FORMALIZED DUE DILIGENCE PROCESS 
Sponsors

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.

Escrow accounts

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.

Boots on the ground

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Confidentiality Agreement
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Funded
Estimated Hold Period 4.75 Years
Estimated First Distribution 5/2024
FUNDED 100%
...
View Our Due Diligence Process
Offered By
RM Communities
Investment Strategy Value-Add
Investment Type Equity
Minimum Investment 35000
Overview
Hunters Ridge is a value-add multifamily investment with favorable fixed rate assumable financing in East Lansing, MI.
Asset Quality

Hunters Ridge is a 2004 vintage, 170-unit asset featuring a favorable unit mix of spacious one-, two-, and three-bedroom apartments and townhomes averaging 1,169 SF. 79 units at the Property feature attached garages which are highly desirable in Michigan winters and serve as additional storage space for units. Significant capital has been recently invested in building exteriors and community amenities, including a fully renovated clubhouse, state-of-the-art fitness center, new community dog park, updated outdoor grill stations, gas fire pit with lounge seating, and a children’s playground. The quality of the asset is underscored by the high-quality tenants it attracts. The Property exhibits strong historical occupancy with a desirable, relatively affluent tenant mix that out-earns the submarket average. The seller completed renovations on 38 units which are achieving average premiums of $280 and trending toward $300. Given the value-add program is substantially proven out at the Property, the Sponsor projects proforma stabilized rents to be in-line with recent leases on renovated units.

Attractive Financing
Sponsorship, as part of the acquisition of the Property, will assume the in-place $21,026,000 Fannie Mae loan serviced by Walker & Dunlop. This loan carries a fixed interest rate of 3.33% and represents 55% total leverage. The loan has nearly eight (8) years of term remaining and nearly two (2) years of interest-only period left. The loan can be prepaid with only a 1% fee any time after July of 2028, providing exit flexibility. A 1% fee associated with the loan assumption will be paid to the lender at closing. Sponsorship plans to execute a supplemental loan upon completion of the interior upgrade plan. They anticipate base case proceeds on the supplemental financing of ~$3M, constrained to a 1.35x DSCR. The supplemental loan is underwritten on a fully amortizing basis, with an interest rate reflective of current market conditions. A 1% financing fee is assumed as part of the supplemental loan execution.
Location

Hunters Ridge is situated in a relatively affluent pocket within East Lansing. Anchored by the state capital and Michigan State University (MSU), the area boasts average household incomes within a 5-mile radius of $73,000. The Property is located near two pristine and highly-rated golf courses. The prime location of the Property is underscored by the tenant demographic the Property attracts. The tenants at Hunters Ridge earn an average of $85,000 household income, with an outsized share of tenants working in healthcare and education, two highly resilient industries. Given these income levels among current tenants at the Property, proforma stabilized rents are affordable to the tenant base.

