The team at our affiliated broker-dealer, RM Securities, conducts diligence on of the issuer, including detailed background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to screening for any criminal background, we may also turn down sponsors due to poor reference checks, even if the background and criminal checks are satisfactory.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent.* When an investor makes an investment with such sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s contingency offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.
* Unless otherwise disclosed, escrow accounts are not required for some investments that accommodate 1031 investments where the property is already acquired.
Our processes typically includes visiting certain properties (or a subset of properties if it's a fund) to confirm the real estate is what and where the real estate is supposed to be. For certain properties that accommodate 1031 exchange investments, the team will review third-party prepared due diligence reports in lieu of a site visit.
We have formalized processes and checklists for every private placement deal listed on the platform.
Birge & Held Asset Management
Birge & Held is a national apartment real estate, private equity and investment firm located in Carmel, Indiana. In an effort to take advantage of strategic real estate acquisition opportunities in the distressed real estate marketplace, J. Taggart Birge and Andrew J. Held started what is now Birge & Held in 2008. Birge & Held has acquired and managed over $400,000,000 in multi-family assets across the country and currently employs over 80 professionals, per the Sponsor. Through private equity and creative debt structures, Birge & Held continues to grow its portfolio of assets. For capital investors who seek to identify and pursue apartment real estate opportunities, Birge & Held provides an experienced operating partner.
http://www.birgeandheld.com/-
Tag Birge - CEO -
Andrew Held - President & COO
Mr. Birge has been involved in commercial development and financing since 1997. He graduated cum laude from Indiana University in 1993 (BA – Political Science). In 1997, he received his JD from the University of Virginia and joined Bose McKinney & Evans, LLP, Indianapolis, Indiana, as an associate, becoming a partner in the real estate group in 2004. His legal practice focused on office and industrial development representing Duke Realty Corporation on numerous transactions around the United States. As an attorney, Mr. Birge was ranked by his peers as one the best real estate attorneys in the State of Indiana.
In 2004, Mr. Birge withdrew from the partnership of Bose McKinney & Evans and joined Lauth Property Group. While at Lauth Property Group, Mr. Birge developed approximately $200 million worth of office and health care buildings around the country. Initially, Mr. Birge ran the Midwest office and health care development for Lauth Property Group and in 2007 assumed responsibility for all of Lauth’s medical development in the United States. During his tenure at Lauth, they were named a top ten developer of medical office buildings as tracked by Modern Healthcare.
Since 2008, Mr. Birge has overseen the acquisition, financing and management of BH's $230 million in multifamily assets. Mr. Birge currently serves on the Board of Directors of Bowen Engineering, the Sports Corporation Board, Heart of Gold Charity Board, and the Orchard School Board of Trustees.
Mr. Held has been involved in commercial and residential development and financing since 2003. He graduated from Indiana University in 1999 (BA – History) where he was a student-athlete and received academic All-American honors. In 2002, he received his JD from the Indiana University School of Law and practiced with the law firms of Hackman Hullet & Cracraft and Bose McKinney & Evans. His practice areas focused on commercial and residential real estate development, handling acquisitions, leasing, financing and dispositions for many of the largest commercial development and construction companies in the United States.
In 2007, Mr. Held received his MBA with a finance focus from Butler University. Since 2008, Mr. Held has overseen BH’s acquisition, financing and management of the company’s $230 million in multifamily assets. Mr. Held currently serves as the President of the Penrod Society focused on raising millions of dollars to serve the Indiana cultural and arts community. He was recently named to the Indianapolis Business Journal’s 2013 “Forty Under Forty” Class.
