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Self-storage
Route 17K Self-Storage
Montgomery, NY
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Route 17K Self-Storage
Montgomery, NY
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Overview
Route 17K Self-Storage
Diversified Properties, LLC is developing a 7-building storage facility in the town of Montgomery, Orange County, NY, located 60 miles Northwest of New York City.
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Details
For more information, view the Sponsor's Investment Memorandum.
Estimated First Distribution 11/2024
Minimum Investment 35000
Estimated Hold Period 4 Years
Investment Strategy Development
Investment Type Equity
# of Storage Units 495
Square Feet 80,400
Land Acquisition Price $1,270,000
Construction Completion Date Q4 2023
Target Return on Cost 6.8%
Exit Cap Rate 5.0%
Sponsor Documents
The offering documents above have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
Deal Highlights
Investment Highlights
The Sponsor has closed on the acquisition of the land and has started the site work for the Project.
The exit strategy is to sell the Property in 4 years at a 5% cap rate.
The facility is a prime location and offers access to Interstate 84 and 87 with traffic counts over 50,000 vehicles per day.
Self-Storage is a great inflationary hedge due to short-term month-to-month leases that will allow the property manager to maximize gross potential income.
Construction will be directly managed by the Sponsor's hands-on executive team and its in-house construction management firm, Morris Construction Management, LLC.
The Sponsor has extensive experience developing and constructing multifamily projects in the Tri-State area. 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. The Sponsor has recently completed the construction of a 98,000 square foot self-storage facility that is currently in lease up and 60% occupied.
The Sponsor has closed on the acquisition of the land and has started the site work for the Project.
The exit strategy is to sell the Property in 4 years at a 5% cap rate.
The facility is a prime location and offers access to Interstate 84 and 87 with traffic counts over 50,000 vehicles per day.
Self-Storage is a great inflationary hedge due to short-term month-to-month leases that will allow the property manager to maximize gross potential income.
Construction will be directly managed by the Sponsor's hands-on executive team and its in-house construction management firm, Morris Construction Management, LLC.
The Sponsor has extensive experience developing and constructing multifamily projects in the Tri-State area. 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. The Sponsor has recently completed the construction of a 98,000 square foot self-storage facility that is currently in lease up and 60% occupied.
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Management
For more information, view the Sponsor's Investment Memorandum.
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.

Sponsor Track Record
  Property City, State Asset Type Project Status Units or SF Current Cost/Stabilized Value NOI Yield on Cost/Stab Cap Rate Net Cash Flow
Built & under current management
1 21 Summit Summit, NJ Retail Operating 7,000 sq ft retail  $1,809,673 $117,629 6.50% $45,986
2 Summit Lane Newburgh, NY Multifamily Operating 188  $44,600,000 $1,805,836 4.05% $458,296
3 Summit Terrace New Windsor, NY Multifamily Operating 270  $61,700,000 $3,201,460 5.19% $1,291,864
4 Summit Court Phase 1 Union, NJ Multifamily Operating 130  $58,500,000 $2,297,777 3.93% $665,538
7 Meadow Ridge Newburgh, NY Multifamily Operating 185  $10,000,000 $2,642,106 26.42% $546,678
8 30 Court Morristown, NJ Multifamily Operating 58  $35,000,000 confidential confidential confidential
9 The Promenade Summit, NJ Mixed Use Operating 22 Residential 16,000 sq ft retail  $17,990,000 $854,525 4.75% $427,263
10 47 River Road Summit, NJ Office Operating 6,000 sq ft office  $2,784,283 $167,057 6.00% $33,411
11 45 River Road Summit, NJ Office Operating 6,000 sq ft office  $729,433 $43,766 6.00% $8,753
12 350 Main Road Montville, NJ Office Operating 34,000 sq ft existing
commercial
 $5,628,000 $256,698 4.56% $55,282
13 Cubesmart Self-Storage Montville, NJ Self-Storage Operating 98,000 sq ft Self-Storage  $23,500,000 $1,104,266 4.70% $1,104,266
14 1,2,3,6,9 Mars Court Montville, NJ Industrial Operating 105,000 sq ft industrial  $25,000,000 $758,093 3.03% $379,047
15 Bergenfield Industrial Bergenfield, NJ Industrial Operating 49,961 sq ft industrial  $3,100,000 $233,626 7.54% $116,813
Subtotal         $290,341,389 $13,482,838 4.64% $5,133,195
                   
