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.
ExchangeRight Real Estate
ExchangeRight is committed to providing 1031-exchangeable DST offerings of value-added multifamily properties and net-leased portfolios. Our multifamily platform targets Class B apartments with stable income and value added upside potential. Our multifamily offerings feature strong cash flow, high debt coverage ratios, conservative underwriting, long-term fixed-rate financing, and the potential to enhance return with value-added strategies.
In addition to intentionally structuring offerings with an alignment of interest with investors, the principals of the company have taken a personal investment position in each DST offering that has been brought to market. Each of our DST offerings provides both 1031 and cash investors with pass-through tax deferral advantages.
http://www.exchangeright.com/-
David Fisher, CPAManaging Member -
Warren Thomas, CPAFounder and Managing Director -
Joshua UngerechtManaging Member -
Dave Van SteenisChief Financial Officer
David Fisher enjoyed a successful career in banking and finance for 20 years. He is now focused on the management success of ExchangeRight and on managing his own investments. He began his career with KPMG in the tax department, and then worked in tax, treasury, and acquisitions for Wells Fargo for over nine years. He was North American Head of Asset and Structured Finance for HSBC's Investment Banking division for the last seven years of his banking career. David and his banking teams executed international financings in excess of $4 billion. He has been an active real estate investor for the past 10 years and has interests in over 30 partnerships across nine states. He graduated from the University of Northern Iowa in 1993, Magna Cum Laude in Accounting, and earned national honors with the Elijah Watt Sells Award on the May 1993 CPA exam.
Warren currently serves as a managing member for ExchangeRight Real Estate. He is focused on the securitization, broker dealer, and registered representative relations sides of the business. Warren is the co-founder and president over a number of integrated wealth management and securitized real estate companies with Joshua Ungerecht. Prior to focusing on the securitized 1031 exchange market in 2003, Warren developed an extensive tax practice including estate planning, financial planning, and real estate advisory services. Warren has over 30 years of experience as a CPA and has been an active commercial real estate investor for the past 15 years. He graduated in 1978 from Biola University with a B.S. in Business Administration, specializing in Accounting. He also earned a master's degree in Taxation from Golden Gate University in 1993. He maintains Series 6, 7, 22, 24, 39,63, and 79 Securities Licenses.
Joshua currently serves as a managing member for ExchangeRight Real Estate. He is focused on the operations, investment structuring, and acquisitions aspects of the business. Concurrently, he serves as CEO and Chief Investment Officer over a number of integrated wealth management and securitized real estate companies. He developed one of the industry's leading due diligence platforms in securitized real estate analysis. Together with Warren Thomas, Joshua has overseen the acquisition of over $500 million in real estate since 2003. Joshua graduated from The Master's College, Summa Cum Laude with a B.A. in Theology, Apologetics, and Missions, and is currently on leave from Talbot Graduate School, where he was pursuing an M.A. in Philosophy of Religion and Ethics. He also maintains Series 7, 22, 24, 63, 65, and 79 Securities Licenses and an active California real estate license.
Dave currently serves as Chief Financial Officer for ExchangeRight Real Estate. He is focused on financial reporting and acquisitions for the Company. Dave began his career with KPMG in the financial services audit practice, and most recently was with Kaufman Jacobs Real Estate Investments were he was involved in the investment acquisition, capital markets, and financial reporting aspects of the business. Dave graduated from Trinity Christian College with highest honors with a B.S. in Accounting and a Finance concentration. Dave is a CPA and is also a CFA Level III candidate.
