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RAD Diversified Land REIT, Inc.

Sponsored by RAD Diversified·

Unknown· Debt· Inc · 1 class· ● Low· PPM v1· Updated 26d ago
2 data notes▶
Unusual structureUnscored: absolute lp take
Run the numbers
Composite
18.3
median 52 −33
Pref Returnⓘ
—
median 12.5% · Land Development
LP Take (Base)ⓘ
—
median 100.0% · Land Development
GP Commitⓘ
0.0%
median 0.0% +0.0%
Min Investment
$5K
ticket size
Offering Size
$75M
target raise
Cascade · Distributions

Where each dollar goes

$875K
LP $825K · Fees $50K · GP $0
GROSS PROCEEDS$875KGPFFees to Manager$50,000 · 5.7% of grossLPT1Return of Capital$500,000 · 57.1% of grossLPGPT4Residual Split (100% / 0%) · 37.1%Limited Partners · $325KGeneral Partner · $0pool fully distributed
Standard scenario · $500K equity · 5y hold · 1.75× exitRun your own cascade →

Deal diligence18 findings · worst high

Automated checks across the fund's extracted PPM. Every finding is shown with the evidence it's based on — proven numbers or a verbatim quote and page.

Waterfall structure

Structural checks run against RAD Diversified Land REIT, Inc.'s extracted waterfall. Each is a deterministic test — the numbers shown are proven from the PPM, not estimated.

Performance Fee (20%) is taken above the waterfall

Medium

A performance- or transaction-linked fee paid above the waterfall reaches the GP before the LP's distribution priorities run, eroding the pool the pref + return-of-capital draw from. Routine asset-management fees above the line are normal; a disposition/promote-flavored fee there is a leak worth pricing.

“The Performance Fee is equal to 20% of the increase in our NAV that is not attributable to capital we have raised from investors as a result of any Regulation A or other securities offering.”
PPM p.685% confidence

Document quality

Drafting defects found in the PPM prose — numeric inconsistencies, broken cross-references, unfilled placeholders, and defined-term problems. Each is shown with the offending quote and its page.

Numeric inconsistency — authorized shares of common stock

High

Audited balance sheet states 7,500,000 shares authorized, but Note 5 and the offering body both state 200,000,000 shares authorized.

“Common stock, $.001 par value, 7,500,000 shares authorized, 206,697 shares issued and outstanding. // The Company has authorized 200,000,000 shares of its common stock at a par value of $0.001.”
PPM p.10692% confidence

Document-quality defect — entity type (corporation vs. limited liability company)

Medium

Independent auditor's report describes the issuer as a limited liability company, contradicting the corporation form used throughout the offering.

“We have audited the accompanying financial statements of RAD DIVERSIFIED LAND REIT, INC. (a limited liability company organized in Maryland) (the 'Company')”
PPM p.9885% confidence

Document-quality defect — RADD Capital Management, LLC promissory-note role

Medium

For the same Dec 30, 2022 $450,000 note, one related-party note calls RADD Capital Management the 'lender' while another calls it the 'debtor', reversing creditor/debtor roles.

“RADD Capital Management, LLC is the lender on one promissory note dated December 30, 2022, in favor of the Company // RADD Capital Management, LLC is the debtor on one promissory note dated December 30, 2022, in favor of the Company”
PPM p.9683% confidence

Broken cross-reference — Statement of Changes in Members' Capital (F-6)

Low

The financial-statement index lists a 'Statement of Changes in Members' Capital' but the actual statement is titled 'Statement of Shareholders' Deficit' (members vs. shareholders for a corporation).

“Statement of Changes in Members' Capital // STATEMENT OF SHAREHOLDERS' DEFICIT”
PPM p.9880% confidence

Document-quality defect — principal telephone number

Low

The cover page lists telephone (833) 723-2637 while the body lists 1-833-723-7348 for the same principal office.

“(833) 723-2637 // Our telephone number is 1-833-723-7348”
PPM p.180% confidence

Numeric inconsistency — FASB ASC citation for uncertainty in income taxes

Low

The income-tax uncertainty policy cites FASB ASC 740 in the audited statements but FASB ASC 470 (Debt) in the unaudited statements for the same accounting guidance.

“The Company complies with FASB ASC 740 for accounting for uncertainty in income taxes // The Company complies with FASB ASC 470 for accounting for uncertainty in income taxes”
PPM p.10290% confidence

Numeric inconsistency — REIT real-estate investment requirement

Low

Garbled percentage: 'seventy 75%' states two conflicting figures (spelled-out 'seventy' and numeric '75%') for the required real-estate allocation.

“the Company is required to invest seventy 75% of its capital in real estate.”
PPM p.5778% confidence

Spelling / typo — recources

Info

Misspelling of 'resources' in the going-concern note.

