Staff Menu (IO ID#: 905616):
Completed Equity
Hawthorne North Ridge
Raleigh, NC
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100% funded
Offered By Willow Creek Partners
17.3%* TARGET IRR 15.3%-19.3%
Estimated Hold Period 5 years
Estimated First Distribution
*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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Value-add acquisition of a multifamily asset and additional undeveloped land in Raleigh, NC.

Willow Creek Partners is a repeat RealtyMogul sponsor with whom RealtyMogul investors have previously invested in the Triangle Park Apartments and Lofts at Midtown transactions.


The Real Estate Company has budgeted for interior unit renovations of $6,500 per unit for 250 units, and over $8 million, inclusive of contingency, in exterior improvements.


The Property is situated in a fundamentally strong market; multifamily rents in Raleigh have increased by more than 50% this cycle (Per Axiometrics), and the population in the vicinity of the Property is set to increase by over 10% in the next five years (per CoStar).

Property at a glance
Year Built 1973
Number of Units 600
Current Occupancy 95% as of March 19, 2019
Parking Ratio 1.45/Unit
Amenities Pool, fitness center, dog park, internet café, tennis court and volleyball court.
Acquisition Price


Investment Highlights
Locally Experienced Real Estate Company: The Real Estate Company reports operating over $100 million of multifamily assets, comprised of over 1,000 units in North Carolina. RealtyMogul investors have previously invested alongside the Real Estate Company on the acquisitions of Triangle Park Apartments and Lofts at Midtown.
Entitled Adjacent Land in Acquisition: Additional upside through the expected sale of approximately 41 acres of undeveloped land adjacent to the Property which will be entitled for the development of up to 900 multifamily units. In January 2019 The Aventon Companies signed a letter of intent to purchase the land for $18,000,000.
Location: The Property is located adjacent to the Raleigh-Durham Research Triangle of North Carolina. Anchored by Duke University, The University of North Carolina at Chapel Hill, and North Carolina State University, the Research Triangle comprises 7,000 acres, is home to over 260 companies such as IBM Corporation, Cisco Systems, Inc. and Credit Suisse, and employs approximately 48,000 skilled workers.
Demographics and Location: Per CoStar, the average annual household income is approximately $74,000 and $92,000 in one and three-mile radii from the Property. Per Axiometrics, the Near North Raleigh submarket in which the Property is located ranked first among 12 submarkets in the Raleigh/Durham market for effective rent growth in 2018 at 6.0%.
Cumulative Distributions

Willow Creek Partners

Willow Creek Partners ("Willow Creek" or the "Real Estate Company"), is a privately-held, vertically integrated multifamily investment and management firm based in Reston, VA. Over the past three years, Willow Creek has acquired ten assets, nine of which are in North Carolina, four of which are in Greensboro, NC. Willow Creek has also recently opened an office in Raleigh, NC and upsized their team from seven employees to twelve, including a VP of Property Management, two VPs of Construction, and two Regional Managers. Willow Creek primarily targets multifamily, both conventional and student housing, in markets where economic conditions provide for increased real estate demand and aims to be long term investors in income-producing real estate. Willow Creek executes their business plans by employing a proven investment strategy comprised of three major elements: identifying markets with built-in demand drivers, focusing on secondary and tertiary markets where local knowledge can potentially create a competitive advantage, and unlocking value through rigorous underwriting and proactive asset management. RealtyMogul previously invested with Willow Creek in Hawthorne North Ridge, Lofts at Midtown, and Triangle Park Apartments. 

An investment overview of Hawthorne North Ridge can be found here:

An investment overview of Lofts at Midtown can be found here:

An investment overview of Triangle Park can be found here:
  • Matthew Brady
    Managing Partner
  • Giuliano Salvo
    Managing Partner
  • Phat Dang
  • Alex Gregory
    Managing Director
Matthew Brady
Managing Partner
Giuliano Salvo
Managing Partner
Phat Dang
Alex Gregory
Managing Director
Track Record

