We run extensive background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to never allowing a sponsor with a criminal history / any securities related issue to use the platform, we may also turn down sponsors due to poor reference checks even if background and criminal checks come back clear.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent. When an investor makes an investment with unaffiliated 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 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.
Our controls include visiting every property (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.
We have robust quality controls with detailed checklists and a review of third-party reports.
This recapitalization opportunity offers immediate, in-place, steady cash flow, produced at a rate anticipated to average approximately 8.1% over the investment period. The benefit of immediate cash flow is the direct result of the Sponsor's successful execution of the original business plan after acquiring the Property from its original developer in four separate stages over approximately 12 months.
The staggered acquisition afforded the Sponsor the opportunity to conduct a methodical, multi-year lease-up and stabilize the property while refining certain operational efficiencies that are intrinsic to the single-family BTR product type. The return profile is reflective of the Sponsor absorbing the initial lease-up risk and offering investors an opportunity to enter the cash-flowing investment at stabilization.
The Sponsor acquired the asset at a total cost basis of $12.1 million. For this recapitalization, the Sponsor is offering the opportunity to investors at a discounted basis, with a Purchase Price of $11.2 million. This opportunity is available at a discount to the original cost basis because the original majority limited partner investor group is not able to enter into an additional multi-year investment in the project. Therefore, this group is willing to accept a discount to ensure the ability to recapitalize its position by offering returns that are acceptable to investors in the current market.
Furthermore, the Project offers robust protection of investor principal since all 75 detached single-family units are situated on individual tax parcels located within a single community. This inherent diversification insulates the Property against the concentrated risk of loss seen with traditional multi-family properties while simultaneously affording exit optionality that drives return maximization. The exit optionality provides the Sponsor the opportunity to either sell the entire project as a single investment property or as individual homes directly to homebuyers.
Newly built in 2021, each unit offers single-floor living across 3 bedrooms and 2 full bathrooms in approximately 1,200 square feet alongside a one-car attached garage and private, fenced backyards. Built on reinforced concrete slabs with a wood frame structure cladded with fiber cement siding and a brick facade on the exterior and finished with hardwood cabinets and woodgrain LVP flooring on the interior, each unit offers Class-A finishes for maximum tenant appeal combined with long-term durability for minimized capital maintenance expenditure.
Cor3 Capital
Cor3 Capital is a Houston-based sponsor of single-family, built-to-rent ("BTR") investments in key Texas markets with strong fundamental growth and demand characteristics. Founded in 2020, Cor3 has grown slowly and steadily since inception to now manage nearly $200 million of single-family BTR assets with nearly 900 units. Cor3 prioritizes steady, organic growth by focusing on the key fundamental differences that position single-family BTR properties to outperform other residential rental investments. With a seasoned leadership team that has a deep background in all aspects of real estate and a strong track record in Texas single-family and built-to-rent investments in particular, Cor3 works to remain a step ahead of the curve.
https://www.cor3.com/-
Ian RussManaging Principal -
Ali HasanManaging Principal
Ian Russ is responsible for Cor3's overall corporate operations and strategy while also managing certain aspects of the capital markets, acquisition, and asset management of individual investments. Ian has nearly 20 years of real estate investment and debt and equity capital markets experience as a principal and as an institutional investment manager. Prior to Cor3, Ian was the Chief Investment Officer of a sovereign wealth entity where he was responsible for a portfolio of real estate assets located in the USA, UK, Africa, and the Middle East with an enterprise value of over $5 billion.
Ali Hasan is responsible for Cor3's acquisition pipeline, disposition process, and its full analytical function, in addition to certain aspects of the asset management of individual investments. Prior to Cor3, Ali co-founded and operated a highly successful investment platform that acquired, renovated, and sold approximately 2,000 single-family properties with a market value in excess of $250 million across all major Texas markets. Before shifting into real estate, Ali spent nearly 10 years as an oil and gas engineer with GE.
