The team at our affiliated broker-dealer, RM Securities, conducts diligence on of the issuer, including detailed background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to screening for any criminal background, we may also turn down sponsors due to poor reference checks, even if the background and criminal checks are satisfactory.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent.* When an investor makes an investment with such sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s contingency offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.
* Unless otherwise disclosed, escrow accounts are not required for some investments that accommodate 1031 investments where the property is already acquired.
Our processes typically includes visiting certain properties (or a subset of properties if it's a fund) to confirm the real estate is what and where the real estate is supposed to be. For certain properties that accommodate 1031 exchange investments, the team will review third-party prepared due diligence reports in lieu of a site visit.
We have formalized processes and checklists for every private placement deal listed on the platform.
Trails at 2112 offers a significant return profile relative to the risks of the investment. Since acquiring the Property in January 2021, the Sponsor has fully renovated approximately 50% of the units. Construction risk continues to drive down every month as they complete 10-12 renovations each month with a targeted completion date of December 2021. Although the Property is subject to California rent control regulations, the tenancy risk continues to decline with the successful execution of the tenancy relocation plan. Over 90% of tenants have already accepted the transfer/renewal program. Market risk is diminishing as the Sponsor has successfully been able to achieve market rents that have surpassed their original proforma rents.
The Project has been a benefactor in the flight to affordability. Multifamily demand in the Modesto MSA has statistically proven to be resilient, market tested against both the ‘08 Great Financial Crisis and the COVID-19 Pandemic, with strong market dynamics due to an increasing desire for affordability in California housing. The submarket has been a benefactor of the current flight to suburbia, a strong workforce grounded in essential services, strong occupancy & collections, and overall strong market fundamentals.
The Property offers a mid-level luxury apartment product which represents just 5% of the current housing stocking in Modesto. The Property provides a highly desirable product that focuses on the unmet demand in the marketplace. A limited supply of new product and future delivery projections support the expectation for continued high occupancies and rent increases. During the past 12 months, absorption outpaced deliveries in Modesto. Only 100 new units were delivered (161 were absorbed). Aside from the new 100 units, there has not been any new construction of market-rate multifamily housing over the past 10 years. Furthermore, according to the Building Permits Survey (US Census), as of September 2020, year-to-date, there were no multifamily building (3+ units) permits pulled in Modesto.
Valiance Capital
From the discovery and acquisition of dislocated market opportunities in high-demand, high-growth areas, to aesthetic upscale renovations and hospitality-driven property management; there’s a lot that goes into Valiance Capital's proven approach to multifamily real estate investing. To put it plainly, they seek to add value at every step of the investing process, no matter how seemingly insignificant the opportunity. This is what makes their properties so attractive to their residents, and in the end, what’s good for their residents is good for their business.
With a single-minded focus on achieving high risk-adjusted returns, Valiance Capital has engineered a vertically integrated approach to real estate investing through their family of companies: Valiance Capital, Bruno Construction, Inc., and The Berkeley Group. This synergy allows them to efficiently capitalize on undervalued opportunities in rapidly expanding, supply-constrained markets with highly-educated and highly-paid populations. Ultimately, their capital partners and stakeholders benefit from this exceptional efficiency, accelerating and amplifying their returns.
https://valiancecap.com/The above bios and track record were provided by Valiance Capital and have not been independently verified by RealtyMogul.
Thesis:
Trails at 2112 is a 1980’s vintage property with significant upside potential to capture unmet demand in the mid-level luxury category. Out of ~15,000 available housing units, only 100 new apartments were delivered in the last 10 years. Higher-end product is virtually nonexistent, and roughly 95% of the inventory is 1,2 & 3-star product. Further, the market is benefiting from a flight to affordability, and while there is land available to develop, the cost to construct new housing has proven to be difficult to pencil, thereby limiting new supply even more. Market demand is strong. Vacancy has remained low, and rents have been rising even through COVID-19.
Opportunity:
The Sponsor's strategy is to reposition the entire Property to provide a highly desirable product that can command market rents that are 31.4% higher than current levels. Capital investment will be deployed to rebrand the Property with enhancements to the curb appeal, existing amenities, and the installation of new amenities. The exterior upgrades will also coincide with a full interior renovation of all 97 units. The finishes will be superior compared to nearby communities, and key interior scope items will include:
- New LVP Flooring
- Recessed Lighting
- New Quartz Countertops
- New Vanities and Refinished Cabinets
- New Bathroom & Kitchen finishes
- New Stainless-Steel Appliances
Since the Sponsor's acquisition in January 2021, nearly 50% of the renovations have been completed, and the expected stabilization timeline has been cut in half, down from 24 months to now only 11 months. To date, all residents except for one have accepted to relocate, renew, or transfer within the Property, thereby solidifying the execution plan. The market has continued to show positive trends, and the Project is achieving rents above proforma with units leasing within one week of it being advertised.
