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.
Comunidad Realty Partners
Comunidad Realty Partners (CRP) is a dynamic real estate investment firm specializing in multifamily apartment communities in densely-populated Hispanic neighborhoods. Core to its investment strategy is creating culturally-relevant, inclusive communities that are tailored to the various ethnicities living at its communities. The company specializes in acquiring and repositioning apartments in infill locations and implementing its proprietary cultural management platform which includes specific cultural upgrades and community-oriented resident services and programs. CRP uses its multifamily lifestyle brand “Buena Vida Community” at its properties to represent its mission of delivering an unparalleled experience of enhanced multifamily living by providing more than just a home but a lifestyle. The firm was founded on a simple principle: enrich lives through enhancing communities while creating value for all stakeholders involved. The firm takes a holistic approach to its investments through symbiotic stakeholder integration of residents, staff, vendors, the greater community, the environment, and investors in order to truly maximize economic and social returns. Its investment philosophy is predicated on fostering innovative lifestyle improvements that align with its residents wants and needs and differentiate the living experience in order to create long-term value for residents and communities in a socially responsible way. Additionally, the firm is focused on “green” environmental improvements that reduce its properties’ energy footprint while reducing utility costs for residents. RM has invested in three prior transactions with the Real Estate Company (Villas de Serenada, Villas del Cabo & Villas de Santa Fe, and Metrocrest Village), all of which have performed well.
http://www.comunidadpartners.com/-
J. Antonio MarquezManaging Partner -
Santiago Rivera TorresManaging Director
J. Antonio Marquez serves as Principal and Managing Partner of Comunidad Realty Partners, a Quez Capital company. He is responsible for strategic planning, capital raising efforts, and sourcing acquisition opportunities for the firm. He is involved in business plan formation on new acquisitions, value-add strategy implementation, and Hispanic marketing efforts. Mr. Marquez has 15 years of experience with his family’s group of companies targeting the Hispanic demographic. He has been involved in over $130 million in commercial/multifamily real estate transactions working with GE Capital, Goldman Sachs, and Principal Real Estate Investors. He has over 10 years of experience managing his family’s commercial portfolio totaling over 1.5 million square feet of office, retail, and industrial space and valued over $110 million. Mr. Marquez graduated cum laude from California Polytechnic – San Luis Obispo and attended the University of Southern California’s Lusk Center for Real Estate where he focused his postgraduate studies in urban real estate with emphasis in affordable/workforce housing through the Stan Ross Program in Real Estate.
Santiago Rivera Torres is a Managing Director at Comunidad Realty Capital. He oversees day to day operations across the portfolio including capital improvement projects, ancillary income services and cultural services & programs implementation. He also is involved in establishing and developing the firm’s commercial partnerships and strategic alliances as well as supporting capital raising efforts and investor relations. Mr. Rivera Torres has worked in the Real Estate and Construction sector in Mexico and U.S. for the last 12 years; his experience ranges from working on family-owned projects on beachfront developments in Baja to residential and low income housing projects in Northern Mexico and retail development in Cabo San Lucas. The Rivera Torres family has been involved in $3 billion USD in housing (400,000 units), hotels & resorts, industrial parks, retail/mall development, and infrastructure development throughout Mexico. In addition, he headed the sales effort for GlobalSolar, a Mexican green technology company specializing in energy-efficient and environmentally sustainable equipment for housing developments throughout Mexico. While he led the sales effort, the company quickly grew to become the largest provider of green technologies to the construction sector in Northern Mexico. Mr. Rivera Torres has a long lineage of real estate experience joined Quez Capital Interests in the early summer of 2012 after learning of their philosophy and Hispanic based multi-family business model.
