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Funded
Mixed-Use
Hugo
Multiple Locations
INVESTMENT STRATEGY
Development
INVESTMENT TYPE
Equity
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100% funded
Offered By LG Development Group LLC
21.0%* TARGET IRR 20.0%-22.0%
2.01X* TARGET EQUITY MULTIPLE
Estimated Hold Period 4 Years
Estimated First Distribution 5/2024
Minimum Investment 35000
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Project Summary
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Explore this Project
Overview
Ground-up development of two mixed-use buildings totaling 227 units in Chicago's coveted River North neighborhood.
Attractive Financing

The Project is financed with a HUD 221d(4) loan, which is one of the strongest financial products available in the marketplace.  The loan automatically converts to a permanent facility upon delivery of the Project, removing refinance risk upon completion of construction.  The first 18 months during the construction period are interest only.  The permanent loan amortizes on a 40-year schedule, which significantly reduces annual debt service payments.  Additionally, the Project will lock the interest rate for the life of the loan, taking advantage of this historically low interest rate environment. The interest rate lock is anticipated to be at 3.24%.

New Construction

The Project is shovel-ready with permit in hand at closing. This shortens the timeline from breaking ground to project stabilization. Additionally, many of the unknown elements of development are fully delineated upon completion of the preconstruction work, making it advantageous for an investor to come into a project at this stage.

Capital Appreciation

The benefits of the accretive financing flow through to the project returns. One of the key elements of the program is that it allows for much higher leverage than traditional construction financing without the risks typically associated with that higher leverage due to the automatic conversion to the permanent loan. The higher leverage limits the amount of required equity for the project, which benefits the investors with increased returns. 

Property At A Glance
# of Units 227 plus 19,000 SF of Retail
Target Return on Cost 6.0%
# of Buildings 2
Parking Ratio 0.24 per unit
Exit Cap Rate 4.75%
Acquisition Price

$18,000,000

Investment Highlights
The building permit is ready and the contractor will break ground immediately after closing the loan.
Attractive financing via a HUD 221d(4) loan, which is 40-year term fixed at 3.24%
The Project consists of 100% market rate units as it is not subject to the city's affordable housing ordinance.
Developer portfolio boasts residential occupancy of 95%.
Chicago rents are forecasted for a full recovery to pre-pandemic levels by early 2023.
Management
Cumulative Distributions

LG Development Group LLC

Opening their doors in 2005, LG Development Group (the "Developer") was founded by Brian Goldberg as a real estate development company focused on producing luxury residential and commercial properties. They quickly realized they had an opportunity to serve their clients and partners more effectively, and in 2008, they started LG Construction Group, offering general contracting services independent from LG Development Group, then LG Advantage, a fully staffed small projects and service division, and their most recent venture, LG Design, a modern interior design division. Each team offers a combination of different skills and abilities, and being under one roof, LG is able to provide those services in a collaborative, cohesive environment.

Their portfolio has expanded from boutique single-family homes to large residential and commercial multi-unit buildings, developing over 2,000 units and $2B in properties spanning more than two million square feet.

http://lgdevelopmentgroup.com/
  • Brian Goldberg
    Partner & Chief Operations Officer
  • Matt Wilke
    Partner & Chief Operations Officer - LG Development Group LLC
  • Daniel Haughney
    Chief Investment Officer
  • Jennifer Albert
    Chief Financial Officer
Brian Goldberg
Partner & Chief Operations Officer

Brian is a founding partner of LG Construction + Development and has spent the last 17 years developing, constructing, and renovating over $2 biillion in high-end residential and commercial projects around Chicago.

Brian’s relentless pursuit of the highest level of customer service and uncompromising standards has led us to be a top-rated company across many different construction types and asset classes.

Brian graduated from the University of Illinois with a Bachelors and Masters of Science in General Engineering, and also has an MBA.

Matt Wilke
Partner & Chief Operations Officer - LG Development Group LLC

Matt’s 15 years of industry success is built on his dedication and professional drive. By keeping his client’s needs foremost, and developing project teams that do the same, he ensures LG Construction + Development thrives.

