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Funded
Multifamily
Pecan Tree Apartments
Dallas, TX
INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
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100% funded
Offered By Productive Capital Associates
17.5%* TARGET IRR 16.5%-18.5%
6.1%* TARGET AVG CASH ON CASH
1.58X* TARGET EQUITY MULTIPLE
Estimated Hold Period 3 Years
Estimated First Distribution 8/2022
Minimum Investment 25000
*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
Pecan Tree Apartments is a 171-unit multifamily property located in Dallas, TX with value-add potential.
Market

The Dallas/Fort Worth market is one the strongest multifamily markets in the nation, and well-maintained Class C properties such as this one tend to fare well in the event of an economic downturn.

Basis

The Sponsor is acquiring the Property at a low price per unit, based on comps of similar vintage, condition, and location. This favorable basis may provide immediate equity and cash flow for investors, in addition to proven upside through continuing to mark post-rehab rents to market, as the Property is already achieving proforma rents on remodeled units. The Sponsor also plans to implement a Ratio Utility Billing System (RUBS), which the management company has confirmed to be the plan with all of the five properties they operate in this submarket.

Management

The Property will continue to be managed by a large locally-based property manager who has successfully managed the asset for years and who manages multiple comparable properties in the submarket, providing a unique inside perspective on current and proforma operations of this property as well as operations of many of the most relevant comps.

Property At A Glance
# of Units 171
# of Buildings 6
Year Built 1974
Current Occupancy 95.9%
Parking Ratio 1.04 Per Unit
Acquisition Price

$14,900,000

Investment Highlights
The Property is being acquired at a favorable basis, providing the opportunity for day-1 equity and cash flow, and a year-1 cap rate of 4.47% on T-12 including replacement reserves.
The Property is located in Dallas, which has consistently been one of the strongest multifamily markets in the nation.
The property management company has successfully managed the asset for years, and also manages 4 comparable properties in the immediate submarket, providing unique insight into business plans of competing assets. The comps plan to implement RUBS and push 1-bedroom rents to $899 in the immediate future.
The three-year exit strategy allows plenty of time to implement the business plan and exit quickly (3 years) so as to maximize realized return on equity and IRR for investors.
High going-in occupancy bolsters confidence in the ability to weather a potential temporary vacancy increase that could result from a change of ownership and/or implementation of the business plan.
The submarket has enjoyed double-digit rent growth, whereas the Sponsor is conservatively underwriting 3% proforma annual rent growth.
The Property has been recently remodeled and well-maintained, having newer roofs (2017), recent electrical and plumbing updates, and interior remodels already completed on the majority of units.
Management
Cumulative Distributions

Productive Capital Associates

Productive Capital Associates ("PCA" or the "Sponsor") was founded in 2014 and acquires and operates large, off-market value-add apartment communities, located in stable or growing US markets, with a primary focus on Texas markets. PCA improves properties and their surrounding communities through vetted operational efficiencies supported by strategic capital expenditures that are led by curated business plans based on the location, demographics, condition, and comps of the target property. PCA’s goal is to drive value and exit relatively quickly so as to maximize return on equity and IRR for its investors, returning the properties to the market as nicer assets, and much better places to live and work. As of January 2022, PCA will have owned and operated nearly 2,000 multifamily units, with a value of over $175 million.

Some of PCA’s investment highlights include the following:
• Achieved 150%+ ROI within ~2 years for multiple commercial real estate projects, spanning multifamily, self-storage, and retail assets
• Tripled income within 12 months for a 220+ unit apartment community in Central Texas, adding millions of dollars of value in year one
• Doubled NOI in 7 months for a 250+ unit apartment community in Central Texas, adding millions of dollars in value in year one
• Repositioned a distressed self-storage facility in Central Texas, more than tripling occupancy, income, and value of the asset within 18 months 
• Repositioned an apartment community in Columbus, OH, achieving 130%+ ROI within two years
• Repositioned a distressed retail strip center in Central Florida, more than doubling the value of the asset within two years
• Currently repositioning a large student housing project in Denver, in addition to multiple large apartment communities in AR and TX, with each asset projecting a deal-level equity multiple of ~2x on a 3-year hold

https://productivecapitalassociates.com/
  • David Barr
    Founding Principal
David Barr
Founding Principal

After buying his first investment property while in high school — a *tiny* condo near Aspen, CO — David was hooked, although it would be years before he would again invest in real estate. 

