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.
This investment offers platform investors an attractive target internal rate of return of 20.0% and equity multiple of 1.50x.
This development will bring a new, Class-A rental apartment product to Western Morris County. The apartment market has benefitted from the outflow of residents from dense urban locales. The Western Morris County submarket's overall apartment vacancy rate is a low 4.7% and landlords are experiencing strong rent growth (7.9% over the last 12 months). A vast majority (95% of the 1,245 units currently under construction) will be delivered to the submarket in 4Q21 and are anticipated to be stabilized when our development is available for lease in the 3Q23.
Morris County is home to 33 Fortune 500 businesses and other major area employers, including AT&T, Pfizer, ExxonMobil, Novartis, Picatinny Arsenal, and St. Clare's Health System. While Morris County has a high cost of living (median home price of $515,800 compared to the national average of $291,700), niche.com ranks Morris County #2 in terms of best counties to live in N.J. in 2021 due to quality public schools, favorable family environment, jobs, diversity, and nightlife. The county is also well connected to the region and NYC metro area via a robust highway system and public transportation network.
Diversified Properties, LLC
Diversified Properties, LLC (the "Sponsor") is a Montville, N.J.-based residential and commercial development and management company founded in 2000, specializing in value creation through the successful execution of multifamily, office, self-storage, retail, and industrial ground-up development and redevelopment projects throughout the northeastern United States. The Sponsor utilizes its substantial in-house expertise in acquisitions, architectural and engineering design, land use, entitlements, construction, leasing, sales, and property management, within an agile and scalable operational structure to capitalize on opportunities in key growth markets. Diversified Properties, LLC currently has developed real estate valued at more than $1.5 billion and boasts a portfolio valued in excess of $500 million.
With deep experience in multifamily development and management, Diversified Properties, LLC has successfully created dozens of multifamily communities comprising over 10,000 units across N.J., N.Y., PA, MD and CT and, today, manages an existing and development pipeline spanning 4,000 residential units across 10 diverse communities.
Highlighting their leadership position in N.J.’s real estate community, the sponsor was recently recognized as one of the state’s Leaders in Real Estate, Construction and Design by NJBIZ. Founder Nicholas Minoia was also recently named to NJBIZ's 2021 Power 50 in Real Estate list and was selected as a GlobeSt. Real Estate Forum Multifamily Influencer in 2021.
https://diversifiedproperties.com/Property | City, State | Asset Type | Project Status | Units or SF | Current Cost/Stabilized Value | NOI | Yield on Cost/Stab Cap Rate | Net Cash Flow | |
Built & under current management | |||||||||
1 | 21 Summit | Summit, NJ | Retail | Operating | 7,000 sq ft retail | $1,809,673 | $117,629 | 6.50% | $45,986 |
2 | Summit Lane | Newburgh, NY | Multifamily | Operating | 188 | $44,600,000 | $1,805,836 | 4.05% | $458,296 |
3 | Summit Terrace | New Windsor, NY | Multifamily | Operating | 270 | $61,700,000 | $3,201,460 | 5.19% | $1,291,864 |
4 | Summit Court Phase 1 | Union, NJ | Multifamily | Operating | 130 | $58,500,000 | $2,297,777 | 3.93% | $665,538 |