Willow Creek Properties Owned
Property Name Location Asset Units Beds Purchase Price Date Acquired
Madison Woods Greensboro, NC Multifamily 180 - $13,350,000 June 2017
Terrace at Olde Battleground Greensboro, NC Multifamily 156 - $13.608.000 June 2017
Terrace Oaks Greensboro, NC Multifamily 120 - $9,924,000 June 2017
Campus East Greensboro, NC Student Housing - 36 $2,150,000 November 2017
Blue Ridge  Raleigh, NC Student Housing - 48 $6,500,000 September 2017
Hunt Club  Winston-Salem, NC Multifamily 128 - $7,680,000 December 2017
Triangle Park  Raleigh, NC Multifamily 120 - $11,500,000 March 2018
Azalea Hill Greenville, SC Multifamily 160 - $19,000,000 June 2018
Lofts at Midtown Raleigh, NC Multifamily 184 - $24,000,000 August 2018
Stonegate & Carlton Scott  Blacksburg, VA Student Housing - 196 $10,948,000 August 2018
Hawthorne North Ridge Raleigh, NC Multifamily 600   $70,000,000 April 2019
Total     1,648 280 $175,052,000  

The above track record information was provided by the Real Estate Company and has not been independently verified by RealtyMogul​.


Business Plan

In this transaction, RealtyMogul investors are to invest in RealtyMogul 130, LLC ("The Company"), which is to subsequently invest in North Ridge Partners, LLC ("The Target"), a limited liability company that will, through a wholly-owned subsidiary, hold title to Hawthorne North Ridge (the "Property"). Willow Creek is acquiring the Property at a purchase price of $70,000,000, or a 5.50% cap rate on T12 NOI (exclusive of capital reserves), and plans to sell the 41.2 acre parcel of entitled adjacent land after closing the Property acquisition. On January 29, 2019, The Aventon Companies signed a letter of intent to purchase the land for $18,000,000, and intends to construct two Class-A multifamily communities consisting of approximately 750 market rate apartments, clubhouse/amenity facilities, surface parking infrastructure, and site amenities.  For the sake of conservatism, the Estimated Financials in the Issuer Document Package attached to this offering assume that land sale consummates at a gross sale price of $15,750,000.

The Business Plan for the existing Property includes approximately $8.3 million (inclusive of contingency) in exterior upgrades with a substantial amenity package upgrade, as well as approximately $1.7 million (inclusive of contingency) for 250 unit interior units renovations (approximately $6,500 per unit) bringing the capital expenditures budget to $10 million total. The interior upgrades include major bathroom renovations (resurface countertops/sinks, replace cabinets, update flooring) and kitchen renovations (replace cabinets/countertops, stainless steel appliances, update flooring).  

Upon completing these upgrades, the proforma financials in the Issuer Document Package of this offering expect that Willow Creek is able to increase rents between $200 and $250 per unit from current leasing levels. Additionally, Willow Creek anticipates increasing tenant fees such as trash fee, pest control, renter's insurance and pet rent, from which they anticipate capturing another approximately $230k (approximately $380 / unit / year).

Upon execution of the business plan the Real Estate Company plans to sell the Property in five (5) years at a 6.0% cap rate.

RealtyMogul investors previously invested alongside the Real Estate Company in the Triangle Park acquisition in March 2018 and the Lofts at Midtown acquisition in August 2018.  For detail on those investments please scroll up to the Management section of this offering.

CapEx Item $ Amount Per Unit
Exterior Upgrades   (Applicable to all 600 units)
Clubhouse $2,133,333 $3,556
HVAC $1,080,000 $1,800
Pop-out Siding $666,667 $1,111
Balcony Railing $432,000 $720
Landscaping $386,667 $644
Common Railing $360,000 $600
Immediate Repairs $333,333 $556
Roofing $300,000 $500
Staircase Railing $280,000 $467
Pool $266,667 $444
Lounge and Playground Areas $200,000 $333
Maintenance Shop $200,000 $333
Project Managers $200,000 $333
Raised Garden Beds $150,000 $250
Drainage $133,333 $222
Community Path $133,333 $222
Mailbox Center $133,333 $222
Unit Locks $120,000 $200
Exterior & Common Area Paint $100,000 $167
Pressure Wash $58,000 $97
Roof Repairs $53,333 $89
Unit Door Paint $40,000 $67
Total Exterior Upgrades $7,760,000 $12,933
Interior Upgrades   (Applicable to the 250 units being renovated)
Light Fixtures $75,000 $300
Plumbing Fixtures $100,000 $400
Countertops $200,000 $800
Appliances $375,000 $1,500
Cabinets $250,000 $1,000
Common Flooring $125,000 $500
Labor $500,000 $2,000
Total Interior Upgrades $1,625,000 $6,500
Contingency (6.55% of Interior & Exterior budget) $615,000 $1,025
Total CapEx Budget $10,000,000 $16,667

Note - Capital expenditures budget is not anticipated to be fully capitalized at closing of the Property acquisition.  It is anticipated that funds generated from the sale of the entitled adjacent land will be partially used to cover any shortfall in the capital expenditures budget at closing.