As COO, Matt oversees all aspects of our projects. His hands-on approach to every facet of the process is visible in each of our completed projects.

Matt grew up in Naperville, Illinois and graduated from Purdue University with a Bachelor of Science in Construction Engineering and Management.

Daniel Haughney
Chief Investment Officer

As Chief Investment Officer, Daniel oversees the firm’s investment activity and leads the overall strategy. His responsibilities include sourcing and analyzing potential investment opportunities, building the capital stack, and structuring joint ventures.  He also assists with portfolio management and investor relations.

Prior to joining LG, Daniel served as a Vice President of JLL’s Capital Markets Group where he focused on development and adaptive reuse assets.Daniel has closed over $1 billion of real estate transactions during his 15 years in the industry. 

Daniel holds a BA in Business Communications from the University of Kansas and a certificate in urban real estate from the UIC Graduate School of Business. He is a LEED accredited professional and a member of the Urban Land Institute.

Jennifer Albert
Chief Financial Officer

Jennifer has spent over 12 years in public accounting, working in audit, tax, and consulting focused primarily on construction and real estate.

In addition to Jennifer’s industry-wide experience and knowledge of best practices, she has a passion for the operations side of it, and actually believes accounting is fun!

Jennifer received a Bachelor in Science from Bradley University, is a Certified Public Accountant, a Certified Construction Industry Finance Professional, and a member of the Illinois CPA Society, the AIPCA, the CFMA, and CREW.

Track Record

Property City, State Asset Type Acq Date Units or SF Purchase Price Sales Price Project Value
1241 N Milwaukee Chicago, IL  Mixed Use 12/17/2013 60 units, 16000 SF retail $3,350,000 $31,470,000  
1643-47 N Milwaukee Chicago, IL  Mixed Use 8/26/2014 36 units, 11000 SF retail, 20000 SF office $5,050,000 $26,280,000  
Illume Chicago, IL  Condos 10/30/2015 79 units $6,350,000 $84,849,978  
1879 N Milwaukee Chicago, IL  Mixed Use 4/1/2016 36 units, 7000 SF retail $1,487,500   $11,875,911
1437 N Wells Chicago, IL  Mixed Use 4/8/2016 50 units, 6743 SF retail $8,677,548   $25,000,000
The Plymouth Chicago, IL  Multi-family 4/29/2016 30 units $3,000,000   $16,800,000
Ronsley Chicago, IL  Condos 5/18/2016 41 units $11,540,000   $72,273,674
The Insurance Center Chicago, IL  Mixed Use 7/14/2016 132 units, 24489 SF office, 5224 SF retail $10,071,897   $54,000,000
The Jax Chicago, IL  Mixed Use 9/7/2018 166 units, 7426 SF retail $5,435,000   $54,000,000
Trailhead Chicago, IL  Mixed Use 4/2/2019 109 units, 9791 SF retail $5,100,000   $51,169,964
Roots - Printers Row Chicago, IL  Retail/Restaurant 10/5/2018 9365 SF $2,730,000   $9,500,000

*The above bios and track record were provided by LG Development, LLC and have not been independently verified by RealtyMogul.

Business Plan

LG Development Group (the "Sponsor") is extremely proud to present this opportunity to invest in a ground-up Class A luxury apartment project consisting of two buildings along Chicago Avenue in the highly desirable River North neighborhood of Chicago. Tapping into demand driven by its prime location, the Project will consist of 227 top-of-the-line apartment units above 19,000 square feet of urban retail space. 

LG purchased the vacant land in September 2019. The Project does not require any zoning relief and has been designed to comply with the Property's as-of-right zoning.  As such, the Project is not subject to the City's affordable housing ordinance, which translates into one hundred percent of the units renting at market rents.

The Project is being financed with a HUD 221d(4) loan, which is one of the strongest financing products available in the marketplace.  The loan locks the interest rate at today's historically low rates for the life of the loan. During the construction period, it remains interest-only and automatically converts to a permanent facility upon completion and amortizes over 40 years. The HUD loan can be assumed by a buyer which allows for a very attractive exit for investors.

