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Multifamily
The Tallows @ Peoria
Phoenix MSA, AZ
Funded
100% funded
...
The Tallows @ Peoria
Phoenix MSA, AZ
All Investments > The Tallows @ Peoria
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Overview
The Tallows @ Peoria
The Tallows @ Peoria (the “Property) is a boutique rental community offering 100 apartment homes in a two-story garden-style layout in the fast-growing Peoria submarket of the Phoenix MSA. The Sponsor exclusively executes the same value-add business plan for all assets acquired. This is their second deal offered to investors via the RealtyMogul platform.
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Details
For more information, view the Sponsor's Investment Memorandum.
Estimated First Distribution 2/2024
Minimum Investment 35000
Estimated Hold Period 60 Months
Investment Strategy Value-Add
Investment Type Equity
# Units 100
Current Occupancy 94.6%
Year Built 1975
Total CapEx Budget $1,555,838
Exit Cap Rate 6.00%
Sponsor Documents
The offering documents above have been prepared and are being delivered by the Sponsor of this investment opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for, the Sponsors offering documents posted below or any content therein.
Deal Highlights
Investment Highlights
Experienced Multifamily Sponsor Acquiring at a Steep Discount From a Forced Seller: RSN Property Group (the ”Sponsor”) is acquiring a 100-unit Class B multifamily property in Peoria, AZ, a fast-growing Phoenix submarket. The Tallows (the “Property”), is being purchased at a 20% discount to recent sales. The current seller has only owned this asset for two years, and after investing over $2 million in maintenance and improvements, is being forced to sell at a breakeven price due to partnership dissolution.
This Will Be The Sponsor’s 4th Phoenix Acquisition, and 25th Overall: The Sponsor's extensive experience in operating multifamily properties is evidenced by their successful acquisition and operation of three similar-sized and aged assets in the Phoenix area, as well as their execution of the same business plan across 24 properties comprising more than $883 million in value.
The Property Sits In A Dynamic Location: The Property is conveniently located in the heart of downtown Peoria, just a 25-minute drive from downtown Phoenix. The highly desirable area boasts a long list of restaurants, shopping centers, major highways, and parks within walking distance of the Property. Additionally, it is adjacent to highly sought-after, top-rated public schools in the State with an A- rating on Niche (Peoria Unified School District).
The Sponsor’s Value-Add Plan Will Primarily Focus on Interior Improvements and Driving Rent Premiums: The Sponsor's value-add business plan involves extensive renovation of unit interiors to maximize their marketability and bring units in line with the competitive set. The Sponsor has seen very strong demand for renovated Class B units within a 3-mile radius, and the Property is located directly adjacent to three other improved comps, which have stabilized occupancy and receive $200-300+/month rent premiums.
The Investment Will Utilize Bonus Depreciation and Cost Segregation: The Sponsor will utilize bonus depreciation and a cost segregation study to provide tax-deductible passive "paper losses." The Sponsor estimates "paper losses" of +40% on investors' initial investment in year 1, with further tax-deductible "paper losses" in subsequent years.
The Investment Will Feature Conservative Leverage: Moderately leveraged (~65% LTPP), fixed-rate, partial term interest-only, agency debt mitigates future interest rate movement in the market, protects investor downside, and maintains positive leverage throughout the hold.
Investors via the RealtyMogul Platform are Eligible for the Most Favorable Common Equity Investment Tier: Investment in the Property through the RealtyMogul platform offers an 8% preferred return and an 80/20 split on the back end. This is the Sponsor’s most favorable common equity tier.
Experienced Multifamily Sponsor Acquiring at a Steep Discount From a Forced Seller: RSN Property Group (the ”Sponsor”) is acquiring a 100-unit Class B multifamily property in Peoria, AZ, a fast-growing Phoenix submarket. The Tallows (the “Property”), is being purchased at a 20% discount to recent sales. The current seller has only owned this asset for two years, and after investing over $2 million in maintenance and improvements, is being forced to sell at a breakeven price due to partnership dissolution.
This Will Be The Sponsor’s 4th Phoenix Acquisition, and 25th Overall: The Sponsor's extensive experience in operating multifamily properties is evidenced by their successful acquisition and operation of three similar-sized and aged assets in the Phoenix area, as well as their execution of the same business plan across 24 properties comprising more than $883 million in value.
The Property Sits In A Dynamic Location: The Property is conveniently located in the heart of downtown Peoria, just a 25-minute drive from downtown Phoenix. The highly desirable area boasts a long list of restaurants, shopping centers, major highways, and parks within walking distance of the Property. Additionally, it is adjacent to highly sought-after, top-rated public schools in the State with an A- rating on Niche (Peoria Unified School District).
The Sponsor’s Value-Add Plan Will Primarily Focus on Interior Improvements and Driving Rent Premiums: The Sponsor's value-add business plan involves extensive renovation of unit interiors to maximize their marketability and bring units in line with the competitive set. The Sponsor has seen very strong demand for renovated Class B units within a 3-mile radius, and the Property is located directly adjacent to three other improved comps, which have stabilized occupancy and receive $200-300+/month rent premiums.
The Investment Will Utilize Bonus Depreciation and Cost Segregation: The Sponsor will utilize bonus depreciation and a cost segregation study to provide tax-deductible passive "paper losses." The Sponsor estimates "paper losses" of +40% on investors' initial investment in year 1, with further tax-deductible "paper losses" in subsequent years.
The Investment Will Feature Conservative Leverage: Moderately leveraged (~65% LTPP), fixed-rate, partial term interest-only, agency debt mitigates future interest rate movement in the market, protects investor downside, and maintains positive leverage throughout the hold.
Investors via the RealtyMogul Platform are Eligible for the Most Favorable Common Equity Investment Tier: Investment in the Property through the RealtyMogul platform offers an 8% preferred return and an 80/20 split on the back end. This is the Sponsor’s most favorable common equity tier.
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Management
For more information, view the Sponsor's Investment Memorandum.
RSN Property Group

