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We have formalized processes and checklists for every private placement deal listed on the platform.
Metairie market rents are over 26% higher than the current rents at the Metairie subject property. Houston market rents are over 13% higher than rents at the Houston subject property. No new product is underway or permitted for the next two years in either submarket.
The assets are both Class A properties from an in-demand asset class located in affluent suburbs with strong demand for self-storage.
Both assets are cash-flow positive from day one over the 3.3% fixed interest-only loan. The properties are already purchased, allowing investors immediate opportunity to participate in cash flow.
Prescott Group and Hickory Capital Group
Prescott Group
Prescott Group is in Dallas, TX and was founded in 1996 by Judson (“Jud”) Pankey and Vance Detwiler. Both founding partners are still currently active executives at the firm. Prescott has three (3) separate but cohesive verticals of the business; Prescott Realty Group, the internal operations and management of our real estate; Prescott Advisors an SEC-registered entity and co-mingled fund manager with a current AUM of $152MM and Dyck O’Neal the in-house debt restructuring and servicing platform. The firm currently has 90+ employees and managed or owned over $685MM in real estate since inception. Prescott has leased over 25MM in commercial square feet. The firm currently focuses its investment efforts through their co-mingled fund mandates. Prescott Strategies Fund II has a debt/equity focus and is asset type agnostic in an effort to create a risk-adjusted portfolio.
Hickory Capital Group
Hickory Capital Group, LLC (“HCG”) is a private real estate investment and property management company focused on the development and acquisition of self-storage properties. The firm currently has a portfolio of assets with a stabilized market value of approximately $130 million spread across the Southeast, Southwest, and Midwest. Founded in 2014, HCG has offices in Cincinnati, Ohio; Nashville, Tennessee; and New Orleans, Louisiana.
http://www.hickorycapitalgroup.com/
Prescott Track Record
Property | Asset Type | City, State | Acq Date | Sale Date | Total Capitalization |
7515 Greenville Ave | Office | Dallas, TX | Jan-97 | Mar-03 | |
6300 Ridgelea Blvd | Office | Ft. Worth, TX | Jan-97 | Feb-03 | |
Franklin Motor Bank | Office | Ft. Worth, TX | Jan-97 | Feb-99 | |
Two Mission | Office | Ft. Worth, TX | Mar-97 | Aug-97 | |
Oaklawn Residential | For-Rent Residential | Dallas, TX | Mar-97 | Aug-98 | |
Walnut Glen Tower | Office | Dallas, TX | Aug-06 | Aug-16 | |
Church Road (3) | Land | Dallas, TX | Nov-06 | Apr-13 | |
Manhattan I-III (3) | For-Rent Residential | Dallas, TX | Aug-07 | Oct-07 | |
Summit Office Park | Office | Ft. Worth, TX | Oct-07 | Jul-14 | |
Crestwood Apartments | For-Rent Residential | Dallas, TX | Nov-07 | Dec-12 | |
6060/6080 North Central Exwy | Office | Dallas, TX | Jun-10 | Jun-15 | |
BLVD Apartments | For-Rent Residential | Dallas, TX | Dec-10 | Apr-16 | |
Johnson Square | Office | Dallas, TX | Aug-12 | Sep-12 | |
110 West 7th (4) | Office | Tulsa, OK | Dec-12 | Aug-15 | |
Houston Tech Center (5 and 6) | Office | Houston, TX | Dec-12 | May-18 | |
Harbour Pointe (5) | Office | Seattle, WA | Dec-12 | May-18 | |
Northrock Apartments | For-Rent Residential | Dallas, TX | Jan-13 | Jan-17 | |
Greensheet Building | Commercial Debt | Houston, TX | Dec-16 | Aug-17 | |
Republic Tower/Turtle Creek Blvd | Mixed-use Development | Dallas, TX | Jan-15 | N/A | |
Stoneleigh TIF | TIF Receivable/Historic Hotel | Dallas, TX | Jul-17 | N/A | |
Westview | Office | Austin, TX | Mar-16 | N/A | |
3100 Monticello Avenue | Office | Dallas, TX | Aug-17 | N/A | |
Cle Elum | Commercial Debt | Cle Elum, WA | Sep-17 | Jun-19 | |
County Line | Office | Columbus, OH | Jul-19 | Dec-20 | |
