The Sponsor's extensive experience in operating multifamily properties is evidenced by their successful acquisition and operation of three similar-sized and aged assets in the Phoenix area, as well as their execution of the same business plan across over 20 properties worth a total of $685MM.
Recent market volatility is enabling the Sponsor to acquire the asset at a highly favorable 5.41% cap rate ($230,682/door) basis, representing a 25% discount compared to the average comp set. This purchase price is even more attractive due to the significant potential for immediate value creation. The current owner operates the asset remotely from Canada, resulting in rents that are approximately 25% below market rates. By simply bringing the rents in line with the market, the Sponsor can capture immediate upside and dramatically increase the asset's NOI, thereby increasing its value right from the start.
The Sponsor's value-add business plan for The Lennox involves an extensive renovation of all aspects of the asset to maximize its marketability and bring its units in line with the comp set. The Property, which is already family-friendly, features a high concentration of 2BR and 3BR units and is conveniently located in a prime retail corridor within walking distance of Sprouts, Walmart Supercenter, and the local high school. By implementing their "Platinum Renovation Package," the Sponsor anticipates meeting strong demand for renovated Class B units and achieving rent premiums of as much as $500/month.
$20,300,000
RSN Property Group
Founded in April 2014, RSN Property Group is a multi real estate investment firm owned by Australian investors living in the U.S. They specialize in acquiring and operating properties with significant value-add components within strong MSAs throughout the U.S. The key principal, Reed Goossens, has been the lead operator on over 20 multifamily value-add syndications acquiring over $685MM in assets.
https://rsnpropertygroup.com/-
Reed GoosensFounder and CEO -
Ben GrayPartner and COO
Reed Goossens is a real estate entrepreneur and founder of RSN Property Group, and formerly the co-founder of Wildhorn Capital. As a native Australian, Reed moved to the U.S. to pursue his career in early 2012. Reed is a qualified chartered structural engineer and project manager. Before founding RSN Capital and Wildhorn Capital, Reed was involved with large-scale commercial construction and real estate development projects with a combined worth of over $500 million, with such projects located in Australia, the United Kingdom, and the U.S., including the London 2012 Olympic Games. Since founding both companies he has gone on to acquire over $685 million worth of multifamily assets, going full cycle on multiple deals and typically exceeding the projected investor returns.
Reed is also the host of a top-rated real estate investing podcast, "Investing in the US", wherein he interviews other distinguished real estate entrepreneurs about their success.
Ben grew up in Australia in a family of real estate investors and developers talking real estate around the dinner table every night. He followed his own path into technology, working with financial services companies in the UK and Canada before transitioning into management at large Silicon Valley tech firms where he focused on big data. Over that time, he was responsible for the successful execution of hundreds of millions of dollars in enterprise-scale projects. In parallel, Ben has owned and operated multiple successful real estate businesses and built a sizable real estate portfolio. Reed and Ben have been personal friends and business associates for over a decade and Ben would succeed Reed as the controlling person of the Manager should anything happen to Reed.
| Property Name | City, State | Asset Type | Acq. Date | Units | Purchase Price | Sales Price / Estimated Value | LP IRR | LP Emx |
