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Multifamily
Sheridan Court Apartments
Chicago, IL
Funded
100% funded
...
Sheridan Court Apartments
Chicago, IL
All Investments > Sheridan Court Apartments
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Overview
Sheridan Court Apartments
Repositioning of a mixed-use apartment building in a gentrifying infill location in Chicago, IL. Experienced multifamily Sponsor who currently owns another asset in the market.
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Details
For more information, view the Sponsor's Investment Memorandum.
Estimated First Distribution 3/2021
Estimated Hold Period 4 Years
Investment Strategy Value-Add
Investment Type Equity
Year Built 1922
Number of Units 160
Commercial Rentable Square Footage 10,156
Current Apartment Occupancy 98.8%
Planned Amenity Offerings Fully redesigned and remodeled management and leasing offices, boutique hotel inspired resident lounge, modern fitness center with a virtual trainer, rooftop common area with an outdoor kitchen and games, bike room with a mechanics table, private on-site storage, automated package delivery cabinets, free wifi access in common areas, and a laundry room with mobile device alerts.
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
Well located near demand drivers and local amenities such as Rogers Park, Lake Michigan, Loyola University, Evanston, and the CTA Red Line providing easy access to downtown Chicago
Strong market conditions—according to Axiometrics, annual rent growth in the submarket is expected to average 4.08% over the next five years, accompanied by an average 2.76% vacancy rate over the same period
Nearby renovated, Class A comparable properties are achieving rental increases
Institutional repeat Sponsor who has owned over 54,000 multifamily units to date
Well located near demand drivers and local amenities such as Rogers Park, Lake Michigan, Loyola University, Evanston, and the CTA Red Line providing easy access to downtown Chicago
Strong market conditions—according to Axiometrics, annual rent growth in the submarket is expected to average 4.08% over the next five years, accompanied by an average 2.76% vacancy rate over the same period
Nearby renovated, Class A comparable properties are achieving rental increases
Institutional repeat Sponsor who has owned over 54,000 multifamily units to date
Contact Us
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Management
For more information, view the Sponsor's Investment Memorandum.
Spirit Bascom Ventures

Spirit Bascom Ventures is a co-sponsorship joint venture between The Bascom Group and Spirit Investment Partners that invests in opportunistic and value-add multifamily throughout the eastern half of the United States. 

Spirit Investment Partners (www.spiritinvestors.com) is a Connecticut-based real estate investment and development company, owned and operated by principals David Nachman, Scott Zwilling, and Ian Hafner. The company owns and operates a portfolio of multifamily assets ranging from New England to Florida, the Midwest and California. Spirit has closed over $350 million in transactions since inception, with over $40 million in renovations currently in process.

The Bascom Group (www.bascomgroup.com) is one of the most active and seasoned buyers and operators of apartment communities in the United States.  Formed in 1996 by Jerome Fink, Derek Chen, and David Kim, The Bascom Group is a private equity firm that specializes in multifamily, commercial, non-performing loans, and real estate related investments and operating companies.  The company has owned over 196 multifamily properties and 52,000 units (as of November 2015).  In 2016, Bascom was awarded the prestigious Ernst & Young Entrepreneur Of The Year award.