Why? He'd sold his tiny condo during college for a nice profit and confidently rolled the gains into a red-hot stock market, which eventually crashed, eliminating both his hard-earned real estate gains and principal. It was a difficult lesson; however, he never forgot that real estate made him money and that the stock market took it away.

After spending time in Corporate America, where he had saved enough cash to buy income properties, David began investing in real estate full-time. Beginning with SFR’s, he parlayed cash flow from houses into down payments on more houses, eventually buying and repositioning self-storage, then retail, and now large multifamily (apartment complexes).

David is passionate about improving properties and their surrounding communities and thrives off of the sourcing, underwriting, negotiating, closing, repositioning, and eventually exiting projects, leaving them as much nicer assets, and much better places to live and work.

Named company-wide “Rookie of the Year” for the sales division of a $10+ billion company with over 60,000 employees, David has been recognized for sales, marketing, and finance accolades on a national level, and has led multiple commercial real estate projects to 150%+ ROI within ~2 years, spanning multifamily, self-storage and retail assets. 

David holds a B.A. with High Honors from Emory University and studied Finance, Accounting, and Marketing at the UC Berkeley Haas School of Business via the BASE Program.

Specialties: Commercial Real Estate Investment and Repositioning, Strategic Deal-Structuring, Operations, Management, Finance, Sales, and Negotiation.

Track Record

City, State Asset Type Purchase Date Units Deal Status Purchase Price Sale Price/Est. Value
Killeen, TX Multifamily 10/24/2017 256 Sold $10,300,000 $15,000,000
Columbus, OH Multifamily 10/12/2017 64 Sold $3,300,000 $4,510,000
Killeen, TX Multifamily 9/17/2018 178 Sold $6,450,000 $11,300,000
Killeen, TX Multifamily 10/30/2019 222 Sold $4,500,000 $12,800,000
North Little Rock, TX Multifamily 7/20/2020 242 Under Renovation $6,150,000 $9,075,000
Killeen, TX Multifamily 8/14/2020 250 Under Renovation $6,500,000 $11,250,000
Killeen, TX Multifamily 8/30/2021 148 Under Renovation $6,145,000 $8,800,000
Denver, CO Student Housing 9/17/2021 120 Under Renovation $40,005,000 $45,000,000
Killeen, TX Multifamily 12/16/2021 266 Under Renovation $41,075,000 $42,000,000
Total     1,746   $124,425 $157,935,000

The management overview and track record detailed above were provided by Productive Capital Associates and have not been verified by RealtyMogul.

Business Plan

Productive Capital Associates has selected a recently remodeled apartment community in one of the hottest multifamily markets in the nation, and is purchasing the Property pre-market at a low basis, providing day one cash flow with value-add upside through strategic capital investment, as well as continuing to mark-to-market proven proforma post-renovated rents and implementing RUBS. The company plans to continue to renovate the remaining classic units, including new flooring, light fixtures, plumbing, hardware, backsplash, resurfaced counters, and tub surrounds, black appliances, grey paint, and installation of baseboards. The Company also plans to invest additional CapEx into the exterior of the Property, including rebranding, upgrading the parking area and adding 50 additional reserved parking spaces (reserved spaces are currently 100% occupied and leasing for $50/mo.), repainting the exterior of the property, adding stone grilling stations in the courtyards and enhancing landscaping. Proforma rents are already being achieved on remodeled units, and RUBS is being implemented across each of the local comps managed by the highly experienced (25k+ units) management company that will continue to manage the Property. With the goal to stabilize the Property within 3 years or less, the Company plans to exit at the end of year 3, so as to maximize IRR and return on equity for investors. As such, the Company is securing 3-year bridge debt, with optional extensions for 2 additional years, if needed.

