The team at our affiliated broker-dealer, RM Securities, conducts diligence on of the issuer, including detailed background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to screening for any criminal background, we may also turn down sponsors due to poor reference checks, even if the background and criminal checks are satisfactory.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent.* When an investor makes an investment with such sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s contingency offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.
* Unless otherwise disclosed, escrow accounts are not required for some investments that accommodate 1031 investments where the property is already acquired.
Our processes typically includes visiting certain properties (or a subset of properties if it's a fund) to confirm the real estate is what and where the real estate is supposed to be. For certain properties that accommodate 1031 exchange investments, the team will review third-party prepared due diligence reports in lieu of a site visit.
We have formalized processes and checklists for every private placement deal listed on the platform.
The investment offers platform investors an attractive target internal rate of return of 20.2% and an equity multiple of 2.06x. Self-Storage has historically outperformed other real estate asset classes due to the business model of short-term, month-to-month leases. These short-term leases allow the property manager to increase rents for new prospective tenants.
Due to the lack of supply and overall development regarding new self-storage facilities in Montgomery, NY, and the surrounding area, this development would deliver a brand new Class A climate-controlled self-storage facility to the market. In the market, there is currently 2.97 sqft/capita supply which proves that the market is undersupplied. The US national average is 7.46 sqft/capita, and the New York state average is 3.83 sqft/capita.
The site is located at 674 Route 17k in the Town of Montgomery and is readily accessible via Interstate 84, Interstate 87, State Route 17, and Palisades Parkway, as well as local roads US Routes 6, 9W, and 209. In addition to its ideal location, there are significant barriers to entry in this market due to the strict land use laws. As a result, demand for self-storage remains high while supply remains low due to the barriers to entry. Diversified Properties, LLC has built a track record over the past 10 years in the Upper Hudson Valley area building multiple multi-family communities. Due to several factors, there has been a large migration of individuals living in New York City moving to nearby suburban areas.
Diversified Properties, LLC
Diversified Properties, LLC (the "Sponsor") is a Montville, N.J.-based residential and commercial development and management company founded in 2000, specializing in value creation through the successful execution of multifamily, office, self-storage, retail, and industrial ground-up development and redevelopment projects throughout the northeastern United States. The Sponsor utilizes its substantial in-house expertise in acquisitions, architectural and engineering design, land use, entitlements, construction, leasing, sales, and property management, within an agile and scalable operational structure to capitalize on opportunities in key growth markets. Diversified Properties, LLC currently has developed real estate valued at more than $1.5 billion and boasts a portfolio valued in excess of $500 million.
With deep experience in multifamily development and management, Diversified Properties, LLC has successfully created dozens of multifamily communities comprising over 10,000 units across N.J., N.Y., PA, MD and CT and, today, manages an existing and development pipeline spanning 4,000 residential units across 10 diverse communities.
Highlighting their leadership position in N.J.’s real estate community, the sponsor was recently recognized as one of the state’s Leaders in Real Estate, Construction and Design by NJBIZ. Founder Nicholas Minoia was also recently named to NJBIZ's 2021 Power 50 in Real Estate list and was selected as a GlobeSt. Real Estate Forum Multifamily Influencer in 2021.