7 | Meadow Ridge | Newburgh, NY | Multifamily | Operating | 185 | $10,000,000 | $2,642,106 | 26.42% | $546,678 |
8 | 30 Court | Morristown, NJ | Multifamily | Operating | 58 | $35,000,000 | confidential | confidential | confidential |
9 | The Promenade | Summit, NJ | Mixed Use | Operating | 22 Residential 16,000 sq ft retail | $17,990,000 | $854,525 | 4.75% | $427,263 |
10 | 47 River Road | Summit, NJ | Office | Operating | 6,000 sq ft office | $2,784,283 | $167,057 | 6.00% | $33,411 |
11 | 45 River Road | Summit, NJ | Office | Operating | 6,000 sq ft office | $729,433 | $43,766 | 6.00% | $8,753 |
12 | 350 Main Road | Montville, NJ | Office | Operating | 34,000 sq ft existing commercial |
$5,628,000 | $256,698 | 4.56% | $55,282 |
13 | Cubesmart Self-Storage | Montville, NJ | Self-Storage | Operating | 98,000 sq ft Self-Storage | $23,500,000 | $1,104,266 | 4.70% | $1,104,266 |
14 | 1,2,3,6,9 Mars Court | Montville, NJ | Industrial | Operating | 105,000 sq ft industrial | $25,000,000 | $758,093 | 3.03% | $379,047 |
15 | Bergenfield Industrial | Bergenfield, NJ | Industrial | Operating | 49,961 sq ft industrial | $3,100,000 | $233,626 | 7.54% | $116,813 |
Subtotal | $290,341,389 | $13,482,838 | 4.64% | $5,133,195 | |||||
Under Current Construction | |||||||||
16 | Clermont Fidelco Urban Renewal | Union, NJ | Multifamily | Development | 266 | $26,000,000 | $5,242,111 | 20.16% | $1,071,785 |
17 | Lighthouse Landing Ventures LLC | Sleepy Hollow, NY | Mixed Use | Development | 1,177 Residential, 135,000 Sq ft retail, and 35,000 sq ft office | $86,900,000 | $0 | n/a | $0 |
18 | Farms at Stony Hill LLC | Bethel, CT | Multifamily | Development | 117 | $5,500,000 | $0 | n/a | $0 |
19 | Irondale @ Wharton | Wharton, NJ | Multifamily | Development | 60 | $17,272,468 | $0 | n/a | $0 |
Subtotal | $135,672,468 | $13,482,838 | $5,133,195 | ||||||
Built and Sold | |||||||||
20 | 480 Flatz | East Rutherford, NJ | Multifamily | Sold | 35 Residential Units | $11,600,000 | - | 4.97% | |
21 | Summerhill Road | East Brunswick, NJ | Mixed Use | Sold | 120 Residential Units & Pharmacy and Bank Pad |
$18,000,000 | - | - | - |
22 | Hackensack Self-Storage | Hackensack, NJ | Self-Storage | Sold | 67,000 sq ft Self-Storage | $10,000,000 | - | - | - |
23 | Summit Place Apartments | Lindenwold, NJ | Multifamily | Sold | 148 Residential Units | $7,500,000 | - | - | - |
24 | Summit Ridge | Allentown, PA | Multifamily | Sold | 204 Residential Units | $45,000,000 | - | - | - |
25 | High Ridge | Montville, NJ | For Sale Townhomes | Sold | 100 Town Homes | $60,000,000 | - | - | - |
26 | Longview Townhome Community | Montville, NJ | For Sale Townhomes | Sold | 400 Town Homes | $190,000,000 | - | - | - |
27 | Bear's Nest | Park Ridge, NJ | For Sale Townhomes | Sold | 150 Town Homes | $95,000,000 | - | - | - |
Subtotal | $437,100,000 | ||||||||
Total | $863,113,857 | $26,965,675 | $10,266,390 |
The above biography and track record were provided by the Sponsor and have not been independently verified by RM Technologies, LLC or its affiliates. Past performance is not indicative of future results. Please carefully review the Disclaimers section below.
The business plan is to develop a 60-unit Class A multifamily community in Wharton, NJ. The land is under contract for $2,250,000. Tapping into unmet demand for rental housing, the Sponsor will leverage its 20+ year track record of successful multifamily development in developing Irondale at Wharton. The investment represents a unique opportunity to enter Morris County's extraordinarily high barrier-to-entry housing market.