| Property Name | Location | Asset | Units | Cost Basis | Occupancy |
|---|---|---|---|---|---|
| Villas de la Luz Apartments | Austin, TX | MF | 240 | $10,865,000 | 89% |
| Villas de la Cascada Apartments | San Antonio, TX | MF | 268 | $18,265,000 | 94% |
| Villas del Zocalo Phase 1 | Dallas, TX | MF | 206 | $5,344,828 | 96% |
| Villas del Zocalo Phase 2 | Dallas, TX | MF | 192 | $4,810,345 | 95% |
| Villas del Zocalo Phase 3 | Dallas, TX | MF | 224 | $5,344,828 | 98% |
| Villas de Estancia Apartments | Irving, TX | MF | 206 | $12,667,724 | 95% |
| Villas de Serenada Apartments | Euless, TX | MF | 208 | $13,625,000 | 96% |
| Villas del Encanto Apartments | San Antonio, TX | MF | 334 | $15,580,000 | 95% |
| The Vive Apartments | Dallas, TX | MF | 248 | $14,836,104 | 90% |
| Cantera Creek Ph. 1 Apartments | Dallas, TX | MF | 200 | $11,038,800 | 90% |
| Cantera Creek Ph. 2 Apartments | Dallas, TX | MF | 272 | $15,012,768 | 90% |
| The Lantern Apartments | Dallas, TX | MF | 340 | $20,943,660 | 90% |
| Villas de Santa Fe Apartments | San Antonio, TX | MF | 208 | $13,172,676 | 90% |
| Azura Apartments | Phoenix, AZ | MF | 387 | $24,000,000 | 93% |
| Colinas Ranch Apartments | Irving, TX | MF | 160 | $10,418,000 | 98% |
| Villas del Solamar | Dallas, TX | MF | 212 | $5,800,000 | 96% |
| Villas del Cabo | San Antonio, TX | MF | 272 | $19,613,324 | 93% |
| Parkview on Hollybrook | Longview, TX | MF | 209 | $31,588,000 | 80% |
| Total | 4,386 | $252,926,057 |
| Property Name | Location | Asset | Units | Cost Basis | Occupancy |
|---|---|---|---|---|---|
| Villas de Sendero Apartments | San Antonio, TX | MF | 209 | $8,750,000 | 97% |
| Villas de las Colinas Apartments | Austin, TX | MF | 178 | $4,700,000 | 98% |
| Villas del Sol Apartments | Austin, TX | MF | 294 | $9,650,000 | 93% |
| Villas de Palmas Apartments | Houston, TX | MF | 659 | $22,425,687 | 98% |
| Villas de la Colonia Apartments | Carrollton, TX | MF | 143 | $6,055,000 | 99% |
| The Current Apartments | Austin, TX | MF | 302 | $22,650,000 | 95% |
| Total | 1,785 | $74,230,687 |
The above track record information was provided by the Sponsor and has not been independently verified by RealtyMogul.com.
In this transaction, RealtyMogul.com investors will invest in Realty Mogul 73, LLC. Realty Mogul 73, LLC will subsequently invest in Montage Portfolio CRP, LLC, the entity that will indirectly hold title to the Properties.
Within the first six to eight months of acquiring the Property, the Sponsor intends on implementing a $2.7MM capital improvement plan. Approximately $1.4MM has been budgeted for exterior improvements to address deferred maintenance, structural issues and make improvements to the common areas and amenities to increase the Property's curb appeal. The exterior capital improvements include painting the building exteriors, office/clubhouse renovations, upgrading the landscaping, renovating the pool, dog park, sports court, signage and BBQ/Picnic area. The Sponsor has also budgeted for interior renovations of ~$3,500 per unit, for 51% of the rentable units, which is expected to include new black on black appliances, energy conservation devices, new faux-wood flooring, nickel brushed fixtures, and new lighting package. The Sponsor estimates that upon renovation, the renovated units should be able to achieve rental premiums of approximately 10.6% above the average in-place rents.
