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Mixed-Use
Hugo
Multiple Locations
Funded
...
Hugo
Multiple Locations
...
Overview
Hugo
Ground-up development of two mixed-use buildings totaling 227 units in Chicago's coveted River North neighborhood.
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Details
For more information, view the Sponsor's Investment Memorandum.
Estimated First Distribution 5/2024
Minimum Investment 1
Estimated Hold Period 4 Years
Investment Strategy Development
Investment Type Equity
# 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%
Sponsor Documents
The offering documents above have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
Deal Highlights
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.
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.
Contact Us
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Management
For more information, view the Sponsor's Investment Memorandum.
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.

Sponsor 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.

Website
Management Team
Management
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.

Management
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.

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.

Management
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.

Property
For more information, view the Sponsor's Investment Memorandum.

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
For more information, view the Sponsor's Investment Memorandum.

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

 

Financials
For more information, view the Sponsor's Investment Memorandum.
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.

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.

Disclosures
RM Securities, LLC and its Affiliates Compensation

RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.

For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

No Approval, Opinion or Representation, or Warranty by RM Securities, LLC

Sponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.

Sponsor’s Information Qualified by Investment Documents

The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.

Risk of Investment

This investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. 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. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.

No Reliance on Forward-Looking Statements; Sponsor Assumptions

Sponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.

Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.

No Reliance on Past Performance

Any description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.

Sponsor’s Use of Debt

A substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.

Sponsor’s Offering is Not Registered

Sponsor’s securities offering 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 offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership 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 Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.

No Investment Advice

Nothing on this Page should be regarded as investment advice (either with respect to 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 to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

1031 Exchange Risk

Internal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.

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