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Confidentiality Agreement
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Funded
Estimated Hold Period 27 Months
Estimated First Distribution 6/2023
FUNDED 100%
...
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Investment Returns: Discerning investors don't rely on a single projected return metric as a basis to invest. Rather, when assessing a potential investment, we encourage you to evaluate all information provided by a sponsor including the business plan, assumptions, and risk factors which can be found in the relevant offering documents. This approach is consistent with our requirements as a broker-dealer, which prohibit us from communicating projected returns.
Offered By
GSB Toluca Apts, LLC
Investment Type Equity
Minimum Investment 1000
Overview
Development and lease-up of a highly amenitized 57-unit multifamily asset in Los Angeles, CA.
Partner

The Real Estate Company is highly experienced, with a strong financial sponsor and a fee developer who has completed over 35 projects in the Los Angeles Metro.

Market

According to Axiometrics, the submarket has enjoyed average annual rent growth of 4.5% and an average occupancy of 96.4% over the past five years. Per CoStar, the median home value within one mile of the Property is $975,328 and the  population grew 6.9% over the past 10 years within the same radius. 

Asset Quality

The Property will be a newly developed, Class A apartment building with a robust amenities package.

Property at a glance
Year Built 2022 (proposed)
# of Units 57 units (proposed)
Rentable Square Feet 38,433 (proposed)
Parking Ratio 1.21 spaces per unit
# of Buildings 1
Cost Basis $22,863,658 (including development fee)
Investment Highlights
The Real Estate Company purchased the land for $4,775,000 in Q2 2019.
The Real Estate Company has budgeted $12.5 million ($219k per unit) for hard costs and $2.7 million ($47k per unit) for soft costs and the development fee.
The Real Estate Company is highly experienced and intends to hire a local, experienced property manager.
The exit strategy is to sell the Property in 27 months at an expected cap rate of 4.00%.
Management

GSB Toluca Apts, LLC

The Real Estate Company is collectively defined as Steve Bram as the financial sponsor and Gary Schaffel as a fee developer. Mr. Schaffel has 55 years of experience in the construction industry, having completed over 10,000 apartment units as Head of Construction for Goldrich & Kest Industries and Schaffel Development Company. He has built 25 similar buildings in the last 15 years throughout Los Angeles as a Principal. Mr. Schaffel has also developed several condominium buildings near the Property, which were built to higher specifications than typical apartment buildings. Mr. Bram has been in the real estate investment business for 37 years and is currently a Co-Manager on over 15 commercial assets. He also manages George Smith Partners, which arranges $4 billion in commercial real estate financing annually. Mr. Bram and Mr. Schaffel have worked together for 13 years. Mr. Bram initially provided real estate investment banking services to Mr. Schaffel and currently serves as Mr. Schaffel's primary financial partner. Mr. Bram will provide 10% of the required cash equity on the subject transaction. The Property will be Mr. Bram and Mr. Schaffel's seventh overall development project that they have completed, reviewed, or have worked on together. The Real Estate Company recently completed a 36-unit project in Tujunga on time and on budget.

  • Steve Bram
    President and Co-Founder, George Smith Partners (Sponsor and Financial Partner)
  • Gary Schaffel
    President, Schaffel Development Company (Fee Developer)
Steve Bram
President and Co-Founder, George Smith Partners (Sponsor and Financial Partner)

Steve Bram is the President and co-Founder of George Smith Partners, Inc. ("GSP"). During his 37 years at GSP, Mr. Bram arranged over $4.5 billion in financing for over 300 projects, including construction, bridge, and permanent financing for commercial and residential projects. Although working at GSP full-time and supervising his team of deal managers, he also spends a substantial portion of his time in his partnership with Gary Schaffel of Schaffel Development Company. Together, they develop apartment projects, with Mr. Bram primarily coming in as the financial partner, and Mr. Schaffel serving as the developer partner. Mr. Bram graduated number one in the class when pursuing his Bachelor's Degree from Cornell University's School of Hotel Administration; he also received an MBA from The Wharton School of Finance in 1984.