Property Details

Built in 1973, The Property is a 30-acre, 600-unit multifamily community. It consists of studios (72 units), one bed one baths (228 units), two bed one baths (228 units), and two bed two baths (78 units), with an average unit size of 828 square feet. The Property is located in the Near North submarket of Raleigh, which per Axio was ranked first among the Raleigh Durham market’s 12 distinct submarkets in effective rent growth for 2018 at 6.0%. The Property also includes an adjacent 41.2 acres of land, which will be fully entitled for the development of up to 900 additional multifamily units at the time of the acquisition of the Property. The development tract and existing unit and amenity renovations create substantial opportunity given the strong Raleigh multifamily market.

In-Place Unit Mix

Unit Type # of Units % of Total Unit (Square Feet) Rent Per Unit (In-Place) Rent Per Unit (Stabilized)
Studio 72 12% 535 $750 $1,000
1 Bed, 1 Bath 228 38% 735 $805 $1,055
2 Bed, 1 Bath 212 35% 960 $850 $1,150
2 Bed, 1 Bath (R) 16 3% 960 $950 $1,250
2 Bed, 2 Bath 71 12% 1,000 $940 $1,240
2 Bed, 2 Bath (R) 1 0% 1,000 $950 $1,250
Totals/Averages 600 100% 828 $834 $1,109



Sale Comparables

  Vert at Six Forks  Woodlyn on the Green Beech Lake Triangle Park Berkshire 54 Averages  Subject*
Date  January-19 July-18 May-18 March-18 December-17 - March-19
# of Units 174 461 344 140 296 283 600
Year Built  1986 1985 1987 1986 1982 1985 1973
Purchase Price $21,025,000 $59,200,000 $37,200,000 $11,500,000 $33,666,925 $32,518,385 $65,000,000
$/Unit  $120,833 $128,416 $108,140 $82,143 $113,740 $110,654 $108,333
Cap Rate  4.99% 5.60% 5.41% 6.32% 5.66% 5.60% 5.50%
Distance from Subject  1.7 miles 10.0 miles 20.0 miles 14.0 miles 26.0 miles 14.3 miles -

*Purchase price of the Subject Property does not include the $5 million allocated to the adjacent entitled land in the acquisition.  The Subject Property cap rate is representative of trailing 12-month net operating income, without capital reserves.

Lease Comparables (Post-Renovation)

  Hunting Ridge Mayfaire Lofts at Midtown Shellbrook Averages Subject
# of Units 176 143 183 238 185 600
Year Built 1972 1995 1974 1972 1978 1973
Average SF 1,036 1,046 1,118 875 1,019 828
Average Rental Rate $1,075 $1,087 $1,188 $1,035 $1,096 $1,109
Distance from
0.8 miles 2.2 miles 1.1 miles 1.4 miles 1.4miles -

Lease and Sale Comparable information provided by Axiometrics and the CBRE appraisal of the Subject Property.


The Property is situated in close proximity to the 2 million square-foot North Hills mixed use development. Additionally, the site is positioned between two of Midtown Raleigh’s main North South thoroughfares (Six Forks & Falls of Neuse Roads), which provide convenient access to both I-440 (South) and I-540 (North). Hawthorne North Ridge is also located near several of the wealthiest neighborhoods in the area, such as North Ridge Country Club, Devon, and Sheffield Manor, all with homes ranging from $500K-$10 million. The Property provides tenants with a convenient commute to both Downtown Raleigh (6.0 miles away) and the Research Triangle (13.2 miles away).

The Research Triangle was founded in 1959 and placed in between Duke University (10 miles), the University of North Carolina at Chapel Hill (12 miles), and North Carolina State University (14 miles), with the intention of keeping educated talent leaving those universities within the state of North Carolina.  Today the Research Triangle employs over 48,000 skilled workers in fields such as: (i) biotechnology and life sciences, (ii) information technologies, (iii) business and professional services, and (iv) foundation think tanks, among other industries.  There are over 260 companies in the Research Triangle, with major employers including IBM Corporation, Cisco Systems, Inc., Credit Suisse, and Biogen, among many others.  Per the self-reported economic brochure attached to the Financials tab of this offering, since its inception the Research Triangle has been home to companies which have been awarded over 3,200 patents and received approximately 2,000 trademarks for their work therein, and over $1 billion of investment into the Research Triangle has occurred over the past five years.


