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.
Next Level Equities, LLC
SCHEDULE OF REAL ESTATE | ||||||
PROJECT NAME | LOCATION | ROLE | PROPERTY TYPE | UNITS | ACQUISITION DATE | ACQUISITION PRICE |
NEXT LEVEL EQUITIES - 2016 TO PRESENT | ||||||
VANGUARD OF POLARIS | WESTERVILLE, OH | PRINCIPAL | MF | 292 | DEC-2016 | $23,000,000 |
SUBTOTAL | 292 | $23,000,000 | ||||
PHIL PHILIPPOU - 2003 TO PRESENT | ||||||
HEIGHTS OF WORTHINGTON PLACE | WORTHINGTON, OH | THIRD PARTY MANAGER | MIXED USE | 193 | MARCH-2015 | $37,500,000 |
SOMERSET APARTMENTS | AVON LAKE, OH | THIRD PARTY MANAGER | MF | 221 | SEPT-2008 | $17,600,000 |
PEBBLEBROOK APARTMENTS | KENT, OH | THIRD PARTY MANAGER | MF | 288 | OCT-2012 | $26,000,000 |
LINDEN LANE APARTMENTS | CUYAHOGA FALLS, OH | THIRD PARTY MANAGER | MF | 144 | OCT-2012 | $14,000,000 |
BRIGHTON PLACE | STOW, OH | THIRD PARTY MANAGER | MF | 82 | MARCH-2013 | $5,400,000 |
PARTRIDGE RUN APARTMENTS | STOW, OH | THIRD PARTY MANAGER | MF | 60 | MARCH-2013 | $1,800,000 |
CAMBRIDGE COURT | BROOK PARK, OH | THIRD PARTY MANAGER | MF | 120 | MARCH-2015 | $8,000,000 |
PORTSIDE APARTMENTS | SCHEFFIELD LAKE, OH | THIRD PARTY MANAGER | MF | 232 | MARCH-2015 | $15,000,000 |
THE RAVINES AT ROCKY RIDGE | WESTERVILLE, OH | THIRD PARTY MANAGER | MF | 136 | MARCH-2015 | $12,000,000 |
THE RESERVE AT WALNUT CREEK | GAHANA, OH | THIRD PARTY MANAGER | MF | 148 | MARCH-2015 | $14,000,000 |
CORTLANDVILLE CROSSING | CORTLAND, NY | THIRD PARTY MANAGER | RETAIL | - | JAN-2006 | $14,100,000 |
STAPLES PLAZA | WALLINGFORD, CT | THIRD PARTY MANAGER | RETAIL | - | JUNE-2005 | $9,250,000 |
SUBTOTAL | 1,624 | $174,650,000 | ||||
JEFFREY MORRIS - 1990 TO PRESENT | ||||||
POLARIS CROSSINGS APTS | COLUMBUS, OH | PRINCIPAL | MF | 248 | JAN-2015 | $9,000,000 |
MADDENS POINTE APTS | COLUMBUS, OH | PRINCIPAL | MF | 72 | JAN-2015 | $6,000,000 |
EASTON VILLAGE APTS | COLUMBUS, OH | PRINCIPAL | MF | 1,064 | JAN-2015 | $55,000,000 |
LEVEQUE TOWER APTS | COLUMBUS, OH | PRINCIPAL | MF | 77 | JAN-2015 | $14,000,000 |
225 COMMONS | COLUMBUS, OH | PRINCIPAL | MF/OFFICE | 120 | JAN-2016 | $58,000,000 |
THE LANE | COLUMBUS, OH | PRINCIPAL | MIXED | 108 | JAN-2013 | $19,000,000 |
RIVER RIDGE CENTER | DUBLIN, OH | PRINCIPAL | RETAIL | - | JAN-2016 | $15,000,000 |
COURT HILL APTS | LOS ANGELES, CA | PRINCIPAL | MF | 49 | JAN-2017 | $11,500,000 |
THE GRAVITY | COLUMBUS, OH | PRINCIPAL | MF/OFFICE | 234 | NOV-2016 | $71,000,000 |
ECHO APTS | LOS ANGELES, CA | LIMITED PARTNER | MF | 49 | JAN-2015 | $10,000,000 |
2300 BEVERLY APTS | LOS ANGELES, CA | LIMITED PARTNER | MF | 49 | JAN-2016 | $10,200,000 |
TWENTY FIVE TEN APTS | LOS ANGELES, CA | LIMITED PARTNER | MF | 47 | JAN-2014 | $10,000,000 |
ASHLEY OAKS APTS | W. LAFAYETTE, IL | LIMITED PARTNER | MF | 128 | JAN-2006 | $4,500,000 |
BAYBERRY APTS | BROWNSBURG, IN | LIMITED PARTNER | MF | 152 | JAN-2007 | $9,500,000 |
ARBOR GLEN APTS | MICHIGAN CITY, IN | LIMITED PARTNER | MF | 253 | JAN-2007 | $10,500,000 |