Sponsor Track Record

Spirit Investment Partners Track Record

Currently Owned Assets
Asset Name Location Purchase Date Year Built # of Units Purchase Price Total Capitalization Price/Unit CapEx Budget
Arlington Village Fairborn, OH 11-Aug 1965 164 $6,000,000 $6,800,000 $36,585 $462,000
Sheffield SONO South Norwalk, CT 12-Dec 2007 138 $43,250,000 $50,136,333 $313,406 $4,290,908
Arlington Flats Fairborn, OH 13-May 1967 150 $1,100,000 $4,375,000 $7,333 $2,347,377
The Henry Pomona, NY 13-Dec 2001 168 $33,050,000 $38,931,033 $196,726 $3,300,000
946-954 Flushing Avenue Brooklyn, NY 14-Jun 1931 n/a $6,000,000 $7,000,000    
The Westcott Tallahassee, FL 14-Jul 20,002,005 444 $36,979,000 $44,400,912 $83,286 $5,094,600
The Adair Sandy Springs, GA 14-Oct 2001 232 $30,000,000 $34,435,333 $129,310 $3,233,000
285 W 12th Street New York, NY 15-Jun 1841 11 $9,350,000 $11,100,905 $850,000 $634,600
Sheridan Edgewater Chicago, NY 15-Nov 1920 223 $21,600,000 $38,978,613 $96,861 $14,015,000
Bellevue West Nashville, TN 16-Feb 1986 560 $63,250,000 $71,695,085 $112,946 $5,118,896
Highlands at the Lake Nashville, TN 16-Feb 1986 278 $30,250,000 $33,452,371 $108,813 $1,812,776
Total/Average       2,368 $280,829,000 $341,305,585 $118,593 $40,309,157
                 
Sold Assets
Asset Name Location Purchase Date Year Built # of Units Purchase Price Total Capitalization Sale Date Sale Price
2146-48 Second Avenue New York, NY Aug-06 1900 35 $5,900,000 $6,219,500 May-12 $8,756,000
Winchester Square Murrieta, CA Oct-12 1987 7 (retail) $1,400,000 $1,637,129 Dec-13 $2,416,366
1818 Clay Avenue Bronx, NY May-10 1937 25 $1,550,000 $1,850,000 Jun-14 $2,400,000
Total/Average     1987 30 $8,850,000 $9,706,629   $13,572,366
                 
Portfolio Total       2,398 289,679,000 351,012,214    

The Bascom Group Track Record

Sale Yr. # of Units Avg. Yrs. Held Total Cost Basis
1999 58 3.60 $456,189
2000 504 3.15 $10,091,732
2001 1,049 3.05 $15,654,528
2002 840 3.80 $14,649,840
2003 2,508 2.77 $48,261,908
2004 1,503 3.16 $28,416,433
2005 1,097 2.84 $36,340,001
2006 1,087 3.35 $30,774,104
2007 7,292 2.48 $121,284,998
2008 1,299 3.54 $29,611,326
2009 3,734 3.33 $39,477,443
2010 4,242 4.85 $74,516,529
2011 5,550 4.65 $105,514,167
2012 7,482 6.07 $151,110,359
2013 4,902 6.43 $107,294,343
2014 4,517 7.53 $80,420,118
2015 4,585 7.15 $69,256,592
Total/Avg. 52,249 4.22 $963,130,610

 

*Sponsor information and track record were provided by the Sponsor and have not been independently verified by RealtyMogul.com

Management Team
Management
David A. Nachman
Principal, Spirit Investment Partners

Prior to co-founding Spirit Investment Partners in 2009, Mr. Nachman was a founding partner and principal of AMS Real Estate Partners (‘AMSREP’), a New York based real estate investment fund formed to invest in both private and publicly traded real estate assets throughout the capital structure, across all asset types and primary US markets. Mr. Nachman was jointly responsible for all of AMS Real Estate Partners I, LP capital raising, investment decisions, and overall Fund management. From 2002 to 2007, Mr. Nachman was a Vice President of Hall Financial Group, a private investment company based in Dallas where he helped launch the company’s Structured Finance Group and had direct responsibility for originating, underwriting, and structuring of value added equity and debt real estate investments across all asset types and multiple geographic regions. In addition, Mr. Nachman maintained asset management responsibility for a $200 million structured loan portfolio as well as the Company’s approximately $1.0 billion real estate investment portfolio, including over 7,000 multifamily units. Mr. Nachman received a B.S. from Cornell University.

