Staff Menu (IO ID#: 582811):
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Funded
Multifamily
Villas de Estancia
Irving, TX
INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
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100% funded
Offered By Eagle Property Capital
15.2%* TARGET IRR 14.2%-16.2%
8.3%* TARGET AVG CASH ON CASH
1.90x* 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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Overview
Value-add acquisition of a multifamily asset with institutional-quality Real Estate Company in Irving, TX.
Property At A Glance
Year Built 1972
Number of Units 206
Current Occupancy 95.6% as of May 2018
Parking Ratio 2.03/Unit
Amenities Clubhouse, dog park, fitness center, laundry facilities, leasing office, mature landscaping, outdoor kitchen, playground, pool, and soccer field.
Acquisition Price

$20,400,000

Investment Highlights
Locally Experienced Real Estate Company: The Real Estate Company reports operating a $180 million portfolio of multifamily assets, comprised of approximately 2,860 units. Eight of the Real Estate Company’s multifamily properties are located in the Dallas MSA, five of which are near the Property in Irving
Well Located: The Property is situated in a major market with favorable fundamentals, nearby retail amenities and employment hubs including the Dallas/Fort Worth Airport and the Las Colinas Urban Center
Value-Add Potential: Opportunity to improve dated interior finishes and common areas to bring rents up to market and implement operational efficiencies
Well Occupied: The Property was 95.6% occupied as of May 2018
Management
Cumulative Distributions

Eagle Property Capital

Eagle Property Capital ("EPC") is a private, vertically integrated real estate investment firm engaged in the origination, ownership, acquisition, management, and disposition of B & C multifamily, narrowly focused in Florida and Texas. EPC targets moderate-income households, in predominantly Hispanic communities. Initially founded by Gerardo Mahuad and Rodrigo Conesa, EPC is headquartered in Coral Gables, FL. EPC has about 78 employees (18 corporate + 60 on-site).       

Since 2011, EPC has acquired 22 multifamily properties ($261M) comprised of approximately 4,937 units.  EPC's current $209M portfolio consists of 13 properties, with 3,130 units.  Among ten of the Sponsor's properties (2,218 units) located in Dallas MSA, seven properties (1,394 units) are located in Irving.

RealtyMogul has invested with the Real Estate Company in the Villas de Estancia transaction, which was acquired in August 2018.   

http://www.eaglepropertycapital.com/
  • Gerardo Mahuad
    Co-Founder, Managing Principal
  • Rodrigo Conesa
    Co-Founder, Managing Principal
Gerardo Mahuad
Co-Founder, Managing Principal

Mr. Mahuad is Co-founder and Managing Principal of EPC, and a member of the Company’s Investment Committee. Under Mr. Gerardo’s leadership, alongside Mr. Conesa, EPC has deployed more than $310 million in 19 multifamily residential properties in Florida and Texas containing in excess of 4,700 apartment units. Mr. Mahuad oversees all aspects of EPC’s operations including portfolio and investment strategy, asset management, property management, capital markets and investor relations. Mr. Mahuad has been responsible for structuring, implementing and executing EPC’s investment vehicles, including business plans and investment documents, fundraising, underwriting, overseeing the acquisition process, designing property-specific repositioning strategy, investor reporting, and asset management. Mr. Mahuad has more than fifteen years of experience in real estate, investments, banking and finance. Prior to EPC, Gerardo managed and advised over $200 million and co-advised in excess of $1.2 billion in assets of high net-worth individuals and families, foundations and private pension funds at Credit Suisse (Mexico) and Morgan Stanley (New York and Geneva). Before Morgan Stanley, he worked for three years at Ritch, where he focused his practice in Real Estate, working with Mr. Conesa advising clients in real estate investments in Mexico. Mr. Mahuad earned his MBA from UCLA Anderson School of Management with a concentration in Finance and Real Estate. He obtained a Law Degree from Universidad Iberoamericana, where he graduated with honors.