FOUNTAIN LAKE APTS | FT. WAYNE, IN | LIMITED PARTNER | MF | 156 | JAN-2008 | $4,600,000 |
REFLECTIONS APARTMENTS | MISHAWAKA, IN | LIMITED PARTNER | MF | 116 | JAN-2012 | $5,000,000 |
RETREAT AT ELKHART APTS | ELKHART, IN | LIMITED PARTNER | MF | 170 | JAN-2015 | $7,800,000 |
HAWTHORNE COMMONS APTS | DUBLIN, OH | LIMITED PARTNER | MF | 86 | JAN-2016 | $19,000,000 |
REDBUD COMMONS APTS | PICKERINGTON, OH | LIMITED PARTNER | MF | 95 | JAN-2017 | $22,500,000 |
FLATS AT POLARIS | COLUMBUS, OH | LIMITED PARTNER | MF | 24 | JAN-2017 | $1,400,000 |
STONE CROSSINGS APTS | SPRINGFIELD, OH | THIRD PARTY MANAGER | MF | 142 | JAN-2005 | $9,500,000 |
GOLFVIEW OFFICE BLDG | COLUMBUS, OH | THIRD PARTY MANAGER | OFFICE | - | JAN-1990 | $1,200,000 |
SHOPPES AT MASON | MASON, OH | THIRD PARTY MANAGER | RETAIL | - | JAN-2012 | $8,500,000 |
SHOPPES AT STERKEL | MANSFIELD, OH | THIRD PARTY MANAGER | RETAIL | - | JAN-2006 | $2,500,000 |
ERIE COMMONS | MENTOR, OH | THIRD PARTY MANAGER | RETAIL | - | JAN-2011 | $15,075,000 |
SUBTOTAL | 3,439 | $410,275,000 | ||||
TOTAL | 5,355 | $607,925,000 |
In this transaction, RealtyMogul.com investors are to invest in Realty Mogul XXXXXX, LLC, which is to subsequently invest in XXXXXX, LLC, a limited liability company that will hold title to the Property. The Real Estate Company will purchase the Property for $31,250,000 ($127,033 per unit) and the total project cost is expected to be $40,430,247 ($164,351 per unit).
The Real Estate Company’s business plan is to implement a value-add strategy by completing interior and exterior renovations at the Property. Unit interior upgrades will include new appliances, granite counters, painted cabinetry with new handles, chrome / nickel ceiling fans, and new lighting packages. Exterior / amenity improvements will consist of painting, carpentry, new landscaping and drainage, a dog park, renovating pools, resealing parking lots, and a new signage package.
The Real Estate Company plans to renovate all 246 units over 24 months (10.3 units per month), which they state is a comfortable pace given their track record and construction team, however the pro forma financials in the Issuer Document Package attached to this offering assume only seven renovations are completed per month. The pro forma financials assume that renovated units will be able to achieve rental premiums of $142 per unit per month upon completion.
Built in 1964 and renovated in 2006, the Property is comprised of one (29 units), two (164 units), three (51 units), and five-bedroom (2 units) floor plans across 246 units and five buildings totaling 313,014 rentable square feet. The weighted average unit size and rent per unit is 1,272 square feet and $1,307 ($1.03 per square foot), respectively. Amenities at the Property include laundry facilities, storage space, courtyards, heated pool, fitness center, walking trails, picnic and BBQ area, assigned parking, on-site bus stop, and 24-hour maintenance. The Property includes 433 on-site parking spaces (1.76 per unit).
