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Multifamily
Irondale at Wharton
Morris County MSA, NJ
INVESTMENT STRATEGY
Development
INVESTMENT TYPE
Equity
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100% funded
Offered By Diversified Properties, LLC
20.0%* TARGET IRR 19.0%-21.0%
1.5X* TARGET EQUITY MULTIPLE
Estimated Hold Period 2.5 Years
Estimated First Distribution 1/2024
Minimum Investment 35000
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Project Summary
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Explore this Project
Overview
Diversified Properties, LLC is developing a 60-unit Class-A multifamily community in Western Morris County, N.J., one of New Jersey's most sought-after housing markets.
Cash Flow

This investment offers platform investors an attractive target internal rate of return of 20.0% and equity multiple of 1.50x.

Market

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. 

Demographics

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. 

Property At A Glance
# of Units 60
# of Buildings 1
Construction Completion Date 10/1/2023
Parking Ratio 2.0 Per Unit
Development Yield on Cost 5.93%
Acquisition Price

$2,536,650

Investment Highlights
Attractive investor target internal rate of return of 20.0% and target equity multiple of 1.50x.
The Property has been vacated and the Sponsor has commenced site improvements leading to a solidified construction and lease-up timeline.
Strong apartment market fundamentals make this development Project attractive to investors and buyers of multifamily product (4.7% submarket vacancy rate and 7.9% asking rent growth over the last 12 months).
Through 2025, Northern N.J. job growth is projected to meet or exceed the national average and the current median household income well above the national average ($92,000 vs $69,000). In addition, several large employers, including AT&T, Pfizer, ExxonMobil, Novartis, Picatinny Arsenal, and St. Clare's Health System, are proximate to the site.
The site offers direct mass transit access to New York City and regional connectivity via Interstates 80, 287, and Route 46.
The Sponsor has extensive experience developing and constructing multifamily projects in New Jersey. The Sponsor has developed over 10,000 multifamily units across New Jersey, New York, Pennsylvania, Connecticut, and Maryland. Diversified Properties, LLC, recently named by NJBIZ as one of New Jersey's top 2021 developers, currently manages an existing and development pipeline totaling 4,000 residential units across 10 diverse communities.
Construction will be directly managed by the sponsor's hands-on executive team and its in-house construction management firm, Morris Construction Management, LLC. In addition, the Sponsor will manage the lease up and its affiliate, DP Property Management, LLC, will manage the Property.
Management
Cumulative Distributions

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/
  • Nicholas W. Minoia
    Managing and Founding Partner
Nicholas W. Minoia
Managing and Founding Partner

Founding Diversified Properties in 2000, Minoia has led the firm in its development of real estate valued at more than $1.5-billion and today boasts a portfolio valued at more than $500 million. Under Minoia’s leadership, the company has become one of the region’s most experienced and trusted commercial real estate builders and owners with expertise across asset classes and markets. A key piece of Diversified Properties' success is its deep history in developing and managing multifamily communities across N.J., N.Y., Pa., Md., and Conn. Over the firm’s two-plus decades of experience, it has developed over 10,000 units and manages a development pipeline spanning 4,000 residential units across 10 diverse communities. Powered by Minoia's 35 years of brokerage, construction, construction management, finance, and property management experience, Diversified Properties is uniquely able to recognize nontraditional geographic and demographic opportunities that are currently underserved by multifamily housing and bring in-demand communities to life. Minoia's work earned him a spot on NJBIZ's 2021 Power 50 in Real Estate list and he was also selected as a GlobeSt. Real Estate Forum Multifamily Influencer in 2021.

Track Record

Name Address Asset Type Acq Date Units or SF
Summit Court - Phase II 1776 Patriot Way,
Union, NJ
Multifamily 2021 266
CubeSmart Self-Storage 352 Main Road,
Montvill, NJ
Self-Storage 2020 98,000 sq ft Self Storage
Summit Court - Phase I  1776 Patriot Way,
Union, NJ
Multifamily 2020 130
1,2,3,6,9 Mars Court 1 Mars Court,
Montville, NJ
Industrial 2020 105,000 sq ft industrial
480 Flatz 480 Paterson Ave,
East Rutherford, NJ
Multifamily 2020 35 - (Sold for $11.6M Q2 2021)
30 Court 30 Court Street,
Morristown, NJ
Multifamily 2019 58
Meadow Ridge 101 Bill Robinson Way,
Newburgh, N.Y.
Multifamily 2018 185
Summerhill Road 377 Summerhill Road,
East Brunswick, NJ
Mixed Use 2018 120 Residential Units & Pharmacy and Bank Pad
Broadway Place Long Branch, NJ Mixed Use 2017 590 Residential & 99,500 sq ft retail
Summit Terrace 1000 Clark Street,
Newburgh, NY
Multifamily 2015 270
Summit Lane 101 Drake Drive,
Newburgh, NY
Multifamily 2015 188
Montville Center 350 Main Road,
Montvill, NJ
Commerical 2015 34,000 sq ft existing commerical
21 Summit 21 Summit Ave,
Summit, NJ
Retail 2011 7,000 sq ft retail
Bergenfield Industrial 72 N. Washington Ave,
Bergenfield, NJ
Industrial 2011 49,961 sq ft industrial
The Promenade 545 Morris Ave,
Summit, NJ
Mixed Use 2009 22 Residential 16,000 sq ft retail
45 River Road 45 River Road,
Summit, NJ
Office 2008 6,000 sq ft office
47 River Road 47 River Road,
Summit, NJ
Office 2008 6,000 sq ft office

