was completed in October 2003, which showed.
The total estimated demand is: 45,000 square feet.
Recommend climate controlled space at: 20 - 25% of the proposed space.
Estimated rent per square foot: $8.24/SF
Estimated expenses per square foot: $2.95/SF
Estimated stabilized NOI per square foot: $4.40/SF (net operating income) excluding debt service.
Estimated lease up: 14 to 16 months
Estimated facility cost to be: $1,700,000 including land cost

General Market Overview

The subject is a proposed self-storage facility. General parameters in the industry indicate that a majority of the demand for these facilities will come from a three-mile radius. The location of the subject site does not present any major barriers within this radius and demand is based on a majority of the customers coming from the three-mile radius.

Population figures for the three-mile radius are provided by National Decision Systems as of September 3, 2003 and are based on the 2000 Census figures adjusted to 2003.

According to National Decision Systems figures the population growth is estimated to average approximately .9 percent per year over the next five years for the three-mile radius. National Decision Systems projects the three-mile population to be 41,296 in 2008.

The parameters of the subject sites are well located and as such should have the physical characteristics considered excellent for a potential self-storage development. The proposed location has good visibility along a well-traveled major thoroughfare. Assuming that the proposed project is well designed, well built, that it is priced competitively, that it includes amenities similar to the competition in the market and consists of the proper unit mix, the project is expected to capture more than it's fair  market share.

The complete 38-page feasibility study is available for review upon request.

Construction Cost

Estimated land size 2.4 acres
Estimated net rent-able square footage 45,000
Estimated cost of construction is $1,427,619
Estimated land cost is $504,000
Total cost estimate $1,827,619
Estimated loan amount $1,300,000

Compensation and Fees

The fees shown below were not determined by arms length negotiation.

For services as General Partner, for providing partnership management services, and assuming all of the risks and liabilities involved in the acquisition and management of such a project, the General Partner and affiliates are to be paid the following fees, profits, reimbursements and shares of distribution set forth below.

The General Partners shall be entitled to a monthly payment of 1% of the gross income as an asset management fee.

Any monthly NOI after note payments and bringing the limited partners accrued preferred interest payments current, and after bringing the reserve account current, will be split evenly between the General Partners (50%) and the limited partners (50%).

The General Partners shall be entitled to a developer's fee of $100,000.00 to be taken as limited partnership shares.

Upon re financing of the partnerships assets the net proceeds after cost of re financing and payment of any accrued preferred interest owed to the limited partners, and return of the limited partner's original capital contributions, and payment of any fees due the general partners under the limited partnership agreement, the balance of the proceeds will be divided equally between the general partners (50%) and the limited partners (50%) based on their prorated capital contribution.

Upon the sale of partnerships assets the balance of the proceeds and any reserve account balance after payments to limited partners as outlined here in at the Return to limited partners clause, will be divided equally between the general partner (50%) and the limited partners (50%) based on their prorated capital contribution.

The general partners shall receive 2% of the sales price as a disposition fee.

Dissolution and termination

The partnership is for a minimum term of three years or a maximum term of seven years at which time the partnerships assets are to be sold and the proceeds distributed as per the terms of the partnership agreement.

The general partner may sell the partnerships assets and terminate the partnership when in the general partners judgment it is in the best interest of the partnership to do so. Proceeds of a sale will be distributed according to the terms of the partnership agreement.

Life Insurance

Life insurance on the principal general partner(s) made payable to the partnership in the amount of $500,000, such proceeds to be used to reduce any of the partnership's outstanding mortgages, with any excess to be used for return of invested capital to the limited investors.

Management of the self-storage facility

Daily management of the self- storage facility will be contracted to a professional management company specializing in the self-storage industry.

Documents

Copies of the limited partnership agreement, the feasibility study and other related documents are available at the office of the General Partner.