Management
Scott D. Zwilling
Principal, Spirit Investment Partners

Prior to co-founding Spirit Investment Partners in 2009, Mr. Zwilling was previously the Director of Northeast Acquisitions for JPI, a large national multi-family developer, where he covered the territory from New York to Maine. Prior to JPI, he held a similar role as an Acquisitions Manager with Crescent Heights, one of the nation's premier condominium developers. Over the past ten years, Mr. Zwilling has been responsible for the acquisition, development and disposition of over $1.0 billion of property located throughout the Northeast. In addition, he currently serves as a Professor of Real Estate Finance at Columbia University. Prior to JPI and Crescent Heights, Mr. Zwilling was a real estate investment banker at Wells Hill Partners, Ltd., where he participated in numerous deals, including various residential, hotel and office assets. Other experiences include working as a consultant in the real estate groups of Arthur Andersen and Ernst and Young. Mr. Zwilling is a Certified Public Accountant and holds a Bachelor of Science in Business Administration from The Ohio State University, Columbus, OH and a Masters in Real Estate Development from Columbia University, New York, NY.

Management
Ian M. Hafner
Principal, Spirit Investment Partners

Prior to joining Spirit Investment Partners in 2011, Mr. Hafner co-founded MHF Real Estate Group a full service real estate investment firm. Prior to forming MHF, Mr. Hafner served as Director of Development and Investments at Equity One, Inc. where he managed investment opportunities throughout the United States. Equity One is a $3.7 billion publicly traded REIT that principally owns, manages, acquires and develops neighborhood and community shopping centers. Mr. Hafner’s thirteen years of experience in the real estate and finance industries includes serving as Acquisitions Director at Westrust, Acquisition Associate for Cornerstone Real Estate Funds, Inc., and President of his own residential development company, Hafner Realty Group, Inc. Mr. Hafner started his career working in fixed income sales and trading for Lehman Brothers, Inc. in New York City where he transacted in Government, Agency, Interest Rate Derivative and Commercial Mortgage Back Securities, successfully underwriting over $1.25 billion in new issues Agency Securities. Mr. Hafner holds a B.S. in City and Regional Planning from Cornell University’s College of Architecture, Art & Planning. Mr. Hafner is a Licensed Real Estate Broker in the State of California, License #01858890, and a Member of California Receivers Forum.

Management
Jerome A. Fink
Co-Founder and Managing Partner, The Bascom Group

Mr. Fink is a co-founder & Managing Partner of The Bascom Group, LLC. Bascom has completed over $8.0 billion in multi-family and commercial value-added transactions since 1996 including more than 220 multifamily properties and 60,000 units. Bascom’s subsidiaries and joint ventures include the Southern California Industrial Fund, Rushmore Properties, Bascom Portfolio Advisors, Shubin Nadal Associates, Spirit Investors, REDA Bascom Ventures, MHF RM Holdings, and the Realm Group. Bascom’s subsidiaries also include Premier Business Centers, the largest privately held executive suite company in the US.

Prior to founding Bascom, Mr. Fink acted as Senior Acquisitions and Sales Manager from 1991 to 1995 for Pacific Mutual Life Insurance Company. His responsibilities included market assessment, property identification and negotiation, and the acquisition and disposition of real estate investments. Mr. Fink holds a Bachelor of Science in Electrical and Computer Engineering and a Master of Business Administration in Real Estate and Finance from the University of Wisconsin-Madison. He is a member of the Institute of Real Estate Managements (IREM) and Turnaround Management Association (TMA). Mr. Fink is a licensed real estate broker in the state of California, a Certified Commercial Investment Member (CCIM), a Certified Property Manager (CPM), a Certified Mergers & Acquisitions Advisor (CM&AA), and a Certified Turnaround Professional (CTP).

Management
David S. Kim
Co-Managing Partner, The Bascom Group

Mr. Kim oversees the development, portfolio management and overall operations for The Bascom Group. His responsibilities include supervising Bascom’s portfolio team in key revenue growth initiatives and expense programs, as well as lender and equity relationships, new ventures, market expansion, and business development.  Prior to founding The Bascom Group, Mr. Kim served as a Senior Analyst and Development Associate, from 1989 to 1995, for the Disney Development Company, a wholly owned subsidiary of The Walt Disney Company, where he was responsible for business development and analysis of more than $400 million in retail, office, entertainment, and residential projects.