The building permit is ready and construction will begin immediately following the loan closing. Residential leasing will commence as the 18 month construction period concludes with delivery in spring 2023. Total project costs are $99M and will be financed with a $75M HUD 221d(4) loan at 75.5% LTC.  The Sponsor anticipates stabilization in 2024 and a target sale in 2025 at a 4.75% cap rate, totaling approximately $124M.  

Development Budget

Acquisition Cost $ Amount Per Unit Per SF
Purchase Price $18,000,000 $79,295 $77.24
Closing Costs $973,969 $4,291 $4.18
Total Acquisition Costs $18,973,969 $83,586 $81.42
       
Hard Costs      
Residential & Common Hard Costs $55,441,853 $244,237 $237.92
GC 2% HUD Fee $1,125,496 $4,958 $4.83
GC Insurance Coverage $143,814 $634 $0.62
GC Bond Costs $409,417 $1,804 $1.76
GC Other Fees (CDOT, Water Tap) $911,682 $4,016 $3.91
Environmental Soils - Hard Costs  $279,067 $1,229 $1.20
Builders Risk Insurance $70,000 $308 $0.30
Total Hard Costs $58,381,329 $257,186 $250.53
       
Soft Costs      
A&E, Design $1,801,460 $7,936 $7.73
Interior Design $57,000 $251 $0.24
Insurance - OCIP (Liability & Pollution) $580,000 $2,555 $2.49
Other Insurance - OPPI $40,000 $176 $0.17
Preconstruction Services $96,000 $423 $0.41
Scott Steel - Design Build Fee $18,500 $81 $0.08
WSP Design Build Fee $146,000 $643 $0.63
Licenses & Permits $210,859 $929 $0.90
Landscaping Tree Evaluation $27,000 $119 $0.12
Stormwater Fee $4,000 $18 $0.02
OSIF $71,051 $313 $0.30
Developer Services Review $46,698 $206 $0.20
Expediting $37,600 $166 $0.16
Surveys $11,000 $48 $0.05
Blue Prints $5,300 $23 $0.02
Exterior Renderings $17,500 $77 $0.08
Traffic Study $11,500 $51 $0.05
ADA Consultant $5,000 $22 $0.02
Electrical New Service $60,000 $264 $0.26
Utilities $200,000 $881 $0.86
Legal, Accounting $75,000 $330 $0.32
Legal, Zoning $7,385 $33 $0.03
Environmental Soils - Soft Costs $75,933 $335 $0.33
FFE $400,000 $1,762 $1.72
Technology Upgrades $30,000 $132 $0.13
Real Estate Tax (During Construction) $400,000 $1,762 $1.72
Testing Soil, concrete etc $365,000 $1,608 $1.57
Cost Certification Audit (Owner) $15,000 $66 $0.06
Placement Fees $70,300 $310 $0.30
Additional Consultants - MAP 2020 $12,000 $53 $0.05
Organization incl 3rd Party Reports $140,471 $619 $0.60
Environmental Holdback (HUD requirement) $177,500 $782 $0.76
1 year Commercial Debt Service Reserve (HUD requirement) $687,386 $3,028 $2.95
Initial Operating Deficit (HUD requirement) $3,531,988 $15,559 $15.16
Working Capital (HUD requirement) $2,997,376 $13,204 $12.86
Development Fee $2,568,769 $11,316 $11.02
Acquisition & Loan Processing Fee $291,500 $1,284 $1.25
Land Carry Costs $944,089 $4,159 $4.05
Bank Inspections $21,000 $93 $0.09
Commissions - Retail $70,000 $308 $0.30
Retail TI $250,000 $1,101 $1.07
GC Fee $588,179 $2,591 $2.52
Owner Contingency $774,620 $3,413 $3.32
Total Soft Costs $17,939,964 $79,031 $76.99
       
Financing Costs      
Loan Fee $749,344 $3,301 $3.22
Loan Closing Costs $135,609 $597 $0.58
Construction Interest /Carry $2,124,390 $9,359 $9.12
HUD Mortgage Insurance $374,672 $1,651 $1.61
HUD Inspection Fee at Closing $374,672 $1,651 $1.61
HUD Pre Application Fee $112,402 $495 $0.48
HUD Firm Commitment Application Fee $112,402 $495 $0.48
Total Financing Costs $3,983,490 $17,548 $17.09
       