Property at a glance
# of Units 170
Year Built 2004
Current Occupancy 98.2%
Market West Michigan
Class B
Acquisition Price $34,650,000
Investment Highlights
Investment Thesis/Business Plan: RM Communities is under contract to acquire Hunters Ridge at a purchase price of $34.65M. The seller’s renovations are achieving an average premium of approximately $280 over classic units. Upon acquisition, RM Communities will continue the seller’s proven renovation plan to complete renovations on the remaining 132 classic units. Underwritten stabilized rents represent an average $17, or 0.9% increase above in-place rents on renovated units. The current business plan projects just under a 5-year hold with an exit at a 5.5% cap rate.
Tenant Base: The Property exhibits strong historical occupancy with a desirable, relatively affluent tenant mix earning an average $85,000 household income. Given the income levels among current tenants at the Property, proforma stabilized rents are affordable to the tenant base.
Market: The Lansing economy is underpinned by recession resistant industries such as government, healthcare, and education. Anchored by the state capital and Michigan State University (MSU), the area boasts average household incomes of $73,000 within a 5-mile radius of the Property. There are no market rate multifamily projects currently under construction. Therefore, we expect limited supply-side pressure on market fundamentals over the next 12-18 months. Market multifamily rents grew 4.3% in the last year and are projected to grow 3.9% annually for the next three years. The Property is located near two pristine and highly rated golf courses.
Attractive Financing: RM Communities will assume the attractive in-place $21.03M Fannie Mae loan at a well-below-market 3.33% fixed interest rate to acquire the asset. This loan carries a fixed interest rate of 3.33% and represents 55% total leverage. The loan has nearly eight (8) years of term remaining and nearly two (2) years of interest-only period left. The loan can be prepaid with only a 1% fee any time after July of 2028, providing exit flexibility. A 1% fee associated with the loan assumption will be paid to the lender at closing. The assumable debt allows for opportunistic future supplemental debt, which could be used during the hold to realize value and return incremental capital to investors.
Deal Narrative: The deal was sourced by RM Communities through their relationship with the existing property manager, Village Green. The sellers brought the deal out to the market in early 2023 with initial pricing expectations of $39M. The seller’s pricing expectations were not met and they pulled the deal off-market. Due to RM Communities’ strong relationship and prior transaction experience with both the broker and seller, they remained in contact and negotiation throughout the first half of the year and were ultimately able to secure the deal on an off-market basis in August 2023 at a significant discount to the original pricing expectation.
Joint Venture with an Experienced Partner: Corridor Ventures is a co-sponsor of this transaction. Corridor is an experienced real estate investor and operator, with deep expertise in the acquisition and operation of over $1 billion of multifamily and student housing properties in the Northeastern, Southeastern, and Midwestern United States. Through its own proprietary acquisitions as well as numerous joint venture partnerships, Corridor has an excellent track record of acquiring and operating multifamily and student assets, executing value-add strategies, and delivering strong risk-adjusted returns upon sale or refinance.
In-Place Institutional Management: Headquartered in Detroit, Village Green currently manages the Property and will be retained to continue managing Hunters Ridge, allowing Sponsorship the ability to leverage their deep understanding of the market and the Property. Village Green is an institutional multifamily operator with a robust team managing over 40,000 units in 50 cities nationwide. Village Green manages a number of properties in the RM Communities portfolio, including one very similar asset with a comparable value-add business plan in relatively close proximity to the Property.
Management
Cumulative Distributions

RM Communities

RM Communities is a sister-company to RealtyMogul, one of the leading real estate technology platforms. RM Communities is an owner/operator of multifamily assets with a proprietary playbook to deliver strong risk-adjusted returns. RM Communities has grown its real estate portfolio to include nearly 2,200 multifamily units and over $350 million in real estate with a fully dedicated team of acquisitions, underwriting and asset management professionals.(1)

(1) References made to the RM Communities portfolio includes four properties that were acquired prior to the formation of RM Communities. Consequently, these assets are managed by an affiliate and are included as part of the RM Communities portfolio as a result of being acquired and managed by the same executive leadership and according to the same investment strategy employed by RM Communities. 

  • Todd Hanson
    Managing Director
  • Yacov Ronen
    Acquisitions Associate
Todd Hanson
Managing Director

Todd Hanson is the Managing Director for RM Communities across the US and has responsibility for planning and execution of overall strategy and directing the investment and financing activities of the company. He is actively involved in maintaining existing client relationships and developing new capital and partnership opportunities for the company.  Mr. Hanson was previously EVP and Head of Investments at The ConAm Group, a private equity multifamily investment firm.  

Yacov Ronen
Acquisitions Associate

Yacov Ronen is an Acquisitions Associate for RM Communities supporting the direct acquisitions of multifamily opportunities in the Mountain West region of the United States and Texas. Prior to joining RM Communities, Mr. Ronen worked as an Associate at RealtyMogul where he was directly involved in $400M in acquisitions across various asset classes. He holds B.A. in Economics from University of California, Santa Barbara.