Gary Schaffel
President, Schaffel Development Company (Fee Developer)

Gary Schaffel is the President of Schaffel Development Company, which he founded in 1977, and will serve as a fee-developer on the proposed development. Over the past 43 years, Mr. Schaffel has developed nearly 40 projects and 1,300+ apartment, condominium, and single-family residential units throughout Southern California. Prior to starting Schaffel Development Company, Mr. Schaffel was the Construction Manager at Goldrich and Kest Industries, the leading builder and developer of multifamily housing in Southern California at the time. During his five years at Goldrich and Kest, Mr. Schaffel was involved in the construction of over 10,000 housing units, as well as numerous board and care facilities. Mr. Schaffel received a Bachelor’s Degree (1967) and Master’s Degree (1969) in Building Construction from the University of Florida.

Track Record

Fee Developer's Representative Transactions

Address City in California Asset Type Units Estimated Completion Date
11240 Commerce Ave. Sun Valley/ Tujunga Multifamily 36 Jul-20
706 N. Alvarado St. Echo Park Multifamily 34 May-20
3500 Chesapeake Ave. Los Angeles Multifamily 22 Oct-20
3524 Chesapeake Ave. Los Angeles Multifamily 27 Oct-20
1249 W. 39th Pl. Los Angeles Multifamily 41 Feb-21
7354 Woodman Ave. Los Angeles Multifamily 86 May-19
6908 Knowlton Pl. Westchester Multifamily 18 Mar-19
5762 Morley St. Westchester Multifamily 31 Aug-17
11430 Burbank Blvd. North Hollywood Multifamily 125 May-17
11120 Huston St. North Hollywood Multifamily 34 May-16
12345 Chandler Blvd. Sherman Oaks Multifamily 23 Jan-16
12005 Albers Valley Village Multifamily 121 Apr-14
15222 Ventura Blvd. Sherman Oaks Multifamily 50 Mar-14
5700 Laurel Canyon Blvd. Valley Village Multifamily 40 May-05
12047 Califa St. Valley Village Multifamily 24 Mar-05
5235 Newcastle Ave. Encino Multifamily 130 Apr-04
5716 Whitsett Ave. Valley Village Multifamily 16 Jul-03
1720 N Taft. Ave. Los Angeles Multifamily 32 Nov-99
433 Casanova St. Los Angeles Multifamily 27 Dec-98
11041 Hesby St. North Hollywood Multifamily 36 Feb-91
749 N. Hudson Ave. Los Angeles Multifamily 8 Apr-90
11251 Osborne Pl. Lakeview Terrace Multifamily 62 Sep-89
1252 Formosa Ave. West Los Angeles Multifamily 5 Mar-89
14218 Victory Blvd. Van Nuys Multifamily 8 Jul-88
14230 Victory Blvd. Van Nuys Multifamily 16 Jul-88
14801 Delano St. Van Nuys Multifamily 10 Oct-86
14200 Victory Blvd. Van Nuys Multifamily 40 Aug-86
442 S. Virgil St. Koreatown Condos 74 Jun-16
4424 Whitsett Ave. Studio City Condos 41 Jul-09
13200 Moorpark Ave. Sherman Oaks Condos 27 Mar-09
4237 Longridge Ave. Studio City Condos 22 Mar-08
14242 Burbank Blvd. Sherman Oaks Condos 26 Sep-07
5101 Whitsett Ave. Valley Village Condos 11 Feb-07
15206 Burbank Blvd. Sherman Oaks Condos 42 Jan-07
4202 Whitsett Ave. Studio City Condos 14 Apr-06
13935 Burbank Blvd. Valley Glen Condos 15 Apr-06
14343 Burbank Blvd. Van Nuys Condos 15 Dec-05
4601 Coldwater Canyon Ave. Studio City Condos 24 Dec-04
2319 Ocean Front Walk Venice Condos 2 Oct-91
2225 N. Beachwood Dr. Hollywood Condos 12 May-85
365 W. Alameda Ave. Burbank Condos 26 Jun-82
441 E. San Jose Burbank Condos 35 Jan-82
11848 Erwin St. North Hollywood Condos 11 Apr-79
Total   43 projects 1,499 units  

The bio and track record were provided by the Real Estate Company and has not been verified by RealtyMogul or its affiliates.