Pro forma financial Projections*
*phase one only

Income
Year 1, -$138,815
Return (-16%)
Gross income $117,993
Expenses $122,460
NOI $4,467
Payments $78,000

Year 2, $323,012
Return 11%
Gross income $323,012
Expenses $125,297
NOI $149,264
Payments $93,000

Year 3, $351,432
Return 22%
Gross income $351,432
Expenses $148,258 NOI $203,173
Payments $93,000

Year 4, $360,217 Return 23%
Gross income $360,217
Expenses $152,215 NOI $208003
Payments $93,000

Year 5, $369,223 Return 24%
Gross income $369,223
Expenses $156,270
NOI $212,953
Payments $93,000

Lease up losses

Year 1, ($20,822)
Year 2, ($48,452)

Return is estimated based on a total investment capital account of $500,000

Sales price based on a 9% cap rate would be $2,350,000 For a Pro forma profit on the sale of the facility of approximately $550,000

A total return over five years of 115% of capital invested.

Risk

The General Partner has taken and will continue to take every reasonable precaution to mitigate the risk as much as possible. It is the belief of the General Partner that the estimates used in preparing the Pro forma are conservative and that with construction of a phase two to increase the available square footage for rent that the performance can be enhanced.

Some of the potential risks are

That land cannot be acquired for the price estimated.
That the interest rate on debt service will be higher than 7%. That a competitor opens up before we reach 80% occupancy. That a sale cannot be consummated at the time anticipated or for the price anticipated.

Conclusion

In the opinion of the General Partner, an investment in the securities of 410 Rigsby Self Storage, L.P. can be considered a conservative business risk, a rare opportunity to join other investors to develop a self-storage facility. The General Partner is of the opinion that the minimum return (on capital invested) over five years will be 75%, and the maximum return could be as high as 150% over five years.

In the opinion of the General Partner the feasibility study has underrated the market demand and the areas growth rate. Our research tells us that early losses from depreciation can only be used to offset other passive income and that long-term profits paid to Limited Partners will be taxed at capital gains rates. It is advisable that investors consult with their CPA.

The enclosed subscription agreement can be used to apply for shares in this investment.

Subscription to limited partner units

Making of a Real Estate limited partnership, Subscription to limited partner units Subscription to limited partner units.

 

Subscription to limited partner units.

To: L410E/Rigsby LP

3419 Northeast Loop 410
San Antonio, Texas 78218

The undersigned tenders this subscription, together with payment of $20,000 per unit, for _________ unit(s) in L410E/Rigsby LP a limited partnership organized under the Uniform Limited Partnership Act of the state of Texas, being offered by the offering prospectus dated June15th, 2004 (the "offering circular"), at a purchase price of $20,000 for each unit. It is understood that the amount payable for each unit tendered is to be deposited in escrow with the Wells Fargo Bank, for the benefit of the undersigned and will be returned promptly in the event that 20 units offered by the offering circular are not subscribed and paid for by September 15^th, 2004.

The undersigned represents and warrants that he [she] is a resident of the state of Texas and either (i) has a net worth (excluding, for this purpose, the value of the undersigned's home and household effects) of at least $250,000 or (ii) has a net worth of at least $250,000 and estimates that he [she] will be in a 15% or more income tax bracket, on the basis of total federal income taxes for 2004. Furthermore, the undersigned represents and warrants that he [she] has either (i) had experience in business enterprises or investments entailing risks of a type or to a degree substantially similar to those entailed in an investment in the company or (ii) has obtained independent financial advice with respect to his [her] investment in the units. The undersigned acknowledges receipt of a copy of the offering circular and represents and warrants that he [she] is familiar with the offering circular and is aware of the risks involved in making an investment in the units.

The undersigned understands and agrees that this subscription is made subject to the following terms and conditions:

(a). The General Partner shall have the right to accept or reject this subscription, in whole or in part.

(b). The agreement of limited partnership to be issued and delivered on account of this subscription will only be issued in the name of, and delivered to, the undersigned. The undersigned also represents that the units subscribed for are not being purchased for subdivision or fictionalization and are solely for the account of the undersigned.