In-Place Unit Mix
Unit Type | # of Units | % of Total | Unit (SF) | Total SF | Rent (Mon.) | Mo Rent/SF | Annual Rents |
1 Bed, 1 Bath | 28 | 11% | 955 | 26,739 | $1,096 | $1.15 | $368,153 |
1 Bed, 2 Bath | 1 | 0% | 1,060 | 1,060 | $1,466 | $1.38 | $17,588 |
2 Bed, 1 Bath | 11 | 4% | 1,093 | 12,020 | $1,183 | $1.08 | $156,178 |
2 Bed, 2 Bath | 153 | 62% | 1,267 | 193,815 | $1,272 | $1.00 | $2,334,925 |
3 Bed, 2 Bath | 51 | 21% | 1,434 | 73,140 | $1,478 | $1.03 | $904,281 |
5 Bed, 3 Bath | 2 | 1% | 3,120 | 6,240 | $3,272 | $1.05 | $78,521 |
Totals/Averages | 246 | 100% | 1,272 | 313,014 | $1,307 | $1.03 | $3,859,645 |
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Sale Comparables | The Vue | Hickory Hill | Park Hill | Remington Apartments | Total / Averages | Subject |
Date | August-16 | August-17 | June-17 | December-16 | ||
Submarket | Beachwood | Brunswick | Fairlawn | Westlake | Beachwood | |
Year Built/Reno | 2015 | 1974 | 1995 | 1992 | 1994 | 1964/2006 |
# of Units | 348 | 178 | 200 | 283 | 252 | 246 |
Building SF | 456,240 | 195,800 | 216,000 | 248,757 | 279,199 | 290,236 |
Purchase Price | $85,260,000 | $8,200,000 | $23,800,000 | $31,000,000 | $37,065,000 | $31,250,000 |
$ per Unit | $245,000 | $46,067 | $119,000 | $109,541 | $129,902 | $127,033 |
Cap Rate | N/A | 7.00% | 6.10% | 5.50% | 6.20% | 6.30% |
Lease Comparables (Post Renovation) |
The Vue | Atrium in the Village | Four Seasons IV | Total / Averages | Subject |
Submarket | Beachwood | Beachwood | Beachwood | Beachwood | |
Occupancy | 95% | 91% | 93% | 93% | 95% |
Units (#) | 348 | 134 | 132 | 205 | 246 |
Year Built | 2015 | 1987 | 2015 | 2006 | 1964 |
Average SF | 1,283 | 1,441 | 1,358 | 1,361 | 1,272 |
Average Rental Rate | $2,258 | $2,154 | $1,895 | $2,102 | $1,748 |
Average $/SF | $1.76 | $1.49 | $1.40 | $1.55 | $1.37 |
Distance (miles from subject) | 0.2 | 3.5 | 2.5 | 2.1 | - |
Lease and Sale Comparable information provided by Axiometrics, CoStar, and Real Capital Analytics.
The Property is located in the Beachwood submarket within the greater Cleveland-Elyria MSA as defined by Axiometrics. Per CoStar, developers had previously shied away from the Beachwood submarket because the affluent population, but the area's excellent schools and an easy commute into the city have raised demand for apartments, and a two decade supply drought came to an end this cycle. Multiple high-quality projects have delivered since 2010, and while demand has kept up there have been adverse effects. Vacancies are currently under the historical average in spite of the recent construction, but have trended up over the last two years. This has hampered rent gains, and while investment activity spiked in 2016, much of the cycle has been fairly muted.