Founded in April 2014, RSN Property Group is a multi-real estate investment firm owned by Australian investors living in the U.S. They specialize in acquiring and operating properties with significant value-add components within strong MSAs throughout the U.S. The key principal, Reed Goossens, has been the lead operator on over 24 multifamily value-add syndications acquiring assets worth more than $883MM today.

Sponsor Track Record
Property Name City, State Asset Type Acq. Date Units Purchase Price Sales Price / Estimated Value LP IRR LP Emx
The Henry B  San Antonio, TX Multifamily 10-01-2018 198 $18,575,000 $22,000,000 15.21% 1.42X
The Blair at Bitters San Antonio, TX Multifamily 10-01-2018 190 $15,625,000 $23,000,000 15.21% 1.42X
The Joseph at Huebner San Antonio, TX Multifamily 11-30-2017 192 $16,100,000 $28,200,000 18.29% 1.92X
The Reserve at Walnut Creek Austin, TX Multifamily 12-30-2018 284 $36,300,000 $62,250,000 24.92% 1.99X
The Baxter Austin, TX Multifamily 11-30-2019 350 $46,000,000 $65,275,000 32.98% 1.98X
The Lila San Antonio, TX Multifamily 04-30-2017 253 $20,600,000 $29,000,000    
Providence Townhomes San Antonio, TX Multifamily 09-25-2019 106 $16,250,000 $18,750,000    
Patten East Austin, TX Multifamily 03-15-2022 248 $43,500,000 $47,000,000    
Barstow Apartments Austin, TX Multifamily 12-15-2020 560 $94,575,000 $99,303,750    
St. Mary Apartments Austin, TX Multifamily 01-26-2021 240 $60,000,000 $65,000,000    
Palmera San Antonio, TX Multifamily 06-18-2021 288 $46,800,000 $49,140,000    
SoNA Austin, TX Multifamily 08-19-2021 164 $26,000,000 $27,820,000    
Henry Heights Austin, TX Multifamily 10-28-2021 184 $32,000,000 $33,600,000    
Lowell Austin, TX Multifamily 11-25-2021 286 $50,700,000 $52,221,000    
Shiloh  Austin, TX Multifamily 01-15-2022 286 $103,050,000 $105,626,250    
North Edge Phoenix, AZ Multifamily 06-12-2021 71 $11,750,000 $12,925,000    
Carolina Commons Greenville, SC Multifamily 05-15-2021 43 $3,500,000 $3,850,000    
Townhomes at Summit Greenville, SC Multifamily 03-15-2021 30 $4,500,000 $5,040,000    
Pines of Lanier Atlanta, GA Multifamily 02-28-2022 157 $17,800,000 $18,868,000    
Bronte East Phoenix, AZ Multifamily 07-04-2022 87 $19,375,000 $19,375,000    
Bronte West Phoenix, AZ Multifamily 07-04-2022 48 $13,250,000 $13,250,000    
Pelham Place North & South Greenville, SC Multifamily 09-24-2022 281 $35,500,000 $35,500,000    
The Lennox at Tempe Phoenix, AZ Multifamily 03-25-2023 88 $20,300,000 $20,300,000    
Totals/Weighted Average       4,634 $752,050,000 $883,680,000 24.4% 1.85X