Properties listed in track record are most representative to the geographic location or development strategy as the subject property

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.

Business Plan

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. 

Property

Investor Q&A 7/7/2022

Property Details

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

Comparables

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.

 

Location

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. 

Photos
Financials
Sources & Uses

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.

Debt Assumptions

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. 

Distributions

Diversified Properties, LLC intends to make distributions from DP Wharton LLC as follows:

  1. 85% / 15% (85% to Investors / 15% to Promote/Carried Interest) of excess cash flow to a 8.0% IRR;
  2. 75% / 25% (75% to Investors / 25% to Promote/Carried Interest) of excess cash flow to a 12.0% IRR;
  3. 65% / 35% (65% to Investors / 35% to Promote/Carried Interest) of excess cash flow to a 14% IRR;
  4. 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. 

Fees

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.

Disclaimers/FAQs
Disclaimers

Sponsor’s Projects and Targets

*Assumptions and projections included in the information on this Page, including pro forma projections (collectively “Projections”) were provided by the Sponsor or an affiliate thereof and are not reflective of the position or opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates.  RM Technologies, LLC and its affiliates do not provide any assurance of returns or the accuracy or reasonableness of the Projections provided by the Sponsor or its affiliates.   There can be no assurance that the Sponsor’s methodology used for calculating any Projections, including Target IRR, Target Annualized Cash-on-Cash Return, and Target Equity Multiple (“Targets”), are appropriate or adequate.  The Sponsor’s Projections and Targets are hypothetical, are not based on actual investment results, and are presented solely for the purpose of providing insight into the Sponsor’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Sponsor’s performance. The Sponsor’s Projections and Targets are not a predictor, projection or guarantee of future performance.  There can be no assurance that the Sponsor’s Projections or Targets will be met or that the Sponsor will be successful in meeting these Projections and Targets.  Projections and Target returns should not be used as a primary basis for an investor’s decision to invest.

No Approval, Opinion or Representation, or Warranty by RM Technologies, LLC or it Affiliates

The information on this Page, including the 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”) was provided by the Sponsor or an affiliate thereof.  RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor.  No part of the information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s Investment Documents.  The opinions expressed on this page are solely the opinions of the Sponsor and its affiliates and none of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.

Sponsor’s Information Qualified by Investment Documents

The Information on this Page, including of the principal terms of the Sponsor’s offering, is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents.  The information on this Page is not complete, and each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment.  The information on this page should not be used as a primary basis for an investor’s decision to invest.  In the event of an inconsistency between the information on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents.  The information on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the sole discretion of the Sponsor and its affiliates.

Risk of Investment

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

Risk of Forward-Looking Statements

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

Sponsor’s use of Debt

A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  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 the annual interest rate and possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account. 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.

In addition, unless the debt provides for a fixed rate of interest during the term of the loan and/or any subsequent extensions, the total amount of interest paid over the term of the debt will increase by the same amount as the related index. For example, if the index rate increases by 0.50% (50 basis points) the interest rate on the loan will increase by the same amount. The amount of such interest rate increases may be capped either by its terms or as the result of the Sponsor entering into an arrangement that caps the interest rate with respect to the debt at a particular rate.

Sponsor’s Offering is Not Registered

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

RM Technologies, LLC Fees and Conflicts

RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform.  RM Technologies, LLC charges a fixed, non-percentage-based licensing fee for real estate companies and their sponsors to license and use the RM Technologies LLC’s proprietary Platform, including one-time flat licensing fees for its Technology Solution and an ongoing quarterly flat licensing fees for its Administration Solution.  An estimate of the Technology Solution licensing fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor.  The licensing fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). Additionally, from time to time, employees of RM Technologies, LL C and its affiliates invest in Sponsor’s offering.  RM Technologies LLC’s receipt of licensing fees and its employee’s investments in Sponsor’s offering creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.

No Investment Advice

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

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

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