San Marco East Plaza | Office | Jacksonville, FL | Jan-19 | N/A | |
5959 Corporate Drive | Office | Houston, TX | May-18 | N/A | |
Knoll Trail | Office | Dallas, TX | Jun-19 | N/A | |
Greenbriar | Office | Fairfax, VA | Nov-19 | N/A | |
Commercial Debt | Commercial Debt | Various | Apr-19 | N/A | |
SFR Debt | SFR Debt | Various | Jan-20 | N/A | |
CB-15 (2) | CMBS Trust Bonds | Various | Dec-20 | N/A | |
Hickory Self-Storage Portfolio | Self-Storage | Various | Jun-21 | N/A | |
Total | $680,467,038 |
Hickory Capital Group Track Record
Property | City, State | Asset Type | Acq Date | Units | SF | Sale Date | Total Capitalization |
Overland Park | Overland Park, KS | SS | May 2019 | 612 | 71,160 | August 2021 | |
Midrivers Mall | St. Louis, MO | SS | April 2018 | 674 | 69,358 | November 2021 | |
Eastgate Mall | Cincinnati, OH | SS | December 2017 | 623 | 67,679 | November 2021 | |
New Market Center | Columbus, OH | SS | December 2020 | 732 | 113,075 | December 2021 | |
Hamilton Place Mall | Chatanooga, TN | SS | September 2019 | 612 | 69,573 | November 2021 | |
Parkdale Mall | Beaumont, YX | SS | May 2019 | 652 | 72,694 | November 2021 | |
Seventh Street | Cincinnati, OH | SS | September 2017 | 312 | 24,626 | ||
Montgomery Crossing | Cincinnati, OH | SS | June 2018 | 580 | 75,666 | ||
Thibodaux | Thibodaux, LA | SS | June 2021 | 186 | 41,740 | ||
Junction City | Junction City, KS | SS | June 2021 | 522 | 105,410 | ||
Reading Road | Cincinnati, OH | SS | September 2017 | 285 | 22,858 | ||
Total | $85,700,304 |
(1) 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.
These two self-storage properties are newly built; the Sponsor bought them from the original developer before the assets are fully stabilized. The Sponsor has closed on the acquisition of the Properties and the loan with Trustmark Bank. The plan is to stabilize the Properties and operate them for full value over several years. This is a great opportunity to participate in two Class A self-storage facilities as most of these are held by REITs and access for individual investors to participate at the project level is limited.
The management of both facilities will be overseen by Hickory. Hickory has experience managing assets in both Texas and Louisiana. Prescott invested with Hickory in two assets in 2021, one in Thibodaux, Louisiana, and the other in Junction City, Kansas. The Properties are already outperforming underwriting. Hickory is a strong operator that looks for operational efficiencies and cost reductions. One of the largest fees that will be removed is marketing Click Fees, which range between $100 to $150 per renter. This fee is applied when a renter finds a unit on the internet. For instance, if ownership gains a total of 40 renters in a month that were generated online, the Click Fee would total $4,000 to $6,000 for that month.
The Sponsor plans to increase economic occupancy through marking rents to market, retail and insurance policy sales, implementing search engine optimization, and using a revenue management system at both properties to monitor rental rates in respective markets and price units in real-time at the most competitive rates. The Sponsor will also market and lease the 3,500 SF of retail space in the Metairie asset at competitive rates ranging from $18.00 to $20.00 per SF NNN. Leasing brokers have already been hired.
The portfolio is comprised of a total of 1,869 units of which 819 (77,969 SF) are in Houston, TX and 1,050 (97,000 SF) in Metairie, LA. All units in both Properties are climate-controlled. Both facilities are among the largest, best quality, and most visible within their respective submarkets. In the Metairie asset, there is also 3,500 SF of rentable retail space that is planned to be leased within two years. The main thesis in the business plan is to mark rents to market as both properties are currently rented at rates materially below market.