 

The above bios and track record were provided by RSN Property Group and have not been independently verified by RealtyMogul.

Website
Management Team
Management
Reed Goosens
Founder and CEO

Reed Goossens is a real estate entrepreneur and founder of RSN Property Group, and formerly the co-founder of Wildhorn Capital. As a native Australian, Reed moved to the U.S. to pursue his career in early 2012. Reed is a qualified chartered structural engineer and project manager. Before founding RSN Capital and Wildhorn Capital, Reed was involved with large-scale commercial construction and real estate development projects with a combined worth of over $500 million, with such projects located in Australia, the United Kingdom, and the U.S., including the London 2012 Olympic Games. Since founding both companies he has gone on to acquire over $685 million worth of multifamily assets, going full cycle on multiple deals and typically exceeding the projected investor returns.

Reed is also the host of a top-rated real estate investing podcast, "Investing in the US", wherein he interviews other distinguished real estate entrepreneurs about their success.

Management
Ben Gray
Partner and COO

Ben grew up in a prominent Australian family of real estate investors and developers. He followed his own path into the tech industry, specializing in working with financial services companies in London and New York. Ben went on to capitalize on the subprime mortgage crisis founding a successful business connecting foreign investors with discounted US real estate. In recent years, Ben has been instrumental in transforming RSN Property Group into a modern tech-forward company able to adapt and scale into new markets and business opportunities.

Property
For more information, view the Sponsor's Investment Memorandum.

The Property is a boutique rental community tailored to families, offering a total of 100 one-bedroom and two-bedroom apartment homes in a two-story garden-style layout. It is conveniently located in the heart of downtown Peoria only a 25-minute drive from downtown Phoenix. The surrounding area boasts a long list of restaurants, shopping centers, and major highways (101 Loop & US-60). Furthermore, the community is adjacent to highly sought-after top-rated public schools in the State with an A- rating on Niche (Peoria Unified School District).

 

Unit Mix

Unit Type # of Units Avg SF/Unit Average Rent / Unit (In-Place) Average Rent PSF (In-Place) Average Rent / Unit (Post Renovation) Average Rent PSF (Post Renovation)
1-Bed (Partially Renovated) 17 480 $1,185 $2.47 $1,230 $2.56
1-Bed (Non-Renovated) 3 480 $1,088 $2.27 $1,240 $2.58
2-Bed (Partially Renovated) 73 780 $1,340 $1.72 $1,479 $1.90
2-Bed (Non-Renovated) 7 780 $1,151 $1.48 $1,501 $1.92
Totals / Averages 100 720 $1,293 $1.66 $1,431 $2.05

 

Comparables
For more information, view the Sponsor's Investment Memorandum.

