RM Communities is a sister-company to RealtyMogul, one of the leading online platforms for real estate investing. RM Communities is an owner/operator of multifamily assets with a proprietary playbook to deliver strong risk-adjusted returns. RM Communities has acquired over 2,700 multifamily units and more than $455 million(1) in real estate with a fully dedicated team of acquisitions, underwriting, and asset management professionals.
Sherwood Oaks is in Riverview, FL, a suburb 12 miles southeast of Downtown Tampa. The property, consisting of 199 units with a mixture of studio, one, and two bedrooms, was built in 1984. Sherwood has a unique, predominantly single-story construction, a feature that is highly desirable amongst tenants and a huge competitive advantage over nearby apartment properties. Amenities at the Property include a modern clubhouse, resort-style pool, and package lockers.
Riverview, along with the broader Tampa metro, has consistently been ranked as one of the top 10 best markets for multifamily investing over the last 2 years. Since 2010, the population has grown 34% in Riverview, and the growth forecast for 2021 is 3.4%. Tampa Bay is home to 20 corporate headquarters with over $1 billion in annual revenue, eight of which are Fortune 1000 companies. The median area income is $85k.
Unit Mix
| Units | Type | Unit SF | Total SF | In-Place Rent | Stabilized Rent | Rent / SF |
| 21 | 0/1 | 300 | 6,300 | $934 | $1,060 | $3.53 |
| 128 | 1/1 | 675 | 86,400 | $1,098 | $1,365 | $2.02 |
| 33 | 2/1 | 1,000 | 33,000 | $1,198 | $1,400 | $1.40 |
| 17 | 2/2 | 1,000 | 17,000 | $1,284 | $1,450 | $1.45 |
| 199 | 717 | 142,700 | $1,114 | $1,346 | $1.88 |
Lease Comparables
| Studio | SF | Stabilized Rent | Per SF | Year Built |
| Sherwood Oaks | 300 | $1,060 | $3.53 | 1984 |
| Indigo Point | 533 | $1,653 | $3.10 | 1989 |
| Rivertree Apartments | 608 | $1,368 | $2.25 | 2004 |
| Average | 571 | $1,511 | $2.65 |
| 1 Bed/1 Bath | SF | Stabilized Rent | Per SF | Year Built |
| Sherwood Oaks | 675 | $1,365 | $2.02 | 1984 |
| Lakewood Place | 600 | $1,323 | $2.21 | 1986 |
| Retreat at Crosstown | 704 | $1,450 | $2.06 | 1985 |
| Rivertree Apartments | 714 | $1,544 | $2.16 | 2004 |
| Average | 673 | $1,439 | $2.14 |
| 2 Bed/1 Bath | SF | Stabilized Rent | Per SF | Year Built |
| Sherwood Oaks | 1,000 | $1,400 | $1.40 | 1984 |
| Lakewood Place | 900 | $1,425 | $1.58 | 1986 |
| Rivertree Apartments | 973 | $1,921 | $1.97 | 2004 |
| Retreat at Crosstown | 902 | $1,705 | $1.89 | 1985 |
| Average | 925 | $1,684 | $1.82 |
| 2 Bed/2 Bath | SF | Stabilized Rent | Per SF | Year Built |
| Sherwood Oaks | 1,000 | $1,450 | $1.45 | 1984 |
| Lakewood Place | 1,000 | $1,625 | 1.63 | 1986 |
| Rivertree Apartments | 1,032 | $1,906 | $1.85 | 2004 |
| Retreat at Crosstown | 1,024 | $1,757 | $1.72 | 1985 |
| Average | 1,019 | $1,763 | $1.73 |
Sales Comparables
| Property Name | Submarket | Property Address | City | Sale Date | Sale Price | Number of Units | Gross Building SF | Price per Unit | Price per SF | Year Built | Building Class |
| Sherwood Oaks | Brandon | 10103 Sherwood Lane | Riverview | 10/1/2021 | $35,000,000 | 199 | 141,376 | $175,879 | $248 | 1984 | B |
| The Park at Elland/Gibraltar | Clearwater | 2481 NE Coachman 2550 Stag Run Blvd |
Clearwater | 8/31/2021 | $76,000,000 | 425 | 370,628 | $178,824 | $205 | 1985/6 | B |
| The Lory of Braden River | Bradenton | 702 51st St | Bradenton | 7/14/2021 | $53,300,000 | 270 | 241,595 | $197,407 | $221 | 2002 | B |
| Bayvue | Rocky Point | 5902 Memorial Hwy | Tampa | 7/7/2021 | $59,500,000 | 368 | 283,729 | $161,685 | $210 | 1984 | B |
| Century Crosstown | Brandon | 9712 Bosque Creek Cir. | Tampa | 6/30/2021 | $73,685,372 | 344 | 375,185 | $214,202 | $196 | 2013 | A |
| Eagles Point Apartments | Tampa Palms | 14551 N 46th St | Tampa | 12/17/2020 | $31,500,000 | 192 | 168,575 | $164,063 | $187 | 1989 | C |