Track Record

Property Name Location Multifamily Class No. of Units Year Built Purchase Price CapEx Budget Status
Terrace Hill El Paso, TX B 310 1983 $18,700,000 $4,095,000 Full Cycle, Net IRR of 18.5% (23.1% deal-level)
La Privada El Paso, TX B 240 1982 $11,700,000 $1,867,000 Closed
The Hamptons Virginia Beach, VA B 212 1973 $19,051,000 $3,792,000 Closed
Pohlig Box Factory & Superior Warehouse Richmond, VA A- 93 & 7,700 Retail SF 2004 $15,900,000 $1,348,000 Closed
Lubbock Medical Office Building Lubbock, TX B 20,880 SF 1966 $8,350,000 NNN Closed
Turtle Creek Fenton, MO A- 128 2018 $24,875,000 $596,000 Closed
The Orion Orion Township, MI B+ 200 1995 $27,375,000 $2,308,000 Closed
Kings Landing Creve Coeur, MO A- 152 & 9,229 Retail SF 2005 $40,100,000 $3,885,850 Closed
Minnehaha Meadows Vancouver, WA A 49 2021 $16,450,000 $83,950 Closed
Roosevelt Commons Vancouver, WA A 36 2020 $12,550,000 $78,200 Closed
Bentley Apartments Grove City, OH A- 138 2020 $30,200,000 $650,000 Closed
Sherwood Oaks Riverview, FL B 199 1984 $35,000,000 $1,266,725 Closed
Haverford Place Georgetown, KY A- 160 2001 $31,050,000 $2,836,734 Closed
Edison Apartments Gresham, OR A 64 2020 $19,500,000 $203,390 Closed
Ridgeline View Townhomes Vancouver, WA A 50 2022 $18,100,000 $37,500 Closed
Brookside Apartments Raleigh, NC B 68 1986 $9,400,000 $1,402,680 Closed
223 E. Town Street Columbus, OH A 84 2017 $19,600,000 $301,566 Pending
Hunters Ridge Apartments East Lansing, MI B 170 2004 $34,650,000 $2,056,660 Pending
Total     2,353   $392,551,000 $26,809,225  

The acquisitions of the Terrace Hill Apartments, La Privada, The Hamptons, and Pohlig Box Factory & Superior Warehouse properties preceded the formation of the RM Communities, LLC.  Consequently, these real estate assets are managed by an affiliate of RM Communities, LLC.  They are included as part of the RM Communities, LLC portfolio because these real estate assets were acquired and are managed under the same executive leadership in Jilliene Helman and according to the same investment strategy employed by RM Communities, LLC.

Note: Totals include Terrace Hill (sold).

*Past performance is not indicative of future performance.

The Sponsorship Group will assume the attractive Fannie Mae loan of $21.03M, which represents a 60.7% LTV at a below-market interest rate of 3.33%, to acquire Hunters Ridge for $34.65M. ​

The business plan upon acquisition is to continue the seller’s renovation plan and capture the clearly proven upside potential in the rents. The seller completed the in-place renovations for approximately $8,100 per unit and Sponsorship is budgeting $11,200 per unit for interiors. There are 132 units in classic condition at the Property that will receive an upgrade to counters, cabinets, bathrooms, flooring, and appliances. ​

Projected stabilized rents are just $17, or 0.9%, above average recent lease rates on renovated units since August 2023. This is a modest increase when considering submarket rents have grown an average 3.8% annually over the last decade.(1) The latest demographics report for this asset shows the in-place tenant base has an average household income of $85,000. This average income implies a 3.9x stabilized income-to-rent ratio. ​

Recent lease trade-outs at the Property are trending upwards on both classic and renovated units with new leases averaging a 12% increase(2) with a high 98.2% occupancy.​

In addition to parking garages for 79 units, the Property has 73 carports. The business plan includes introducing a reserved parking program for a fee for these 73 spaces, which should be absorbed quickly given weather patterns in the state. We have conservatively assumed a stabilized occupancy rate of 75% on carports by the end of year one. Another revenue boost should be realized once valet trash is implemented over the course of year one of the business plan. ​

Sponsorship is maintaining the in-place property management team, Village Green, to continue managing the Property. Not only does Village Green already manage properties in the RM Communities portfolio, but they manage over 1,000 units in the Lansing market and are uniquely equipped to manage the Property, as they managed it for the seller. Our financial projections were prepared in close collaboration with Village Green.​

