FORM 1-A

Regulation A Offering Statement

Part II – Offering Circular

Amendment No. 2

Multi-Housing Income REIT, LLC

9050 N. Capital of Texas Highway

Suite 320

Austin, TX 78759

(512) 872-2898

investors@upsideavenue.com

www.upsideavenue.com

November 15, 2023

This Offering Circular Follows the Form 1-A Disclosure Format

Multi-Housing Income REIT, LLC, a limited liability company organized under the laws of Delaware (which we refer to as the “Company,” “we,” “us” or “our”), was formed to acquire interests in real estate assets in the United States. We are a real estate investment trust, or “REIT,” for federal income tax purposes.

The Company is seeking to raise up to $74,500,000 of capital by offering to the public limited liability company interests designated as “Common Shares,” in what we refer to as the “Offering.” You can read a complete description of these securities in “Securities Being Offered.” We refer to individuals and entities that purchase Common Shares as “Investors.”

The Offering will begin as soon as our offering statement is “qualified” by the SEC. The Offering will end upon the earlier of (1) the date we have sold $74,500,000 of Common Shares, (2) the date two years after it begins, or (3) the date we decide to end it.

Initially, the Company will sell Common Shares for $11.29 each, with a minimum initial investment of $2,000. We may raise or lower the price of the Common Shares during this Offering to reflect the value of the Company’s assets by filing an amendment to this Offering Circular. For more information, see “Securities Being Offering – Price of Common Shares.”

We are selling these securities directly to the public at our website, www.upsideavenue.com. We are not using a placement agent or a broker and we are not paying commissions to anyone. All the money we raise goes directly to the Company:

When you invest, your funds will first be deposited in an escrow account with North Capital until we determine whether you are qualified to invest. We try to make that determination within 30 days.

The owners of our Common Shares do not have voting rights. You should consider an investment only if you are willing to entrust all aspects of the Company’s business to its management team.

Please note that the Company’s governing instruments (i) restrict the ability of Investor to sell or otherwise transfer Common Shares, and (ii) allow the Manager has the right to buy back the Common Shares of Investors without their consent in certain circumstances. See “Summary of LLC Agreement.”

Investing in our Common Shares is speculative and involves substantial risks, including the risk that you could lose all your money. Before investing, you should carefully review “Risks of Investing.”

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERM OF THE OFFERING. NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV. FOR MORE INFORMATION, SEE “Limits on How Much Non-Accredited Investors Can Invest” STARTING ON PAGE 26.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION UNIFORM LEGEND:

YOU SHOULD MAKE YOUR OWN DECISION WHETHER THIS OFFERING MEETS YOUR INVESTMENT OBJECTIVES AND RISK TOLERANCE LEVEL. NO FEDERAL OR STATE SECURITIES COMMISSION HAS APPROVED, DISAPPROVED, ENDORSED, OR RECOMMENDED THIS OFFERING. NO INDEPENDENT PERSON HAS CONFIRMED THE ACCURACY OR TRUTHFULNESS OF THIS DISCLOSURE, NOR WHETHER IT IS COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS ILLEGAL.

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. YOU SHOULD BE AWARE THAT YOU WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

Table of Contents

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

The term “forward-looking statements” means any statements, including financial projections, that relate to events or conditions in the future. Often, forward-looking statements include words like “we anticipate,” “we believe,” “we expect,” “we intend,” “we plan to,” “this might,” or “we will.” The statement “We believe interest rates will rise” is an example of a forward-looking statement.

Because we are talking about a new business, most of the things we say in this Offering Circular are forward-looking statements. In fact, everything we say is a forward-looking statement, other than statements of historical fact.

Forward-looking statements are, by their nature, subject to uncertainties and assumptions. The statement “We believe interest rates will rise” is not like the statement “We believe the sun will rise in the East tomorrow.” It is impossible for us to know exactly what is going to happen in the future, or even to anticipate all the things that could happen. Our business could be subject to many unanticipated events, including all of the things we talk about in “Risks of Investing.”

Consequently, the actual result of investing in the Company could (and almost certainly will) differ from those anticipated or implied in any forward-looking statement, and the differences could be both material and adverse. We do not undertake any obligation to revise, or publicly release the results of any revision to, any forward-looking statements, except as required by applicable law. GIVEN THE RISKS AND UNCERTAINTIES, PLEASE DO NOT PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS.

RISKS OF INVESTING

BUYING COMMON SHARES IS SPECULATIVE AND INVOLVES SIGNIFICANT RISK, INCLUDING THE RISK THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY. THIS SECTION DESCRIBES WHAT WE BELIEVE ARE THE MOST SIGNIFICANT RISK FACTORS AFFECTING THE FUND AND ITS INVESTORS. THE ORDER IN WHICH THESE FACTORS ARE DISCUSSED IS NOT INTENDED TO SUGGEST THAT SOME FACTORS ARE MORE IMPORTANT THAN OTHERS.

You Might Lose Your Money: When you buy a certificate of deposit from a bank, the federal government (through the FDIC) guarantees you will get your money back. Our Common Shares have no such guarantee. The ability of the Company to make distributions depends on a number of factors, including some beyond our control. Nobody guarantees that you will receive payments and you might lose some or all of your money.

Our Track Record Does not Guaranty Future Performance: The section of this Offering Circular captioned “Past Performance: Our Track Record So Far” illustrates the performance of the Company and certain affiliates. However, there is no guaranty that the Company will do well in the future as it has done in the past.

Speculative Nature of Real Estate Investing: Real estate can be risky and unpredictable. For example, many experienced, informed people lost money when the real estate market declined in 2007-8. Time has shown that the real estate market goes down without warning, sometimes resulting in significant losses. Some of the risks of investing in real estate include changing laws, including environmental laws; floods, fires, and other Acts of God, some of which can be uninsurable; changes in national or local economic conditions; changes in government policies, including changes in interest rates established by the Federal Reserve; and international crises. You should invest in real estate in general, and in the Company in particular, only if you can afford to lose your investment and are willing to live with the ups and downs of the real estate industry.

Our Growth Focus Increases Risk: The Company intends to focus on real estate projects on the “growth” side of the growth/income spectrum. By definition, these projects will tend to carry greater risk, along with the potential for higher profits.

Investors Must Wait 90 Days Before Receiving Dividends: If the Company pays a dividend, Investors who have acquire their Common Shares within the preceding 90 days will not share in the dividend.

Risks from Rising Interest Rates: Over the last six months interest rates have risen significantly. Meanwhile, consumer-level inflation has reached levels not seen for 40 years. While many economists believe the increase in inflation will be short-lived, caused by supply chain bottlenecks created by the COVID-19 pandemic, nobody knows for sure. If interest rates continue to rise it will likely harm our business.

Pricing of Common Shares: The price of our Common Shares was determined by the Manager based on the Manager’s estimate of the value of the Company’s assets. The Manager’s estimate was not necessarily based on third-party appraisals of the Company’s assets.

Property Values Could Decrease: The value of the properties in which we invest could decline, perhaps significantly. Factors that could cause the value of a property to decline include, but are not limited to:

Illiquidity of Real Estate: Real estate is generally illiquid, meaning that it is not typically capable of being readily sold for cash at fair market value. Thus, the Company might not be able to sell a real estate project as quickly or on the terms that it would like. Moreover, the overall economic conditions that might cause the Company to want to sell properties are generally the same as those in which it would be most difficult to sell.

Competition: To achieve satisfactory returns for our Investors, the Manager must identify projects that satisfy our investment selection criteria and that can be acquired at reasonable prices. There is no guaranty that the Manager will be able to do so. The real estate industry is highly competitive and fragmented. The Manager, directly or through affiliates, will compete with other real estate developers for the most promising projects, and some of those other real estate developers could have substantially greater resources, allowing them to move more quickly, pay more, or have greater access to the best projects. The result could be that the Company winds up investing in projects of lower quality, or where the owner of the project (an affiliate of the Manager) paid too much as a result of intense competition. In addition, each project acquired will face competition from other projects, including both existing properties and new properties. Such competition could limit the ability of the Company to raise rents in its projects or even force the Company to decrease rents, at the risk of higher vacancy rates.

The Company will Invest Primarily in the Sponsor’s Projects: To date, the Company has invested primarily in projects sponsored by the Sponsor. We expect that will continue in the future. These projects will not necessarily be the best projects available.

Entitlement Risks: The Company might invest in projects before some or all of the necessary zoning approvals have been obtained. Securing zoning approval can take a long time and be very expensive, and even after a long and expensive process there is no guaranty that approval will be given. If approvals cannot be obtained the value of the real estate could go down and Investors could lose some or all of their money.

Governmental Regulation: In addition to zoning approval, any development project will require the approval of numerous government authorities regulating such matters as density levels, the installation of utility services such as water and waste disposal, and the dedication of acreage for open space, parks, schools and other community purposes. Governmental authorities have imposed impact fees as a means of defraying the cost of providing certain governmental services to developing areas and the amount of these fees has increased significantly during recent years. Many state laws require the use of specific construction materials which reduce the need for energy consuming heating and cooling systems. Local governments also, at times, declare moratoriums on the issuance of building permits and impose other restrictions in areas where sewage treatment facilities and other public facilities do not reach minimum standards. All of these regulations will impose costs and risks on our Projects.

Lack of Representations and Warranties from Sellers: The Company might invest in projects where the seller of the real estate made limited or no representations and warranties concerning the condition of the real estate, the status of leases, the presence of hazardous materials or hazardous substances, the status of governmental approvals and entitlements, and other important matters. If we fail to discover defects through our own due diligence review but discover them only after the project has been acquired and the Company has made its investment, we may have little or no recourse against the sellers.