Total capitalization is approximately $19,500,000 (or $325K per unit). The investment will be funded by a $13,665,000 construction loan (70% LTC), $5,000,000 in LP equity and $850,000 in Sponsor equity. Construction is anticipated to be 15 months (complete by Oct 2023) and the community is projected to be stabilized in 19 months (Feb 2024). The Project is anticipated to be sold in Oct 2024 for gross sale proceeds of $23,100,000 (or $385K per unit), representing a 5.00% cap rate.
There will be 54 market-rate units and 6 affordable rate units (as mandated by state law). The unit mix is as follows: 4 studio units (7% of mix), 39 1BR/1BA + Den units (65%), 11 2BR/2BA units (18%) and 6 affordable units (10%). The average unit size is 844 square feet, and the community will feature underground parking and a community gym. Unit amenities include washer/dryers and a fully equipped kitchen with stainless steel appliances and granite countertops.
Development Budget
Acquisition Cost | $ Amount | Per Unit | Per SF |
Purchase Price | $2,250,000 | $37,500 | $37.25 |
Closing Costs(1) | $286,650 | $4,778 | $4.75 |
Total Acquisition Costs | $2,536,650 | $42,278 | $41.99 |
Capital Expenditures - Hard Costs | $ Amount | Per Unit | Per SF |
Hard Costs (Residential) | $10,098,000 | $168,300 | $167.16 |
Hard Cost Contingency (Residential) | $1,009,800 | $16,830 | $13.34 |
Site Work | $2,022,657 | $33,711 | $26.73 |
Site Work Contingency | $101,133 | $1,686 | $1.34 |
Total Hard Costs | $13,231,590 | $220,527 | $219.03 |
Capital Expenditures - Soft Costs | $ Amount | Per Unit | Per SF |
Legal | $50,000 | $833 | $0.83 |
Environmental | $35,720 | $595 | $0.59 |
Engineering and Surveying | $20,000 | $333 | $0.33 |
Architectural | $150,000 | $2,500 | $2.48 |
Consultants | $50,835 | $847 | $0.84 |
Project Permit Fees | $95,571 | $1,593 | $1.58 |
Utility and Design Connection Fees | $256,792 | $4,280 | $4.25 |
Performance and Maintenance Bonds | $6,000 | $100 | $0.10 |
Insurance | $345,000 | $5,750 | $5.71 |
Salaries and Marketing | $500,000 | $8,333 | $8.28 |
Bank Financing Fees | $81,450 | $1,358 | $1.35 |
Real Estate Taxes (During Construction) | $60,626 | $1,010 | $1.00 |
Operating Expense Deficit (During Leaseup) | $28,600 | $477 | $0.47 |
Construction Management Fees | $661,579 | $11,026 | $10.95 |
Soft Cost Contingency | $131,441 | $2,191 | $2.18 |
Total Soft Costs | $2,473,614 | $41,227 | $40.95 |
Other | $ Amount | Per Unit | Per SF |
Construction Interest Reserve - Financing | $751,620 | $12,527 | $12.44 |
Developer Fee | $529,263 | $8,821 | $8.76 |
Grand Total | $19,522,737 | $325,379 | $323.18 |
(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.
Investor Q&A 7/7/2022
Irondale at Wharton will be located in Wharton, N.J., a growing marketplace with a strong demand for housing. In 1902, Wharton, N.J. was re-named in honor of Joseph Wharton, an industrialist who was involved in mining, manufacturing, and education. He founded the Wharton School at the University of Pennsylvania. The site is proximate to New York City (less than one hour east), major employers, and numerous dining, shopping, and entertainment venues. Morris County boasts 13,000 acres that encompass 28 parks making it the largest county park system in NJ. The nearby New Jersey Highlands Region, a 60-mile stretch, offers area residents diverse recreational opportunities, abundant wildlife, and significant historic and scenic resources.
