Staff Menu (IO ID#: 941344):
EDIT IO DOCUMENTS
Funded
Multifamily
Briar Court Apartments
Houston, TX
INVESTMENT STRATEGY
Value-Add
INVESTMENT TYPE
Equity
Add to Watchlist
100% funded
Offered By ParaWest Group
16.2%* TARGET IRR 15.2%-17.2%
9.1%* TARGET AVG CASH ON CASH
1.7x* TARGET EQUITY MULTIPLE
Estimated Hold Period 4 Years
Estimated First Distribution 4/2019
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
Project Webinar
View The Webinar
Project Summary
current
current
current
current
current
current
current
current
Explore this Project
Overview
Value-add acquisition of a well-maintained multifamily property alongside a strong Real Estate Company with extensive experience in the Houston market.
Diversification

Houston's economy has diversified in recent years, with a move away from energy reliance. This should afford a layer of protection against downturns like the one caused by the recent drop in oil prices.

Partner

The Real Estate Company is highly experienced; its Principals have successfully owned and operated more than 4,800 multifamily units in Texas over the course of multiple real estate cycles, in addition to having managed more than 40 multifamily properties in Houston.

Basis

The Property is being purchased at a favorable basis. The $87.35 per rentable square foot purchase price is 10% below the sale comps' average.

Property At A Glance
Year Built 1973
# of Units 201
# of Buildings 12
Current Occupancy 90%
Parking Ratio 2.03 spaces per unit
Acquisition Price

$17,100,000

Investment Highlights
The Real Estate Company is purchasing the Property for $85,075 per unit, which represents a going-in cap rate of 6.52% on year one net operating income
The Real Estate Company has budgeted for interior unit renovations of approximately $4,912 per unit, and $721,000 for exterior improvements
The Property will be managed by an affiliate of the Real Estate Company, ParaWest Management, which is vertically integrated and has experience managing more than 40 multifamily properties in Houston
The exit strategy is to sell the Property in four years at an expected cap rate of 6.50%
Management
Cumulative Distributions

ParaWest Group

ParaWest Group (PWG)(1) brings together the collective experience of Curtis Haines, Michael Salkeld, Delane Salkeld, and CRSC Residential, Inc. through its President and CEO, Bryan Krizek. These principals bring to the table decades of experience in multi-family investments and operations both individually and collectively resulting in in-depth knowledge and experience that is unsurpassed in the industry. PWG focuses solely on multi-family properties in select markets. As an investment arm of these principals, PWG is an investment platform that includes ParaWest Management(2), thus creating a fully integrated platform for multi-family investments. This platform extends from sourcing and acquisitions to financing and equity structuring, renovation and operations, and ultimately disposition. ParaWest Group, through its principals, has created a strategic advantage in sourcing, underwriting, and closing opportunistic value-add multi-family properties and since its inception in 2012, has participated in the acquisition and investment in twenty-three properties totaling more than 4,000 units.

As a repeat Sponsor on the RealtyMogul Platform, Bay Island at Lake Ray Hubbard will be ParaWest Group’s fifth transaction with Realty Mogul. The first two deals have now gone full cycle (i.e. through sale) with the first having closed in June 2022, and generated an IRR to Investors of 27%, and the second, currently in escrow and scheduled to close during the third quarter, generating a projected Investor IRR of 24%. Both deals had proforma returns of 15.9% each.

Notes:
1) ParaWest Group, LLC  is a pass-through entity and its principals invest as individuals in single ownership entities on each transaction. 
2) ParaWest Management has been in business since 2003 and is solely owned by Michael and Delane Salkeld.         

http://www.parawestgroup.com/
  • Michael Salkeld
    Co-Founder / Managing Partner
  • Delane Salkeld
    Co-Founder / Partner
  • Curtis Haines
    Partner
  • CRSC Residential, Inc.
    Principal
Michael Salkeld
Co-Founder / Managing Partner

Prior to cofounding ParaWest in 2003, Mr. Salkeld served as Regional Vice President of Pinnacle Realty Management's Arizona Office between 1990 and 2001, where he developed and supervised a fee management portfolio of more than 6,000 units in Arizona, Nevada, California, and New Mexico.  Before that (1982-1989) he served as Executive V.P. of Property Management and Development for Urban Investment Corporation.