Lease Comparables

  Flats at Peoria Moxi Artisan Park Fountain Place Bingham Blocks Stone View Rise at Northridge Napa Place Apartments Peoria Grand Averages THE TALLOWS @ PEORIA
Distance from Subject Property 2.8 miles 0.5 miles 3.4 miles 3.4 miles 3.7 miles 4.2 miles 5.5 miles 1.9 miles 0.4 miles 2.9 miles  
Year Built 1984 1984 1984 1984 1972 1974 1979 1985 1985 1981 1975
Number of Units 154 216 197 164 207 123 130 100 145 160 100
                       
1 Bedrooms                   Averages Market Rent (Post-Reno)
$ / Unit $1,465 $1,414 $1,221 $1,230 $1,300 $1,461 $1,256 N/A N/A $1,335 $1,232
Square Feet 700 SF 695 SF 600 SF 550 SF 450 SF 706 SF 575 SF N/A N/A 611 SF 480 SF
$ / SF $2.09 / SF $2.03 / SF $2.04 / SF $2.24 / SF $2.89 / SF $2.07 / SF $2.18 / SF N/A N/A $2.22 / SF $2.57 / SF
                       
2 Bedrooms                      
$ / Unit $1,919 $1,544 $1,346 $1,450 $1,500 $1,600 $1,450 $1,350 $1,445 $1,517 $1,481
Square Feet 900 SF 977 SF 842 SF 812 SF 1,150 SF 925 SF 852 SF 811 SF 864 SF 904 SF 780 SF
$ / SF $2.13 / SF $1.58 / SF $1.60 / SF $1.79 / SF $1.30 / SF $1.73 / SF $1.70 / SF $1.66 / SF $1.67 / SF $1.69 / SF $1.90 / SF

 

Sales Comparables

  The Parker  Edge @ Westgate  Glenridge Apartments  Rise on Cactus Rise at the Meadows Sunrise on Bethany Tides on 67th Tides on 59th Peoria Grand Country Gables Averages THE TALLOWS @ PEORIA
Sale Date 05-01-2022 07-01-2022 09-10-2022 09-15-2022 09-15-2022 11-01-2022 12-01-2022 12-01-2022 In Escrow In Escrow 09-14-2022 In Escrow 
Sales Price $45,000,000 $18,270,000 $31,500,000 $31,000,000 $29,200,000 $25,000,000 $33,362,765 $32,508,414 $31,000,000 $27,800,000 $31,205,775 $18,500,000
Year Built 1984 1975 1985 1984 1983 1974 1985 1985 1985 1984 1983 1975
Number of Units 152 87 135 124 120 120 148 141 144 139 131 100
Average Unit Size 676 SF 757 SF 699 SF 745 SF 740 SF 950 SF 805 SF 724 SF 889 SF 604 SF 757 SF 720 SF
Sales Price / Unit $296,053 $210,000 $233,333 $250,000 $243,333 $208,333 $225,424 $230,556 $215,278 $200,000 $232,551 $185,000
Sales Price / SF $438 $277 $334 $336 $329 $219 $280 $318 $242 $331 $313 $257
Cap Rate 5.00% N/A 3.64% 4.30% 3.66% N/A N/A N/A N/A N/A 4.15% 5.70%
Occupancy at Sale 93.00% 94.00% 93.50% 95.00% 93.50% 96.00% 95.50% 96.00% 98.00% 96.00% 95.10% 94.60%
Distance from Subject Property 6.2 miles 4.0 miles 6.0 miles 6.4 miles 8.3 miles 5.7 miles 5.1 miles 4.5 miles 0.1 miles 6.0 miles 5.2 miles  
Financials
For more information, view the Sponsor's Investment Memorandum.
Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Preferred Equity (Class A) $1,831,398 $18,314
LP Investor Equity (Class B) $4,705,590 $47,056
LP Investor Equity (Class C) $2,000,000 $20,000
GP Investor Equity(1) $620,000 $6,200
Senior Loan (Net Proceeds) $12,090,000 $120,900
Total Sources of Funds $21,246,988 $212,470
     
Uses of Funds $ Amount $/Unit
Acquisition Price $18,500,000 $185,000
Acquisition Fee $370,000 $3,700
Rate Buy Down $241,800 $2,418
Closing Costs(2) $148,000 $1,480
Financing $181,350 $1,814
Working Capital $250,000 $2,500
Capital Expenditures $1,555,838 $15,558
Total Uses of Funds $21,246,988 $212,470

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

(2) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the Platform and for Platform-related services. Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC. 