Under Current Construction
16 Clermont Fidelco Urban Renewal Union, NJ Multifamily Development 266  $26,000,000 $5,242,111 20.16% $1,071,785
17 Lighthouse Landing Ventures LLC Sleepy Hollow, NY Mixed Use Development 1,177 Residential, 135,000 Sq ft retail, and 35,000 sq ft office  $86,900,000 $0 n/a $0
18 Farms at Stony Hill LLC Bethel, CT Multifamily Development 117  $5,500,000 $0 n/a $0
19 Irondale @ Wharton Wharton, NJ Multifamily Development 60  $17,272,468 $0 n/a $0
Subtotal         $135,672,468 $13,482,838   $5,133,195
                   
Built and Sold
20 480 Flatz East Rutherford, NJ Multifamily Sold 35 Residential Units  $11,600,000 - 4.97%  
21 Summerhill Road East Brunswick, NJ Mixed Use Sold 120 Residential Units &
Pharmacy and Bank Pad
 $18,000,000 - - -
22 Hackensack Self-Storage Hackensack, NJ Self-Storage Sold 67,000 sq ft Self-Storage  $10,000,000 - - -
23 Summit Place Apartments Lindenwold, NJ Multifamily Sold 148 Residential Units  $7,500,000 - - -
24 Summit Ridge Allentown, PA Multifamily Sold 204 Residential Units  $45,000,000 - - -
25 High Ridge Montville, NJ For Sale Townhomes Sold 100 Town Homes  $60,000,000 - - -
26 Longview Townhome Community Montville, NJ For Sale Townhomes Sold 400 Town Homes  $190,000,000 - - -
27 Bear's Nest Park Ridge, NJ For Sale Townhomes Sold 150 Town Homes  $95,000,000 - - -
Subtotal         $437,100,000      
                   
Total           $863,113,857 $26,965,675   $10,266,390

The above biography and track record were provided by the Sponsor and have not been independently verified by RM Technologies, LLC or its affiliates. Past performance is not indicative of future results. Please carefully review the Disclaimers section below.

Website
Management Team
Management
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.

Property
For more information, view the Sponsor's Investment Memorandum.

The site has been approved for the development of 495 units of self-storage in seven (7) buildings. There will be one 2-story climate-controlled building consisting of 39,000 GSF and six 1-story buildings consisting of 6,900 GSF each (41,400 GSF total).

The unit mix is as follows: 111 1st Floor units (22% of the mix), 131 2nd Floor units (28%), and 253 Ambient Drive-Up units (50%).  The average unit size is 115 square feet (net) and individual units will be 10 feet by 10 feet.  All buildings will be fully sprinklered.  Per the zoning code, there are no standard parking requirements for self-storage units, but the project will have six (6) parking spaces (based on the portion of the building dedicated to office space).

