Risk Factors*

• Forward-Looking Statements: Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated”, “projected”, “forecasted”, “estimated”, “prospective”, “believes”, “expects”, “plans”, “future”, “intends”, “should”, “can”, “could”, “might”, “potential”, “continue”, “may”, “will”, and similar expressions to identify these forward-looking statements.
• Market Risk: Investments related to mortgages secured by real estate are subject to market valuation risks that may be caused by changing economic and local market conditions. The property underlying the corresponding borrower loan is expected to have reasonably acceptable loan-to-value ratios and to meet certain other valuation criteria, but estimated values made when the loan is originated may not fully represent current market values, and subsequent market values will in particular be affected by changing economic or local market conditions. Such conditions are beyond the control of Realty Mogul and of the corresponding borrower on this loan. Such conditions may change due to factors such as local real estate market conditions, prevailing interest rates, the rate of unemployment, the level of consumer confidence, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets and other factors.
• Financing Risk: The borrower will be attempting to obtain a construction loan to pay off the acquisition loan and fund the construction of the new building. There is a risk that the borrower will not be able to obtain such construction financing or it may take longer than the anticipated timeframe.
• Permitting Risk: There is a risk that the borrower will be unable to obtain the necessary building permits or that the permitting process may take longer than the estimated six (6) months.

Risk Mitigation*

• There is a full personal guarantee on the underlying borrower loan.
• The borrower is a real estate company with a history and a track record of success.
• The security interest for the underlying borrower loan is a mortgage deed.
• The underlying borrower loan is protected by title insurance.
• The underlying property is protected by hazard insurance.
• Investor returns are not contingent on the appreciation of the property value and investor returns do not increase based on any resale price. The borrower is still obligated to repay the corresponding borrower loan.
• Althgough the borrower expects that the permitting and financing process should take no longer than six (6) months, Realty Mogul has required that an interest and carrying reserve be capitalized with 12 months of estimated carrying costs.

*The above is not intended to be a full discussion of all the risks of this investment.