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Freddie Mac
  • Loan Type: Agency
  • Term: 60 Months
  • Loan-to-Value (LTV): 65.0%
  • Loan-to-Cost (LTC): 56.9%
  • Estimated Proceeds(1): $12,090,000
  • Interest Type: Fixed
  • Annual Interest Rate: 5.58%
  • Interest -Only Period: 36 Months
  • Amortization: 35 Years
  • Prepayment Terms: Two (2) year lockout period in which neither prepayment nor defeasance is permitted. Thereafter the Loan cannot be prepaid but can be defeased as defined in the Loan Documents (“Defeasance Period”), with securities substituted as collateral for the Loan in place of the Property. After expiration of the Defeasance Period (i.e., the last three (3) calendar months of the Loan Term) the Loan may be prepaid with no prepayment premium due.
  • Extension Requirements: None (agency debt)
  • Recourse Description: Non-recourse

(1) Estimated Proceeds are net of a $241,800 buy-down fee, in exchange for a 34-basis-point reduction in rate.

(2) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt. 

Distributions

RSN Property Group intends to make distributions from RSNPG Tallows Apts Partners RM, LLC to investors on a pro rata basis, based on distributions received as the holder of a Class C interest from RSNPG Tallows Apts Partners, LLC. RSNPG Talllows Apts Partners, LLC will make distributions as follows:

  1. To the Class A Investors, until they receive a 10% annualized preferred equity return;
  2. Pari-passu all cash flow available for distribution to the Class C Investors(1) until the Class C Investors receive an 8.0% IRR;
  3. 80% / 20% (80% to Class C Investors / 20% to GP as Promoted/Carried Interest) of excess cash flow thereafter.

RSN Property Group intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loans. As set forth in the operating agreement, Class C Investors are subordinate to the Class A Investors, who receive a 10% annualized preferred equity return. After payments of amounts to the Class A Investors, Class C Investors will recieve their pro rata share of the amount remaining which will be distributed as provided above.

Distributions are expected to start in February 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of RSN Property Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.

RSN Property Group will receive a promoted/carried interest as indicated above.

Cash Flow Summary
    Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Revenue   $1,607,276 $1,850,047 $1,983,481 $2,056,741 $2,151,822
Total Operating Expenses   ($550,071) ($550,071) ($569,113) ($586,911) ($605,954)
Net Operating Income   $1,078,198 $1,299,976 $1,414,368 $1,469,830 $1,545,868
             
Project-Level Cash Flows
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($9,156,988) $446,430 $638,353 $750,077 $691,972 $15,817,002
             
Investor-Level Cash Flows(2)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($2,030,000) $74,038 $116,436 $136,938 $121,074 $3,451,074
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment(2)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($50,000) $1,824 $2,868 $3,373 $2,982 $85,002

 

(1) Class C Investors include the Sponsor and investors who invest via the RealtyMogul platform. Please refer to the Business Plan section for the delineation of different share classes.

(2) RM Technologies, LLC and its affiliates do not provide any assurance of returns.  Returns presented are net of all fees.  Please carefully review the Fees and Disclaimers sections for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to RSN Property Group's materials for details. The following fees and compensation will be paid(1)(2):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 2.00% of Purchase Price RSN Property Group Capitalized Equity Contribution
Financing Fee 1.50% of Loan Proceeds Walker Dunlop Debt Capitalized Equity Contribution
Technology Solution Licensing Fee(2) Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution RM Technologies, LLC

Capitalization (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 2.00% of Effective Gross Income RSN PG Operations, LLC Cash Flow
Property Management Fee 3.00% of Effective Gross Income Chamberlin & Associates Cash Flow
Construction Management Fee 5.00% of Construction Budget (Paid in 4 Equal Installments during the 12-month period after the Company Effective Date) RSN PG Operations, LLC Construction Expenditure Budget
Administration Solution Licensing Fee(2) Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of  RM Technologies’ Administration Solution RM Technologies, LLC Cash Flow

(1) Fees may be deferred to reduce impact to investor distributions.