| Offering | Description | Projected Annualized Return | Actual Annualized Return* |
|---|---|---|---|
| Net-Leased Preferred Equity Fund 1 | Shorter-term fund to acquire and sell net-leased assets for the Sponsor. | Range of 12-20%** | Average Annualized Fund Return of 14% |
| Net-Leased Preferred Equity Fund 2 | Shorter-term fund to acquire and sell net-leased assets for the Sponsor. Performing as expected. | Range of 8-12%** | 10% |
| Net-Leased Preferred Equity Fund 3 | Shorter-term fund to acquire and sell net-leased assets for the Sponsor. Performing as expected. | 8.25% | 8.25% |
| Acquisition Notes | Company that issues short term debt capital to the Sponsor to acquire and sell net-leased assets. Performing as expected. | Range of 12-14%** |
12% |
| Acquisitions Notes II | Company that issues short term debt capital to the Sponsor to acquire and sell net-leased assets. Performing as expected. | Range of 8- 12%** |
10% |
| Net-Leased Portfolio 1 | Portfolio of two long-term net-leased properties leased to Family Dollar. One of the two properties sold in January, 2015 at a 10.59% annualized net profit to investors. Current remaining property return shown in chart and is exceeding expectations. | 7.25% | 7.39% |
| Net-Leased Portfolio 2 | Portfolio of seven long-term net-leased properties leased to Family Dollar (6) and Dollar General (1). Performing as expected. | 7.23% | 7.23% |
| Net-Leased Portfolio 3 | Portfolio of nine long-term net-leased properties leased to Family Dollar (8) and Dollar General (1). Performing as expected. | 7.30% | 7.30% |
| Net-Leased Portfolio 4 | Portfolio of eleven long-term net-leased properties leased to Family Dollar (8), Dollar General (1), Aaron's (1) and Advance Auto Parts (1). Performing as expected. | 8.02% | 8.02% |
| Net-Leased Portfolio 5 | Portfolio of fourteen long-term net- leased properties leased to Family Dollar (5), Dollar General (4), Advance Auto Parts (2), AutoZone (1), Sherwin Williams (1) and The Christ Hospital (1). Performing as expected. | 7.50% | 7.50% |
| Net-Leased Portfolio 6 | Portfolio of sixteen long-term net- leased properties leased to Family Dollar (3), Dollar General (8), Advance Auto Parts (1), AutoZone (1), CVS (1), Dollar Tree (1) and Tractor Supply (1). Performing as expected. | 7.51% | 7.51% |
| Net-Leased Portfolio 7 | Portfolio of sixteen long-term net- leased properties leased to Family Dollar (4), Dollar General (8), Advance Auto Parts (1), CVS (1), Napa Auto Parts (1), and O'Reilly Auto Parts (1). Performing as expected. | 7.75% | 7.75% |
| Net-Leased Portfolio 8 | Portfolio of thirteen long- term net- leased properties leased to Advance Auto Parts (3), AutoZone (2), CVS (1), Dollar General (2), Family Dollar (1), Franciscan Alliance (1), Ross Stores (1) and Tractor Supply (2). Performing as expected. | 7.32% | 7.32% |
| Net-Leased Portfolio 9 | Portfolio of twenty-two long- term net- leased properties leased to Advance Auto Parts (4), AutoZone (4), CVS (1), Dollar General (9), Hobby Lobby (1), Napa Auto Parts (2) and TCF National Bank (1). Performing as expected. | 7.03% | 7.03% |
| Net-Leased Portfolio 10 | Portfolio of twenty-two long-term net- leased properties leased to Advance Auto Parts (3), AutoZone (1), CVS (1), Dollar General (5), Dollar Tree (1), Family Dollar (4), Napa Auto Parts (2), O'Reilly Auto Parts (2), PNC Bank (1) and Tractor Supply (2). Performing as expected. | 7.03% | 7.03% |
| Net-Leased Portfolio 11 | Portfolio of seventeen long-term net- lease properties leased to Advance Auto Parts (3), CVS (1), Dollar General (5), Family Dollar (2), Hobby Lobby (1), Napa Auto Parts (3), Sherwin- Williams (1) and Walgreens (1). | 6.75% | 6.75% |
| Net-Leased Portfolio 12 | Portfolio of nineteen long-term net-lease properties leased to Advance Auto Parts (3), Dollar General (9), Family Dollar (1), Fresenius Medical Care (1), Kroger (1), Napa Auto Parts (2), Tractor Supply (1), and Walgreens (1). | 6.15% | 6.30% |
| Net-Leased Portfolio 13 | Portfolio of twenty long-term net-lease properties leased to Advance Auto Parts (1), CVS, (1), Dollar General (5), Family Dollar (4), Hobby Lobby (1), Napa Auto Parts (1), Sherwin Williams (4), Tractor Supply (1) and Walgreens (2). | 6.64% | 6.80% |
| Net-Leased Portfolio 14 | Portfolio of seventeen long-term netlease properties leased to Advance Auto Parts (1), Athletico Physical Therapy (1), Dollar General (6), Fresenius Medical Care (2), MedSpring (1), Napa Auto Parts (1), O’Reilly Auto Parts (1), Tractor Supply (1) and Walgreens (3) | 6.50% | 6.57% |
| Multifamily 1 - Van Mark Creek Apartments | One (1) apartment community consisting of 144 units. Performing as expected. | 7.11% | 7.11% |
| Mira Bella and San Martin | One (1) apartment community consisting of 378 units. Performing as expected. | 6.56% | 6.62% |
| Lakeside at Arbor Place Apartments | One (1) apartment community consisting of 246 units. Performing as expected. | 6.20% | 6.20% |
