An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this preliminary offering circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This preliminary offering circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of such state. The Company may elect to satisfy its obligation to deliver a final offering circular by sending you a notice within two business days after the completion of the Company’s sale to you that contains the URL where the final offering circular or the offering statement in which such final offering circular was filed may be obtained.

PRELIMINARY OFFERING CIRCULAR DATED APRIL 15, 2019

 REITless Impact Opportunity Zone Strategies LLC

Sponsored by North Capital Investment Technology, Inc.

Up to $50,000,000 in Common Shares

REITless Impact Opportunity Zone Strategies LLC (the “Company”) is a newly organized Delaware limited liability company formed to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity. The Company will focus its investment activity in designated “qualified opportunity zones” (“Opportunity Zones”), as designated by the recently enacted 2017 H.R. 1, known as the Tax Cuts and Jobs Act of 2017 (“TCJA”), so as to allow the Company to be classified as a “qualified opportunity fund.” There can be no guarantee that we will so qualify, or that any investor will realize any tax advantages of investing in an qualified opportunity fund as a result of investment in the Company. See “Risk Factors.” A key objective of the Company is to generate positive social and environmental impact alongside a financial return.

We are externally managed by North Capital, Inc. (the “Manager”), an SEC-registered investment advisor and an affiliate of North Capital Investment Technology, Inc. (“NCIT” or the “Sponsor”). Registration with the SEC does not imply a certain level of skill or training.  NCIT owns and operates an online investment platform www.reitless.com (the “REITless Platform”) that allows investors to become equity or debt holders in real estate opportunities that may have been historically difficult to access for some investors. Through the use of the REITless Platform, investors can browse real estate debt investments, view details of an investment, execute legal documents, and arrange for payments online. We intend to qualify as a real estate investment trust, or REIT, for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2019, which may be extended by our board of directors until the taxable year ending December 31, 2020.

We are offering up to $50,000,000 in our common shares, which represent limited liability company interests in the Company, to the public at $10.00 per share. The minimum investment in our common shares for initial purchases is 100 shares, or $1,000, based on the current per share price. In addition, our Sponsor and its officers and employees intend to purchase up to 50,000 common shares from us at $10.00 per share in a private placement once the minimum threshold is met (including 100 common shares already owned by the Sponsor). We expect to offer common shares in this offering until we raise the maximum amount being offered, unless terminated by our Sponsor at an earlier time or extended in accordance with the terms of this offering circular. Until the date that is one year from the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC, the per share purchase price for our common shares will be $10.00 per share, an amount that was arbitrarily determined by the Manager. Thereafter, the per share purchase price in this offering will be adjusted every fiscal quarter as of the last business day of March, June, September, and December, and will equal the quotient of our Net Asset Value, or NAV, divided by the number of our common shares outstanding as of the end of the subject fiscal quarter (NAV per share). We have adopted a redemption plan designed to provide our shareholders with limited liquidity on a quarterly basis for their investment in our shares.

We intend to distribute the Company’s shares principally through the REITless Platform and through broker-dealers and other qualified intermediaries engaged by the Manager on behalf of the Company. See “Plan of Distribution.”

Investing in the Company’s common shares is speculative and involves substantial risks. You should purchase these securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 26 to read about the more significant risks you should consider before buying our common shares. These risks include the following:

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the SEC; however, the SEC has not made an independent determination that the securities offered are exempt from registration.

The use of projections or forecasts in this offering is prohibited. No one is permitted to make any oral or written predictions about the cash benefits or tax consequences you will receive from your investment in our common shares.

We will offer our common shares on a best efforts basis through the online REITless Platform. The Sponsor’s wholly owned subsidiary, North Capital Private Securities Corporation (“NCPS”), is a registered broker-dealer, member FINRA and SIPC, and will be involved in the distribution of the common shares through the REITless Platform, through selling agreements with other broker-dealers and other qualified intermediaries, and through wholesale distribution to institutional investors and registered investment advisors evaluating the common shares on behalf of their clients.

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 non-natural persons and we are entitled to apply different rules to accredited investors as defined under Rule 501(a) of Regulation D. 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.

This Offering Circular follows the Form S-11 disclosure format.

The date of this offering circular is ______, 2019

IMPORTANT INFORMATION ABOUT THIS OFFERING CIRCULAR

Please carefully read the information in this offering circular and any accompanying offering circular supplements, which we refer to collectively as the offering circular. You should rely only on the information contained in this offering circular. We have not authorized anyone to provide you with different information. This offering circular may only be used where it is legal to sell these securities. You should not assume that the information contained in this offering circular is accurate as of any date later than the date of this offering circular or such other dates as are stated in this offering circular or as of the respective dates of any documents or other information incorporated by reference into this offering circular.

This offering circular is part of an offering statement that we filed with the Securities and Exchange Commission (the “SEC”), using a continuous offering process.