Market Overview

Per CoStar, Raleigh boasts a low cost of living and a well-educated population, both of which have contributed to recent economic growth. High-paying pharmaceutical and tech jobs are abundant in the metro, with an average annual salary of more than $75,000. Raleigh's economic growth has contributed to a surge in housing demand and an uptick in construction to house new residents. Strong leasing in the metro has drawn vacancies downward in recent quarters with Raleigh's premium apartment inventory the most affected. The strongest rent growth has been in suburban submarkets to the north and east of Raleigh where construction has been limited and absorption has been decidedly positive. In these submarkets, communities purchased as value-add opportunities have easily pushed rents following renovations. Multifamily assets in Raleigh have appreciated by more than 50% this cycle, with the strongest appreciation in lower and mid-end properties.

Per Axiometrics, effective rent decreased 0.3% from $1,097 in 3Q18 to $1,094 in 4Q18; even so, annual effective rent growth was 3.9% in 2018. Annual effective rent growth is forecast to be 2.8% in 2019, and average 2.7% from 2020 to 2023. Annual effective rent growth has averaged 1.8% since 1Q95. The market's annual rent growth rate was above the national average of 2.3%. The market's occupancy rate decreased from 95.4% in 3Q18 to 95.0% in 4Q18, and was up from 94.5% a year ago. For the forecast period, the market's occupancy rate is expected to be 94.9% in 2019, and average 94.8% from 2020 to 2023. The market's occupancy rate has averaged 94.2% since 1Q95.

Submarket Overview

Apartment demand in the submarket is driven in part by its office market. These relatively high-paying jobs support demand for luxury units from renters who for a multitude of reasons have not ventured into homeownership. North Hills continues to grow, and demand is expected to keep up with the continued commercial development.

Per Axiometrics, effective rent increased 1.9% from $1,073 in 3Q18 to $1,093 in 4Q18. The submarket's annual rent growth rate of 6.0% was above the market average of 3.9% in 2018. Annual effective rent growth is forecast to be 3.5% in 2019, and average 2.7% from 2020 to 2023. The annual effective rent growth has averaged 1.9% per year since 1Q95. The submarket's occupancy rate decreased from 95.4% in 3Q18 to 95.2% in 4Q18, and was up from 93.9% a year ago. The submarket's occupancy rate was above the market average of 95.0% in 4Q18. For the forecast period, the submarket's occupancy rate is expected to increase slightly to 94.9% in 2019 and average 94.8% from 2020 to 2023. The submarket's occupancy rate has averaged 94.1% since 1Q95.

Demographic Information


  1 Mile 3 Miles 5 Miles
Population (2018) 14,715 90.084 222,762
Estimated Population (2023) 16,189 99,623 246,153
Estimated Population Growth (2018-2023) 10.02% 10.59% 10.50%
Median Household Income $53,120 $67,370 $71,588
Median Home Value $239,927 $272,674 $276,598
Average Household Size 2.2 2.3 2.3

Demographic information above was obtained from CoStar.

Sources & Uses

Total Capitalization

Sources of Funds Cost
Debt $49,400,000
Equity* $28,000,000
Total Sources of Funds $77,400,000
Uses of Funds Cost
Purchase Price $70,000,000
Real Estate Company Acquisition Fee $700,000
Loan Fee $240,585
Interest Rate Cap $200,000
Capital Expenditures Budget $4,150,000
Escrows & Prepaids $360,000
Working Capital $400,000
Closing Costs & Fees $1,349,415
Total Uses of Funds $77,400,000

*Note - The total equity capitalized to the acquisition at the time of closing may be more or less than represented above.  Should less equity be capitalized to the transaction than is represented above, the equity shortfall would be accretive to the RealtyMogul Estimated Financials in the Issuer Document Package attached to this offering.  Should more equity be capitalized to the transaction than is represented above, the additional equity would be dilutive to the RealtyMogul Estimated Financials in the Issuer Document Package attached to this offering.    

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Berkeley Point Capital, LLC
  • Estimated Proceeds: $49,400,000
  • Loan Term: 3 years
  • Extension Options: Two (2) one-year extension options
  • Interest Only Period: Full Term
  • Estimated Rate (Floating): 1 Month LIBOR + 2.30%
  • Amortization: None
  • Prepayment: TBD

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.


The Target intends to make distributions of all available cash and capital proceeds to the Company as follows:​

  1. To the Company, pro rata share of distributable cash to an 8% IRR;
  2. 80%/20% (80% to the Company pro rata / 20% to the Real Estate Company) of excess distributable cash to a 16% IRR;​
  3. Excess balances will be split 50%/30%/20% (50% to the Company pro rata / 30% to the Real Estate Company / 20% to RM Manager, Co.).