Summary Total Per Unit
Interior Upgrades $1,478,400 $8,696(3)
Exterior Upgrades and Repairs $310,000 $1,824
Contingency (10%) $178,840 $1,052
Capital Improvement Supervision Fee (5%) $89,420 $526
Total $2,056,660 $12,098
     
Interior Upgrades (132 units) Total Per Unit
Stainless Steel Appliances $330,000 $2,500
Countertops $158,400 $1,200
Cabinet Repaint $158,400 $1,200
Bathroom Countertop + Cabinets  $158,400 $1,200
Plumbing Fixtures (Faucets, Showerhead)  $105,600 $800
Lighting $158,400 $1,200
Flooring $198,000 $1,500
Paint $211,200 $1,600
Total $1,478,400 $11,200
     
Exterior and Common Area Upgrades and Repairs Total Per Unit
Fitness Center Enhancement $10,000 $59
Roof Repair (contingency) $75,000 $441
Signage $50,000 $294
Deferred $175,000 $1,029
Total $310,000 $1,824

(1) CoStar

(2) As of September 2023

(3) The business plan targets interior renovations for 132 units. Dividing the interior upgrades budget by the number of planned interior renovations results in a per unit interior budget of $11,200. 

Summary
Property Information
Hunters Ridge is a 2004 vintage, 170-unit asset featuring a favorable unit mix of spacious one-, two-, and three-bedroom apartments and townhomes averaging 1,169 SF. The seller renovated 38 units to include vinyl flooring, shaker cabinetry, updated plumbing, modern lighting, and stainless-steel appliances. The remaining 132 units remain in original condition and offer an opportunity to capture proven value-add upside. 79 units at the Property feature garages, which currently receive a $100 rental premium. Current ownership recently completed an extensive common area renovation to the clubhouse/leasing office, fitness center, dog park, grilling stations, shared green space, and building exteriors. 

Unit Mix and Rent Schedule

Units

Type

Unit SF

Total SF

In-Place Rent

Stabilized Rent

Stabilized Rent/SF

6

1x1

922 SF

5,532 SF

$1,332

$1,450

$1.57

22

2x2 S

1,064 SF

23,408 SF

$1,371

$1,675

$1.57

10

2x2 S Reno

1,064 SF

10,640 SF

$1,657

$1,675

$1.57

25

2x2 M

1,080 SF

27,000 SF

$1,408

$1,685

$1.56

7

2x2 M Reno

1,080 SF

7,560 SF

$1,654

$1,685

$1.56

8

2x2 L

1,100 SF

8,800 SF

$1,456

$1,715

$1.56

17

2x2 L Garage

1,100 SF

18,700 SF

$1,478

$1,815

$1.65

7

2x2 L Reno Garage

1,100 SF

7,700 SF

$1,791

$1,815

$1.65

8

2x2 XL

1,208 SF

9,664 SF

$1,493

$1,825

$1.51

25

2x2 XL Garage

1,208 SF

30,200 SF

$1,625

$1,925

$1.59

2

2x2 XL Reno

1,208 SF

2,416 SF

$1,785

$1,825

$1.51

5

2x2 XL Reno Garage

1,208 SF

6,040 SF

$1,908

$1,925

$1.59

1

2/2.5 TH

1,435 SF

1,435 SF

$1,850

$2,100

$1.46

14

2/2.5 TH Garage

1,435 SF

20,090 SF

$1,841

$2,200

$1.53

5

2/2.5 TH Reno Garage

1,435 SF

7,175 SF

$2,101

$2,200

$1.53

2

3x2

1,555 SF

3,110 SF

$1,910

$2,200

$1.41

4

3x2 Garage

1,555 SF

6,220 SF

$1,945

$2,300

$1.48

2

3x2 Reno Garage

1,555 SF

3,110 SF

$2,240

$2,300

$1.48

Comparables

Lease Comparables

Property Beaumont Apartments Coolidge Place Apartments Gateway Lofts Reserve at Falcon Point Averages Hunters Ridge
Distance to Subject 1.7 Miles 3.5 Miles 4.7 Miles 0.7 Miles 2.7 Miles  
Year Built 2006 1972 2022 2016 2004 2004
Number of Units 89 186 181 116 143 170
             