Delane Salkeld
Co-Founder / Partner

Prior to serving as principal for ParaWest, Mrs. Salkeld served as Senior Investment Manager for Pinnacle Realty Management, Inc. (1990-2000).  Mrs. Salkeld is certified as a Licensed Real Estate Broker in AZ, and as a Property Manager (CPM).  She is also a member of the Arizona Multi-Housing Associate Board of Directors.

Curtis Haines
Partner

As of January 2021, Mr. Haines is invested in more than 100 multifamily properties as Key Principal with an aggregate value of more than $1.9 billion. Prior to engaging in multifamily investing, Mr. Haines founded, developed, and sold one of Houston's largest Permanent Placement Firms designated by Inc. Magazine as one of the "Fastest-Growing Private Companies in the U.S." before moving into Apartment Investment and applying the same diligence, fortitude, and insightfulness that has made him one of Houston's most prodigious apartment owner-operators.

CRSC Residential, Inc.
Principal

CRSC Residential, Inc. as an affiliate of CRS, Inc. owns and operates multi-family properties in Virginia, Kansas, and Arizona, and has investment interests in properties in Texas. Total wholly-owned properties together with Investments in Property Operating interests exceed $100 million.

Track Record

ParaWest Group's Track Record

ParaWest Group Principals - Managing Members - Current SREO
Property Units Location Built  Value   Value/Unit   Debt   Total Equity  Lender Date Acquired MMR2
Idlewood Park1 268 Houston, Texas 1984  $24,460,000  $91,269  $16,710,000  $7,750,000 Berkeley Point Capital (FNMA) Nov-13 MS
Fountain Park 176 Stafford, Texas 1969  $14,960,000  $85,000  $7,100,000  $7,860,000 Berkeley Point Capital (FNMA) Oct-13 CH
Plantation at Quail Valley 124 Missouri City, Texas 2004  $16,415,886  $132,386  $8,118,612  $8,297,274 Keybank Nov-13 CH
Springfield 100 Missouri City, Texas 1977  $8,846,615  $88,466  $2,553,573  $6,293,042 Arbor (FNMA) Sep-14 CH
Briar Court 201 Houston, Texas 1973  $28,200,000  $140,299  $15,200,000  $13,000,000 MF1 Jun-19 MS
Lexington at Champions 89 Houston, Texas 2003  $13,500,000  $151,685  $10,878,750  $2,621,250 Arbor Sep-21 MS
Total/Avg 958      $106,382,501  $689,105  $60,560,935  $45,821,566      
 
ParaWest Group Principals - Managing Members - Exited Deals
Property Units Location Built  Sales Price   Price/Unit   Date Sold  Date Acquired MMR2    
Mirabella Galleria 160 Houston, Texas 1965  $14,700,000  $91,875 Aug-18 Jun-12 CH    
Beverly Palms 362 Houston, Texas 1968  $31,338,000  $86,569 May-18 Aug-12 MS    
Stoney Brook 113 Houston, Texas 1966  $11,550,000  $102,212 Apr-18 Jan-10 CH    
Legacy at Westchase 324 Houston, Texas 1977  $25,000,000  $77,160 Aug-17 Jun-14 MS    
Idlewood Park1 268 Houston, Texas 1981  $22,258,000  $83,052 Jun-17 Oct-13 MS    
Jacinto Palms 128 Houston, Texas 1972  $6,765,000  $52,852 Jan-16 Jun-14 CH    
Barcelona 118 Houston, Texas 1963  $6,500,000  $55,085 Dec-13 Jul-09 CH    
Carrington Court 111 Houston, Texas 1963  $11,000,000  $99,099 Apr-19 Mar-11 CH    
Watermill 192 Houston, Texas 1970  $17,477,000  $91,026 Apr-19 Aug-11 CH    
Quail Valley 176 Missouri City, Texas 1978  $16,192,000  $92,000 Aug-19 Sep-14 CH    
Colonade 192 Grand Prairie, Texas 2001  $22,000,000  $114,583 Dec-18 Oct-15 Other    
Somerset 264 Fort Worth, Texas 1985  $24,245,000  $91,837 Jan-22 Oct-16 Other    
Stratton Park 264 Fort Worth, Texas 1985  $24,245,000  $91,837 Jan-22 Oct-16 Other    
Valencia 263 Fort Worth, Texas 263  $22,345,000  $84,962 Jan-22 Jul-17 Other    
Corners 242 Dallas, Texas 242  $21,250,000  $87,810 Jan-22 Nov-17 Other    
Landmark at Laurel Heights 286 Mesquite, Texas 286  $37,915,000  $132,570 Jan-22 Dec-17 Other    
Briarstone2 97 Rosenberg, Texas 1997  $12,500,000  $128,866 Mar-21 Oct-18 MS    
Tiffany Square 84 Houston, Texas 1971  $7,896,000  $94,000 Feb-22 Dec-12 CH    
Residences 2727 171 Houston, Texas 1995  $23,350,000  $136,550 May-21 Oct-17 CH    
Palms on Westheimer 798 Houston, Texas 1974  $70,224,000  $88,000 Dec-21 Jul-15 CH    
Montclair Estates 113 Garland, Texas 1983  $17,050,000  $150,885 June-22 Oct-19 MS    
Total/Avg 4,726      $445,800,000  $244,982          
 