CapEx Breakdown:

  $ Amount Per Unit
Interior Renovation Budget    
   Interior Renovations for Studios (2 units) $8,500 $4,250
   Interior Renovations for 1x1s (22 units) $110,000 $5,000
   Interior Renovations for 2x1s (3 units) $16,500 $5,500
Total Interior Renovation Budget $135,000 $5,000
     
Exterior Renovation Budget    
   Fire Extinguisher Inspection $250 $1
   Install Lever Action Hardware at the Leasing Office Door $100 $1
   Install a Roll-Under Sink at the Leasing Office Restroom $350 $2
   Parking Lot Addition $79,200 $463
   Asphalt Repairs/ Sealcoat & Re-stripe $10,708 $63
   Grill Stations $14,500 $85
   Exterior Paint $114,750 $671
   Landscaping/Irrigation/Tree Trim - Removal $10,000 $58
   Monument Signs/Signage $10,000 $58
Total Exterior Renovation Budget $239,858 $1,403
     
Contingency (10%) $37,486 $219
     
Grand Total $412,344 $1,622
Property
Property Details

Productive Capital Associates (PCA) is offering the opportunity to invest in a recently remodeled property in one of the hottest markets in the nation, pre-market at a low basis, providing day one cash flow with value-add upside through continuing to mark-to-market proven proforma post-renovated rents and implementing RUBS. The company plans to continue to renovate the remaining classic units, as well as to invest additional CapEx into the Property, including rebranding, upgrading the parking area, and adding additional reserved parking spaces (currently 100% occupied and leasing for $50/mo.), repainting the exterior of the property, adding stone grilling stations in the courtyards, and enhancing landscaping. Pro forma rents are already being achieved on remodeled units and RUBS is being implemented across each of the local comps managed by the highly experienced (25k+ units) management company that will continue to manage the Property.

Unit Type # of Units Avg SF/Unit Avg Rent (In-Place) Avg Rent (Post-Reno) Avg Rent Per SF (In-Place) Avg Rent Per SF (Post-Reno)
Renovated            
Studio 1 396 $755 $775 $1.91 $1.96
1x1 143 531 $865 $899 $1.63 $1.69
2x1 3 827 $1,150 $1,150 $1.39 $1.39
             
Non-Renovated            
Studio 2 396 $775 $799 $1.96 $2.02
1x1 22 531 $869 $899 $1.64 $1.69
Total/Averages 171 534 $869 $902 $1.63 $1.69
Comparables

Lease Comparables

  In Place Apartments Villa Encanto Apartments Westwood Apartments Averages Subject (Post-Reno Rents)
Year Built 1973 1974 1964 1970 1974
Building Class C C C C C
# of Units 80 72 103 85 171
Average Rental Rate $987 $849 $1,213 $1,016 $902
Average Unit Size 579 SF 542 SF 894 SF 672 SF 534 SF
Average $/SF $1.70/SF $1.56/SF $1.36/SF $1.54/SF $1.69/SF
Levels 2 2 2 2 2
Occupancy 100% N/A N/A 100% 95.9%
Distance from subject 0.1 mi 0.2 mi 0.5 mi 0.3 mi  
           
$/Unit (Studio) $765 $735 $900 $800 $775
SF (Studio) 435 SF 484 SF 500 SF 473 SF 396 SF
$/SF (Studio) $1.76/SF $1.52/SF $1.80/SF $1.69/SF $1.96/SF
           
$/Unit (1x1) $896 $920 $1,095 $970 $899
SF (1x1) 550 SF 528 SF 615 SF 564 SF 531 SF
$/SF (1x1) $1.63/SF $1.74/SF $1.78/SF $1.72/SF $1.69/SF
           
$/Unit (2x1) $1,112 $1,150 $1,450 $1,237 $1,150
SF (2x1) 660 SF 1,097 SF 864 SF 874 SF 827 SF
$/SF (2x1) $1.68/SF $1.05/SF $1.68/SF $1.47/SF $1.39/SF