Market Overview
Per Axiometrics, effective rent remained 0.0% from $917 in 2Q17 to $917 in 3Q17, which resulted in an annual growth rate of 2.0%. Annual effective rent growth is forecast to be 1.7% in 2018, and average 2.8% from 2019 to 2021. Annual effective rent growth has averaged 1.3% since 4Q98. The market's annual rent growth rate was below the national average of 2.2%. Out of the 120 markets ranked by Axiometrics nationally, Cleveland-Elyria, OH Metro Area was 102nd for quarterly effective rent growth, and 66th for annual effective rent growth for 3Q17. The market's occupancy rate increased from 95.3% in 2Q17 to 95.4% in 3Q17, but was down from 96.0% a year ago. The market's occupancy rate was above the national average of 95.0% in 3Q17. For the forecast period, the market's occupancy rate is expected to be 94.9% in 2018, and average 95.0% from 2019 to 2021. The market's occupancy rate has averaged 93.6% since 3Q95.
Submarket Overview
Effective rent decreased 3.3% from $1,601 in 2Q17 to $1,549 in 3Q17. The submarket's annual rent growth rate of -4.8% was below the market average of 2.0%. Out of the 13 submarkets in the market, the Beachwood submarket ranked 13th for quarterly effective rent growth and 13th for annual effective rent growth for 3Q17. Annual effective rent growth is forecast to be -2.9% in 2017, and average 0.0% through 2017 to 2019. The annual effective rent growth has averaged 1.2% per year since 2Q03. The submarket's occupancy rate increased from 88.4% in 2Q17 to 90.5% in 3Q17, and was down from 95.3% a year ago. The submarket's occupancy rate was below the market average of 95.4% in 3Q17. For the forecast period, the submarket's occupancy rate is expected to decrease to 89.0% in 2017 and average 91.3% from 2017 to 2019. The submarket's occupancy rate has averaged 94.2% since 2Q03.
Demographic Information
Distance from Property | 1 Mile | 3 Miles | 5 Miles |
Population (2017) | 4,758 | 80,596 | 250,754 |
Expected Growth (2017-2022) | 0.50% | -0.70% | -1.10% |
Median Household Income (2017) | $105,260 | $63,164 | $48,868 |
Median Home Value (2017) | $269,290 | $176,412 | $130,062 |
*Demographic information was obtained from CoStar.
Total Capitalization | |
Sources of Funds | Cost |
Debt | $35,694,720 |
Equity | $4,735,527 |
Total Sources of Funds | $40,430,247 |
Uses of Funds | Cost |
Purchase Price | $31,250,000 |
Broker-Dealer Placement Fee | $100,000 |
Acquisition Fee | $312,500 |
Loan Fee | $356,947 |
Closing Costs | $500,000 |
CapEx Reserve | $6,660,800 |
Contingency | $500,000 |
Start-Up Expense | $200,000 |
Tax Settlement Reserve | $550,000 |
Total Uses of Funds | $40,430,247 |
The projected terms of the debt financing are as follows:
The Target intends to make distributions of operating cash flows to investors (The Company, Other LP investors and the Real Estate Company, collectively, the "Members") as follows:
Operating Income, Refinance, and Sales Proceeds
- To the Members, pari passu, all excess operating cash flows to a 10.0% IRR to the Members,
- 70.0% / 30.0% thereafter.
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).
The Company will distribute 100% of its share of excess cash flow (after expenses and fees) to the members of The Company (the RealtyMogul.com investors). The Manager of The Company will receive a portion (up to 10%) of The Real Estate Company's promote.
Distributions are expected to start in June 2018 and are expected to continue on a quarterly basis thereafter. These distributions are at the discretion of the The Real Estate Company, who may decide to delay distributions for any reason, including maintenance or capital reserves.
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 Fee | $312,500 | The Real Estate Company | Capitalized Equity Contribution | 1.0% of Property purchase price |
Broker-Dealer Fee | $120,000 | North Capital (1) | Capitalized Equity Contribution | 4.0% based on the amount of equity invested by The Company |
Construction Management Fee | 10.0% of hard costs | The Real Estate Company | Capitalized Equity Contribution | |
Recurring Fees: | ||||
Asset Management Fee | 1.0% of effective gross revenues | The Real Estate Company | Operating Cash Flow | |
Property Management Fee | 4.0% of effective gross revenues | The Real Estate Company | Operating Cash Flow | |
Management and Administrative Fee | 1.0% of amount invested in The Company | RM Manager, LLC | Distributable Cash | RM Manager, LLC is the Manager of The Company 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 The Company, 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.