ParaWest Group Principals -  Co-Managing Member Investors - Current SREO
Property Units Location Built  Value   Value/Unit   Debt   Total Equity  Lender Date Acquired MMR2
Park on Spring Creek 278 Plano, Texas 1983  $45,935,467  $       165,235  $    32,500,000  $13,435,467 NXT Capital Dec-17 Other
Total/Avg 278      $45,935,467  $       165,235  $    32,500,000  $13,435,467      
 
ParaWest Group Principals -  Investors - Current SREO3
Property Units Location Built  Value   Value/Unit   Debt   Total Equity  Lender Date Acquired MMR2
Forest Oaks 164 Arlington, Texas 1980  $24,600,000  $150,000  $8,925,000  $15,675,000 Berkadia (Freddie Mac) Aug-16 Other
Braesridge 542 Houston, Texas 1982  $70,460,000  $130,000  $23,280,000  $47,180,000 Freddie Mac Jun-15 Other
Summer Cove 376 Houston, Texas 1983  $43,240,000  $115,000  $18,160,000  $25,080,000 Holliday Fenoglio Fowler Sep-15 Other
Highland Bluffs 357 Dallas, Texas 1984  $30,345,000  $85,000  $7,631,000  $22,714,000 FNMA Dec-14 Other
Total/Avg 1,439      $168,645,000  $120,000  $57,996,000  $110,649,000      

Notes

1) Idlewood Park was restructured in 2021.

2)"MMR" denotes Managing Member.  CH - Curtis Haines; MS - Michael Salkeld; Other - Non ParaWest Group Managing Member.

3) Individual Principals SREO's (attached) may include properties invested in separately from ParaWest Group.

4) Values are derived from estimated market-based capitalization rates applied to net operating income. Actual values as determined by any future appraisal or sale may vary.

The bio and track record reflect those of ParaWest Group Principals, and were provided by the Sponsor and have not been verified by RealtyMogul

Business Plan

In this transaction, RealtyMogul investors are to invest in RealtyMogul 131, LLC ("The Company"), which is to subsequently invest in Briar Court Apartments LLC ("The Target"), a limited liability company that will directly or indirectly own interest in the Property. ParaWest Group (the "Real Estate Company") is under contract to purchase the Property for $17.1 million ($85,075 per unit) and the total project cost is expected to be $20.1 million ($99,898 per unit).

The Real Estate Company plans to implement a value-add strategy, in which it will capitalize $2.1 million ($10,602 per unit) to renovate the Property. $987,266 ($4,912 per unit) has been budgeted for interior unit upgrades which include new fixtures, blinds, black appliances, flooring, two-tone paint, six-panel doors, cabinet improvements, and countertop resurfacing.  Additionally, $857,719 has been budgeted for exterior improvements including exterior paint, roof improvements, carpentry, wrought iron, parking lot repairs, gutter repairs, pool renovation, leasing office renovation, and signage.  The total CapEx budget also includes a $193,723 contingency (10% of renovation costs) and a 5% construction management fee to be paid to the Real Estate Company ($92,249).  Upon stabilization, the Real Estate Company expects to achieve net effective rents of $1,113 per unit (based on a weighted average).  This represents a 21% premium over in-place rents, but a 4.5% discount to comps on a per square foot basis. The business plan calls for a four year hold, at which point the Property will be sold at a 6.50% cap rate.