Per review of the August 2016 rent roll, recent leasing at the Properties have already achieved rents above or near the targeted post-renovation rents across most unit types. Refer below for a comparison of the underwritten post renovation rents to the highest in-place rents at the Properties by unit type:
| Unit Type | U/W Post-Renovation Rent | Highest In-Place Rent | |
|---|---|---|---|
| 1/1 | $630 | $679 | |
| 1/1 | $740 | $755 | |
| 2/2 | $860 | $817 | |
| 2/2 | $945 | $869 | |
| 3/2 | $1,075 | $1,070 | |
| Unit Type | U/W Post-Renovation Rent | Highest In-Place Rent | |
|---|---|---|---|
| 1/1 | $700 | $649 | |
| 1/1 | $750 | $809 | |
| 2/2 | $920 | $869 | |
| 2/2 | $1,005 | $989 | |
It is expected that all interior renovations will be completed in approximately 23 months at City Heights and 19 months at Montage at North Point, with an average of six (6) units being renovated per month. Upon completion of all renovations, the Sponsor intends on selling the Property within five years, although if the renovations are successfully implemented ahead of schedule and market conditions allow for a favorable sale, the hold period could be shorter. However, the hold period is not guaranteed and could also extend beyond the five year expected hold period.
A summary of the capital expenditures planned at the Properties is as follows:
| CapEx Item | $ Amount | Per Unit |
|---|---|---|
| Interior Rehab ($3,529 each for 136 units) | $480,000 | $1,764 |
| Exterior Paint/Carpentry | $100,000 | $368 |
| Solar Screens | $50,000 | $184 |
| Office/Clubhouse Renovations | $100,000 | $368 |
| Drainage Remediation | $35,000 | $129 |
| Signage | $25,000 | $92 |
| Pool Upgrades | $25,000 | $92 |
| Sports Court | $15,000 | $55 |
| BBQ/Picnic Area | $15,000 | $55 |
| Parking Lot | $35,000 | $129 |
| Miscellaneous | $30,000 | $110 |
| Roof & Foundation Repairs | $391,412 | $1,439 |
| Subtotal | $1,301,412 | $4,785 |
| Contingency 10.0% | $130,141 | $478 |
| Construction Services 10.0% | $130,141 | $478 |
| Total | $1,561,694 | $5,742 |
| CapEx Item | $ Amount | Per Unit |
|---|---|---|
| Interior Rehab ($3,518 each for 108 units) | $380,000 | $1,827 |
| Exterior Paint/Carpentry | $75,000 | $361 |
| Office/Clubhouse Renovations | $100,000 | $481 |
| Dog Park | $5,500 | $26 |
| Landscaping | $25,000 | $120 |
| Signage | $25,000 | $120 |
| Pool Upgrades | $15,000 | $72 |
| Sports Court | $25,000 | $120 |
| BBQ/Picnic Area | $17,500 | $84 |
| Parking Lot | $20,000 | $96 |
| Miscellaneous | $20,000 | $96 |
| Roof & Foundation Repairs | $245,898 | $1,182 |
| Subtotal | $953,898 | $4,586 |
| Contingency 10.0% | $95,390 | $459 |
| Construction Services 10.0% | $95,390 | $459 |
| Total | $1,144,678 | $5,503 |
In addition to implementing a capital improvement plan, the Sponsor plans to leverage its ownership of over 800 units in the market to create management efficiencies to bring down expenses at both Properties. The trailing 12 month expense ratios at both Properties are currently 64% which is high when compared to other similar properties in the market (e.g. the trailing 12 month expense ratio at the Sponsor-owned Villas de Sendero Apartments is 50%). RM has underwritten minimal expense reductions from trailing 12 expenses for purposes of presentation, so any further expense reductions achieved by the Sponsor should be accretive to returns.
RealtyMogul.com, along with Comunidad Realty Partners (“CRP” or the “Sponsor”), is providing the opportunity to invest in the acquisition and ownership of the City Heights & Montage at North Point Apartments (the "Portfolio" or "Properties"), two garden-style apartment properties totaling 480 units in San Antonio, TX. This will be the Sponsor's third transaction with RealtyMogul.com.