Unit Type Type # of Units Avg SF/Unit Rent/Unit/Mo Rent/SF/Mo Total Rent/YR
4x5 1st Floor 2 20 $84.96 $4.25 $2,039
5x10 1st Floor 5 50 $180.65 $3.61 $10,839
5x9 1st Floor 5 45 $171.86 $3.82 $10,312
10x10 1st Floor 21 100 $225.06 $2.25 $56,715
10x9 1st Floor 21 90 $212.97 $2.37 $53,668
10x12 1st Floor 2 120 $243.15 $2.03 $5,836
10x14 1st Floor 28 140 $259.75 $1.86 $87,276
10x18 1st Floor 2 180 $312.48 $1.74 $7,500
10x20 1st Floor 19 200 $331.08 $1.66 $75,486
13x20 1st Floor 1 260 $415.99 $1.60 $4,992
12x9 1st Floor 1 108 $230.45 $2.13 $2,765
10x8 1st Floor 4 80 $199.21 $2.49 $9,562
5x5 2nd Floor 4 25 $81.26 $3.25 $3,900
4x5 2nd Floor 1 20 $67.96 $3.40 $816
5x10 2nd Floor 19 50 $144.52 $2.89 $32,951
5x9 2nd Floor 12 45 $137.49 $3.06 $19,799
10x10 2nd Floor 17 100 $180.05 $1.80 $36,730
10x9 2nd Floor 25 90 $170.38 $1.89 $51,113
10x13 2nd Floor 9 130 $194.89 $1.50 $21,048
10x12 2nd Floor 4 120 $194.52 $1.62 $9,337
10x14 2nd Floor 4 140 $207.80 $1.48 $9,974
10x18 2nd Floor 4 180 $249.98 $1.39 $11,999
10x20 2nd Floor 22 200 $264.86 $1.32 $69,924
13x20 2nd Floor 1 260 $332.79 $1.28 $3,993
12x13 2nd Floor 1 156 $216.76 $1.39 $2,601
12x9 2nd Floor 2 108 $184.36 $1.71 $4,425
5x13 2nd Floor 3 65 $145.68 $2.24 $5,244
10x8 2nd Floor 3 80 $151.92 $1.90 $5,469
10x30 Drive up 23 300 $523.87 $1.75 $144,588
10x10 Drive up 23 100 $257.89 $2.58 $71,177
10x20 Drive up 23 200 $370.65 $1.85 $102,300
10x15 Drive up 46 150 $287.56 $1.92 $158,731
10x10 Drive up 23 100 $211.39 $2.11 $58,343
10x20 Drive up 23 200 $370.65 $1.85 $102,300
10x10 Drive up 23 100 $211.39 $2.11 $58,343
10x20 Drive up 23 200 $370.65 $1.85 $102,300
10x10 Drive up 23 100 $211.39 $2.11 $58,343
10x20 Drive up 23 200 $370.65 $1.85 $102,300
Total/Averages   495 139 $265.16 $1.91 $1,575,039
Comparables
For more information, view the Sponsor's Investment Memorandum.

Lease Comparables

  Beehive Self-Storage
155 Bracken Road, Montgomery, NY
StorageTown Rental Spaces
130 Neelytown Road,
 Montgomery, NY
StorQuest
765 South St,
 Newburgh, NY
Montgomery Self-Storage
9 Factory Street,
 Montgomery, NY
Albany Post Self-Storage
2377 Albany Post Road,
 Walden, NY
Averages Subject
Year Built 1981 1985 1985 2005 2001 1991 2023
SF 49,918 80,433 66,846 55,296 12,300 52,959 80,400
# Units 400           495
Estimated Occupancy 90% 90% 90% 90% 90% 90%  
Average Rent/Mo (CC)     $216     $216 $130
Average Rent/SF (CC)     $2.28     $2.28 $1.88
Average Rent/Mo (NC) $143 $129 $225 $155 $158 $162 $208
Average Rent/SF (NC) $1.51 $1.35 $2.46 $1.61 $1.67 $1.72 $1.67
               
10x5 Rent/Mo (CC)     $136.00     $136.00 $173.00
10x5 Rent/SF (CC)     $2.72     $2.72 $3.46
10x5 Rent/Mo (NC) $85.00 $77.00 $155.00 $90.00 $100.00 $101.40  
10x5 Rent/SF (NC) $1.70 $1.54 $3.10 $1.80 $2.00 $2.03  
               
10x10 Rent/Mo (CC)     $214.00     $214.00 $217.00
10x10 Rent/SF (CC)     $2.14     $2.14 $2.17
10x10 Rent/Mo (NC) $155.00 $137.00 $239.00 $160.00 $150.00 $168.20 $167.00
10x10 Rent/SF (NC) $1.55 $1.37 $2.39 $1.60 $1.50 $1.68 $1.67
               
10x15 Rent/Mo (CC)     $299.00     $299.00 $0.00
10x15 Rent/SF (CC)     $1.99     $1.99 $0.00
10x15 Rent/Mo (NC) $190.00 $173.00 $281.81 $215.00 $225.00 $216.96 $249.00
10x15 Rent/SF (NC) $1.27 $1.15 $1.88 $1.43 $1.50 $1.45 $1.66
               
Distance from subject 1.5 Miles 3.2 Miles 6.33 Miles 3.37 Miles 4.74 Miles 3.83 Miles  