| Property Name | Location | Number of Units | Date Acquired | Total Cost Basis |
| Aurum | Indianapolis, IN | 208 | 2/12/13 | $13,940,593 |
| Beacon Hill Apartments | Indianapolis, IN | 14 | 4/1/13 | $1,000,000 |
| Clinton Estates | Indianapolis, IN | 184 | 7/1/13 | $13,553,680 |
| College Court Condominiums | Frankfort, IN | 48 | 11/25/13 | $1,800,000 |
| Cypress Square Apartments | Indianapolis, IN | 188 | 3/27/14 | $12,350,000 |
| Eagle Creek Apartments | Muncie, IN | 67 | 4/25/14 | $5,279,925 |
| Echo Ridge Apartments | Muncie, IN | 36 | 4/25/14 | $2,376,609 |
| Elston Point Apartments | Elkhart, IN | 76 | 10/16/14 | $3,550,000 |
| English Village Apartments | Elkhart, IN | 95 | 10/16/14 | $3,300,000 |
| Greenleaf Hunter's Pond Apartments | Indianapolis, IN | 208 | 10/22/14 | $8,600,000 |
| Kensington/Chesterfield | South Bend, IN | 60 | 11/7/14 | $6,000,000 |
| Parc Bordeaux Apartments | Bloomington, IN | 62 | 11/7/14 | $4,000,000 |
| Pheasant Run Apartments | Indianapolis, IN | 208 | 12/9/14 | $8,700,000 |
| Railway Manor | Bloomington, IN | 32 | 8/31/15 | $3,575,000 |
| Regency Park | Indianapolis, IN | 632 | 9/18/15 | $45,000,000 |
| The Arbors | Bloomington, IN | 24 | 10/6/15 | $2,732,000 |
| The Oaks of Eagle Creek Apartments | Indianapolis, IN | 304 | 12/22/15 | $15,322,000 |
| Walnut Springs Apartments | Lafayette, IN | 62 | 1/19/16 | $3,882,000 |
| Woodwind Apartments | Lafayette, IN | 44 | 1/28/16 | $2,220,000 |
| The Villager | Centerville, OH | 276 | 2/19/16 | $22,900,000 |
| Chesapeake Landing | Centerville, OH | 256 | 4/28/16 | $22,110,000 |
| Beechmill Apartments | Indianapolis, IN | 256 | 5/6/16 | $19,175,000 |
| Trails at Lakeside Apartments | Indianapolis, IN | 208 | 9/8/16 | $18,100,000 |
| Lakeshore Apartments | Indianapolis, IN | 740 | 9/15/16 | $84,900,000 |
| Cross Creek Apartments | Indianapolis, IN | 208 | 1/9/17 | $14,725,000 |
| Total | 4,496 | $339,091,808 |
| Property Name | Location | Number of Units | Date Acquired | Total Cost Basis | Sale Price |
| Harborview Condominiums | San Diego, CA | 81 | 3/1/09 | $20,406,491 | $22,000,000 |
| Bear Valley Apartments | San Diego, CA | 24 | 11/8/10 | $4,200,000 | $4,900,000 |
| Walnut Manor Apartments | Muncie, IN | 120 | 11/30/11 | $2,471,700 | $4,850,000 |
| Centro Apartments | San Diego, CA | 60 | 12/19/11 | $11,213,764 | $15,800,000 |
| Palm Valley Apartments | Goodyear, AZ | 264 | 4/1/12 | $22,925,000 | $27,200,000 |
| Fox Brook Apartments | Muncie, IN | 41 | 4/2/12 | $1,275,000 | $1,900,000 |
| Total | 590 | $62,491,955 | $76,650,000 | ||
| Total Currently Owned and Sold | 5,086 | $401,583,763 | $76,650,000 |
*Performance information provided by the Sponsor
In this transaction, RealtyMogul.com investors will invest in Realty Mogul 78, LLC. Realty Mogul 78, LLC will subsequently invest in BH Chestnut Ridge, LLC, the entity that will indirectly hold title to the Property.
Upon acquisition, the Sponsor’s business plan is to complete upgrades to the clubhouse and fitness center, install washer dryers in 183 units, as well as renovate 30 unit interiors. The seller has completed upgrades on 23 units which are currently achieving rental premiums of $50-125 over unrenovated units, which the Sponsor intends to continue to capitalize on. The level of improvements to the unit interiors will be determined on a case-by-case basis, but will typically include new floors, painting cabinets, lighting, appliances and re-glazed bathtubs. The Sponsor believes the current out of state ownership has not given the asset the appropriate attention and sees an opportunity to increase value through continuing a targeted renovation program as well as implementing increased hands on management.