Incomplete Due Diligence: The Manager or an affiliate of the Manager will perform “due diligence” on each project, meaning we will review available information about the project, its current zoning, the surrounding community, and other information we believe is relevant. As a practical matter, however, it is simply impossible to review all of the information about a given piece of real estate (or about anything) and there is no assurance that all of the information we have reviewed is accurate. For example, sometimes important information is hidden or unavailable, or a third party might have an incentive to conceal information or provide inaccurate information, or we might not think of all the relevant information, or we might not be able to verify all the information we review. It is also possible that we will reach inaccurate conclusions about the information we have reviewed. Due diligence is as much an art as it is a science, and there is a risk that, especially with the benefit of hindsight, our due diligence will turn out to have been incomplete or inadequate.

Pricing of Assets: The success of the Company and its ability to make distributions to Investors depends on the Manager’s ability to gauge the value of real estate assets. Although the Manager and its principals are experienced real estate investors and will rely on various objective criteria to select properties for investment, including, in all or almost all cases, third-party appraisals, ultimately the value of these assets is as much an art as a science, and there is no guaranty that the Company and its advisors will be successful.

Americans with Disabilities Act: Under the Americans with Disabilities Act (the “ADA”), public accommodations must meet certain federal requirements related to access and use by disabled persons. Some (although not all) of the projects in which the Company invests will be “public accommodations,” and complying with the ADA and other similar laws will make those projects more expensive to build and maintain than they would have been otherwise. Furthermore, it is possible that the ADA could be extended by law or regulation, requiring existing projects to be retrofitted at great expense.

Difficulty Attracting Buyers and Tenants: Some of the projects in which the Company invests will involve the construction of houses, with the expectation that the houses will be sold once construction is complete. Other projects will involve the construction of multi-family apartment communities, with the expectation that the apartments will be leased to tenants once construction is complete. In either situation, the projects will be built on “spec,” meaning that we will not have a buyer for the house or tenants for the apartments at the time construction begins. Depending on market conditions, we might experience difficulty finding a buyer or tenants, with adverse effects on the profitability of the project.

Construction Risks: From time to time we may acquire unimproved real property or properties that are under development or construction. No matter how carefully we plan, the construction process is notorious for cost overruns and delays. If the construction of a project ended up costing significantly more than we had budgeted, or took significantly longer to complete than forecast, or were done improperly, the profitability or even the viability of the project could suffer.

Environmental Risks: The Manager or its affiliates will conduct typical environmental testing on each project to determine the existence of significant environmental hazards. However, it is impossible to be certain of all the ways that a given piece of real estate has been used, raising the possibility that environmental hazards could exist despite our environmental investigations. Under federal and state laws, moreover, a current or previous owner or operator of real estate may be required to remediate any hazardous conditions without regard to whether the owner knew about or caused the contamination. Similarly, the owner of real estate could become subject to common law claims by third parties based on damages and costs resulting from environmental contamination. The cost of investigating and remediating environmental contamination can be substantial, even catastrophic. The existence of an environmental hazard could therefore present direct or indirect risks to the Company.

Inability to Implement Liquidity Transactions: We will typically aim to invest in projects that can be liquidated (i.e., sold) within approximately five years. However, there is no guarantee that we will be able to successfully pursue a liquidity event with respect to any of our projects. Market conditions may delay or even prevent the Manager from pursuing liquidity events. If we do not or cannot liquidate our real estate portfolio, or if we experience delays due to market conditions, this could delay Investors’ ability to receive a return of their investment indefinitely and may even result in losses.

Need for Additional Capital: The real estate industry is capital-intensive, and the inability to obtain financing could limit our growth. We may need to raise more money in the future so we can continue to acquire and operate projects. In addition, we might need to raise money to make capital improvements required by law or by market conditions, or for other purposes. There is no guarantee that funding will be available to us when we need it, or on terms that are not adverse to your interests. If we cannot raise additional funding when needed, our operations and prospects could be negatively affected.

Future Securities Could Have Superior Rights: The Company might issue securities in the future that have rights superior to the rights associated with the Common Shares. For example, the holders of those securities could have the right to receive distributions before any distributions are made to Investors, or distributions that are higher, dollar for dollar, than the distributions paid to the holders of the Common Shares, or the right to receive all their money back on a liquidation of the Company before the holders of the Common Shares receive anything.

Risks Associated with Leverage: We intend to borrow money to finance most or all of the projects in which the Company invests. While debt financing can improve returns in a good market, it carries significant risks in a bad market, and therefore increases our vulnerability to downturns in the real estate market or in economic conditions generally. There is no guaranty that we will generate sufficient cash flow to meet our debt service obligations, and we may be unable to repay, refinance or extend our debt when due. We may also give our lender(s) security interests in our assets as collateral for our debt obligations. If we are unable to meet our debt service obligations, those assets could be foreclosed upon, which could negatively affect our ability to generate cash flows to fund distributions to Investors. We may also be required to sell assets to repay debt and may be forced to sell at times that are unfavorable to the Company, which would likewise negatively affect our ability to operate successfully.

Uninsured Losses: The Manager or an affiliate of the Manager will try to ensure that each project carries adequate insurance coverage against foreseeable risks. However, there can be no assurance that our insurance will be adequate, and insurance against some risks, like the risk of earthquakes and/or floods, might be unavailable altogether or available at commercially unreasonable rates or in amounts that are less than the full market value or replacement cost of the underlying properties. Hence, it is possible that a project would suffer an uninsured loss, resulting in a loss to the Company and Investors. Given the Company’s initial focus on Southern California, the risk of uninsured losses from earthquakes is especially significant.

Broad Investment Strategy: The Manager has broad discretion to choose projects. An Investor might prefer a more focused strategy.

Loss of Uninsured Bank Deposits: Any cash the Company has on hand from time to time will likely be held in regular bank accounts. While the FDIC insures deposits up to a specified amount, it is possible that the amount of cash in the Company’s account would exceed the FDIC limits, resulting in a loss if the bank failed.

Potential Liability to Return Distributions: Under some circumstances, Investors who received distributions from the Company could be required to return some or all of those distributions. However, Investors generally will not be liable for the debts and obligations of the Company beyond the amount they paid for the Common Shares.

Limited Liability of Manager: Under the Company’s First Amended and Restated Limited Liability Company Agreement, the grounds for which an Investor may sue the Manager is very limited. For example, the First Amended and Restated Limited Liability Company Agreement waives all fiduciary obligations of the Manager. This means that except in rare circumstances, you will not be able to sue the Manager even if the Manager makes mistakes and those mistakes cost you money.

Limited Participation in Management: Investors will not have a right to vote or otherwise participate in managing the Company. For example, Investors will have no voice in selecting the projects in which the Company invests, deciding on the terms of the investment, or deciding when a project should be sold. Only those willing to give complete control to our management team should consider an investment in the Company.

Reliance on Management: The success of the Company depends almost exclusively on the abilities of its current management team. If any of these individuals resigned, died, or became ill, the Company and its Investors could suffer.

Conflicts of Interest: The interests of the Manager could conflict with the interests of Investors in a number of important ways, including these:

Waiver of Right to Jury Trial: The Investment Agreement and the LLC Agreement both provide that legal claims will be decided only by a judge, not by a jury. The provision in the LLC Agreement will apply not only to an Investor who purchases Common Shares in the Offering, but also to anyone who acquires Common Shares in secondary trading. Having legal claims decided by a judge rather than by a jury could be favorable or unfavorable to the interests of an owner of Common Shares, depending on the parties and the nature of the legal claims involved. It is possible that a judge would find the waiver of a jury trial unenforceable and allow an owner of Common Shares to have his, her, or its legal claim decided by a jury. In any case, the waiver of a jury trial in both the Investment Agreement and the LLC Agreement do not apply to claims arising under the federal securities laws.

Forum Selection Provision: Our Investment Agreement and our LLC Agreement both provide that disputes will be handled solely in the state or federal courts located in or most geographically convenient to Austin, Texas. We included this provision primarily because the Company’s headquarters are in Austin. This provision could be unfavorable to an Investor to the extent that (i) a court in a different jurisdiction would be more likely to find in favor of an Investor, (ii) bringing a claim in Austin, Texas would be geographically inconvenient to an Investor or increase his, her, its costs, or (iii) this provision discourages Investors from bringing claims. It is possible that a judge would find this provision unenforceable and allow an Investor to file a lawsuit in a different jurisdiction.

Section 27 of the Exchange Act provides that federal courts have exclusive jurisdiction over lawsuits brought under the Exchange Act, and that such lawsuits may be brought in any federal district where the defendant is found or is an inhabitant or transacts business. Section 22 of the Securities Act provides that federal courts have concurrent jurisdiction with State courts over lawsuits brought under the Securities Act, and that such lawsuits may be brought in any federal district where the defendant is found or is an inhabitant or transacts business. Investors cannot waive our (or their) compliance with federal securities laws. Hence, to the extent the forum selection provisions of the Investment Agreement or the LLC Agreement conflict with these federal statutes, the federal statutes would prevail.

Limitation on Rights in LLC Agreement: The Company’s First Amended and Restated Limited Liability Company Agreement limits your rights in several important ways, including these:

Limitations on Rights in Investment Agreement: To purchase Common Shares, you are required to sign our Investment Agreement. The Investment Agreement would limit your rights in several important ways if you believe you have claims against us arising from the purchase of your Common Shares:

Limits on Transferability: There are several obstacles to selling or otherwise transferring your Common Shares:

Risk of Failure to Comply with Securities Laws: The Company is conducting this Offering under Regulation A, an exemption from registration authorized by the SEC, and engaged in a previous offering under Regulation A, which was qualified by the SEC on June 18, 2018. While the Company has been guided by the advice of legal counsel, the securities laws are very complicated and it is possible to violate one rule or another without intending to. If the Company fails to comply with the securities laws in the future or has failed to comply in the past, the Company could be subject to severe penalties and/or prohibited from raising additional capital, in both cases with material adverse effects for investors.

Risk of Severe Penalties Without Doing Anything Wrong: Under SEC Rule 262(a)(7), the Company could be disqualified from selling securities even if it has done nothing wrong, merely because the SEC has begun an investigation of the Company. Thus, for example, if a competitor with an ax to grind contacts the SEC with false information and the SEC begins an investigation, it could prohibit the Company from raising capital, thereby imposing substantial harm on the Company and its investors, harm that would not be mitigated or compensated even when the investigation reveals no wrongdoing.