In this transaction, RealtyMogul investors are to invest in GSB Toluca Apartments, LLC ("The Target"), a limited liability company that will directly own interest in the Property. The Real Estate Company purchased three parcels for land in Q2 2019 for $4.8 million ($84k per unit) or $6.2 million when including the land closing costs, carrying costs, and return on pre-development equity. The total project cost is expected to be $23.1 million when including development fee ($405k per unit). 

Post acquisition, the Real Estate Company plans to spend approximately $12.5 million in hard costs, $2.7 million in soft costs, and $1.7 million in financing costs. The soft cost estimate includes a 4.75% developer fee paid to the Real Estate Company. While the development fee is typically paid monthly during the construction period, the Real Estate Company has agreed to subordinate its developer fee to the investor's return of capital. In recognition of this reinvestment, the Real Estate Company will receive an 8% return pari passu with investors, however it will collect no additional return beyond that amount on its deferred development fee.

The Real Estate Company plans to close on the transaction in January 2021, start construction immediately after closing, and have an 20-month construction period through September 2022. The proposed development includes demolition of all existing structures on acquired land, site work, creation of exterior structure, building infrastructure and systems, units and amenities, landscaping, and a 69-space garage. Post completion, the Real Estate Company has assumed a six-month lease-up period and one-month stabilization through April 2023. The Real Estate Company will seek a 30-month interest only construction loan. The business plan calls for a 27-month hold, at which point the Property is to be sold at a 4.00% exit cap for $27.4 million ($480k per unit).

Below is a summary of the development's hard and soft costs:

Project Costs Total Per Unit
Hard Costs    
Hard Costs (on-site) $10,728,560 $188,220
Hard Costs (off-site) $71,000 $1,246
Contractor's Fee $593,976 $10,421
Bank Hard Cost Contingency $539,978 $9,473
Sponsor Hard Cost Contingency $539,978 $9,473
Subtotal - Hard Costs $12,473,492 $218,833
Soft Costs    
Design Fees $346,540 $6,080
Entitlement Costs $110,618 $1,941
Relocation Fees $248,411 $4,358
Permits & Fees $500,000 $8,772
Real Estate Taxes $119,372 $2,094
Insurance (Wrap - 24 Months) $300,000 $5,263
Development Fee* $854,460 $14,991
Acquisition Fee $71,625 $1,257
Miscellaneous Fees (Bank Fees, Accounting, LLC) $12,000 $211
Soft Cost Contingency $91,937 $1,613
Subtotal - Soft Costs $2,654,963 $46,578
Total Hard and Soft Costs $15,128,455 $265,411

*The development fee will be paid at sale and accrued at a 8% preferred return.

These amounts are subject to change at the discretion of the Real Estate Company.

Property Information

Toluca Lake Apartments (the “Property”) is the development of a Class A multifamily building with 57 units. The Property is located at 4366-4376 Cahuenga Blvd in the Toluca Lake neighborhood of Los Angeles, CA. The Property will feature a mix of one studio unit (359 sf), 45 one-bedroom units (613 sf), and 11 two-bedroom units (954 sf). The property used the California Density Bonus Ordinance which provided certain incentives in return for providing additional affordable units. Six units will be designated affordable and four units will provide right of return/replacement rent levels to tenants. The Property will have high-end finishes and state-of-the-art appliance packages throughout all units. Most upper units will have balconies, while ground-floor units will have private patios with direct access to Cahuenga Boulevard and Bloomfield Street. The Property will be fully-amenitized with a 69-car secured subterranean garage, a recreation room, a gym, coworking spaces on each floor, a 15-seat theater, and 25 storage units. The Property will also include two landscaped rooftop courtyards with views of Santa Monica and the San Gabriel Mountains. The Property is within walking distance of NBC Universal, Universal Studios, Warner Brothers Lot, the Metro Red Line (to Downtown LA), and the Toluca Lake Shopping district, which has a Trader Joe’s and numerous boutique restaurants. The Property also has easy access to the 134, 170, and 101 Freeways.