Rodrigo Conesa
Co-Founder, Managing Principal

Mr. Conesa is Co-founder and Managing Principal of EPC, and chair of the Company’s Investment Committee. Mr. Conesa has deployed more than $329 million in 22 multifamily residential properties in Florida and Texas containing in excess of 4,900 apartment units. Mr. Conesa directs the portfolio and investment strategy and leads the legal side of the business. Mr. Conesa has extensive expertise in real estate investments, specifically in the multifamily sector. Mr. Conesa has been responsible for structuring EPC’s investment vehicles, including investment documents, coordinating the formation of legal structures, fundraising, underwriting, co-designing property specific repositioning strategy and supervising the legal matters. Mr. Conesa is also a partner with Ritch Mueller, Heather y Nicolau S.C. (“Ritch”), a leading Mexican law firm. Mr. Conesa leads the real estate practice of the firm, where he advises Mexican and international clients in their real estate investments in Mexico. Mr. Conesa’s practice includes structuring of private equity funds, capital markets transactions associated with real estate, acquisition of land and development of real estate projects in all asset classes, financing and refinancing of real estate projects and acquisition and disposition of stabilized real estate assets. Mr. Conesa obtained a law degree from Universidad Iberoamericana in Mexico City in 1993 and his LL.M. from Columbia University in New York in 1996. Chambers and Partners have recognized Rodrigo as a leading real estate lawyer for six consecutive years.

Track Record

Currently Owned Multifamily Assets
Property Name Location Units Year Acquired Purchase Price
Villas de Estancia Irving, TX 206 2018 $20,400,000
Woodwind Irving, TX 64 2018 $5,950,000
Sedona Park Irving, TX 282 2018 $28,220,000
Gateway on 4th St. Petersburg, FL 304 2017 $32,882,000
Captiva Club Tampa, FL 344 2016 $32,770,225
Montecito Club Arlington, TX 331 2016 $17,400,000
Arlington Hills Arlington, TX 171 2016 $14,900,000
Clarendon Irving, TX 192 2016 $5,550,000
Woodchase Irving, TX 74 2016 $11,950,000
Valley Oaks Hurst, TX 322 2016 $17,500,000
Huntington Houston, TX 264 2015 $10,956,000
Westgate Irving, TX 256 2014 $4,572,215
Glen Arbor Irving, TX 320 2014 $6,025,177
Total   3,130   $209,075,618
Exited Multifamily Assets
Property Name Location Units Year Acquired Purchase Price Year Sold
Silverado Irving, TX 184 2014 $7,405,000 2016
Cross Creek Jacksonville, FL 292 2014 $8,710,000 2017
Riverview Jacksonville, FL 304 2014 $8,834,063 2017
Sedona Ridge Dallas, TX 317 2013 $8,350,000 2016
The Columns Jacksonville, FL 246 2013 $8,896,269 2017
Magnolia Jacksonville, FL 276 2012 $6,640,000 2017
Palm Villas Fort Myers, FL 64 2011 $1,575,000 2014
Park Side Fort Myers, FL 54 2011 $847,658 2014
Woodside Villas Fort Myers, FL 70 2011 $1,028,792 2014
Total   1,807   $52,286,782  
Total Assets
  Units Purchase Price
Total 4,937 $261,362,399

The Real Estate Company's biography and track record were provided by the Real Estate Company and have not been verified by RealtyMogul or NCPS.

 
Business Plan

In this transaction, RealtyMogul investors are to invest in RealtyMogul 119, LLC (“The Company”), which is to subsequently invest in EPC-RM JV Villas Estancia, LLC ("The Target”), a limited liability company that will, through a 100% wholly-owned subsidiary, hold title to the Property.  The Real Estate Company is under contract to purchase the Property for $20,400,000 ($99,029 per unit) and the total project cost is expected to be $22,728,480 ($110,332 per unit). 

Eagle Property Capital (the “Real Estate Company”) believes rents at the Property are currently below market and plans to implement a value-add strategy by completing interior and exterior renovations with a capital improvement plan of approximately $2.1 million ($10,179 per unit). $1.6 million has been capitalized to the transaction while approximately $0.5 million will be paid from available cashflow. 

The Real Estate Company’s value-add strategy is comprised of exterior, interior and common area improvements such as: 1) full exterior paint, wood balcony framing installation, new signage, outdoor LED lighting, landscaping upgrade and parking lot repairs, to improve the Property’s curb appeal; 2) reconfiguration and upgrade of clubhouse, leasing office and gym, to improve tenants’ experience; 3) outdoor kitchen, playground and dog park upgrades to improve tenants’ quality of life; 4) water conservation program that contemplates installing low-flow water fixtures and low-flush toilets; and 5) upgrade unit interiors of approximately 180 of 206 units (87% of the Property) at a cost of approximately $3,500 per unit. Interior renovations are expected to include: black appliances, faux wood vinyl flooring, new paint, tile backsplashes, brushed nickel light fixtures, and 2nd blinds. 