The Sponsor intends to optimize a tax strategy called Cost Segregation to immediately accelerate the depreciation of the building and once stabilized, will accelerate depreciation of the Sponsor's capital expenditure. Based on an initial analysis, the cost segregation is expected to return $1.05 in tax shelter losses for every $1.00 invested.
Furthermore, through the increase in rental income upon stabilization, the Sponsor expects to execute an additional 59.8% cash-out refinance distribution in Year 2 through a supplemental loan with Fannie Mae, thereby returning a significant 63.5% cumulative return of original equity back to the Partnership over 2 years.
Summary:
In summary, an investment in Trails at 2112 represents a fantastic opportunity to generate a high cash on cash return of 11.6%, a 63.5% return of original equity over the first two years, and a stable cash flow generating investment return of 16.0% IRR over the proposed 8-year hold period. Given that the acquisition cost is significantly below replacement cost, there is a healthy margin of safety with a high return profile relative to the risks. Even the Sponsor's Year 8 exit price is below today’s replacement cost, which further supports their compelling investment thesis.
CapEx Breakdown
Hard Costs | |||
Exterior | Amount | Per Unit | Per SQFT |
Branding & Signage | $10,000 | $103 | $0.12 |
Security Gate Entrance System | $25,000 | $258 | $0.29 |
WIFI Fiber Optics System | $134,370 | $1,385 | $1.58 |
Security Cameras | $10,000 | $103 | $0.12 |
Amazon Locker | $17,150 | $177 | $0.20 |
Dog Park | $22,960 | $237 | $0.27 |
BBQ Patio Areas | $10,000 | $103 | $0.12 |
Gym Renovation | $16,744 | $173 | $0.20 |
Pool Area Improvements | $24,000 | $247 | $0.28 |
Community Mural | $7,500 | $77 | $0.09 |
Landscaping & Hardscape | $49,650 | $512 | $0.58 |
Exterior Painting | $38,800 | $400 | $0.46 |
Asphalt Repairs | $25,000 | $258 | $0.29 |
Tree Trimming | $15,000 | $155 | $0.18 |
Stair Repairs | $1,500 | $15 | $0.02 |
Concrete Repairs | $10,000 | $103 | $0.12 |
Exterior Lighting | $12,000 | $124 | $0.14 |
Contingency | $41,236 | $425 | $0.49 |
Exterior Total | $470,910 | $4,855 | $5.54 |
Interior | Amount | Per Unit | Per SQFT |
1x1 Renovated Units | $442,746 | $4,564 | $5.21 |
2x2 Renovated Units, Open Concept | $1,347,146 | $13,888 | $15.86 |
Non-Renovated 2x2 | $175,794 | $1,812 | $2.07 |
Total Interior | $1,965,687 | $20,265 | $23.14 |
Total Hard Costs | $2,436,597 | $25,120 | $28.68 |
Soft Costs | Amount | Per Unit | Per SQFT |
City Permit Fees | $7,000 | $72 | $0.08 |
Marketing, Staging, Photography | $15,000 | $155 | $0.18 |
Operational Costs | $9,874 | $102 | $0.12 |
Tenant Buyouts | $25,000 | $258 | $0.29 |
Engineering | $9,900 | $102 | $0.12 |
General Goods | $5,000 | $52 | $0.06 |
Onsite Storage | $2,478 | $26 | $0.03 |
Soft Cost Contingency | $3,200 | $33 | $0.04 |
Construction Fee | $125,702 | $1,296 | $1.48 |
Total Soft Costs | $203,154 | $2,094 | $2.39 |
Grand Total | $2,639,751 | $27,214 | $31.08 |
Built in 1985, Trails is a two-story garden style apartment community spread across 12 residential buildings on 5.32 acres. Designed with a great unit mix of spacious one-bedroom and two-bedroom floor plans, the Sponsor sees an opportunity in the market to renovate and deliver superior upgrades to capture unmet demand in the mid-level luxury category of apartment homes. Secured to purchase at $17,750,000—a price below replacement cost, Trails at 2112 represents an opportunity to generate a high cash on cash return of 11.6%, a 63.5% return of original equity within the first 2 years, and a stable cash flow generating investment return of a 16.0% IRR over the proposed 8-year hold period.