Periodically, as we make material investments, update our quarterly NAV per share amount, or have other material developments, we will provide an offering circular supplement that may add, update or change information contained in this offering circular. Any statement that we make in this offering circular will be modified or superseded by any inconsistent statement made by us in a subsequent offering circular supplement. The offering statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this offering circular. You should read this offering circular and the related exhibits filed with the SEC and any offering circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC. See the section entitled “Additional Information” below for more details.

The offering statement and all supplements and reports that we have filed or will file in the future can be read at the SEC website, www.sec.gov, or on the REITless Platform website, www.reitless.com. The contents of the REITless Platform website (other than the offering statement, this offering circular and the appendices and exhibits thereto) are not incorporated by reference in or otherwise a part of this offering circular.

Our Sponsor and those selling shares on our behalf in this offering will be permitted to make a determination that the purchasers of shares in this offering are “qualified purchasers” in reliance on the information and representations provided by the shareholder regarding the shareholder’s financial situation. 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.

TABLE OF CONTENTS

STATE LAW EXEMPTION AND PURCHASE RESTRICTIONS

The Company’s common shares are being offered and sold only to “qualified purchasers” (as defined in Regulation A under the Securities Act). As a Tier 2 offering pursuant to Regulation A under the Securities Act, this offering will be exempt from state law “Blue Sky” review, subject to meeting certain state filing requirements and complying with certain anti-fraud provisions, to the extent that our common shares are offered and sold only to “qualified purchasers” or at a time when our common shares are listed on a national securities exchange. “Qualified purchasers” include: (i) “accredited investors” under Rule 501(a) of Regulation D and (ii) all other investors so long as their investment in our common shares does not represent more than 10% of the greater of their annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). However, our common shares are being offered and sold only to those investors that are within the latter category (i.e., investors whose investment in our common shares does not represent more than 10% of the applicable amount), regardless of an investor’s status as an “accredited investor.” Accordingly, we reserve the right to reject any investor’s subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a “qualified purchaser” for purposes of Regulation A.

To determine whether a potential investor is an “accredited investor” for purposes of satisfying one of the tests in the “qualified purchaser” definition, the investor must be a natural person who has:

If the investor is not a natural person, different standards for accreditation apply. See Rule 501 of Regulation D for more details.

For purposes of determining whether a potential investor is a “qualified purchaser,” annual income and net worth should be calculated as provided in the “accredited investor” definition under Rule 501 of Regulation D. In particular, net worth in all cases should be calculated excluding the value of an investor’s home, home furnishings and automobiles.

QUESTIONS AND ANSWERS ABOUT THIS OFFERING

The following questions and answers about this offering highlight material information regarding us and this offering that is not otherwise addressed in the “Offering Summary” section of this offering circular. You should read this entire offering circular, including the section entitled “Risk Factors,” before deciding to purchase our common shares.

In this offering circular, we refer to an entity that qualifies to be taxed as a real estate investment trust for U.S. federal income tax purposes as a REIT. We intend to elect to be treated as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2019, which may be extended by our board of directors until the taxable year ending December 31, 2020.

Investors receive the following tax benefits when investing in a Qualified Opportunity Fund:

In other words, a shareholder would receive back their original investment amount, from the redemption price paid, prior distributions received and distributions that have been declared (and that will be received when paid), but would not receive any amounts in excess of their original investment amount.

Beginning with the first day of the second quarter following the settlement of the common shares subject to the redemption request (the “Regular Investment Period”), the per share redemption price will be calculated based on a declining discount to the per share price for our common shares in effect at the time of the redemption request, and rounded down to the nearest cent. In addition, the redemption plan is subject to certain liquidity limitations, which may fluctuate depending on the liquidity of the real estate assets held by us. During the Regular Investment Period, the redemption price with respect to the common shares that are subject to the redemption request will not be reduced by the aggregate sum of distributions, if any, that have been (i) paid with respect to such shares prior to the date of the redemption request or (ii) declared but unpaid on such shares with record dates during the period between the redemption request date and the redemption date.

In the event the Manager determines, in its sole discretion, that we do not have sufficient funds available to redeem all of the common shares for which redemption requests have been submitted in any given calendar quarter, as applicable, such pending requests will be honored on a pro rata basis In the event that not all redemptions are being honored in a given quarter, the pro rata distributions will be rounded down to the nearest share for each shareholder. For investors who hold common shares with more than one record date, redemption requests will be applied to such common shares in the order in which they settled, on a last in first out basis – meaning, those common shares that have been continuously held for the shortest amount of time will be redeemed first.