Exterior and common area improvements are expected to entail exterior painting, playground upgrades, and reconfiguration of common areas (the clubhouse, gym, and office).

VILLAS DE ESTANCIA - CAPITAL EXPENDITURES BUDGET
CapEx Item $ Amount Per Unit
Unit Interior Upgrades ($3,500 each for 180 units) $630,000 $3,058
Outdoor $828,500 $4,022
Indoor $291,780 $1,416
Contingency 13.2% (Renovation Reserve) $266,000 $1,291
Construction Management Fee 4.0% $80,651 $392
Total $2,096,931 $10,179
Property

RealtyMogul.com, along with Eagle Property Capital (the "Real Estate Company"), is providing the opportunity to invest in the acquisition of Villas de Estancia, a 206-unit multifamily Property located in Irving, Texas (the "Property").

The primary objective of this investment is to acquire the Property, perform curb appeal upgrades including common area and interior improvements, and then sell the Property within approximately five (5) years.

The Real Estate Company sees this investment as an opportunity to capitalize on a well-occupied, well-maintained and well-located asset in a high-demographic and strong market that can be improved through targeted capital improvements and improved management and leasing efforts via the property manager Vidalta Life, an affiliate of the Real Estate Company.

Property Details

Built in 1972, this garden-style apartment complex is comprised of one (60 units), two (90 units), and three-bedroom (56 units) floor plans in 20 two-story buildings across 11 acres. The Property is currently 95.6% leased (as of May 2018), has a large average apartment size of 1,113 square feet, and offers five floor plans. Amenities at the Property include a clubhouse, dog park, fitness center, laundry facilities, outdoor kitchen, playground, pool, and soccer field.

No significant value-add strategies were implemented to the exterior of the property by the previous owner, creating an attractive value-add opportunity for new ownership. Approximately 20% of the units have been upgraded, with unit amenities such as black appliances, ceiling fans, faux wood blinds, new carpet, painted cabinet fronts, tile backsplashes and resurfaced countertops.

In-Place Unit Mix
Unit Type # of Units % of Total Unit (Square Feet) Total Square Feet Rent Per Unit Rent Per Square Foot
1 Bed, 1 Bath 25 12% 722 18,050 $757 $1.05
1 Bed, 1 Bath 35 17% 800 28,000 $779 $0.97
2 Bed, 2 Bath 54 26% 1,100 59,400 $998 $0.91
2 Bed, 2.5 Bath 36 17% 1,261 45,396 $1,059 $0.84
3 Bed, 2 Bath 56 27% 1,400 78,400 $1,174 $0.84
Totals/Averages 206 100% 1,113 229,246 $990 $0.89


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Comparables

Sale Comparables
   Knollwood
Apartments 
 Sierra Point  Sedona Park Bridgeport
 Apartments
Tower Village
Apartments
 Averages   Subject
Date  September-17 February-18 February-18 August-17 August-17 - April-18
# of Units  188 212 282 312 264 252 206
Year Built  1973 1971 1982 1983 1970 1976 1972
Purchase Price  $14,250,000 $20,882,000 $30,000,097 $26,800,000 $20,500,000 $23,322,426 $20,400,000
$/SF $99 $106 $135 $112 $84 $107 $89
$/Unit  $75,798 $98,500 $106,383 $85,897 $77,652 $89,374 $99,029
Average SF/Unit 766 931 787 766 920 834 1,113
Cap Rate  - - - 5.6% - 5.6% 5.8%
Miles from Subject  0.5 mi 1.3 mi 1.6 mi 1.6 mi 3.9 mi 1.8 mi -
Lease Comparables (Post-Renovation)
  The Residences at
Northgate
Resort at 
Jefferson Park
Broadmoor Villas The Brandt Bel Air
Las Colinas
Averages Subject
# of Units 320 420 100 504 533 375 206
Year Built 1984 1985 1982 1985 1979 1983 1972
1 BDR              
# of Units 106 244 20 384 162 183 60
Average
Rent
$824 $1,035 $1,095 $1,240 $1,069 $1,053 $877
Average
$/SF
$1.14 $1.54 $1.36 $1.56 $1.32 $1.38 $1.14
2 BDR              
# of Units 53 124 70 120 137 101 90
Average
Rent
$1,145 $1,319 $1,314 $1,546 $1,335 $1,332 $1,130
Average
$/SF
$1.09 $1.34 $1.36 $1.55 $1.02 $1.27 $0.97
3 BDR              
# of Units 108 52 - - - 80 56
Average
Rent
$1,428 $1,588 - - - $1,508 $1,282
Average
$/SF
$1.06 $1.33 - - - $1.20 $0.92
Miles from
Subject
1.8 mi 1.3 mi 1.3 mi 0.7 mi 2.0 mi 1.4mi -