“the Company may not be able to continue as a going concern if it exhausts its cash recources pursuing profitable operations.”
PPM p.10985% confidence

Spelling / typo — so / do

Info

Word substitution breaks the sentence: 'so not expressly' should read 'do not expressly' in the broker-disclaimer text.

“Broker and Participating Broker so not expressly or impliedly affirm the completeness or accuracy of the offering statement”
PPM p.4982% confidence

Diligence gaps

Questions a standard diligence questionnaire would ask that the PPM leaves unanswered.

DDQ gap: Does the fund engage an independent auditor?

High

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.

90% confidence

DDQ gap: Does the fund have a GP clawback provision?

High

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.

90% confidence

DDQ gap: What is the LP/GP carried-interest split above the preferred return?

High

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.

90% confidence

DDQ gap: What is the preferred return (hurdle) rate offered to LPs?

High

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.

90% confidence

DDQ gap: Does the fund use a third-party fund administrator?

Medium

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.

90% confidence

DDQ gap: Is there a GP catch-up, and at what rate?

Medium

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.

90% confidence

DDQ gap: What distribution-waterfall structure does the fund use?

Medium

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.

90% confidence

DDQ gap: What is the GP's capital commitment (skin in the game)?

Medium

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.

90% confidence

DDQ readiness

How much of a standard institutional due-diligence questionnaire this fund's offering documents answer out of the box. Gaps are questions an allocator will ask directly.

38%
Coverage
5 answered0 partial8 gaps13 questions
Economics
  • What is the preferred return (hurdle) rate offered to LPs?Gap
  • What is the LP/GP carried-interest split above the preferred return?Gap
  • Is there a GP catch-up, and at what rate?Gap
  • Does the fund have a GP clawback provision?Gap
  • What is the GP's capital commitment (skin in the game)?Gap
Structure
  • What distribution-waterfall structure does the fund use?Gap
  • What is the fund's investment strategy / asset class?Debt · UnknownAnswered
  • What is the fund's vintage year?Vintage 2017.Answered
  • What is the target offering size?Target offering of $75,000,000.Answered
  • What is the minimum LP investment?Minimum investment of $5,000.Answered
Fees & Expenses
  • Is the fund's fee schedule disclosed (management fee, etc.)?8 fee line item(s) extracted from the offering documents.Answered
Governance
  • Does the fund engage an independent auditor?Gap
  • Does the fund use a third-party fund administrator?Gap
Generate IC memo →

Fee scheduletaken before LP distributions

Total load 29.00%
Fee
Trigger
Basis
Rate
Broker One-Time Expense and Consulting Fee
One-time at engagement
Flat fees: $5,000 one-time expense fee and $20,000 one-time consulting fee payable to Dalmore Group, LLC
0.00%
Asset Management Fee
Ongoing, quarterly
Annualized 2% of net asset value (NAV), payable quarterly in arrears. NAV calculated as fair market value of all assets less fair market value of all liabilities.
2.00%
Performance Fee
Annual, on NAV appreciation from operations
20% of the increase in NAV that is not attributable to capital raised from investors via Regulation A or other securities offerings. Paid annually in arrears.
20.00%
Dealer-Manager / Broker Fee (Company direct marketing)
On funds raised via Company direct marketing
1.5% cash commission on aggregate amount raised through Company's own direct marketing efforts (rounded up to 2% in table assumes 5% scenario; actual direct-marketing rate is 1.5%)
2.00%
Dealer-Manager / Broker Fee (Going Public series)
On funds raised via Going Public series
5% cash commission on all funds from investors obtained via the Going Public series produced by Crush Capital. A portion of this 5% is shared with Crush Securities, LLC (Participating Broker).
5.00%
Participating Broker Fee
One-time during term of engagement
Flat fee of $500,000 payable to Crush Securities, LLC (Participating Broker), in addition to its share of the 5% commission
0.00%
Platform Fee (DealMaker)
Ongoing while offering is live
Approximately $10,000 upfront plus $1,000 per month plus miscellaneous transaction fees for direct-marketing subscription platform
0.00%
Platform Fee (Issuance / Going Public)
Ongoing while offering is live
$2,495 per month while offering is live, plus transaction fees: 3.5% credit card processing, 1.5% ACH processing, 0.5% wire processing
0.00%

Service providers3 gaps

Provider network →
Legal Counsel
Gap
Not disclosed
No independent counsel named for investors. Common in small syndications where Manager and Fund share counsel — reduces independence. Verify during diligence.
Auditor
Gap
Not disclosed
Audit intent not stated in PPM. Ask the sponsor: will the fund be audited, by whom, and on what frequency?
Fund Administrator
Gap
Not disclosed
No third-party fund administrator referenced. Manager likely handles admin internally — common for <$10M raises but reduces independence.
Placement Agent
OK
No placement agent engaged
No placement agent engaged. Direct placement by Manager — no placement fees eat your invested capital.

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