Reduced Disclosure Requirements Under the JOBS Act: The Common Shares are being offered pursuant to Tier 2 of Regulation A issued by the SEC, as amended pursuant to the Jumpstart Our Business Startups Act of 2012 (known as the “JOBS Act”). Regulation A does not require us to provide you with all of the information that would be required in a registration statement in connection with an initial public offering (IPO) of securities. As a Regulation A issuer, we are also not subject to the same level of ongoing reporting obligations as a typical public reporting company, including, but not limited to, many of the disclosure requirements applicable to public reporting companies under the Securities Exchange Act of 1934.

We Are an “Emerging Growth Company” Under the JOBS Act: Today, the Company qualifies as an “emerging growth company” under the JOBS Act. If the Company were to become a public company (e.g., following an IPO) and continued to qualify as an emerging growth company, it would be able to take advantage of certain exemptions from the reporting requirements under the Securities Exchange Act of 1934 and exemptions from certain investor protection measures under the Sarbanes Oxley Act of 2002. Using these exemptions could benefit the Company by reducing compliance costs but could also mean that investors receive less information and receive fewer protections than they would otherwise. However, these exemptions – and the status of the Company as an “emerging growth company” in the first place – will not be relevant unless the Company becomes a public reporting company, which we do not plan or foresee.

We Are Not Subject to the Corporate Governance Requirements that Apply to Companies Listed on a National Exchange: Companies whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) are generally subject to a number of rules about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with the company or management), which is responsible for monitoring the Company’s compliance with the law. As of the date of this Offering Statement, neither the Common Shares nor any other securities of the Company are listed on a national exchange, and it is likely that our securities will never be listed on a national exchange. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of a national exchange. 

Regulation As An Investment Company: If the Company were treated as an “investment company” under the Investment Company Act of 1940, we would be required to comply with a number of special rules and regulations and incur significant cost doing so. In addition, if it were determined that the Company had operated as an investment company without registering as such, we could be subject to significant penalties and, among other things, any contracts the Company had entered into could be rendered unenforceable. As described in “Investment Company Act Limitations,” we intend to conduct our business so that we are not treated as an investment company. However, we might not be successful.

Failure to Satisfy Conditions of REIT; Taxes on REITs: We intend to be taxed as a real estate investment trust, or “REIT,” under Sections 856 through 860 of the Internal Revenue Code (the “Code”) for purposes of federal income taxes. To qualify as a REIT, the Company must satisfy a number of criteria, both now and on an ongoing basis. Should the Company fail to satisfy any of these criteria, even inadvertently, it could become subject to penalty taxes and/or lose its REIT status altogether, which would make the Company subject to federal income tax and thereby reduce the returns to investors substantially. Further, even if it maintains its REIT status, the Company could be subject to various taxes in some situations. While the Company intends to seek guidance from tax advisors and operate its business accordingly, there is no guaranty that it will be able to avoid taxes and maintain its qualification as a REIT.

REIT Requirements Could Restrict Actions: REITs are subject to a 100% tax on income from “prohibited transactions,” which include sales of assets that constitute inventory or other property held for sale in the ordinary course of a business, other than foreclosure property. This 100% tax could impact our desire to sell assets and other investments at otherwise opportune times if we believe such sales could be considered a prohibited transaction.

Required Distributions: As a REIT, we generally must distribute 90% of our annual taxable income to our investors. From time to time we might generate taxable income greater than our net income for financial reporting purposes from, among other things, amortization of capitalized purchase premiums, or our taxable income might be greater than our cash flow available for distribution to our stockholders. If we do not have other funds available in these situations, we might be unable to distribute 90% of our taxable income as required by the REIT rules. In that case, we would need to borrow funds, sell a portion of our investments, potentially at disadvantageous prices, or find another alternative source of funds. These alternatives could increase our costs or reduce our equity and reduce amounts to invest in real estate assets and other investments. Moreover, the distributions received by our stockholders in such an event could constitute a return of capital for federal income tax purposes, as the distributions would be in excess of our earnings and profits.

Federal and State Income Taxes as a REIT: Even if the Company qualifies and maintains its qualification as a REIT, it may be subject to federal income taxes and related state taxes. For example, if we have net income from a “prohibited transaction,” such income will be subject to a 100% tax. The Company may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. The Company may also decide to retain income it earns from the sale or other disposition of its property and pay income tax directly on such income. In that event, the Company’s investors will be treated as if they earned that income and paid the tax on it directly. However, shareholders that are tax-exempt would have no benefit from their deemed payment of such tax liability. The Company may also be subject to state and local taxes on its income or property. Any federal or state taxes paid by the Company will reduce the Company’s operating cash flow and cash available for distributions.

FIRPTA Tax on Non-U.S. Sellers: A non-U.S. Investor who sells Common Shares for a gain would generally be subject to tax under the Foreign Investment in Real Property Tax Act (FIRPTA) if the Company does not qualify as a “domestically controlled REIT,” meaning a REIT in which less than 50% of the value of the outstanding shares are owned by non-U.S. persons. We intend to qualify as a domestically controlled REIT, but there can be no assurance we will always do so.

Changes in Tax Laws: At any time, the federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be amended. We cannot predict when or if any new federal income tax law, regulation or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. Any such change could result in an increase in our, or our shareholders’, tax liability or require changes in the manner in which we operate in order to minimize increases in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income or be subject to additional restrictions. These increased tax costs could, among other things, adversely affect our financial condition, the results of operations and the amount of cash available for the payment of dividends. We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation, or administrative interpretation.

Breaches of Security: It is possible that our systems would be “hacked,” leading to the theft or disclosure of confidential information you have provided to us. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched, we and our vendors may be unable to anticipate these techniques or to implement adequate defensive measures.

The Foregoing Are Not Necessarily The Only Risks Of Investing
Please Consult With Your Professional Advisors

OUR COMPANY AND BUSINESS

Summary of Our Company and its Investment Strategies

The Company was formed on October 17, 2017 to invest in a diversified portfolio of predominantly income-producing real estate assets throughout the United States. The Company focuses primarily on student housing, multi-housing, conventional apartments, and senior living (both existing and new development projects) but also looks for opportunities across other commercial real estate sectors.

The Company typically targets projects with capitalization rates in the single digits and where we believe we can achieve a double digit IRR. Our typical expected holding period is between three to seven years, subject to market conditions. We do not expect to invest more than 50% of our assets in any one property.

Our investment strategies include the following:

To the extent allowed by the rules governing REITs, we might also invest, to a limited extent, in other real estate-related assets, including mortgage-backed obligations and loans where the business of the borrower is significantly related to real estate, or highly liquid shares of REITs or other securities representing real estate assets traded on national and international exchanges such as the TSX, ASX, NSE, BSE, and US-domiciled OTC markets.

As of the date of this Offering Circular, the Company has invested a total of $ 5,618,858 in nine different real estate projects.

Our Sponsor

The sponsor of the Company is Casoro Capital Partners, LLC, also a Texas limited liability company (the “Sponsor”). Monte K. Lee-Wen is a principal of the Sponsor. See “Our Management Team.”

Over the last 10 years, the Sponsor has raised approximately $203 million of capital and acquired approximately 22 apartment communities. See “Our Sponsor’s Track Record.”

Investments Through Other Entities

Sometimes the Company will own real estate directly. Most of the time, however, the investments made by the Company will be through other entities (“Project Entities”). For example, if the Company invests in a student housing property, the property will be owned by a Project Entity formed as a limited partnership or a limited liability company. Typically, Project Entities will be controlled by the Sponsor or another entity controlled by the Sponsor. However, if the Company does not control the Project Entity itself then it will retain control rights, meaning the Company’s consent will be required to certain major actions taken by the Project Entity, such as the sale or refinancing of its real estate and the replacement of its manager or general partner.

Investments in Sponsor Projects

To date, the Company has not acquired any real estate directly. Instead, the Company has invested only as an investor in projects sponsored by the Sponsor. However, the Company could acquire real estate directly in the future and/or invest in projects with different sponsors.

LLC Agreement

The Company is governed by a Limited Liability Company Agreement dated September 29, 2023, which we refer to as the “LLC Agreement.” You can read a summary in “Summary of LLC Agreement” and a copy of the LLC Agreement is attached as Exhibit 1A-2B.

Management

The Company is managed by Casoro Investment Advisory Firm LLC, a Texas limited liability company (the “Manager”). The LLC Agreement generally gives the Manager exclusive control over all aspects of the Company’s business. Other members of the Company, including Investors who purchase Common Shares in the Offering, generally have no right to participate in the management of the Company.

There is only one exception to this rule: the owners of Common Shares may, in some situations, remove the Manager for cause. For more information, see “Summary of LLC Agreement.”

Leverage

We expect that all the real estate projects we invest in, whether as a direct owner or as an investor, will be “leveraged,” meaning encumbered by debt. As a general rule, we will invest in projects only where the ratio of the loan amount to the value of the property is no more than 80%. In certain cases, depending on the property and its underwriting, we might also use mezzanine debt or preferred equity.

Competition

The Company competes with many other companies for suitable projects, ranging from small real estate investors owning one or two projects to large, public REITs owning dozens.

Our competitive advantages include the following:

Our Conversion to Limited Liability Company Structure

The Company was formed as a Maryland corporation on October 17, 2017. Early in 2022 our management team decided that the flexibility associated with limited liability companies would be better suited to our business. Hence, after gaining the approval of our shareholders, the Company was converted to a Delaware limited liability company effective on March 18, 2022.

Although the Company is now a limited liability company for purposes of state law, it has elected to be treated as a “C” corporation for tax purposes. Hence, it remains eligible to be treated as a REIT.

Our Previous Regulation A Offerings

The Company has already conducted two previous offerings under Regulation A. The first offering was qualified by the SEC on June 18, 2018 and the second on July 22, 2022. Together, the Company raised approximately $609,541 in those offerings. All the documents relating to the previous offerings are available on EDGAR.