Below is a summary of the capital improvements budget:

Capital Improvements Budget Summary
Exterior Renovations Amount Per Unit
Full Exterior Paint $116,604 $580
Roofs $338,368 $1,683
Carpentry $98,595 $491
Wrought Iron $23,800 $118
Parking Lot Restoration $119,164 $593
Gutters/Downspouts $7,020 $35
Pool Renovation $44,168 $220
Sign Package $35,000 $174
Leasing Office $75,000 $373
Exterior Subtotal $857,719 $4,267
Interior Renovations  $987,266 $4,912
Contingency $193,723 $964
Construction Management Fee $92,249 $459
Grand Total $2,130,958 $10,602

These amounts are subject to change at the discretion of the Real Estate Company

Property
Property Details

Built in 1973, Briar Court Apartments is a Class B apartment community comprised of 72 one-bedroom units, 118 two-bedroom units, and 11 three-bedroom units. Amenities include a swimming pool, onsite laundry facility, gazebo, stainless steel BBQ, and charcoal grills. Unit interiors include laminate and ceramic floors, washer/dryer connections in select units, walk-in closets, and fireplaces. Within one mile of the Property is a Walgreens, Whole Foods, Target, Wells Fargo, LensCrafters, Petco, Office Depot, and an array of dining options. Within two miles there is a Chipotle, Starbucks, HEB, Trader Joe's, and a Walmart. Immediately adjacent to the Property is Club Westside, a 16.5 acre recreational facility that includes 30 tennis courts, three pools, a waterpark, and a bowling alley. Although the Property has been well maintained, it has not undergone any major improvements recently (per Real Estate Company).

In-place/Stabilized Unit Mix
Unit Type # of Units % of Total Unit (square feet) In-Place Rent Post-Reno Rent
1 Bed, 1 Bath 72 36% 717 $748 $840
2 Bed, 2 Bath 40 20% 1,027 $941 $1,179
2 Bed, 2 Bath 34 17% 1,113 $999 $1,224
2 Bed, 2.5 Bath 44 22% 1,177 $1,016 $1,294
3 Bed, 2.5 Bath 11 5% 1,645 $1,336 $1,592
Total 201 100% 997 $920 $1,113
Comparables

Lease Comparables

  Belvedere at Westchase Cove at Briar Forest Commons at Westchase Abbey at Briargrove Park Total/Averages Subject
# of Units 367 296 282 234 295 201
Year Built 1979 1965 1980 1973 1974 1973
Average SF 832 800 749 896 819 997
Average Rental Rate $945   $1,048   $872   $980 $961 $1,113
Average Rent per SF $1.14 $1.31 $1.16 $1.09 $1.17 $1.12
Distance from Subject 1.1 miles 0.4 miles 1.4 miles 1.3 miles 1.1 miles  

All rents are net effective

Sale Comparables

  Legacy at Westchase Westchase Creek Apartments Lakeside Forest Madison Park at Westchase Waters at Westchase Averages Subject
Date Aug-17 Aug-18 May-18 Jul-18 Jul-17    
Year Built 1977 1983 1975 1978 1979 1978 1973
# of Units 324 456 240 576 260 371 201
Average SF/Unit 752 639 1,024 967 747 826 974
Rentable SF 243,648 291,384 245,760 556,992 194,220 306,537 195,774
Purchase Price $25,000,000 $36,720,000 $20,900,000 $48,000,000 $16,450,000 $29,414,000 $17,100,000
$/Unit $77,160 $80,526 $87,083 $83,333 $63,269 $78,275 $85,075
$/Rentable SF $102.61 $126.02 $85.04 $86.18 $84.70 $96.91 $87.35
Cap Rate   6.85% 6.47%   5.68% 6.33% 6.36%
Distance from Subject 2.4 miles 1.2 miles 0.3 miles 2.1 miles 2.2 miles 1.6 miles  

