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

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.

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Confidentiality Agreement
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By clicking the ‘I Agree’ button below:
Open for investment
Estimated Hold Period 3 Years
Estimated First Distribution 9/2024
FUNDED 50%
...
View Our Due Diligence Process
Offered By
ClearWorth Capital
Investment Strategy Value-Add
Investment Type Equity
Minimum Investment 35000
Overview
The Carling on Frankford is a Class B, 274-unit, garden-style multifamily property located in Carrollton, TX being sold by a distressed seller forced to sell. The Property is being purchased by a Dallas-based Sponsor with 5,000+ units under management in Texas and a strong track record.
Investment Highlights
Experienced, Repeat Sponsor: ClearWorth Capital is a vertically integrated multifamily owner with over 5,000 units under management in Texas. Its managing partner has acquired and renovated thirty (30) multifamily projects with a combined value approaching $1 billion in his career.
Off-Market and Distressed Opportunity: The Sponsor is acquiring the property off-market from a distressed seller who is being forced to sell their portfolio due to poor operations and floating rate debt exposure. ClearWorth has a proven track record of closing with this seller, who exclusively presented this offering to them.
Operational Upside: ClearWorth has identified opportunities for increased income and expense optimization at The Carling, including turnover and administrative costs, to bring it in line with their portfolio average.
Value-Add: ClearWorth plans to spend money on a value-add package. Higher-end comps are achieving hundreds higher on rents over The Carling at Frankford. The Sponsor believes that its renovation plan will allow the Sponsor to reprice the asset and close the gap in the market.
Strong Suburban Submarket with Low Taxes: Moody’s Analytics projects the vacancy in the Carrollton submarket for the next 3 years to be 4.5%, 3.7%, and 3.8%, respectively. Notably, the Denton County mill rate is one of the lowest in the DFW metroplex, at 1.72%. This translates to an additional $187k in cash flow compared to if this same asset was situated in Dallas County.
Quality Demographics: The asset is proximate to some of the city’s largest employment hubs and is situated in a high-income suburban neighborhood, with 1-mile median incomes at approximately $87k, and home values in Carrollton, TX averaging $418k, which translates to roughly a $2.5k monthly payment. The Carling is zoned to the highly rated Carrollton Independent School District and notably the A-rated Creekview High School per niche.com.
Low Basis Versus Replacement Cost: The Carling on Frankford is being purchased near the loan basis of the current owner - $135k per unit. This is less than one-third the cost of the average area home. Replacement costs for garden-style projects are roughly $230k+ per unit due to continued construction inflation.
Management
Cumulative Distributions

ClearWorth Capital

ClearWorth Capital is a vertically integrated, Texas-based multifamily owner and operator with offices in Dallas and Houston. The company serves as a deal sponsor providing acquisition, investment management, and disposition functions. ClearWorth Residential provides property and construction management services. ClearWorth seeks to maximize returns for investment partners through physical property enhancements and operational improvements. They enhance their business through joint venture partnerships, creative deal structuring, sophisticated approaches to finance, and the implementation of transformative technologies.

ClearWorth has a track record of delivering consistent, superior returns. Its managing partner, Matthew Stone, has been a principal in development and renovation projects totaling over $2 billion in value. Development experience includes thirty-seven (37) projects, twenty-eight (28) of which were multifamily, with 5,000+ multifamily units, as well as senior housing, student housing, townhomes, hotels, condominiums, and office buildings. He has also acquired and renovated thirty (30) multifamily projects with a combined value approaching $1 billion.

https://clearworthcapital.com/
  • Matthew Stone
    Managing Partner and CEO
  • Chris Mendenhall
    Senior Vice President
Matthew Stone
Managing Partner and CEO

During his career, Mr. Stone has been part of the Sponsor team for over $1 billion in commercial real estate development and renovation projects. His development experience includes 37 projects, including over 6,000 multifamily units, as well as senior housing, student living, townhomes, condominiums, office buildings, and hotels.