Unit Type | # of Units | Avg SF/Unit | Avg Rent | Rent per SF |
Studio | 4 | 540 | $1,600 | $2.96 |
1 BR (+ Den) | 39 | 798 | $2,350 | $2.94 |
2 BR | 11 | 1,080 | $2,550 | $2.36 |
1 BR (Affordable) | 1 | 815 | $943 | $1.16 |
2 BR (Affordable) | 4 | 900 | $1,074 | $1.19 |
3 BR (Affordable) | 1 | 1,003 | $1,250 | $1.25 |
Total/Averages | 60 | 843 | $2,210 | $2.67 |
Lease Comparables
Avalon Boonton | Meridia Transit Plaza | 34 Bank | Avalon Wharton | The Boulders at Rockaway | Woodmont West at Mount Arlington | Pondview Estates | Comp Averages | Irondale at Wharton | |
Address | 1 Avalon Way | 1 W Dickerson St | 34 Bank Street | 111 E Dewey Ave | 10 Mount Pleasant Ave | 100 Fieldstone Drive | 100 Julia Drive | 47 Kossuth Street | |
Year Built | 2017 | 2020 | 2021 | 2014 | 2006 | 2016 | 2017 | 2016 | 2023 |
Units | 350 | 214 | 126 | 247 | 128 | 300 | 560 | 275 | 54 |
Average Rental Rate | $3,062 | $1,914 | $2,033 | $2,723 | $2,260 | $2,843 | $2,853 | $2,675 | $2,335 |
Average SF | 1081 | 817 | 852 | 1,160 | 1,009 | 1,146 | 1,409 | 1,068 | 836 |
Average $/SF | $2.83 | $2.34 | $2.39 | $2.35 | $2.24 | $2.48 | $2.03 | $2.51 | $2.79 |
# Units (Studio) | 72 | 7 | 40 | 4 | |||||
$ (Studio) | $1,979 | $2,239 | $2,002 | $1,600 | |||||
SF (Studio) | 599 | 618 | 601 | 540 | |||||
$/SF (Studio) | $3.30 | $3.62 | $3.33 | $2.96 | |||||
# Units (1x1) | 86 | 112 | 120 | 88 | 48 | 119 | 225 | 114 | 39 |
$ (1x1) | $2,853 | $1,819 | $2,010 | $2,441 | $2,067 | $2,479 | $2,488 | $2,330 | $2,350 |
SF (1x1) | 927 | 782 | 838 | 954 | 709 | 948 | 1,029 | 915 | 798 |
$/SF (1x1) | $3.08 | $2.33 | $2.40 | $2.56 | $2.92 | $2.61 | $2.42 | $2.55 | $2.94 |
# Units (2x2) | 154 | 102 | 6 | 114 | 76 | 181 | 198 | 119 | 11 |
$ (2x2) | $3,428 | $2,019 | $2,490 | $2,832 | $2,369 | $3,082 | $2,916 | $2,872 | $2,550 |
SF (2x2) | 1,282 | 855 | 1,134 | 1,261 | 1,188 | 1,277 | 1,580 | 1,287 | 1,080 |
$/SF (2x2) | $2.67 | $2.36 | $2.20 | $2.25 | $1.99 | $2.41 | $1.85 | $2.23 | $2.36 |
# Units (3x2) | 38 | 38 | 4 | 137 | 54 | ||||
$ (3x2) | $4,102 | $3,136 | $2,518 | $3,363 | $3,437 | ||||
SF (3x2) | 1,527 | 1,437 | 1,215 | 1,785 | 1,668 | ||||
$/SF (3x2) | $2.69 | $2.18 | $2.07 | $1.88 | $2.06 | ||||
Distance to Subject | 9.57 miles | 1.7 miles | 2.7 miles | 0.63 miles | 1.6 miles | 3.52 miles | 1.08 miles | 3.0 miles | |
Notes | 6 Affordable Units |
Sales Comparables
480 Flatz(1) | The Residences at North Village | Meridia Transit Plaza | Morris Crossing | Magnolia Lane Luxury | Total/Averages | Irondale at Wharton (Subject) | |
Date | September 21' | Apr 21' | December 21' | Oct '19 | Aug 19' | Feb '24 (Projected) | |
Submarket | Greater Bergen County | Sussex County | Western Morris County | Morris County | Essex County | Western Morris County | |
Year Built | 2021 | 2020 | 2020 | 2009 | 2018 | 2018 | 2023 |
SF | 40,000 | 75,200 | 280,000 | 110,960 | 60,000 | 113,232 | 75,675 |
Units | 35 | 60 | 214 | 123 | 34 | 93 | 60 |
Average SF | 867 | 911 | 817 | 911 | 1,312 | 964 | 844 |
Sale Price | $11,600,000 | $14,650,000 | $53,000,000 | $39,500,000 | $13,800,000 | $26,510,000 | $20,300,000 |
$/Unit | $331,429 | $244,167 | $247,664 | $321,138 | $405,882 | $310,056 | $338,333 |
$/SF | $290.00 | $194.81 | $189.29 | $355.98 | $230.00 | $252.02 | $268.25 |