Property | Units | Total SF | Current Eff. Rent PSF | Proforma Rent (Year Four) |
Houston | 819 | 77,969 | $1.30 | $1.90 |
Metairie | 1,050 | 97,000 | $1.37 | $1.90 |
Total/Averages | 1,869 | 174,969 | $1.34 | $1.90 |
TX Lease Comparables
LA Lease Comparables
Sales Comparables
TX Market Overview
The Houston facility is roughly eight miles west of Downtown Houston on the north side of the affluent Spring Valley neighborhood. The facility fronts on Bingle Road, a 4-lane north/south primary artery. It is in Harris County, which is part of the nine-county Houston MSA and is the 3rd most populous county in the US. The 3-mile radius from the property echoes this density with a population of 140,628 individuals, while the population within the 5-mile radius is 400,482 individuals. The current saturation within a 3-mile radius is calculated to be 9.4 SF of self-storage space per capita -- being below 10 SF is a clear advantage -- supported by no new self-storage in the development pipeline in this market. Neighborhoods serviced by this facility include Spring Valley, Spring Branch East, Hunters Creek Village, Bunker Hill Village, and Piney Point Village. These neighborhoods are among Houston’s most affluent.
TX Submarket Overview
In Houston, the competitive local submarket has approximately 12,167 self-storage units (over 1,370,000 SF) in a 3-mile radius including the Property. The subject Property is one of the newer, if not the newest, property in the submarket, and as it is 100% climate-controlled it has an advantage over several competitors. It should be one of the market leaders in rate and occupancy when fully stabilized (both physically and economically). Additionally, the unit mix offered at the property is optimal for the needs of self-storage users in the area. In the Property’s submarket, 78% of the total square footage is over 18 years old, therefore, being a new facility, the subject Property is strongly favored by local self-storage users. It offers its tenants superior amenities including a covered unloading area with an access-controlled entrance, spacious management office, 21 24-hour video surveillance cameras, two access-controlled freight elevators, full building intercom system, ambient music, and security lighting throughout.
LA Market Overview
The facility in Metairie is just eight miles northwest of New Orleans. It is an institutional-quality asset that has prominent visibility and ease of access along North Causeway Boulevard, a major 5-lane thoroughfare that connects New Orleans to Mandeville. In fact, this self-storage facility benefits from direct exposure to over 80,000 vehicles per day. Metairie is a densely populated area that was recently ranked the 5th largest Census Designated Place (CDP) in the US. The 3-mile radius from the property has a population density of 118,461 individuals, while the population within the 5-mile radius is about 268,790 individuals. According to Yardi Matrix, the current saturation within a 3-mile radius is estimated at only 7.3 SF of self-storage space per capita, with 57% of the total square footage being over 15 years old. Communities serviced by the facility include Bucktown, West End, Bonnabel Place, as well as a variety of other affluent and upper-middle-class Metairie neighborhoods. Market demand is expected to continue to be strong due to the lack of basements and garages in residential properties in the New Orleans area, which would otherwise serve as storage space.
LA Submarket Overview
The Metairie Property is across the street from the Lakeside Shopping Center; a well-occupied and well-performing mall owned by New York-based Feil Group and anchored by JC Penny, Macy’s, and Dillard’s. The competitive local submarket has approximately 5,700 self-storage units (~622,000 SF) within the 2-mile radius including the Property. The subject property is one of the newer, if not the newest, property in the submarket, and as it is 100% climate-controlled it has an advantage over several competitors. Due to the amenities and location of the property, it should be one of the market leaders in rate and occupancy when fully stabilized. Additionally, the unit mix offered at the property is optimal for the needs of self-storage users in the area. There is no new self-storage in the development pipeline in this submarket and the submarket’s occupancy is 90%.