Through ClearWorth Capital and its predecessor companies, Matthew has also acquired and renovated 30 multifamily projects totaling over 7,000 units. During his career, Matthew has held a number of other positions, including:

- President and CEO of Seneca Investments, a real estate development company

- Associate with Oliver Wyman, a global strategy and operations consulting firm

- Loan officer with Bank of America engaged in the origination of construction loans, lines of credit, bridge loans, and mini-perms in excess of $500M.

Matthew earned a BS in Industrial Engineering from Stanford University and an MBA with distinction (Sord Scholar, Dean’s Award, MBA Excellence Fund Scholar, and Endowed Presidential Scholar) from the University of Texas at Austin with a concentration in Real Estate Finance.

Chris Mendenhall
Senior Vice President

Chris Mendenhall joined the ClearWorth team in February of 2018 and currently serves as Vice President, Investments. He is responsible for acquisitions as well as investment management. Chris began his career in corporate investment banking at JP Morgan, and has held various positions with multiple companies, including:

- Development and Acquisitions Associate at Seneca Investments with responsibilities including development project management, asset management, and debt and equity relationships.

- Development Associate at Genesis Real Estate Group with responsibilities including site selection, construction management, and development project management. While at Genesis, Chris worked on two high-rise multifamily projects totaling over 1,000 units.

- Investment Analyst and Transaction Manager with Newmark Knight Frank (formerly Apartment Realty Advisors), where he gained experience underwriting 200+ assets throughout the Southwest valued at over $5.5 billion.

Chris earned his degree in Real Estate Finance from the University of Arkansas. He is a member of the Urban Land Institute and holds a real estate sales license in the state of Texas.