Term of the Company

We will begin deploying the capital we raise in this Offering right away. We intend to operate the Company indefinitely.

To wind down the Company, the Manager will seek to generate liquidity for Investors and realize any gains in the value of our investments by selling or refinancing our properties and returning capital to Investors on an orderly basis. Sales and refinancing will be subject to prevailing market conditions and there is no guarantee that we will be successful in executing any such liquidity transactions on terms favorable to the Company and Investors, or that we will be able to do so within the time frame we have anticipated.

Existing Investments

The following summarizes the Company’s existing investments:

OUR ORGANIZATIONAL STRUCTURE

When you buy Common Shares you will become an owner of the Company, Multi-Housing Income REIT LLC, a Delaware limited liability company.

The Manager of the Company is Casoro Investment Advisory Firm, LLC, a Texas limited liability company.

Casoro Investment Advisory Firm, LLC is wholly-owned by the Sponsor, Casoro Capital Partners, LLC, also a Texas limited liability company.

Casoro Capital Partners, LLC is wholly-owned by Casoro Capital LLC, a Delaware limited liability company.

Casoro Capital, LLC is owned 95% by Casoro Group, LLC, a Delaware limited liability company.

Casoro Group LLC is wholly-owned by The PPA Group, LLC, a Nevada limited liability company.

The PPA Group, LLC is owned 50% by Monte K. Lee-Wen and 50% by Nalie Lee-Wen. Mr. and Mrs. Lee-Wen are married.

The following chart shows our ownership structure: 

OUR SPONSOR’S TRACK RECORD

Summary and Narrative Description

The Sponsor of the Company is Casoro Capital Partners, LLC, which we refer to as “CCP.” The principal owner and manager of the Sponsor is Monte Lee-Wen. Mr. Lee-Wen is also the Chief Executive Officer The PPA Group, LLC, a real estate investment firm, which we refer to as “PPA.”

Since 2002, PPA has acquired over 37 multifamily apartment communities and invested equity amounts in excess of $221.3 million in Washington, Arizona, and Texas. The communities purchased or developed by Mr. Lee-Wen and his team involved approximately 11 different offerings, raising over $18.9 million in equity from more than 100 investors. We refer to each of these securities offerings as a “Program.”

All of the Programs are similar to the Company in the following respects:

Because of these similarities, investors who are considering investing in the Company’s common stock might find it useful to review information about the Programs. Of course, prospective investors should bear in mind that PRIOR PERFORMANCE DOES NOT GUARANTY FUTURE RESULTS. The fact that Mr. Lee-Wen and PPA have been successful with the Programs does not mean the Company will experience the same results.

There have been no major adverse business developments or conditions experienced by any Program that would be material to purchasers of the Company’s Common Shares.

None of the Programs:

“Round Trip” Programs

Of the 37 multifamily apartment communities PPA acquired, 28 have completed their full investment cycle, from acquisition to renovation to operation to disposition. The financial results of these 28 “round trip” projects are as follows:

In addition, the other nine projects – the nine that have not yet completed their “round trip” – have paid an aggregate of $29.3 million to investors, either as a return of capital or as profit.

Explanation of Defined Terms

Property Class

In the world of real estate investing, properties and locations are ranked on a scale from A to D, with A best and D worst. Our ranking combines both the location of the project and its condition.

Internal Rate of Return (IRR)

Internal rate of return, or IRR, measures the financial performance of an investment taking into account the time the investment is held. For example, suppose that a bond costs $100, pays $10 at the end of each year for four years, and is redeemed after five years for $110. The IRR of that bond is 10%. But if the only payment on the bond were $150 at the end of the fifth year, the IRR would drop to 8.45%, even though the investor had still received a total of $150. The reason: the investor had to wait longer for her money.

Return on Investment (ROI)

Return on investment, or ROI is a fraction, where the numerator (the top of fraction) is the total distributions from the investment minus the total contributions to the investment, and the denominator (the bottom of the fraction) is the total contributions to the investment. For example, if an investment is capitalized with $100 and returns $135, the ROI is 135%.

Multiple on Invested Capital (MOIC)

Multiple on invested capital, or MOIC, is a fraction, the numerator of which is the total amount returned from the investment and the denominator of which is the total amount invested. For example, if an investment is purchased for $100 and is later sold for $225, net of expenses, the MOIC is 2.25.

Average Annual Cash-on-Cash Return (CoC)

Cash-on-cash return, or CoC, for any year, is a fraction, the numerator of which is the cash flow generated by an investment for that year minus the total amount invested as of that year (not counting borrowed money). For example, if the investment generates $9 for 2015 and the total cash investment as of 2015 was $100, the CoC for 2015 was 9%. The average annual CoC simply takes the average over the life of the investment.

Project-Level vs. Investor-Level Calculations

We have calculated IRR, ROI, and MOIC in two ways: first from the perspective of the project as a whole, and then from the perspective of investors. For example, suppose a property cost $100, all funded by investors, and were sold after one year for $120, with investors receiving a return of their $100 of capital plus 70% of the $20 profit, or $14, for a total of $114, and the sponsor receiving 30% of the $20 profit, or $6. The project would have an IRR of 20%, while investors would have an IRR of 14%.

Acquisitions of Properties Within Last Three Years

During the last three years, Casoro Group has purchased seven properties, with 2,090 rental units and an aggregate cost of over $260 million. For more detailed information, see Table VI of the prior performance tables.

Prior Performance Tables

For more information about all the Programs please refer to Appendix A– Results of Prior Programs, below. The information in Appendix A is presented as of December 31, 2022.

WHAT IS A REIT?

The Company is currently treated as a Real Estate Investment Trust, or “REIT,” and intends to remain so.

Until January 2, 2022, the Company did not qualify as a REIT because too few people owned too much of its stock. However, the failure of the Company to qualify as a REIT did not harm the Company or its investors.

A REIT is just a tax concept: an entity that is treated as a corporation for federal income tax purposes and satisfies a long list of requirements listed in section 856 of the Internal Revenue Code. These requirements include:

A REIT is not a function of securities laws. Thus, many REITs have “gone public” by offering their securities in offerings that are registered under the Securities Act of 1933, while many other REITs are still private. Some “public” REITs have registered their shares on a national securities exchange, allowing the shares to be publicly traded, while the shares of other “public” REITs are traded privately. There are very large REITs and very small REITs, and everything in between. Some REITs invest in one class of real estate assets, others invest in completely different classes of real estate assets (e.g., only mortgages), and still others invest in multiple classes of real estate assets. The only thing all these companies have in common, being REITs, is that they all satisfy the requirement in section 856 of the Code.

The benefit of a REIT is just taxes:

If you are interested, you can read much more detailed information about the tax treatment of REITs in “Federal Income Tax Consequences.”

The Company is a limited liability for purposes of state law but has elected to be treated as a corporation for federal income tax purposes. That’s what allows the Company to be treated as a REIT.

OUR MANAGEMENT TEAM

Names, Ages, Etc.

NOTE: All these individuals are employed by Casoro Capital Partners, LLC, the Sponsor, not by the Company directly. Each works full time for the Sponsor, but that doesn’t mean they spend all their time on the Company’s business.

Monte K. Lee-Wen

CEO

As CEO, Monte is responsible for the overall leadership, growth, and business development. Monte Wen is a Principal of the Manager and an owner of the Sponsor. Monte has executed over $600 million in transactions, acquiring, managing, and repositioning commercial property across the United States. He is the Chairman of Casoro Group, LLC, a multi-housing real estate investment company which merged with The PPA Group in 2019. Casoro Group is headquartered in Austin, Texas and also serves as a holding company for Casoro Group family of companies. He has a unique investment philosophy which involves evaluating and taking advantage of opportunities where superior risk-adjusted returns can be realized.

Through founding The PPA Group, Monte has been able to combine his investment experience and philosophy with the creative talent required to renovate and reposition properties. Monte brings an extensive knowledge in property assessment and transaction due diligence. He has created a standardized internal analysis system to effectively evaluate investment properties which has enabled Casoro Group to streamline the process of acquiring profitable real estate investments.

In 2008, Monte formed a subsidiary company called PPA Real Estate Management (“REM”) to serve as the property management company for The PPA Group’s real estate holdings and to conduct third-party fee management business. REM currently manages a diverse portfolio of multi-housing properties. Monte takes pride in investing not only in properties, but also in the communities and families that reside at the company’s properties.

Monte is a seasoned entrepreneur having started and run several companies:

His networking and speaking skills have propelled the company forward very quickly. He is actively involved in board positions and guidance committees of many private and public initiatives nationwide. During the last five years, Monte has held Board/Committee positions on the following organizations:

Nalie Lee-Wen

Chief Financial Officer

As CFO, Nalie Lee-Wen heads Casoro Group’s internal finance department. She specializes in developing profitable relationships with capital partners and coordinating seamless transactions during the funding and closing phase of Casoro’s acquisitions.

Nalie oversees the team of accounting professionals for Casoro Group and its family of companies, including CLEAR Property Management. Her experience in commercial financing and lender relationships contributes significant value to the company’s operational management. She also plays a pivotal role in the asset management and property management departments.

Starting as a family office alongside Monte Lee-Wen, they have grown Casoro Group into a vertically integrated owner / operator and private equity investor on behalf of institutions. The company serves as a holding company for the Casoro Group family of companies, including CLEAR Property Management, Performance Utilities and Billing, Ingenium Construction, and Upside Avenue, a public non-traded multifamily REIT.

Prior to founding the company, Nalie served as the Chief Executive Officer of a commercial real estate funding group. Nalie has more than 10 years of experience in real estate financing, asset management, and portfolio management. Her strong background in real estate and finance has afforded Nalie with a singular talent for anticipating potential problems and creating effective solutions that stop asset acquisitions issues in their tracks — before they can derail a deal.

Nalie’s high level of expertise in working with state and local governments, surveyors, vendors, lenders, and legal professionals further empowers her to resolve title issues and move acquisitions over the finish line.

Nalie currently sits on the board of Casoro Group Education Foundation.