| The Henry B | San Antonio, TX | Multifamily | 10-01-2018 | 198 | $18,575,000 | $22,000,000 | 15.21% | 1.42X |
| The Blair at Bitters | San Antonio, TX | Multifamily | 10-01-2018 | 190 | $15,625,000 | $23,000,000 | 15.21% | 1.42X |
| The Joseph at Huebner | San Antonio, TX | Multifamily | 11-30-2017 | 192 | $16,100,000 | $28,200,000 | 18.29% | 1.92X |
| The Reserve at Walnut Creek | Austin, TX | Multifamily | 12-30-2018 | 284 | $36,300,000 | $62,250,000 | 24.92% | 1.99X |
| The Baxter | Austin, TX | Multifamily | 11-30-2019 | 350 | $46,000,000 | $65,275,000 | 32.98% | 1.98X |
| The Lila | San Antonio, TX | Multifamily | 04-30-2017 | 253 | $20,600,000 | $29,000,000 | ||
| Providence Townhomes | San Antonio, TX | Multifamily | 09-25-2019 | 106 | $16,250,000 | $18,750,000 | ||
| Patten East | Austin, TX | Multifamily | 03-15-2022 | 248 | $43,500,000 | $47,000,000 | ||
| Barstow Apartments | Austin, TX | Multifamily | 12-15-2020 | 560 | $94,575,000 | $99,303,750 | ||
| St. Mary Apartments | Austin, TX | Multifamily | 01-26-2021 | 240 | $60,000,000 | $65,000,000 | ||
| Palmera | San Antonio, TX | Multifamily | 06-18-2021 | 288 | $46,800,000 | $49,140,000 | ||
| SoNA | Austin, TX | Multifamily | 08-19-2021 | 164 | $26,000,000 | $27,820,000 | ||
| Henry Heights | Austin, TX | Multifamily | 10-28-2021 | 184 | $32,000,000 | $33,600,000 | ||
| Lowell | Austin, TX | Multifamily | 11-25-2021 | 286 | $50,700,000 | $52,221,000 | ||
| Shiloh | Austin, TX | Multifamily | 01-15-2022 | 286 | $103,050,000 | $105,626,250 | ||
| North Edge | Phoenix, AZ | Multifamily | 06-12-2021 | 71 | $11,750,000 | $12,925,000 | ||
| Carolina Commons | Greenville, SC | Multifamily | 05-15-2021 | 43 | $3,500,000 | $3,850,000 | ||
| Townhomes at Summit | Greenville, SC | Multifamily | 03-15-2021 | 30 | $4,500,000 | $5,040,000 | ||
| Pines of Lanier | Atlanta, GA | Multifamily | 02-28-2022 | 157 | $17,800,000 | $18,868,000 | ||
| Bronte East | Phoenix, AZ | Multifamily | 07-04-2022 | 87 | $19,375,000 | $19,375,000 | ||
| Bronte West | Phoenix, AZ | Multifamily | 07-04-2022 | 48 | $13,250,000 | $13,250,000 | ||
| Pelham Place North & South | Greenville, SC | Multifamily | 09-24-2022 | 281 | $35,500,000 | $35,500,000 | ||
| Totals/Weighted Average | 4,546 | $731,750,000 | $836,994,000 | 24.4% | 1.85X |
The above bios and track record were provided by RSN Property Group and have not been independently verified by RealtyMogul.
- Immediately rebranding the asset and completely updating the entire marketing program currently in place.
- Extensively renovating the exterior of the Property, repainting, landscaping, and generally enhancing the curb appeal.
- Renovating and improving the common areas, including the pool, adding a new children’s playground, a new dog park, upgrading the gym, and more.
- And finally, renovating 90%+ of the units to their platinum renovation package, including granite countertops and stainless steel appliances.
Furthermore, the Sponsor is once again offering three different investment tiers, but the offering on the RealtyMogul platform contemplates Class C.
- Class A: This class is for those investors who want consistent 9% pure cash flow paid out quarterly. This class is limited to 25% of the total equity. Investors are paid out first before Class B/C, however, they do not get to participate in the profits once the Sponsor sells. (min. $50k) – 9% Pref.
- Class B: This class is the Sponsor's basic investment class mixing long-term equity growth, with some cash flow throughout the hold. Min. $50k – 7% preferred return and a 70/30 profit split once the Sponsor sells.
- Class C: This class is for those investors who invest larger amounts of equity (min. $500k). For doing so, these investors get an 8% preferred return and an 80/20 split on the back end. Both Class B and C investors sit equally in the capital stack.