The primary objective of this investment is to acquire the Property at an attractive basis, implement exterior and interior capital improvements to increase rental rates, tighten operations, and sell the Property within five (5) years.
City Heights
City Heights is a 272-unit garden-style apartment complex located at 9400 Fredericksburg Rd., San Antonio, Texas. Built in 1972, the unit mix consists of 124 one (1) bedroom, one (1) bathroom units, 120 two (2) bedroom, two (2) bathroom units, and 28 three (3) bedroom, two (2) bathroom units across 35 buildings. Current occupancy is 96% with in-place rents averaging $739 and ranging from $589 for one bedrooms and $1,007 for three bedrooms.
Amenities at the Property include two swimming pools, a fitness center, limited access gates, two laundry facilities, BBQ grills, a cabana, sports court, renovated clubhouse and mature landscaping. There are 500 parking spaces for a parking ratio of 1.84 spaces/unit. Exteriors at the Property were recently renovated in 2014-2015, but the unit interiors have not undergone a substantial renovation.
| Unit Type | # of Units | Avg SF/Unit | In-Place Rent | Rent/SF | Post-Reno Rent | Rent/SF | % Variance* |
|---|---|---|---|---|---|---|---|
| 1 Bed, 1 Bath | 56 | 525 | $589 | $1.12 | $630 | $1.20 | 7.0% |
| 1 Bed, 1 Bath | 68 | 705 | $652 | $0.92 | $740 | $1.05 | 13.5% |
| 2 Bed, 2 Bath | 80 | 905 | $778 | $0.86 | $860 | $0.95 | 10.5% |
| 2 Bed, 2 Bath | 40 | 1,032 | $833 | $0.81 | $945 | $0.92 | 13.4% |
| 3 Bed, 2 Bath | 28 | 1,253 | $1,007 | $0.80 | $1,075 | $0.86 | 6.8% |
| Total | 272 | 831 | $739 | $0.89 | $817 | $0.98 | 10.6% |
*Note: This figure is representative of the expected achievable rents for post-renovation units as a percentage of in-place rents.
Montage at North Point
Montage at North Point is a 208-unit garden-style apartment complex located at 3601 Magic Dr., San Antonio, Texas. Built in 1982, the unit mix consists of 136 one (1) bedroom, one (1) bathroom units and 72 two (2) bedroom, two (2) bathroom units across 12 buildings. Current occupancy is 92% with in-place rents averaging $729 and ranging from $611 for one bedrooms two $928 for two bedrooms.
Amenities at the Property include a swimming pool, limited access gates, shaded picnic space, BBQ area, a dog park, modernized leasing center and clubhouse, two laundry facilities, on site maintenance, on site parking, a business center and sports court. There are 219 parking spaces for a parking ratio of 1.05 spaces/unit. Exteriors at the Property were recently renovated in 2014-2015, but the unit interiors have not undergone a substantial renovation.
| Unit Type | # of Units | Avg SF/Unit | In-Place Rent | Rent/SF | Post-Reno Rent | Rent/SF | % Variance* |
|---|---|---|---|---|---|---|---|
| 1 Bed, 1 Bath | 48 | 500 | $611 | $1.22 | $700 | $1.40 | 14.6% |
| 1 Bed, 1 Bath | 88 | 700 | $687 | $0.98 | $750 | $1.07 | 9.2% |
| 2 Bed, 2 Bath | 48 | 900 | $826 | $0.91 | $920 | $1.02 | 11.4% |
| 2 Bed, 2 Bath | 24 | 1,000 | $928 | $0.93 | $1,005 | $1.00 | 8.3% |
| Total | 208 | 735 | $729 | $0.99 | $807 | $1.10 | 10.7% |
*Note: This figure is representative of the expected achievable rents for post-renovation units as a percentage of in-place rents.