Mehul Chavada

Chief Investment Officer

Mehul joined the team at Casoro Group in January 2023. He is responsible for strategizing and executing the firm’s growth strategy in investing in real assets that meet or exceed performance thresholds. Mehul specializes in identifying and acquiring multifamily investments throughout the United States for Casoro Group’s institutional, family office, and high-net-worth clients, as well as its discretionary non-traded multifamily income REIT, Upside Avenue.

With more than 15 years of commercial transaction experience, Mehul brings deep expertise in the acquisition and asset management of multiple asset types, including multifamily, student housing, industrial, office, and retail. Mehul has also built close relationships with some of the world’s largest sovereign wealth funds, pension funds and family offices. Most recently during 2020 through 2022, he was Head of Investments at Nitya Capital in Houston, a firm with over $2.5 billion of assets under management in multifamily, office and retail assets. Previously, as Director – Fund Management at Hines from 2015 through 2020, one of the largest privately held global real estate investors and managers, he managed several funds including opportunistic, value-added and sustainable income fund strategies. Prior to joining Hines, Mehul led a real estate development business which focused on residential and mixed-use projects. He has contributed to the investment and development of more than 17 million square feet of commercial real estate across Americas, Europe and Asia. At Casoro Group, Mehul plays a crucial role in developing the firm’s market presence, uncovering profitable opportunities, leading the underwriting, structuring, negotiation, and closing of new acquisitions. Mehul also oversees the company’s equity and debt capital raising activities.

He holds a M.S. in Civil Engineering from Virginia Tech, and an M.S. in Real Estate from Massachusetts Institute of Technology. Mehul is also an adjunct professor teaching Real Estate Private Equity at Rice University’s Jones Graduate School of Business.

Dustin Gabriel

Director of Investor Relations

Dustin will be focused on investor communication, experience and capital raising for Upside Avenue as well as assisting with broader capital markets activities. He has a diversified background from sponsorship, investment, finance and management perspectives. He joins from a structured finance company owned by Apollo and Bank OZK’s Real Estate Specialties Group. He also has a background syndicating CRE deals and he raised the capital to co-sponsor in the acquisition and development of suburban class A office buildings, land assemblage and a multifamily rehab.

Dustin holds a Bachelor of Science and MPA with Finance Emphasis from Brigham Young University.

Lea Allen

Controller

Lea Allen joined the team at Casoro Group in February 2022. She serves as the Corporate Controller for Upside Avenue where she is responsible for all accounting matters related to corporate, property asset management and fund level functions. With over a decade of experience in the field, Lea provides expertise in accounting and strong knowledge of financial reporting.

Prior to joining Casoro Group, Lea served as Controller for Secured Investment Corp, a top peer to peer real estate lending company and private equity fund manager. During this time, Lea was responsible for leading the accounting and reporting functions for the corporate family of companies as well as for the private equity funds managed by the company. Her tenure at Secured Investment Corp spanned from 2012 through 2022 where she held multiple accounting positions. During her time there she worked on both funds they had since inception, totaling in millions of loans originated and hundreds of SFR assets purchases and fixed. Her private equity fund experience spans both Regulation D and Regulation A+ funds and her investment fund experience includes a portfolio of first trust deeds (mortgages) and single-family residences.

Lea holds a BBA in Accountancy from Gonzaga University.

Related Parties

The Sponsor owns 70% of Casoro Investment Advisory Firm, LLC, the Manager of the Company. The PPA Group LLC owns 100% of the Sponsor.

Family Relationships

Nalie Lee-Wen is the CFO of the Casoro Group, and wife of Monte Lee-Wen. Monte Lee-Wen is the majority owner of our sponsor Casoro Investment Advisory Firm, LLC.

Legal Proceedings

Within the last five years, no Executive Officer or Significant Employee of the Company has been convicted of, or pleaded guilty or no contest to, any criminal matter, excluding traffic violations and other minor offenses.

Within the last five years, no Executive Officer or Significant Employee of the Company, no partnership of which an Executive Officer or Significant Employee was a general partner, and no corporation or other business association of which an Executive Officer or Significant Employee was an executive officer, has been a debtor in bankruptcy or any similar proceedings.

Within the last five years, no Executive Officer or Significant Employee of the Company, no partnership of which an Executive Officer or Significant Employee was a general partner, and no corporation or other business association of which an Executive Officer or Significant Employee was an executive officer, has been involved as a defendant in a lawsuit arising from real estate transactions.

SUMMARY OF MANAGEMENT AGREEMENT

The Company entered into an agreement captioned “Management Services Agreement” with the Manager effective on May 1, 2022 (the “Management Agreement”). The following summarizes some of the key terms of the Management Agreement. However, this summary is qualified by the Management Agreement itself, a copy of which is attached as Exhibit 1A-6A.

Duties of Manager

The duties of the Manager fall into several categories:

Compensation of Manager

As compensation for its services under the Management Agreement, the Manager is entitled to a fee equal to one-half of one percent (0.5%) of the Company’s net asset value as of the last day of the previous quarter.

Term of Management Agreement

The Management Agreement will remain in effect for as long as the Manager is the manager of the Company.

COMPENSATION OF MANAGEMENT

Overview

The people who run the Company make money from the Company in (only) two ways:

Both forms of compensation are discussed below.

The Company itself does not have any employees or payroll. For example, Monte K. Lee-Wen, the principal of the Sponsor, does not receive any salary, bonuses, or other compensation directly from the Company. Instead, their compensation is paid from the fees paid to the Manager.

Fees

Report to Investors

No less than once per year, the Company will provide Investors with a detailed statement showing:

In each case, the detailed statement will describe the services performed and the amount of compensation paid.

Co-Investment

As of the date of this Offering Circular principals of the Sponsor own approximately 33% of the total number of Common Shares issued and outstanding. See “Security Ownership of Management.” Principals of the Sponsor might acquire additional Common Shares in the future. As owners of Common Shares they are and will be entitled to the same distributions as all other owners of Common Shares.

SECURITY OWNERSHIP OF MANAGEMENT

As of the date of this Offering Circular, the Company has only one class of securities outstanding: Common Shares. The following table lists the ownership of:

VOTING RIGHTS OF OWNERS

Under the LLC Agreement, the Manager has full control over all aspects of the business of the Company. Investors and other owners of Common Shares will not be entitled to vote on any matter involving the Company or the Manager, except that the owners of Common Shares may, in some situations, remove the Manager for cause or make certain amendments to the LLC Agreement. For more information, see “Summary of LLC Agreement.”

The Manager is wholly-owned by the Sponsor, Casoro Capital Partners, LLC, which is in turn wholly-owned by PPA Group LLC, which is owned by Monte Lee-Wen and Nalie Lee-Wen.

Thus, Mr. Lee-Wen has effective control over the Company and its business.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has entered into the following transactions with related parties:

If the Company enters into transactions with related parties in the future, we will file a Supplement to the Offering Circular. Any compensation paid by the Company to a related party shall be (i) fair to the Company, and (ii) consistent with the transaction that would be paid to an unrelated party.

By “related party” we mean:

SECURITIES BEING OFFERED

Description of Securities

We are offering to the public up to $74,500,000 of our Common Shares, which represent limited liability company interests in the Company. All of the rights and obligations associated with Common Shares are set forth in the LLC Agreement, which is attached as Exhibit 1A-2B.

Price of Common Shares

Initially, we will offer the Common Shares at $11.29 per Common Share. During the term of this Offering, we may increase or decrease the price per Common Share to reflect changes in the value of our assets and the amount of our liabilities, which will be determined by the Manager in its sole and absolute discretion.

To determine the price of the Common Shares, the Manager would determine the “Net Asset Value” of the company. The Net Asset Value means the amount a holder of Common Shares would receive with respect to each Common Share if all the assets of the Company were sold for their fair market value, all the liabilities and obligations of the Company satisfied, and the remaining proceeds, if any, distributed in accordance with the LLC Agreement. The Manager shall calculate the Net Asset Value from time to time in its sole discretion, but no less than as of the last day of each fiscal year.

Net Asset Value is calculated internally by reviewing:

In instances where we determine that an independent appraisal of the real estate asset is necessary, we may engage an appraiser that has expertise in appraising multi-housing real estate assets. The independent valuation expert will not calculate Net Asset Value.

NOTE: The use of different judgments or assumptions would likely result in different estimates of Net Asset Value. Moreover, the Net Asset in effect as of any moment will not reflect changes since the last calculation. Further, our published Net Asset Value may not fully reflect certain material events to the extent that they are not known or their financial impact on our portfolio is not immediately quantifiable. The calculation of Net Asset Value is not based on, nor intended to comply with, fair value standards under GAAP and might not be indicative of the price that we would receive for our assets in an arm’s length sale.

Changes in the price of the Common Shares will be reflected in an amendment to this Offering Statement filed with the SEC. At this time, the Manager cannot reasonably estimate when or how often it will amend the Offering price. Such amendments will depend upon numerous factors, including, but not limited to, (i) the amount of capital raised in this Offering, (ii) our ability to effectively deploy the capital we raise, (iii) the timing of actual asset acquisitions and dispositions by the Company, (iv) the value of assets acquired or disposed of by the Company, and (v) changes in interest rates and international or local market conditions.

Voting Rights

Owners of the Common Shares – that is, Investors – will have no right to vote or otherwise participate in the management of the Company. Instead, the Company is managed by the Manager exclusively. However, under certain circumstances Investors have the right to remove the Manager for “cause.”

Distributions

We intend to make distributions periodically, as conditions permit. All distributions will be on a pro rata basis with respect to the Common Shares. Distributions will not be made to Investors who have not yet owned Common Shares for 90 days.

How We Decide How Much To Distribute

To decide how much to distribute, we start with our revenues, which may include proceeds from the sale or refinancing properties and rental income, and then subtract our actual expenses, which may include items such as management fees (including fees to the Manager), bank fees, appraisal costs, employment, insurance, commissions, marketing costs, taxes, legal and accounting fees, travel expenses, and fees paid to third parties. Finally, depending on the circumstances at the time, we decide how much should be held in reserve against future contingencies.