(2) Please see the Fees and Disclaimers sections for additional information concerning fees paid to RM Technologies, LLC.

.

Sources & Uses

Total Capitalization

Sources of Funds $ Amount $/Unit
Preferred Equity (Class A) $1,831,398 $18,314
LP Investor Equity (Class B) $4,705,590 $47,056
LP Investor Equity (Class C) $2,000,000 $20,000
GP Investor Equity(1) $620,000 $6,200
Senior Loan (Net Proceeds) $12,090,000 $120,900
Total Sources of Funds $21,246,988 $212,470
     
Uses of Funds $ Amount $/Unit
Acquisition Price $18,500,000 $185,000
Acquisition Fee $370,000 $3,700
Rate Buy Down $241,800 $2,418
Closing Costs(2) $148,000 $1,480
Financing $181,350 $1,814
Working Capital $250,000 $2,500
Capital Expenditures $1,555,838 $15,558
Total Uses of Funds $21,246,988 $212,470

(1) The Sponsor’s equity contribution may consist of friends and family equity and equity from funds controlled by the Sponsor.

(2) RM Technologies, LLC, an affiliate of RealtyMogul, operates the RealtyMogul Platform. RM Technologies, LLC charges a fixed, non-percentage-based fee for real estate companies and their sponsors to use the Platform and for Platform-related services. Please see the Fees and Disclaimers sections below for additional information concerning fees paid to RM Technologies, LLC. 

Debt Assumptions

The expected terms of the debt financing are as follows:

  • Lender: Freddie Mac
  • Loan Type: Agency
  • Term: 60 Months
  • Loan-to-Value (LTV): 65.0%
  • Loan-to-Cost (LTC): 56.9%
  • Estimated Proceeds(1): $12,090,000
  • Interest Type: Fixed
  • Annual Interest Rate: 5.58%
  • Interest -Only Period: 36 Months
  • Amortization: 35 Years
  • Prepayment Terms: Two (2) year lockout period in which neither prepayment nor defeasance is permitted. Thereafter the Loan cannot be prepaid but can be defeased as defined in the Loan Documents (“Defeasance Period”), with securities substituted as collateral for the Loan in place of the Property. After expiration of the Defeasance Period (i.e., the last three (3) calendar months of the Loan Term) the Loan may be prepaid with no prepayment premium due.
  • Extension Requirements: None (agency debt)
  • Recourse Description: Non-recourse

(1) Estimated Proceeds are net of a $241,800 buy-down fee, in exchange for a 34-basis-point reduction in rate.

(2) A substantial portion of the total acquisition for the Property will be paid with borrowed funds, i.e., debt.  Please carefully review the Disclaimers section below for additional information concerning the Sponsors use of debt. 

Distributions

RSN Property Group intends to make distributions from RSNPG Tallows Apts Partners RM, LLC to investors on a pro rata basis, based on distributions received as the holder of a Class C interest from RSNPG Tallows Apts Partners, LLC. RSNPG Talllows Apts Partners, LLC will make distributions as follows:

  1. To the Class A Investors, until they receive a 10% annualized preferred equity return;
  2. Pari-passu all cash flow available for distribution to the Class C Investors(1) until the Class C Investors receive an 8.0% IRR;
  3. 80% / 20% (80% to Class C Investors / 20% to GP as Promoted/Carried Interest) of excess cash flow thereafter.