| Bent Tree | Abode | San Antonio Station | Ashler Oaks | City Summit | Total / Averages | City Heights | |
|---|---|---|---|---|---|---|---|
| Units | 272 | 104 | 172 | 150 | 269 | 193 | 272 |
| Year Built | 1975 | 1977 | 1979 | 1972 | 1979 | 1976 | 1972 |
| 1x1 Rent | $685 | $617 | $767 | $700 | $750 | $704 | $690 |
| 1x1 Avg SF | 522 | 512 | 697 | 720 | 678 | 626 | 624 |
| 1x1 Rent PSF | $1.31 | $1.21 | $1.10 | $0.97 | $1.11 | $1.12 | $1.11 |
| 2x2 Rent | $927 | $825 | $950 | $850 | $950 | $900 | $888 |
| 2x2 Avg SF | 949 | 850 | 844 | 929 | 1,078 | 930 | 947 |
| 2x2 Rent PSF | $0.98 | $0.97 | $1.13 | $0.91 | $0.88 | $0.97 | $0.94 |
| 3x2 Rents | N/A | $1,107 | N/A | $1,050 | $1,375 | $1,177 | $1,075 |
| 3x2 Avg SF | N/A | $1,417 | N/A | 1,320 | 1,441 | 1,393 | 1,253 |
| 3x2 Rent PSF | N/A | $0.78 | N/A | $0.80 | $0.95 | $0.85 | $0.86 |
| Distance | 1.1 mi | 3.0 mi | 1.8 mi | 0.9 mi | 1.2 mi | N/A |
| Park Hill | Altitude | Morgan Manor | Fifth Avenue | City Summit | Total / Averages | Montage | |
|---|---|---|---|---|---|---|---|
| Units | 288 | 226 | 156 | 180 | 269 | 213 | 208 |
| Year Built | 1984 | 1977 | 1963 | 1982 | 1979 | 1977 | 1982 |
| 1x1 Rents | $800 | $709 | $765 | $900 | $750 | $785 | $732 |
| 1x1 Avg SF | 648 | 700 | 720 | 720 | 678 | 693 | 629 |
| 1x1 Rents PSF | $1.23 | $1.01 | $1.06 | $1.25 | $1.11 | $1.13 | $1.16 |
| 2x2 Rent | $1,000 | $919 | $860 | $1,000 | $950 | $946 | $948 |
| 2x2 Avg SF | 948 | 900 | 940 | 925 | 1,078 | 958 | 933 |
| 2x2 Rent PSF | $1.05 | $1.02 | $0.91 | $1.08 | $0.88 | $0.99 | $1.02 |
| Distance | 3.2 mi | 0.8 mi | 0.9 mi | 4.0 mi | 2.2 mi | N/A |
| SummerCreek | Salado Crossing | Avesta Summit | City Summit | Vizcaya Apartments | Total / Averages | Subject | |
|---|---|---|---|---|---|---|---|
| Date | April-16 | May-16 | August-15 | December-15 | July-16 | October-16 | |
| Units | 180 | 164 | 284 | 269 | 256 | 231 | 480 |
| Year Built | 1975 | 1986 | 1984 | 1981 | 1983 | 1982 | 1972/1982 |
| Purchase Price | $12,500,000 | $16,400,000 | $18,200,000 | $20,600,000 | $17,650,000 | $17,446,823 | $29,515,000 |
| $/Unit | $69,444 | $100,000 | $64,085 | $76,580 | $68,945 | $75,658 | $61,490 |
| Cap Rate | N/A | 5.34% | 6.42% | 5.63% | 5.72% | 5.78% | 5.49% |
| Distance | 5.5 mi | 5.2 mi | 4.7 mi | 1.7 mi | 5.4 mi | N/A |
The Properties are located two and a half miles apart, approximately nine miles northwest of the San Antonio central business district and approximately seven miles from the San Antonio International Airport in the Far Northwest submarket of San Antonio. City Heights is located within walking distance of the USAA headquarters and two miles from the South Texas Medical Center, both major local employers. Additionally, the asset is located one mile from Interstate 10 which provides access to downtown San Antonio and the surrounding areas. Montage at North Point is located two and a half miles southeast of City Heights/USAA and three miles from the South Texas Medical Center. There are numerous retail amenities adjacent to both Properties and both Properties are afforded ease of access due to their proximity to major local thoroughfares and highways.