| Interior Renovations (88 units being renovated) | Total Amount | Per Unit |
| Electrical Fixtures | $30,800 | $350 |
| Flooring | $88,000 | $1,000 |
| Kitchen Appliances | $132,000 | $1,500 |
| Interior Upgrade Materials | $30,800 | $350 |
| Countertops | $105,600 | $1,200 |
| Tubs / Enclosures | $35,200 | $400 |
| Paint / Drywall / Cabinets | $88,000 | $1,000 |
| Plumbing | $22,000 | $250 |
| Door Hardware | $22,000 | $250 |
| Demolition | $22,000 | $250 |
| Bathroom Vanity / Fixtures | $17,600 | $200 |
| Glass Tile Backsplash | $17,600 | $200 |
| Labor | $224,400 | $2,550 |
| Total Interior Renovation Costs | $836,000 | $9,500 |
| Exterior Renovations | Total Amount | Per Unit |
| Paint / Siding / Roof | $50,000 | $568 |
| HVAC / Chiller | $70,000 | $795 |
| Hot Water / Boiler | $50,000 | $568 |
| Landscaping | $50,000 | $568 |
| Signage | $20,000 | $227 |
| Dog Park | $10,000 | $114 |
| Gym | $8,000 | $91 |
| Plumbing | $100,000 | $1,136 |
| W/D | $87,500 | $994 |
| FFE | $35,000 | $398 |
| BBQ / Amenities / Package | $40,000 | $455 |
| Low Flow Toilets | $45,000 | $511 |
| Roof | $150,000 | $1,705 |
| Total Exterior Renovation Costs | $715,500 | $8,131 |
| Other Costs | Total Amount | Per Unit |
| Contingency | $71,550 | $813 |
| Construction Management Fee | $81,153 | $922 |
| Total Other Costs | $152,703 | $1,735 |
| Grand Total | $1,704,203 | $19,366 |
The Property is a boutique rental community tailored to families, offering a total of 88 two-bedroom and three-bedroom apartment homes in a two-story garden-style layout. It's conveniently located in a prime Tempe, AZ location near the intersection of E Southern Ave and S McClintock Dr, directly across the street from Sprouts farmers market, premium retail outlets, restaurants, cafes, and more. Residents in the surrounding 1-mile area have an average yearly income of just over $100,000, and this affluence is reflected in the beautiful homes, neighborhoods, and communities.
Unit Mix
| Renovated | # of Units | Avg SF/Unit | Avg Rent | Rent per SF |
| 2Bx2B | 4 | 877 | $1,775 | $2.02 |
| 3Bx2B | 11 | 1,098 | $1,950 | $1.78 |
| Non-Renovated | ||||
| 2Bx2B | 30 | 877 | $1,331 | $1.52 |
| 3Bx2B | 43 | 1,098 | $1,506 | $1.37 |
| Total/Averages | 88 | 1,010 | $1,517 | $1.50 |
Lease Comparables
| Talavera | The Enclave | Eastridge | The Rev | Villatree | Galleria Palms | Omnia McClintock | Omnia On 8th | Nines at Lakeside | Averages | Subject Property (The Lennox at Tempe) | ||
| Year Built | 1984 | 1994 | 1981 | 1972 | 1980 | 1997 | 1962 | 1985 | 1974 | 1981 | 1972 | |
| Class | A- | B+ | B- | B | B+ | A- | B- | B | B | B | ||
| # of Units | 144 | 204 | 334 | 172 | 150 | 424 | 181 | 188 | 244 | 227 | 88 | |
| Average Unit Size | 911 SF | 1,100 SF | 845 SF | 959 SF | 1,000 SF | 976 SF | 810 SF | 755 SF | 1,130 SF | 943 SF | 1,013 SF | |
| Distance from Subject Property | 0.3 Miles | 0.5 Miles | 0.4 Miles | 0.7 Miles | 2.3 Miles | 3.0 Miles | 1.8 Miles | 2.0 Miles | 2.0 Miles | 1.4 Miles | ||
| Market Rent (Post-Reno) | ||||||||||||
| $ / Unit (2 BR) | $2,119 | $1,866 | $1,795 | $1,630 | $1,623 | $1,740 | $1,802 | $1,750 | N/A | $1,791 | $1,775 | |
| SF (2 BR) | 911 SF | 1,000 SF | 845 SF | 959 SF | 1,000 SF | 816 SF | 810 SF | 755 SF | N/A | 887 SF | 877 SF | |
| $ / SF (2 BR) | $2.33 / SF | $1.87 / SF | $2.12 / SF | $1.70 / SF | $1.62 / SF | $2.13 / SF | $2.22 / SF | $2.32 / SF | N/A | $2.02 / SF | $2.02 / SF | |
| $ / Unit (3 BR) | N/A | $1,953 | N/A | N/A | N/A | $2,448 | N/A | N/A | $1,875 | $2,092 | $1,950 | |
| SF (3 BR) | N/A | 1,200 SF | N/A | N/A | N/A | 1,133 SF | N/A | N/A | 1,130 SF | 1,154 SF | 1,098 SF | |
| $ / SF (3 BR) | N/A | $1.63 / SF | N/A | N/A | N/A | $2.16 / SF | N/A | N/A | $1.66 / SF | $1.81 / SF | $1.78 / SF | |
Sales Comparables
| Sofia | Villatree | Omnia McClintock | Omnia on 8th | Mercury on Mill | Tides at Parkview | The Rev | Thrive Tempe | The Mark | Averages | Subject Property (The Lennox at Tempe) | |