Proposed Unit Mix:

Unit Type (Market)                                       # of Units % of Total Unit Size (square feet) Avg. Market Rent*        
Studio 1 2% 359 $2,100
1 Bed, 1 Bath 37 65% 615 $2,653
2 Bed, 2 Bath 9 16% 957 $3,370
Subtotal/Averages 47 82% 675 $2,778
Unit Type (Affordable)                                 # of Units % of Total Unit Size (square feet) Avg. Affordable Rent* 
1 Bed, 1 Bath** 5 9% 608 $379
2 Bed, 2 Bath 1 2% 937 $890
Subtotal/Averages 6 11% 663 $464
Unit Type (Right of Return/ Replacement) # of Units % of Total Unit Size (square feet) Avg. Affordable Rent* 
1 Bed, 1 Bath 3 5% 597 $1,777
2 Bed, 2 Bath 1 2% 937 $2,546
Subtotal/Averages 4 7% 682 $1,969
Total/Averages 57 100% 674 $2,478

*All rents are net effective

**Includes manager's unit at free rent

Comparables

Lease Comparables

  Windsor Lofts at Universal City L'Estancia Talaria Burbank NOHO5500 Avalon Studio 4121 NVE Apartments Total/Averages Subject
CoStar Class A A A A A A   A (as developed)
Units 138 160 241 84 149 82 142 57
Year Built 2007 1995 2019 2018 2009 2017 2011 2022 (projected)
Average Square Feet 952 900 1,183 721 786 834 896 675
Average Rental Rate $2,682 $2,697 $4,243 $2,653 $2,839 $2838 $2,992 $2,778*
Distance from Subject  0.5 miles 1.0 mile 1.9 miles 2.4 miles 2.6 miles 2.9 miles 1.6 miles  

Sales Comparables

  The Weddington Metropolitan at Larchmont Village Chateau Toluca Apartments Riverside Arts Apartments NVE Apartments Vues on Gordon Total/Averages Subject
Date Jan-2020 Jun-2019 Apr-2019 Mar-2019 Dec-2018 Apr-2018    
Costar Rating A B B B A A   A (as developed)
Units 329 34 40 51 82 47 97 57
Year Built 2019 2017 1991 1986 2017 2018 2008 2022 (projected)
Purchase Price $169,200,000 $19,000,000 $16,425,000 $15,350,000 $34,350,000 $23,500,000 $46,304,167 $23,078,522**
$/Unit $514,286 $558,824 $410,625 $300,980 $418,902 $500,000 $476,544 $404,886
Cap Rate 4.50% 3.91% 4.02% 3.42% 3.50% 4.20% 3.93% 4.75%***
Distance from Subject  1.8 miles 6.2 miles 0.1 mile 1.5 miles 2.9 miles 5.3 miles 2.7 miles  

* Reflects market-rate units only

** Total development costs

*** Stabilized return on capital

Sale and lease comps were obtained from the Real Estate Company using CoStar, Axiometrics and/or other sources. Leasing activities at above comps may fluctuate due to the COVID-19 pandemic and/or the above rents may reflect pre-pandemic rent levels due to the development transaction and projected lease-up starting in 2022.