Grand Total $99,278,752 $437,351 $426.04
Property

Property Details

This fully amenitized Class A project consists of two mixed-use buildings totaling 227 units with approximately 19,000 SF of ground-floor retail nestled in the heart of Chicago's affluent and highly sought-after River North neighborhood, capturing the tremendous demand from renters' desire to live near the city's employment centers, top restaurants, trendy bars, waterfront parks, and abundant public transportation. The Project is truly shovel-ready and with its advantageous HUD financing, forecasts annual cash on cash returns averaging 13% with a net IRR to investors of 21%.

Unit Mix

Unit Type # of Units Avg SF/Unit Avg Rent  Rent per SF
751 N Hudson         
Studio 40 452 $1,929 $4.27
1x1 67 669 $2,671 $4.00
2x2 24 975 $3,305 $3.39
3x2 3 1,307 $5,428 $4.15
411 W Chicago        
Studio 28 498 $1,798 $3.61
1x1 59 621 $2,320 $3.73
2x2 2 1,035 $3,138 $3.03
3x2 3 1,739 $6,462 $3.72
4x3 1 1,967 $7,995 $4.06
Retail        
757 Retail 1 10,505 $446,463 $42.50
411 Retail 1 8,390 $356,575 $42.50
Total/Averages 227 661 $2,522 $3.82
Comparables

Lease Comparables

  Marlowe Aurelien Apartments The Hudson Hubbard 221 The Sinclair Wolf Point West 3Eleven Comp Averages Hugo
Address 169 W Huron 833 N Clark 750 N Hudson 221 W Hubbard  102 W Division 343 W Wolf Point  311 W Illinois   411 Chicago & 757 Hudson
Year Built 2018 2017 2017 2018 2017 2016 2018 2017 2023
Units 176 368 240 195 390 509 245 303 227
Average Rental Rate $3,098 $3,146 $3,507 $2,833 $3,265 $3,178 $2,748 $3,138 $2,522
Average SF 780 849 936 802 805 863 779 831 661
Average $/SF $3.97   $3.71   $3.75   $3.53   $4.06   $3.68   $3.53 $3.78 $3.82
                   
# Units (Studio) 49 78   44 100 128 67 78 68
$ (Studio) $2,006 $2,349   $1,752 $2,077 $1,843 $2,086 $2,021 $1,875
SF (Studio) 487 654   467 505 568 565 550 471
$/SF (Studio) $4.12 $3.59   $3.75 $4.11 $3.24 $3.69 $3.67 $3.98
                   
# Units (1x1) 69 209 28 103 200 252 140 143 126
$ (1x1) $2,591 $2,863 $2,658 $2,741 $2,937 $2,638 $2,699 $2,761 $2,507
SF (1x1) 645 768 675 759 747 753 767 748 646
$/SF (1x1) $4.02 $3.73 $3.94 $3.61 $3.93 $3.50 $3.52 $3.69 $3.88
                   
# Units (2x2) 58 79 208 46 79 102 34 87 26
$ (2x2) $4,624 $4,450 $3,509 $3,871 $4,813 $4,625 $3,848 $4,143 $3,292
SF (2x2) 1,188 1,204 954 1,190 1,188 1,254 1,167 1,120 980
$/SF (2x2) $3.89 $3.70 $3.68 $3.25 $4.05 $3.69 $3.30 $3.70 $3.36
                   
# Units (3x2)   2 4 2 9 27 4 8 6
$ (3x2)   $12,276 $9,330 $7,489 $8,050 $9,085 $6,200 $8,737 $5,945
SF (3x2)   2,890 1,830 1,511 1,699 1,811 1,473 1,796 1,523
$/SF (3x2)   $4.25 $5.10 $4.96 $4.74 $5.02 $4.21 $4.87 $3.90
                   