Management
Derek Ming-Dar Chen
Co-Founder and Chairman, The Bascom Group

Mr. Chen oversees corporate finance and strategic development. Mr. Chen is the founder and Chairman of Chenco Holding Company, a firm specializing in real estate and venture capital investment as well as the founder of various subsidiaries investing in and managing assets in Greater China.  Mr. Chen serves as the President of The International Leadership Foundation, as a member of the Finance Executive Advisory Board of the College of Business, University of Nevada Las Vegas, as a trustee of the Center for Real Estate at University of Wisconsin, Madison, and as a board member of National Asian Pacific Center on Aging. Mr. Chen studied Chemical Engineering at the National Taiwan University, holds a Bachelor of Science in Business Management, from Eastern Michigan University, and holds a Master of Business Administration degree in Real Estate and a Master of Science degree in Finance from the University of Wisconsin‐Madison.

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

Sheridan Court Apartments is a 160-unit mid-rise apartment building with 10,156 square feet of ground-floor retail space.  Currently 98.8% occupied, the Property offers a mix of studio (65%) and one-bedroom (35%) units.  Originally built as a luxury hotel in the 1920’s, Sheridan Court Apartments features an art deco façade with classic design elements such as exterior brick and limestone ornamentation and high coffered ceilings with carved moldings.  With nine stories and a useable rooftop space, approximately 25% of the units have an unobstructed view of Lake Michigan.

The ground-floor retail space is leased to 7-Eleven, Asahi Sushi and Noodle, Internet Superstar, Twisted Tapas, and Oasis Bar.  Approximately 60% of the commercial space has prime frontage along the retail corridor of N. Sheridan Road.  With an average in-place rent of $13.97 per square foot, the Sponsor believes that the commercial space is currently leased at below market rates which may create an opportunity to increase commercial rents.  The Property also leases a rooftop antenna to T-Mobile that currently contributes $21,453 of income annually. 

Community amenities at the Property include a 24-hour emergency maintenance staff, key card entry with intercom and CCTV, and a bicycle storage room.  

Unit Mix

Unit Type # of Units % of Total Average Size In-Place Avg.  Rent In-Place Avg Rent/ SF
Efficiency Studio 16 10% 296 $692 $2.34
Medium Studio 16 10% 399 $723 $1.81
Large Studio 72 45% 425 $756 $1.78
1 Bedroom / 1 Bathroom 56 35% 610 $885 $1.45
Total 160 100% 474 $791 $1.72
Comparables
For more information, view the Sponsor's Investment Memorandum.
Rent Comps
Property Name Dist From Subject Built Renovated Total Units Studio 1 x 1
          Units Rents SF PSF Units Rents SF PSF
The Morgan at Loyola Station 0.4 2009 - 152 28 $1,584 665 $2.38 69 $1,647 714 $2.31
AMLI Evanston 2.0 2013 - 214 7 $1,586 500 $3.17 15 $1,873 709 $2.64
Somerset Place 2.3 n/a Yes ('14) 160 24 $1,355 462 $2.93 103 $1,442 576 $2.50
Lawrence House* 2.7 1920's Yes 344 n/a $1,400 375 $3.73 n/a $1,750 550 $3.18
Pensacola Place 3.1 1981 Yes ('08) 264 56 $1,390 560 $2.48 112 $1,718 840 $2.05
Evanston Place 3.6 1990 Yes 189 16 $1,844 567 $3.25 32 $1,893 657 $2.88
The Belmont by Reside 5.0 1924 Yes 317 47 $1,367 384 $3.56 48 $1,769 634 $2.79
Comp Set Average   1983   234   $1,504 502 $3.07   $1,727 669 $2.62
                         
Subject - Post Renovation   1922   160 104 $1,387 401 $3.46 56 $1,550 610 $2.54
Variance from Comp Set           -8% -25% 11%   -11% -10% -3%

*For Lawrence House, square footages are estimated based on floor plans that have been provided, since actual square footages are not advertised or available.  Furthermore, Costar shows an average unit size for this building of 247 SF.

