Equity Fund RE, LLC

Location:

Los Angeles, California

Offering Type:

Real Estate Fund

Asset Backed Real Estate Fund

Equity Fund has been acquiring, developing, operating, syndicating and managing multi-family residential, office buildings and retail projects. Christina buys only top-notch real estate properties to own and operate, those investments where it can see potential to return investor capital as quickly as possible. Equity Fund RE generates tax sheltered returns and maximizes profits through active management, and sells when the opportunity is right.

Investment Overview

The investment objective of the Company is to achieve superior long term tax advantaged and risk adjusted returns by acquiring, investing in, operating, improving, optimizing, developing, and redeveloping, a diversified portfolio of properties.

The Company intends to employ its proprietary opportunistic and value-added strategies to acquire and reposition real estate projects primarily located in the exclusive sub-markets of Los Angeles.

Specifically, the Company intends to capitalize on Equity Fund RE broad experience, as well as their extensive network of brokerage, private, and professional relationships, to identify and capitalize upon opportunities that show promise of superior risk adjusted returns. The Company generally seeks to acquire properties “off market” that become available for purchase due to liquidity events generally resulting from deaths, divorces, bankruptcies, fund closures and ownership disputes. The principals long history of operating in Los Angeles often makes them the “first to know” of such circumstances, providing a unique edge in a highly competitive market. The principals believe this “edge” provides opportunities to acquire and invest in properties that are priced below market upon acquisition, thereby providing a built-in margin of safety on top of Equity Fund long term proprietary value added strategies.

Investing in Equity Fund RE will provide investors with the opportunity to have their capital directly allocated to investments by a team of professionals with a long established operating history and proven track record of performance in West Los Angeles who co-invest their own funds. Investments will include the following components: (a) acquiring real estate investments, (b) managing, repositioning and redeveloping portfolio assets, and (c) generation of above market returns through disposition of improved, stabilized properties in a tax efficient manner.

Previous Mixed Use Investment

Issuer:

Equity Fund RE

Token Symbol:

EFRE

Asset Type:

Real Estate

Offering Type:

A+

Estimate IRR:

28%

Fund Term:

10 Years

Management Fees:

2%

Performance Fee:

0%

Issuer Profile:

$80,000,000 AUM

Soft/Hard Cap:

$5,000,000/$50,000,000

Date:

2/1/2018 - 12/31/2018

$30,000,000 66% Funded
Invest

Redevelopment: Properties that need to be repositioned in order to perform at optimal levels. Such opportunities include properties for which physical upgrades are required, or for which there is a higher and better use, such as future development, additional entitlements and/or change of use and utilization. The management team’s expertise in and focus on value-added projects will allow the Company to quickly analyze and secure opportunities and to successfully manage the value creation process.

Under-Managed Properties: Properties in which the former ownership’s lack of focus or expertise has resulted in under-performance and for which application of highly skilled, focused, and experienced management will provide operational improvement and increased net operating income.

Capital and Physical Constraints: Undercapitalized properties in which the increasingly inferior physical quality of the property or an inability to finance necessary capital improvements has limited the property’s operational results and market value. The Company intends to identify and implement meaningful and cost-effective strategies to reposition and redevelop physically constrained and undercapitalized properties.

Management Expertise: The Company believes that through utilization of Christina’s proprietary active management process, access to financing, tax structuring knowledge, experience in successfully executing profitable dispositions, and decades of development experience, it possesses the ability to source and successfully acquire, operate, and profitably sell its Investments.

Active Management: The Company will rely on Christina’s management capabilities. The combined team of seasoned professionals has extensive expertise in investment management as well as decades of experience operating, developing and redeveloping properties in West Los Angeles. This expertise and “hands-on” approach provides assurance that each Investment will be actively managed and positioned for optimal performance. The management team, collectively, has over 100 years of experience in the real estate industry and in core competencies, including acquisitions, operations, development, redevelopment, sales and marketing, investment management, capital markets and finance. Furthermore, the management team has an extensive network of relationships with property owners, developers, brokers, bankers and consultants, providing a constant flow of acquisition opportunities.