Unit Type | # of Units | Avg SF/Unit | Avg Rent (In-Place) |
Avg Rent (Stabilized) |
Rent per SF |
Studio | 1 | 550 | $1,015 | $1,400 | $2.55 |
1x1 | 28 | 707 | $1,253 | $1,650 | $2.33 |
2x2 | 68 | 950 | $1,419 | $1,850 | $1.95 |
Total/Averages | 97 | 876 | $1,265 | $1,674 | $1.91 |
Lease Comparables
Allure at 2920 | Brooks Landing | The Marc at 1600 | Summerview Apartments | Live Oak* | The Villas at Villagio* | Trails at 2112 | |
Address | 2920 Healthcare Way | 3055 Floyd Ave | 1600 Standiford Ave | 3601 Prescott Rd | 1900 Oakdale Rd | 2920 Floyd Ave | |
Year Built | 2020 | 2005 | 1989 | 1988 | 1988 | 2009 | 1985 |
Units | 100 | 231 | 100 | 136 | 328 | 240 | 97 |
Average Rental Rate | $1,931 | $1,901 | $1,860 | $1,835 | $1,648 | $1,726 | $1,792 |
Average SF | 725 | 977 | 799 | 813 | 761 | 774 | 825 |
Average $/SF | $2.66 | $1.95 | $2.33 | $2.26 | $2.17 | $2.23 | $2.17 |
# Units (1x1) | 48 | 67 | 50 | 68 | 160 | 72 | 28 |
$ (1x1) | $1,795 | $1,846 | $1,775 | $1,725 | $1,489 | $1,595 | $1,650 |
SF (1x1) | 679 | 786 | 682 | 700 | 680 | 707 | 550 |
$/SF (1x1) | $2.64 | $2.35 | $2.60 | $2.46 | $2.19 | $2.26 | $3.00 |
# Units (2x2) | 40 | 164 | 50 | 68 | 168 | 136 | 68 |
$ (2x2) | $2,095 | $1,924 | $1,945 | $1,945 | $1,799 | $1,795 | $1,850 |
SF (2x2) | 997 | 1,055 | 915 | 925 | 838 | 992 | 950 |
$/SF (2x2) | $2.10 | $1.82 | $2.13 | $2.10 | $2.15 | $1.81 | $1.95 |
Distance to Subject | 5.3 miles | 1.2 miles | 3.5 miles | 4.1 miles | 0.5 miles | 0.9 miles | |
Notes | *Unrenovated Property | *Unrenovated Property |
Acquisition Comparables
The Edge at Lakewood | Sedona | Park Lakewood | The Marc at 1600 | Summerview Apartments | Cameron Villa | Chardonnay Ridge | Trails at 2112 | |
Date | Apr '21 | Jan '19 | Dec '20 | Feb '20 | Apr '20 | Feb '19 | Jun '19 | Jan '21 |
Submarket | East Stanislaus | East Stanislaus | East Stanislaus | East Stanislaus | East Stanislaus | East Stanislaus | East Stanislaus | East Stanislaus |
Year Built | 1985 | 1987 | 1985 | 1989 | 1988 | 1977 | 1979 | 1985 |
SF | 153,328 | 43,176 | 97,180 | 79,982 | 115,752 | 61,200 | 85,900 | 84,946 |
Units | 196 | 42 | 116 | 100 | 136 | 68 | 116 | 97 |
Average SF | 782 | 1,028 | 838 | 800 | 851 | 900 | 741 | 825 |
Sale Price | $33,300,000 | $7,950,000 | $20,880,000 | $16,500,000 | $22,191,250 | $10,250,000 | $16,500,000 | $17,550,000 |
$/Unit | $169,898 | $189,286 | $180,000 | $165,000 | $163,171 | $150,735 | $142,241 | $180,928 |
$/SF | $217 | $184 | $215 | $206 | $192 | $167 | $192 | $207 |
Cap Rate | 5.77% | 5.79% | 6.07% | 5.16% | 5.16% | 4.00% | 6.76% | 6.18% |
Distance from Subject (mi.) | 2.0 Miles | 4.8 Miles | 1.4 Miles | 3.5 Miles | 4.1 Miles | 1.8 Miles | 0.9 Miles |
Please refer to the Project Summary in the Documents section for more details on comparables.
Market Overview
Central California is home to some of the most productive agricultural land in the country and produces nearly 25% of the nation's food supply. At an estimated production value of $17 billion per year, the region and local economy has been built around this core industry, and its continued production is what drives local jobs and employment, located just 20 minutes from Modesto.
Beginning in early May 2020, California permitted certain essential businesses to begin reopening. Modesto’s essential job employment sectors benefited from this and are the reason why Modesto is experiencing positive trends in high rent collections, increasing rents, and extremely low vacancy. Additionally, there is news that Amazon is opening a major fulfillment center of over 1.0 million square feet that will employ 1,000 workers in the neighboring city of Turlock, located just 20 minutes from Modesto.
Submarket Overview
The average Modesto multifamily rents are meaningfully lower than high cost urban cities of the San Francisco Bay Area, whose rents are 2.1x Modesto rents. Due to the pandemic, many sectors have transitioned to remote work, accelerating outflow from high rent centers like San Francisco and inflow to low rent centers like Modesto. This trend is evidenced by high vacancy rates in high rent centers like San Francisco (10.0%) and low vacancy rates in low-cost centers like Modesto (2.0%) during the pandemic. In Q4 2020, the submarket saw a 5.0% increase in market rents. In Q1 2021, the submarket saw an additional 5.7% increase in market rents.
