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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 Fund’s primary focus is on development within the Southern United States, a region that is increasing in population up to 70% faster than the national average with consistently sub-4% unemployment rates. The strategic focus is on growing, undersupplied housing markets that have been capital-constrained even though their underlying population and job growth statistics are often similar to many primary markets. The General Partner has capitalized on this unsatisfied demand by pursuing projects in these markets and engaging experienced development partners through Ardent’s established relationships.
Investors benefit from a Fund with fully identified assets and a shorter deployment period. The six assets that have been identified represent 1,447 units in aggregate, and as the Fund has already achieved its first resolution - investors capture the upside of increased buying power through the realized proceeds.
Ardent and its co-General Partners combined have fully developed nearly 8,000 apartment units across the Southeastern United States and brings over 80 years of expertise in the development of apartment properties. The fund has four apartment properties under development currently, totaling 984 units. Additionally, the Fund has an established pipeline of 568 more units slated for development in growing submarkets in Florida and Georgia. While independent of Ardent Housing Fund II, Ardent’s seasoned and trusted multi-family development team has realized an average of 31.8% IRR and 2.19x on its exits within Ardent Housing Fund I.
The Ardent Companies, LLC
Ardent is a privately held real estate firm focused on opportunistic and diversified investment strategies. With significant industry experience and a demonstrated track record, Ardent leverages its established relationships and capital flexibility to attain a diverse set of risk adjusted investments. The firm pursues opportunities with an innovative and disciplined approach, making material investments together with its limited partners for maximum alignment. As the firm continues to build upon its infrastructure, portfolio, and footprint, Ardent is committed to creating a positive impact on its employees, investors, and communities. Founded in 2012, Ardent has invested over $4.0 billion with $1.5 billion in assets currently under management. Ardent’s investment strategies extend across state lines and country borders, with a current presence in thirty states and two countries. As Ardent expands upon its geographic footprint, the firm continues to grow its employee base with team members based in Atlanta, Charlotte, New York City, and London.
https://theardentcompanies.com/-
Matthew ShulmanCEO/Managing Partner -
Dror BezalelCFO/Partner
Mr. Shulman is the CEO and Managing Partner of TAC and the CEO of each of the General Partner and the Advisor. Prior to forming TAC, Mr. Shulman was a Managing Director with Rialto Capital where he managed an origination platform for equity investments across Rialto’s strategies. In that role, Mr. Shulman oversaw deployment of capital into deals varying from performing and non-performing loans, equity investments directly in real estate and recapitalization of existing sponsors. In 2010, prior to the investment and acquisition focus, Mr. Shulman built and managed a team on the asset management side of Rialto. Prior to Rialto, Mr. Shulman was a founding partner at Fairway Capital Partners, a real estate distressed debt firm started in 2007. Fairway acquired direct real estate or loans secured by commercial and residential development real estate. Mr. Shulman received a B.A. in Political Science from the University of Arizona and an M.A. in Real Estate Finance from New York University. Mr. Shulman was also an adjunct professor of real estate finance at New York University.
Mr. Bezalel is a Partner and CFO of Ardent and the CFO of each of the General Partner and the Advisor. Prior to forming Ardent, Mr. Bezalel was a principal and CFO/COO of Anthem Capital Partners, a Georgia based distressed debt real estate investor. Prior to Anthem, Mr. Bezalel worked as the COO for Fairway Capital Partners, a New York Based distressed debt real estate firm. Prior to Fairway Capital Partners, Mr. Bezalel was a senior CMBS loan underwriter at Morgan Stanley. Mr. Bezalel has been working in commercial real estate for more than 25 years and his experience includes commercial appraisal, commercial leasing, asset management and disposition. He received a BA in Business Management in Israel and an MS in Real Estate Development and Finance from New York University.
Please refer to the Documents section for Ardent's track record.
The bios and track record were provided by The Ardent Companies and have not been independently verified by RealtyMogul.
