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.
Founded in 2004, A.J. Khair Construction, Inc. (‘A.J. Khair’ or ‘The Sponsor’) is a Southern California-based real estate development and construction firm specializing in multifamily, lodging, and commercial mixed-use developments including hotel rooms, retail space, and residences. A.J. Khair’s experience not only as a developer but also as a contractor provides the distinct advantage of identifying, planning, and constructing projects that are on-time and cost-effective.
In order to maintain its reputation as a principled developer, A.J. Khair works closely with public officials, local stakeholders, renowned architects, and carefully selected subcontractors with substantial experience and market expertise. Investors should note that the Sponsor recently completed a 60-unit multifamily apartment development less than 2 miles from the Property and has leased it to 96% occupancy since completion in June 2022.
The Northeast Los Angeles Submarket has experienced relatively muted levels of construction which is a function of lack of available supply coupled with a challenging municipal process. The Northeast Los Angeles Submarket has seen just 754 units delivered over the course of the last six years which equates to just 3.8% of existing inventory. Absorption is projected to remain positive for every quarter through 2028, which will offset any currently planned or in-progress developments.
Given the high barriers to entry for new developments, Echo Park remains relatively unscathed by competitive supply, contributing to notable increases in home prices and rents. The neighborhood's strategic location offers a blend of a distinctive local ambiance plus proximity to public transportation, including the Metro Red Line, and employment hubs like DTLA and Hollywood.
Well-Located New Development in a Dynamic Los Angeles Enclave: Allesandro Apartments (“The Property”) is a fully entitled, 43-unit multifamily project being developed at the intersection of two of the most dynamic and dense neighborhoods in Los Angeles, Echo Park and Silver Lake, which feature a growing population of 410,000+ individuals within a 3-mile radius. The Property will consist of large one- and two-bedroom units and sits proximate to three of Southern California’s major arterials: I-5, US-101, and I-110.
A.J. Khair Construction, Inc.
A.J. Khair Construction, Inc. ('A.J. Khair') is a real estate development and construction firm that excels in creating and constructing real estate developments of all types. The firm’s expertise in both the development and construction aspects of the process allows it to identify, plan, and construct projects in a timely and cost-effective manner. A.J. Khair takes on a variety of projects ranging in size from single-family homes to large mixed-use developments that include hotels, residential units, and retail space specializing in those that create value for both investors and the community. The Company takes pride in crafting real estate developments distinguished by their high-quality design and construction. To uphold their reputation, they collaborate closely with city officials, renowned architects, and handpicked subcontractors, ensuring the delivery of extraordinary products.
At A.J. Khair, their extensive industry knowledge and dedication to clients result in comprehensive project planning from start to finish. Furthermore, the Company is actively focusing on sustainable design and construction methods, recognizing the increasing importance of these factors. They prioritize real estate development and construction that combines distinctive design with environmentally friendly practices and building materials.
Upon completion, Moss & Company will manage day-to-day operations at the Property. Founded in 1960, Moss & Company is Southern California's leader in property management, maximizing revenue growth along with expense control to increase both property value and cash flow. They actively manage over 13,000 residential units, 100 furnished apartment homes, 10 student housing properties, and over 2M SF of retail and office space in Southern California. President of Moss & Company, Chris Gray has been instrumental in building its multifamily business from 4,500 to over 14,000 units under management in the Greater Los Angeles Area.https://www.ajkhair.com/
Demitri is the founder and President of A.J. Khair Construction Inc. and has over thirty years of real estate investment, development, and construction experience. He started his career in real estate by investing in and developing projects for his and his family’s personal investment. In 2004, he decided to start A.J. Khair to focus his career exclusively on real estate investment and development.
As President, Demitri is directly involved in the development and operations of all ventures, from acquisition through financing, design, construction, and lease-up. Since founding A.J. Khair in 2004, the Company has developed hotels, apartments, condominiums, and custom homes. Demitri is a licensed general contractor in the state of California. He resides in Sherman Oaks with his two sons. Demitri is an avid hockey fan and is actively involved with youth hockey.
Scott joined A.J. Khair in 2006. During his time with the company, he has worked on all facets of the real estate development process, including acquisitions, design, entitlement, financing, and construction of the company’s projects. As Vice President Scott is responsible for overseeing the day-to-day operations of the company.