| North Austin Apartment Portfolio | Three (3) apartment communities consisting of 422 units. Performing as expected. | 6.25% | 6.25% |
*These returns were provided by and calculated by the Sponsor
**These investment opportunities are open-ended (i.e. Investors come into the fund at different times) resulting in a range of returns
The Trust acquired the three apartment buildings comprising the Portfolio on October 27, 2016 from Rutland Communities, an unaffiliated third party. Concurrently with the acquisition of the Portfolio, the Trust obtained a loan from JPMorgan Chase Bank. The Properties are master leased by the Trust to North Austin Apartment Portfolio Master Lessee, LLC ("Master Lessee" or "Master Tenant") an affiliate of the Sponsor. The Master Tenant will pay rent to the Trust and sub-lease the apartment units to tenants pursuant to residential leases. The Trust is a passive owner of the Properties and will not be involved in any manner in the active management of the Properties. The Master Lessee is to enter into a property management agreement with United Core Management Inc., an unaffiliated third party ("Property Manager") to manage the day-to-day operations of the Properties.
The Sponsor intends to implement approximately $2,500,000 toward interior upgrades to 193 units and add/upgrade amenities including clubhouses, dog parks, grilling stations, fitness centers, etc. The Sponsor estimates that upon renovation the renovated units should be able to achieve rental premiums of approximately 6.71% above in place rents. Under the prior owner, the 229 units that underwent similar interior upgrades in the last two years, without many of the amenity upgrades, realized 7% asking rent growth over the past year.
The Trust expects to provide the Beneficial Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Beneficial Owners; and (ii) upon any disposition of the Property. The Trust intends to dispose of all of the assets in the Trust in a single sale of the Property. This strategy is anticipated to provide investors with the opportunity to perform a 1031 exchange following the disposition.
Investors are being offered the opportunity to invest in the acquisition of a Portfolio of three Class B, garden-style multifamily properties located in North Austin, TX (the "Portfolio", or the "Properties"). The Properties were constructed between 1980 and 1984, consist of 422 units and are currently 95.7% occupied.
North Austin Apartment Portfolio DST, a Delaware Statutory Trust ("DST" or "Trust"), owns the Portfolio, and North Austin Apartment Portfolio, LLC an entity wholly-owned and managed by ExchangeRight Real Estate, LLC ("Sponsor"), is offering beneficial interests in the DST to investors. The Sponsor is retaining at least a 1.0% ownership interest in the Portfolio and is offering up to 99.0% of the beneficial interests in the DST to accredited investors ("Beneficial Owners"). The Trust expects to provide the Beneficial Owners a return on their investment in two primary ways: (i) in the form of monthly cash distributions to the Beneficial Owners; and (ii) upon any Disposition of the Properties.
The total offering amount is $44,640,000, of which $21,030,000 is equity and $23,610,000 is long-term fixed-rate financing.
This offering is designed for two types of investors. "Existing 1031 Investors" who have already sold or are planning to sell an existing property that is 1031 eligible and want to invest in this offering to complete their 1031 exchange. As well as "Cash Investors" who are investing with funds that are not part of an existing 1031 exchange but want the option for future sales to be 1031 exchange eligible. Existing 1031 Investors may invest for a minimum of $100,000; Cash Investors may invest for a minimum of $25,000.
The Portfolio consists of three Class B garden-style multifamily buildings located in North Austin: Amor, Feliz, and Vida.
Amor is located at 1200 Mearns Meadow Blvd. in North Austin, TX. This property was built in 1984 and is currently 98% occupied. The 132 units consist of 20 studio, 88 one-bedroom one-bathroom, and 23 two-bedroom two-bathroom units. Average in place rents are $800 per unit ranging from $675 to $995. Amor is a gated community that offers amenities including a swimming pool, laundry facilities, and a leasing office. Recent capital improvements at the property in 2014 included full exterior painting, landscaping and new pool decking. Standard unit interiors at Amor include basic appliances, faux wood vinyl or vinyl tile flooring, laminate countertops, pantries, mini blinds, walk-in closets, and a patio or balcony. The approximately 90 currently upgraded units generally contain white GE appliances, resurfaced countertops, faux wood plank flooring, brushed nickel hardware, and two inch blinds. The effective rent growth for these upgraded units has been approximately 6.7% from January 2015 through April 2016.
