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.
ClearWorth has secured an exclusive multifamily real estate opportunity in Dallas through a strong local broker relationship. The investment basis of approximately $119k per unit ($116 per square foot) is significantly lower than replacement cost and recent trades in the area. With a cap rate exceeding 6%, the property's core location adds to its attractiveness.
Lavera is situated in the Lake Highlands neighborhood of Northeast Dallas, surrounded by new luxury developments. The median income within a 1-mile radius of Lavera stands at $103,000, indicating the presence of a prosperous community. The area is experiencing rapid gentrification, attracting young and affluent families who value access to premier schools and various entertainment options.
The property currently has 30% of its units renovated, leaving an opportunity to upgrade the remaining 70% with potential rental premiums averaging $268. Additionally, the fact that it is under out-of-state ownership and subpar 3rd party management presents a strong case for immediate rental upside, along with the potential for better expense control.
ClearWorth Capital
ClearWorth Capital is a vertically integrated, Texas-based multifamily owner and operator with offices in Dallas and Houston. The company serves as a deal sponsor providing acquisition, investment management, and disposition functions. ClearWorth Residential provides property and construction management services. ClearWorth seeks to maximize returns for investment partners through physical property enhancements and operational improvements. They enhance their business through joint venture partnerships, creative deal structuring, sophisticated approaches to finance, and the implementation of transformative technologies.
ClearWorth has a track record of delivering consistent, superior returns. Its managing partner, Matthew Stone, has been a principal in development and renovation projects totaling over $1.8 billion in value. Development experience includes thirty-seven (37) projects, twenty-eight (28) of which were multifamily, with 5,000+ multifamily units, as well as senior housing, student housing, townhomes, hotels, condominiums, and office buildings. He has also acquired and renovated twenty-eight (28) multifamily projects with a value of $600+ million.
https://clearworthcapital.com/Property Name | Market Name | City, State | Status | Acq Date | Units | Purchase Price | Sales Price or Estimated Value | IRR | EM | Exit Date | Year Built | Asset Type |
Firewheel Town Village | Dallas-Fort Worth | Garland, Texas | Owned | 11-30-2018 | 154 | $24,640,000 | $36,960,000 | 19.50% | 1.50X | Currently Owned | 2018 | Senior Independent Living |
Woodside Flats | Dallas-Fort Worth | Dallas, Texas | Owned | 05-31-2021 | 311 | $20,837,000 | $34,210,000 | 21.00% | 1.64X | Currently Owned | 1982 | Multifamily Value-Add |
Northwood | Dallas-Fort Worth | Richardson, Texas | Owned | 12-20-2021 | 272 | $40,800,000 | $61,200,000 | 19.00% | 1.50X | Currently Owned | 1969 | Multifamily Value-Add |
Solana | Dallas-Fort Worth | Garland, Texas | Owned | 04-30-2022 | 230 | $23,000,000 | $36,000,000 | 22.00% | 1.57X | Currently Owned | 1965 | Multifamily Value-Add |
The Brooke Apartments | Killeen | Temple, Texas | Owned | 04-17-2023 | 206 | $17,350,000 | $28,840,000 | 20.48% | 1.66X | Currently Owned | 1982 | Multifamily Value-Add |
The Halston | College Station-Bryan | College Station, Texas | Owned | 8-10-2022 | 284 | $29,000,000 | $49,000,000 | 22.37% | 1.69X | Currently Owned | 1981 | Multifamily Value-Add |
Lockwood Heights | Dallas-Fort Worth | Richardson, Texas | Owned | 10-6-2022 | 202 | $30,000,000 | $44,440,000 | 19.50% | 1.48X | Currently Owned | 1968 | Multifamily Value-Add |
Lakeridge Heights | Dallas-Fort Worth | Dallas, Texas | Owned | 7-28-2022 | 178 | $21,000,000 | $35,000,000 | 20.50% | 1.67X | Currently Owned | 1969 | Multifamily Value-Add |
