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.

Detailed Checklists

We have formalized processes and checklists for every private placement deal listed on the platform.

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Eligibility 1031 Exchange Only
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ExchangeRight Essential Income REIT
Offered By
ExchangeRight
Investment Type Equity
Minimum Investment 100000
Overview
The Essential Income REIT is invested in a diversified portfolio of 352 properties in 34 states with net leases backed by 36 historically recession-resilient and primarily investment-grade tenants successfully operating in the necessity retail and healthcare industries.
Investment Highlights
Recession-Resilient Tenants: Tenants currently operate in the grocery, healthcare, farm and rural supply, discount retail, and other necessity-based retailers.
Increased Diversification Targeting Reduced Risk and Enhanced Value: The 721 exchange allows investors to defer taxes and enhance diversification. As of March 31, 2024, the REIT portfolio consisted of over 352 properties, reducing dependence on any one property, geography, tenant, industry, lease term, or debt term.
Historically Stable Monthly Income: The Class A 721 OP units' current pre-tax annualized distribution rate is 6.02%, paid monthly. The REIT has never lowered or missed a monthly distribution since its inception in 2019, including through the pandemic, economic lockdowns, and the recessionary and inflationary periods that followed. Past performance does not guarantee future results.
Identified Trust Properties: Instead of taking a blind pool approach, the Essential Income REIT’s aggregation strategy is unique in that it features a pre-identified and vetted portfolio of net-leased properties intended to provide investors with enhanced diversification, scale, capital, and return potential.
Expanded Potential to Accommodate Liquidity Needs: Unlike a DST, the REIT targets quarterly liquidity for investors who desire partial or full liquidity on their investment in the future. Liquidity timing and features are subject to market conditions and annual limits to protect shareholder value and are not guaranteed.
Targeting Long-Term Value for Shareholders: The Essential Income REIT will utilize its net lease platforms to aggregate properties and provide additional AFFO coverage, leading to increased NAV per share for shareholders over the longer term.
An Investor-Centric Structure and Significant Alignment of Interest: The Sponsor and its Key Principals have invested over $15,000,000 of their capital into shares and OP Units of the Essential Income REIT alongside investors as of March 31, 2024. The Sponsor’s fees are among the lowest in the industry and the Sponsor earns the majority of their returns by participating in the potential profits above a 100% return of capital and a 7% annual return on investment to investors. Combining these factors creates a strong incentive for the Sponsor to execute a successful aggregation strategy on behalf of investors and their own capital.
Management
Cumulative Distributions

ExchangeRight

ExchangeRight and its affiliates’ vertically integrated platform features more than $5.9 billion in assets under management that are diversified across over 1,200 properties and 24 million square feet throughout 47 states as of May 31, 2024. ExchangeRight pursues its passion to empower people to be secure, free, and generous by providing REIT, fund, and 1031 DST portfolios that target secure capital, stable income, and strategic exits, all of which have historically met or exceeded investor projections since ExchangeRight’s inception. The company structures and manages net-leased portfolios of assets backed primarily by investment-grade corporations that have successfully operated in the necessity-based retail and healthcare industries, as well as diversified value-add portfolios of inline and outparcel retail properties shadow-anchored by strong-performing grocery tenants on behalf of more than 8,200 investors nationwide. 

https://www.exchangeright.com/
  • Warren Thomas, CPA
    Managing Partner
  • David Fisher
    Managing Partner
  • Joshua Ungerecht
    Managing Partner
Warren Thomas, CPA
Managing Partner

Warren has over 40 years of experience as a CPA and has been an active commercial real estate investor for the past 30 years. Prior to focusing on the securitized 1031 exchange market in 2003, he developed an extensive tax practice including estate planning, financial planning, and real estate advisory services. He graduated in 1978 from Biola University with a B.S. in Business, specializing in Accounting. He also earned a master’s degree in Taxation from Golden Gate University in 1993. He maintains Series 6, 7, 22, 24, 39, 63, 66, and 79 Securities Licenses.

David Fisher
Managing Partner

David is primarily responsible for the acquisition, asset management, financing, and advocacy efforts related to ExchangeRight and its affiliate businesses. He is an active member of the Federation of Exchange Accommodators, Institute for Portfolio Alternatives, and the Tax Committee of the Real Estate Round Table, where he focuses on lobbying efforts in Congress to protect the interests of investors and other stakeholders in the health and stability of the American commercial real estate market.

David began his real estate and finance career nearly three decades ago as a manager in the tax department of KPMG. He later joined Wells Fargo, where he focused on tax, treasury, and acquisitions for more than seven years. From 2005 until 2012, he served as HSBC’s North American Head of Asset and Structured Finance for the company’s investment banking division, where he and his banking teams executed international financings in excess of $8 billion. David graduated magna cum laude from the University of Northern Iowa in 1993 with a degree in Accounting, earning national honors with the Elijah Watt Sells Award on the May 1993 CPA exam.

Joshua Ungerecht
Managing Partner

Joshua currently serves as Managing Partner of ExchangeRight and Telos Capital and continues to serve as CEO and Chief Investment Officer of a wealth management firm and Broker-Dealer specializing in securitized real estate investments. Together with his Partners, Joshua has overseen and underwritten the acquisition of over $6 billion in real estate. Joshua graduated from The Master’s College summa cum laude with a B.A. in Theology, Apologetics, and Missions and is currently on leave from Talbot Graduate School, where he was pursuing an M.A. in Philosophy of Religion and Ethics. He also maintains Series 7, 22, 24, 63, 66, and 79 securities licenses and an active California real estate broker license. 

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Distributions

Please refer to the Essential Income Operating Partnership, LP - Private Placement Memorandum in the Documents section for details regarding distributions and fees.

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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