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Completed Equity
Multifamily
Montgomery Portfolio - Philadelphia Multifamily
Multiple Locations
INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
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100% funded
Offered By AION Partners
13.8%* TARGET IRR 12.8%-14.8%
7.5%* TARGET AVG CASH ON CASH
* TARGET EQUITY MULTIPLE
Estimated Hold Period 5 years
Estimated First Distribution 12/2018
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Project Summary
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Explore this Project
Overview
Value-add acquisition of a well located multifamily portfolio by an experienced, repeat Real Estate Company.
Property At A Glance
Year Built 1964/1970
# of Units 189
# of Properties 2
Current Occupancy 94.7%
Parking Ratio 1.67/Unit
Acquisition Price

$21,000,000

Amenities

Courtyard, pool, dog park, BBQ, laundry facilities, and balconies

Investment Highlights
Experienced Repeat Real Estate Company: The Real Estate Company operates a $1.2+ billion portfolio of office, retail, and multifamily assets, and RealtyMogul has invested in two prior transactions with the Real Estate Company: Greens at Forest Park and Burlington Court Apartments
Attractive Basis: The Real Estate Company is purchasing the Properties for $111,111 per unit which is below most comparable sales
Well Occupied: The Portfolio was 95% occupied as of March 2018
Potential Upside: In-place rents are about $83 below market according to a comparable lease analysis. Marking rents to market and implementing a $3.2 million capital improvements budget should garner higher rents
Management
Cumulative Distributions

AION Partners

AION Partners acts as Operating Partner on core-plus, value-add, and opportunistic real estate investments across the U.S. With over $1.2 billion of assets under management, AION operates a portfolio of office, retail, and multifamily assets located primarily in the New York – Washington D.C. corridor and across the Sunbelt. The company targets well-located office and retail properties in major gateway markets, and multifamily in the suburban infill locations surrounding them.  AION has participated in institutional equity partnerships with Kushner Companies, NorthStar Realty Finance, Related, The Carlyle Group, Lehman Brothers, C-III Capital Partners, China Orient Asset Management, and Clarion Partners.  The firm has operated continuously since 2001, investing actively during the downturn caused by the 2007-09 financial crisis.

AION’s multifamily investment arm focuses on workforce housing opportunities in close proximity to employment centers and demand drivers.  They typically pursue investments in markets with high populations and job growth, often targeting assets that are non-institutionally managed or neglected by current management.  AION currently owns over 9,000 multifamily units with a total capitalization of more than $1 billion.

AION operates an in-house construction management team that efficiently identifies, bids, and oversees robust capital improvement projects.  In addition, they have a centralized accounting team that includes two CPAs with experience in fund management accounting, investor reporting, and audits.

RealtyMogul has invested in two prior transactions with the Real Estate Company, Burlington Court and Greens at Forest Park.

http://www.aionpartners.com/
  • Michael Betancourt
    Managing Director
  • Siraj Dadabhoy
    Chairman
  • Victor Cole
    Principal
  • Sean Belfi
    Vice President
Michael Betancourt
Managing Director

Michael Betancourt is a founding partner and Managing Director of AION Partners. Michael heads the Investment Committee of AION and oversees underwriting of all new transactions. He also dedicates his time to AION’s institutional equity relationships and private investors. At AION, he has purchased over $1.5 billion in real estate across multifamily, office, retail, and development deals. Michael began his real estate career with DCD America in 2001. He has also held positions with Prudential Securities and Shearson Lehman Brothers.  Mr. Betancourt is a graduate of Saint Joseph's University with a Bachelor of Science in Finance.

Siraj Dadabhoy
Chairman

Siraj Dadabhoy has over 20 years of experience in finance and real estate investment. He focuses on AION’s overall investment strategy; new real estate opportunities, global marketing, and capital raising. He has a thorough knowledge of the entire investment lifecycle and maintains a high level of attention to detail throughout the process, from the initial structuring of the deal through the development of the investment thesis and design details. He is also the Chairman of AION Global; an owner, operator and developer of real estate in the U.K. Siraj is a 1988 graduate of Indiana University, with a Bachelor of Science in Accounting and Finance. He is also a qualified Certified Public Accountant.