Verlaine on the Parkway | Dallas-Fort Worth | Dallas, Texas | Owned | 10-1-2020 | 294 | $40,278,000 | $60,270,000 | 19.75% | 1.50X | Currently Owned | 1971 | Multifamily Value-Add |
North Bend Living | Houston | Houston, Texas | Owned | 9-9-2021 | 282 | $22,500,000 | $35,000,000 | 27.90% | 1.56X | Currently Owned | 1983 | Multifamily Value-Add |
The Ambrose | Houston | Houston, Texas | Owned | 9-30-2022 | 408 | $53,000,000 | $91,500,000 | 19.00% | 1.73X | Currently Owned | 1999 | Multifamily Value-Add |
Northside Heights | Houston | Conroe, Texas | Owned | 4-12-2022 | 228 | $26,250,000 | $38,750,000 | 19.50% | 1.48X | Currently Owned | 1980 | Multifamily Value-Add |
Park At Woodmoor Apartments | Houston | Shenandoah, Texas | Owned | 3-1-2022 | 220 | $32,760,000 | $48,000,000 | 22.50% | 1.47X | Currently Owned | 2000 | Multifamily Value-Add |
South Shore Coastal Living | Corpus Christi | Corpus Christi, Texas | Owned | 6-9-2021 | 233 | $21,203,000 | $32,228,560 | 18.00% | 1.52X | Currently Owned | 1973 | Multifamily Value-Add |
The Reston | Houston | Conroe, Texas | Owned | 10-10-2018 | 212 | $17,250,000 | $25,440,000 | 21.00% | 1.47X | Currently Owned | 1983 | Multifamily Value-Add |
The Palm on SPID | Corpus Christi | Corpus Christi, Texas | Owned | 08-31-2019 | 299 | $21,300,000 | $36,210,000 | 22.00% | 1.70X | Currently Owned | 1973 | Multifamily Value-Add |
The Pointe at Victoria | Victoria | Victoria, Texas | Owned | 04-28-2022 | 286 | $42,000,000 | $60,000,000 | 21.50% | 1.43X | Currently Owned | 2012 | Multifamily Value-Add |
Lakeside at Campeche | Houston | Galveston, Texas | Owned | 05-17-2023 | 320 | $32,500,000 | $55,500,000 | 25.80% | 1.71X | Currently Owned | 1985 | Multifamily Value-Add |
Stoneleigh on the Lake | Houston | Houston, Texas | Sold | 12-15-2015 | 228 | $20,145,000 | $24,500,000 | 32.00% | 1.96X | 4-1-2013 | 2005 | Multifamily Value-Add |
Axiom Hub 121 | Dallas-Fort Worth | McKinney, Texas | Sold | 08-20-2022 | 286 | $46,600,000 | $80,000,000 | 34.00% | 2.95X | 3-1-2020 | 2020 | Multifamily New Development |
McDermott Park | Dallas-Fort Worth | Plano, Texas | Sold | 08-31-2018 | 144 | $23,080,000 | $38,293,700 | 34.00% | 2.76X | 2-1-2022 | 2018 | Multifamily New Development |
McDermott Crossing | Dallas-Fort Worth | Plano, Texas | Sold | 03-01-2012 | 123 | $18,000,000 | $28,706,300 | 18.00% | 2.34X | 8-1-2012 | 2011 | Multifamily New Development |
Stoneleigh on Cypress Pointe | Houston | Houston, Texas | Sold | 05-01-2016 | 228 | $18,300,000 | $23,800,000 | 32.30% | 1.97X | 5-1-2016 | 2007 | Multifamily Value-Add |
Estates of Coppell | Dallas-Fort Worth | Coppell, Texas | Sold | 02-01-2014 | 56 | $9,260,000 | $13,700,000 | 28.00% | 1.84X | 3-1-2017 | 2005 | Multifamily Value-Add |
Stoneleigh Spring Cypress | Houston | Houston, Texas | Sold | 04-01-2014 | 216 | $19,986,000 | $24,800,000 | 36.00% | 2.26X | 12-1-2017 | 2004 | Multifamily Value-Add |
The Grand Hampton at Clear Lake | Houston | Houston, Texas | Sold | 08-30-2017 | 347 | $25,165,000 | $39,011,000 | 24.10% | 2.04X | 9-14-2021 | 1976 | Multifamily Value-Add |
Champions at Ponderosa | Houston | Houston, Texas | Sold | 09-01-2016 | 177 | $10,500,000 | $16,700,000 | 16.20% | 1.83X | 2-23-2021 | 1978 | Multifamily Value-Add |
Huxley at Medical Center | Houston | Houston, Texas | Sold | 10-10-2018 | 284 | $24,200,000 | $36,000,000 | 22.60% | 1.91X | 12-9-2021 | 1983 | Multifamily Value-Add |
Creekside Villas at Lake | Houston | Houston, Texas | Sold | 08-30-2017 | 202 | $13,215,000 | $25,850,000 | 28.00% | 2.25X | 6-3-2022 | 1978 | Multifamily Value-Add |
Steeplecrest | Houston | Houston, Texas | Sold | 10-1-2019 | 260 | $29,400,000 | 6.00% | 1.15X | 2-1-2023 | 1992 | Multifamily Value-Add | |
Harbor House on Saratoga | Corpus Christi | Corpus Christi, Texas | Sold | 3-1-2019 | 252 | 18.00% | 1.73X | 1998 | Multifamily Value-Add | |||
Stoneleigh Corpus Christi | Corpus Christi | Corpus Christi, Texas | Sold | 348 | 15.00% | 1.90X | 2004 | Multifamily Value-Add | ||||
Totals/Weighted Avg. | 7,770 | $773,519,000 | $1,159,909,560 |