| Trellis at the Lakes | Brighton Bay | 11401 Dr. Martin Luther King Jr St N | Saint Petersburg | 11/9/2020 | $114,000,000 | 688 | 503,498 | $165,698 | $226 | 1990 | A |
| Promenade at Carillon | Carillon | 540 Carillon Pky | Saint Petersburg | 1/14/2020 | $64,128,000 | 334 | 323,688 | $192,000 | $198 | 1986 | B |
Total Capitalization
| Sources | Amount | $/unit | % |
| Senior Loan | $27,750,000 | $139,447 | 72.3% |
| LP Investor Equity | $10,657,819 | $53,557 | 27.7% |
| Total | $38,407,819 | $193,004 | 100.0% |
| Uses | Amount | $/unit | % |
| Purchase Price | $35,000,000 | $175,879 | 91.1% |
| Loan Fee | $485,625 | $2,440 | 1.3% |
| Closing, Legal Fees | $503,760 | $2,531 | 1.3% |
| CapEx Budget | $1,345,500 | $6,761 | 3.5% |
| Acquisition Fee | $700,000 | $3,518 | 1.8% |
| Taxes and Insurance | $167,190 | $261 | 0.4% |
| Working Capital | $130,000 | $653 | 0.3% |
| Interest & CF Reserve | $75,744 | $381 | 0.2% |
| Total | $38,407,819 | $193,004 | 100.0% |
The expected terms of the debt financing are as follows:
Senior Debt:
- Loan Type: Debt Fund
- Total Loan Amount: $27,750,000
- Loan Term: 5 Years
- Lender: Harbor Group Intl.
- Mortgage Broker: Berkadia
- Amortization: 30 Years
- Interest Rate: LIBOR + 3.25%
- Interest-Only: 3 Years
- Initial Loan-to-Value: 76.4%
- Loan-to-Cost: 74.3%
- Extension Options: 2, 12 month
Refinance:
- Refi Date: Month 36
- Total Loan Amount: $31,074,614
- Refi Loan Term: 10 Years
- Amortization: 30 Years
- Refi Loan-to-Value: 72.0%
- Interest Rate: 4.25%
- Interest-Only: 3 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.
RM Communities intends to make distributions from Sherwood Oaks Investors, LLC as follows:
Operating Cash Flow
- 8% Preferred Return
- 70%/30% (70% to Members/30% to RM Communities) to a 16% IRR
- 50%/50% (50% to Members/50% to RM Communities) thereafter
Capital Event
- 8% Preferred Return
- Return of Capital
- 70%/30% (70% to Members/30% to RM Communities) to a 16% IRR
- 50%/50% (50% to Members/50% to RM Communities) thereafter
RM Communities 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 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of RM Communities, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Cash Flow Summary
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Reversion | |
| Effective Gross Income | $2,990,926 | $3,386,171 | $3,554,617 | $3,685,392 | $3,820,994 | $4,304,463 |
| Expenses | $1,422,938 | $1,510,225 | $1,554,872 | $1,599,514 | $1,645,458 | $1,792,866 |
| Net Operating Income | $1,567,988 | $1,875,946 | $1,999,745 | $2,085,878 | $2,175,537 | $2,511,596 |
Projected Investor Cash Flows
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | |
| Net Earnings to Investor -Hypothetical $50,000 Investment(1) | ($50,000) | $2,806 | $3,692 | $17,108 | $3,194 | $3,473 | $3,688 | $79,640 |
(1) Returns are net of all fees.
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 RM Communities' materials for details. The following fees and compensation will be paid(1):
| One-Time Fees: | |||||
| Type of Fee | Amount of Fee | Received By | Paid From | ||
| Acquisition Fee | 2.0% of Purchase Price | RM Communities | Capitalized Equity Contribution | ||
| Recurring Fees: | |||||
| Type of Fee | Amount of Fee | Received By | Paid From | ||
| Asset Management Fee | 1.5% of Effective Gross Income | RM Communities | Distributable Cash | ||
| Property Management Fee | 3.0% of Effective Gross Income | Cushman & Wakefield, Third Party Property Manager | Distributable Cash | ||
(1) Fees may be deferred to reduce impact to investor distributions.
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 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. Sponsor is 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.
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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. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.