Track Record

Property Name Market Name City, State Status Acq Date Units Purchase Price Sales Price or Estimated Value IRR EM Exit Date Year Built Asset Type
Firewheel Town Village Dallas-Fort Worth Garland, Texas Owned 11/30/2018 154 $24,640,000 $36,960,000 19.50% 1.50X Currently Owned 2018 Senior Independent Living
Woodside Flats Dallas-Fort Worth Dallas, Texas Owned 5/31/2021 311 $20,837,000 $34,210,000 21.00% 1.64X Currently Owned 1982 Multifamily Value-Add
Northwood Dallas-Fort Worth Richardson, Texas Owned 12/20/2021 272 $40,800,000 $61,200,000 19.00% 1.50X Currently Owned 1969 Multifamily Value-Add
Solana Dallas-Fort Worth Garland, Texas Owned 4/30/2022 230 $23,000,000 $36,000,000 22.00% 1.57X Currently Owned 1965 Multifamily Value-Add
The Brooke Apartments Killeen Temple, Texas Owned 4/17/2023 206 $17,350,000 $28,840,000 20.48% 1.66X Currently Owned 1982 Multifamily Value-Add
The Halston College Station-Bryan College Station, Texas Owned 8/10/2022 284 $29,000,000 $49,000,000 22.37% 1.69X Currently Owned 1981 Multifamily Value-Add
Lockwood Heights Dallas-Fort Worth Richardson, Texas Owned 10/6/2022 202 $30,000,000 $44,440,000 19.50% 1.48X Currently Owned 1968 Multifamily Value-Add
Lakeridge Heights Dallas-Fort Worth Dallas, Texas Owned 7/28/2022 178 $21,000,000 $35,000,000 20.50% 1.67X Currently Owned 1969 Multifamily Value-Add
Verlaine on the Parkway Dallas-Fort Worth Dallas, Texas Owned 10/1/2020 294 $40,278,000 $60,270,000 19.75% 1.50X Currently Owned 1971 Multifamily Value-Add
Wimbledon Houston Houston, Texas Owned 1/15/2024 161 $13,846,000 $24,050,000 26.08% 1.95X Currently Owned 1979 Multifamily Value-Add
North Bend Living Houston Houston, Texas Owned 9/9/2021 282 $22,500,000 $35,000,000 27.90% 1.56X Currently Owned 1983 Multifamily Value-Add
The Ambrose Houston Houston, Texas Owned 9/30/2022 408 $53,000,000 $91,500,000 19.00% 1.73X Currently Owned 1999 Multifamily Value-Add
Northside Heights Houston Conroe, Texas Owned 4/12/2022 228 $26,250,000 $38,750,000 19.50% 1.48X Currently Owned 1980 Multifamily Value-Add
Park At Woodmoor Apartments Houston Shenandoah, Texas Owned 3/1/2022 220 $32,760,000 $48,000,000 22.50% 1.47X Currently Owned 2000 Multifamily Value-Add
South Shore Coastal Living Corpus Christi Corpus Christi, Texas Owned 6/9/2021 233 $21,203,000 $32,228,560 18.00% 1.52X Currently Owned 1973 Multifamily Value-Add
The Reston Houston Conroe, Texas Owned 10/10/2018 212 $17,250,000 $25,440,000 21.00% 1.47X Currently Owned 1983 Multifamily Value-Add
The Palm on SPID Corpus Christi Corpus Christi, Texas Owned 8/31/2019 299 $21,300,000 $36,210,000 22.00% 1.70X Currently Owned 1973 Multifamily Value-Add
The Pointe at Victoria Victoria Victoria, Texas Owned 4/28/2022 286 $42,000,000 $60,000,000 21.50% 1.43X Currently Owned 2012 Multifamily Value-Add
Lakeside at Campeche Houston Galveston, Texas Owned 5/17/2023 320 $32,500,000 $55,500,000 25.80% 1.71X Currently Owned 1985 Multifamily Value-Add
Lavera at Lake Highlands Dallas-Fort Worth Lake Highlands, TX Owned 8/28/2023 280 $33,300,000 $55,816,000 24.00% 1.85X Currently Owned 1970 Multifamily Value-Add
Stoneleigh on the Lake Houston Houston, Texas Sold 12/15/2015 228 $20,145,000 $24,500,000 32.00% 1.96X 4/1/2013 2005 Multifamily Value-Add
Axiom Hub 121 Dallas-Fort Worth McKinney, Texas Sold 8/20/2022 286 $46,600,000 $80,000,000 34.00% 2.95X 3/1/2020 2020 Multifamily New Development
McDermott Park Dallas-Fort Worth Plano, Texas Sold 8/31/2018 144 $23,080,000 $38,293,700 34.00% 2.76X 2/1/2022 2018 Multifamily New Development
McDermott Crossing Dallas-Fort Worth Plano, Texas Sold 3/1/2012 123 $18,000,000 $28,706,300 18.00% 2.34X 8/1/2012 2011 Multifamily New Development
Stoneleigh on Cypress Pointe Houston Houston, Texas Sold 5/1/2016 228 $18,300,000 $23,800,000 32.30% 1.97X 5/1/2016 2007 Multifamily Value-Add
Estates of Coppell Dallas-Fort Worth Coppell, Texas Sold 2/1/2014 56 $9,260,000 $13,700,000 28.00% 1.84X 3/1/2017 2005 Multifamily Value-Add
Stoneleigh Spring Cypress Houston Houston, Texas Sold 4/1/2014 216 $19,986,000 $24,800,000 36.00% 2.26X 12/1/2017 2004 Multifamily Value-Add
The Grand Hampton at Clear Lake Houston Houston, Texas Sold 8/30/2017 347 $25,165,000 $39,011,000 24.10% 2.04X 9/14/2021 1976 Multifamily Value-Add
Champions at Ponderosa Houston Houston, Texas Sold 9/1/2016 177 $10,500,000 $16,700,000 16.20% 1.83X 2/23/2021 1978 Multifamily Value-Add
Huxley at Medical Center Houston Houston, Texas Sold 10/10/2018 284 $24,200,000 $36,000,000 22.60% 1.91X 12/9/2021 1983 Multifamily Value-Add
Creekside Villas at Lake Houston Houston, Texas Sold 8/30/2017 202 $13,215,000 $25,850,000 28.00% 2.25X 6/3/2022 1978 Multifamily Value-Add
Steeplecrest Houston Houston, Texas Sold 10/1/2019 260 $29,400,000 $36,600,999 6.00% 1.15X 2/1/2023 1992 Multifamily Value-Add
Harbor House on Saratoga Corpus Christi Corpus Christi, Texas Sold 3/1/2019 252 $25,704,000 $40,500,000 18.00% 1.73X 6/22/2022 1998 Multifamily Value-Add
Stoneleigh Corpus Christi Corpus Christi Corpus Christi, Texas Sold 8/1/2004 348 $22,620,000 $31,000,000 15.00% 1.90X 4/16/2013 2004 Multifamily Value-Add
Totals         8,211 $868,989,000 $1,347,876,559          