Cap Rate | 4.97% | 4.75% | 5.15% | 5.50% | 6.34% | 5.34% | 5.00% |
Distance from Subject (mi.) | 33.2 Miles | 14.3 Miles | 2.4 Miles | 13.9 Miles | 4.6 Miles | 13.7 Miles |
(1) 480 Flatz - Recent Case Study: The Sponsor just executed on a very similar Property Development in Rutherford, NJ (37 miles west) totaling 35 units. They acquired the parcel in Nov 2018, developed it, and leased it up to 90% with a sale effectuating June 2021 (27 months – 9 quarters) amid the pandemic. Their net development costs were $212k/unit and their sale proceeds were $331k/unit or a 4.97% cap rate on the in-place T-3, rent roll pro-forma expenses.
Market Overview
The 1.8-acre site is situated in the borough of Wharton, a community of approximately 6,500 residents in the Western Morris County, N.J. The site offers convenient access to local highways (Interstate 80, Route 15, and US Highway 46) and the area's extensive mass transit system. Wharton is approximately 2.2 square miles and bound on the west by Roxbury Township and the east by Dover and Rockaway Townships. The Property is proximate to several large retailers, including Costco, Walmart, Home Depot, and Target. The site is also easily accessible to many of northern New Jersey's largest employers, including AT&T, Pfizer, ExxonMobil, Novartis, Picatinny Arsenal, and the St. Clare's Health System.
Submarket Overview
According to CoStar, Morris County, N.J. benefits from the outflow of residents from dense urban locales. The Western Morris County apartment submarket is performing well as exhibited by its 4.7% 3Q21 overall vacancy rate and 7.9% overall rental growth rate spanning the past 12 months. The market is characterized by high barriers to entry, including a lack of developable land and a lengthy entitlement process. While there are several apartment properties under construction in Western Morris County, a majority of these new units (95% of the 1,245 units) will be delivered to the market for lease in 4Q21 and are anticipated to be stabilized by the time the Sponsor's community is available for lease in 3Q23.
Total Capitalization
Sources of Funds | $ Amount | $/Unit |
Debt | $13,665,916 | $227,765 |
GP Investor Equity | $856,821 | $14,280 |
LP Investor Equity | $5,000,000 | $83,333 |
Total Sources of Funds | $19,522,737 | $325,379 |
Uses of Funds | $ Amount | $/Unit |
Purchase Price | $2,250,000 | $37,500 |
Closing Costs | $286,650 | $4,778 |
Hard Costs | $12,120,657 | $202,011 |
Hard Cost Contingency | $1,110,933 | $18,516 |
Soft Costs | $2,342,173 | $39,036 |
Soft Cost Contingency | $131,441 | $2,191 |
Interest Reserve | $751,620 | $12,527 |
Developer Fee | $529,263 | $8,821 |
Total Uses of Funds | $19,522,737 | $325,379 |
The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
The expected terms of the debt financing are as follows:
- Lender: Malvern Bank, National Association
- Term: 2 Years
- Loan-to-Value: 70.0%
- Estimated Proceeds: $13,665,916
- Interest Type: Floating
- Spread Above One-Month PRIME: 0.50% [PRIME + 50bps (Floor Rate 4.00%)]
- Interest-Only Period: 2 Years
- Amortization: None
- Prepayment Terms: Exit Fee of 33 bps if sold at stabilization
- Modeled Refinance: No
A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt.