# Units (4x2)         2     2 1
$ (4x2)         $12,792     $12,792 $7,995
SF (4x2)         2,486     2,486 1,967
$/SF (4x2)         $5.15     $5.15 $4.06

Sales Comparables

  Oakwood Linea - 215 W Lake Optima - 220 E Illinois The Parker - 730 W Couch North Water - 340 W North Water Gateway West Loop - 11 S Green Total/Averages Hugo
Date 2019 2018 2018 2017 2016 2016    
Submarket River North Loop Streeterville West Loop Streeterville West Loop    
Year Built 2014 2017 2017 2016 2015 2015    
SF 170,000 235,000 480,000 182,242 384,070 133,851 264,194 233,028
Units 188 265 491 227 398 167 289 227
Average SF 815 885 1,071 803 965 802 890 661
Sale Price $91,000,000 $121,100,000 $155,000,000 $112,750,000 $240,312,000 $83,700,000 $133,977,000 $126,173,376
$/Unit $484,043 $456,981 $315,682 $496,696 $603,799 $501,198 $476,400 $555,829
$/SF $535.29 $515.32 $322.92 $618.68 $625.70 $625.32 $540.54 $541.45

 

Location

Market Overview

Chicago is positioned for growth as an attractive hub for commerce and culture. There has been and will continue to be, significant investment into growing the city's technology, healthcare, and life sciences sectors. Based on a recent report from JLL, Chicago is projecting five-year employment growth of 19% in the technology sector, 16% in healthcare, and 11% in life sciences. There is a lack of new apartments coming online in 2022 & 2023 and absorption is tracking to outpace supply.

Submarket Overview

River North boasts award-winning restaurants paired with a trendy nightlife scene and a plethora of public transit. The median age is 32 with an average household income of $165,178. The neighborhood boasts a transit score of 100 and walk score of 99, creating a popular home for young professionals working in Chicago. The urban oasis bursts with energy and has transformed into a neighborhood of luxury high-rises and historical mansions on tree-lined streets. River North is an ideal destination for working, living, and playing, given its proximity to the Loop, Lake Michigan, Merchandise Mart, and Michigan Avenue. It's just steps away from all the outdoor recreation that Chicago has to offer including Oak Street Beach, Millennium Park, East Bank Club, the Chicago River, and Lincoln Park.

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Debt $74,934,400 $330,107
GP Investor Equity $6,100,000 $26,872
LP Investor Equity $18,244,352 $79,535
Total Sources of Funds $99,278,752 $437,351
     
Uses of Funds $ Amount $/Unit
Purchase Price $18,973,969 $83,586
Hard Costs $58,381,329 $257,186
Soft Costs $17,939,964 $79,031
Financing Costs $3,983,490 $17,548
Total Uses of Funds $99,278,752 $437,351

The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

(1) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform.  RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the Platform and for Platform-related services.  Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC. 

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: HUD
  • Term: 41.5 Years
  • Loan to Value: 75.5%
  • Estimated Proceeds: $74,934,400
  • Interest Type: Fixed
  • Annual Interest Rate: 3.24%
  • Interest-Only Period: 18 Months
  • Amortization: 40 Years
  • Prepayment Terms: Loan is fully assumable by buyer for 25 bps fee.  Prepayment penalty through year 10.

HUD 221(d)(4) Loan

The HUD 221(d) (4) loan is one of the strongest financial instruments offered. This loan is non-recourse and offers 40-year fixed-rate debt for both the construction and post stabilization portions of the project. HUD(d)(4) loans have 40-year amortizations, not including the interest-only construction period, which is underwritten as 18-months in this deal, making it essentially a 41.5-year loan term and is fully assumable, allowing current and future investors to take advantage of today’s historically low interest rate period and lock in pricing that will still be honored well past the year 2060.

  • Interest-only for the 18-months of construction;
  • 41.5-year loan term with 40-year amortization schedule after stabilization;
  • Locks in historically low interest rate past the year 2060;
  • Fully assumable;
  • Non-recourse.

There can be no assurance that the Sponsor will secure debt on the rates and terms noted above, or at all.  All of the Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, including but not limited to possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account.