Prior to joining A.J. Khair, Scott worked for H.B. Parkco Construction and the Los Angeles County Department of Regional Planning. His prior experience included working on the construction of over 1,000 multi-family units and helping the public with land use issues within the County of Los Angeles. Scott received his Bachelor of Science degree in urban planning from the University of Southern California. He is a licensed California real estate broker and an active member of the Urban Land Institute. He resides in Rancho Palos Verdes with his wife and son.
Jason is a trained economist and financial analyst with 30+ years of experience in real estate investment underwriting, valuation, impact analysis, and litigation. Jason started his career in management consulting with E&Y where he focused on business strategic planning and litigation support in the technology, real estate, and banking sectors. Since then and prior to joining A.J. Khair, he worked for several small consulting practices focused on land use, real estate, and natural resource development and management.
As A.J. Khair’s head of finance, Jason directs and is actively involved in the firm’s investment evaluations, deal structure, and equity and debt financing activities. Jason is a CPA in California and holds the CFA designation from the CFA Institute. He has a B.Sc. in resource economics from U.C. Berkeley and an M.Sc. in resource economics from U.C. Davis.
|Property Name||City, State||Asset Type||Status||Acq Date(2)||Units or SF||Total Costs(1)||Sales Price or Estimated Value||Status|
|The Sunset Hue||Los Angeles, CA||Multifamily||OWNED||03-09-2005||40 Units||$21,885,000||$32,000,000||Completed|
|Solari Silver Lake||Los Angeles, CA||Multifamily||OWNED||01-25-2016||60 Units||$27,000,000||$40,000,000||Completed|
|West Sherman Way Apts||Reseda, CA||Multifamily||OWNED||04-17-2014||49 Units||$15,000,000||$25,000,000||Completed|
|125 Pacific||Santa Monica, CA||Condo/Townhomes||SOLD||12-31-2008||9 Units||$9,300,000||$12,500,000||Completed|
|935 N Hudson||Los Angeles, CA||Condo/Townhomes||SOLD||02-20-2008||6 Units||$3,840,000||$5,258,500||Completed|
|Paloma Ave||Venice, CA||Single-Family||OWNED||12-08-2014||1 Units||$2,560,000||$5,000,000||Completed|
|Paloma Ave||Venice, CA||Single-Family||SOLD||12-08-2014||1 Units||$1,800,000||$2,125,000||Completed|
|Paloma Ave||Venice, CA||Multifamily||SOLD||12-08-2014||6 Units||$1,100,000||$1,800,000||Completed|
|1305 Cabrillo||Venice, CA||Single-Family||SOLD||03-22-2013||1 Units||$2,400,000||$3,850,000||Completed|
|10405 Sarah||Toluca Lake, CA||Single-Family||SOLD||02-05-2014||1 Units||$2,225,000||$3,600,000||Completed|
|La Peer Hotel||West Hollywood, CA||Hospitality||OWNED||2005||105 Keys||$60,000,000||$100,000,000||Completed|
|Wilcox Ave||Los Angeles, CA||Retail/Multifamily Development||OWNED||06-13-2013||18,000 SF||$29,500,000||$40,000,000||Pre-Development|
|San Pedro Tribute||San Pedro, CA||Hospitality||OWNED||03-28-2018||80 Keys||$41,116,000||$51,543,000||Pre-Development|
|1667 Allesandro||Los Angeles, CA||Multifamily||OWNED||08-24-2021||42 Units||$19,859,614||$30,800,000||Pre-Development|
|1931 Wilcox||Los Angeles, CA||Multifamily||OWNED||10-29-2021||99 Units||$6,300,000||$9,000,000||Pre-Development|
|1120 El Centro||Los Angeles, CA||Condo/Townhomes||SOLD||2005||18 Units||$10,000,000||$15,000,000||Completed|
|616 Robertson||West Hollywood, CA||Retail/Office||OWNED||1992||5,200 SF||$1,458,413||$8,500,000||Completed|
|8228 Sunset||Los Angeles, CA||Office||OWNED||1991||35,000 SF||$624,575||$35,000,000||Completed|