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

Location

The Property is located along West Walnut Hill Lane, approximately 3.6 miles southeast of the Dallas/Fort Worth International Airport and 14.9 miles northwest of downtown Dallas. A number of retail amenities surround the Property, including the 1.1 million square feet Irving Mall less than a mile away. Major nearby employment hubs include the Dallas/Fort Worth International Airport (60,000 on-site employees) supporting 228,000 regional jobs, and the 960-acre Las Colinas Urban Center (4.3 miles from the Property) with 22.3 million square feet of office space and more than 2,000 companies.


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Market Overview

Per Costar, the Dallas-Fort Worth ("DFW") apartment market has performed well over the last few years, thanks to exceptional demand driven by some of the best in-migration and employment growth in the country. Supply levels are cresting, but the influx of tens of thousands of jobs from corporate moves like those by Toyota and Liberty Mutual is helping drive demand, especially in the northern suburbs along the Dallas North Tollway. Rent growth has cooled from its peak in 2015, with the slowdown most prevalent in pricey, supply-heavy submarkets and in four & five Star assets. As the market moves towards the late-cycle phase, rising vacancies and slower rent growth can be expected. However, the DFW economy continues to fire on all cylinders, and as long as the metro comes close to maintaining its recent job growth numbers, there should be enough demand to keep vacancies below the historical average for at least a few more quarters.

Submarket Overview

Per CoStar, the Irving submarket offers residents access to employment nodes throughout the metroplex. Strong employment growth in the industrial sector and at the DFW International Airport are main demand drivers here. While nothing has delivered here since 2002, sales transactions are common. More than 10% of the submarket's inventory changed hands every year since 2012.

Per Axiometrics, effective rent remained at last quarter's level of $1,153 in 1Q18. The submarket's annual rent growth rate of 2.0% was above the Dallas-Plano-Irving market average of 1.4%. Out of the 28 submarkets in the market, the Property's submarket ranked 16th for quarterly effective rent growth and 14th for annual effective rent growth for 1Q18. Annual effective rent growth is forecast to be 1.5% in 2018, and average 2.7% from 2018 to 2020. The annual effective rent growth has averaged 2.0% per year since 3Q96. The submarket's occupancy rate decreased from 94.7% in 4Q17 to 94.5% in 1Q18 and was down from 95.3% a year ago. The submarket's occupancy rate was above the market average of 94.1% in 1Q18. For the forecast period, the submarket's occupancy rate is expected to increase to 94.8% in 2018 and average 95.3% from 2018 to 2020. The submarket's occupancy rate has averaged 93.9% since 3Q96.

Demographic Information

Demographics
  1 Mile 3 Miles 5 Miles
Population (2018) 18,827 110,684 219,356
Estimated Population (2023) 20,040 117,561 232,860
Estimated Population Growth (2018-2023) 6.4% 6.2% 6.2%
Average Household Income $55,243 $73,992 $78,201
Median Home Value $173,589 $160,110 $168,645
Average Household Size 2.3 2.4 2.5

Demographic information above was obtained from CoStar.

Photos
Financials
Sources & Uses

Total Capitalization
Sources of Funds Cost
Debt $14,300,000
Equity $8,428,480
Total Sources of Funds $22,728,480
Uses of Funds Cost
Purchase Price $20,400,000
Real Estate Company Acquisition Fee $204,000
Broker Dealer Fee $120,000
Capital Expenditures $1,602,307
Loan Broker Fee $107,250
Lender Costs $47,750
Escrows (Insurance) $5,923
Buyer's Closing, Insurance Up-Front, Legal Fees & Due Diligence $241,250
Total Uses of Funds $22,728,480
Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Berkadia as a Fannie Mae DUS
  • Estimated Proceeds: $14,300,000
  • Term: 10 years
  • Estimated Rate (Fixed): 4.64% (10 Year Treasury + 1.67%)
  • Amortization: 30 years with ten years of interest-only
  • Prepayment: Yield Maintenance through the first 96 months of the loan. From Months 97-117 of the loan the prepayment shall be 1.0%. Thereafter, the loan may be paid off at par.