(1) The provided track record represents the experience of the Sponsor, ClearWorth Capital, since its inception.

(2) The above bios and track record were provided by ClearWorth Capital and have not been independently verified by RealtyMogul.

(3) The IRRs and EMx of the owned deals represented above are projections based on initial budgets and underwriting. They do not reflect realized returns and are subject to change.

Property Information

The Sponsor plans to acquire the subject property for $37 million or $135k per unit. This price is slightly higher than the current loan of roughly $36 million but is still 14% lower per unit compared to the comps, which average $156k. Plans for the property entail comprehensive improvements to both its interior and exterior, as well as operational enhancements. A total budget of $2.9 million, or $10,585 per unit, has been allocated, with approximately $1.5 million designated for interior renovations and approximately $1.4 million for exterior enhancements. The sponsor aims to capitalize on the premium achieved by the renovated units, which command a $200 rent premium reflecting a 23% ROC. To achieve this, $13,388 per unit has been earmarked for upgrades in 40% of the total 274 units, totaling 110 units. Enhancements will encompass lighter paint colors, granite countertops with undermount sinks, backsplashes, and updated component packages. Additionally, washer/dryer sets will be procured for approximately 70 units. For the building's exterior, attention will be directed toward rectifying deferred maintenance, exterior painting, rebranding efforts, and reactivating the common laundry room. Operational improvements will be facilitated by the sponsor's in-house property management arm, aimed at reducing various expense items such as turnover costs, administrative expenses, maintenance, and painting. This initiative is expected to yield cost savings, aligning with the sponsor's portfolio average. Under the current underwriting, a bridge loan with a 3-year initial term and two 1-year extensions at a floating interest rate of SOFR+3.25% is assumed, with a budgeted rate cap maintaining the overall interest rate at or below 7.25% throughout the 3-year hold period. The renovation is projected to be completed in month 18 or early 2026.

Comparables

Lease Comparables

  Galleria Townhomes The Place at Briarcrest Trinity Mills Apartments Orchids of Carrollton Holden Villa Sienna Tallows Averages Subject
(In-Place)
Subject
(Post-Reno)
Year Built 1984 1983 / 2016 1982 1984 1981 1979 1983 1982 1983 1983
Class B C C C C B B - -
# of Units 174 238 208 131 320 256 252 226 274 274
Average Unit Size 1,049 SF 961 783 SF 858 SF 840 SF 821 SF 866 SF 876 SF 804 SF 804 SF
Levels 2 2 2 2 2 2 2 2 2 2
Distance from Subject 0.6 mile 2.0 miles 2.7 miles 1.8 miles 1.9 miles 0.50 mile 0.90 mile 1.5 miles 0.0 mile 0.0 mile
                     
$/Unit (1x1)       $1,000   $1,185 $1,155 $1,113 $1,070 $1,178
SF (1x1)       618 SF   655 SF 730 SF 668 SF 672 SF 672 SF
$/SF (1x1)       $1.62   $1.81 $1.58 $1.67 $1.66 $1.93
                     
$/Unit (2x1)         $1,385 $1,573   $1,479 $1,318 $1,449
SF (2x1)         866 SF 787 SF   827 SF 830 SF 830 SF
$/SF (2x1)         $1.60 $2.00   $1.80 $1.68 $1.90
                     
$/Unit (2x2)       $1,300 $1,460 $1,745 $1,655 $1,540 $1,422 $1,549
SF (2x2)       963 SF 1000 SF 919 SF 975 SF 964 SF 960 SF 960 SF
$/SF (2x2)       $1.35 $1.46 $1.90 $1.70 $1.60 $1.56 $1.79
                     