The above bios and track record were provided by ClearWorth Capital and have not been independently verified by RealtyMogul.
The IRRs and EMx of the owned deals represented above are projections based on initial budgets and underwriting. They do not reflect realized returns and are subject to change.
ClearWorth Capital is set to acquire a Class B asset located in the Lake Highlands submarket. The property boasts strong demographics in its immediate area, making it a promising investment. To further enhance its potential, ClearWorth plans to implement a comprehensive value-add program. This program will include unit renovations, exterior improvements, and expense control measures.
ClearWorth's interior renovation plan is as follows, approximately 70% of the units will undergo upgrades, such as fresh paint, granite countertops, backsplash installations, a new consistent component package, and resurfaced tubs and showers. Additionally, 15% of the units will receive stainless steel appliances, wood-like flooring, new cabinet fronts, pulls, and 2" blinds. Exterior improvements will focus on enhancing the common areas and grounds, refreshing exterior paint, addressing deferred maintenance, upgrading building systems, and giving the clubhouse and signage a facelift. The total capital budget for these improvements is almost $5.3 million, a feasible amount due to ClearWorth's low basis in the property.
Furthermore, ClearWorth's management team plans to implement expense controls to address the ballooning expenses that the current management has allowed. The expense ratio, which was running at 75% of income on the T12, will be optimized with specific areas of improvement, including marketing and electrical expenses.
Notably, there exists a significant rental rate gap between newer vintage assets and Class B assets in the area. The proposed rental increases will narrow this gap, though the rental rates will remain discounted by $600-$1,000 compared to the new Class A asset that is currently in lease-up less than 1 mile away.
Upon stabilization, ClearWorth Capital aims to sell the property at a projected 5.8% cap rate. This anticipated exit cap rate is still well above where most assets in Dallas are trading despite the high interest rate environment we are in relative to recent history.
CapEx Breakdown
Interior Renovations | Total Amount | Per Unit |
Interior Paint / Carpentry | $240,845 | $860 |
Cabinets / Counters / Backsplash | $854,000 | $3,050 |
Hardware / Components / Accessories | $88,200 | $315 |
Make Ready / Demo / Clean | $450,800 | $1,610 |
Appliances | $88,200 | $315 |
Flooring | $98,918 | $353 |
Total Interior Renovations | $1,820,963 | $6,503 |
Exterior Renovations | Total Amount | Per Unit |
Common Area / Grounds | $238,000 | $850 |
Building Exterior | $1,325,000 | $4,732 |
Building Systems | $827,685 | $2,956 |
Concrete / Metals / Fencing | $118,000 | $421 |
Clubhouse / Design / Amenities | $315,000 | $1,125 |
Total Exterior Renovation Costs | $2,823,685 | $10,084 |
Other Costs | Total Amount | Per Unit |
Contingency | $278,614 | $995 |
Construction Management | $344,628 | $1,231 |
Total Other Costs | $623,242 | $2,226 |
Grand Total | $5,267,890 | $18,813 |
Lavera, a stable property with 280 units, was constructed in 1970 and is situated in Lake Highlands, a vibrant neighborhood northeast of Downtown Dallas. Dallas consistently ranks among the top metropolitan areas in the country for job and population growth, and Lake Highlands is currently benefiting from the region's strong economic momentum. Its advantageous location offers easy access to major employers, top-rated schools in the Richardson Independent School District (RISD), and a wide range of recreational amenities and entertainment options. With 83% of its units featuring 2 and 3 bedrooms, Lavera caters well to families seeking access to the renowned Richardson ISD. The property is conveniently located within a mile of the Lake Highlands DART station Blue route and just over 1 mile away from the amenity-rich White Rock Lake.