Sale and lease comps were obtained from CoStar, Axiometrics, and site visit

Location

Market Overview

Per CoStar, the Houston market is the nation’s fourth most populous metropolitan area and posted population growth of 11.6% from 2012 to 2017 – three times the national average and ranked second only to the Dallas-Fort Worth metro. Recent job growth in Houston remains robust as the local economy continues to rebound from the oil downturn and Hurricane Harvey. 2018 job growth stood at 2.4% versus the 20-year average of 1.7%, and the University of Houston projects an additional 60,000 jobs in 2019. Houston remains the energy capital of the world, with half of the its Gross Metro Product (GMP) tied to energy. That said, the local economy continues to diversify. The Ion in Midtown, which will serve as the de-facto hub of a Houston Innovation District upon completion in 2020, is set to be a welcome addition to Houston’s growing tech ecosystem. The Texas Medical Center, already the largest healthcare complex in the world, is partnering with Houston’s major research universities on the Texas Medical Center 3 development. According to Houstonia, the project is set to inject $5.2 billion into the local and furnish up to 30,000 new jobs when it is finished in 2022. Finally, the metro should see considerable improvements to its infrastructure as it welcomes a wave of new residents. Construction on the $7 billion North Houston Highway Improvement Project (NHHIP) should begin in 2020 and take eight years to complete. There are also plans for the Texas Central Railway, a 90-minute, high-speed train connecting Dallas and Houston. Texas Central Partners have already taken out a $300 million loan on the project and have purchased one-third of the land needed for completion; service could begin as early as 2024.

Per Axiometrics, effective rent increased 1.4% from $1,085 in 4Q18 to $1,100 in 1Q19, and annual effective rent growth was 3.1% in 2018. Annual effective rent growth is forecast to be 0.9% in 2019, and average 2.5% from 2020 to 2022. Annual effective rent growth has averaged 2.0% since 1Q95. The market's annual rent growth rate was below the national average of 2.7%. The market's occupancy rate decreased from 93.2% in 4Q18 to 92.9% in 1Q19, and was down from 94.1% a year ago. The market's occupancy rate is expected to be 93.0% in 2019, and average 92.8% from 2020 to 2022. The market's occupancy rate has averaged 92.9% since 1Q95.

Submarket Overview

The economic centerpiece of the Westchase Submarket is the Westchase Management District. Created by the Texas Legislature in 1995, the district uses a tax increment on businesses within its boundaries to provide branding, urban planning, and public safety functions to its constituents. Many leading-edge companies are based there, including Kroger, Bank of America, Phillips 66, Target, Cisco, MetLife, Honeywell, National Oilwell Varco, and Office Depot. Overall, 1,500 companies do business in the Westchase Management District, and it is only 0.8 miles from the Property.

Per Axiometrics, effective rent increased 2.0% from $984 in 4Q18 to $1,004 in 1Q19. The submarket's annual rent growth rate of 2.0% was below the market average of 3.1% in 2018. Annual effective rent growth is forecast to be 1.7% in 2019, and average 2.4% from 2020 to 2022. The annual effective rent growth has averaged 2.0% per year since 1Q95. The submarket's occupancy rate decreased from 92.0% in 4Q18 to 91.2% in 1Q19, and was down from 93.1% a year ago. The submarket's occupancy rate was below the market average of 92.9% in 1Q19. For the forecast period, the submarket's occupancy rate is expected to increase to 92.0% in 2019 and average 92.7% from 2020 to 2022. The submarket's occupancy rate has averaged 93.0% since 1Q95.

Demographic Information

Demographics
  1 Mile 3 Miles 5 Miles
Population (2019) 23,447 181,998 459,084
Population (2024) 24,563 191,369 483,336
Average Age 35 36 35
Median Household Income $52,479 $57,345 $50,362
Average Household Size 2.3 2.3 2.5
Median Home Value $265,136 $312,462 $243,012
Population Growth 2019-2024 4.76% 5.15% 5.28%

Demographic information above was obtained from CoStar.