|8240 Sunset Blvd||West Hollywood, CA||Mixed-Use||OWNED||1991||170,000 SF||$150,000,000||$250,000,000||Pre-Development|
|507 Orlando||Hollywood, CA||Condo/Townhomes||SOLD||2007||9 Units||$9,000,000||$13,000,000||Completed|
|9200 Cotharin||Malibu, CA||Single-Family||SOLD||N/A||12,000 SF||$5,000,000||$10,000,000||Completed|
|2615 Creston||Los Angeles, CA||Single-Family||SOLD||1992||3,500 SF||$1,000,000||$1,500,000||Completed|
|2621 Creston||Los Angeles, CA||Single-Family||SOLD||1995||3,500 SF||$1,000,000||$1,800,000||Completed|
|Outpost||Los Angeles, CA||Single-Family||SOLD||2006||5,000 SF||$1,800,000||$1,650,000||Completed|
|Fulton||Los Angeles, CA||Single-Family||SOLD||2003||3,500 SF||$2,000,000||$2,800,000||Completed|
|Beverly||Beverly Hills, CA||Office Rehab||SOLD||1989||60,000 SF||$5,500,000||$9,000,000||Completed|
|La Brea||Los Angeles, CA||Office Rehab||SOLD||1989||7,000 SF||$2,700,000||$5,000,000||Completed|
|Sunset Office||Los Angeles, CA||Office Rehab||SOLD||1990||25,000 SF||$4,500,000||$7,800,000||Completed|
(1) Figures in the Total Cost column are anticipated total costs for projects in pre-development and approximate rounded figures for completed/sold properties.
(2) Properties acquired before the formation of A.J. Khair in 2004 were acquired and owned by Demitri Samaha. The represented Track Record encompasses all real estate transactions for A.J. Khair and Demitri Samaha, and does not exclude any deals with unfavorable outcomes (e.g. default, foreclosure, loss).
The above bios and track record were provided by A.J. Khair Construction, Inc. and have not been independently verified by RealtyMogul.
A.J. Khair Construction, Inc. (A.J. Khair) acquired the Property in 2021 and has since completed the full entitlement process through the Los Angeles Planning Department. The Sponsor has received pricing based on 100% complete construction drawings (CDs) and is ready to break ground once LP Equity is committed and funded as all project permits are RTI. The Sponsor is in final negotiations on the GMAX with the third-party GC which will be finalized by closing.
A.J. Khair and its affiliates will invest over $3 million dollars of equity into the Project by construction start and have secured attractive construction financing from Century Housing. The proposed construction timeline is 24 months (inclusive of four months of pre-development), with construction commencing in March 2024, and projected completion in December 2025. Lease-up and stabilization are anticipated to occur within the following 12 months based on their recent experience in the supply-constrained submarket. Based on a 36-month hold period and 4.50% exit cap rate, the Project is expected to yield a 27.3% levered IRR and 2.02x equity multiple at the project level and 23.4% IRR and 1.84x for Class A Members net of certain offering expenses.
The Sponsor's projected rental income rates are based on market rent comparables from CoStar and Axiometrics as well as the actual rents at Solari Silverlake. Solari Silverlake is the Sponsor's recently completed 60-unit property that is located less than 2 miles from the Allesandro development site. Solari has leased up to 96% occupancy as of July 10, 2023, at rates in line with the Sponsor's untrended projections for Allesandro Apartments. Given the team's extensive experience in developing this product type in various submarkets across the Los Angeles metro area, the Sponsor is confident they can deliver an on-time, on-budget project that will benefit both the community and investors.