The strategic positioning of Lavera provides residents with convenient transportation options and easy access to various attractions, making it an attractive place to call home. Its strong unit mix and proximity to key amenities contribute to the property's appeal and potential for continued success in the thriving Dallas real estate market.
Unit Type | # of Units | Avg SF/Unit | Avg Rent (Proforma) |
Rent PSF (Proforma) |
Avg Rent (In Place) |
Rent PSF (In Place) |
Studio E1 (A1 website) | 8 | 484 | $1,082 | $2.24 | $952 | $1.97 |
1x1 WD (A2) | 16 | 675 | $1,198 | $1.77 | $1,017 | $1.51 |
1x1 WD (A3) | 24 | 782 | $1,235 | $1.58 | $1,025 | $1.31 |
2x2 WD (B1) | 30 | 949 | $1,532 | $1.61 | $1,277 | $1.35 |
2x2 (B2) | 30 | 1,056 | $1,625 | $1.54 | $1,341 | $1.27 |
2x2 (B3) | 24 | 1,057 | $1,608 | $1.52 | $1,324 | $1.25 |
2x1.5 WD (B4 TH) | 96 | 1,058 | $1,644 | $1.55 | $1,359 | $1.28 |
2x2.5 WD (B5) | 10 | 1,165 | $1,872 | $1.61 | $1,558 | $1.34 |
3x2 (C1) | 16 | 1,185 | $2,102 | $1.77 | $1,784 | $1.51 |
3x2.5 WD (C2) | 16 | 1,347 | $2,087 | $1.55 | $1,837 | $1.36 |
3x2 WD (C3) | 4 | 1,367 | $1,997 | $1.46 | $1,622 | $1.19 |
3x2 (C4) | 6 | 1,389 | $2,046 | $1.47 | $1,723 | $1.24 |
Totals / Averages | 280 | 1,023 | $1,624 | $1.59 | $1,356 | $1.33 |
Lease Comparables
Paxton | Trellis at Lake Highlands | Laney | Melville | Lakeridge Heights | Averages | Lavera at Lake Highlands (Post Reno) | |
Distance from Subject Property | Adjacent | Adjacent | 1.0 Mile | 2.0 Miles | 1.5 Miles | 1.5 Miles | NA |
Year Built | 1969 | 1984 | 1982 | 1979 | 1968 | 1976 | 1970 |
Number of Units | 114 | 104 | 71 | 356 | 178 | 165 | 280 |
$ / Unit | $1,765 | $1,494 | $1,517 | $1,318 | $1,310 | $1,587 | $1,623 |
Avg. Square Feet | 945 SF | 834 SF | 905 SF | 743 SF | 707 SF | 827 SF | 1,024 SF |
$ / SF | $1.87 | $1.79 | $1.73 | $1.75 | $1.66 | $1.76 | $1.59 |
1 Bedroom | 24 | 24 | 29 | 192 | 68 | 67 | 48 |
$ / Unit | $1,327 | $1,179 | $1,178 | $1,193 | $1,202 | $1,216 | $1,197 |
Square Feet | 737 SF | 658 SF | 630 SF | 631 SF | 603 SF | 652 SF | 697 SF |
$ / SF | $1.80 | $1.79 | $1.87 | $1.89 | $1.99 | $1.87 | $1.72 |
2 Bedrooms | 70 | 80 | 43 | 156 | 70 | 84 | 190 |
$ / Unit | $1,825 | $1,588 | $1,710 | $1,540 | $1,582 | $1,649 | $1,630 |
Square Feet | 965 SF | 887 SF | 1,069 SF | 920 SF | 885 SF | 945 SF | 1,045 SF |
$ / SF | $1.89 | $1.79 | $1.60 | $1.67 | $1.79 | $1.75 | $1.56 |
3 Bedrooms | 20 | 20 | 20 | 42 | |||
$ / Unit | $2,082 | $2,035 | $2,059 | $2,079 | |||
Square Feet | 1, 122 SF | 1,146 SF | 1,134 SF | 1,293 SF | |||
$ / SF | $1.86 | $1.78 | $1.82 | $1.61 |
Sales Comparables