Rent comps were obtained from Axiometrics and the properties' leasing offices

Sales Comps
Property Miles From Subj. Year Built Renovated Stories # Of Units Sale Date Sale Price Price / Unit
6000 N. Kenmore Ave 1.3 1968 - 4 15 Aug-14 $3,162,000 $210,800
5731-5733 N. Winthrop 1.4 1887 - 4 35 Apr-15 $10,500,000 $300,000
Andersonville Apts 2.5 1916 - 3 30 Mar-14 $5,225,000 $174,167
5073 N. Wolcott Ave 3.0 1929 - 4 17 Mar-14 $2,636,000 $155,059
4641 N Paulina 3.3 1930 - 3 48 Feb-15 $5,800,000 $120,833
900 W Sunnyside Ave 3.5 1911 - 3 19 Feb-15 $2,707,000 $142,474
Pensacola Place 3.7 1981 2008 18 264 Apr-15 $65,750,000 $249,053
4739 N Hermitage Ave 3.7 1932 2013 4 38 Jan-14 $5,375,000 $141,447
Elaine Place 4.9 1924 2012 3 174 Jun-15 $50,500,000 $290,230
Total / Average 3.0 1931   5 71   $16,850,556 $198,229
                 
Subject   1922   9 160   $18,875,000 $117,969
                 
Subject Total Cost Basis             $31,215,459 $195,097


Sales comps were obtained from Real Capital Analytics and the Sponsor

Financials
For more information, view the Sponsor's Investment Memorandum.
Sources & Uses

Total Capitalization

Sources of Funds  
Debt $25,694,000
Equity $5,521,459
Total Sources of Funds $31,215,459
   
Uses of Funds  
Purchase Price $18,875,000
Acquisition Fee $285,000
BD Placement Fee (4.0%) $46,000
Capital Improvement Budget $9,579,000
Working Capital $490,002
Legal and Third Parties $516,000
Lender Fees $153,470
Loan Broker Fee $255,205
Interest Rate Cap $100,000
Interest Reserve $915,782
Total Uses of Funds $31,215,459
Debt Assumptions

The projected terms of the debt financing are as follows:

Senior Loan

  • Lender: First Midwest Bank
  • Total Loan Amount: $20,694,000
  • Initial Funding: $11,115,000
  • Future Advance: $9,579,000
  • Term: Three Years
  • Extension Options: Two (2) one-year extension options
  • Rate: 30-Day LIBOR + 290 bps
  • Amortization: Interest only for the first three years, with a 30-year amortization schedule during the two extension periods
  • Loan to Purchase Price (Initial Funding): 59%
  • Loan to Cost (Total Loan Amount): 66%

Mezzanine Loan

  • Lender: Hillcrest Finance, LLC
  • Total Loan Amount: $5,000,000
  • Initial Funding: $5,000,000*
  • Term: Three Years
  • Extension Options: Two (2) one-year extension options
  • Rate: 30 Day LIBOR + 11.25% (7.00% paid current, remainder due at maturity.  Excess operating cash flow after reserves is to be applied to paying down accrued interest prior to any distributions to investors)
  • Amortization: Interest only for initial term, with a 30-year amortization during extension periods
  • Loan to Purchase Price (Senior Loan Initial Funding + Mezzanine Loan): 85%
  • Loan to Cost (Senior Loan + Mezzanine Loan): 82%

*$475,000 of loan proceeds will be held by the lender as an interest reserve

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

Distributions

6807 N. Sheridan Investor, LLC is to make distributions to Investors (Realty Mogul 61, LLC, other LP investors, and Sponsor, collectively, the "Members") per the priority order below. Realty Mogul 61, LLC is to distribute 100% of its share of excess cash flow (after expenses) to the members of Realty Mogul 61, LLC (the RealtyMogul.com investors). The manager of Realty Mogul 61, LLC is to receive a portion (up to 10%) of the Sponsor's promoted interest.