Withholding

In some situations, we might be required by law to withhold taxes and/or other amounts from distributions made to Investors. The amount we withhold will still be treated as part of the distribution. For example, if we distribute $100 to you and are required to withhold $10 in taxes, for our purposes you will be treated as having received a distribution of $100 even though only $90 was deposited in your bank account.

No Guaranty

We can only distribute as much money as we have. There is no guaranty that we will have enough money, after paying expenses, to distribute anything to Investors.

Transfers

Investors may freely transfer their Common Shares, but only after providing the Manager with written assurance that (i) the transfer is not required to be registered under the Securities Act of 1933, (ii) the transferor or the transferee will reimburse the Company for expenses incurred in connection with the transfer, and (iii) the transfer will not compromise the Company’s election to be taxed as a REIT for purposes of federal income taxation.

Mandatory Redemptions

The Manager may require an Investor to sell his, her, or its Common Shares back to the Company:

If an Investor’s Common Shares are purchased under these circumstances, the price will be based on 90% of then-current net asset value of the Company.

Limited Right Of Redemption

An Investor who has owned Common Shares for at least one year may ask the Company to redeem (buy back) a portion of his, her, or its Common Shares. The Company will use reasonable efforts to buy the Common Shares in the next fiscal quarter immediately following the quarter in which the redemption request was made based on the following formula:

The following conditions apply:

LIMIT ON AMOUNT A NON-ACCREDITED INVESTOR CAN INVEST

As long as you’re at least 18 years old, you can invest in this Offering. But if you’re not an “accredited” investor, the amount you can invest is limited by law.

Under 17 CFR §230.501, a regulation issued by the Securities and Exchange Commission, the term “accredited investor” means:

If you fall within any of those categories, then you can invest as much as you want. If you don’t fall within any of those categories, then the most you can invest in this Offering is the greater of:

These limits are imposed by law, not by us.

When you go to our website, www.UpsideAvenue.com, we will ask whether you’re an accredited investor. If you aren’t, then we’ll ask about your annual income and net worth.

PLAN OF DISTRIBUTION

Size of Offering

We are offering up to $74,500,000 of our Common Shares in the Offering. We will begin deploying the proceeds of the Offering (that is, we will begin to invest in real estate projects) as soon as we begin raising capital, without waiting to raise any minimum amount.

Who is Selling Shares

Only the Company itself is selling securities in this Offering. No securities are being sold by or on behalf of any existing owner of the Company.

Who Can Buy Shares

Anyone 18 or older can buy Common Shares, regardless of income or net worth. If you are not an “accredited investor” the law limits how much you can invest. See “Limit on Amount a Non-Accredited Investor Can Invest.”

Term of Offering

The Offering will begin as soon as our offering statement is “qualified” by the SEC. The Offering will end upon the earlier of (1) the date we have sold $74,500,000 of Common Shares (i.e., all the securities we are offering), (2) the date two years after it begins, or (3) the date we decide to end it.

Minimum Initial Investment

The minimum initial investment is $2,000, without regard to the price or the number of Shares.

Manner of Distribution

The Common Shares will be offered by the Company itself through www.upsideavenue.com, which we refer to as the “Site.” Purchases and sales of our Common Shares made through our Site will not be subject to any sales commissions or fees.

How To Invest

To buy Common Shares, visit the Site and register, locate the Offering, and follow the instructions. We will ask for certain information about you, including:

We will also ask you to sign our Investment Agreement, a copy of which is attached as Exhibit 1A-4.

You will pay for your Common Shares using one of the options described on the Site.

The information you submit, including your signed Investment Agreement, is called your “subscription.” We will review your subscription and decide whether to accept it. We have the right to accept or reject subscriptions in our sole discretion, for any reason or for no reason.

Once we have accepted your subscription, we will notify you by email and the investment process will be complete. We will also notify you by email if we do not accept your subscription, although we might not explain why. We reserve the right to reject any subscription in whole or in part for any reason. If we reject your subscription, we will return all your money without interest or deduction.

Your Common Shares will be issued in electronic form only. We will not issue you a paper certificate representing your Common Shares.

Escrow

When you invest through our Site, your money will be held in an escrow account with Prime Trust, LLC, or other third-party financial institution that will serve as the escrow agent. Your investment will be held only until we review your subscription and decide whether to accept it. If we decide to reject your subscription for any reason, we will return your funds to you without interest or deduction.

Advertising the Offering

After the Offering has been “qualified” by the SEC, we intend to advertise the Offering using the Site and through other means, including public advertisements and audio-visual materials, in each case only as we authorize. Although these materials will not contain information that conflicts with the information in this Offering Circular and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to the Common Shares, our advertising materials will not give a complete understanding of this Offering, the Company, or the Common Shares and are not to be considered part of this Offering Circular. The Offering is made only by means of this Offering Circular and prospective Investors must read and rely on the information provided in this Offering Circular in connection with their decision to invest in the Common Shares.

Supplements and Amendments to Offering Circular

From time to time we will supplement or amend this Offering Circular during the term of the Offering to reflect changes or additions to the information presented, as required by SEC rules.

Among other things, while the Offering is being conducted, we will file a “sticker supplement” pursuant to Rule 253(g) of SEC Regulation A for each project in which we intend to invest, at such time as we determine that there is a reasonable probability that we will invest. The supplement will describe the project and will disclose all compensation and fees paid to the Manager or its affiliates in connection with the acquisition.

At least once every three months, we will consolidate all such sticker supplements into a “post-qualification amendment” to this Offering Circular. Where appropriate, the post-qualification amendment will also include or incorporate by reference audited financial statements meeting the requirements of Rule 3-14 of Regulation S-X for properties acquired during the distribution period.

We will also file, after the end of the distribution period, a current report on Form 1-U containing the financial statements and any additional information required by Rule 3-14 of Regulation S-X (as applicable), to reflect each commitment (i.e., the signing of a binding purchase agreement) to purchase a property made after the end of the distribution period involving the use of 20% or more (on a cumulative basis) of the net proceeds of the Offering, and we will provide the information contained in such report to Investors at least once each quarter after the distribution period ends.

USE OF PROCEEDS

We expect the Offering itself to cost about $75,000, consisting of legal, accounting, and filing fees. All the remaining proceeds of the Offering will be used for marketing, to invest in real estate projects, to pay the Company’s normal operating costs, including fees to the Manager and its affiliates, employees, and for working capital. The following table estimates the use of the Offering proceeds under four scenarios:

We are not paying commissions to underwriters, brokers, or anybody else for selling or distributing Common Shares. Because we are not paying any commissions, more of your money can go to work for you.

INVESTMENT COMPANY ACT LIMITATIONS

A company that is treated as an “investment company” under the Investment Company Act of 1940 (the “1940 Act”) is subject to stringent and onerous regulation, like a mutual fund. Being an investment company isn’t illegal but is very expensive. If the Company were treated as an investment company it would be costly for our business and our Investors.

Under section 3(a) of the 1940 Act, the term “investment company” means any company that:

Real estate itself is not a “security” for purposes of the 1940 Act. Thus, if all of the Company’s assets consisted of direct interests in real estate – direct ownership of land and buildings – the Company could not be an investment company.

However, the Company will own most assets through other companies. For example, the Company might own an interest in a real estate development through a limited liability company. Because an interest in a limited liability company is generally treated as a “security” within the meaning of the 1940 Act, the possibility remains that the Company could be treated as an investment company looking only at section 3(a)(1) of the statute.

However, section 3(b)(1) of the 1940 Act provides that “Any [company] primarily engaged, directly or through a wholly-owned subsidiary or subsidiaries, in a business or businesses other than that of investing, reinvesting, owning, holding, or trading in securities” will not be treated as an “investment company.” Further, 17 CFR §270.3a-1, a regulation issued by the SEC pursuant to section 3(b)(1), provides that a company will not be treated as an investment company if no more than 45% of the value of its assets (exclusive of government securities and cash items) consist of, and no more than 45% of its after-tax income is derived from, securities other than:

For these purposes:

Typically, the Company acquires interests in real estate indirectly, by acquiring an interest in a limited liability company or limited partnership that owns the real estate. The other entity typically is controlled by the Sponsor. When the Company makes an investment of this kind, it enters into an agreement with the property-owning entity that requires the entity to obtain the consent of the Company before taking certain significant actions, including (i) removing or replacing the entity’s general partner or manager; (ii) selling or otherwise disposing of all or any substantial part of the entity’s property; (iii) incurring any indebtedness other to trade creditors in the ordinary course of business; (iv) placing a lien, mortgage, deed of trust, or other encumbrance on any property of the entity, other than a lien in the nature of an equipment lease; (v) changing the nature of the entity’s business; or (vi) dissolving or liquidating the entity.

This being the case, the Company expects to satisfy the requirements of 17 CFR §270.3a-1 and, consequently, to be exempted from the definition of “investment company” under the 1940 Act.

Section 5.7 of the LLC Agreement requires the Manager to use commercially reasonable efforts to satisfy the requirements of 17 CFR §270.3a-1 and ensure that the Company is not treated as an “investment company” within the meaning of the 1940 Act.

SUMMARY OF LLC AGREEMENT

The Company as a whole is governed by an agreement captioned “First Amended and Restated Limited Liability Company Agreement” dated September 29, 2023. We refer to this as the “LLC Agreement.”

This summary is qualified in its entirety by the LLC Agreement itself, which is included as Exhibit 1A-2E.

Formation and Ownership

The Company was formed as a Maryland corporation on October 17, 2017. Effective on March 18, 2022, the Company was converted to a Delaware limited liability company.

Under Delaware law, the ownership interests of a limited liability company are referred to as “limited liability company interests.” Under the LLC Agreement, the limited liability company interests in the Company are referred to as “Shares” and the owners are referred to as “Members.”

Shares and Ownership

The Company has authorized 10,000,000 Shares, consisting of 5,000,000 “Common Shares” and 5,000,000 “Preferred Shares.” The Company has not issued any Preferred Shares.