Per conversations with the on-site manager and residents, as well as studying competitive properties, the Sponsor believes that installation of washer dryer units will provide the greatest increase in value to the asset, as the Property currently only has one laundry facility on site, causing many residents to have to travel to one of the nearby offsite laundromats. Including the 30 units slated for renovations, the Sponsor intends to install a total of 183 washer dryer units in the 2x1 units. The Sponsor has selected the 2x1 units to receive the washer dryers, as the bathrooms in those floor plans have a vacant space adjacent to the vanity which will allow a stackable washer dryer to fit with no need to build a ‘’box’’ or other housing unit to hold the appliances. The required water supply is located next to the installation locations, and the electrical panels, which were recently upgraded to allow for higher amperage, are located in the hallway outside of the bathroom doors. The buildings at the Property are not set up to allow for proper ventilation for dryers on the first or second floors, so the Sponsor intends to use a lint trap kit to capture the exhaust from units on the first and second floors. Those units work by having the exhaust run into the box where a pool of water collects the expelled lint. The onsite maintenance staff will be responsible for making sure there is an appropriate level of water in the boxes and this will be added to the maintenance schedule. The Sponsor is targeting rental increases for the 30 renovated units averaging $115/unit, a 16% increase over average in-place rents for those units and is projecting a $55 increase for the units receiving only washer dryers, an 8% increase from in place. The Sponsor intends to complete all renovations within the first two years of ownership, and intends to sell the Property within seven years.
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A summary of the capital expenditures planned at the Property is as follows:
| CapEx Item | $ Amount | Per Unit |
|---|---|---|
| Interior Rehabs (30 units) | ||
| Kitchen and Bath Hnges/Handles | $19,500 | $650 |
| White Resin Countertops in Bathrooms | $30,000 | $1,000 |
| Granite Countertops in Kitchen | $36,000 | $1,200 |
| LVT Plank Flooring | $48,000 | $1,600 |
| Lighting & Door Hardware/Handles | $30,000 | $1,000 |
| Paint Cabinets and add Hardware | $36,000 | $1,200 |
| New Appliances | $42,000 | $1,400 |
| Replace Tub Surround/Glaze Tub | $30,000 | $1,000 |
| General Contractor Fee (8%) | $21,720 | $724 |
| Total Interiors | $293,220 | $9,774 |
| Washer Dryer Installations (183 units) | $457,500 | $2,500 |
| Clubhouse/Fitness Center Remodel | $250,000 | $651 |
| Total | $1,000,720 | $2,606 |
RealtyMogul.com, along with Birge and Held Asset Management (the "Sponsor"), is providing the opportunity to invest in the acquisition of Chestnut Ridge, a 384-unit multifamily Property located in Jeffersontown, KY (Louisville MSA) the "Property".
The primary objective of this investment is to acquire the Property, perform common area upgrades, interior renovations, and install much needed washer dryers in approximately 48% of the units, then sell the Property within approximately seven (7) years.
The Sponsor sees this investment as an opportunity to capitalize on a well occupied, well located asset in a strong market that can be improved through targeted capital improvements and improved management and leasing efforts.
Chestnut Ridge is a 384-unit garden-style apartment complex located at 9601 Balsam Way, Jeffersontown, KY. Built in 1968, the unit mix consists of 72 one (1) bedroom, one (1) bathroom units, 201 two (2) bedroom, one (1) bathroom units, 51 two (2) bedroom, one and a half (1.5) bathroom units, 31 three (3) bedroom, one (1) bathroom units, and 29 three (3) bedroom, one and a half (1.5) bathroom units across 15 buildings. Current occupancy is 92% with in-place rents averaging $723 and ranging from $624 for one bedrooms and $851 for three bedrooms.
Amenities at the Property include a fitness center, a pool, laundry room, clubhouse, dog park, tennis court, playground, and mature landscaping. There are 528 parking spaces for a parking ratio of 1.38 spaces/unit. The Seller has renovated 23 unit interiors to date which are currently achieving rental premiums of $50-125 over unrenovated units.