1/1            
$ / Unit $1,243 $1,325 $1,721   $1,430 $1,450
SF 862 600 605   689 922
$ / SF $1.44 $2.21 $2.84   $2.07 $1.57
             
2/2 S   2/1.5        
$ / Unit $1,598 $1,610 $1,936   $1,715 $1,675
SF 1,131 950 1,057   1,046 1,064
$ / SF $1.41 $1.69 $1.83   $1.64 $1.57
             
2/2 M   2/1.5        
$ / Unit $1,598 $1,610 $1,936   $1,715 $1,685
SF 1,131 950 1,057   1,046 1,080
$ / SF $1.41 $1.69 $1.83   $1.64 $1.56
             
2/2 L   2/1.5        
$ / Unit $1,598 $1,610 $2,191   $1,800 $1,715
SF 1,131 950 1,194   1,092 1,100
$ / SF $1.41 $1.69 $1.84   $1.65 $1.56
             
2/2 XL            
$ / Unit $1,682   $2,191 $1,830 $1,901 $1,825
SF 1,176   1,194 1,300 1,223 1,208
$ / SF $1.43   $1.84 $1.41 $1.55 $1.51
             
2/2.5 TH            
$ / Unit $2,288   $2,191   $2,240 $2,100
SF 1,480   1,194   1,337 1,435
$ / SF $1.55   $1.84   $1.68 $1.46
             
3/2  2/2   2/2      
$ / Unit $2,288   $2,191   $2,240 $2,200
SF 1,480   1,194   1,337 1,555
$ / SF $1.55   $1.84   $1.68 $1.41

Sales Comparables

Property Name

Submarket Name

Property Address

City

Sale Date

Sale Price

Number of Units

Gross Building SF

Price per Unit

Price per SF

Year Built

Cap Rate

Building Class

Hunters Ridge

Outer Clinton County

4060 Springer Way

East Lansing

Q4 2023

$34,650,000

170

221,371

$203,824

$157

2004

5.24%

B

Volaris Lansing

Forest View

4540 Collins Rd

Lansing

12/2021

$74,000,000

289

261,256

$256,055

$283

2023

4.21%

A

Club Meridian

Meridian Township/Okemos

4425 Heritage Ave

Okemos

6/2022

$70,500,000

406

355,565

$173,645

$198

2004

4.91%

B

Esker Square

Outer Ingham County

2030-2054 N Cedar St

Holt

4/2022

$20,000,000

90

90,000

$222,222

$222

2023

N/A

A

Newman Lofts

Grand River

200 Albert Ave

East Lansing

4/2022

$22,250,000

91

91,000

$244,505

$245

2019

N/A

A

Location Information

Location: East Lansing

East Lansing boasts a median household income of $75,200 with a multifamily vacancy rate of 4.7% and no multifamily units under construction. Rents in East Lansing have grown an average of 3.3% annually over the last five years, which speaks to the city’s resilience and consistent growth.

This durability in rent growth can be attributed to two key factors. First, East Lansing's multifamily unit supply has remained relatively flat in the last decade, with CoStar showing a net of 100 units added within East Lansing’s borders over the last ten years.1 The second factor is the presence of recession-resistant industries such as education, healthcare, and government that underpin the greater Lansing’s economy. These three industries appear in Indeed.com’s top ten recession-resistant industries.2 Over half of Lansing’s top employers fall into one of these three industries.

Niche.com calls East Lansing the #3 Best Place to Live in the Lansing Area and awards it an overall “A” ranking with an “A” score in the public schools, family friendliness, and nightlife categories. Niche also ranks East Lansing with an “A+” for commuters and an “A-” for outdoor activities.3

East Lansing has a population of 47,427 and is ranked among the “Best Suburbs to Live in Michigan.” Living in East Lansing offers residents an urban-suburban mix and 61% of its residents are renters. East Lansing features a variety of restaurants, coffee shops, and parks to enjoy with highly rated public schools.3

East Lansing benefits from access to a durable job market, excellent public schools, a majority renter demographic, and multifamily supply constraints, all of which should continue to contribute to Hunters Ridge’s success as an investment.