| Year Built | 1979 | 1980 | 1962 | 1985 | 1971 | 1983 | 1972 | 1968 | 1970 | 1974 | 1972 |
| Class | B | B+ | B1 | B | B+ | B+ | B | B- | B | B | |
| # of Units | 173 | 150 | 181 | 188 | 167 | 196 | 172 | 110 | 125 | 162 | 88 |
| Sale Date | 08-2022 | 07-2022 | 05-2022 | 05-2022 | 05-2022 | 05-2022 | 03-2022 | 02-2022 | 12-2021 | 04-2022 | 04-2023 |
| Sales Price | $55,000,000 | $43,100,000 | $51,250,000 | $60,500,000 | $56,500,000 | $66,500,000 | $53,000,000 | $31,080,000 | $36,100,000 | $50,336,667 | $20,300,000 |
| Sales Price / Unit | $317,919 | $287,333 | $283,149 | $321,809 | $338,323 | $339,286 | $308,140 | $282,545 | $288,800 | $307,478 | $230,682 |
| Distance from Subject Property | 2.3 Miles | 2.3 Miles | 1.8 Miles | 2.0 Miles | 2.5 Miles | 3.5 Miles | 0.7 Miles | 2.7 Miles | 2.5 Miles | 2.3 Miles |
Market Overview
The Phoenix real estate market has experienced short-term volatility, presenting incredibly attractive investment opportunities while the long-term fundamentals underpinning the market remain intact:
- Population Growth: The fifth-biggest city in the country continues its phenomenal growth. No major city in the US grew faster than Phoenix over the 2010-2020 census period (Source: census.gov), and that trend is slated to continue.
- Economic Growth: The Phoenix economy is a whopping $261.7B, and it’s growing at twice the US average (Source: Phoenix.gov).
- Job Market: With a huge boom in tech and other high-income jobs, Phoenix continues to outperform other US cities. Phoenix has a 3.2% unemployment rate that is trending down and sitting near 30-year lows (Source: stlouisfed.org)
Submarket Overview
The asset is located in the highly sought-after submarket of Tempe, where the average household income within a 1-mile radius of the Property is over $100k. Furthermore, Tempe is bolstered by Arizona State University, in addition to being one of the largest universities in the country it was named the No. 1 Most Innovative School in America two years in a row by U.S. News & World Report. The southeast valley has fast become a hotbed for technology with Amazon, Microsoft, SAP, and others establishing local offices, with a plethora of non-tech companies staking claims too, including American Airlines, Coca-Cola, Humana, Wells Fargo, Honeywell, and more.
Total Capitalization
| Sources of Funds | $ Amount | $/Unit | ||||
| Debt | $12,586,000 | $143,023 | ||||
| GP Investor Equity(1) | $1,000,000 | $11,364 | ||||
| LP Investor Equity | $9,778,923 | $111,124 | ||||
| Total Sources of Funds | $23,364,923 | $265,510 | ||||
| Uses of Funds | $ Amount | $/Unit | ||||
| Purchase Price | $20,300,000 | $230,682 | ||||
| Capital Improvements | $1,704,203 | $19,366 | ||||
| Interest Rate Cap | $500,000 | $5,682 | ||||
| Closing Costs(2) | $203,000 | $2,307 | ||||
| Acquisition Fee | $406,000 | $4,614 | ||||
| Loan Fees | $251,720 | $2,860 | ||||
| Total Uses of Funds | $23,364,923 | $265,510 | ||||
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(2) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the Platform and for Platform-related services. Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
The expected terms of the debt financing are as follows:
- Lender: Fannie Mae
- Loan Type: Permanent Loan
- Term: 60 Months (no extensions)
- Loan-to-Value: 62.0%
- Loan-to-Cost: 53.9%
- Estimated Proceeds: $12,586,000
- Interest Type: Fixed
- Annual Interest Rate: 4.9%
- Interest-Only Period: 60 Months
- Amortization: 30 Years
- Prepayment Terms: Yield Maintenance (57 Months)
(1) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt.
RSN Property Group intends to make distributions from RSNPG Lennox Apts Partners RM, LLC on a pro-rata basis out of funds received as holder of a Class C Unit of RSNPG Lennox Apts Partners, LLC.