| Unit Type | # of Units | Avg SF/Unit | Avg Rent/Unit | Avg Rent/SF |
|---|---|---|---|---|
| 0/1 | 20 | 396 | $675 | $1.70 |
| 1/1 | 88 | 545 | $775 | $1.42 |
| 2/2 | 24 | 875 | $995 | $1.14 |
| Total | 132 | 582 | $800 | $1.37 |
Feliz is located at 1804 W. Rundberg Ln. in North Austin, TX. This property was built in 1980 and is currently 95% occupied. The 130 units consist of 90 one-bedroom one-bathroom, 30 two-bedroom one-bathroom, and 10 two-bedroom two-bathroom units. Average in place rents are $851 per unit ranging from $759 to $1,084. Feliz is a gated community that offers amenities including a swimming pool, laundry facilities, fitness center, picnic area with barbecue grills, and a leasing office. Recent major capital improvements include new pool decking in 2014 and a significant amount of repairs to patios, stairs, and exterior siding. Standard interior features at Feliz include plain white or cream appliances, laminate countertops, mini blinds, vinyl tile flooring, walk-in closets, and a patio or balcony. The current owners have implemented an interior value-add renovation program and have completed approximately 80 units or 62% of the property. Upgraded units vary slightly, but generally consist of black or stainless steel appliances, faux wood plank flooring in wet areas and throughout living areas in ground floor units, resurfaced countertops, painted cabinets, brushed nickel hardware, and two inch blinds. The effective rent growth for these upgraded units has been approximately 8.3% from the beginning of 2015 through April 2016.
| Unit Type | # of Units | Avg SF/Unit | Avg Rent/Unit | Avg Rent/SF |
|---|---|---|---|---|
| 1/1 | 90 | 591 | $787 | $1.34 |
| 2/1 | 30 | 816 | $977 | $1.20 |
| 2/2 | 10 | 1,005 | $1,084 | $1.08 |
| Total | 130 | 670 | $851 | $1.27 |
Vida is located at 1735 Rutland Dr. in North Austin, TX. This property was built in 1983 and is currently 96% occupied. The 160 units consist of 32 studio, 56 one-bedroom one-bathroom, 56 two-bedroom one-bathroom, and 16 two-bedroom two-bathroom units. Average in place rents are $851 per unit ranging from $745 to $1,040. Vida is a gated community that offers amenities including a swimming pool, laundry facilities, fitness center, and a leasing office. The pool area, with new decking and a pool resurface in 2014, is the focal point of the amenity set and is the largest of the three properties. Standard units at Vida include vintage appliances, faux wood vinyl or vinyl tile flooring, laminate countertops, walk-in closets, patios and balconies, and mini blinds. The approximately 100 currently upgraded units generally contain GE stainless steel appliances, resurfaced countertops, faux wood plank flooring, two-tone paint, brushed nickel hardware, and two inch blinds. The effective rent growth for these upgraded units has been approximately 7.6% from January 2015 through April 2016.
| Unit Type | # of Units | Avg SF/Unit | Avg Rent/Unit | Avg Rent/SF |
|---|---|---|---|---|
| 0/1 | 32 | 450 | $745 | $1.66 |
| 1/1 | 56 | 598 | $830 | $1.40 |
| 2/1 | 56 | 846 | $990 | $1.17 |
| 2/2 | 16 | 935 | $995 | $1.11 |
| Total | 160 | 688 | $878 | $1.29 |
| Subject | Arbors of Austin | Creekside Trace | Northgate Hills | Villas del Sol | Total / Averages | |
|---|---|---|---|---|---|---|
| # of Units | 422 | 226 | 192 | 416 | 294 | 282 |
| Year Built | 1982 | 1984 | 1984 | 1984 | 1978 | 1983 |
| Average SF (Per Unit) | 649 | 687 | 585 | 671 | 676 | 661 |
| Average Rental Rate (Per Unit) | $757 | $880 | $850 | $885 | $862 | $872 |
| Average Rent PSF | $1.17 | $1.28 | $1.45 | $1.32 | $1.27 | $1.32 |
| Rating | - | Superior | Superior | Superior | Similar | - |
Source: CBRE Appraisal
| Subject | Meridian | Northchase Apartments | Shadow Oaks | Uptown Crossing | Total / Averages | |
|---|---|---|---|---|---|---|
| Date | Oct-16 | May-16 | Dec-15 | Nov-15 | April-15 | - |
| # of Units | 422 | 200 | 120 | 176 | 88 | 146 |
| Year Built | 1982 | 1985 | 1983 | 1985 | 1969 | 1981 |
| Average SF (per Unit) | 649 | 741 | 747 | 763 | 832 | 763 |
| Purchase Price | $39,071,047 | $17,250,000 | $9,750,000 | $16,350,000 | $9,000,000 | $14,194,521 |
| $/Unit | $92,585 | $86,250 | $81,250 | $92,898 | $102,273 | $89,641 |
| Cap Rate | 6.00% | 6.00% | 6.35% | 5.71% | 6.00% | 5.98% |
| Occupancy at Sale | 97% | 96% | 95% | 97% | 100% | 97% |
Source: CBRE Appraisal
Property Appraisal available upon request. Please email investor-help@realtymogul.com.