Submarket Overview: Outer Clinton County

The Property is located in the Outer Clinton County Multifamily submarket, which is part of the Clinton County Submarket Cluster. Per CoStar, multifamily vacancy in the Clinton County submarket is 3.7% and has decreased by 0.5% over the past 12 months. During this period, there has been a modest amount of positive absorption, and nothing has been delivered.

Submarket rents have grown 8.3% over the last 12 months and 23.3% over the last 3 years. CoStar projects rents to grow 4.6% over the next year and an average of 4.2% annually for the next three years. Additionally, there are no conventional multifamily construction projects in the submarket pipeline.1

The submarket has an affluent tenant base, with a median income at $72,500. The submarket is highly educated as well, with 53% of residents within two miles of Hunters Ridge holding a bachelor’s degree or higher – 19.3% greater than the national average.1

The submarket is university anchored by MSU with direct access to resilient employment in education, healthcare, and government while offering seamless connectivity to major markets in the state. Lansing is centrally located in the state and sits along i-96, about 90 minutes from Detroit to the east and 75 minutes from Grand Rapids to the west.

The submarket is poised to benefit from significant employment growth as General Motors, in conjunction with LG, is constructing a $2.6B battery manufacturing plant just outside of Lansing.

Cap Stack
Sources & Uses

Total Capitalization

Sources Amount Amount per Unit Percentage
Senior Loan $21,026,000 $123,682 54.60%
Investor Equity $17,215,000 $101,265 44.70%
Seller Credit $240,000 $1,412 0.60%
Total  $38,481,000 $226,359 100.00%
       
Uses Amount Amount per Unit Percentage
Purchase Price $34,650,000 $203,824 90.00%
Loan Fee $210,260 $1,237 0.50%
Non-Recourse Carveout Guarantee $105,130 $618 0.30%
Closing Costs $341,839 $2,011 0.90%
CapEx Budget $2,056,660 $12,098 5.30%
Acquisition Fee $540,000 $3,176 1.40%
Taxes and Insurance $314,111 $1,848 0.80%
Working Capital $263,000 $1,547 0.70%
Total  $38,481,000 $226,359 100.00%

 

 

Debt Assumptions

The expected terms of the debt financing are as follows:

Senior Debt:

  • Loan Type: Assumable Fixed
  • Lender/Servicer: Fannie Mae/Walker & Dunlop
  • Total Loan Amount: $21,026,000
  • Loan Term: 7.75 Years Remaining
  • Interest Rate: 3.33%
  • Interest-Only Period: 1.75 Years Remaining
  • Amortization: 30 Years
  • Initial Loan-to-Value: 60.7%
  • Loan-to-Cost(1): 57.3%

Future Supplemental in Month 25:

  • Loan Type: Supplemental Fixed
  • Lender/Servicer: Fannie Mae/Walker & Dunlop
  • Total Loan Amount: $2,993,790
  • Loan Term: 5.75 Years
  • Interest-Only Period: 0 Years
  • Amortization: 30 Years
  • Interest Rate: 8.28%
  • Loan-to-Stabilized Value: 50.5%
  • Loan-to-Cost(1): 65.4%
  • Underwritten DSCR: 1.35x

(1) Loan-to-cost is calculated as the loan amount divided by total cost (purchase price  + capex budget)

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 possible increases in capital reserve requirements for funds to be held in a lender-controlled capital reserve account.

A substantial portion of the total acquisition for the Property will be paid with borrowed funds. 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.

Distributions

RM Communities intends to make distributions from Hunters Ridge Investors, LLC as follows:

Operating Cash Flow:

  1. To the Investors, pari passu, all operating cash flows to a 7.0% preferred return;
  2. Return of Capital to Members;
  3. 70% / 30% (70% to Investors / 30% to Promote) of excess cash flow thereafter. 

Capital Event:

  1. To the Investors, pari passu, all operating cash flows to a 7.0% preferred return;
  2. Return of Capital to Members
  3. Payment of Disposition Fee
  4. 70% / 30% (70% to Investors / 30% to Promote) of excess cash flow thereafter. 