Paxton Lake Highlands | Lakewood on the Trail | Maverick Oak Lawn | Hidden Oaks | Bay Island | Zander Park | Tides at Royal North | Trellis at Lake Highlands (Recap) | Legends on Lake Highlands | The Lex | Averages | Lavera at Lake Highlands - Purchase Price | Lavera at Lake Highlands - All In Cost Basis | |||||
Sale Date | 07-31-2022 | 03-31-2022 | 10-31-2022 | 09-30-2022 | 08-31-2022 | 09-30-2022 | 04-30-2022 | 07-01-2023 | 04-30-2022 | 02-28-2023 | 9-17-2022 | 09-01-2023 | 09-01-2023 | ||||
Sales Price | $17,200,000 | $77,000,000 | $24,800,000 | $34,300,000 | $19,750,000 | $25,400,000 | $53,676,310 | $16,000,000 | $51,100,000 | $21,000,000 | $34,022,631 | $33,300,000 | $41,592,379 | ||||
Year Built | 1969 | 1987 | 1970 | 1974 | 1973 | 1972 | 1978 | 1984 | 1971 | 1984 | 1976.2 | 1970 | 1970 | ||||
# of Units | 114 | 352 | 137 | 208 | 120 | 160 | 340 | 104 | 348 | 144 | 203 | 280 | 280 | ||||
Average Unit Size | 945 SF | 734 SF | 826 SF | 889 SF | 865 SF | 978 SF | 873 SF | 834 SF | 753 SF | 820 SF | 852 SF | 1024 SF | 1024 SF | ||||
Sales Price / Unit | $150,877 | $218,750 | $181,022 | $164,904 | $164,583 | $158,750 | $157,872 | $153,846 | $146,839 | $145,833 | $164,328 | $118,929 | $148,544 | ||||
Sales Price / SF | $160 | $298 | $219 | $185 | $190 | $162 | $181 | $184 | $195 | $178 | $195 | $116 | $145 | ||||
Cap Rate | 4.00% | 3.64% | 5.25% | 4.30% | 6.15% | 4.92% | |||||||||||
Distance from Subject Property | Adjacent | 6.0 Miles | 10.0 Miles | 1.0 Miles | 14.0 Miles | 24.0 Miles | 2.0 Miles | Adjacent | 2.0 Miles | 2.0 Miles | 7.6 mi | NA | NA |
(1) The Sponsor has underwritten exiting the Property in Month 36 for $55.8M ($199,343/unit) assuming a 5.80% exit cap rate.
Market Overview
Apartment demand in Dallas continues to thrive, supported by the city's enduring reputation as a powerhouse for job and population growth. In the aftermath of the pandemic, rent growth and occupancy levels reached record highs. Although the influx of new supply has moderated the rapid increases, rent growth remains robust, averaging 4.7% over the past 5 years, as reported by CoStar. Interestingly, CoStar also notes that 'mid-tier' or value-add apartments have demonstrated greater resilience in rent growth compared to new luxury properties that directly compete with the influx of new supply.
Despite rising rents in the past decade, Dallas remains an affordable market relative to states like California and New York, which contribute significantly to Texas' population growth. The city's diversified economic base bolsters its resilience even in times of national downturns. As a result, Dallas stands strong as an attractive and stable investment destination, with a consistently high demand for rental properties.