Victor Cole
Principal

Victor Cole is a Principal of AION Partners. Victor heads the Investment Team at AION, focusing on new acquisitions and asset management. He personally oversees several of AION’s large assets in the firm’s portfolio. At AION, Victor has purchased close to $1 billion of real estate in office and multifamily deals.

Prior to joining AION, Victor was a member of JPMorgan's Commercial Mortgage Backed Securities group. He previously worked for NorthMarq Capital where he was involved in debt and equity placement on behalf of real estate investor and developer clients.  Victor received a Bachelor of Science in Business Administration from Bucknell University and a Graduate Certificate in Real Estate from New York University's Real Estate Institute.

 

Sean Belfi
Vice President

Sean Belfi focuses on new acquisitions and asset management responsibilities across AION’s portfolio. He also structures and oversees equity and debt partnerships. Prior to joining AION, Sean was a Vice President at Citi Private Bank. At Citi, he worked with High Net Worth clients and Institutional clients investing in real estate development projects and real estate funds. Prior to Citi, Sean practiced law in New York. Sean received a Juris Doctor from Brooklyn Law School and a Bachelor of Arts from Georgetown University. He received a Professional Certificate in Real Estate Investment and Finance from New York University Schack Institute of Real Estate. He also holds a Chartered Financial Analyst designation.

Track Record

Schedule of Real Estate
Property Name Location Asset Type Units Occupancy   Capitalization 
Cipriani Club Residences New York, NY Other   100% $1,073,653
One Carnegie Hill Associates, LLC New York, NY Other   100% $1,639,415
80th at Madison Condominium New York, NY Other   100% $2,017,084
11 East 44th Street  New York, NY Office   95% $110,000,000
Park Waverly (f/k/a Adams Run Apartments) Philadelphia, PA Multifamily 498 94% $49,000,000
Middle River Portfolio Middle River & Essex, MD Multifamily 514 93% $49,000,000
One South Broad Street Philadelphia, PA Office   85% $80,000,000
Overlook at Flanders (fka Oakwood Village) Flanders, NJ Multifamily 1,224 94% $220,350,000
Orchard Park Edgewater Park, NJ Multifamily 276 97% $25,466,667
Union Grove Barrington, NJ Multifamily 347 91% $24,586,828
Cedar Brook Pine Hills, NJ Multifamily 255 98% $18,328,378
Fox Pointe Hi-Nella, NJ Multifamily 246 97% $20,784,969
Joralemon Belleville, NJ Multifamily 62 100% $7,598,558
Timber Pointe Deptford, NJ Multifamily 99 99% $7,642,370
Liberty Square Newark, DE Multifamily 297 93% $23,691,713
Liberty Pointe Newark, DE  Multifamily 136 92% $11,691,643
Stonebridge Apartments Harrisburg, PA Multifamily 626 92% $56,000,000
The Bradford Leola, PA Multifamily 238 98% $28,180,934
Lehigh Square Allentown, PA Multifamily 220 93% $20,435,250
The Harrison Somerset, NJ Multifamily 316 93% $71,241,677
Franklin Commons Bensalem, PA Multifamily 703 94% $119,988,555
Valley Park Bethlehem, PA Multifamily 276 95% $36,621,452
Mulberry Station Harrisburg, PA Multifamily 100 86% $10,013,233
Canterbury Court Philadelphia, PA Multifamily 173 95% $19,533,684
Kingsrow Lindenwold, NJ Multifamily 208 97% $18,646,103
Holly Court Pitman, NJ Multifamily 188 93% $21,606,482
Residences of South Hills Baldwin, PA Multifamily 1,050 91% $62,255,471
The Greens at Forest Park Baltimore, MD Multifamily 190 94% $14,931,252
Hunters Crossing Newark, DE Multifamily 680 92% $66,388,726
Burlington Pointe Burlington, NJ Multifamily 210 96% $15,480,248
River Pointe Townhomes Bethlehem, PA Multifamily 211 95% $30,846,522
           