https://diversifiedproperties.com/Property | City, State | Asset Type | Project Status | Units or SF | Current Cost/Stabilized Value | NOI | Yield on Cost/Stab Cap Rate | Net Cash Flow | |
Built & under current management | |||||||||
1 | 21 Summit | Summit, NJ | Retail | Operating | 7,000 sq ft retail | $1,809,673 | $117,629 | 6.50% | $45,986 |
2 | Summit Lane | Newburgh, NY | Multifamily | Operating | 188 | $44,600,000 | $1,805,836 | 4.05% | $458,296 |
3 | Summit Terrace | New Windsor, NY | Multifamily | Operating | 270 | $61,700,000 | $3,201,460 | 5.19% | $1,291,864 |
4 | Summit Court Phase 1 | Union, NJ | Multifamily | Operating | 130 | $58,500,000 | $2,297,777 | 3.93% | $665,538 |
7 | Meadow Ridge | Newburgh, NY | Multifamily | Operating | 185 | $10,000,000 | $2,642,106 | 26.42% | $546,678 |
8 | 30 Court | Morristown, NJ | Multifamily | Operating | 58 | $35,000,000 | confidential | confidential | confidential |
9 | The Promenade | Summit, NJ | Mixed Use | Operating | 22 Residential 16,000 sq ft retail | $17,990,000 | $854,525 | 4.75% | $427,263 |
10 | 47 River Road | Summit, NJ | Office | Operating | 6,000 sq ft office | $2,784,283 | $167,057 | 6.00% | $33,411 |
11 | 45 River Road | Summit, NJ | Office | Operating | 6,000 sq ft office | $729,433 | $43,766 | 6.00% | $8,753 |
12 | 350 Main Road | Montville, NJ | Office | Operating | 34,000 sq ft existing commercial |
$5,628,000 | $256,698 | 4.56% | $55,282 |
13 | Cubesmart Self-Storage | Montville, NJ | Self-Storage | Operating | 98,000 sq ft Self-Storage | $23,500,000 | $1,104,266 | 4.70% | $1,104,266 |
14 | 1,2,3,6,9 Mars Court | Montville, NJ | Industrial | Operating | 105,000 sq ft industrial | $25,000,000 | $758,093 | 3.03% | $379,047 |
15 | Bergenfield Industrial | Bergenfield, NJ | Industrial | Operating | 49,961 sq ft industrial | $3,100,000 | $233,626 | 7.54% | $116,813 |
Subtotal | $290,341,389 | $13,482,838 | 4.64% | $5,133,195 | |||||
Under Current Construction | |||||||||
16 | Clermont Fidelco Urban Renewal | Union, NJ | Multifamily | Development | 266 | $26,000,000 | $5,242,111 | 20.16% | $1,071,785 |
17 | Lighthouse Landing Ventures LLC | Sleepy Hollow, NY | Mixed Use | Development | 1,177 Residential, 135,000 Sq ft retail, and 35,000 sq ft office | $86,900,000 | $0 | n/a | $0 |
18 | Farms at Stony Hill LLC | Bethel, CT | Multifamily | Development | 117 | $5,500,000 | $0 | n/a | $0 |
19 | Irondale @ Wharton | Wharton, NJ | Multifamily | Development | 60 | $17,272,468 | $0 | n/a | $0 |
Subtotal | $135,672,468 | $13,482,838 | $5,133,195 | ||||||
Built and Sold | |||||||||
20 | 480 Flatz | East Rutherford, NJ | Multifamily | Sold | 35 Residential Units | $11,600,000 | - | 4.97% | |
21 | Summerhill Road | East Brunswick, NJ | Mixed Use | Sold | 120 Residential Units & Pharmacy and Bank Pad |
$18,000,000 | - | - | - |
22 | Hackensack Self-Storage | Hackensack, NJ | Self-Storage | Sold | 67,000 sq ft Self-Storage | $10,000,000 | - | - | - |
23 | Summit Place Apartments | Lindenwold, NJ | Multifamily | Sold | 148 Residential Units | $7,500,000 | - | - | - |
24 | Summit Ridge | Allentown, PA | Multifamily | Sold | 204 Residential Units | $45,000,000 | - | - | - |
25 | High Ridge | Montville, NJ | For Sale Townhomes | Sold | 100 Town Homes | $60,000,000 | - | - | - |
26 | Longview Townhome Community | Montville, NJ | For Sale Townhomes | Sold | 400 Town Homes | $190,000,000 | - | - | - |
27 | Bear's Nest | Park Ridge, NJ | For Sale Townhomes | Sold | 150 Town Homes | $95,000,000 | - | - | - |
Subtotal | $437,100,000 | ||||||||
Total | $863,113,857 | $26,965,675 | $10,266,390 |
The above biography and track record were provided by the Sponsor and have not been independently verified by RM Technologies, LLC or its affiliates. Past performance is not indicative of future results. Please carefully review the Disclaimers section below.
Diversified Properties, LLC ("Sponsor") is developing a 7-building self-storage facility in the Town of Montgomery, Orange County, NY, located 60 miles northwest of New York City. Sponsor plans to build, stabilize and sell the asset. Sponsor currently owns the land and the site work is under construction.