Sophisticated Financing: The Company will benefit from the management team’s refined and proven decision making process, properly matching leverage terms, pricing, duration, and conditions with the business plan for each Investment.

Tax Efficient Returns: The Company will seek to maximize tax benefits and any available tax credits for its Investments. Multiple Investments in the Company’s portfolio will provide the opportunity to utilize operating losses achieved through componentized depreciation and amortization to offset disposition gains from sales of Investments. Most of the Company’s operating income and distributions are anticipated to be tax-deferred.

Enhanced Returns through Multiple Exits: The Company will seek to acquire properties that provide multiple exit options for achieving maximum returns while minimizing downside risk.

Investment Advisory Fee: 2% per annum of drawn down Commitments, paid on the first day of each month during the Term.

In addition the Sponsor and/or its affiliates will receive the following fees:

Acquisition Fee: The Investment Manager will receive an Acquisition Fee equal to 3% of the total project costs for each Property acquired.

Disposition Fee: The Investment Manager will receive a Disposition Fee equal to 3% of the gross sale price of each Property sold.

Property Management Fee: The Investment Manager shall be paid a monthly management fee equal to five percent (5.0%) of the gross monthly revenue of the Properties directly from each Property account.

Reimbursable Expenses: The Investment Manager’s reimbursable expenses shall be paid directly from each Property account.

Leasing Commissions: The Investment Manager shall be paid market rate leasing commissions in connection with each new lease procured by the Investment Manager (or renewal of existing leases) during the term of the Operating Agreement.

Development Fee: The Investment Manager shall be paid a development fee equal to fifteen percent (15%) of all hard and soft expenditures in connection with any development, redevelopment, refurbishment, renovation or improvements made to the Properties.

Finance Fee: The Investment Manager shall be paid a fee equal to 1% of the loan amount for any loan obtained for the Properties.

Guaranty Fee: The Investment Manager shall be paid a fee equal to 1% of the loan amount for any loan obtained for the Properties that requires a personal guaranty of repayment and/or if the lender has recourse against the the Investment Manager or the principals of the Investment Manager and/or the Fund.

Distribution
Net proceeds from operations and project debt refinancings will be distributed 75% to the investors and 25% to the Managing Member.
Net proceeds from the disposition of any Investment will be distributed:
First 100% to the investors until each investor has received cumulative distributions equal to each investor’s invested capital with respect to the Investment.
Second 75% to investors and 25% to the Managing Member.
Net proceeds from Investment operations and sales after expiration of the investment period (as defined in the LLC Agreement) will not be reinvested. Net proceeds from Investment operations will be determined on a “portfolio basis” and will be distributed quarterly to the investors in accordance with the preceding order of priority.

Geography – Los Angeles

Los Angeles is the third largest economic metropolitan area in the world with a diverse economy comprised primarily of international trade, entertainment, aerospace, technology, real estate, petroleum, fashion, finance, tourism, law, and healthcare. It is also the largest major manufacturing center in the United States. Significant components of the manufacturing sector are apparel, computers, electronics, transportation, steel fabrication, food, and furniture.

Steel fabrication is the second largest industry in manufacturing, followed closely by apparel. As a “car-economy”, Los Angeles is the second largest producer of automobiles in the United States and is home to many automobile design studios. Los Angeles is also the nation’s largest port in terms of value of goods handled and tonnage. Proximity to the major Pacific manufacturing nations—Japan, China, Korea, and Taiwan—and easy access to transcontinental rail and truck shipping, plus the large commercial facilities available at Los Angeles International Airport make the Los Angeles Customs District the largest customs district in the United States. The city’s prominence in international trade is evidenced by the nearly 50 U.S. headquarters of foreign companies located in Los Angeles.

More than 100 foreign and countless domestic banks operate in Los Angeles, along with international legal and accounting companies and investment banks. Entertainment, film, television, and music, are the best known industries in Los Angeles, focusing worldwide attention on the city and making Los Angeles a major tourist destination. Tourism employs more than 468,000 people in the Los Angeles.1 Savills ranked Los Angeles as the fifth-largest destination behind London, Paris, New York and Tokyo for cross-border real estate investment in 2014 with more than $2.5 billion in large (over $10m) cross-border deals.2