RM Communities 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 RM Communities, who may decide to delay distributions for any reason, including maintenance or capital reserves.

Cash Flow Summary

 

Year 1

Year 2

Year 3(1)

Year 4

Year 5(2)

Reversion(3)

Effective Gross Income (EGI)

$3,511,735

$3,904,052

$4,158,917

$4,313,058

$3,320,354

$4,543,300

Expense

$1,480,345

$1,529,039

$1,578,836

$1,627,038

$1,252,783

$1,774,207

Net Operating Income

$2,031,391

$2,375,013

$2,580,081

$2,686,020

$2,067,571

$2,769,093

Total Property Cash Flow

$1,340,403

$1,531,609

$4,052,010

$1,241,534

$27,689,873

 

Projected Investor Cash Flow
Investor-Level Cash Flows - Hypothetical $50,000 Investment(4)  ($50,000) $3,880 $4,435 $11,756 $3,593 $68,447

(1) Assumes a supplemental loan in Month 25 constrained to a 1.35x DSCR, fully amortizing immediately.

(2) The current business plan contemplates exiting prior to the end of the fifth year of operations, hence the decrease in Income, Expenses, and NOI.

(3) Reversion Expenses and Net Operating Income are tax-adjusted without the tax abatement based on the projected purchase price at sale.

(4) Projected returns are net of all fees. 

RM Technologies, LLC and its affiliates do not provide any assurance of returns.  The content on this page, including Sponsor’s pro forma projections, was provided by the Sponsor or an affiliate thereof.  Although RM Technologies, LLC believes the Sponsor reliably produced this content, RM Technologies, LLC makes no representations or warranties as to the accuracy of such information and accepts no liability therefor.  The assumptions and projections included in the content on this Page, including the Sponsor’s pro forma projections, are not reflective of the position of RM Technologies, LLC or any other person or entity other than the Sponsor or its affiliates.  There can be no assurances that all or any of the Sponsor’s assumptions will be true, that actual performance will bear any relation to these hypothetical illustrations, or that the Sponsor’s investment objectives will be achieved.  For additional information concerning the Sponsor’s assumptions and projections, and the significant risks involved in investing in real estate, please see the Disclaimers section below. 

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to RM Communities' materials for details. The following fees and compensation will be paid(1)(2)(3)(4):

One-Time Fees
Type of Fee Amount of Fee Received By
Acquisition Fee

1.56% of Purchase Price, or $540,000

Sponsorship Group
Financing Fee(1) 1.0% of Refinanced Loan Amount or Supplemental Sponsorship Group
Non-Recourse Carveout Guarantor Fee(2)

0.5% of Assumable Loan Amount

Split Among Specific Principals of the Sponsorship Group
Disposition Fee(3)

Up to 1.0% of Gross Sale Proceeds paid to Sponsorship

Sponsorship Group
 
Recurring Fees
Type of Fee Amount of Fee Received By
Asset Management Fee 1.5% of Effective Gross Income (EGI) Sponsorship Group
Capital Improvement Supervision Fee 5% Capital Improvement Supervision fee on cost of major capital improvements Village Green, Third Party Property Manager
Property Management Fee

Monthly, 2.85% of Effective Gross Income (EGI)

Village Green, Third Party Property Manager

(1) A Financing Fee will only be charged in the event of a refinancing or supplemental event. The current business plan and returns presented herein assume a supplemental event during the investment hold period outlined

(2) The lender is requiring a warm body guaranty in connection with the loan assumption. Principals from the Sponsorship Group, including the CEO of RM Communities, will be paid this fee in connection with serving as the guarantor and facilitating the loan assumption

(3) The Disposition Fee will only be paid if investors have received their full 7% accrued pref and had a full return of capital.

(4) Fees may be deferred to reduce impact to investor distributions.

 

The following offering documents have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
RM Securities, LLC and its Affiliates Compensation

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, LLC

Sponsor 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 Documents

The 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 Investment

This 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 Assumptions

Sponsor 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 Performance

Any 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 Debt

A 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 Registered

Sponsor’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 Advice

Nothing 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 Risk

Internal 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.

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