| Unit Type | # of Units | Avg SF/Unit | In-Place Rent | Rent/SF | Stabilized Rent | Rent/SF |
|---|---|---|---|---|---|---|
| 1 Bed, 1 Bath | 72 | 850 | $624 | $0.73 | $659 | $0.78 |
| 2 Bed, 1 Bath | 201 | 950 | $721 | $0.76 | $783 | $0.82 |
| 2 Bed, 1.5 Bath | 51 | 950 | $739 | $0.78 | $774 | $0.81 |
| 3 Bed, 1 Bath | 31 | 1,000 | $826 | $0.83 | $861 | $0.86 |
| 3 Bed, 1.5 Bath | 29 | 1,000 | $851 | $0.85 | $886 | $0.89 |
| Total | 384 | 939 | $723 | $0.77 | $773 | $0.82 |
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| Saddle River | Four Seasons | The Park at Hurstbourne | Mallgate at Saint Matthews | Breckenridge Square | Total / Averages | Subject - Stabilized | |
|---|---|---|---|---|---|---|---|
| Year Built | 1972 | 1975 | 1976 | 1969 | 1970 | 1972.4 | 1968 |
| # 1 Bed Units | 40 | 52 | 106 | 129 | 112 | 88 | 72 |
| 1 Bedroom Rent | $742 | $625 | $737 | $675 | $734 | $705 | $654 |
| SF | 914 | 700 | 850 | 768 | 800 | 801 | 850 |
| # 2 Bed Units | 150 | 84 | 159 | 246 | 32 | 134 | 252 |
| 2 Bedroom Rent | $852 | $745 | $777 | $832 | $814 | $812 | $780 |
| SF | 1,291 | 1,000 | 967 | 1,065 | 1,000 | 1,081 | 950 |
| # 3 Bed Units | 38 | 40 | 53 | 38 | 40 | 42 | 60 |
| 3 Bedroom Rent | $998 | $900 | $882 | $1,008 | $1,024 | $957 | $870 |
| SF | 1,525 | 1,500 | 1,260 | 1,301 | 1,550 | 1,417 | 1,000 |
| Distance | 2.4 mi | 1.9 mi | 3.2 mi | 3.8 mi | 4.0 mi |
| Subject | Saddle River | Woodbridge Apts | Willowbrook Apts | Enclave at Breckenridge | Carlisle Arms | Total / Averages | |
|---|---|---|---|---|---|---|---|
| Date | May-17 | February-17 | January-16 | December-16 | January-17 | February-16 | |
| # of Units | 384 | 228 | 360 | 120 | 384 | 67 | 232 |
| Year Built | 1968 | 1972 | 1984 | 1970 | 1970 | 1971 | 1973 |
| Purchase Price | $26,000,000 | $21,000,000 | $30,450,000 | $6,175,000 | $34,000,000 | $4,500,000 | $19,225,000 |
| $/Bed | $67,708 | $92,105 | $84,583 | $51,458 | $88,542 | $67,164 | $82,938 |
| Cap Rate | 7.54% | 5.50% | 6.22% | N/A | N/A | N/A | 5.86% |
| Distance | 2.4 mi | 6.1 mi | 5.5 mi | 3.7 mi | 4.4 mi |
The Property is located in Jeffersontown, KY (Louisville MSA) along Taylorsville Rd, a major local thoroughfare connecting I-265 to S. Hurstbourne Pkwy., which connects to I-64, leading to downtown Louisville 20 minues away. The Property is within walking distance to a Dollar General anchored retail center and Jeffersontown High School. Other retail amenities nearby include a Kroger anchored center, a Target Anchored center, Home Depot and a Walmart Supercenter. Major employers within an eight-mile radius include: UPS Worldport & UPS Supply Chains Solutions (22,800 employees), Norton Healthcare (11,389 employees), Kentucky One Health (6,000 employees), Baptist Healthcare (4,995 employees), University of Louisville Hospital (2,331 employees), and the Ford Assembly and Ford Truck Plants (12,990 employees).
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Market Overview
Per Axiometrics, Louisville/Jefferson County, KY-IN Metro Area's two largest job sectors are the Trade, Transportation, and Utilities sector (22.6% of employment), followed by the Professional and Business Services sector (14.3% of employment). The Trade, Transportation, and Utilities sector gained 1,900 jobs during the 12 months ending December 2016, constituting job growth of 1.3%. The Professional and Business Services sector grew 5,500 jobs during the same period; a 6.0% growth rate.