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The South Texas Medical Center
The Property is located within the 900 acre South Texas Medical Center (STMC), the largest concentration of healthcare facilities in San Antonio. The South Texas Medical Center is the city’s second largest employment center and directly serves 38 counties as well as patients from Mexico and Latin America. The STMC is home to the largest for-profit hospital in the country - Methodist Hospital (HCA), the country’s 8th largest hospital - Baptist Hospital (Tenet) and the University of Texas Health Science Center. The STMC contains 13 hospitals with over 4,200 beds, 45 medically related institutions, five higher education institutions and numerous other specialty and research institutions. The San Antonio Medical Foundation controls about 280 acres within the STMC, representing the vast majority of the remaining undeveloped medical center land. The Foundation’s multi-generational plan should facilitate the development of institutional medical facilities that support education and research.
Market Overview
Per Axiometrics, effective rent increased 1.3% from $904 in 1Q16 to $916 in 2Q16, which resulted in an annual growth rate of 1.9%. Annual effective rent growth is forecast to be 2.3% in 2017, and average 3.3% from 2018 to 2020. Annual effective rent growth has averaged 1.7% since 3Q96. The market's annual rent growth rate was below the national average of 3.7%. Out of the 120 markets ranked by Axiometrics nationally, San Antonio-New Braunfels, TX Metro Area was 92nd for quarterly effective rent growth, and 97th for annual effective rent growth for 2Q16. The market's occupancy rate increased from 93.3% in 1Q16 to 94.0% in 2Q16, and was up from 93.9% a year ago. The market's occupancy rate was below the national average of 95.2% in 2Q16. For the forecast period, the market's occupancy rate is expected to be 93.4% in 2017, and average 94.3% from 2018 to 2020. The market's occupancy rate has averaged 93.2% since 3Q95.
Submarket Overview
Per Axiometrics, effective rent increased 1.4% from $845 in 1Q16 to $857 in 2Q16. The submarket's annual rent growth rate of 2.3% was above the market average of 1.9%. Out of the 16 submarkets in the market, the Far Northwest submarket ranked 7th for quarterly effective rent growth and 8th for annual effective rent growth for 2Q16. Annual effective rent growth is forecast to be 2.7% in 2016, and average 2.1% through 2016 to 2018. The annual effective rent growth has averaged 1.9% per year since 3Q96. The submarket's occupancy rate increased from 93.4% in 1Q16 to 93.7% in 2Q16, which was the same rate as a year ago. The submarket's occupancy rate was below the market average of 94.0% in 2Q16. For the forecast period, the submarket's occupancy rate is expected to increase to 93.8% in 2016 and average 93.9% from 2016 to 2018. The submarket's occupancy rate has averaged 94.8% since 3Q96
Market and Submarket information provided by Axiometrics.