Sales Comparables

  The Ayva at Oakland Trinity Apartments Residence at Lake Highlands Infinity on the Mark Orchids of Carrollton Teruko Springs Apartments Averages Subject (Going-in)
Date Sold 6/20/2021 9/24/2021 10/28/2021 6/9/2021 5/24/2021 4/21/2021   Q1 2022
Year Built 1972 1984 1969 1986 1984 1964 1977 1974
Building Class C B C B C C   C
# of Units 121 496 247 373 131 71 240 171
Average Unit Size 716 SF 850 SF 870 SF 760 SF 858 SF 831 SF 814 SF 534 SF
Sale Price $11,600,000 $66,500,000 $30,000,000 $46,350,000 $20,800,000 $5,725,000 $30,162,500 $14,900,000
$/Unit $95,868 $134,073 $121,457 $124,263 $158,779 $80,634 $119,179 $87,135
$/SF $72/SF $157/SF $341/SF $154/SF $176/SF $94/SF $166/SF $163/SF
Cap Rate N/A 4.16% 4.30% 5.65% N/A 5.00% 4.78% 4.83%
Building Size 161,994 SF 422,880 SF 87,859 SF 300,549 SF 118,124 SF 61,215 SF 192,104 SF 91,284 SF
Distance from subject 5.5 mi 9.4 mi 10.9 mi 11.9 mi 11.9 mi 12.5 mi 10.4 mi  
Location

Market Overview

Per CoStar, the Dallas-Fort Worth apartment market is performing well compared to other major markets, despite the widespread economic disruption to the local economy in the past year. Leasing activity has surged in 2021 with the highest net absorption on record. With a surge in demand, rent growth has accelerated, registering the best performance on record. The trend is pervasive across asset classes and communities in both urban and suburban settings. That rapid turnaround is after steep rent cuts in the urban core and supply-heavy submarkets, leaving rent growth in the market essentially flat last year.

Robust economic underpinnings have fostered a healthy apartment market, and Dallas-Fort Worth's employment base has essentially recovered from the pandemic and recession through September 2021. Healthy job growth and continuous in-migration are two primary drivers of apartment demand in the metroplex; before the latest recession, Dallas-Fort Worth consistently added jobs at an annual rate of around 3.5%, down from a peak of 6% set in 2017. In terms of demographic growth, the metroplex led the country in nominal population growth, up 120,000 new residents from 2019 to 2020. Despite a continuous flow of new properties coming to the market, the renter pool continues to absorb new units at a steady pace.

Submarket Overview

Per CoStar, Northwest Dallas is a growing submarket within urban Dallas. It is home to plenty of well-paying jobs, thanks to the Southwestern Medical District and extends along the Dallas North Tollway from the trendy Uptown/Park Cities Submarket. The unit mix in Northwest Dallas caters to this cross-section of renters in Dallas, as about two-thirds of all units are one-bedrooms or studios. Renters priced out by rents in Uptown/Park Cities who still want a live/work/play environment often select Northwest Dallas. Several dining destinations spill over in the area along Maple and Oak Lawn, within the Design District, making this area attractive to renters. In the past five years, developers have added an outsized number of units in and around the Southwestern Medical District and south of Love Field, taking advantage of infill opportunities. Retail development has also chased this growth, activating overlooked parcels once dominated by aging industrial and flex space. 

Photos
Financials
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Debt $12,300,000 $71,930
GP Investor Equity(2) $556,344 $3,253
LP Investor Equity $3,300,000 $19,298
Total Sources of Funds $16,156,344 $94,482
     
Uses of Funds $ Amount $/Unit
Purchase Price $14,900,000 $87,135
Acquisition Fee $298,000 $1,743
Loan Fee $246,000 $1,439
Closing Costs(1) $200,000 $1,170
CapEx $412,344 $2,411
Lender Reserves $100,000 $585
Total Uses of Funds $16,156,344 $94,482

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. 

(2) Lender required that the Sponsor contribute an additional ~$110,000 of equity into the deal which is currently not reflected in the projected returns but is not anticipated to materially impact economic projections. The exact amount required by the lender will be reflected at closing.