When the Company was a Maryland corporation it had once class of stock issued and outstanding: voting common stock. When the Company converted into a Delaware limited liability company each outstanding share of voting common stock was converted into one Common Share. Hence, as of the date of the conversion the Company was owned by exactly the same people who owned it before the conversion, in exactly the same proportions.

Management

The Manager has complete discretion over all aspects of the business conducted by the Company. For example, the Manager may (i) admit new members to the Company; (ii) enter into contracts on behalf of the Company; (iii) borrow money; (iv) acquire and dispose of assets; (v) determine the timing and amount of distributions to Members; (vi) create new classes of limited liability company interests; (vii) determine the information to be provided to the Members; (viii) grant liens and other encumbrances on the assets of the Company; (ix) and dissolve the Company.

Investors who purchase Common Shares will not have any right to vote on any issue other than certain amendments to the LLC Agreement, or to remove and replace the Manager.

The Manager can be removed for “cause” under a procedure set forth in section 6.9 of the LLC Agreement.

The term “cause” includes:

A vote to remove the Manager for cause must be approved by Members owning at least 75% of the outstanding Common Shares. Whether “cause” exists would then be decided in arbitration proceedings conducted under the rules of the American Arbitration Association.

If the Manager is removed or resigns, a replacement will be chosen by the holders of the majority of the Common Shares then issued and outstanding.

Exculpation and Indemnification of Manager

The LLC Agreement protects the Manager, its affiliates, their members, managers, officers, employees, and agents, and the officers, employees, and agents of the Company from lawsuits brought by Investors or other parties. For example, it provides that such persons will not be responsible to Investors or the Company for mistakes, errors in judgment, or other acts or omissions (failures to act) as long as the act or omission was not the result of fraud or willful misconduct by such persons. This limitation of liability is referred to as “exculpation.” The LLC Agreement also provides that these persons do not owe any fiduciary duties to the Company or its owners.

The LLC Agreement also requires the Company to indemnify (reimburse) the directors, officers and employees of the Company and their affiliates from losses, liabilities, and expenses they incur in performing their duties, provided that they (i) acted in good faith and in a manner believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful, and (ii) the challenged conduct did not constitute fraud or willful misconduct, in either case as determined by a final, nonappealable order of a court of competent jurisdiction. For example, if a third party sued the Manager on a matter related to the Company’s business, the Company would be required to indemnify the Manager for any losses or expenses it incurs in connection with the lawsuit, including attorneys’ fees, judgments, etc. However, this indemnification is not available where a court or other juridical or governmental body determines that the person to be indemnified is not entitled to indemnification under the standard described in the preceding sentence.

Notwithstanding the foregoing, no exculpation or indemnification is permitted to the extent such exculpation or indemnification would be inconsistent with the requirements of federal or state securities laws or other applicable law.

The detailed rules for exculpation and indemnification are set forth in section 7 of the LLC Agreement.

Obligation to Contribute Capital

Once an Investor pays for his, her, or its Common Shares, he, she, or it will not be required to make any further contributions to the Company. However, if an Investor has wrongfully received a distribution he, she, or it might have to pay it back.

Personal Liability

No Investor will be personally liable for any of the debts or obligations of the Company.

Distributions

The manner in which the Company will distribute its available cash is described in “Securities Being Offered – Distributions.”

Transfers and First Right of Refusal

In general, Investors may freely transfer their Common Shares. However, the Manager may prohibit a transfer that the Manager determines would jeopardize the status of the Company as a REIT.

If an Investor wants to sell Common Shares, the Investor must first offer the Common Shares to the Manager.

Death, Disability, Etc.

If an Investor who is a human being (as opposed to an Investor that is a legal entity) should die or become incapacitated, the Investor or his, her or its successors will continue to own the Investor’s Common Shares.

Mandatory Redemption

The Manager may cause the Company to redeem (purchase) the Common Shares owned by an Investor in some circumstances (in effect kicking the Investor out of the deal) as described in “Securities Being Offering – Mandatory Redemptions.”

“Drag-Along” Right

If the Manager wants to sell the business conducted by the Company, it may affect the transaction as a sale of the assets owned by the Company or as a sale of all the Interests in the Company. In the latter case, Investors will be required to sell their Common Shares as directed by the Manager, receiving the same amount they would have received had the transaction been structured as a sale of assets.

Limited Right of Redemption

Investors have a limited right to cause the Company to redeem (buy back) their Common Shares. See “Securities Being Offering – Limited Right of Redemption.”

Electronic Delivery

All documents, including all tax-related documents, will be transmitted by the Company to Investors via electronic delivery.

Amendment

The Manager may amend the LLC Agreement unilaterally (that is, without the consent of anyone else) for a variety of purposes, including to:

An amendment that has, or could reasonably be expected to have, an adverse effect on Investors, requires the consent of the Manager and Investors holding a majority of the Common Shares.

An amendment that would require an Investor to make additional capital contributions or impose personal liability on an Investor requires the consent of the Manager and each affected Investor.

Information Rights

Within 120 days after the end of each fiscal year of the Company, we will provide Investors with (i) a statement showing in reasonable detail the computation of the distributions made by the Company, (ii) audited financial statements of the Company, (iii) a statement of the income and expenses of the Company, and (iv) a description of the Company’s investments.

As a “tier 2” issuer under Regulation A, the Company may also be required to provide investors with additional information on an ongoing basis, including annual audited financial statements, annual reports filed on SEC Form 1-K, semiannual reports filed on SEC Form 1-SA, special financial reports filed on SEC Form 1-K, and current reports on SEC Form 1-U. If, however, our Common Shares are held “of record” by fewer than 300 persons, these reporting obligations could be terminated.

A Member’s right to see additional information or inspect the books and records of the Company is limited by the LLC Agreement.

SUMMARY OF MANAGEMENT AGREEMENT

The Company entered into an agreement captioned “Management Services Agreement” with the Manager effective on May 1, 2022 (the “Management Agreement”). The following summarizes some of the key terms of the Management Agreement. However, this summary is qualified by the Management Agreement itself, a copy of which is attached as Exhibit 1A-6A.

Duties of Manager

The duties of the Manager fall into several categories:

Compensation of Manager

As compensation for its services under the Management Agreement, the Manager is entitled to a fee equal to one-half of one percent (0.5%) of the Company’s net asset value as of the last day of the previous quarter.

Term of Management Agreement

The Management Agreement will remain in effect for as long as the Manager is the manager of the Company.

FEDERAL INCOME TAX CONSEQUENCES

The following summarizes some of the federal income tax consequences of the Company and Investors. This summary is based on the Internal Revenue Code (the “Code”), regulations issued by the Internal Revenue Service (“Regulations”), and administrative rulings and court decisions, all as they exist today. The tax laws, and therefore the federal income tax consequences of acquiring Common Shares, could change in the future.

This is only a summary, applicable to a generic Investor. Your personal situation could differ. We encourage you to consult with your own tax advisor before investing.

Federal Income Taxation of the Company

We intend to elect to be taxed as a “real estate investment trust,” or “REIT,” beginning with our first taxable year.

Assuming that we qualify as a REIT, the Company itself will generally not be subject to federal income taxes on net income that is currently distributed to shareholders. The Company will, however, be subject to federal income tax as follows:

If we failed to satisfy one or more of the technical requirements described below, we might nevertheless be entitled to be treated as a REIT under certain “relief” provisions. Otherwise, we would be subject to tax on our taxable income at regular corporate rates, with no deduction allowed for distributions to shareholders. The resulting corporate income tax liability would significantly reduce the cash available for distribution to Investors.

Requirements for Qualifying as a REIT

To qualify as a REIT, we must elect to be treated as a REIT and meet certain requirements related to our organization, income, assets and distributions. Each set of requirements is discussed in turn below.

Organizational Requirements

The Code defines a REIT as a corporation, trust or association:

Income Test Requirements

To maintain qualification as a REIT, on an annual basis we must meet the following two gross income requirements:

To satisfy the gross income requirements any “rents from real property” received must meet the following conditions:

We do not anticipate deriving rent attributable to personal property leased in connection with real property that exceeds 15% of the total rent attributable to such lease.

We may provide certain services with respect to our properties. We believe that these services will only be of the type that are usually or customarily rendered in connection with the rental of space for occupancy and that are not otherwise rendered to the tenants. Therefore, we believe that the provision of such customary services will not cause rents received with respect to our properties to fail to qualify as “rents from real property.” Non-customary services and services rendered primarily for the tenants’ convenience will be provided by an independent contractor or a taxable REIT subsidiary to avoid jeopardizing the qualification of rent as “rents from real property.”

Except for amounts received with respect to certain investments of cash reserves, we anticipate that substantially all of our gross income will be derived from sources that will allow us to satisfy the income tests described above; however, we can make no assurance in this regard.

Asset Test Requirements

At the close of each quarter of the taxable year, we must also satisfy the following four tests related to the nature and diversification of our assets:

Annual Distribution Requirements

To qualify as a REIT, we must meet the following annual distribution requirements:

We expect that our REIT taxable income will be less than our cash flow due to the allowance of depreciation and other non-cash charges in computing REIT taxable income. Accordingly, we anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement. It is possible, however, that we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement or to distribute such greater amount as may be necessary to avoid income and excise tax. In such event, we may find it necessary to borrow funds to pay the required distribution or, if possible, pay taxable stock dividends in order to meet the distribution requirement.

Taxation Of Investors

How Income is Reported To Investors

Each Investor will receive a Form 1099 from the Company each year, and will transfer the information onto his, her, or its personal tax return. Investors will not receive a Form K-1 from the Company.

Taxation of Distributions

Distributions to Investors other than “capital gain dividends” will be treated as taxable dividends up to the amount of the Company’s current or accumulated earnings and profits. To the extent that we make a distribution in excess of our positive current or accumulated earnings and profits, the distribution will be treated first as a tax-free return of capital, up to an Investor’s tax “basis” in his, her, or its Common Shares, then as capital gain.