|Hard Costs||Total Amount||Per Unit|
|Wood, Plastics & Composites||$1,122,708||$26,109|
|Heating, Ventilating, & Air Conditioning||$714,936||$16,626|
|Utilities & Fire Suppression||$51,199||$1,191|
|Overhead & Profit||$976,591||$22,711|
|Total Hard Costs||$11,500,000||$267,442|
|Soft Costs||Total Amount||Per Unit|
|Permits & Fees||$765,000||$17,791|
|Project Management Personnel||$150,000||$3,488|
|Real Estate Tax||$120,000||$2,791|
|Plan Check Fees||$70,000||$1,628|
|Inspection / 3rd party||$50,000||$1,163|
|Contingency Soft Cost||$40,000||$930|
|Temporary Services / Construction||$35,000||$814|
|Soils Test / Report||$30,000||$698|
|Traffic Control Plan||$29,000||$674|
|FF&E (Furniture Fixtures and Equipment)||$25,000||$581|
|Seismic / Geology||$18,500||$430|
|Utility Designer (Public Agency)||$15,000||$349|
|Utility Costs Development /Not temporary services||$15,000||$349|
|Asset Management Fee||$15,000||$349|
|Land Use Consultant||$10,000||$233|
|Meals / Entertainment||$5,000||$116|
|Dry Utility Engineer||$5,000||$116|
|Inspection / City / Approving Agency||$4,000||$93|
|Temporary Power Designer / Engineer||$3,000||$70|
|Temporary Services / Development||$3,000||$70|
|Total Soft Costs||$2,296,414||$53,405|
|Financing + Other Costs||Total Amount||Per Unit|
|Property (includes acquisition costs)||$3,630,500||$84,430|
|Post Opening Interest Reserve (Over and Above Construction Interest Reserves with Lender)||$315,413||$17,540|
|Interest Carry to Date||$150,000||$3,488|
|Construction Interest & Financing Costs||$1,160,287||$26,655|
|Loan Extension Costs (additional WC)||$117,000||$2,721|
|Total Financing + Other Costs||$6,063,200||$150,881|
The strategically located 0.15-acre development site is located in the heart of the burgeoning Echo Park and Silver Lake neighborhoods ideally positioned at the nexus of three of Southern California’s major arterials including I-5, US-101, and I-110 providing convenient access to the entire Los Angeles Metro region. The 43-unit Property will feature 37 one-bedroom units (including three affordable units) averaging a large 920 square feet and office space, and 6 two-bedroom units (including one affordable unit) averaging 973 square feet.
Units at Allesandro Apartments will be complemented by best-in-class in-unit and community amenities including in-unit washer/dryer, hardwood flooring, secure/covered parking, amenitized rooftop, and high-end finishes. A.J. Khair is turning its energies towards the increasingly important concept of sustainable design and building techniques as evidenced by recently completed projects such as 60-unit Solari Silverlake located less than 2 miles from the Property and 40-unit 6630 Sunset Blvd located in Hollywood.
|Unit Type||# of Units||Avg SF/Unit||Avg Rent||Rent PSF|
|One Bedroom - BMR||3||920||$1,726||$1.88|
|Two Bedroom - BMR||1||973||$1,776||$1.82|
|Solari Silver Lake||Vica Silver Lake||Milo on Morton||Dillon Silver Lake II||Dillion Silver Lake||Averages||Allesandro Apartments|
|Distance from Subject Property||1.8 mi||1.7 mi||1.0 mi||1.8 mi||1.8 mi||1.6 mi|
|Number of Units||60||31||66||53||49||52||43|
|1 Bedrooms||Market Rent|
|$ / Unit||$2,636||$4,181||$2,399||$2,708||$2,579||$2,901||$3,451|
|Square Feet||655 SF||718 SF||601 SF||629 SF||653 SF||651 SF||920 SF|
|$ / SF||$4.02 / SF||$5.82 / SF||$3.99 / SF||$4.31 / SF||$3.95 / SF||$4.42 / SF||$3.75 / SF|
|$ / Unit||$3,174||$4,800||$3,415||N/A||$3,458||$3,712||$3,553|
|Square Feet||977 SF||945 SF||744 SF||N/A||905 SF||893 SF||973 SF|
|$ / SF||$3.25 / SF||$5.08 / SF||$4.59 / SF||N/A||$3.82 / SF||$3.35 / SF||$3.65 / SF|
|689 S Catalina St||2812 Temple Street||The LC||552 N Hobart Blvd||HIVE Los Angeles||Olivia Apartments||Averages||Allesandro Apartments|
|# of Units||61||42||84||26||33||45||49||43|
|Average Unit Size||799 SF||N/A||978 SF||938 SF||939 SF||1,163 SF||963 SF||928|
|Sales Price / Unit||$485,484||$709,524||$553,571||$526,923||$734,848||$713,333||$620,614||$700,030|
|Sales Price / SF||$608||N/A||$566||$562||$783||$613||$522||$754|
|Occupancy at Sale||N/A||N/A||95.00%||80.00%||95.00%||100.00%||92.50%||95.00%|
|Distance from Subject Property||3.5 mi||1.3 mi||4.7 mi||3.7 mi||8.0 mi||9.5 mi||5.1 mi|
Los Angeles is the nation’s second most populous city and the major gateway for Pacific Rim and Latin American trade. Los Angeles County has a total population of more than 10 million and is expected to reach 11 million in 2025. It is the second largest manufacturing center in the United States, employing over 350,000 individuals within 12,500 different establishments and encompassing a rich and diverse array of industries and service businesses. Los Angeles County has a large, well-trained workforce with over 5 million people. Almost one-third of workers hold a bachelors or advanced degree.
