Red Oak Capital Fund III, LLC

Cascade · Distributions

Where each dollar goes

$875K

LP $829K · Fees $46K · GP $0

Standard scenario · $500K equity · 5y hold · 1.75× exitRun your own cascade →

Class structure · 2 classes· viewing as Series A Bonds

How Red Oak Capital Fund III, LLC divides the cap table

The cascade above is filtered to Series A Bonds. Reset to blended view.

Series A Bonds● active
debt/bond
“6.5% Senior Secured Bonds (Series A Bonds) ... Series A Bonds - December 31, 2022.”— PPM p. 1
Series B Bonds
debt/bond
“8.5% Senior Secured Bonds (Series B Bonds) ... Series B Bonds - December 31, 2025.”— PPM p. 1

Deal diligence16 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.

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 — organizational costs incurred ($0 vs approximately $30,000)

Medium

Self-contradicting run-on in the financial-statement notes: states no organizational costs have been incurred and, in the same sentence, that approximately $30,000 has been incurred (also missing a space after 'applicable.').

“As of June 15, 2019, there have not been any organizational costs incurred by the Managing Member, through the date of issuance, the Managing Member has incurred approximately $30,000 of organizational and offering costs.”

PPM p.7282% confidence

Defined-term defect — Bond Service Reserve / Bond Service Obligations

Low

The summary introduces 'Bond Service Reserve' and references 'Bond Service Obligations, as defined herein,' but the body section is titled 'Bond Reserve' and never defines 'Bond Service Obligations' — inconsistent/undefined defined terms.

“Our company will be required to keep 3.75% of gross offering proceeds in a reserve account with the trustee for a period of one (1) year following the first closing date, which reserve may be used to pay our company's Bond Service Obligations, as defined herein, during such time”

PPM p.962% confidence

Document-quality defect — UMB Bank, P.A.

Low

Escrow payee in the subscription instructions is rendered 'UMB Bank, P.A.' whereas the bank is identified everywhere else in the document as 'UMB Bank, N.A.' — a wrong-suffix typo in a payment instruction.

“Prior to reaching the Minimum Offering Amount and the initial closing of this offering, all checks should be made payable to 'UMB Bank, P.A., Escrow Agent for Red Oak Capital Fund III, LLC.'”

PPM p.4080% confidence

Document-quality defect — stockholders' investments

Info

Equity-template carryover in a debt offering: an LLC bond deal with no stock or stockholders refers to 'stockholders' investments,' indicating boilerplate copied from an equity offering.

“the value of our stockholders' investments could vary more widely than if we invested in a more diverse portfolio of loans.”

PPM p.2055% confidence

Spelling / typo — COMMISION

Info

The all-caps SEC legend misspells 'COMMISSION' as 'COMMISION' (one 'S').

“AN EXEMPTION FROM REGISTRATION WITH THE SEC; HOWEVER, THE COMMISION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.”

PPM p.497% confidence

Spelling / typo — complying the with 25% limitation

Info

Garbled word order 'complying the with' (should read 'complying with the'); the same broken phrase is repeated verbatim in three separate covenant passages.

“For purposes of complying the with 25% limitation described above, any principal owed on the Bonds will not count as indebtedness.”

PPM p.1292% confidence

Spelling / typo — on or and have our initial closing

Info

Broken/garbled sentence in the summary: 'on or and have our initial closing' contains a stray 'or' from an incomplete edit.

“If we are unable to sell the minimum offering amount on or and have our initial closing prior to the Minimum Offering Termination Date, we will return all funds in the escrow account.”

PPM p.585% confidence

Spelling / typo — should viewed

Info

Missing verb 'be' in the prior-program track record: 'should viewed' should read 'should be viewed'.

“Each successive maturity date should viewed as a periodic liquidity event and the first such event has not yet been reached.”

PPM p.6490% 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?UnknownAnswered
What is the fund's vintage year?Vintage 2015.Answered
What is the target offering size?Target offering of $2,000,000.Answered
What is the minimum LP investment?Minimum investment of $10,000.Answered

Fees & Expenses

Is the fund's fee schedule disclosed (management fee, etc.)?9 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 19.35%

Fee

Trigger

Basis

Rate

Bond Service Reserve

First closing; released after one year if in compliance

Gross offering proceeds held in reserve account with trustee for one year post-first-closing

3.75%

Selling Commission - Series A Bonds

Bond sale

Gross offering proceeds on sale of Series A Bonds

1.95%

Selling Commission - Series B Bonds

Bond sale

Gross offering proceeds on sale of Series B Bonds

6.50%

Managing Broker-Dealer Fee

Bond sale

Gross proceeds of the offering

0.95%

Wholesaling Fee

Bond sale through certain selling group members

Gross proceeds from certain sales of the Bonds

0.95%

Nonaccountable Expense Reimbursement

Bond sale

Gross proceeds in the offering

1.00%

Organization and Offering Fee (O&O Fee)

Offering stage

Gross offering proceeds; Manager retains excess over actual O&O expenses as compensation

2.00%

Asset Management Fee

Ongoing operations

Outstanding principal amount of Series A Bonds and Series B Bonds annually, paid quarterly in advance

1.75%

Acquisition Fee

Asset acquisition

Total acquisition cost of each asset acquired (inclusive of closing costs)

0.50%

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

No placement agent engaged

No placement agent engaged. Direct placement by Manager — no placement fees eat your invested capital.

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Waterfalls Composite Score

36.3.

LP-favorability score · 5 weighted dimensions

Benchmark · Real Estate Equity

Diversified Real Estate

See where this fund sits across 189 indexed diversified real estate funds — median pref, hurdle, splits, GP commit.

Compare to bucket →

Score breakdown5 dimensions

Absolute LP Takeⓘunscored—

GP Timing Riskⓘ35

Pref Qualityⓘunscored—

Fee Dragⓘ54

Alignmentⓘ20

LP take × exit multiple

at 5y hold · 95% at 1.75×

LP take Fee drag· sim at $500k equity

Exit	LP IRR	LP MoC	LP Take	Fees
1.00×	-1.9%	0.91×	90.8%	9.3%
1.50×	7.1%	1.41×	93.8%	6.2%
1.75×	10.6%	1.66×	94.7%	5.3%
2.00×	13.8%	1.91×	95.4%	4.6%
2.50×	19.2%	2.41×	96.3%	3.7%
3.00×	23.8%	2.91×	96.9%	3.1%

Jump to an exit

1.0× downside 1.5× base 2.0× upside 3.0× home run

Red Oak Capital Fund III, LLC

Series A Bonds● active

Series B Bonds

Document quality

Numeric inconsistency — organizational costs incurred ($0 vs approximately $30,000)

Defined-term defect — Bond Service Reserve / Bond Service Obligations

Document-quality defect — UMB Bank, P.A.

Document-quality defect — stockholders' investments

Spelling / typo — COMMISION

Spelling / typo — complying the with 25% limitation

Spelling / typo — on or and have our initial closing

Spelling / typo — should viewed

Diligence gaps

DDQ gap: Does the fund engage an independent auditor?

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

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

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

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

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

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

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

DDQ readiness

Fee scheduletaken before LP distributions

Community threads0 active

Reviews