At A Glance

Investment Details

MMI Capital Partners (the “Sponsor”) plans to acquire the Property, a 240-unit apartment community located in Gulfport, MS.

The Sponsor has an active presence in the Gulfport area.  MMI Capital Partners is a division of MMI Multifamily Management, who is based in Mobile, AL and is the property manager for 10,000 units in the southeast. In the Gulfport market specifically, MMI has managed 1,700 units across 13 properties, providing extensive "on the ground" knowledge of the market.

The property was constructed in two phases (88 units in 1985 and 152 units in 1990). When the projects were combined in 2007, the current owner spent more than $1 million on common area capital projects and amenities are robust. Between 2007 and 2011, approximately 68% of the units were fully upgraded with black appliances, updated plumbing and lighting fixtures, new countertops, faux wood flooring throughout, built-in microwave oven, upgraded ceiling fans, and washer/dryer connections.

The sponsor plans to upgrade the remaining 76 units at $3,350 a unit totaling $254,600 during the initial two years of ownership. These enhancements include: refinishing the kitchen and bathroom countertops, new cabinet doors and cabinet hardware, new appliances, bathroom fixtures, ceiling fans, higher quality lighting, and vinyl wood plank flooring in the kitchen/dining/bathrooms in the units. Additional improvements and repairs will be required on the exteriors of some buildings. The sponsor has budgeted a $50 per month rental premium for all upgraded units.

Investment Highlights

• Strong potential cash flow: Estimated 10.9% in year-one and 13.0% in year-two based on pro-forma
• The sponsor has significant local market experience, managing 1,700 multifamily units in Gulfport over the past 10 years
• Prime location near retail centers, major thoroughfares, and employment centers
• Property is 97% occupied as of 8/11/15
• Potential for rent increases based on upgrades and improvements
• Robust amenity package
• Favorable Basis Compared to Recent Comparable Trades in the Market​