RSN Property Group intends to make distributions to the Class C Unitholders, after the payment of the preferred return to the Class A members, as follows:
- To the Class C Investors, pari passu, all operating cash flows to an 8.0% IRR;
- 80% / 20% (80% to Investors / 20% to Promote/Carried Interest) of excess cash flow thereafter.
RSN Property Group intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).
Distributions are expected to start in September 2023 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of RSN Property Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.
RSN Property Group will receive a promoted/carried interest as indicated above.
| Cash Flow Summary | ||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
| Effective Gross Revenue | $1,734,708 | $2,118,001 | $2,244,278 | $2,350,814 | $2,440,666 | |
| Total Operating Expenses | $649,250 | $684,571 | $705,235 | $725,978 | $746,931 | |
| Net Operating Income | $1,085,459 | $1,433,430 | $1,539,043 | $1,624,836 | $1,693,736 | |
| Project-Level Cash Flows | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | ($10,778,923) | $434,050 | $774,356 | $877,443 | $961,106 | $18,142,931 |
| Investor-Level Cash Flows(1) | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | ($2,000,000) | $29,626 | $113,808 | $139,303 | $159,992 | $3,440,965 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(1) | ||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flow | ($50,000) | $741 | $2,845 | $3,483 | $4,000 | $86,024 |
(1) RM Technologies, LLC and its affiliates do not provide any assurance of returns. Returns presented are net of all fees. Please carefully review the Fees and Disclaimers sections below for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.
Certain fees and compensation will be paid over the life of the transaction; please refer to RSN Property Group's materials for details. The following fees and compensation will be paid(1)(2):
| One-Time Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Acquisition Fee | 2.00% of Purchase Price | RSN Property Group | Capitalized Equity Contribution |
| Technology Solution Licensing Fee(2) | Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution | RM Technologies, LLC |
Capitalization (at Sponsor’s discretion) |
| Recurring Fees: | |||
| Type of Fee | Amount of Fee | Received By | Paid From |
| Asset Management Fee | 2.00% of Gross Revenues | RSN Property Group | Cash Flow |
| Property Management Fee | 3.00% of Gross Revenues | 3rd Party Property Manager | Cash Flow |
| Construction Management Fee | 5.00% of applicable construction budget | RSN Property Group | Construction Expenditure Budget |
| Administration Solution Licensing Fee(2) | Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of RM Technologies’ Administration Solution | RM Technologies, LLC | Cash Flow |
(1) Fees may be deferred to reduce impact to investor distributions.
(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.
.
Sponsor’s Projects and Targets
*Assumptions and projections included in the information on this Page, including pro forma projections (collectively “Projections”) were provided by the Sponsor or an affiliate thereof and are not reflective of the position or opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates, or any other person or entity other than the Sponsor or its affiliates. RM Technologies, LLC and its affiliates do not provide any assurance of returns or the accuracy or reasonableness of the Projections provided by the Sponsor or its affiliates. There can be no assurance that the Sponsor’s methodology used for calculating any Projections, including Target IRR, Target Annualized Cash-on-Cash Return, and Target Equity Multiple (“Targets”), are appropriate or adequate. The Sponsor’s Projections and Targets are hypothetical, are not based on actual investment results, and are presented solely for the purpose of providing insight into the Sponsor’s investment objectives, detailing its anticipated risk and reward characteristics and for establishing a benchmark for future evaluation of the Sponsor’s performance. The Sponsor’s Projections and Targets are not a predictor, projection or guarantee of future performance. There can be no assurance that the Sponsor’s Projections or Targets will be met or that the Sponsor will be successful in meeting these Projections and Targets. Projections and Target returns should not be used as a primary basis for an investor’s decision to invest.
No Approval, Opinion or Representation, or Warranty by RM Technologies, LLC or it Affiliates
The information on this Page, including the 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”) was provided by the Sponsor or an affiliate thereof. RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor. No part of the information on this Page is intended to be binding on RM Technologies, LLC or its affiliates, or to supersede any of the Sponsor’s Investment Documents. The opinions expressed on this page are solely the opinions of the Sponsor and its affiliates and none of the opinions expressed on this Page are the opinions of, nor are they endorsed by, RM Technologies, LLC or its affiliates.
