Class A 506(c) Offering

The following table illustrates the amount of proceeds to be received by the Company on the sale of Units and the intended uses of such proceeds.

• The Company must raise $100,000.00 (the “Minimum Offering Amount”) before breaking impounds and deploying investor funds.
• The Maximum Offering Amount is based on the sale of 10,000 Class A Units pursuant to this Offering. The Company does not anticipate that the Maximum Offering Amount will be required to execute its business plan. The Company may sell less than the Maximum Offering Amount or amend or supplement this Memorandum to sell more Units.
• The Manager and its Affiliates or designees may purchase an unlimited number of Class A Units outside of the Offering on the same terms as those offered to prospective investors. Sale of Units to the Manager, its Affiliates, or other investors is not an indication that such Units are suitable for any other investor.
• The Company does not expect to require the Maximum Offering Amount to purchase the properties or execute its business plan. However, the Company may choose to raise capital, in its discretion, up to the Maximum Offering Amount and set aside such funds as additional reserves.

The allocation of the use of proceeds among the categories of anticipated expenditures represents management’s best estimates based on the current status of the Company’s proposed operations, plans, investment objectives, capital requirements, and financial conditions.

Future events, including changes in economic or competitive conditions of the Company’s business plan or the completion of less than the total Offering, may cause the Company to modify the above-described allocation of proceeds. The Company’s use of proceeds may vary significantly in the event any of the Company’s assumptions prove inaccurate.

The Company reserves the right to change the allocation of net proceeds from the Offering as unanticipated events or opportunities arise.

Investment Terms

Distributable Cash from operational cash flow will be distributed as follows:

• First, from the Class A (Reg D Investors) Distribution Percentage Share, the Class A Members shall receive sixty percent (60%) of all Distributable Cash, ratably apportioned according to their Class A Membership Interest.
• Second, from the Class B (Reg CF Investors) Distribution Percentage Share, the Class B Members shall receive fifty percent (50%) of all Distributable Cash, ratably apportioned according to their Class B Membership Interest.
• Thereafter, Class A and Class B Distribution Percentage Share, the Class C Members shall receive all remaining Distributable Cash, ratably apportioned according to their Class C Membership Interest.

Distributable Cash from Capital Transactions or from dissolution and liquidation of the Company will be distributed as follows:

• First, from the Class A Distribution Percentage Share, the Class A Members shall receive a return of their Unreturned Capital Contributions, and then sixty percent (60%) of all remaining Distributable Cash, ratably apportioned according to their Class A Membership Interest.
• Second, from the Class B Distribution Percentage Share, the Class B Members shall receive a return of their Unreturned Capital Contributions, and then fifty percent (50%) of all remaining Distributable Cash, ratably apportioned according to their Class B Membership Interest.
• Finally, the Class A and Class B Distribution Percentage Share, the Class C Members shall receive all remaining Distributable Cash, ratably apportioned according to their Class C Membership Interest.

The Company will be subject to those general risks relating to the development, ownership, and operation of real estate.

The Company’s economic success will depend upon the results of operations of the Properties, which will be subject to those risks typically associated with such asset class. Fluctuations in operating expenses and tax rates can adversely affect operating results or render the sale or refinancing of the Properties difficult or unattractive.

Certain expenditures associated with the Properties will be fixed (principally mortgage payments, if any, and real estate taxes) and will not necessarily decrease due to events adversely affecting the Company’s income from the operation of the Properties. No assurance can be given that certain assumptions as to the future profits from such operations will be accurate, since such matters will depend on events and factors beyond the Company’s and the Manager’s control.

These factors include, among others:

• Adverse changes in local and national economic conditions;
• Changes in the financial condition of buyers and sellers of similar properties;
• Changes in the relative popularity of the Properties and in real estate as an investment class;
• Changes in interest rates, real estate taxes, operating expenses, and other expenses;
• Changes in market capitalization rates;
• Changes in utility rates;
• Development and improvement of competitive properties;
• Ongoing development, capital improvement, and repair requirements;
• Risks and operating problems arising out of the presence or scarcity of certain construction materials;
• Environmental claims arising in respect of real estate acquired with undisclosed or unknown environmental problems or as to which adequate reserves had not been established;
• Physical destruction and depreciation of property and equipment;
• Damage to and destruction of the Properties, or any improvements or personal property located thereon;
• Acts of God;
• Changes in availability and cost of insurance;
• Unexpected construction costs;
• Increases in the costs of labor and materials;
• Materials shortages; and
• Labor strikes.
• Changes in the availability of debt financing and refinancing;

Real estate is a long-term illiquid investment that may be difficult to sell in response to changing economic conditions.

Real estate is generally a long-term investment that cannot be quickly converted to cash. Therefore, the ability to liquidate the Properties promptly in response to economic or other conditions will be limited, which will affect the Company’s ability to realize a return on its investment. Real estate investments are also subject to adverse changes in overall economic conditions or local conditions that may reduce the demand for real estate generally.