A substantial portion of the total acquisition for the Property will be paid with borrowed funds. The use of borrowed money to acquire real estate is referred to as leveraging.  Leveraging increases the risk of loss.  If the Sponsor were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Sponsor could lose its investment in its property.

Distributions

LG Development Group intends to make distributions from 401 Chicago Holdings, LLC as follows:

  1. To the Investors, pari passu, all operating cash flows to a 10% IRR;
  2. 75% / 25% (75% to Investors / 25% to Promote) of excess cash flow to a 15% IRR;
  3. 65% / 35% (65% to Investors / 35% to Promote) of excess cash flow to a 18% IRR;
  4. 60% / 40% (60% to Investors / 40% to Promote) of excess cash flow thereafter.

LG Development Group intends to make distributions to investors after the payment of both company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).

Distributions are expected to start in May 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of LG Development Group, who may decide to delay distributions for any reason, including maintenance or capital reserves. LG Development Group will receive a promote as indicated above, and a portion of this promote may be received by RM Admin, LLC for administrative services.

Underwriting reflects the next buyer assumes the remaining term of the HUD 221(d)(4) loan due to its low fixed rate and 40-year amortization schedule. If the next buyer forgoes this favorable financing for a different type of leverage, the Venture will pay a prepayment penalty yielding the following net returns to RM Investors: 18.7% IRR and a 1.9x equity multiple.

Cash Flow Summary
    Year 1 Year 2 Year 3 Year 4^
Effective Gross Revenue   $0 $1,497,837 $7,883,110 $8,614,400
Total Operating Expenses   $0 $453,765 $2,396,059 $2,619,073
Net Operating Income   $0 $1,044,072 $5,487,051 $5,995,327
             
Project-Level Cash Flows
  Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow ($24,344,352) $0 $63,853 $2,318,267 $59,016,655
             
Investor-Level Cash Flows*
  Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow ($7,000,000) $0 $17,532 $566,527 $13,485,559
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment*
  Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow ($50,000) $0 $125 $4,047 $96,325

^Underwriting assumes sale in month 46

*Returns are net of all fees.  Such Fees include fees paid to RM Admin, an affiliate of RealtyMogul, who charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor.  Please see the Fees and Disclaimers sections and Disclaimers sections below for additional information concerning fees paid to RM Admin. 

Underwriting reflects the next buyer assumes the remaining term of the HUD 221(d)(4) loan due to its low fixed rate and 40-year amortization schedule. If the next buyer forgoes this favorable financing for a different type of leverage, the Venture will pay a prepayment penalty yielding the following net returns to RM Investors: 18.7% IRR and a 1.9x equity multiple.

RM Technologies, LLC and its affiliates does not provide any assurance of returns.  The content on this Page, including Sponsor’s pro forma projections, was provided by the Sponsor or an affiliate thereof.  Although RM Technologies, LLC believes the Sponsor reliably produced this content, RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor.  The assumptions and projections included in the content on this Page, including the Sponsor’s pro forma projections, are not reflective of the position of RM Technologies, LLC or any other person or entity other than the Sponsor or its affiliates.  There can be no assurances that all or any of the Sponsor’s assumptions will be true, that actual performance will bear any relation to these hypothetical illustrations, or that the Sponsor’s investment objectives will be achieved.  For additional information concerning the Sponsor’s assumptions and projections, and the significant risks involved in investing in real estate, please see the Disclaimers section below. 

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to LG Development Group's materials for details. The following fees and compensation will be paid(1)(2)(3):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From Notes
Development Fee 4.0% of Hard & Soft Costs LG Development Group LLC Development Costs  
Acquisition Fee 1.0% of Land Cost LG Development Group LLC Development Costs  
Loan Processing Fee $150,000 LG Development Group LLC Development Costs  
General Contractor Fee 1.06% of Total Hard Costs & GC Costs LG Construction Group LLC Development Costs  
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From Notes
Asset Management Fee 2.5% of EGI LG Development Group LLC Cash Flow  
Administrative Services Fee 1.0% of Equity* RM Admin(3) RM Capitalization Partially capitalized upfront

*Only applies to equity raised through the RealtyMogul Platform

(1) Fees may be deferred to reduce impact to investor distributions.