Order of Distributions to Members (Operating Cash Flow)

  • First, to the Members to pay a 10% cumulative non-compounded annual return;
  • Second, 70% to the Members pro-rata and 30% to the Sponsor until cumulative distributions to each Member equal a 15% cumulative non-compounded annual return; and
  • Thereafter, 60% to the Members pro rata and 40% to the Sponsor.

Order of Distributions to Members (Refinance, and Sales Proceeds)

  • First, to the Members to pay a 10% cumulative non-compounded annual return;
  • Second, to the Members pro rata until all capital contributions have been returned;
  • Third, 70% to the Members pro-rata and 30% to the Sponsor until cumulative distributions to each Member equal a 15% cumulative non-compounded annual return; and
  • Thereafter, 60% to the Members pro rata and 40% to the Sponsor.

The first distribution is projected in March of 2021 following the sale of the Property. These distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves. 

 

Cash Flow Projections
  Year 1 Year 2 Year 3 Year 4
Effective Gross Revenue $1,279,732 $1,890,298 $2,609,200 $3,212,616
Total Operating Expenses $931,429 $973,667 $1,104,940 $1,151,089
Net Operating Income $348,303 $916,632 $1,504,260 $2,061,527
Distributions to Realty Mogul 61, LLC Investors $0 $0 $0 $2,541,346
Fees

Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:

Type of Fee Amount of Fee Received By Paid From Notes
One-Time Fees:
Acquisition Fee 1.0% Sponsor Capitalized Equity Contribution 1.0% of Property purchase price plus capital improvement hard costs
Broker-Dealer Fee 4.0% North Capital(1) Capitalized Equity Contribution 4.0% based on the amount of equity invested by Realty Mogul 61, LLC
Construction Management Fee 5.0% Sponsor

Capitalized Equity Contribution

5.0% of total capital improvement hard costs
Recurring Fees:
Property Management Fee 2.75% Third Party Property Manager Operating Cash Flow 2.75% of Effective Gross Income
Asset Management Fee 1.0% Sponsor Operating Cash Flow 1.0% of Effective Gross Income
Management and Administrative Fee
1.0% 
RM Manager, LLC
Distributable Cash

1.0% of amount invested in Realty Mogul 61, LLC. RM Manager, LLC is the Manager of Realty Mogul 61, LLC and a wholly-owned subsidiary of Realty Mogul, Co.(2)

Notes:
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.

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

The above presentation is based upon information supplied by the Sponsor or others.  Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 61, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein.  The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.

Sources & Uses

Total Capitalization

Sources of Funds  
Debt $25,694,000
Equity $5,521,459
Total Sources of Funds $31,215,459
   
Uses of Funds  
Purchase Price $18,875,000
Acquisition Fee $285,000
BD Placement Fee (4.0%) $46,000
Capital Improvement Budget $9,579,000
Working Capital $490,002
Legal and Third Parties $516,000
Lender Fees $153,470
Loan Broker Fee $255,205
Interest Rate Cap $100,000
Interest Reserve $915,782
Total Uses of Funds $31,215,459
Debt Assumptions

The projected terms of the debt financing are as follows:

Senior Loan

  • Lender: First Midwest Bank
  • Total Loan Amount: $20,694,000
  • Initial Funding: $11,115,000
  • Future Advance: $9,579,000
  • Term: Three Years
  • Extension Options: Two (2) one-year extension options
  • Rate: 30-Day LIBOR + 290 bps
  • Amortization: Interest only for the first three years, with a 30-year amortization schedule during the two extension periods
  • Loan to Purchase Price (Initial Funding): 59%
  • Loan to Cost (Total Loan Amount): 66%