Tourism continues to be an important driver of the local economy. Visitor counts to Los Angeles County reached over 40 million in 2021 and those tourists spent nearly $100 billion. Traditional tourist areas like Downtown, Hollywood, Beverly Hills, and Santa Monica continue to attract millions of visitors, and the development of the multibillion SoFi stadium has brought additional media attention. L.A. remains an entry point for international migration and an attractive destination for younger tech, entertainment, and professional workers.
The Los Angeles Metro has recently experienced significant capital inflows towards its media and technology industry, already well-known as the nation’s and the world’s number-one market for content production. Warner Bros. is investing billions of dollars in new studio space and production facilities in Los Angeles, as the company seeks to maintain its position as a major player in the global entertainment industry. In 2018, CBS sold CBS Television City to Hackman Capital Partners for $750 million. Hackman Capital Partners has plans to invest $1.25 billion in renovating and expanding the studio complex. The renovations are expected to be completed in 2025. Echelon at Old Sears is a proposed $450 million studio complex in Hollywood that would replace a shuttered Sears department store. The 6AM studio site in the Arts District in Los Angeles was previously planned to be a mixed-use development but is now being redeveloped into a film and television production campus. A $650 million studio complex is planned for downtown Los Angeles' Arts District, on the site of the former Los Angeles Times printing plant.
Echo Park, a true embodiment of the authentic L.A. experience, finds itself at the very heart of the city's development, nestled between Downtown/Chinatown to the south and Silver Lake/Los Feliz to the north. This vibrant neighborhood has evolved into one of L.A.'s trendiest hotspots, serving as a captivating bridge between the allure of the big city and the charm of a close-knit community. Echo Park showcases an array of trendy entertainment venues, restaurants, and a flourishing arts scene, drawing in a diverse mix of long-time residents and a fresh influx of young professionals.
Echo Park is designated as a Geographically-Targeted Economic Development Area by the California Department of Housing and Community Development. Specifically, it falls into the Enterprise Zone Program, which provides special incentives to business owners to promote the creation of new jobs. Echo Park benefits from the program because its business owners are given significant tax incentives to operate in the area. As a result, owners can invest more money into their businesses, creating jobs and overarching economic prosperity.
The Northeast Los Angeles Submarket boasts a stable vacancy rate of 4.6%, which is in line with the average for the entire Los Angeles apartment market. The Submarket’s current vacancy rate is identical to the trailing 3-year vacancy rate and is projected to stay consistent, compressing to 4.30% by 2028 per 2023 CoStar data. The Northeast Los Angeles Submarket is primarily residential but located near major L.A. job hubs. With 23 Fortune 500 headquarters and continuous job and population growth, demand for multifamily assets in Los Angeles remains high, especially with international migration offsetting domestic population loss. The city's appeal to younger professionals further drives the demand for apartments, making Los Angeles a sought-after destination for housing in the competitive real estate landscape.
|Sources of Funds||$ Amount||$/Unit|
|Class B Members (Sponsor)(1)||$3,000,000||$69,767|
|Class A Members(2)(3)||$5,159,614||$119,991|
|Total Sources of Funds||$19,859,614||$461,851|
|Uses of Funds||$ Amount||$/Unit|
|Property (includes acquisition costs)||$3,630,500||$84,430|
|Post Opening Interest Reserve (Over and Above Construction Interest Reserves with Lender)||$315,413||$7,335|
|Interest Carry to Date||$150,000||$3,488|
|Construction Interest & Financing Costs||$1,160,287||$26,983|
|Loan Extension Costs (additional WC)||$117,000||$2,721|
|Total Uses of Funds||$19,859,614||$461,851|
(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.