Total     9,343   $1,245,040,867

 

The Sponsor's bio and track record were provided by the Sponsor and have not been verified by RealtyMogul or NCPS

Business Plan

In this transaction, RealtyMogul investors are to invest in RealtyMogul 115, LLC ("The Company"), which is to subsequently invest in AP RM Montgomery, LLC ("The Target"), a limited liability company that will indirectly own interest in the Properties. AION Partners (the "Real Estate Company") is under contract to purchase the Properties for $21.0 million ($111,111 per unit) and the total project cost is expected to be $26.0 million ($137,660 per unit).

The Real Estate Company’s business plan is to implement a value-add strategy in which it will acquire the Portfolio at a favorable basis through an off-market transaction and maximize cash flow by implementing several exterior improvements, renovating all 189 units, and then re-leasing them at market rates. Although the Properties have been well-maintained and have undergone significant capital improvements over the years, they have been managed defensively as the previous owner has focused on maintaining high occupancy by offering below-market rents.

The capital improvements budget contemplates $1.4 million ($7,624 per unit) of interior renovations, which will involve upgrading flooring, appliances, and cabinetry as well as installing in-unit washer/dryers (expected to command $50 per month per unit). The Real Estate Company has also set aside $1.3 million for exterior property enhancements including corridor renovations, pool improvements, landscaping, lighting, water conservation, BBQ upgrades, new property signage, balcony improvements, and the construction of a new fitness center at Wellington. While these improvements are anticipated to command rent premiums, expenses are expected to decrease with additional efficiencies associated with gas boiler repairs/replacements, water heater replacements, and the installation of low flow shower heads, faucets, and toilets. After improvements are made, the plan is to raise rents from an average of $1,053 per unit to $1,246 per unit, which represents a 5% mark-to-market, a $125 per unit bump from interior unit renovations, and a $15 per unit increase associated with exterior property enhancements and amenity upgrades.

The Real Estate Company sees further upside in Utility Reimbursements as the Properties currently charge tenants for heat and hot water consumption but do not bill for water and sewage expenses. A RUBs program will be implemented along with a $5 flat fee for trash collection. Both of these practices are common in the submarket and have been successfully implemented at other assets in AION's greater Philadelphia portfolio.

RealtyMogul has invested in two prior transactions with the Real Estate Company, Burlington Court and Greens at Forest Park.

Property
Property Details

The Portfolio consists of Wellington Apartments and Livingstone Apartments, which are located approximately two miles apart. Built in 1964, Wellington Apartments is a 96% occupied, 150 unit apartment complex with 85 one-bedroom, 59 two-bedroom, and six three-bedroom units. Built in 1970, Livingstone Apartments is a 95% occupied, 39 unit apartment complex with four one-bedroom and 35 two-bedroom units. Both Properties have been well-maintained. Site amenities at both complexes include a courtyard, pool, BBQ, and laundry facilities. Unit amenities include air conditioning, balconies, dishwashers, microwaves, refrigerators, and ranges. Select units in both Properties offer ceramic tile flooring, upgraded appliances, and new cabinetry.

The Properties are situated off of Route 611, near the Willow Grove interchange of the Pennsylvania Turnpike (I-276). The immediate area is a hub for business and employment with 5.3 million square feet of office space in the Horsham/Willow Grove area, featuring several corporate headquarters including Toll Brothers, Bimbo Bakeries, Janssen, and Penn Mutual, among others. Additionally, Best Buy, Target, Walmart Supercenter, and The Home Depot are all within two miles.