The Austin Metropolitan Statistical Area ("MSA") is home to over 2 million people and is one of the fastest growing MSAs in the country. The city has earned the nickname “Silicon Hills” because it is a major employment base for technology companies such as Apple, Dell Computer, IBM, AMD, Motorola, National Instruments, and Samsung. High-tech employment has grown at triple the national pace over the past five years. In addition, the city is home to The University of Texas’ flagship institution.*
Market Overview
With growth at twice the national pace, the Austin MSA took the top spot on Forbes Magazine’s “Fastest-Growing U.S. City” list from 2010–2014 and was 2nd on 2015’s list. It is currently estimated that an average of 110 people move to the city every day.** From 2016 to 2020, Austin expects an average economic growth rate of over 4%, with a population growth rate approaching 3%. Over the past decade, the Austin metro population has expanded by 36.8%, the fastest pace in the state, adding more than 500,000 new residents.*** This growth is expected to continue in Austin as the especially well-educated work force, high concentration of tech business, and steady population growth may combine to yield above-average performance.
Submarket Overview
The properties are located in the North Austin submarket. The submarket is currently at a 2.3% vacancy rate among Class B properties and has averaged 7.7% asking rent growth over the past year and 4.2% over the past five years according to REIS 2Q 2016 report. The multifamily product in the surrounding area has experienced tremendous value-add investment in recent years. This has significantly strengthened the quality of surrounding assets and the renter pool in the area.
Market and Submarket Overview information above was obtained from Axiometrics, Costar and the Appraisal.
Demographic Information
| Distance from Property | 1 Mile | 3 Miles | 5 Miles |
| Population | 35,138 | 150,127 | 331,447 |
| Population Estimates (2021) | 39,397 | 169,296 | 373,148 |
| Average Age | 31.7 | 34.1 | 35.1 |
| Median Household Income | $37,569 | $48,421 | $55,090 |
| Average Household Size | 3.0 | 2.4 | 2.3 |
| Median Home Value | $149,160 | $184,918 | $232,316 |
| Owner Occupied Households | 3,261 | 20,856 | 55,997 |
| Renter Occupied Households | 8,044 | 39,575 | 85,930 |
| Population Growth 2015 -2020 | 12.12% | 12.77% | 12.58% |
Demographic information above was obtained from CoStar and Census.gov
This content does not constitute an offer to sell or a solicitation of an offer to buy any securities. RealtyMogul.com and North Capital Private Securities are in the process of screening, performing due diligence, and verifying information for the offering. The content is presented to gauge interest only and is subject to change without notice.
* Fannie Mae - https://www.fanniemae.com/content/fact_sheet/multifamily-metro-outlook-quarterly-austin.pdf
** City of Austin - https://www.austintexas.gov/sites/default/files/files/AMP_Report_DrupalUpload.pdf
*** CBRE - https://assets.recenter.tamu.edu/Documents/MktResearch/CBRE_Texas_Office_SpecialReport_Sept2014.pdf
| Equity | $21,030,000 | |
| Debt | $23,610,000 | |
| Total Sources of Funds | $44,640,000 | |
| Acquisition Price* | $39,071,047 | |
| Acquisition Fee | $744,047 | |
| Broker-Dealer Fee and Marketing Allowance | $1,682,400 | |
| Prepaid Taxes | $109,881 | |
| Reserves | $2,487,024 | |
| Closing Costs | $545,600 | |
| Total Uses of Funds | $44,640,000 | |
* Purchase price of $38,350,000 and $721,047 of acquisition related costs
The Portfolio has existing debt:
- Lender: JPMorgan Chase, N.A.
