Equity Offering

Each preferred shareholder will make a capital commitment of at least $50,000 to the equity fund, although the sponsor reserves the right to accept capital commitments of lesser amounts. A preferred shareholder must contribute a portion of their total capital commitment on the closing date of their investment to the equity fund. The balance of such capital commitment must be contributed within 30 days when it is called for by the sponsor over the Investment Period of the equity fund, as described below. Preferred shareholders will not be required to make additional capital contributions more than their capital commitment.

The investment period is the period in which the equity fund may draw down the balance of capital commitments not previously funded from the preferred shareholders to make investments. The investment period of the equity fund is 5 years from the date of investment.

The investment should be considered illiquid as there is no secondary market for selling such preferred shareholder units. The sponsor is under no obligation to repurchase such interests, and applicable securities laws restrict the resale of such interests. In addition, the sponsor will be invested in value-add real estate assets, which generally cannot be immediately sold for maximum potential value.

Each preferred shareholder will receive an annual Schedule K-1 that will indicate how profits from the equity fund will be treated for tax purposes. Based on current tax laws, it is expected that income from cash flow will be taxed as ordinary income. Gains from the sale of most assets held longer than 12 months will typically be taxed as capital gains.

The preferred shareholders receive a 10% APR cumulative return. At the year 5 exit, preferred shareholders receive their principle, any unpaid cumulative preferred returns, and 45% of their original principle. The expected IRR is 16% and the expected equity multiple is 1.95x.

Generally, the sponsor believes they will be able to buy a property, add value, lease, and sell. The sponsor’s typical holding period ranges from three to five years depending on real estate market conditions. However, as part of the equity fund, it is expected that the sponsor will either sell the properties at year 5 or refinance and buy out preferred shareholders. Regardless, preferred shareholders are expected to exit at year 5. All the sponsor’s investments will be income-producing and we anticipate distributing cash flow during the investment period of the equity fund quarterly. Investors should rely on the equity fund to provide a steady, predictable stream of income beginning quarter 5 of the investment.

The sponsor is led by a highly experienced executive team assisted by a skilled group of professionals. The sponsors have extensive real estate, management, investment, underwriting, deal structuring, legal, and financial experience. Additionally, our executive officers average more than 15 years of real estate and/or investment/financial management experience.

Yes. Prospective foreign investors should be aware that proceeds from the equity fund will be subject to U.S. tax filing and withholding and tax payment obligations for foreign partners. Foreign investors should consult their tax professional.

The sponsor believes in sharing substantial information with equity fund investors. Annually audited financial statements of the equity fund, prepared by a qualified, certified public accounting firm, on each portfolio investment of the equity fund, prepared by the sponsor, will be provided to each preferred shareholder. U.S. federal income tax information will be provided annually. The sponsor will hold annual meetings to provide preferred shareholders with the opportunity to review and discuss with the sponsor the equity fund’s investment activities and portfolio.

The sponsor owns 5 properties, 3 of which are on the Fair Oaks Campus in Sacramento County. The other two properties are in San Diego.

The sponsor currently owns 7 commercial healthcare properties all of which are in California. The sponsor also has a property in Huntington Beach that has not yet closed, but subleases to a tenant. During the past 36 months the LLC’s has acquired developed and sold 3 commercial real estate properties,totaling profits of over $1,000,000.