LEGACYHUB MULTIFAMILY REIT I, LLC

Key economics

Preferred return

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Hurdle rate

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LP / GP split

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GP catch-up

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GP clawback

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GP commitment

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Diligence findings (23 · 7 high/critical)

• high
  DDQ gap: Does the fund engage an independent auditor?The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.
• high
  DDQ gap: Does the fund have a GP clawback provision?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• high
  DDQ gap: What is the LP/GP carried-interest split above the preferred return?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• high
  DDQ gap: What is the preferred return (hurdle) rate offered to LPs?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• high
  Document-quality defect — Signature date predates company formation (July 20, 2020 vs. Sept 24, 2020)The offering statement is certified as signed on July 20, 2020, but the Company was not formed until September 24, 2020 -- the issuer purportedly signed before it existed (logically impossible date).
• high
  Numeric inconsistency — Asset management fee basis (net offering proceeds vs. net asset value)The 2.00% annualized asset management fee is described as based on 'net offering proceeds' in the Q&A but on 'the Company's net asset value' in the financial-statement notes -- two materially different fee bases for the same fee.
• high
  Numeric inconsistency — Platform Administration Fee (4% vs. 3%)The Sponsor's platform fee is stated as 4% (annualized) of gross revenue in the management-compensation section but as 3% of gross annual revenue in the financial-statement notes.
• medium
  DDQ gap: Does the fund use a third-party fund administrator?The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.
• medium
  DDQ gap: Is there a GP catch-up, and at what rate?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• medium
  DDQ gap: What distribution-waterfall structure does the fund use?The offering documents don't answer a standard institutional DDQ question (Structure). An allocator will ask this directly — the GP should be ready with an answer.
• medium
  DDQ gap: What is the GP's capital commitment (skin in the game)?The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.
• medium
  Numeric inconsistency — Initial fixed offering price end date (Dec 31, 2021 vs. Sep 30, 2021)The cover/price-table footnote says the $10.00 fixed price applies 'until December 31, 2021,' while the Q&A says it is the purchase price 'until September 30, 2021' -- conflicting dates for when NAV-based pricing begins.
• medium
  Numeric inconsistency — Ownership limit (9.99% vs. 9.8%)The Risk Factors disclose a REIT ownership limit of 9.99% of shares, but the Operating Agreement's Article XIII defines the Aggregate Ownership Limit and Common Share Ownership Limit as 9.8 percent.
• medium
  Numeric inconsistency — REIT qualification taxable year (2021 vs. 2022)The document variously states REIT qualification begins with 'our 2021 taxable year' and 'our taxable year ended December 31, 2022' / 'our 2022 taxable year,' an internal contradiction about the first REIT year.
• medium
  Numeric inconsistency — Targeted portfolio leverage range (50-80% vs. 60-75%)Targeted portfolio-wide leverage is stated as 'between 50-80%' in the Q&A but as 'between 60-75%' in the Plan of Operation.
• medium
  Unfilled placeholder text — [____________]The Operating Agreement title block ships with an unfilled date placeholder ('Dated as of [____________]'), indicating the governing agreement was not finalized.
• low
  Broken cross-reference — Exhibit 7 / Exhibit 8 (NAV and escrow references)The NAV Q&A cites 'See Exhibit 7' for NAV information and the escrow narrative says the escrow agreement 'can be found in Exhibit 8,' but the exhibit index lists Exhibit 7 as 'Tax opinion' and Exhibit 8 as 'NAV Disclosure' -- both pointers resolve to the wrong exhibit (and there is no escrow-agreement exhibit).
• low
  Broken cross-reference — Redemption Plan definition -> Section 4.6 (actually Section 4.5)The Operating Agreement defines 'Redemption Plan' as having the meaning assigned in Section 4.6, but the provision actually establishing the Redemption Plan is captioned Section 4.5, while Section 4.6 is a separate provision -- a broken internal cross-reference.
• low
  Defined-term defect — General Partner (in a Manager-managed LLC)A Risk Factors summary bullet refers to 'our General Partner,' a term inapplicable to this Manager-managed LLC (the entity is run by 'the Manager'), creating ambiguity about who owes/limits duties -- residual template language.
• low
  Document-quality defect — Entity type ('Delaware Corporation company' for an LLC)The cover page describes this LLC/REIT as 'a newly organized Delaware Corporation company,' an internally inconsistent entity description for an entity named and operated as an LLC.
• low
  Document-quality defect — Residual hotel-template language in property-management descriptionThe multifamily property manager's team is described with hotel-industry roles ('general hotel management, front office managerial skillset and room service cleaners'), residual template text inconsistent with a multifamily REIT.
• low
  Numeric inconsistency — Redemption waiting period (60-day vs. 30-day)The redemption disclosure describes both a 'minimum 60 day waiting period' and a 'thirty (30) day waiting period' for the same redemption process.
• info
  Spelling / typo — February 15, 021The independent auditor's consent references an Auditor's Report 'dated February 15, 021' -- a malformed/typo year (missing the '2' in 2021).

DDQ readiness — 38% covered

5 answered · 0 partial · 8 gaps of 13 standard questions.