Total Capitalization
Sources of Funds | $ Amount | $/Unit | $/SF |
Debt | $24,000,000 | $12,841 | $137 |
LP Equity(2) | $11,500,000 | $6,153 | $66 |
Prescott Group Equity | $3,499,410 | $1,872 | $20 |
Hickory Capital Group Equity | $874,853 | $468 | $5 |
Total Sources of Funds | $39,874,263 | $21,335 | $228 |
Uses of Funds(3) | $ Amount | $/Unit | $/SF |
Purchase Price | $37,500,000 | $20,064 | $214 |
Pre-Paid OPEX | $215,924 | $116 | $1 |
CAPEX | $235,100 | $126 | $1 |
Loan Origination & App. Fees | $220,000 | $118 | $1 |
HCG Transaction Fee | $377,200 | $202 | $2 |
Working Capital | $275,201 | $147 | $2 |
Legal Fees | $128,831 | $69 | $1 |
RealtyMogul Fees & Costs(1) | $500,000 | $268 | $3 |
Title Insurance & Recording Fees | $178,996 | $96 | $1 |
Credit Line Interest Carry | $150,000 | $80 | $1 |
Other Closing Costs | $93,012 | $50 | $1 |
Total Uses of Funds | $39,874,263 | $21,335 | $228 |
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(2)(3) Please see PPM and LPA for more details. A guaranteed payment totaling $11MM was used originally to facilitate the acquisition of the property, which guaranteed payment will be paid down with the subject offering.
The terms of the debt financing are as follows:
- Lender: Trustmark Bank
- Term: 3 Years
- Loan-to-Cost: 60.2%
- Estimated Proceeds: $24,000,000
- Interest Type: Fixed
- Annual Interest Rate: 3.30%
- Interest-Only Period: 3 Years
- Amortization: 25 Years
- Prepayment Terms: The loan can be prepaid at any time without penalty
- Extension Options(2): 1 two-year extension option, no fee.
- Extension Requirements: 1.3 DSCR, no event of default, written notice within 30 to 120 days prior to maturity date
(1) 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.
(2) At the option of the Borrower, the interest rate for the extension above can be (1) fixed at the then current "two year swap rate" plus 2.05% (the "Swap Rate") or (2) a floating rate equal to the Swap Rate.
Prescott Group and Hickory Capital Group intend to make distributions as follows:
- To the Investors, pari passu, all operating cash flows to an 8.0% IRR;
- 80% / 20% (80% to Investors / 20% to Promote/Carried Interest) of excess cash flow to a 14.0% IRR;
- 60% / 40% (60% to Investors / 40% to Promote/Carried Interest) of excess cash flow thereafter.
Prescott Group and Hickory Capital Group intend 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 September 2022 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Prescott Group and Hickory Capital Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Cash Flow Summary | ||||||
Year 1 | Year 2 | Year 3 | Year 4 | |||
Effective Gross Revenue | $3,293,669 | $3,783,769 | $3,955,758 | $4,073,540 | ||
Total Operating Expenses | $1,299,683 | $1,365,383 | $1,414,597 | $1,464,856 | ||
Net Operating Income | $1,993,985 | $2,418,387 | $2,541,161 | $2,608,684 | ||
Project-Level Cash Flows | ||||||
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 (1) | ||
Net Cash Flow | ($15,874,263) | $1,337,151 | $1,630,511 | $1,465,565 | $26,942,867 | |
Investor-Level Cash Flows (2) | ||||||
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 (1) | ||
Net Cash Flow | ($11,500,000) | $840,912 | $1,053,435 | $933,940 | $16,886,888 | |
Investor-Level Cash Flows - Hypothetical $50,000 Investment (2) | ||||||
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 (1) | ||
Net Cash Flow | ($50,000) | $3,656 | $4,580 | $4,061 | $73,421 |
(1) stub year of seven months
(2) 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 the Sponsors' materials for details. The following fees and compensation will be paid:
One-Time Fees: | |||
Type of Fee | Amount of Fee | Received By | Paid From |
Acquisition Fee | 1.0% of Purchase Price | Hickory Capital Group | Capitalization |
Technology Solution Licensing Fee(2) | Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution | RM Technologies, LLC | Capitalization |
Recurring Fees: | |||
Type of Fee | Amount of Fee | Received By | Paid From |
Asset Management Fee | 1.5% of EGI | Prescott Group | Cash Flow |
Property Management Fee | 5.0% of EGI | Hickory Capital Group | Cash Flow |
Administrative Solution Fee | flat quarterly fee of $125 per investor serviced through the Administration Solution | RM Technologies, LLC | Cash Flow |
(1) Fees may be deferred to reduce impact to investor distributions.
(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
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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.