*(CC) - Climate Controlled Units

*(NC) - Non Climate Controlled Units

Sales Comparables

  StorQuest
Self-Storage
US Storage Center Mohegan Lake Storage Westchester
Self-Storage
X-Tra Space Center Averages Subject Property
Date Sold 3/22/2022 11/29/2021 11/17/2021 11/17/2022 5/18/2021    
Year Built 1960 1982 1970   1973 1971 2026
Building Size (SF) 66,846 SF 29,592 SF 63,681 SF 25,000 SF 12,727 SF 39,569 SF 80,400 SF
Sale Price $19,510,000 $10,500,000 $30,806,000 $12,090,000 $7,200,000 $16,021,200 $19,904,135
$/SF $292/SF $355/SF $484/SF $484/SF $566/SF $436/SF $248/SF
Financials
For more information, view the Sponsor's Investment Memorandum.
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/GSF
Debt $10,850,000 $134.95
GP Investor Equity(1) $539,216 $6.71
LP Investor Equity $3,200,000 $39.80
Total Sources of Funds $14,589,216 $181.46
     
Uses of Funds $ Amount $/GSF
Purchase Price $1,270,000 $15.80
Hard Cost $9,319,000 $115.91
Hard Cost Contingency $470,000 $5.85
Soft Cost(2) $1,709,325 $21.26
Soft Cost Contingency $107,365 $1.34
Interest and OpEx Reserve $1,713,526 $21.31
Total Uses of Funds $14,589,216 $181.46

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

(2) Includes closing costs and RM Technology Solution Licensing Fee.

Debt Assumptions

The committed terms of the debt financing are as follows:

  • Lender: Salisbury Bank
  • Term: 2 Years (+1 Year extension)
  • Loan-to-Value: 74.4%
  • Estimated Proceeds: $10,850,000
  • Interest Type: Floating
  • Spread Above One-Month PRIME: 0.50%
  • Interest-Only Period: 3 Years
  • Amortization: None
  • Prepayment Terms: If refinanced with a bank other than Salisbury, subject to a prepayment penalty of Year 1: 5%, Year 2: 4%, Year 3&4: 1%
  • Extension Requirements: None

Refinance Information: Salisbury Bank's commitment letter includes a construction loan that converts into a permanent loan upon Property stabilization

  • Lender: Salisbury Bank
  • Term: 5 Years
  • Estimated Proceeds: $10,850,000
  • Interest Type: Fixed
  • Annual Interest Rate: fixed at the prevailing 5-year FHLBB Classic Advance Rate + 1.90% 
  • Interest-Only Period:  The Sponsor assumes an additional interest-only period of 12 months given the Property is not expected to stabilize until the end of the hold period. The lender will not contemplate granting an additional i/o period until such time that the construction loan extension is expiring (Month 36). 
  • Amortization: 25 Years

(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. 

Distributions

Diversified Properties, LLC intends to make distributions as follows:

  1. To the Investors, pari passu, all cash flow available for distribution to an 8% Preferred Return;
  2. 25% Promote Sponsor of cash flow available for distribution up to a 12% IRR - (64.18% to Investors / 35.82% to Sponsor);
  3. 35% Promote Sponsor of cash flow available for distribution up to a 15% IRR - (55.63% to Investors / 44.37% to Sponsor);
  4. 45% Promote Sponsor of cash flow available for distribution thereafter - (47.07% to Investors / 52.93% to Sponsor).

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 November 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.

Cash Flow Summary
      Year 0 Year 1 Year 2 Year 3 Year 4
Effective Gross Revenue $0 $0 $256,599 $780,250 $1,324,536
Total Operating Expenses $0 $0 $317,928 $489,871 $557,706
Net Operating Income $0 $0 ($61,328) $290,379 $766,829
               
Project-Level Cash Flows
      Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow   ($3,739,216) $0 $8,987 $159,708 $9,128,977
               
Investor-Level Cash Flows(1)
      Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow   ($3,200,000) $0 $4,916 $103,378 $6,410,754
               
Investor-Level Cash Flows - Hypothetical $50,000 Investment(1)
      Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow   ($50,000) $0 $77 $1,615 $100,168

(1) 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):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Construction Management Fee 5.0% of Hard Costs (Exclusive of Land) Diversified Properties, LLC Capitalization
Developer Fee 4.0% of Hard and Soft Costs (Exclusive of Land) Diversified Properties, LLC 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 (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Property Management Fee Greater of 5.0% of Effective Gross Income or $2,500 Third-Party Manager Cash Flow
Asset Management Fee 1.0% of Effective Gross Income Diversified Properties, LLC Cash Flow
Administration Solution Licensing Fee(2) Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of  RM Technologies’ 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.