Total Capitalization
Sources of Funds | $ Amount | $/Unit |
Debt | $13,065,000 | $134,691 |
GP Investor Equity | $1,850,000 | $19,072 |
LP Investor Equity | $5,850,000 | $60,309 |
Total Sources of Funds | $20,765,000 | $214,072 |
Uses of Funds | $ Amount | $/Unit |
Purchase Price | $17,550,000 | $180,928 |
Closing Costs(1) | $499,908 | $5,154 |
Interest & Cash Reserves | $75,341 | $777 |
Soft Costs | $203,154 | $2,094 |
Hard Costs | $2,436,597 | $25,120 |
Total Uses of Funds | $20,765,000 | $214,072 |
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.
The expected terms of the debt financing are as follows:
- Lender: Fannie Mae
- Term: 144 Months
- Loan to Value: 62.9%
- Estimated Proceeds: $13,065,000
- Interest Type: Fixed
- Annual Interest Rate: 4.42%
- Interest-Only Period: 34 Months
- Amortization: 30 Years
- Prepayment Terms: YM through 4/30/2029
- Extension Requirements: None
Supplemental Loan:
- Lender: Fannie Mae
- Term: Coterminous
- Estimated Proceeds: $5,177,663
- Interest Type: Fixed
- Annual Interest Rate: 4.59%
- Interest-Only Period: 0 Months
- Amortization: 30 Years
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.
Valiance Capital intends to make distributions from RM 2112 Trails LLC as follows:
- To the Investors, pari passu, all operating cash flows to an 8.0% preferred return;
- 80% / 20% (80% to Investors / 20% to Promote) of excess cash flow to a 15% preferred return;
- 65% / 35% (65% to Investors / 35% to Promote) of excess cash flow to a 20% preferred return;
- 50% / 50% (50% to Investors / 50% to Promote) of excess cash flow thereafter.
Valiance Capital 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 February 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Valiance Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves. Valiance Capital will receive a promote as indicated above, and a portion of this promote may be received by RM Admin, LLC for administrative services.
Cash Flow Summary | |||||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | ||
Effective Gross Revenue | $1,599,782 | $1,989,627 | $2,132,456 | $2,191,582 | $2,252,349 | $2,314,801 | $2,378,987 | $2,238,569 | |
Total Operating Expenses | $598,077 | $624,330 | $633,005 | $646,118 | $659,506 | $673,175 | $687,130 | $642,246 | |
Net Operating Income | $1,001,705 | $1,365,297 | $1,499,451 | $1,545,464 | $1,592,843 | $1,641,627 | $1,691,857 | $1,596,323 | |
Project-Level Cash Flows | |||||||||
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | |
Net Cash Flow | ($7,700,000) | $283,431 | $4,919,715 | $327,878 | $282,415 | $324,115 | $369,253 | $415,754 | $10,521,593 |
Investor-Level Cash Flows* | |||||||||
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | |
Net Cash Flow | ($3,000,000) | $18,793 | $1,886,772 | $97,745 | $80,032 | $96,279 | $113,865 | $131,982 | $3,514,198 |
Investor-Level Cash Flows - Hypothetical $50,000 Investment* | |||||||||
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | |
Net Cash Flow | ($50,000) | $313 | $31,446 | $1,629 | $1,334 | $1,605 | $1,898 | $2,200 | $58,570 |
*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.
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.
Certain fees and compensation will be paid over the life of the transaction; please refer to Valiance Capital'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 |
Completion Distribution | 2.00% of Stabilized Appraised Value | Valiance Capital | Refinance Proceeds | |
Construction Management Fee | 5.00% of Total CapEx | Bruno Construction | Partnership | Affiliate to Valiance Capital |
Recurring Fees: | ||||
Type of Fee | Amount of Fee | Received By | Paid From | Notes |
Asset Management^ | 2.25% of EGI | Valiance Capital | Partnership | |
Administrative Services Fee | 1% of Equity* | RM Admin(3) | RM Distributions |
*Only applies to equity raised through the RealtyMogul Platform
^Asset management fee is 5% of EGI, however, property management fee (2.75% of EGI) must be paid from asset management fee. Asset management is projected at 2.25% of EGI for illustrative purposes.
An acquisition fee of 1.75% of the purchase price was paid to Sponsor in January 2021, which is capitalized in the transaction.
(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.
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, LLCSponsor 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 DocumentsThe 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 InvestmentThis 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 AssumptionsSponsor 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 PerformanceAny 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 DebtA 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 RegisteredSponsor’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 AdviceNothing 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 RiskInternal 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.