(2) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform.  RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the RM Technologies, LLC’s proprietary Platform and receive Platform-related services.  An estimate of this fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor.  The Platform fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s).  RM Technologies LLC’s receipt of Platform fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

(3) RM Admin, an affiliate of RealtyMogul, charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor.  RM Admin’s administrative services and fees are disclosed in the relevant operating agreement(s). RM Admin’s receipt of administrative fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

Disclaimers/FAQs
Disclaimers

The content on this Page was provided by the Sponsor or an affiliate thereof.  Although RM Technologies, LLC believes the Sponsor reliably produced this content, RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor.  No part of the content and information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s offering materials.  None of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.

The content on this Page, including of the principal terms of the Sponsor’s offering, is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s offering documents, including, without limitation, the Private Placement Memorandum, Operating Agreement, Subscription Agreement and all exhibits and other documents attached thereto or referenced therein (collectively, the "Investment Documents").  The content on this Page is not complete, and each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment.  The content on this page should not be used as a primary basis for an investor’s decision to invest.  In the event of an inconsistency between the content on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents.  The content on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the discretion of the Sponsor. 

Assumptions and projections included in the content on this Page are not reflective of the position of RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates.  There can be no assurance that the Sponsor’s methodology used for calculating any projections, including Target IRR, Target Annualized Cash-on-Cash Return, and Target Equity Multiple (“Targets”), are appropriate or adequate.  The Sponsor’s Targets are hypothetical, are not based on actual investment results, and are presented solely for the purpose of providing insight into the Sponsor’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Sponsor’s performance. The Sponsor’s Targets are not a predictor, projection or guarantee of future performance.  There can be no assurance that the Sponsor’s Targets will be met or that the Sponsor will be successful in meeting these Targets.  Target returns should not be used as a primary basis for an investor’s decision to invest.

This real estate investment is speculative and involves substantial risk.  There can be no assurances that all or any of the assumptions will be true or that actual performance will bear any relation to the hypothetical illustrations herein, and no guarantee or representation is made that investment objectives of the Sponsor will be achieved.  In the event that actual performance is below the Sponsor’s Targets, your investment could be materially and adversely affected, and there can be no assurance that investors will not suffer significant losses.  A loss of part or all of the principal value of your investment may occur.  You should not invest unless you can readily bear the consequences of such loss.  Please see the Sponsor’s Investment Documents for additional information, including the Sponsor’s discussion concerning risk factors.

Please see the applicable Investment Documents for disclosure relating to forward-looking statements.  All forward-looking statements attributable to the Sponsor or its affiliates apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in the Investment Documents.  Any financial projections are preliminary and subject to change; the Sponsor undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.  Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.

The interests offered by the Sponsor will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement.”).  In addition, the interests will not be registered under any state securities laws in reliance on exemptions from registration.  Such interests are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption.  All Private Placements on the RealtyMogul Platform are intended solely for “Accredited Investors,” as that term is defined Rule 501(a) of the Securities Act.  Prospective investors must certify that they are Accredited Investors and provide either certain supporting documents or third party verification, and must acknowledge that they have received and read all investment materials.

RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform.  RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the RM Technologies LLC’s proprietary Platform and receive Platform-related services.  An estimate of this fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor.  The Platform fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). RM Technologies LLC’s receipt of Platform fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

RM Admin, an affiliate of RealtyMogul, charges an annual fixed administrative fee for providing certain ongoing administrative services to the Sponsor.  RM Admin’s administrative services and fees are disclosed in the relevant operating agreement(s). RM Admin’s receipt of administrative fees creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

RealtyMogul is not a registered broker-dealer, investment adviser or crowdfunding portal.  Nothing on this Page should not be regarded as investment advice, either on behalf of a particular security or regarding an overall investment strategy, a recommendation, an offer to sell, or a solicitation of or an offer to buy any security.  Advice from a securities professional is strongly advised, and we recommend that you consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any real estate investment.

For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.

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