Diversified Properties, LLC intends to make distributions from DP Wharton LLC as follows:
- 85% / 15% (85% to Investors / 15% to Promote/Carried Interest) of excess cash flow to a 8.0% IRR;
- 75% / 25% (75% to Investors / 25% to Promote/Carried Interest) of excess cash flow to a 12.0% IRR;
- 65% / 35% (65% to Investors / 35% to Promote/Carried Interest) of excess cash flow to a 14% IRR;
- 60% / 40% (60% to Investors / 40% to Promote/Carried Interest) of excess cash flow thereafter.
Diversified Properties, LLC intends to make distributions to investors after the payment of the 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 January 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Diversified Properties, LLC, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Diversified Properties, LLC will receive a promoted/carried interest as indicated above, and a portion of this promoted/carried interest may be received by RM Admin, LLC.
Cash Flow Summary | ||||||
Year 1 | Year 2 | Year 3(1) | ||||
Effective Gross Revenue | $0 | $1,026,392 | $855,124 | |||
Total Operating Expenses | $0 | $389,213 | $285,928 | |||
Net Operating Income | $0 | $637,179 | $569,195 | |||
Project-Level Cash Flows | ||||||
Year 0 | Year 1 | Year 2 | Year 3(1) | |||
Net Cash Flow | ($5,856,821) | $0 | $449,273 | $8,911,038 | ||
Investor-Level Cash Flows(3) | ||||||
Year 0 | Year 1 | Year 2 | Year 3(1) | |||
Net Cash Flow | ($5,000,000) | $0 | $451,093 | $7,022,993 | ||
Investor-Level Cash Flows - Hypothetical $50,000 Investment(3) | ||||||
Year 0 | Year 1 | Year 2 | Year 3(1) | |||
Net Cash Flow | ($50,000) | $0 | $4,511 | $70,230 |
(1) Stub Year
(2) Return of Capital occurs at sale of Property: Please see offering documents for more details.
(3) RM Technologies, LLC and its affiliates do not provide any assurance of returns. Returns presented are net of all fees. Please carefully review the Fees and Disclaimers sections below for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.
Certain fees and compensation will be paid over the life of the transaction; please refer to Diversified Properties, LLC's materials for details. The following fees and compensation will be paid(1)(2)(3)(4)(5):
One-Time Fees | |||
Type of Fee | Amount of Fee | Received By | Paid From |
Developer Fee | 4.0% of Hard and Site Work Costs | Diversified Properties, LLC | Deal Capitalization |
Construction Management Fee | 5.0% of Hard and Site Work Costs | Diversified Properties, LLC | Deal Capitalization |
Affiliate Mortgage Broker Fee | 0.75% of Debt Proceeds(1) | Diversified Properties, LLC | Deal Capitalization |
Recurring Fees: | |||
Type of Fee | Amount of Fee | Received By | Paid From |
Administrative Services Fee | 1.0% of Equity(2) | RM Admin, LLC(5) | Cash Flow |
Property Management Fee | 4.0% of Effective Gross Income | Diversified Properties, LLC | Cash Flow |
Disposition Fee | 0.25% of Sales Proceeds | Diversified Properties, LLC | Cash Flow |
(1) Only applies if Sponsor secures the debt without a third-party broker
(2) Only applies to equity raised through the RealtyMogul Platform
(3) Fees may be deferred to reduce impact to investor distributions.
(4) 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.
(5) 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.