The undersigned constitutes and appoints Jim Edward Glasgow, with power of substitution, his [her] attorney-in-fact for the purpose of executing and delivering on behalf of the undersigned the agreement of limited partnership between the undersigned and the other persons and parties who (together with the undersigned) shall constitute the partners of the company, and for the further purpose of executing and filing, on behalf of the undersigned, any and all certificates of limited partnership required in order that the undersigned may obtain the benefits provided under the Uniform Limited Partnership Act of the state of Texas.

Dated ______________, 2004

X_______________________________ Signature	Residence ________________________ No. and Street
________________________________ Name (please print)	City _______________ State _________ ZIP _________
_________ Married	Social Security number _______________
_________ Single	Domicile (if different from residence)

___________________________________

 

Referral Form

Making of a Real Estate limited partnership, Referral Form

Referral Form

To; ______________________
Fax 210-829-1482

Fax From:________________________________

Referrals

Please send an investment packet to the following potential Investors
I have contacted them and advised them to be on the look out for it.

Name:_________________________________________________
Address ________________________________________________
City______________________, Texas__ZIP:__________________

Name:_________________________________________________
Address________________________________________________
City______________________, Texas__ZIP:__________________

Name:_________________________________________________
Address ________________________________________________
City______________________, Texas__ZIP:__________________

Name:_________________________________________________
Address ________________________________________________
City______________________, Texas__ZIP:__________________

Your name and contact information

General partners resume

 

Making of a Real Estate limited partnership

Resume

General partners resume

Jim Glasgow

San Antonio, Texas 78221

Phone 210-829-7531

Fax 210-829-1482

E-mail Jim@patiostore.com

Summery Of Qualifications:

· Fifteen years retail store management experience

· Nine years sales management experience

 · Seventeen years business ownership and management experience

· Twenty-five year rental property owner and management experience

 · Twenty years experience in manufacturing and sales of storage buildings in all positions both as owner and employee.

 · Thirty-five years P&L responsibility both as owner and employee.

Professional Experience:

· 1987-Present President, CEO Horizon Building System, DBA Patiostore.com 3419 Northeast parkway, San Antonio, Texas 78218 Founder, President and CEO Horizon Building Systems started in 1987 originally a manufacture and retailer of portable buildings; The Company was converted to a retailer of products for the backyard in the early 1990s. With the advent of the Internet, the company was transformed into an on line retailer of the same product our stores sold. Including above ground pools, Patio furniture, Grills, Home Improvements, etc. The main web site is www.patiostore.com and we have Twelve (12) web sites for the customer to browse. We currently have sales of about $2.2 million dollars. Prior Positions Held:

· 1978-1987 Morgan Portable Buildings District Sales manager for Texas, Arizona and Colorado, responsible for a sales territory with 17 sales offices and three manufacturing plants with annual sales of $6 million dollars. Left to start my current company.

· 1976-1978 Globe Discount Stores District Merchandise Manager for Texas and Arizona, responsible for 10-store district with sales of $28 million. Responsibilities to include sales volume, merchandise display, staff development, inventory control, P&L goals. Company dissolved, was a division of the Walgreen's Corp.

· 1974-1976 Globe Discount Stores San Antonio, Texas Soft-Lines Manager, P&L responsibilities payroll control, staffing, training, inventory, sales, profitability, advertising and promotions

· 1966-1973 Perry Brothers Variety Store. Store manager, started as assistant manager at age 17 and promoted to store manager at age 20, Left to start a restaurant business which failed during the Presidential price freeze and gas wars of 1973

Education:

 Business degree

· College Bee county college 1968 course work in computers.

· Numerous, workshops, courses and classes over twenty-five years to include and not limited to courses covering: dynamic communications, book keeping, drafting & design of buildings, estimating, sales management, retail display, marketing, business legal, computer software, Internet marketing, business management, personal management, real estate sales, and investment management.

· Instructor experience giving training classes covering: drafting & design of re-locatable buildings, e-commerce and web site design, small business management, salesmanship, and office management.

References: On request