Total development cost is approximately $14,589,216 ($181.50 per GSF). The development will be funded by a $10,850,000 construction loan (74.4% LTC) and $3,739,216 of equity (LP equity $3,200,00 or 85.6%; Sponsor equity $539,216, or 14.4%).
Construction started in March 2022 and is planned to be finished by October 2023. Project stabilization is estimated to be August 2026. The asset is anticipated to be sold at stabilization in September 2026 at a 5% exit cap rate generating gross sale proceeds of $19,904,135 (or $247.60 per GSF).
Development Budget
Acquisition Cost | $ Amount | Per Unit | Per SF |
Purchase Price | $1,270,000 | $2,566 | $15.80 |
Total Acquisition Costs | $1,270,000 | $2,566 | $15.80 |
Development | $ Amount | Per Unit | Per SF |
Hard Costs (GC) | $9,789,000 | $19,776 | $121.75 |
Soft Costs | $1,816,690 | $3,670 | $22.60 |
Total Development Costs | $11,605,690 | $23,446 | $143.65 |
Carry Costs | $ Amount | Per Unit | Per SF |
Interest and OpEx Reserve | $1,658,526 | $3,351 | $20.63 |
Financing Fees | $55,000 | $111 | $0.68 |
Total Other | $1,713,526 | $3,462 | $21.31 |
Grand Total | $14,589,216 | $29,473 | $181.46 |
Property Highlights
Aerial View of Current Construction
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 |
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 |
Market Overview
The site is located in the Town of Montgomery, Orange County, NY, approximately 60 miles northwest of New York City, directly north of the New Jersey – New York border and west of the Hudson River. The site is readily accessible to Interstate 84, Interstate 87, and Palisades Parkway, as well as local roads US Routes 6, 9W, and 209.
According to the United States Census Bureau, Orange County's total 2020 population was 401,310 (a 7.6% increase over 2010) and has been among the fastest-growing regions in the NYC metropolitan area. The Town of Montgomery's 2020 population was 23,322 (a 3.2% increase over 2010).
According to the Orange County Partnership Center of Economic Development, the site is also easily accessible to many of Orange County's largest employers, including US Military Academy (West Point), Orange County Regional Medical Center, Crystal Run Health, Access: Supports for Living, St. Luke's Cornwall Hospital, Elant, C&S Wholesale Grocers, Amscan and Empire Blue Cross/Blue Shield.
Submarket Overview
The Town of Montgomery, which has a total area of 51.1 square miles, is bordered on the east by the town of Newburgh and on the north by Shawangunk in Ulster County. The Property is proximate to several large retailers, including Costco, Walmart, Home Depot, and Target.
The site is located at 674 Route 17k in the Town of Montgomery and is readily accessible via Interstate 84, Interstate 87, and Palisades Parkway, as well as local roads US Routes 6, 9W, and 209. The town also benefits from extensive mass transit options, including Stewart International Airport/Air Force Base, the Metro-North Railroad, and numerous bus lines.
Square foot per capita in the 10-mile radius is 2.97 square feet/capita. This compares with 8.33 sqft/capita within a 3 miles radius and 10.92 sqft/capita within a 5 miles radius. For other comparison purposes, the US national average is 7.46 sqft/capita.
The rental rate in this market has trended up in the last 3 months, by a total of 1.43%. This would indicate an increased demand against available supply. In addition to the Subject, within a 3 miles radius, there is one known new development and within a 5 miles radius, there is one known new development. The Property is located on 17K, a well-trafficked road near Route 87 and conveniently accessible to several cities in the area.
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.
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.
Diversified Properties, LLC intends to make distributions as follows:
- To the Investors, pari passu, all cash flow available for distribution to an 8% Preferred Return;
- 25% Promote Sponsor of cash flow available for distribution up to a 12% IRR - (64.18% to Investors / 35.82% to Sponsor);
- 35% Promote Sponsor of cash flow available for distribution up to a 15% IRR - (55.63% to Investors / 44.37% to Sponsor);
- 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.
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.
.
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.