Demographic Information
| Distance from Properties | 1 Mile | 3 Miles | 5 Miles |
| Population | 24,378 | 141,868 | 375,855 |
| Projected Growth (2016-2021) | 9.24% | 9.03% | 8.72% |
| Average HH Size | 2.1 | 2.2 | 2.4 |
| Median HH Income | $38,286 | $44,621 | $45,128 |
| Median Home Value | $124,181 | $154,878 | $148,485 |
| Owner Occupied Households | 1,361 | 23,175 | 69,358 |
| Renter Occupied Households | 9,981 | 41,204 | 84,465 |
Demographic information above was obtained from CoStar.
| Sources of Funds | Cost |
|---|---|
| Debt | $25,786,000 |
| Equity | $7,024,000 |
| Total Sources of Funds | $32,810,000 |
| Uses of Funds | Cost |
| Purchase Price | $29,515,000 |
| Sponsor Acquisition Fee | $440,000 |
| North Capital Broker Dealer Fee | $60,000 |
| CapEx* | $2,706,372 |
| Closing Costs and Fees | $634,850 |
| Working Capital | $203,778 |
| Roof & Foundation Repair Credit | ($750,000) |
| Total Uses of Funds | $32,810,000 |
* - Note that the construction budget for the CapEx Reserve is inclusive of a 10% contingency.
The projected terms of the debt financing are as follows:
- Lender: Prudential
- Loan Type: Agency (Fannie Mae - DUS)
- Proceeds: $25,786,000
- Term: 12 years
- Rate: 10-Year Treasury Rate plus 214 basis point spread, 3.97% (as of November 1, 2016)
- Amortization: 30 years
- Interest Only Period: 48 months
- Prepayment Fee: 11.5 years yield maintenance, then 1.0% for the three month period prior to maturity
- Assumption Fee: 1.0%
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.
Montage Portfolio CRP, LLC intends to make distributions to investors (Realty Mogul 73, LLC - 21.3%, Sponsor co-invest - 11.4%, Other LP Investors - 67.3%. collectively, the "Members") as follows:
- To the Members, pari passu, all excess cash flows and appreciation to an 8.0% IRR to the Members (which will include return of principal),
- 70.0% / 30.0% (70.0% to Members / 30.0% to the Sponsor) of excess cash flows and appreciation to a 16.0% IRR to Members.
- 60.0% / 40.0% (60.0% to Members / 40.0% to the Sponsor) of excess cash flow and appreciation thereafter.
Note that these distributions will occur after the payment of the Company's liabilities (loan payments, operating expenses and other fees as set forth in the LLC agreement, in addition to any member loans or returns due on member loans).
Realty Mogul 73, LLC will distribute 100% of its share of excess cash flow (after expenses and fees) to the members of Realty Mogul 73, LLC (the RealtyMogul.com investors).
Distributions are expected to start in December 2017 and are expected to continue on a quarterly basis thereafter. These distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves.
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|---|
| Effective Gross Revenue | $715,111 | $4,541,151 | $4,793,271 | $4,945,836 | $5,111,274 | $5,270,421 |
| Total Operating Expenses | $429,664 | $2,628,857 | $2,696,522 | $2,761,644 | $2,828,757 | $2,897,131 |
| Net Operating Income | $285,447 | $1,912,294 | $2,096,749 | $2,184,191 | $2,282,517 | $2,373,290 |
| Annual Debt Service | $170,402 | $1,022,415 | $1,022,415 | $1,022,415 | $1,097,186 | $1,471,039 |
| Distributions to Realty Mogul 73, LLC Investors | $0 | $109,360 | $237,480 | $214,719 | $219,262 | $2,114,218 |
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 | $440,000 | Sponsor | Capitalized Equity Contribution | 1.5% of the Protfolio purchase price |
| Broker-Dealer Fee | $60,000 | North Capital (1) | Capitalized Equity Contribution | 4.0% of the amount of equity raised by RealtyMogul.com |
| Recurring Fees | ||||
| Construction Management Fee | 10.0% of Total Costs | Sponsor | Capital Expenditure Budget | |
| Asset Management Fee | 1.5% of Effective Gross Income | Sponsor | Operating Cash Flow | |
| Management and Administrative Fee | 1.0% of amount invested in Realty Mogul 73, LLC | RM Manager, LLC | Distributable Cash | RM Manager, LLC is the Manager of Realty Mogul 73, 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 73, 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.
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.