RSN Property Group intends to make distributions to investors after the payment of the company's liabilities (loan payments, operating expenses, and other fees as more specifically set forth in the LLC agreements, in addition to any member loans or returns due on member loans. As set forth in the operating agreement, Class C Investors are subordinate to the Class A Investors, who receive a 10% annualized preferred equity return. After payments of amounts to the Class A Investors, Class C Investors will recieve their pro rata share of the amount remaining which will be distributed as provided above.

Distributions are expected to start in February 2024 and are projected to continue on a quarterly basis thereafter. Distributions are at the discretion of RSN Property Group, who may decide to delay distributions for any reason, including maintenance or capital reserves.

RSN Property Group will receive a promoted/carried interest as indicated above.

Cash Flow Summary
    Year 1 Year 2 Year 3 Year 4 Year 5
Effective Gross Revenue   $1,607,276 $1,850,047 $1,983,481 $2,056,741 $2,151,822
Total Operating Expenses   ($550,071) ($550,071) ($569,113) ($586,911) ($605,954)
Net Operating Income   $1,078,198 $1,299,976 $1,414,368 $1,469,830 $1,545,868
             
Project-Level Cash Flows
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($9,156,988) $446,430 $638,353 $750,077 $691,972 $15,817,002
             
Investor-Level Cash Flows(2)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($2,030,000) $74,038 $116,436 $136,938 $121,074 $3,451,074
             
Investor-Level Cash Flows - Hypothetical $50,000 Investment(2)
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Cash Flow ($50,000) $1,824 $2,868 $3,373 $2,982 $85,002

 

(1) Class C Investors include the Sponsor and investors who invest via the RealtyMogul platform. Please refer to the Business Plan section for the delineation of different share classes.

(2) RM Technologies, LLC and its affiliates do not provide any assurance of returns.  Returns presented are net of all fees.  Please carefully review the Fees and Disclaimers sections for additional information concerning Sponsor’s use or projected returns and fees paid to Sponsor and RM Technologies, LLC.

 

Fees

Certain fees and compensation will be paid over the life of the transaction; please refer to RSN Property Group's materials for details. The following fees and compensation will be paid(1)(2):

One-Time Fees:
Type of Fee Amount of Fee Received By Paid From
Acquisition Fee 2.00% of Purchase Price RSN Property Group Capitalized Equity Contribution
Financing Fee 1.50% of Loan Proceeds Walker Dunlop Debt Capitalized Equity Contribution
Technology Solution Licensing Fee(2) Flat one-time licensing fees of $15,000 plus $1,500 per each prospective investor onboarded by Sponsor through its license and use of RM Technologies’ Technology Solution RM Technologies, LLC

Capitalization (at Sponsor’s discretion)

       
Recurring Fees:
Type of Fee Amount of Fee Received By Paid From
Asset Management Fee 2.00% of Effective Gross Income RSN PG Operations, LLC Cash Flow
Property Management Fee 3.00% of Effective Gross Income Chamberlin & Associates Cash Flow
Construction Management Fee 5.00% of Construction Budget (Paid in 4 Equal Installments during the 12-month period after the Company Effective Date) RSN PG Operations, LLC Construction Expenditure Budget
Administration Solution Licensing Fee(2) Flat quarterly licensing fee of $125 per investor serviced by Sponsor through the license and use of  RM Technologies’ Administration Solution RM Technologies, LLC Cash Flow

(1) Fees may be deferred to reduce impact to investor distributions.

(2) Please see the Fees and Disclaimers sections for additional information concerning fees paid to RM Technologies, LLC.

.

Disclosures
RM Securities, LLC and its Affiliates Compensation

RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.

For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

No Approval, Opinion or Representation, or Warranty by RM Securities, LLC

Sponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.

Sponsor’s Information Qualified by Investment Documents

The information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.

Risk of Investment

This investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.

No Reliance on Forward-Looking Statements; Sponsor Assumptions

Sponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.

Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.

No Reliance on Past Performance

Any description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.

Sponsor’s Use of Debt

A substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.

Sponsor’s Offering is Not Registered

Sponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.

No Investment Advice

Nothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.

1031 Exchange Risk

Internal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.

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