Sponsor’s Information Qualified by Investment Documents
The Information on this Page, including of the principal terms of the Sponsor’s offering, 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 each prospective investor should carefully read all of the Investment Documents and any supplements thereto, copies of which are available by clicking the links above or upon request, before deciding whether to make an investment. The information on this page should not be used as a primary basis for an investor’s decision to invest. In the event of an inconsistency between the information on this Page and the Investment Documents, investors should rely on the information contained in the Investment Documents. The information on this Page and the information in the Investment Documents are subject to last minute changes up to the closing date at the sole discretion of the Sponsor and its affiliates.
Risk of Investment
This real estate investment is speculative and involves substantial risk. There can be no assurances that all or any of the assumptions will be true or that actual performance will bear any relation to the hypothetical illustrations herein, and no guarantee or representation is made that investment objectives of the Sponsor will be achieved. In the event that actual performance is below the Sponsor’s Targets, your investment could be materially and adversely affected, and there can be no assurance that investors will not suffer significant losses. 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. Please see the Sponsor’s Investment Documents for additional information, including the Sponsor’s discussion concerning risk factors.
Risk of Forward-Looking Statements
Forward-looking statements are found here and in the applicable Investment Documents and may include words like “expects,” “intends,” “anticipates,” “estimates” and other similar words. These statements are intended to convey the Project Sponsor’s projections or expectations as of the date made. These statements are inherently subject to a variety of risks and uncertainties. Please see the applicable Investment Documents for disclosure relating to forward-looking statements. All forward-looking statements attributable to the Sponsor or its affiliates apply only as of the date of the offering and are expressly qualified in their entirety by the cautionary statements included elsewhere in the Investment Documents. Any financial projections are preliminary and subject to change; the Sponsor undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual results achieved may vary significantly from the forecasts, and the variations may be material.
Sponsor’s use of Debt
A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt. There can be no assurance that the Sponsor will secure debt on the rates and terms noted above, or at all. All of the Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, including but not limited to the annual interest rate and possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account. The use of borrowed money to acquire real estate is referred to as leveraging. Leveraging increases the risk of loss. If the Sponsor were unable to pay the payments on the borrowed funds (called a "default"), the lender might foreclose, and the Sponsor could lose its investment in its property.
In addition, unless the debt provides for a fixed rate of interest during the term of the loan and/or any subsequent extensions, the total amount of interest paid over the term of the debt will increase by the same amount as the related index. For example, if the index rate increases by 0.50% (50 basis points) the interest rate on the loan will increase by the same amount. The amount of such interest rate increases may be capped either by its terms or as the result of the Sponsor entering into an arrangement that caps the interest rate with respect to the debt at a particular rate.
Sponsor’s Offering is Not Registered
The interests offered by the Sponsor 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 interests will not be registered under any state securities laws in reliance on exemptions from registration. Such 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 RealtyMogul Platform are intended solely for “Accredited Investors,” as that term is defined Rule 501(a) of the Securities Act. Prospective investors must certify that they are Accredited Investors and provide either certain supporting documents or third party verification, and must acknowledge that they have received and read all investment materials.
RM Technologies, LLC Fees and Conflicts
RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based licensing fee for real estate companies and their sponsors to license and use the RM Technologies LLC’s proprietary Platform, including one-time flat licensing fees for its Technology Solution and an ongoing quarterly flat licensing fees for its Administration Solution. An estimate of the Technology Solution licensing fee is included in the Closing Costs above and is intended to be capitalized into the transaction at the discretion of the Sponsor. The licensing fees received by RM Technologies, LLC are disclosed in the relevant operating agreement(s). Additionally, from time to time, employees of RM Technologies, LL C and its affiliates invest in Sponsor’s offering. RM Technologies LLC’s receipt of licensing fees and its employee’s investments in Sponsor’s offering creates a conflict of interest between RealtyMogul and its affiliates, and investors or prospective investors.
No Investment Advice
None of RM Technologies nor any affiliate are registered as a broker, dealer, investment adviser, or funding portal (except with respect to RM Adviser, LLC, which has no involvement in the transactions to be consummated hereby or contemplated herein and solely for the purposes hereof, shall not be deemed an affiliate or RM Technologies). They do not provide investment advice or recommend the purchase of any securities that are the subject of this agreement or the Sponsor’s offering with respect to the Project. Project Sponsor’s use of the Platform, including Project Sponsor’s license to utilize the Platform and any related technology, software and supporting services, Project Sponsor’s posting of offering documents and all related information on the Platform does not constitute the approval of or endorsement by RM Technologies or any of its affiliates of Project Sponsor’s securities offering with respect to the Project or signify the suitability thereof in any manner.
For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.