Louisville/Jefferson County, KY-IN Metro Area's 2014 population of 1,269,702 was an increase of 7,458, or 0.6% from the previous year, below the national population change of 0.7%, according to the U.S. Census Bureau. The median price for existing single family homes in Louisville/Jefferson County, KY-IN Metro Area was $164,000 in 4Q16, according to the National Association of Realtors, 6.9% more than the previous year. According to the U.S. Department of Housing and Urban Development, the market's median family income was $64,670, an increase of 3.4% from the prior year. When combining median home price, median family income, interest rate, and the loan-to-price ratio into the housing affordability index, Louisville/Jefferson County, KY-IN Metro Area ranks as the 64th most affordable single family market out of the 211 markets measured nationwide.
Effective rent decreased 0.6% from $851 in 3Q16 to $846 in 4Q16, which resulted in an annual growth rate of 3.4%. Annual effective rent growth is forecast to be 2.7% in 2017, and average 3.1% from 2018 to 2020. Annual effective rent growth has averaged 2.1% since 3Q96. The market's annual rent growth rate was above the national average of 2.6%. Out of the 120 markets ranked by Axiometrics nationally, Louisville/Jefferson County, KY-IN Metro Area was 51st for quarterly effective rent growth, and 52nd for annual effective rent growth for 4Q16. The market's occupancy rate decreased from 96.1% in 3Q16 to 95.1% in 4Q16, but was up from 94.6% a year ago. The market's occupancy rate was above the national average of 94.7% in 4Q16. For the forecast period, the market's occupancy rate is expected to be 95.3% in 2017, and average 94.9% from 2018 to 2020. The market's occupancy rate has averaged 93.7% since 3Q95.
Submarket Overview
Effective rent decreased 0.1% from $856 in 3Q16 to $855 in 4Q16. The submarket's annual rent growth rate of 2.0% was below the market average of 3.4%. Out of the 7 submarkets in the market, the Chenoweth/Taylorsville submarket ranked 4th for quarterly effective rent growth and 5th for annual effective rent growth for 4Q16. Annual effective rent growth was forecasted to be 2.7% in 2016, and average 2.4% through 2016 to 2018. The annual effective rent growth has averaged 1.9% per year since 3Q96. The submarket's occupancy rate decreased from 96.0% in 3Q16 to 95.0% in 4Q16, and was up from 93.8% a year ago. The submarket's occupancy rate was below the market average of 95.1% in 4Q16. For the forecast period, the submarket's occupancy rate is expected to decrease to 94.5% in 2016 and average 94.6% from 2016 to 2018. The submarket's occupancy rate has averaged 94.0% since 3Q96
| Axiometrics Market Performance Summary Report - Chenoweth/Taylorsville Submarket | |||||
| 2016 | 2017 | 2018 | 2019 | ||
| Submarket Vacancy | 5.4% | 4.9% | 5.8% | 5.4% | |
| Avg Rent Growth | 2.7% | 2.6% | 2.0% | 3.1% | |
Demographic Information
| Distance from Property | 1 Mile | 3 Miles | 5 Miles |
| Population (2016) | 11,160 | 78,393 | 190,760 |
| Projected Growth (2016-2021) | 3.04% | 2.26% | 2.55% |
| Median Household Income (2016) | $53,042 | $64,381 | $58,945 |
| Median Household Value (2016) | $146,795 | $183,596 | $180,273 |
*Demographic information was obtained from CoStar.
| Sources of Funds | Cost |
|---|---|
| Debt | $19,012,012 |
| Equity | $8,404,988 |
| Total Sources of Funds | $27,417,000 |
| Uses of Funds | Cost |
| Purchase Price | $26,000,000 |
| CapEx Reserve | $1,000,000 |
| Sponsor Acquisition/Guarantor Fee | $390,000 |
| Sr. Loan Assumption Costs | $490,650 |
| Supplemental Loan Financing Costs | $98,500 |
| Closing Costs | $50,000 |
| Working Capital | $285,558 |
| Broker Dealer Fee | $64,000 |
| Tax, Rent, CapEx and Deposit Credits | ($961,708) |
| Total Uses of Funds | $27,417,000 |
The projected terms of the debt financing are as follows:
Loan Assumption: Due to the yield maintenance provisions, the Sponsor anticipates assuming the loan currently in place at the Property and plans to obtain additional supplemental financing from the existing lender which is to be coterminous with the existing debt.