$/Unit (2x2.5) - Townhome             $1,625 $1,625 $1,544 $1,649
SF (2x2.5)             1,056 SF 1,056 SF 1,100 SF 1,100 SF
$/SF (2x2.5)             $1.54 $1.54 $1.46 $1.74
                     
Property Address 1737 E Frankford Rd, Carrollton, TX 75007 1330 Mac Arthur Dr, Carrollton, TX 75007 2750 E Trinity Mls Rd, Carrollton, TX 75006 2240 E Trinity Mls Rd, Carrollton, TX 75006 2500 Guerrero Dr, Carrollton, TX 75006 3022 N Josey Ln, Carrollton, TX 75007 1602 E Frankford Rd, Carrollton, TX 75007   1811 E Frankford Rd, Carrollton, TX 75007 1811 E Frankford Rd, Carrollton, TX 75007

 

Sales Comparables

  Bella Vista Apartment Savannah at North Dallas The Holden Tides on Timberglen The Place at Briarcrest Gardens of Josey Lane Apartments Bridges at Deer Run Apartments Windsong Tiburon The Vines Apartments Rise Heather Ridge Morrison Apartment Homes Lakeland Apartments Averages Subject
(Going-in)
Subject
(Exit)
Date Sold May-22 Jul-22 Apr-22 Apr-22 May-22 Jan-23 May-22 Apr-22 Oct-23 Dec-23 Oct-23 Mar-23 Oct-23 Nov-22 May-24 May-27
Year Built 1982 1986 1981 1984 1983 1973 1984 1986 1982 1984 1986 1978 1985 1983 1983 1983
# of Units 400 192 320 580 238 208 304 264 362 300 252 144 61 279 274 274
Average Unit Size 922 SF 601 SF 839 SF 870 SF 961 SF 881 SF 680 SF 652 SF 995 SF 814 SF 735 SF 876 SF 804 SF 818 SF 804 SF 804 SF
Sale Price $69,033,060 $29,150,945 $47,079,325 $97,999,936 $60,200,000 $33,625,748 $45,326,266 $39,362,284 $50,680,000 $42,500,000 $29,150,954 $21,000,000 $8,000,000 $44,198,659 $37,000,000 $56,047,374
$/Unit $172,583 $151,828 $147,123 $168,965 $252,941 $161,662 $149,100 $149,100 $140,000 $141,667 $121,528 $145,833 $131,148 $158,506 $135,036 $204,552
$/SF $186 $252 $175 $194 $263 $187 $219 $228 $141 $174 $165 $166 $163 $193 $168 $254
Cap Rate                 5% 5.11% 4.30% 3.75% 4.75% 4.58% 5.5%¹ 5.80%
Building Size 404,371 SF 115,300 SF 344,080 SF 535,162 SF 228,674 SF 179,775 SF 206,720 SF 203,656 SF 371,836 SF 250,334 SF 197,450 SF 122,572 SF 51,801 SF 247,056 SF 322,975 SF 322,975 SF
Distance from subject (miles) 0.4 mile 1.4 miles 1.4 miles 1.8 miles 1.9 miles 2.4 miles 2.5 miles 2.5 miles 5.7 miles 5.9 miles 18.0 miles 6.2 miles 8.8 miles 3.9 miles 0.0 miles 0.0 miles
Property Address 1834 E Peters Colony Rd, Carrollton, TX 75007 17910 Kelly Blvd, Dallas, TX 75287 2500 Guerrero Dr, Carrollton, TX 75006 3550 Timberglen Rd, Dallas, TX 75287 1330 Mac Arthur Dr, Carrollton, TX 75007 1937 N Josey Ln, Carrollton, TX 75006 3637 E Trinity Mls Rd, Dallas, TX 75287 17717 Vail St, Dallas, TX 75287 15411 Preston Rd, Dallas, TX 75248 247 E Corporate Dr, Lewisville, TX 75067 706 Heather Hill Ct, Arlington, TX 76006 6069 Belt Line Rd, Dallas, TX 75254 322 Lake Park Rd, Lewisville, TX 75057   1811 E Frankford Rd, Carrollton, TX 75007 1811 E Frankford Rd, Carrollton, TX 75007

(1) The going-in cap rate reflects T12 Revenue minus Controllable T12 Exp & UW Noncontrollable Exp divided by the purchase price. 