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 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 September 2019 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. 


  Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Revenue $6,955,188 $7,721,440 $8,124,325 $8,464,862 $8,738,795
Total Operating Expenses $2,798,166 $2,881,392 $2,955,222 $3,028,725 $3,101,813
Net Operating Income $4,157,022 $4,840,048 $5,169,103 $5,436,137 $5,636,982


  Year 0 2019 2020 2021 2022 2023 2024
Distributions to the Company ($3,655,000) $116,879 $250,867 $1,498,940 $306,427 $329,150 $4,397,592
Net Earnings to Investor
- Hypothetical $50,000
($50,000) $1,599 $3,432 $20,505 $4,192 $4,503 $60,159

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 $700,000 Real Estate Company  Capitalized Equity Contribution 1.0% of the Property purchase price. 
Broker-Dealer Fee 4.8%

North Capital (1)

Capitalized Equity Contribution

Real Estate Company

3.55% based on the amount of equity invested by RealtyMogul 130, LLC, rounded to the nearest multiple of $5,000.

1.25% based on the amount of equity invested by RealtyMogul 130, LLC, rounded to the nearest multiple of $5,000.  This portion fee is paid outside of the transaction and has no bearing on RealtyMogul 130, LLC investors' economics

Recurring Fees

Type of Fee Amount of Fee Received By Paid From Notes
Property Management Fee 3.0% of
Gross Income
Real Estate Company Distributable Cash  
Management and Administrative Fee 1.25% of amount invested in RealtyMogul 130, LLC RM Manager, LLC Distributable Cash  RM Manager, LLC is the Manager of RealtyMogul 130, 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.


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.

Escrow Contingency

All funds from investors will be held in a non-interest-bearing escrow account with Broker-Dealer as escrow agent for the benefit of the investors in accordance with Rule 15c2-4 under the Exchange Act. All investor funds will be transmitted directly by wire or electronic funds transfer via ACH to the escrow account maintained by the escrow agent per the instructions in the Subscription Agreement. Upon certification by Broker-Dealer and acceptance by the Company that all contingencies have been met, the investor’s funds will be promptly transmitted to the Company. If the contingencies fail to be satisfied during the offering period, we will instruct the Broker-Dealer to return all funds to the investors without interest, deduction, or setoff, and all of the obligations of the investor hereunder shall terminate.

Adjacent Land Sale Risks

Investors will be relying solely on the Target for the execution of its business plan, which includes the disposition of an adjacent parcel of fully entitled land. The Target may be unable to complete the planned disposition on currently anticipated terms. Failure to sell the land on currently anticipated terms could adversely affect the Property’s financial results or occupancy levels, including its business operations and thus the value of the Company’s investment.

Capital Adequacy

The Target anticipates that present cash reserves, together with the net proceeds from the sale of Membership Interests in this offering, will be sufficient to finance operating costs and expenses for a period of at least 12 months following the closing of this offering, assuming that all of the Membership Interests offered hereby are sold in accordance with the terms hereof. However, the Target may need additional capital, including from the currently anticipated disposition of the adjacent land, to continue and expand operations and to implement business plan and strategy, as contemplated in this offering. If operations expand faster or at a higher rate than currently anticipated, revenues generated by the Target are lower than projected, and/or the Target fails to sell the adjacent land on currently anticipated terms, additional capital may be required sooner than expected to fund the business plan. There is no assurance or guarantee that additional capital will be available when needed by the Target, or that such capital will be available under terms acceptable to the Target or on a timely basis. If additional funds are raised through the issuance of equity, convertible debt, or similar Membership Interests of the Company, the percentage of ownership of the Company by the Company's Members will be reduced, the Company's Members may experience dilution, and such Membership Interests may have rights or preferences senior to those of the Company's Membership Interest issued pursuant to this offering. There is no assurance that additional financing will be available on terms favorable to Target or at all. If adequate funds are not available or are not available on acceptable terms, the ability to fund the business plan would be limited significantly. This limitation could harm substantially the business, results of operations, and financial condition.

Floating Interest Rate

The loan being used to acquire the Property is expected to have a floating rate based on the London Interbank Offered Rate (“LIBOR”). If LIBOR increases the interest payments due on the loan are expected to increase as well. This could adversely affect the Property’s financial results or business operations and thus the value of the Company’s investment.

Renovation Risks

The Property was 95% occupied as of March 2019, and the Target 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 Target intends to renovate all or some of the units within the Property 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 Target 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.

*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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