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Term: 3 years + 2 one-year extension options
  • Loan-to-Cost: 76.1%
  • Estimated Proceeds: $12,300,000 
  • Interest Type: Floating
  • Spread Above One-Month LIBOR: 4% with a floor of 10 bps; 1% rate cap is purchased to protect the first two years of the loan
  • Interest-Only Period: Full-term
  • Amortization: N/A
  • Prepayment Terms: 1% exit fee unless refinanced with Arbor into permanent loan
  • Extension Requirements: The Extended Term may be extended for twelve (12) months (the “Second Extended Term”), provided that: (i) Arbor receives written notice of Borrower’s election to extend the Extended Term at least thirty (30) days prior to the expiration of the Extended Term (the “Second Notice of Extension”); (ii) along with the Second Notice of Extension, Borrower delivers to Arbor an extension fee in an amount equal to one percent (1%) of the maximum Loan Amount; (iii) no event of default shall have occurred and no event shall have occurred that with notice, passage of time or both would constitute an event of default; (iv) the Interest Reserve (defined below) is resized by Arbor in its sole discretion and is replenished by Borrower; (v) Borrower shall purchase a new Rate Cap in form and substance acceptable to Arbor; and (vi) the Property shall achieve a debt service coverage ratio of no less than 1.25:1.00, using the greater of (a) the then current Interest Rate, (b) the then prevailing market constant for Fannie Mae, and (c) the then prevailing market constant for conduit ten-year fixed rate loans (the “Second DSCR Extension Test”), provided that if the Property fails to meet the Second DSCR Extension Test, then, in order to qualify for the Second Extended Term, Borrower shall rebalance the Loan by making a payment in an amount necessary to cause the debt service coverage ratio, as determined by Arbor in its sole discretion, to satisfy the Second DSCR Extension Test.

There can be no assurance that the Sponsor will secure debt on the rates and terms noted above, or at all.  All of the Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, including but not limited to possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account.

A substantial portion of the total acquisition for the Property will be paid with borrowed funds. The use of borrowed money to acquire real estate is referred to as leveraging.  Leveraging increases the risk of loss.  If the Sponsor were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Sponsor could lose its investment in its property.

Distributions

Productive Capital Associates intends to make distributions from 3001 Kendale Drive JV, LLC as follows:

  1. To the Investors, pari passu, all operating cash flows to a 9.0% IRR;
  2. 70% / 30% (70% to Investors / 30% to Promoted/Carried Interest) of excess cash flow to a 15.0% IRR;
  3. 50% / 50% (50% to Investors / 50% to Promote/Carried Interest) of excess cash flow thereafter.

Productive Capital Associates 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 August 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Productive Capital Associates, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Productive Capital Associates 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
Effective Gross Revenue   $1,752,189 $1,883,807 $2,026,602
Total Operating Expenses   $1,033,110 $1,028,498 $1,050,502
Net Operating Income   $719,080 $855,308 $976,100
             
Project-Level Cash Flows
  Year 0 Year 1 Year 2 Year 3
Net Cash Flow ($3,856,344) $197,690 $314,695 $6,539,393
             
Investor-Level Cash Flows(1)
  Year 0 Year 1 Year 2 Year 3
Net Cash Flow ($3,300,000) $106,182 $204,054 $4,914,248
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment(1)
  Year 0 Year 1 Year 2 Year 3
Net Cash Flow ($50,000) $1,609 $3,092 $74,458

(1) 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. 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to Productive Capital Associates' materials for details. The following fees and compensation will be paid(1)(2)(3)(4):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 2.0% of Purchase Price Productive Capital Associates Capitalized Equity Contribution
       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 2.0% of EGI Productive Capital Associates Distributable Cash
Administrative Services Fee 1.0% of Equity(1) RM Admin, LLC(4) Distributable Cash

(1) Only applies to equity raised through the RealtyMogul Platform

(2) Fees may be deferred to reduce impact to investor distributions.

(3) 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.

(4) 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

The content on this Page 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.  No part of the content and information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s offering materials.  None of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.

The content 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 offering documents, including, without limitation, the Private Placement Memorandum, Operating Agreement, Subscription Agreement and all exhibits and other documents attached thereto or referenced therein (collectively, the "Investment Documents").  The content 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 content 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 content on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents.  The content on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the discretion of the Sponsor. 

Assumptions and projections included in the content on this Page are not reflective of the position of RM Technologies, LLC or its affiliates, or any other person or entity other than 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 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 Targets are not a predictor, projection or guarantee of future performance.  There can be no assurance that the Sponsor’s Targets will be met or that the Sponsor will be successful in meeting these Targets.  Target returns should not be used as a primary basis for an investor’s decision to invest.

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.

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.

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, 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.

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.

RealtyMogul is 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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