.

Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/GSF
Debt $10,850,000 $134.95
GP Investor Equity(1) $539,216 $6.71
LP Investor Equity $3,200,000 $39.80
Total Sources of Funds $14,589,216 $181.46
     
Uses of Funds $ Amount $/GSF
Purchase Price $1,270,000 $15.80
Hard Cost $9,319,000 $115.91
Hard Cost Contingency $470,000 $5.85
Soft Cost(2) $1,709,325 $21.26
Soft Cost Contingency $107,365 $1.34
Interest and OpEx Reserve $1,713,526 $21.31
Total Uses of Funds $14,589,216 $181.46

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

(2) Includes closing costs and RM Technology Solution Licensing Fee.

Debt Assumptions

The committed terms of the debt financing are as follows:

  • Lender: Salisbury Bank
  • Term: 2 Years (+1 Year extension)
  • Loan-to-Value: 74.4%
  • Estimated Proceeds: $10,850,000
  • Interest Type: Floating
  • Spread Above One-Month PRIME: 0.50%
  • Interest-Only Period: 3 Years
  • Amortization: None
  • Prepayment Terms: If refinanced with a bank other than Salisbury, subject to a prepayment penalty of Year 1: 5%, Year 2: 4%, Year 3&4: 1%
  • Extension Requirements: None

Refinance Information: Salisbury Bank's commitment letter includes a construction loan that converts into a permanent loan upon Property stabilization

  • Lender: Salisbury Bank
  • Term: 5 Years
  • Estimated Proceeds: $10,850,000
  • Interest Type: Fixed
  • Annual Interest Rate: fixed at the prevailing 5-year FHLBB Classic Advance Rate + 1.90% 
  • Interest-Only Period:  The Sponsor assumes an additional interest-only period of 12 months given the Property is not expected to stabilize until the end of the hold period. The lender will not contemplate granting an additional i/o period until such time that the construction loan extension is expiring (Month 36). 
  • Amortization: 25 Years

(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. 

Distributions

Diversified Properties, LLC intends to make distributions as follows:

  1. To the Investors, pari passu, all cash flow available for distribution to an 8% Preferred Return;
  2. 25% Promote Sponsor of cash flow available for distribution up to a 12% IRR - (64.18% to Investors / 35.82% to Sponsor);
  3. 35% Promote Sponsor of cash flow available for distribution up to a 15% IRR - (55.63% to Investors / 44.37% to Sponsor);
  4. 45% Promote Sponsor of cash flow available for distribution thereafter - (47.07% to Investors / 52.93% to Sponsor).

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 November 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.

Cash Flow Summary
      Year 0 Year 1 Year 2 Year 3 Year 4
Effective Gross Revenue $0 $0 $256,599 $780,250 $1,324,536
Total Operating Expenses $0 $0 $317,928 $489,871 $557,706
Net Operating Income $0 $0 ($61,328) $290,379 $766,829
               
Project-Level Cash Flows
      Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow   ($3,739,216) $0 $8,987 $159,708 $9,128,977
               
Investor-Level Cash Flows(1)
      Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow   ($3,200,000) $0 $4,916 $103,378 $6,410,754
               
Investor-Level Cash Flows - Hypothetical $50,000 Investment(1)
      Year 0 Year 1 Year 2 Year 3 Year 4
Net Cash Flow   ($50,000) $0 $77 $1,615 $100,168

(1) 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):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Construction Management Fee 5.0% of Hard Costs (Exclusive of Land) Diversified Properties, LLC Capitalization
Developer Fee 4.0% of Hard and Soft Costs (Exclusive of Land) Diversified Properties, LLC 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 (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Property Management Fee Greater of 5.0% of Effective Gross Income or $2,500 Third-Party Manager Cash Flow
Asset Management Fee 1.0% of Effective Gross Income Diversified Properties, LLC Cash Flow
Administration Solution Licensing Fee(2) Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of  RM Technologies’ 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.

.

Disclosures
RM Securities, LLC and its Affiliates Compensation

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, LLC

Sponsor 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 Documents

The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.

Risk of Investment

This 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 Assumptions

Sponsor 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 Performance

Any 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 Debt

A 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 Registered

Sponsor’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 Advice

Nothing 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 Risk

Internal 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.

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