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 intends to make distributions of all available cash and capital proceeds to investors (The Company and Real Estate Company, collectively, the "Members") as follows:​

  1. To the Company, pro rata share of distributable cash to an 8% IRR;
  2. 75.0%/25.0% (75.0% to the Company / 25.0% to the Real Estate Company) of excess distributable cash to a 16.7% IRR;​
  3. Excess balances will be split pro rata 65% to the Company and 35% to Real Estate Company.

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% 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. 

TARGETED CASH FLOWS
  Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Revenue $2,681,942 $2,914,134 $3,121,433 $3,231,788 $3,335,088
Total Operating Expenses $1,210,016 $1,347,561 $1,390,329 $1,430,770 $1,472,061
Net Operating Income $1,471,926 $1,566,574 $1,731,104 $1,801,018 $1,863,027
 THE COMPANY CASH FLOWS
  Year 0 2018 2019 2020 2021 2022 2023
Distributions to the Company ($3,030,000) $67,208 $180,607 $238,754 $281,956 $302,509 $4,698,605
Net Earnings to Investor
- Hypothetical $50,000
Investment
($50,000) $1,109 $2,980 $3,940 $4,653 $4,992 $77,535
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 $204,000 Real Estate Company  Capitalized Equity Contribution 1.0% of the Property purchase price. 
Broker-Dealer Fee $120,000 North Capital (1) Capitalized Equity Contribution 4.0% of equity raised by RealtyMogul.com ($50,000 minimum)
Recurring Fees
Type of Fee Amount of Fee Received By Paid From Notes
Property Management Fee 3.5% of
Effective
Gross Income
Real Estate Company Affiliate Distributable Cash  
Asset Management Fee 1.5% of amount
 invested in
RealtyMogul
119, LLC
Real Estate Company Distributable Cash Asset Management Fee based on distributable cash to Realty Mogul 119, LLC
Construction Management Fee 4.0% of costs Real Estate Company Affiliate Capitalized Equity Contribution & Distributable Cash  
Management and Administrative Fee 1.0% of amount invested in RealtyMogul 119, LLC RM Manager, LLC Distributable Cash  RM Manager, LLC is the Manager of Realty Mogul 119, LLC and a wholly-owned subsidiary of Realty Mogul, Co. (2)

(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 that cannot be determined at this time.  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 loan being used to acquire the Property is expected to have an interest-only period during the first 10 years of the loan term, which means that there will be no reduction in the principal balance during that interest-only period.


Prepayment Penalty

The loan for the acquisition or the Property, or any subsequent loan placed the Property, may involve a prepayment penalty. The Target may therefore have additional costs associated with the payoff of any loan that may result in an inability to take advantage of more favorable financing terms that may become available to it during the term of any such permanent loan or could incur additional loan payoff costs upon sale. If the Target seeks alternative financing, there can be no assurance that the Target will be able to obtain such refinancing on a timely or favorable basis.


Renovation Risks

The Property currently has a 95.6% occupancy level, and the Sponsor intends to implement a capital improvement plan involving the interior and exterior renovation of the Property, and a leasing program in its effort to add value to the Property. The Sponsor intends to renovate all or some of the units within the Property, including property repair required by the property condition assessment for individual unit(s), and increase the current rental rates of such renovated units. There can be no assurance that, (i) the renovations will be consummated on a timely basis, (ii) the renovations will be completed satisfactorily, (iii) such work will not materially adversely affect other aspects of the operation of the Property, and (iv) the planned rental rate increase will have favorable results to meet the goals the Sponsor projected. Any delays or negative results of the renovation work or rental increase efforts could adversely affect the Property’s financial results or occupancy levels, including its business operations and thus the value of the Company’s investment.


Texas Tornado Risks

The state of Texas is an area which can be subject to frequent and sometimes destructive tornadoes.  There is no guarantee that the Target will obtain tornado insurance. If no insurance is obtained, a tornado could have a material adverse impact on the Target, and thus the Company.  Further, even if tornado insurance is obtained, there can be no assurance that a tornado will not cause significant damage to the Property or otherwise interrupt its operations in a manner not covered by the Property’s insurance, in which case the business and financial condition of the Target.


*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 Real Estate Company 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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