(2) Up to $2,000,000 of this amount may include friends and family equity, in which case those investors would be Class B Members. This would increase the Class B investment and decrease the Class A investment by the same amount.
(3) The Sponsor anticipates up to $3,000,000 of the Class A equity via the RealtyMogul Platform.
The expected terms of the debt financing are as follows:
- Loan Type: Construction Loan
- Lender: Century Bank
- Term: 24 Months & 100 bps at end of 24 months for single-year extension
- Loan-to-Value (LTV): 38.9%
- Loan-to-Cost (LTC): 58.9%
- Estimated Proceeds: $11,700,000
- Interest Type: Floating
- Spread Above SOFR: 2.19% (All-in Rate Floor: 7.25%)
- Interest-Only Period: Full-Term
- Prepayment Terms: No lockout or prepayment penalties. No exit fee.
- Extension Requirements: May extend if no prior incidences of default and if borrower may replenish interest reserves, to the extent necessary, to carry through the extension period
- Recourse Description: Full 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 Sponsor's use of debt.
A.J. Khair Construction, Inc. intends to make distributions from 1667 Allesandro LLC as follows:
- Pari passu all cash flow available for distribution to the Equity Investors until the Equity Investors receive a Preferred Return of 6.0%;
- 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;
- 85% / 15% (85% to Investors / 15% to Promote/Carried Interest) of all cash flow available for distribution thereafter.
A.J. Khair Construction, Inc. 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 in February 2027. Distributions are at the discretion of A.J. Khair Construction, Inc., who may decide to delay distributions for any reason, including maintenance or capital reserves.
An affiliate of A.J. Khair Construction, Inc. will receive a promoted/carried interest as indicated above.
|Cash Flow Summary|
|Year 1||Year 2||Year 3|
|Effective Gross Revenue||$0||$1,334,966||$1,833,134|
|Total Operating Expenses||$0||$445,111||$478,575|
|Net Operating Income||$0||$889,855||$1,354,559|
|Project-Level Cash Flows|
|Year 0||Year 1||Year 2||Year 3|
|Net Cash Flow||($8,159,614)||$0||$0||$16,454,010|
|Investor-Level Cash Flows(2)|
|Year 0||Year 1||Year 2||Year 3|
|Net Cash Flow||($3,060,000)||$0||$0||$5,645,011|
|Investor-Level Cash Flows - Hypothetical $50,000 Investment(2)|
|Year 0||Year 1||Year 2||Year 3|
|Net Cash Flow||($50,000)||$0||$0||$92,239|
(1) Equity Investors include all members part of the Limited Partnership and General Partnership, including affiliates of A.J. Khair Construction, Inc.
(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 A.J. Khair Construction, Inc.'s materials for details. The following fees and compensation will be paid(1)(2):
|Type of Fee||Amount of Fee||Received By||Paid From|
|Acquisition Fee||1.00% of Purchase Price||A.J. Khair Construction, Inc.||Capitalized Equity Contribution|
|Financing Fee||0.75% of Loan Proceeds||A.J. Khair Construction, Inc.||Capitalized Equity Contribution|
|Guarantee Fee||1.50% of Loan Proceeds||Demitri Samaha and Mousa Mesho||Capitalized Equity Contribution|
|Disposition Fee||0.50% of Gross Sales Price||A.J. Khair Construction, Inc.||Sale Proceeds|
|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)
|Consulting Fee||3.00% of Class A funds raised by Sponsor||Jones Lang LaSalle Americas, Inc.||Capitalized Equity Conrtibution|
|Type of Fee||Amount of Fee||Received By||Paid From|
|Asset Management Fee||1.25% of Effective Gross Income||A.J. Khair Construction, Inc.||Cash Flow|
|Property Management Fee||4.00% of Effective Gross Income||Moss Management Services, Inc.||Cash Flow|
|Developer Fee||3.50% of Hard Costs||A.J. Khair Construction, Inc.||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. 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.