Wellington Apartments In-Place Unit Mix
Unit Type # of Units % of Total Unit (Square Feet) Rent Per Unit Rent Per Square Foot
One Bedrooms 85 57% 605 $962 $1.59
Two Bedrooms 59 39% 837 $1,110 $1.33
Three Bedrooms 6 4% 1,200 $1,419 $1.18
Totals/Averages 150 100% 720 $1,039 $1.44
Livingstone Apartments In-Place Unit Mix
Unit Type # of Units % of Total Unit (Square Feet) Rent Per Unit Rent Per Square Foot
One Bedrooms 4 10% 650 $967 $1.49
Two Bedrooms 35 90% 928 $1,125 $1.21
Totals/Averages 39 100% 899 $1,109 $1.23
Comparables

Sale Comparables
   Blair Mill Village
East 
 Pine Grove Town
homes 
 Jefferson on the Creek   The Woods Apartments   Glenside Terrace Apartments   Averages   Subject (Wellington)   Subject (Livingstone) 
Date  Dec-16 Dec-17 Dec-17 Feb-17 Apr-16   May-18 May-18
Year Built  1971 1971 1971 1974 1966 1975 1964 1970
Occupancy  91% 86% 94% 94% 90% 91% 96% 95%
Purchase Price  $100,000,000 $3,875,000 $63,750,000 $44,275,000 $3,575,000 $43,095,000 $16,600,000 $4,400,000
# of Units  768 22 390 321 30 306 150 39
$/Unit  $130,208 $176,136 $163,462 $137,928 $119,167 $145,380 $110,667 $112,821
Cap Rate  5.70%     5.40%   5.55% 5.29% 5.65%
Distance from Subject  0.3 miles 1.1 miles 3.3 miles 4.4 miles 4.5 miles 2.7 miles    
Lease Comparables (Post-Renovation)
  Village Green Fox Run Apartments The Woods The Glen at Bucks Willow Run Averages Subject (Wellington) Subject (Livingstone)
Occupancy 97% 96% 94% 98% 96% 96% 96% 95%
# of Units 152 196 321 390 172 246 150 39
Year Built 1975 1968 1974 1968 1971 1971 1964 1970
Average SF 875 1037 739 1086 981 947 720 899
Average Rental Rate $1,293 $1,362 $1,385 $1,410 $1,308 $1,367 $1,231 $1,305
Average $/SF $1.48 $1.31 $1.87 $1.30 $1.33 $1.44 $1.71 $1.45
Distance from Subject 1.1 miles 1.1 miles 4.4 miles 2.5 miles 2.3 miles 2.3 miles    

Lease and Sale Comparable information provided by Axiometrics and Real Capital Analytics.

Location

The Properties are located in the Horsham/Willow Grove Submarket within the greater market of Philadelphia, Pennsylvania as defined by CoStar. Per CoStar, Philadelphia’s apartment market continues to hold its ground even as new apartment deliveries have remained near a 30-year high for more than 36 months. However, the metrowide vacancy rate is rising, rent growth is decelerating, and these trends are likely to persist into 2019. While developers have pumped the brakes on projects in Center City West, groundbreakings on new projects continue to proceed at full steam in micromarkets along North and South Broad, in Market East, and in suburban areas including the Main Line, King of Prussia, and Cherry Hill.

While supply growth is likely to remain at record highs into 2018 and 2019, local employment growth is slowing, and Philadelphia’s large Millennial cohort is aging out of its prime renting years and into its early 30s. Apartment communities that offer spacious units, along with access to good schools and ample parking within low-crime areas should perform best amid these changing tides. Along those lines, recently delivered projects within the mixed-use Village at Valley Forge in King of Prussia have demonstrated some of the fastest lease-up rates of all new construction projects in the entire metro.

Philadelphia’s apartment market was red-hot from 2014 to 2016. Although it has begun to lose some momentum in recent quarters, vacancy rates for Class B and C properties are relatively tight (below 5%) and are not rising, as tenants compete for a limited supply of relatively affordable apartment units. While recent trends suggest that the strongest years for occupancy gains and rent growth in this cycle may be behind us, they also do not foreshadow a serious downturn in Philadelphia’s apartment market over the next few years. Job growth is slowing in Philadelphia, but only because the labor market has tightened, and there are very few unemployed residents left for firms to hire. Hiring in the high-paying professional, scientific, and technical services sector is accelerating here, and local firms remain eager to increase staffing levels. Increased upward pressure on wages should help limit damage to apartment rents even if demographics and construction create upward pressure on vacancies.

Market Overview 

Per Axiometrics, effective rent decreased 1.4% from $1,316 in 3Q17 to $1,297 in 4Q17, which resulted in an annual growth rate of 2.1%. Annual effective rent growth is forecast to be 2.5% in 2018, and average 2.9% from 2018 through 2020. Annual effective rent growth has averaged 2.5% since 1Q00. The market's annual rent growth rate was below the national average of 2.3%. Out of the 120 markets ranked by Axiometrics nationally, the Properties' market was 86th for quarterly effective rent growth, and 60th for annual effective rent growth for 4Q17. The market's occupancy rate decreased from 95.8% in 3Q17 to 95.5% in 4Q17, but was up from 95.0% a year ago. The market's occupancy rate was above the national average of 94.7% in 4Q17. For the forecast period, the market's occupancy rate is expected to be 95.7% in 2018, and average 95.8% from 2018 through 2020. The market's occupancy rate has averaged 95.4% since 1Q99.

Submarket Overview

Per Axiometrics, effective rent decreased 0.3% from $1,316 in 3Q17 to $1,312 in 4Q17. The submarket's annual rent growth rate of 3.2% was above the market average of 2.1%. Out of the 10 submarkets in the market, the Properties' submarket ranked third for quarterly effective rent growth and second for annual effective rent growth for 4Q17. Annual effective rent growth is forecast to be 2.8% in 2018, and average 3.0% from 2018 through 2020. The annual effective rent growth has averaged 2.2% per year since 2Q01. The submarket's occupancy rate increased from 93.8% in 3Q17 to 94.4% in 4Q17, and was up from 94.3% a year ago. The submarket's occupancy rate was below the market average of 95.5% in 4Q17. For the forecast period, the submarket's occupancy rate is expected to decrease to 94.5% in 2018 and average 95.0% from 2018 through 2020. The submarket's occupancy rate has averaged 94.6% since 2Q01.

Demographic Information

Demographics

Distance from Property 1 mile 3 miles 5 miles
Population (2017) 14,165 82,408 192,992
Population (2022) 14,546 83,437 195,656
Average Age 39 41 42
Median Household Income $63,916 $71,972 $81,120
Average Household Size 2.4 2.5 2.6
Median Home Value $261,963 $276,367 $310,283
Population Growth 2017-2022 2.7% 1.3% 1.4%

Demographic information above was obtained from CoStar.

Photos
Financials
Sources & Uses

Total Capitalization
Sources of Funds Cost
Debt $16,950,000
Equity $9,067,752
Total Sources of Funds $26,017,752
Uses of Funds Cost
Purchase Price $21,000,000
Capital Improvements $3,209,866
Real Estate Company Acquisition Fee $210,000
North Capital Broker Dealer Fee $50,000
Lender Origination Fee $169,500
Closing Costs $516,345
Working Capital $100,000
Escrows $512,041
Interest Rate Cap $250,000
Total Uses of Funds $26,017,752
Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Greystone
  • Estimated Proceeds: $16,950,000
  • Estimated Rate (Floating): LIBOR + 1.88%
  • Amortization: 30 years, with three years of interest-only
  • Term: 10 years
  • Prepayment Penalty: 1% of remaining balance

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.

Distributions

The Target will make distributions to investors (The Company, the Real Estate Company and Other LP Investors, collectively, the "Members") as follows:  

Operating Income, Refinance, and Sales Proceeds

  1. To the Members, in proportion to, and to the extent of, their accrued but unpaid preferred returns (8.0%);
  2. To the Members, in proportion to, and to the extent of, their unreturned capital;
  3. 75.0% / 25.0% (75.0% to Members / 25.0% to the Real Estate Company) of excess cash flows and appreciation 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) to the members of The Company (the RealtyMogul investors). The manager of The Company will receive a portion (up to 10% pro-rata) of the Real Estate Company's promote interest. Distributions are expected to start in December 2018 and are projected to continue on a quarterly basis thereafter. These distributions are at the discretion of the Real Estate Company, who may decide to delay distributions for any reason, including maintenance or capital reserves. 

Cash Flow Summary
  Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Revenue $2,674,036 $2,972,646 $3,185,956 $3,309,849 $3,391,977
Total Operating Expenses $1,253,506 $1,340,651 $1,384,678 $1,427,220 $1,469,746
Net Operating Income $1,420,530 $1,631,995 $1,801,278 $1,882,629 $1,922,232
RealtyMogul 115, LLC Cash Flows
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Distributions to
RealtyMogul 115, LLC Investors
($1,265,000) $41,141 $88,555 $109,791 $103,805 $1,940,194
Net Earnings to Investor
- Hypothetical $50,000 Investment
($50,000) $1,626 $3,500 $4,340 $4,103 $76,687
Fees

Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:

One-Time Fees
Type of Fee Amount of Fee Received By Paid From Notes
Acquisition Fee $210,000 Real Estate Company  Capitalized Equity Contribution 1.0% of the Properties purchase price. 
Broker-Dealer Fee $50,000 North Capital (1) Capitalized Equity Contribution 4.0% based on the amount of equity invested by RealtyMogul 115, LLC.
Construction Management Fee 5.0% of costs Real Estate Company Capitalized Equity Contribution  
Recurring Fees
Type of Fee Amount of Fee Received By Paid From Notes
Asset Management Fee 1.25% of effective gross revenues Real Estate Company Operating Cash Flow  
Management and Administrative Fee 1.0% of amount invested in RealtyMogul 115, LLC RM Manager, LLC Distributable Cash  RM Manager, LLC is the Manager of RealtyMogul 115, LLC and a wholly-owned subsidiary of Realty Mogul, Co. (2)
Property Management Fee 3.0% of effective gross revenue Real Estate Company Operating Cash Flow  

(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 Real Estate Company 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.

Disclaimers/FAQs
Disclaimers

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.


Non-Transferability of Securities

The transferability of membership interests in The Company are restricted both by the operating agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the investment interests and none is expected to be available in the future. Moreover, the estimated investment holding period described herein is only a projection, and there can be no assurance when or if an investment may be liquidated. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.


Capital Call Risk

The amount of capital that may be required by the Target from the Company is unknown, and although the Target does not require that the Company and its members contribute additional capital to it, it may from time to time request additional funds in the form of loans or sell additional equity.  The Company does not intend to participate in a capital call if one is requested by the Target, and in such event the manager of the Target may accept additional contributions from other members of Target or from new members.  In the event that the manager of Target advances any capital on behalf of the Company, it will be deemed to be a manager loan at an interest rate of 10% per annum.  Amounts that are contributed by existing or new members will be deemed to be additional capital contributions, in which case the Company's interest in Target will potentially suffer a proportionate amount of dilution.


Interest-Only Loan Period

The Target is expected to obtain a senior loan (the “Loan”) to, in part, acquire the apartment community.  The Loan is anticipated to have an interest-only period during the first three years of the loan term, which means that there will be no reduction in the principal balance during that interest-only period.


Flood Risk

A portion of the Properties are located in a designated Flood Zone. It is possible that all or a portion of the Properties could experience significant damage due to flooding, in which case the business and financial condition of the Target, and thus the Company, would be materially adversely affected. There is no guarantee that the Target has or will obtain adequate flood insurance for the Properties.


The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Issuer Document Package for a discussion of additional risks. The above presentation is based upon information supplied by the Sponsor and 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.

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