| Property Name | City, State | Asset Type | Status | Acq Date | Units | Purchase Price | Sales Price or Estimated Value | IRR | EMx |
| Sydney's Park | Houston, Texas | Single-Family, Built-to-Rent | Owned | 12-02-2021 | 41 | $13,300,000 | $14,750,000 | NA | NA |
| Salt Creek I | Lubbock, Texas | Single-Family, Built-to-Rent | Sold | 05-10-2021 | 80 | $12,000,000 | $14,700,000 | 26.4% | 1.41x |
| Palm Trace | Houston, Texas | Single-Family, Built-to-Rent | Owned | 05-28-2021 | 94 | $18,500,000 | $21,575,000 | NA | NA |
| Crest at Cooper | Lubbock, Texas | Multi-Family | Owned | 07-08-2021 | 128 | $19,300,000 | $20,700,000 | NA | NA |
| Oak Forest | Houston, Texas | Single-Family, Built-to-Rent | Owned | 07-14-2021 | 65 | $19,314,000 | $25,700,000 | NA | NA |
| Tech Village | Lubbock, Texas | Single-Family, Built-to-Rent | Owned | 03-01-2021 | 25 | $4,500,000 | $5,600,000 | NA | NA |
| Hunters Pond | Elkhart, Indiana | Multi-Family | Sold | 02-09-2021 | 76 | $7,120,000 | $8,812,870 | 22.2% | 1.37x |
| Salt Creek II | Lubbock, Texas | Single-Family, Built-to-Rent | Owned | 05-11-2021 | 80 | $14,700,000 | $16,500,000 | NA | NA |
| Woodwind | Elkhart, Indiana | Multi-Family | Sold | 02-09-2021 | 95 | $7,180,000 | $8,887,130 | 22.2% | 1.37x |
| Hayden's Park | Lubbock, Texas | Single-Family, Built-to-Rent | Owned | 03-10-2022 | 52 | $13,400,000 | $14,330,550 | NA | NA |
| Louetta Creek | Houston, Texas | Multi-Family | Owned | 03-02-2022 | 44 | $12,320,000 | $15,900,000 | NA | NA |
| Rella Village | Houston, Texas | Multi-Family | Owned | 09-15-2022 | 102 | $19,000,000 | $27,000,000 | NA | NA |
| Totals/Weighted Avg. | 882 | $160,634,000 | $194,455,550 |
The above bios and track record were provided by Cor3 Capital and have not been independently verified by RealtyMogul.
Cor3 acquired the property from the original developer in 4 separate stages over the course of approximately 12 months. During that staggered acquisition period, and for approximately 9 months following the final stage of acquisition, the property was leased up by Cor3 and its property management partners and is now approximately 97.0% leased with an expectation of an average occupancy during the hold period of 95.0%.
Based on the property's stabilized operations, in September 2023, Cor3 placed a 10-year, fixed-rate loan on the property with a repeat lender relationship, ensuring that the in-place, stable cash flow derived from the stabilized operations of the property is supported by a property loan that mirrors the reality of the property's operations. With the staggered acquisition and lease-up complete, along with long-term, stable financing in place, the forward-looking business plan involves balancing two key return drivers: maintaining occupancy at an optimal level while simultaneously maximizing rent growth while maintaining maximum occupancy. Expense control will be a key, ongoing initiative to ensure the property maintains the higher average Net Operating Income margins of 60% to 65% expected of a single-family, built-to-rent property such as Cypress Grove, an initiative that will be accomplished through the on-site property and asset management team that oversees all 5 properties and nearly 400 units that Cor3 owns and operates in Lubbock, Texas.
Cypress Grove in Lubbock, TX, is a detached single-family, built-to-rent community located in the North Lubbock submarket. The property consists of 75 contiguous, free-standing units, each on individual tax parcels. The homes are located on public streets in a neighborhood setting, surrounded by other single-family homes, and there is no homeowner's association. All homes offer a similar 1,200 square foot, 3-bed/2-bath layout and cottage-style design, offering private backyards, driveways, and garages.
In order to comply with the Sponsor’s ethical investment guidelines, the transaction is structured using a finance lease arrangement where a leasehold interest (as opposed to a fee simple interest) will be held in the Property pursuant to various finance lease agreements with a Sponsor affiliate. Such Sponsor affiliate will lease and convey all rights of ownership of the Property (except for the fee simple interest) to a subsidiary of the investment entity as well as a unilateral right to acquire the fee simple interest in the Property at a nominal value upon a third-party sale or certain other triggering events. Please see the offering documents for additional information.
Unit Mix
| Unit Type | Avg SF/Unit |
Avg Rent |
Rent PSF |
| Plan A | 1,200 | $1,400 | $1.17 |
| Plan B | 1,200 | $1,400 | $1.17 |
| Plan C | 1,200 | $1,400 | $1.17 |
| Totals / Averages | 1,200 | $1,400 | $1.17 |
Lease Comparables
| Courtyards on the Park | Ashton Pointe Apartments | Hayden's Park | The Pointe Apartments | 19West | Averages | Cypress Grove | |||
| Distance from Subject Property | 6.7 Miles | 7.6 Miles | 9.6 Miles | 4.6 Miles | 7.6 Miles | 7.2 Miles | NA | ||
| Year Built | 1963 | 2017 | 2021 | 1973 | 2019 | 1999 | 2021 | ||
| Number of Units | 103 | 80 | 52 | 90 | 224 | 110 | 75 | ||
| Rental Rate (Per SF) | $1.21 | $1.39 | $1.22 | $1.12 | $1.37 | $1.26 | $1.17 | ||
| Tenant Lease Size (SF) | 962 SF | 952 SF | 1,350 SF | 850 SF | 756 SF | 974 SF | 1,200 SF | ||
| Lease Type | 12-month | 12-month | 12-month | 12-month | 12-month | 12-month | 12-month | ||
Sales Comparables
| Salt Creek Ranch Townhomes | Ariza Corpus Christi | Thayer Point | Century Palm Bluff | Hayden's Park | Averages | Cypress Grove | |||
| Sale Date | 05-01-2021 | 11-01-2021 | 12-01-2021 | 09-01-2021 | 02-09-2022 | 10-9-021 | NA | ||
| Sales Price | $14,700,000 | $50,984,934 | $42,732,900 | $43,569,000 | $13,400,000 | $33,077,367 | $16,738,875 | ||
| Year Built | 2017 | 2020 | 2020 | 2017 | 2021 | 2019 | 2021 | ||
| # of Units | 80 | 286 | 266 | 250 | 52 | 187 | 75 | ||
| Average Unit Size | 951 SF | 830 SF | 795 SF | 952 SF | 1,645 SF | 1,035 SF | 1,200 SF | ||
| Sales Price / Unit | $183,750 | $178,269 | $160,650 | $174,276 | $257,692 | $190,927 | $223,185 | ||
| Sales Price / SF | $193 | $215 | $202 | $183 | $157 | $190 | $186 | ||
| Occupancy at Sale | 98.0% | 97.0% | 80.0% | 96.0% | 94.0% | 93.0% | 95.0% | ||
| Distance from Subject Property | 12.3 Miles | 554 Miles | 332 miles | 533 Miles | 9.6 Miles | 277.2 mi | NA | ||
Market Overview
As the 11th largest city in Texas and the largest city in West Texas (US Census Bureau), Lubbock is the heart of West Texas and the economic center of a 26-county region that is home to more than 500,000 residents (BBG Real Estate Services). In contrast with many other mid-sized metros in Texas, the local economy of Lubbock is relatively diversified, driven in part by the education, trade, and healthcare sectors. Fortunately, most of these industries have proven to be fairly stable during uncertain economic times. Education in this city revolves around the ubiquitous presence of Texas Tech University: the state's sixth-largest university. Texas Tech is a key employer for many renters, especially those employed in academic research, the life sciences, administrative positions, and sports and athletics. This diverse array of jobs provides the backbone for the local economy, stimulating a sizeable amount of the apartment demand in this city. (CoStar)
Lubbock’s recovery post-pandemic was strong enough to put the metro area in the top quartile of performers nationally, according to data from Economy.com. Leisure/hospitality was a particular bright spot thanks to the ever-growing draw of Texas Tech University. Further evidence of Lubbock's economic performance is the jobless rate which sits closer to its pre-pandemic rate than the Texas average. House price growth has been the strongest seen in the last two decades, even if it has not quite kept pace with the overall high levels of growth seen in Texas as a whole (BBG Real Estate Services).
Overall, Lubbock benefits from the large university presence of Texas Tech University with over 40,000 students, its below-average business costs, a diverse economy relative to metro areas that are similar in size, and its below-average employment volatility. It is expected that Lubbock’s economy will remain stable and grow steadily, even if not at as fast a pace as fast-growing Texas overall. According to Economy.com, Lubbock is expected to have an average annual employment growth rate of 1.7% over the next five years (2022-2026), a decrease in unemployment from 4.95% in 2022 to 2.35% in 2026, and an average annual growth rate on personal income of 4.3% over the next five years (2022-2026).
As a multi-family investment market, Lubbock is perenially stable. According to Costar, since 2021, Lubbock has had a stable vacancy rate across the entire market of approximately 8.7%. From 2022 to 2026, Costar anticipates asking rent growth and effective rent growth to be 3.5% and 3.4% per annum, respectively, with concession loss averaging 0.7% per annum.
Submarket Overview
Cypress Grove is located in the fast-growing North Lubbock submarket. Major amenities like Lubbock Country Club, Hillcrest Golf & Country Club, Meadowbrook Canyon Creek Golf Club, and Berl Huffman Athletic Complex), industrial districts, including the Lubbock Preston Smith International Airport, are all within minutes of the property. In addition, downtown Lubbock and Texas Tech are a 10-minute drive to the south.
Access to major cross-town highways is within immediate proximity to the property. The property is surrounded by single-family homes, which creates a desirable residential community feel. An industrial/commercial area just to the south and Lubbock’s international airport just 10 minutes to the north are job centers within the immediate vicinity.
The area around Cypress Grove is a fast-growing neighborhood that is predominantly owner-occupied single-family homes which keeps demand high for rental product within the immediate area, especially at Cypress Grove, where renters get a full house with a backyard and garage at an affordable rental rate.
The market area is considered to be in a stable stage of its life cycle. The market area has an average reputation in respect to most types of real estate, and residential improvements are generally in fair to good condition. With good regional linkage to major employment centers and the presence of the Lubbock Country Club and the nearby Hillcrest Golf & Country Club, as well as abundant land that is cheaper than southwest Lubbock, prospects appear favorable for transitioning into a growth stage in the near future.
Total Capitalization
| Sources of Funds | $ Amount | $ / Unit |
| Senior Loan | $8,714,025 | $116,187 |
| LP Equity | $3,295,000 | $43,933 |
| GP Equity(1) | $366,081 | $4,881 |
| Total Sources of Funds | $12,375,106 | $165,001 |
| Uses of Funds | $ Amount | $/Unit |
| Purchase Price | $11,200,000 | $156,933 |
| Transaction Costs | $67,046 | $894 |
| Closing, Legal & Other Transaction Costs | $298,161 | $3,975 |
| Cor3 Acquisition Fee | $112,000 | $1,569 |
| Cor3 Debt Placement Fee | $87,140 | $1,162 |
| Financing Fees/Costs | $202,952 | $2,706 |
| Working Capital (Cash Reserves) | $407,807 | $2,214 |
| Total Uses of Funds | $12,375,106 | $165,001 |
(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: Lending One
- Loan Type: Permanent Loan
- Loan-to-Value (LTV): 74.0%
- Loan-to-Cost (LTC): 68.6%
- Estimated Proceeds: $8,714,025
- Interest Type: Fixed
- Annual Interest Rate: 6.57%
- Interest-Only Period: Full Term
- Amortization: N/A - Balloon Payment due at Maturity
- Prepayment Terms: Yield Maintenance through April 1, 2033
- Extension Requirements: N/A
- 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.
(2) The Property has been financed with a long-term, 10-year, fixed-rate loan. This loan includes a provision for a prepayment premium if the loan is repaid prior to the maturity date of the loan. If the loan is repaid prior to maturity and the interest rate available in the market for the lender to redeploy the funds from the repaid loan is the same as or higher than the interest rate on the Property's loan, then there is no prepayment premium due to the lender; if the interest rate available in the market for the lender to redeploy the funds from the repaid loan is lower than the interest rate on the Property's loan then there will be a calculation of a prepayment premium due to the lender. As the loan matures, the total potential prepayment premium is steadily reduced through maturity.
Cor3 Capital intends to make distributions as follows:
- Pari-passu all cash flow available for distribution to the Equity Investors until the Equity Investors receive a Preferred Return of 8.0% (IRR);
- Pari-passu all cash flow available for distribution to the Equity Investors until the Equity Investors have received aggregate distributions equal to the aggregate unreturned equity Contributions;
- 72% / 28% ( 80% to Equity Investors / 20% to Promoted/Carried Interest ) of all cash flow available for distribution thereafter.
Cor3 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 February 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of Cor3 Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves.
Cor3 Capital will receive a promoted/carried interest as indicated above.
| Cash Flow Summary | |||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| Effective Gross Revenue | $1,293,518 | $1,322,714 | $1,366,986 | $1,410,889 | $1,455,229 | $1,500,381 | |
| Total Operating Expenses | ($463,560) | ($477,178) | ($491,631) | ($506,467) | ($521,722) | ($537,418) | |
| Net Operating Income | $829,958 | $845,536 | $875,355 | $904,422 | $933,507 | $962,962 | |
| Project-Level Cash Flows | |||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| Net Cash Flow | ($3,661,081) | $274,021 | $286,783 | $298,829 | $309,349 | $318,212 | $7,913,109 |
| Investor-Level Cash Flows(2) | |||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| Net Cash Flow | ($3,298,634) | $246,893 | $258,392 | $269,245 | $278,723 | $286,709 | $6,361,709 |
| Investor-Level Cash Flows - Hypothetical $50,000 Investment(2) | |||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| Net Cash Flow | ($50,000) | $3,742 | $3,917 | $4,081 | $4,225 | $4,346 | $96,429 |
(1) Equity Investors include all members part of the Limited Partnership and General Partnership, including Cor3 Capital.
(2) 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 Cor3 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 | 1.0% of Purchase Price | Cor3 Capital, LLC | Capitalized Equity Contribution |
| Financing Fee | 1.0% of Loan Amount | Cor3 Capital, LLC | 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 | 1.0% of Equity Contribution | Cor3 Capital, LLC | Cash Flow |
| Property Management Fee | Greater of 2.0% of Gross Monthly Collection or $3,000/month | Asset Plus USA, LLC | 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.
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. A portion of the offering proceeds may be allocated as a reserve to ensure timely payment of the ongoing licensing fees for RM Technologies’ Administration Solution. For the avoidance of doubt, the Administration Solution Fee is not due with respect to any quarter until the Administration Solution has been provided by RM Technologies and without regard to any amounts on reserve for the payment of such fees. 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.