Dividends that we declare in October, November, or December of any year payable to stockholders of record on a specified date in any such month are treated as both paid by us and received by Investors on December 31 of that year, provided that we actually pay the dividends in the following quarter.

Dividends from the Company will not be treated as “qualifying dividends,” which are eligible for lower tax rates (generally the same tax rates that apply to long term capital gains).

“Capital gain dividends” will be reported as long-term capital gains on the tax returns of Investors (to the extent that they do not exceed our actual net capital gain for the taxable year), without regard to how long an Investor has owned his, her, or its Common Shares.

Taxation of Losses

Because the Company will be taxed as a corporation, and not as a partnership, Investors may not report on their own income tax returns any tax losses incurred by the Company.

Additional Medicare Tax

Higher-income taxpayers are subject to an additional 3.8% tax on net “investment income.” Income Investors receive from the Company will be included as “investment income” for these purposes.

Tax on Sale of Common Shares

An Investor who sells Common Shares generally will realize capital gain or loss equal to the difference between the selling price and his, her, or its adjusted tax “basis” in the Common Shares. If the Investor has owned the Common Shares for at least one year, any gain would generally be treated as long term capital gain.

Passive Activity Losses

Taxable distributions from the Company will not be treated as “passive activity income” under Code section 469 and may not be offset against losses from passive activities.

Withholding Taxes

We might be required to withhold federal income tax from distributions under certain circumstances, e.g., where an Investor has failed to provide us with a valid taxpayer identification number.

Each Investor must either report Company items on his tax return consistent with the treatment on the information return of the Company or file a statement with his tax return identifying and explaining the inconsistency. Otherwise the IRS may treat such inconsistency as a computational error and re-compute and assess the tax without the usual procedural protections applicable to federal income tax deficiency proceedings.

The Manager will serve as the “tax matters partner” of the Company and will generally control all proceedings with the IRS.

The Code imposes interest and a variety of potential penalties on underpayments of tax.

Other Tax Consequences

The foregoing discussion addresses only selected issues involving federal income taxes and does not address the impact of other taxes on an investment in the Company, including federal estate, gift, or generation-skipping taxes, or State and local income or inheritance taxes. Prospective Investors should consult their own tax advisors with respect to such matters.

LEGAL PROCEEDINGS

Neither the Company itself, the Manager, the Sponsor, or any of their respective employees, officers, directors, managers, or members is currently engaged in any material legal proceedings, except as provided in “Our Management Team – Legal Proceedings.”

Neither the Company itself, the Manager, the Sponsor, or any of their respective employees, officers, directors, managers, or members is, to the knowledge of the Company, currently the subject of any investigation or proceedings by any governmental authorities.

MANAGEMENT DISCUSSION

Operating Results

The Company was formed on October 17, 2017. As of December 31, 2022, the Company had invested a total of $4,938,021 in seven separate real estate project investments, six of which are invested in multifamily projects, and one is invested in a land development project: 

For the 12-month period ending December 31, 2022, the Company had a net loss of ($139,832).

Revenue collections in the Company’s real estate projects have been strong in the post-covid environment and despite a few pending evictions across the portfolio, the projects are generally expected to perform similarly in the future.

We are not aware of matters that have had an impact on reported operations that are not expected to have an impact on future operations.

Material Changes in Financial Line Items from 2021 to 2022

On the Balance Sheet:

On the Income Statement:

Liquidity and Capital Resources

The Company is seeking to raise up to $74,500,000 of capital in the Offering by selling Common Shares to Investors.

The Company had no material commitments for capital expenditures as of December 31, 2022, and has none today. Capital expenditures required by the individual real estate projects are raised during the initial acquisition of the property. Generally, no further capital is required from the Company during the operations and enhancement of each real estate project.

The Company does have certain fixed operating expenses. If it raises additional capital and acquires more projects these fixed operating expenses will, by definition, represent a lower percentage of our overall revenue.

Trend Information

The Company believes its primary market risk is interest rate risk. To mitigate this risk, our Manager follows certain practices such as (1) balancing levels of fixed and floating rate debt and (2) refinancing our outstanding debt when we believe doing so is advantageous to our investors.

Investment capital flowing into the multifamily sector has increased substantially, making it increasingly competitive to source attractive investment opportunities. Additionally, rising interest rates may negatively impact the selling price of certain of our assets.

We had initially planned to invest in, among other types of properties, student housing and senior living housing. With many colleges and universities shut down in whole or in part, or pursuing an entirely virtual academic year, the demand for student housing decreased as students increasingly decided to live with their parents instead of living in student housing. Additionally, the dramatic impact of the COVID-19 pandemic on senior communities is well-documented and had a deleterious effect on the demand for such housing. As a result, we had to tailor our investment strategy to accommodate for these new realities, but we believe the faster-than-anticipated development and deployment of vaccines will again make these properties attractive investment candidates in the near future.

While we expect at least some of these trends to continue in the short term, we believe there is significant cause for optimism regarding the Company’s potential moving forward. Among the reasons, according to Federal Reserve data during the fourth quarter of 2021, as it specifically pertains to our largest two markets where our investments are located:

FINANCIAL STATEMENTS

Multi-Housing Income REIT, LLC

CONSOLIDATED FINANCIAL STATEMENTS

AND

INDEPENDENT AUDITOR’S REPORT

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Independent Auditor’s Report

To the Board of Directors
Multi-Housing Income REIT, LLC

Opinion

We have audited the consolidated financial statements of Multi-Housing Income REIT, LLC, which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Multi-Housing Income REIT, LLC as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (“GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Multi-Housing Income REIT, LLC and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Multi-Housing Income REIT, LLC’s ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ CohnReznick LLP

CohnReznick LLP

Atlanta, Georgia

July 3, 2023

 Multi-Housing Income REIT, LLC

CONSOLIDATED BALANCE SHEETS

As of December 31, 2022 and 2021

The accompanying notes are an integral part of these consolidated financial statements

Multi-Housing Income REIT, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31, 2022 and 2021

The accompanying notes are an integral part of these consolidated financial statements

Multi-Housing Income REIT, LLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the years ended December 31, 2022 and 2021

The accompanying notes are an integral part of these consolidated financial statements

Multi-Housing Income REIT, LLC

CONSOLIDATED STATEMENTS OF CASH FLOW

For the years ended December 31, 2022 and 2021

The accompanying notes are an intregral part of these consolidated financial statements

Multi-Housing Income REIT, LLC

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

Note 1 – Organization and nature of operation

Multi-Housing Income REIT, Inc. was formed as a Maryland corporation on October 17, 2017 to invest in and manage a diversified portfolio of multifamily properties located in target markets within the continental U.S. in the areas of student housing, multi- housing, conventional apartments and senior living. On March 1, 2022, the Company converted from a Maryland corporation to a Delaware limited liability company. The name of the Company was thereby also changed from Multi-Housing Income REIT, Inc. to Multi-Housing Income REIT, LLC (the “Company”). The Company has elected to continue to be treated as a corporation for federal and state tax purposes. The Company is externally managed by Casoro Investment Advisory Firm, LLC (“Manager”), which is an affiliate of the sponsor, Casoro Capital Partners, LP (“Sponsor”). The Manager and Sponsor are each wholly-owned subsidiaries of Casoro Capital, LLC.

The Company’s investing and management activities related to commercial real estate are all considered a single reportable business segment for financial reporting purposes. All of the investments the Company has made to date have been in domestic commercial real estate assets with similar economic characteristics, and the Company evaluates the performance of all of its investments using similar criterion.

Pursuant to the Form 1-A filed with the SEC with respect to the offering (the “Offering”) of up to $50,000,000 in common shares, the initial purchase price for all shares was $10.00 per share as of December 31, 2021. The Offering was declared to be qualified by the SEC on June 18, 2018. The Offering expired during 2021. As of December 31, 2022, and 2021, the Company has issued 609,841 and 614,001 shares respectively.

The company filed with the SEC a second offering of up to $75,000,000 in common shares, the initial purchase price for the second offering shares was $11.29 per share as of December 31, 2022. The Offering was declared to be qualified by the SEC on July 22, 2022.

The Company commenced substantial operations on November 30, 2018, when the minimum capital raise of $3,000,000 was reached.

The Company offered a Distribution Reinvestment Plan to shareholders. By opting into the Distribution Reinvestment Plan, shareholders are authorizing the Company to automatically reinvest any distributions that the shareholders receive from the Company into additional shares of the Common Stock, and to issue additional shares of Common Stock to the shareholders based on the then current price per share of the Common Stock.

Note 2 – Summary of significant accounting policies

Basis of presentation and principles of consolidation:

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

GAAP requires any subsidiaries, investments, or affiliates under the Company’s control to be consolidated. The consolidated financial statements of the Company include its wholly owned subsidiary Casoro Chronos, LP (Chronos) which was acquired in 2020. On November 29, 2021, Chronos was sold to a third party (see Note 3).

Multi-Housing Income REIT, LLC

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

Use of estimates:

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual events and results could differ from those assumptions and estimates.

Cash and cash equivalents:

Cash and cash equivalents consist of demand deposits held at federally insured financial institutions. At times, amounts held at these financial institutions, may exceed the amount insured by the Federal Deposit Insurance Corporation. To date the Company has not experienced any losses on cash.

Commercial real estate investments:

The majority of the Company’s investments are limited partnership interests of entities that own commercial real estate and less than 10% of the net asset value of the entity the Company invested in. Therefore, the Company carries the value of these investments at cost, until there is an event that would require adjustment to the value, such as a return of capital in the form of a distribution. There are five investments that exceed 10% of the net asset value of the entity, Casoro JAX LP, Casoro LACH LP, PPA Water Ridge, LP, CG Jax Investors, LP, and CG Sunset Land LLC. Because these investments exceed 10% of the net asset value of the entity, the Company has accounted for these investments using the equity method reflecting equity in gains of the investee to the Company of $20,901 and $14,009 which is represented on statements of operations for the years ended December 31, 2022 and 2021.

The summarized balance sheet and statement of operations of the operating entities utilizing the equity method at December 31, 2022 and 2021 is as follows: