LEGAL DISCLAIMERGENERAL RISK CONSIDERATIONS

This investment is speculative and involves high risk

The Units being offered should be considered a speculative investment that involves a high degree of risk. Therefore, you should thoroughly consider all of the risk factors discussed herein. You should understand that there is a possibility that you could lose your Capital Contribution. You should not invest in the Fund if you are in any way dependent upon the funds you may be using to acquire Units.

This Memorandum includes forward-looking statements

This Memorandum includes many forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things:

  • Supply and demand for the various commercial real estate asset classes, including, without limitation, self-storage, multifamily real estate, and senior living real estate
  • The actions of our competitors
  • Fluctuating interest rates and taxes
  • Cost of building materials (for new construction and remodels/renovations/turnover)
  • Availability of suitable property for acquisition
  • Governmental restrictions and unforeseeable legislation (including for COVID-19 and related matters)
  • The impact of the most-recent U.S. financial crisis, and any as may occur in the future
  • Apparent real estate bubbles occurring in regional U.S. markets
  • Our creditworthiness
  • Mortgage foreclosure risks and inability to obtain lending
  • Litigation risk against other secured creditors
  • Non-diversification in the event we cannot acquire assets or otherwise liquidate current assets
  • Environmental and regulatory concerns
  • Successful implementation of the Fund's objectives
  • Economic and demographic trends affecting the Fund

Although we may attempt to supplement this Memorandum from time to time with new information with respect to our progress, we may not update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Memorandum might not occur.

You should rely only on the information contained in this Memorandum. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, do not rely on it.

We are not making an offer to sell these Units in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this Memorandum is accurate as of the date on the front cover. Our business or financial condition, the results from our operations and prospects may have materially changed subsequent to that date.

The Fund will be subject to inherent conflicts of interest

As explained elsewhere in this Memorandum, the Fund's Class B Member(s) receives Ten Percent (10.0%) of distributions in the event the Fund realizes revenue or other monetization of assets in excess of the Preferred Return. Thus, there may be an inherent tendency for the Manager to cause the Fund to take disproportionate risks with the Fund's capital in order to achieve higher overall returns.

Prospective investors should consider these factors in addition to and/or in conjunction with all of the other risk factors detailed below and elsewhere in this Memorandum.
(See “Certain Relationships and Conflicts of Interest”).

The Fund has minimal initial capitalization

The Fund has received minimal initial capital from the Class B Member(s). To become further capitalized, and in order to fully implement our business objectives, we will rely primarily upon the proceeds of this Offering.

Because of the manner of capitalization, the Fund will not have sufficient assets beyond any physical assets, if any at all, to pay the Preferred Members distributions equaling the stated Preferred Return (which is a benchmark and is not guaranteed) on their Capital Contribution.

If one or more of our assets are unable to be liquidated or do not generate sufficient cash flow, we may not be able to pay distributions at or near the Preferred Return to our Preferred Members or otherwise fulfill our obligations, or even return the capital to the investor at the winding up and dissolution of the Fund.

GENERAL RISKS ASSOCIATED WITH THE FUND'S BUSINESS PLAN

The purchase of Units involves various risks. Prospective purchasers should consider the following factors before making a decision to acquire Units.

Risks of Unspecified Real Estate Assets

We do not have any binding commitments to purchase any particular real estate properties. Persons who purchase Units will not have an opportunity to evaluate any of our assets or underlying property in which the proceeds of the Offering may be invested or the terms of any such assets.

We are not required to obtain an independent appraisal in connection with any acquisition. Purchasers of Units must depend solely upon the ability of the Fund's management with respect to the selection of assets, and the determination of the price and other terms upon which they will be made.

In selecting such assets, we may have conflicts of interest. See “Certain Relationships and Conflicts of Interest.”

Substantial delays may occur between the time a person purchases a Unit and the time the funds are invested by the Fund, which could reduce the benefits, if any, to be received from an investment in Units.

Any such delays may result in delays in distributions, and the investors returns may not vest until such funds are actually invested in assets by the Fund.

Potential Risks of Real Estate Ownership

In the event we are required to foreclose and take title to real property underlying any particular real estate asset, we will then become subject to the risks generally incident to the ownership of real property including changes in national and local economic conditions, changes in the investment climate for real estate investments, changes in the demand for or supply of competing properties, changes in local market conditions and neighborhood characteristics, the availability and cost of mortgage funds, the obligation to meet fixed and maturing obligations (if any), unanticipated holding costs, the availability and cost of necessary utilities and services, changes in real estate tax rates and other operating expenses, changes in governmental rules and fiscal policies, changes in zoning and other land use regulations, environmental controls, acts of God (which may result in uninsured losses) and other factors beyond the control of the Fund. The Fund may become subject to risks inherent in the ownership of real property, such as occupancy, operating expenses and rental schedules, which in turn may be adversely affected by general and local economic conditions, the supply of and demand for properties of the type in which the Fund has invested, the financial condition of tenants and sellers of properties, zoning laws, federal and local rent controls and real property tax rates.

Certain expenditures associated with real estate equity investments are fixed (principally mortgage payments, if any, real estate taxes and maintenance costs) and are not necessarily decreased by events adversely affecting the Fund's income from such investments.

The Fund's ability to meet its obligations will depend on factors such as these and no assurance of profitable operation can be given.

Lack of Diversification; Sale of Assets

Because the business of the Fund is anticipated to involve the investment in a limited number of multi-family real estate assets, the purchase of Units has additional risks from economic or other problems, the effects of which could be absorbed or compensated for in an investment program that contained a larger number of such assets.

If the Offering is completed at less than the maximum number of Units that can be sold, the opportunity for diversification will be further reduced.

The profitability of the Fund will be dependent upon the ultimate sale of our assets. Conditions in the real estate market, including overbuilding of residential, commercial, and industrial real estate, have adversely affected the value of and ability to sell real estate backed assets.

In addition, financial market conditions during recent years have significantly affected the availability, value and cost of real estate loans, at times making real estate financing difficult or costly to obtain.

The continuation of these conditions in the future may adversely affect the ability of the Fund to liquidate assets when a sale is determined to be in the best interest of the Fund, and may affect the terms of such sale.

Because we cannot predict these and other conditions that may exist at the time that assets are sold, there can be no assurance that we will be able to sell acquired assets on favorable terms or at profitable discounts to the cost of acquisition.

Working Capital

We intend to sell, exchange or otherwise dispose of acquired real estate assets and/or underlying properties when we determine such action to be in the best interests of the Fund.

The Fund is not required to maintain any minimum level of permanent working capital reserves.

To the extent that expenses increase or unanticipated expenses arise and accumulated reserves are insufficient to meet such expenses, the Fund would be required to obtain additional funds through borrowing, if available.

Due to the limited capitalization of the Fund prior to this Offering and the fact that we are a limited liability company, there would be limited resources to pursue in the event that we are unable to honor our financial commitments.

The ability of the Fund to repay any indebtedness incurred in connection with our activities, or subsequent refinancing, will depend upon the sale, refinancing or other disposition of acquired assets prior to the date such amounts become due.

There can be no assurance that any such sale or refinancing can be accomplished at a time or on such terms and conditions as will permit the Fund to make any distributions to the investor.

Risks of Joint Ventures

Some of the Fund's assets may be in the form of joint venture partnerships between the Fund (as either a general or limited partner or as a member of an LLC) and the seller, the Manager, Affiliates of the Manager, third-party developers, or real estate investors.

Investment in entities that own assets may involve risks not otherwise present.

These include risks associated with the possibility that the Fund's co-venturer in an asset might become bankrupt, that such co-venturer may at any time have economic or business interests or goals that are inconsistent with those of the Fund, or that such co-venturer may be in a position to take action contrary to the instructions or the requests of the Fund or contrary to the Fund's policies or objectives.

The Fund may relinquish control of a joint venture and the Fund may receive a disproportionate share of profits from a joint venture.

Actions by a co-venturer might have the result of subjecting assets owned by the joint venture to liabilities in excess of those contemplated by the terms of the joint venture or might have other adverse consequences for the Fund.

Uninsured Losses

The Fund may not obtain insurance on all assets it acquires; provided, however, that the Fund as a general practice affirmatively obtains insurance on its underlying assets.

Should a disaster or economic crisis occur to or cause the destruction or devaluation of any of our assets, the Fund could lose a portion of our invested capital and possible interest or other income from those assets.

Loss of interest or other income could require us to seek additional capital to meet Fund expenses in which case our ability to pay the Preferred Return or other obligations may be materially and adversely affected which could consequently result in a partial or complete loss of the investment.

Environmental and Regulatory Matters

The value of our assets may be adversely affected by legislative, regulatory, administrative and enforcement actions at the local, state and national levels in the areas, among others, of environmental controls.

In addition to possible increasingly restrictive zoning regulations and related land use controls, such restrictions may relate to air and water quality standards, noise pollution and indirect environmental impacts such as increased motor vehicle activity.

Capital Expenditures; Costs of Construction

The Manager may determine that it is in the best interests of the Fund to make Capital Expenditures.

There can be no assurance that the Fund will be able to sell such assets, or that it will be able to realize sales proceeds sufficient for its purposes.

Accordingly, in such event, if the Manager determines to make Capital Expenditures, it may be necessary to incur indebtedness in order to finance such Capital Expenditures.

There can be no assurance that the Fund would be able to achieve sufficient capital from such sources.

Costs of construction can vary greatly from week to week and thus the Fund has a limited ability to forecast costs with true precision.

Any variance may affect the return or may wipe out any and all returns expected by the Fund, or it may reduce the ability of the borrower of the Fund to repay the Fund from proceeds upon sale of the underlying real estate asset(s).

No History of Fund Operations

The Fund has only recently been formed and has no history of operations.

Reliance on Management

The Manager will have the right to make all decisions with respect to the management and operation of the business and affairs of the Fund.

Although the Manager and its Affiliates have direct and substantial experience in managing partnerships and/or limited liability companies, including those investing in distressed real estate assets, there can be no assurance that this will translate into successful management of the Fund.

Under our Limited Liability Company Agreement, the Preferred Members will have no right or power to take part in the management of the Fund.

Accordingly, no Person should purchase Units unless such Person is willing to entrust all aspects of the management of the Fund to the Manager.

Bankruptcy

In the event that a borrower obligated under one or more of our distressed or non-performing real estate assets seeks bankruptcy protection under Chapters 7, 11 or 13 of Title 11 of the United States Code in United States Bankruptcy Court, no assurance can be given that we will be able to obtain clear title or lift the automatic stay applicable in connection with associated bankruptcy proceedings.

Purchase Money Obligations

Upon the sale of our assets, the Fund may take as partial payment purchase money obligations in the form of a note and deed of trust, a note and mortgage or an agreement of sale or other form of security instrument.

To that extent, the distribution of the sales proceeds to the Preferred Members may be delayed until the maturity of such obligations.

The Fund also would be subject to the risk that the purchaser may default in the payment or satisfaction of any such obligation to the Fund.

In addition, the Members may be required to report taxable gain on the disposition of our assets without receiving Fund Distributions to satisfy any tax liabilities.

No Market for Units

The transfer of Units will be subject to certain limitations.

Moreover, it is not anticipated that any public market for Units will develop, and the transfer of Units may result in adverse tax consequences for the transferor.

Consequently, holders of Units may not be able to liquidate their investment in the Fund in the event of emergency or for any other reason.

The purchase of Units should be considered only as a long-term investment.

Timing of Sale of Assets

The Manager intends to sell, exchange or otherwise dispose of our assets when the Manager, in its sole discretion, determines such action to be in the best interests of the Fund.

The Manager and Preferred Members may experience a conflict of interest as to the optimum time to sell a particular asset.

Exclusion from Management and Indemnification

The Manager will have sole authority for the management of the Fund.

Preferred Members will have no right to participate in the Manager's decisions.

The Manager is entitled to certain limitations of liability and indemnification except in cases of fraud, gross negligence or willful misconduct.

Risks of Dissolution

The Manager has the right to dissolve the Fund at any time.

There can be no assurance that the Fund will not be dissolved at a time adverse to the interests of the Preferred Members.

IMPORTANT NOTICE

This Offering Memorandum is provided solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy any securities.

Past performance is not indicative of future results.

Prospective investors should consult their own legal, tax, and financial advisors before investing.