Fund at a Glance
| Fund Size | $100 Million |
| Target Yield on Cost | 6.4% |
| Target # of Properties | 6 Properties; Fully Identified |
| Estimated Hold Period | 5 years from Initial Closing, with up to 2 two-year extensions at the discretion of the General Partner, and thereafter with approval of Advisory Board |
| Investment Period | 2 years from Final Closing, with a six month extension option with approval of General Partner |
Business Plan
The Fund’s focus is on the development and operation of rental housing in growing, undersupplied housing markets that have been capital constrained even though their underlying population and job growth statistics often mirror many primary markets. The focus on markets with existing unmet demand reduces risk. The Fund has successfully executed on its investment objective of using a data-driven investment strategy to establish a diversified portfolio of rental communities through the sourcing, acquisition, and development of rental housing opportunities to generate above-average risk-adjusted returns to investors. Since its launch in 4Q21, the Fund has a fully identified pipeline, securing six development sites - five of which are active as one asset has been sold. Construction has commenced on three of the five assets with locked in costs and low debt spreads in place. The other two assets benefit from a firm commitment from HUD thus locking in fixed rate debt for the long term.
Investors benefit from depreciation and interest deductions, making for tax efficient income. The Fund plans to refinance assets upon project stabilization with long-term fixed-rate debt. Market dynamics will dictate whether assets are held long-term, with investors benefitting from long-term capital gains tax treatment when assets are sold.
New investors come into the Fund at basis, and will benefit from a Fund with fully identified assets and a shorter deployment period. As the Fund has already had its first resolution, investors reap the rewards of increased buying power through the sales proceeds. The capital distribution from the sale of Cape Coral reduces the catch-up interest (admission interest) component for all investors that participated in closings following the sale. Catch-up interest is charged at an annual rate of 8% on outstanding capital. Catch-up interest is paid in by later closing investors pro rata based on their total ownership of the fund and is then applied pro rata to existing investors capital accounts based on their total ownership of the fund. As such, any catch-up interest paid in is not applied to the investor’s capital account.
Ardent and it's co-General Partners combined have fully developed nearly 8,000 apartment units across the Southeastern United States and brings over 80 years of expertise in the development of apartment properties. The fund has four apartment properties under development currently, totaling 984 units. Additionally, the Fund has an established pipeline of 568 more units slated for development in growing submarkets in Florida and Georgia.
| Deal | Status | % Complete | Units | UW Rent/SF | Costs | Costs / Unit | Equity | Yield on Cost | UW IRR |
| Punta Gorda |
Under Construction |
83% | 297 | $1.64 | $61,797,192 | $208,071 | $23,173,947 | 6.60% | 22% |
| Ocala | Under Construction | 78% | 329 | $1.73 | $77,187,647 | $234,613 | $30,937,647 | 5.80% | 20% |
| Braselton 2.0 | Under Construction | 18% | 253 | $1.64 | $72,878,246 | $288,056 | $29,443,246 | 6.40% | 20% |
| Port Wentworth | Land Owned | - | 235 | - | - | - | $4,517,710 | - | - |
| Boca Grande | Land Owned | - | 333 | - | - | - | $3,309,344 | - | - |
| Total | 1,447 | $1.67 | $211,863,085 | $241,027 | $91,381,894 | 6.23% | 21% |
Parkside at Punta Gorda, Punta Gorda, FL
The Fund’s first investment, Parkside at Punta Gorda, began construction in November 2021. The project is approximately 83% complete and is currently on budget but 60-days behind schedule due to Hurricane Ian and material delivery delays. Citizens Bank is providing conventional financing at 62.5% loan-to-cost. The loan is non-recourse with an interest rate of LIBOR + 2.40%, converting to Overnight SOFR (capped at 5%) + 2.40% in Q2 2023. The first units were delivered in June 2023 and preleasing started in February 2023. Demand in the market has been robust with 63 leases (21% of units) executed at a $200 premium to underwritten rent. Leases signed during this period offer one month of free rent which is credited in the first full month after move-in to compensate for ongoing construction and lack of access to amenities. Initial quotes for permanent insurance came back at $1,800/unit for the site; original underwriting assumed $475/unit based on previous experience in Florida. Insurance costs are elevated, especially in Florida, and the GP will continue to monitor the market as we approach project completion. The Fund plans to evaluate options for a sale or refinance at the end of the year after the property is substantially leased.