Location Information

Market Overview*

According to CoStar, the economic upheaval caused from the COVID-19 pandemic has disrupted otherwise stable apartment markets, and the Los Angeles metro is not immune from that effect. Vacancies have exceeded the highs from the last recession and are expected to continue to rise as apartment demand declines. However, a notoriously limited supply and a large 50% renter ratio have kept the metro's vacancies fairly low in favor of landlords and owners. As is the case in various markets throughout the US, apartment demand and vacancies will continue to suffer until a public health and economic recovery takes hold.

Per Axiometrics, effective rent decreased 2.1% from $2,322 in 1Q20 to $2,284 in 2Q20, and annual effective rent growth was 2.6% in 2019. Annual effective rent growth is forecasted to average 0.2% from 4Q20 to 4Q22, and 5.6% in 2023. Annual effective rent growth has averaged 3.9% since 1Q97, which was above the national average of 2.7% over the same period. The market's occupancy rate decreased from 96.2% in 1Q20 to 95.4% in 2Q20, and has averaged 96.3% since 1Q15. The market's occupancy rate is expected to average 96.7% during the projected lease-up period in 2022. The market's occupancy rate has averaged 95.9% since 1Q97.

Submarket Overview*

Per CoStar, the Studio City/ North Hollywood submarket has been a focal point for residential development over the past decade; however, demand for new product has been strong and the submarket has therefore avoided a supply-driven vacancy increase outside of COVID-19. Depending on when a vaccine is introduced and the status of the current development pipeline, rents are expected to decline until there is an economic recovery. The submarket's desirable location and affordability relative to other centrally located submarkets should help the area bounce back whenever conditions improve. Additionally, the planned $1 billion redevelopment of land surrounding the North Hollywood Metro Stop will further shape the submarket over the coming years.

Per Axiometrics, effective rent decreased 3.3% from $2,378 in 1Q20 to $2,300 in 2Q20, and annual effective rent growth was 3.2% in 2019. Annual effective rent growth is forecasted to average 0% from 4Q20 to 4Q22, and 6.1% in 2023. Annual effective rent growth has averaged 3.6% since 1Q97. The submarket's occupancy rate decreased from 96.5% in 1Q20 to 96.0% in 2Q20, and has averaged 96.7% since 1Q15. The submarket's occupancy rate is expected to average 96.7% during the projected lease-up period in 2022. The submarket's occupancy rate has averaged 96.0% since 1Q97.

*The above market and submarket overviews reflect current forecasts. The actual market and submarket performance may vary due to the uncertainty of economic and health conditions caused from COVID-19. 

Demographic Information (2020) 1 Mile 3 Miles 5 Miles
Population 29,404 196,544 637,768
Population Projection (2025) 29,639 197,845 641,971
Average Age 40 40 40
Median Household Income $79,861 $78,936 $70,442
Average Household Size 1.9 2.2 2.3
Median Home Value $975,938 $888,877 $859,484
Population Growth 2020-2025 0.80% 0.66% 0.66%

Demographic information above was obtained from CoStar

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Cap Stack
Sources & Uses
Total Capitalization
Sources of Funds Amount
Debt $16,500,000
Equity $5,724,062
Total Sources of Funds (1) $22,224,062
Uses of Funds Amount
Land Purchase Price $4,775,000
Land Closing Costs, Carrying Costs, and Return on Predevelopment Equity $1,472,529
Real Estate Company Acquisition Fee $71,625
Loan Fees $144,375
Hard Costs $12,473,492
Soft Costs $1,728,878
Real Estate Company Development Fee(1) $854,460
Financing Fees and Closing Costs (2) $592,912
Interest Reserve $965,250
Total Uses of Funds(1) $22,224,062

Please note that the Real Estate Company's equity contribution may consist of friends and family equity and equity from funds controlled by the Real Estate Company. Additionally, the numbers represented above can change prior to closing depending on final loan proceeds, property condition assessments, appraisals, final closing costs, and other lender-mandated expenses.