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.
• Illiquid Investment - Transfer Restrictions & No Public Market: The transferability of membership interests in Realty Mogul 50, LLC 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.  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.
• Interest-Only Loan: The loan being used to acquire the Property is expected to have an interest-only period during the first 24 months of the loan term, which means that there will be no reduction in the principal balance during that interest-only period.
• New Development: There is risk associated with potential new development and the impact it would have on the Property's operations.
• Uncertainty Surrounding Future Sales Price: There is risk associated with the Sponsor being unable to sell the Property as projected.
• Rising Interest Rates: The Federal Reserve has methodically reduced the amount of stimulus it was earlier injecting into the U.S. economy, and has signaled that increases in the federal funds rate may be forthcoming.  This could potentially lead to rising interest rates offered by other lenders and could have an effect on the future value of the Property (since higher loan interest rates might mean that potential buyers would face proportionately higher debt service expenses). 
• Mortgage Risk and Prepayment Penalty: The Sponsor has a signed loan application with a lender to provide the debt financing for the acquisition of the Property, but there can be no assurance that the lender will complete financing on the rates and terms included in the underwriting being presented in the model for this investment opportunity.  Should the terms of the debt financing change materially and adversely, investors will be notified.  If the debt financing does not close as anticipated and the Sponsor needs an extension on the purchase contract, the seller of the Property may not so extend and the transaction may be canceled. The lender's due diligence may result in modifications of the proposed terms indicated in the executed loan application, which may result in the transaction being canceled. The Sponsor expects that the loan used to acquire the Property will be subject to a prepayment penalty; a shorter than expected hold period would increase the risk of a prepayment penalty being assessed.
• Management Risk: Investors will be relying solely on the manager of MMI Capital Partners "The Palms", LLC for the execution of its business plan. That manager in turn may rely on other key personnel with relevant experience and knowledge, including contractors and consultants. Members of MMI Capital Partners "The Palms", LLC (including Realty Mogul 50, LLC) will agree to indemnify the manager in certain circumstances, which may result in a financial burden if any litigation results from the execution of the business plan. While the manager of MMI Capital Partners "The Palms", LLC has significant operating experience,MMI Capital Partners "The Palms", LLC was recently formed and has no significant operating history or record of performance.
• Manager of Realty Mogul 50, LLC Will Participate in Sponsor's Promote Interest: The manager of Realty Mogul 50, LLC (or one of its affiliates) will be entitled to a participation in the value of any excess distributable cash flow and any appreciation of the Property realized upon its sale.  This could lead to a potential conflict of interest between the manager and Realty Mogul 50, LLC.  Investors must recognize and agree to waive and bear the risk of this conflict of interest.  Realty Mogul 50, LLC itself is pursuing a venture capital strategy through investments in operating companies that manage and develop real estate; under this strategy, the manager of Realty Mogul 50, LLC is expected to be treated as an investment adviser exempt from federal or state registration.
• Uncertain Distributions: The manager of MMI Capital Partners "The Palms", LLC cannot offer any assurances that there will be sufficient cash available to make distributions to its members (including Realty Mogul 50, LLC) from either net cash from operations or proceeds from the sale of the asset.  That manager, in its discretion, may retain any portion of such funds for property operations or capital improvements. 
• Risk of Interest Charges or Dilution for Capital Calls: The amount of capital that may be required by MMI Capital Partners "The Palms", LLC from Realty Mogul 50, LLC is unknown, and although MMI Capital Partners "The Palms", LLC does not require that its members contribute additional capital to it, it may from time to time request additional funds in the form of additional capital.  Realty Mogul 50, LLC does not intend to participate in a capital call if one is requested by MMI Capital Partners "The Palms", LLC and in such event the Manager of MMI Capital Partners "The Palms", LLC may accept additional contributions from other members of MMI Capital Partners "The Palms", LLC Amounts that the manager or other members of MMI Capital Partners "The Palms", LLC advances on behalf of Realty Mogul 50, LLC will be deemed to be either a loan at an interest rate of 10% or an additional capital contribution, in which case Realty Mogul 50, LLC's interest in MMI Capital Partners "The Palms", LLC will suffer a proportionate amount of dilution.
• General Economic and Market Risks: While the Sponsor has conducted significant research to justify the intended rental rates and sales price relative to comparable properties in the market, there can be no assurance that investor sentiment will be favorable, or that purchase financing to a buyer will be readily available, when the Sponsor attempts to sell the Property.  The real estate market is affected by many factors, such as general economic conditions, supply and demand for real estate investments, interest rates, the availability of financing, and other factors, all of which are beyond the control of both RealtyMogul.com and MMI Capital Partners "The Palms", LLC.
• Hurricane Risk: Gulfport is near the Gulf of Mexico, which is subject to frequent and sometimes destructive hurricanes.  There can be no assurance that a sizable hurricane will not cause significant damage to the Property, in which case the business and financial condition of the Property, and thus the Company, would be materially adversely affected.
• Sponsor Risk: The Sponsor, as a recently formed entity, does not have an established track record of investment returns or effective asset management. The principals/owners of the Sponsor are Patrick J. Coffey and Daniel Anderson.  While the principals/owners of the sponsor have significant operating experience, the track record demonstrated includes a combination of deals acquired both together and through separate entities.

*The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Investor Document Package for a discussion of additional risks.

The above presentation is based upon information supplied by the Sponsor.  Realty Mogul, Co., RM Manager, LLC, and Realty Mogul 50, LLC, 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.

The investment will be structured as the purchase of limited liability company interests in Realty Mogul 50, LLC, which will in turn purchase interests in MMI Capital Partners "The Palms", LLC.  MMI Capital Partners "The Palms", LLC will hold title to the Property and is managed by the Sponsor.  Realty Mogul 50, LLC is a special purpose entity pursuing a venture capital strategy, and will be advised by RM Manager, LLC, an exempt reporting adviser and a wholly-owned subsidiary of Realty Mogul, Co.