The Grove at Ocala, Ocala, FL
The Fund acquired approximately 35 acres located 30 minutes northwest of Fund I’s successful Parkside at East Village development and construction began in February 2022. The project is approximately 78% complete; it is on budget and within 90 days of scheduled delivery. Citizens Bank is providing conventional financing at 62.5% loan-to-cost. The loan is non-recourse with an interest rate of BSBY (capped at 5%) + 2.4%. The clubhouse and first units were delivered in August 2023 and preleasing began in May 2023. Due to construction delays in the market caused by COVID and issues with the municipality, we expect the initial lease-up to compete with more units than anticipated. As such, the property is offering additional construction concessions in order to stimulate leasing activity for the first buildings delivered and will be reducing the concessions as the lease-up continues. Preleasing activity started with 29 leases (9% of units) signed. The average market rent for the project is $45/unit per month (3%) higher than underwriting projected, however the average signed lease rate is $95/unit per month (-6%) lower than underwriting due to these concessions. The Fund plans to evaluate options for sale or refinance in 2024 after the property is substantially leased.
Claret Village at Braselton, Braselton, GA
The Fund acquired 57 acres of land in April 2022 and began construction immediately thereafter. The site is approximately five minutes from Fund I’s successful Noble Vines at Braselton development. The property will include 111 single family homes for rent, 24 townhomes, and 118 apartments which will be operated as one cohesive rental community. Cadence Bank is providing conventional financing at 60% loan-to-cost. The loan is non-recourse with an interest rate of LIBOR + 2.2%. Construction is approximately 18% complete and is on budget, but is 12-16 weeks delayed due to weather delays, erosion control issues with the City of Braselton, and other site-related issues. Construction costs are expected to be in line with underwriting and the project is holding ~$440,000 of remaining contingency. Vertical construction commenced in July 2023. The Harrison at Braselton, previously Noble Vines at Braselton which was developed and sold in Ardent D4 Housing Fund I, is the closest comparable property to the site and underwritten rents for Claret Village remain in line with the offered rents at The Harrison. Vacancy in the submarket has remained low and The Harrison reports 95% occupancy with only limited availability.
Parkside at Port Wentworth, Port Wentworth, GA
The Fund acquired 20 acres located just north of Savannah, GA in November 2021. The Fund has received a revised firm commitment from HUD for financing at approximately 67% loan-to-cost at a fixed rate of 5.97% including MIP. The Fund’s basis in the land is approximately $4.6 million and we have accepted an offer to sell the land for $6,000,000 with closing scheduled for 1Q24. The sale is projected to result in an unlevered IRR of 17% to investors and an equity multiple of 1.19x.
Parkside at Boca Grande, Port Charlotte, FL
The Fund acquired 28 acres in the Englewood East neighborhood of Port Charlotte for $18,657/unit ($6,250,000). The Fund closed with a $3.6 million land loan from Georgia Banking Corporation at 55% loan-to-cost with an interest rate of SOFR + 4.00%; the loan currently matures in December 2023. The land is zoned for 297 multifamily units and includes 18 duplex lots surrounding the apartment site. The Fund would construct these 36-units simultaneously with the apartments. As a secondary market, Port Charlotte has not seen the elevated levels of development that was realized in Tampa, Orlando, Miami, and Jacksonville. Although the site is well located in a strong submarket, the projected yields are underwritten to be lower than the first three deals in the Fund due to market changes and rising interest rates. The Fund continues to pursue a HUD loan and is considering selling the land or partnering with an institutional equity partner with a lower cost of capital and the Fund could contribute the land for investors’ benefit.