Mezzanine Loan

  • Lender: Hillcrest Finance, LLC
  • Total Loan Amount: $5,000,000
  • Initial Funding: $5,000,000*
  • Term: Three Years
  • Extension Options: Two (2) one-year extension options
  • Rate: 30 Day LIBOR + 11.25% (7.00% paid current, remainder due at maturity.  Excess operating cash flow after reserves is to be applied to paying down accrued interest prior to any distributions to investors)
  • Amortization: Interest only for initial term, with a 30-year amortization during extension periods
  • Loan to Purchase Price (Senior Loan Initial Funding + Mezzanine Loan): 85%
  • Loan to Cost (Senior Loan + Mezzanine Loan): 82%

*$475,000 of loan proceeds will be held by the lender as an interest reserve

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

Distributions

6807 N. Sheridan Investor, LLC is to make distributions to Investors (Realty Mogul 61, LLC, other LP investors, and Sponsor, collectively, the "Members") per the priority order below. Realty Mogul 61, LLC is to distribute 100% of its share of excess cash flow (after expenses) to the members of Realty Mogul 61, LLC (the RealtyMogul.com investors). The manager of Realty Mogul 61, LLC is to receive a portion (up to 10%) of the Sponsor's promoted interest.

Order of Distributions to Members (Operating Cash Flow)

  • First, to the Members to pay a 10% cumulative non-compounded annual return;
  • Second, 70% to the Members pro-rata and 30% to the Sponsor until cumulative distributions to each Member equal a 15% cumulative non-compounded annual return; and
  • Thereafter, 60% to the Members pro rata and 40% to the Sponsor.

Order of Distributions to Members (Refinance, and Sales Proceeds)

  • First, to the Members to pay a 10% cumulative non-compounded annual return;
  • Second, to the Members pro rata until all capital contributions have been returned;
  • Third, 70% to the Members pro-rata and 30% to the Sponsor until cumulative distributions to each Member equal a 15% cumulative non-compounded annual return; and
  • Thereafter, 60% to the Members pro rata and 40% to the Sponsor.

The first distribution is projected in March of 2021 following the sale of the Property. These distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves. 

 

Cash Flow Projections
  Year 1 Year 2 Year 3 Year 4
Effective Gross Revenue $1,279,732 $1,890,298 $2,609,200 $3,212,616
Total Operating Expenses $931,429 $973,667 $1,104,940 $1,151,089
Net Operating Income $348,303 $916,632 $1,504,260 $2,061,527
Distributions to Realty Mogul 61, LLC Investors $0 $0 $0 $2,541,346
Fees

Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:

Type of Fee Amount of Fee Received By Paid From Notes
One-Time Fees:
Acquisition Fee 1.0% Sponsor Capitalized Equity Contribution 1.0% of Property purchase price plus capital improvement hard costs
Broker-Dealer Fee 4.0% North Capital(1) Capitalized Equity Contribution 4.0% based on the amount of equity invested by Realty Mogul 61, LLC
Construction Management Fee 5.0% Sponsor

Capitalized Equity Contribution

5.0% of total capital improvement hard costs
Recurring Fees:
Property Management Fee 2.75% Third Party Property Manager Operating Cash Flow 2.75% of Effective Gross Income
Asset Management Fee 1.0% Sponsor Operating Cash Flow 1.0% of Effective Gross Income
Management and Administrative Fee
1.0% 
RM Manager, LLC
Distributable Cash

1.0% of amount invested in Realty Mogul 61, LLC. RM Manager, LLC is the Manager of Realty Mogul 61, LLC and a wholly-owned subsidiary of Realty Mogul, Co.(2)

Notes:
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.

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

The above presentation is based upon information supplied by the Sponsor or others.  Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 61, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein.  The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.

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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