- Lender: Fannie Mae (Arbor)
- Estimated Balance at Closing: $15,712,012
- Rate: Fixed (5.36%)
- Amortization: 30 years
- Maturity Date: February 2024
- Prepayment Penalty: Yield maintenance until July 2023
Supplemental Debt:
- Lender: Fannie Mae (Arbor)
- Estimated Proceeds: $3,300,000
- Rate: 7 Year Treasury + 3.43% (5.61% as of 4/6/2017). Rate has not been locked yet, RM has assumed a rate of 5.75% for underwriting purposes.
- Amortization: 30 years
- Maturity Date: February 2024
- Prepayment Penalty: Yield maintenance until August 2023, 1% thereafter
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.
BH Chestnut Ridge, LLC intends to make distributions to investors (Realty Mogul 78, LLC, Sponsor and Other LP Investors, collectively, the "Members") as follows:
Operating Cash Flow
- First, to investors for any accumulated unpaid preferred return
- Second, a cumulative non-compounded 8% annual preferred return
- Then, any excess balance will be split 70% to members pari passu (which will reduce the Member's capital accounts) and 30% to Sponsor.
Capital Events (sale, refinance)
- First, to investors for any accumulated unpaid preferred return
- Second, a cumulative non-compounded 8% annual preferred return
- Third, return of capital
- Then, any excess balance will be split 70% to members pari passu and 30% to Sponsor.
Note that these distributions will occur after the payment of the Company's liabilities (loan payments, operating expenses and other fees as set forth in the LLC agreement, in addition to any member loans or returns due on member loans).
Realty Mogul 78, LLC will distribute 100% of its share of excess cash flow (after expenses and fees) to the members of Realty Mogul 78, LLC (the RealtyMogul.com investors).
Distributions are expected to start in September 2017 and are expected to continue on a semi-annual basis thereafter. These distributions are at the discretion of the Sponsor, who may decide to delay distributions for any reason, including maintenance or capital reserves.
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|
| Effective Gross Revenue | $2,637,694 | $3,686,821 | $3,830,276 | $3,959,566 | $4,083,087 | $4,205,782 | $4,331,955 |
| Total Operating Expenses | $1,228,109 | $1,673,610 | $1,719,784 | $1,766,697 | $1,814,680 | $1,863,943 | $1,914,677 |
| Net Operating Income | $1,409,586 | $2,013,211 | $2,110,492 | $2,192,869 | $2,268,407 | $2,341,839 | $2,417,278 |
| Annual Debt Service | $1,003,490 | $1,337,987 | $1,337,987 | $1,337,987 | $1,337,987 | $1,337,987 | $1,337,987 |
|
Distributions to Realty |
$62,049 | $108,438 | $124,230 | $131,944 | $141,196 | $149,987 | $2,990,864 |
Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:
| Type of Fee | Amount of Fee | Received By | Paid From | Notes |
| One-Time Fees | ||||
|---|---|---|---|---|
| Acquisition/Guarantor Fee | $390,000 | Sponsor | Capitalized Equity Contribution | 1.5% of the Property purchase price |
| Broker-Dealer Fee | $64,000 | North Capital (1) | Capitalized Equity Contribution | 4.0% of the amount of equity raised by RealtyMogul.com |
| Recurring Fees | ||||
| Property Management Fee | 3.0% of Effective Gross Income | Sponsor | Operating Cash Flow | |
| Management and Administrative Fee | 1.0% of amount invested in Realty Mogul 78, LLC | RM Manager, LLC | Distributable Cash | RM Manager, LLC is the Manager of Realty Mogul 78, LLC and a wholly-owned subsidiary of Realty Mogul, Co. (2) |
Notes:
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.
(2) Fees may be deferred to reduce impact to investor distributions.
The above presentation is based upon information supplied by the Sponsor or others. Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 78, LLC, along with their respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.
For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
No Approval, Opinion or Representation, or Warranty by RM Securities, LLCSponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.
Sponsor’s Information Qualified by Investment DocumentsThe information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.
Risk of InvestmentThis investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.
No Reliance on Forward-Looking Statements; Sponsor AssumptionsSponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.
Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.
No Reliance on Past PerformanceAny description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.
Sponsor’s Use of DebtA substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.
Sponsor’s Offering is Not RegisteredSponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.
No Investment AdviceNothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
1031 Exchange RiskInternal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.