Resolved Asset - Noble Vines at Cape Coral, Cape Coral, FL
The Fund sold the 28 acres of land pre-development in early June for $14,650,000 ($32,995/unit) after having acquired it in February 2022 for $4,950,000 ($11,149/unit) – for a profit of approximately $8 million. As of September 2022, the Fund has distributed $2,958,414 of proceeds from the sale to investors in accordance with their ownership share.
The Market
The strength of the multifamily market in mid-to-late 2021 through mid-2022 was remarkable, with most of the markets experiencing low vacancy and more rent growth than the five years leading up to 2020. However, the market reached an inflection point near the end of 2022 as rapidly rising interest rates and volatility in the capital markets have led to a slowdown in multifamily investment activity. In Q4 2022, rent growth appeared flat and vacancy rates increased. Multifamily fundamentals are expected to rebound by the second half of 2023 with rent growth and vacancy rates projected to return to historical averages by the end of the year. Assumptions driving the multifamily recovery are driven by strong labor markets which have slowed but are continuing to grow at a healthy pace and above pre-pandemic averages. Unemployment has stayed consistently below 4.0% since early 2022 and was 3.5% as of December 2022, according to the Bureau of Labor Statistics.
The recession caused by the COVID-19 pandemic impacted high-density urban submarkets much more than suburban ones in 2020. As a result, suburban markets led multifamily growth in 2021. According to CBRE, five major COVID-related factors diminished the appeal of urban submarkets in 2020: (1) remote working requirements, (2) the closing of a portion of urban amenities, (3) the reluctance to use public transit, (4) a desire for more living space, and (5) a desire for greater access to the outdoors. Non-COVID-related factors exacerbated the situation, including the high cost of urban apartments and shifting demographics. Millennials are reaching life stages where urban living is often traded in for larger housing options in less-dense submarkets.
Overall demographic growth is expected to generate demand for another 3.7 million new rental properties through 2035 driven by lower homeownership rates and increased population growth. High-cost urban multifamily markets have continued to show a lagging recovery and economic forecasts expect that secondary cities will continue to drive growth. Freddie Mac projects that the best performing multifamily markets will be concentrated in smaller southwestern and Florida markets. Regionally, new demand through 2035 is focused in three states: Texas, Florida, and California which will require more than 1.5 million new housing units or 40% of net new demand. Multifamily fundamentals are expected to decelerate through the first few months of 2023 but demand for housing is expected to return later in the year, as long as the labor market doesn’t fall into recessionary territory. The Freddie Mac baseline forecast shows an increase in vacancy rates up to 5.1% by year-end 2023 and rents to grow by a modest 3.9%. The average vacancy rate going back to 1980 is 5.5%.
Rising mortgage rates seem to have dampened home buying in the near term as the minimum household income to buy a median-priced home has increased by 20% since the end of 2021. At today’s prices, a 3.5% down payment that a first-time buyer would have to make on a median-priced home amounts to $11,700. This requirement alone would rule out most renters whose median savings are just $1,500. In addition, the monthly mortgage payment on the median-priced home has raised the minimum income needed to afford these payments from $79,600 in April 2021 to $107,600 in April 2022—effectively pricing out some 4 million renter households with incomes in this range. In 2021, the cost-to-own grew 19.2% over the prior year, while rent grew 12%. However, this trend was exacerbated in the first three quarters of 2022 as the cost-to-own increased an additional 40.3% while rents increased 7.2%. These trends are expected to prolong the need for additional rental housing.