Cap Stack
Sources & Uses

Total Capitalization

Sources $ Amount
Senior Loan $29,400,000
LP Equity $12,720,412
GP Equity $1,413,379
Total $43,533,792
   
Uses $ Amount
Purchase Price $37,000,000
Equity Fees $470,603
Soft Costs $2,110,218
Hard Costs $2,726,273
HC Contingency $174,017
Interest Rate Cap $849,660
Construction Management $203,020
Total $43,533,792

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

Debt Assumptions

The expected terms of the debt financing are as follows:

Lender

Voya Investment Management 

Loan Type

Bridge Loan

Loan Amount (2)

$29,400,000

Initial Loan Term

36 Months

Extension Options

Two (2) 1-Year Extension Options

Extension Terms

Extension Options subject to the following conditions - (i) a fee of 0.25% of the then Loan balance for each extension; (ii) the Property having a physical occupancy of at least 91% for each extension; (iii) the Property generating a debt yield of at least 9.50% based on the NOI for the first extension and a debt yield of at least 10.0% based on the NOI for the second extension; and (iv) the purchase of an interest rate cap agreement acceptable to Lender for the extension period, with a notional amount equal to the maximum Loan amount, and with a Floating Rate strike price determined by Lender.

Interest Rate Type

Floating

Interest Rate

1-Month SOFR + 3.25% (subject to a SOFR Floor Rate of 3.25%)

Interest Rate Cap

Rate cap to be purchased at a strike rate of 4.00%

Interest-Only Period

Full Term

Prepayment Penalty

15-Month Yield Maintenance

(1) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt. 

(2) An additional $600,000 of loan proceeds may become available, subject to the successful completion of a tax appeal with the local jurisdiction prior to Closing. The availability of these funds is not guaranteed, however, and subject to the Lender's approval.

Distributions

ClearWorth Capital intends to make distributions as follows:

  1. Pari-passu all cash flow available for distribution to the Equity Investors until the Equity Investors receive a Preferred Return of 9.0% IRR.
  2. 70% / 30% (70% to Equity Investors / 30% to Promoted/Carried Interest) of all cash flow available for distribution thereafter.

ClearWorth Capital intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loan).

Distributions are expected to start in September 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of ClearWorth Capital, who may decide to delay distributions for any reason, including maintenance or capital reserves.

ClearWorth Capital will receive a promoted/carried interest as indicated above.

 

Fees

You will pay certain fees and compensation over the life of the transaction; please refer to ClearWorth Capital's materials for details. The following fees and compensation will be paid(1)(2):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 1.50% of Purchase Price ClearWorth Capital Capitalized Equity Contribution
Construction Management Fee 7.00% of any Renovation-Related Costs ClearWorth Capital Capitalized Equity Contribution
Due Diligence Fee Flat, One-Time Fee of $240,000 Prevail Real Estate Capitalized Equity Contribution
Platform Fee Flat, One-Time Fee of $15,000 RM Securities, LLC Capitalized Equity Contribution
Placement Fee(2) 4.00% of the Raised Amount up to $2 million, plus 3.50% of the Raised Amount in excess of $2 million. RM Securities, LLC Capitalized Equity Contribution
       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 1.50% of Gross Collections ClearWorth Capital/Prevail Alternate Assets, LLC Cash Flow
Property Management Fee 3.00% of Gross Collections ClearWorth Capital Cash Flow
Administration Solution Licensing Fee(2) 1.00% per annum of the aggregate capital contributions of the RM platform investor for whom RM Technologies provides the Administration Solution RM Technologies, LLC Cash Flow/Capitalized Equity Contribution

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

(2) Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC.

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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