Photos
Financials
Sources & Uses

Total Capitalization
Sources of Funds Amount
Debt $15,200,000
Equity $4,879,458
Total Sources of Funds $20,079,458
Uses of Funds Amount
Purchase Price $17,100,000
Real Estate Company Acquisition Fee $256,500
Broker Dealer Fee $156,000
Loan Fee $266,000
CapEx Budget $2,130,958
Working Capital $70,000
Interest Rate Cap $30,000
Closing Costs $70,000
Total Uses of Funds $20,079,458

Please note that the Sponsor's equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: MF1 Capital
  • Estimated Proceeds: $15,200,000
  • Estimated Rate (Floating): One Month Libor plus 3.25%
  • Amortization: 30 years
  • Term: 2 years
  • Interest Only: 5 years
  • Exit Fee: 0.5% of loan proceeds
  • Extension Options: Three (3) one-year extension options (no fee for the first, 0.25% for the second and third)

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 to investors (the Company and Real Estate Company, collectively, the "Members") as follows: 

  1. To the Members, pari passu, all excess operating cash flows to a 10.0% IRR to the Members;
  2. 70.0% / 30.0% (70.0% to Members / 30.0% to promote) of excess cash flow to a 15.0% IRR;  
  3. 50.0% / 50.0% (50.0% to Members / 50.0% to promote) of excess cash flow 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 manager of The Company may receive a portion of the promote. Distributions are expected to start in March 2020 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
Effective Gross Revenue $2,305,592 $2,557,961 $2,705,714 $2,833,633
Total Operating Expenses $1,191,513 $1,225,617 $1,306,884 $1,337,795
Net Operating Income $1,114,079 $1,332,344 $1,398,830 $1,495,838
RealtyMogul 131, LLC Cash Flows
  Year 0 2019 2020 2021 2022 2023
Distributions to RealtyMogul 131, LLC Investors ($3,940,000) $69,176 $320,748 $377,662 $411,680 $5,685,896
Net Earnings to Investor
- Hypothetical $50,000 Investment
($50,000) $878 $4,070 $4,793 $5,224 $72,156
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 $256,500 Real Estate Company  Capitalized Equity Contribution 1.5% of the Property purchase price
Broker-Dealer Fee $156,000 North Capital Capitalized Equity Contribution Greater of $50,000 and 4.0% of the equity raised by RealtyMogul 131, 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
Management and Administrative Fee 1.0% of amount invested in RealtyMogul 131, LLC RM Manager, LLC Distributable Cash RM Manager, LLC is the Manager of RealtyMogul 131, LLC and a wholly-owned subsidiary of Realty Mogul, Co. (2)
Asset Management Fee 1.1% of Effective Gross Income Real Estate Company Distributable Cash  
Property Management Fee 3.5% of Effective Gross Income ParaWest Management Distributable Cash  

(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.

Documents
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.


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.


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.


Apartment Complex - Competition

Competition in the Property’s local market area is significant and may affect the Property’s occupancy levels, rental rates and operating expenses. The Property will compete with other residential alternatives to attract tenants, including but not limited to other apartment units that are currently available for rent, new apartments that are built and condominiums/houses that are for rent or sale. If development of apartment complexes by other operators were to increase, due to increases in availability of funds for investment or other reasons, then competition with the Property could intensify. If the Property is not able to successfully compete with the competitive residential alternatives in the local or regional area this could adversely affect the ability of Target Entity to sell the Property, rent its units as necessary to maintain occupancy, and/or to increase or maintain unit rental rates.


Renovation Risks

The Property was 90% occupied as of April 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.


Texas Hurricane Risk

Texas is subject to frequent and sometimes debilitating natural disasters including but not limited to coastal hurricanes. There can be no assurance that hurricanes and flooding within the state, or any other environmental factor, will not cause significant difficulties and disruptions in the daily operation of the Property, or that Real Estate Company and the Target are properly insured for any such damage caused to the Property or its business operations. As a result, the business and financial condition of the Target, and thus the Company and its investors, may be materially adversely affected.


Interest-Only Loan Period

The loan being used to acquire the Property is expected to have an interest-only period during the first 5 years of the loan term, which means that there will be no reduction in the principal balance during that interest-only period.


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.

INVEST TODAY

Questions?

(877) 781-7062

Contact Investor Relations
Join RealtyMogul
Gain access to commercial real estate deals across the country
Easily review, compare and invest in deals that meet your criteria
Build the real estate portfolio that’s right for you
Potential benefits include diversification, growth and passive income
ARE YOU AN ACCREDITED INVESTOR?
Password should be at least 8 characters, contain an uppercase character, a lowercase character, a number and a symbol.
Sign In
Don’t have an account yet? Join RealtyMogul
Please enter your email and password below.

Forgot Password?

Forgot Password
Enter your email address to receive a code to reset your password.
Enter the code sent to your email address below and your new password.

Resend Code