Source: “America’s Rental Housing 2022”, Joint Center for Housing Studies of Harvard University, https://www.jchs.harvard.edu/americas-rental-housing-2022
Source: “The State of the Nation’s Housing 2022”, Joint Center for Housing Studies of Harvard University, https://www.jchs.harvard.edu/state-nations-housing-2022
Source: “2023 Multifamily Outlook”, Freddie Mac Multifamily, https://mf.freddiemac.com/docs/2023_multifamily_outlook.pdf
Source: “U.S. Apartment Demand Through 2035”, Hoyt Advisory Services, Eigen10 Advisors, LLC, https://www.nmhc.org/research-insight/research-report/us-apartment-demand-through-2035/
Source: “US Real Estate Market Outlook 2021” CBRE Inc., CBRE Research, https://www.cbre.us/research-and-reports/US-Real-Estate-Market-Outlook-2021
Note that Sponsor co-invest in the fund is ~$10MM.
|
As of July 2023 |
|||||
|
Sources |
$ Total |
% Total |
Uses |
$ Total |
% Total |
|
Debt |
$62,841,796 |
43% |
Punta Gorda |
$51,256,917 |
35% |
|
Equity |
$82,463,035 |
57% |
Ocala |
$62,058,224 |
43% |
|
|
Braselton |
$20,524,387 |
14% |
||
|
|
Boca Grande |
$6,947,594 |
5% |
||
|
|
Port Wentworth |
$4,517,710 |
3% |
||
|
Total |
$145,304,831 |
100% |
Total |
$145,304,831 |
100% |
|
Projected Total |
|||||
|
Sources |
$ Total |
% Total |
Uses |
$ Total |
% Total |
|
Debt |
$131,946,495 |
59% |
Punta Gorda |
$61,797,192 |
28% |
|
Equity |
$91,298,159 |
41% |
Ocala |
$77,187,647 |
35% |
|
|
Braselton |
$72,794,511 |
33% |
||
|
|
Boca Grande |
$6,947,594 |
3% |
||
|
|
Port Wentworth |
$4,517,710 |
2% |
||
|
Total |
$223,244,654 |
100% |
Total |
$223,244,654 |
100% |
Ardent Companies intends to make distributions as follows:
Distributable Cash from Operations:
(i) 100% to investors until an 8% IRR to the investors (taking into account prior distributions to the investors);
(ii) 100% to the General Partner until the General Partner has received the difference between (A) the amount necessary to provide a ten percent (10.0%) IRR to investors on their aggregate capital contributions and (B) the amount distributed under clause (i);
(iii) 80% to investors and 20% to the General Partner.
Distributable Cash from Capital Events:
(i) 100% to investors until an 8% IRR to the investors (taking into account prior distributions to the investors);
(ii) 100% to the General Partner until the General Partner has received the difference between (A) the amount necessary to provide a ten percent (10.0%) IRR to investors on their aggregate capital contributions and (B) the amount distributed under clause (i);
(iii) 80% to investors and 20% to the General Partner until a sixteen percent (16.0%) IRR to investors (taking into account prior distributions to the investors); and
(iv) 60% to investors and 40% to the General Partner.
Ardent Companies 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 Ardent, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Certain fees and compensation will be paid over the life of the transaction; please refer to Ardent Companies' materials for details. The following fees and compensation will be paid(1)(2):
| One-Time Fees: | |||
| Type of Fee | Amount of Fee | Received By | Notes |
| Development Fee | Less than or equal to 5% of Project Costs | AHF II GP, LP | per project basis |
| Acquisition Fee | 3.0% of Land Costs | AHF II GP, LP | the greater of 3% of $100,000 |
| Investment Management Fee | The Fund will pay investment management fees quarterly, beginning with the initial Closing, in advance ("Management Fees") equal to 1.50% per annum of the aggregate amount of Invested Capital allocable to assets that are owned by the Fund | AHF II GP, LP | |
| 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 |
| Asset Management Fee | 1.0% of Collected Revenue | AHF II GP, LP | Annual rate, pulled quarterly |
| 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 | Pulled quarterly |
(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.
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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.