Submarket Overview
Apartment fundamentals in East Dallas are demonstrating notable strength, driven by robust demand. The 'East Dallas/M Street/White Rock' submarket, part of the greater Dallas area, ranks among the top 5 submarkets with positive changes in occupancy and rent growth, according to ALN Data. Over the past year, occupancy has increased by 1.7% to reach a stable 92.3% per ALN, and further growth is anticipated. Rent growth has proven to show continued strength, rising by 5.7% year over year per ALN. As much of East Dallas is already developed, new development opportunities are limited. However, the area continues to attract strong demand as it presents an enticing option for renters seeking affordability compared to the Uptown/Park Cities and Downtown submarkets. The region's emerging communities, cultural attractions, and convenient access to major employment centers contribute to its growing appeal.
Total Capitalization
Sources of Funds | $ Amount | $ / Unit |
Senior Loan | $26,942,153 | $96,222 |
GP Equity | $3,500,000 | $12,500 |
LP Equity | $11,150,226 | $39,822 |
Total Sources of Funds | $41,592,379 | $148,544 |
Uses of Funds | $ Amount | $/Unit |
Purchase Price | $33,300,000 | $118,929 |
Soft Costs / Closing Costs / Contingency | $3,024,419 | $10,801 |
Renovation Budget | $5,267,960 | $18,814 |
Total Uses of Funds | $41,592,379 | $148,544 |
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
The expected terms of the debt financing are as follows:
- Lender: Gateway First Bank
- Loan Type: Bridge Loan
- Term: 3 + 1 + 1 Years
- Loan-to-Value (LTV): 65.1%
- Loan-to-Cost (LTC): 64.8%
- Estimated Proceeds: $26,942,153
- Interest Type: Fixed
- Annual Interest Rate: 7.0%
- Interest-Only Period: 27 Months
- Amortization: 30 Years
- Prepayment Terms: Prepayable day 1 without any penalty
- Extension Requirements: 1.25x DSCR & 10 bps fee per extension
- Recourse Description: Non-recourse
(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.
ClearWorth Capital intends to make distributions as follows:
- Pari-passu all cash flow available for distribution to the Equity Investors(1) until the Equity Investors(1) receive a 9.0% IRR
- 70% / 30% (70% to Equity Investors(1) / 30% to Promoted/Carried Interest(2)) of all cash flow available for distribution thereafter.
ClearWorth Capital 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 May 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of ClearWorth Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves.
(1) Equity Investors include all members part of the Limited Partnership and General Partnership, including Sponsor
(2) ClearWorth Capital will receive a promoted/carried interest as indicated above.
Cash Flow Summary | ||||
Year 0 | Year 1 | Year 2 | Year 3 | |
Effective Gross Revenue | $5,343,680 | $6,018,830 | $6,876,011 | |
Total Operating Expenses | $3,306,236 | $3,403,658 | $3,470,646 | |
Net Operating Income | $2,037,445 | $2,615,172 | $3,405,365 | |
Project-Level Cash Flows | ||||
Year 0 | Year 1 | Year 2 | Year 3 | |
Net Cash Flow | ($38,777,960) | $1,946,957 | $2,522,450 | $3,309,806 |
Investor-Level Cash Flows(1) | ||||
Year 0 | Year 1 | Year 2 | Year 3 | |
Net Cash Flow | ($14,650,226) | $293,005 | $875,266 | $26,791,586 |
Investor-Level Cash Flows - Hypothetical $50,000 Investment(1) | ||||
Year 0 | Year 1 | Year 2 | Year 3 | |
Net Cash Flow | ($50,000) | $1,000 | $2,987 | $91,437 |
(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 ClearWorth Capital'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 | ClearWorth Capital | Capitalized Equity Contribution |
Financing Fee | 1.55% of Loan Proceeds | Lender and Mortgage Broker | Capitalized Equity Contribution |
Equity Fees | 4% of $3.5M raise | Prevail Real Estate | 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 | 1.50% of Effective Gross Income | ClearWorth Capital | Cash Flow |
Property Management Fee | 3.00% of Effective Gross Income | ClearWorth Residential | Cash Flow |
Construction Management Fee | 7.00% of Total Costs Before Contingency | ClearWorth Construction | Cash Flow |
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.
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.