(1) Development fee to be paid at sale of Property, is not escrowed upfront, and is therefore excluded from the "Total Sources of Funds" and "Total Uses of Funds" figures.

(2) RM Technologies operates the RealtyMogul platform. RM Technologies charges a fixed, non-percentage-based fee for real estate companies to use the marketplace. An estimate of this fee is included in the Financing Fees and Closing Costs and is intented to be capitalized into the transaction at the discretion of the Manager.

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Estimated Proceeds: $16,500,000
  • Initial Funding: $2,692,727
  • Future Funding: $13,807,273
  • Estimated Rate (Floating): 4.625%
  • Term: 30 months
  • Interest Only: 30 months
  • Extension Options: 5-year miniperm
  • Prepayment Penalty (During Extension Period): Swap breakage fee

There can be no assurance that a lender will provide debt on the rates and terms noted above, or at all. All 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.

Distributions

The Target intends to make distributions to investors (RealtyMogul investors and the Real Estate Company collectively defined as "Members") as follows: 

  1. To the Members, pari passu, all excess operating cash flows to an 8.0% IRR to the Members;
  2. 70% / 30% (70% to Members / 30% to Promote) of excess cash flow to an 18.0% IRR; 
  3. Real Estate Company "catch-up" up to $1,000,000 for land value lift;
  4. 50% / 50% (50% to Members / 50% to Promote) of excess cash flow and appreciation thereafter.  

Note that all distributions will occur after the payment of the Target's liabilities (loan payments, operating expenses, and other fees as set forth in the LLC agreements, in addition to any member loans or returns due on member loan).

Distributions are expected to start in Q2 2023 and are projected to continue on a quarterly basis thereafter (as applicable). These distributions are at the discretion of the Real Estate Company, who may decide to delay distributions for any reason, including maintenance or capital reserves. 

Cash Flow Summary
  Year 1 Year 2 Year 3 (partial)
Effective Gross Revenue $0 $266,517 $421,896
Total Operating Expenses $0 $214,315 $162,591
Net Operating Income $0 $52,201 $259,306
GSB Toluca Apts, LLC Cash Flows
  Year 0 2020 2021 2022 2023
Distributions to GSB Toluca Apts, LLC Investors ($5,151,656) $0 $0 $0 $7,435,204
Net Earnings to Investor
- Hypothetical $50,000 Investment
($50,000) $0 $0 $0 $72,163
Fees

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

One-Time Fees
Type of Fee Amount of Fee Received By Paid From Notes
Acquisition Fee $71,625 Real Estate Company  Capitalized Equity Contribution 1.5% of the land purchase price in transaction
Developer Fee $854,460 Real Estate Company  Paid at Sale 4.75% of development hard costs and soft costs plus 8% accrued return
Debt Placement Fee $82,500 Real Estate Company or its Affiliate Capitalized Equity Contribution 0.5% of the loan amount

 

Recurring Fees
Type of Fee Amount of Fee Received By Paid From
Administrative Services Fee 1.0% of amount invested into GSB Toluca Apts, LLC RM Admin(3) Distributable Cash or Capitalized Equity Contribution

(1) Fees may be deferred to reduce impact to investor distributions

(2) RM Technologies operates the RealtyMogul platform. RM Technologies charges a fixed, non-percentage-based fee for real estate companies to use the marketplace. An estimate of this fee is included in the Closing Costs and is intented to be capitalized into the transaction at the discretion of the Manager.

(3) RM Admin will be providing the following services:(a) responding to inbound investor inquiries regarding how to subscribe to the Project, (b) distribution of all annual tax forms (after receipt of same from Project Sponsor), (c) processing distributions that are payable from GSB Toluca Apts, LLC to Investors, however, RM Admin will not be deemed to have custody of client funds, (d) distribution of all quarterly reports (after receipt of same from Project Sponsor) and (e) summarizing sponsor information on property performance, responding to investor inquiries regarding sponsor performance information as well as the real estate market generally.

 
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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