- Loan Origination Date: 10/27/2016
- Loan Proceeds: $23,610,000
- Loan to Cost: 53%
- Interest Rate: Fixed (3.82%)
- Amortization: Full term (10-year) interest-only
- Recourse: Non-recourse to the Trust, but recourse to the Trust and principals of the Sponsor for certain (i) "bad acts," and (ii) environmental indemnification
- Term: 10 years
- Prepayment Penalty: Subject to Yield Maintenance fee if loan repaid before June 2026
- Other Senior Lender Provisions:
- Upfront replacement reserves to be withheld from Loan proceeds by Lender and deposited on the Trust’s behalf on the Loan closing in the amount of (A) $422,000 to be used for Replacements (the “Upfront Replacement Deposit”); (B) $1,636,834 to be used for the Replacements related to capital improvements (the “Capital Improvement Deposit”); and (C) the Trust shall thereafter deposit $250 per unit per year for replacements and repairs to the Property during the term of the Loan (the “Replacement Reserve Monthly Deposit”) (collectively, the “Replacement Reserve”);
- A required repair reserve was withheld from Loan proceeds by Lender and deposited on the Trust’s behalf on the Loan closing in the amount of $28,190, which amount equals one hundred twenty-five percent (125%) of the estimated cost for the completion of the Lender’s required repairs at the Property (the “Required Repair Reserve”); and,
- An on-going tax and insurance reserve shall be funded by the Trust beginning on the Loan payment date occurring in January, 2017 and on each Loan payment date thereafter in an amount equal to one-twelfth of the tax premiums that the Lender estimates will be payable during the next ensuing twelve (12) months (the “Tax and Insurance Reserve”).
The Sponsor is to make distributions directly to investors who own a beneficial interest in the DST on a pro-rata basis.
Distributions are expected to start for each investor within 45 days of the completion of that investors beneficial interest in the DST. Distributions are expected to continue on a monthly basis thereafter. These distributions are at the discretion of the Sponsor and made directly by the Sponsor, neither Realty Mogul Co. nor any of its affiliates have any control or discretion on the timing or amount of distributions.
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 | $744,047 | Sponsor | Capitalized Equity Contribution | 3.54% of the offering amount. |
| Broker-Dealer Fee | 7.0% | Broker Dealers | Capitalized Equity Contribution | Paid to North Capital(1) or other licensed broker-dealers based on the amount of equity capital raised. Surplus fees retained by Sponsor. |
| Marketing & Due Diligence Fee | 1.0% | Broker Dealers | Capitalized Equity Contribution | 1.0% based on the amount of equity invested by investors through RealtyMogul.com, third-party Broker Dealers (including North Capital(1)) are entitled to additional fees based on equity they originate. Surplus fees retained by Sponsor. |
| Syndication Costs | $155,150 | Sponsor or Third Parties | Capitalized Equity Contribution | Fees associated with expenses for preparation of offering materials/documents, PPM, and tax opinion paid to third parties. |
| Organizational & Offering Costs | $315,450 | Sponsor | Capitalized Equity Contribution | 1.5% of maximum offering amount. |
| Sponsorship Cost | $50,000 | Sponsor | Capitalized Equity Contribution | 0.5% of the offering amount. To reimburse Sponsor for accounting, due diligence, marketing, distribution, and other costs. |
| Recurring Fees: | ||||
| Asset Management Fee | 0.25% - 0.75% annual gross income actually collected | Manager | Operating Cash Flow | 0.25% in Year 1, 0.75% in Year 2, in 1% Year 3 through Year 10. |
| Disposition Fee | 2.0% | Manager | Disposition Proceeds | 2% of gross proceeds from disposition of property if disposition price plus reserves is greater than $44,640,000. |
| Trustee Fee | $750 annually | Third-Party | Operating Cash Flow | Joan L. Yori, unaffiliated third party |
| Master Lease Operating Profit | N/A | Master Lessee | Operating Cash Flow | Master Lessee will retain operating revenues from the Properties that exceed the Annual Base Rent and the Annual Bonus Rent due to the Trust under the Master Lease. Master Tenant is entitled to 50% of rental income above the Effective Gross Revenue Benchmark in a given year. |
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.
The above presentation is based upon information supplied by the Sponsor or others. Realty Mogul, Co. along with its 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.