In accordance with the SEC’s current guidance on redemption plans contained in T-REIT Inc. (June 4, 2001) and Wells Real Estate Investment Trust II, Inc. (Dec. 3, 2003), we are prohibited from redeeming more than 5.0% of the weighted average number of common shares outstanding during the prior calendar year. Accordingly, we presently intend to limit the number of shares to be redeemed during any calendar quarter to 1.25% of the common shares outstanding, with excess capacity carried over to later calendar quarters in that calendar year. However, as we intend to make a number of different commercial real estate investments, the Manager may elect to increase or decrease the amount of common shares available for redemption in any given calendar quarter, as these commercial real estate assets are traded or sold, but in no event will we redeem more than 5.0% during any calendar year. 

Notwithstanding the foregoing, we are not obligated to redeem common shares under the redemption plan, and, further, the Manager may, in its sole discretion, amend, suspend, or terminate the redemption plan at any time without notice, in order to protect our operations and/or our non-redeeming shareholders, to prevent an undue burden on our liquidity, to preserve our status as a REIT, following any material change in our NAV, or for any other reason. However, in the event that we amend, suspend or terminate our redemption plan, we will file an offering circular supplement and/or Form 1-U, as appropriate, to disclose such amendment. See “Description of Our Common Shares—Quarterly Redemption Plan” for more details.

Following the completion of the offering, we will reimburse the Manager for the organization and offering expenses that the Manager has paid or will pay on our behalf. We will also reimburse the Manager for out-of-pocket expenses in connection with the origination of our commercial real estate investments, to the extent not reimbursed by a project sponsor. Additionally, we will reimburse the Manager for out-of-pocket expenses paid to third parties in connection with providing services to us, including license fees, auditing fees, fees associated with SEC reporting requirements, increases in insurance costs, Delaware taxes and filing fees, administration fees, fees for the services of an independent representative, and third-party costs associated with these expenses. This does not include overhead, employee costs, utilities or technology costs of the Manager, NCIT or their affiliates. The expense reimbursements that we will pay to the Manager include expenses incurred by our Sponsor in the performance of services under the shared services agreement between the Manager and our Sponsor. See “Management—Shared Services Agreement.” 

The payment by us of fees and expenses will reduce the cash available for investment and distribution and will directly impact our quarterly NAV. See “Management Compensation” for more details regarding the fees that will be paid to the Manager and its affiliates.

Any distributions that we make will directly impact our NAV, by reducing the amount of our assets. Our goal is to provide a reasonably predictable and stable level of current income, through quarterly distributions, while at the same time maintaining a fair level of consistency in our NAV. Over the course of your investment, your distributions plus the change in NAV per share (either positive or negative) will produce your total return.

However, our common shares are being offered and sold only to those investors that are within the latter category (i.e., investors whose investment in our common shares does not represent more than 10% of the applicable amount), regardless of an investor’s status as an “accredited investor.”

Net worth in all cases should be calculated excluding the value of an investor’s home, home furnishings and automobiles. We reserve the right to reject any investor’s subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a “qualified purchaser” for purposes of Regulation A. Please refer to the section above entitled “State Law Exemption and Purchase Restrictions” for more information.

We will provide this information to you by posting such information on the SEC’s website at www.sec.gov, on the REITless Platform at www.reitless.com, via e-mail, or, upon your consent, via U.S. mail.

REITless Impact Opportunity Zone Strategies LLC

c/o North Capital, Inc.

623 E Fort Union Blvd., Suite 101

Salt Lake City, UT 84047

info@reitless.com

OFFERING SUMMARY

This offering summary highlights material information regarding our business and this offering that is not otherwise addressed in the “Questions and Answers About this Offering” section of this offering circular. Because it is a summary, it may not contain all of the information that is important to you. To understand this offering fully, you should read the entire offering circular carefully, including the “Risk Factors” section before making a decision to invest in our common shares.

REITless Impact Opportunity Zone Strategies LLC

REITless Impact Opportunity Zone Strategies LLC is a newly organized Delaware limited liability company formed to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity. The Company will focus its investment activity in designated Opportunity Zones, so as to allow the Company to be classified as a Qualified Opportunity Fund.

The Company will focus its investment activity in designated Opportunity Zones, so as to allow the Company to be classified as a Qualified Opportunity Fund, for which special tax preferences may apply. A key objective of the Company is to generate positive social and environmental impact alongside a financial return.

We intend to operate in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes. Among other requirements, REITs are required to distribute to shareholders at least 90% of their annual REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain).

Our office is located at 623 E Fort Union Blvd., Suite 101, Salt Lake City, UT 84047. Our telephone number is (888) 625-7768. Information regarding the Company is also available on our web site at www.reitless.com. Information about the Sponsor and the Manager is available on the NCIT website, at www.northcapital.com.

Investment Strategy

We intend to use substantially all of the proceeds of this offering to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, and to invest in other estate-related assets.

We will seek to create and maintain a diversified portfolio of investments that generate cashflow through the periodic payment of rents and/or preferred dividends, allowing us to make regular dividend distributions to our shareholders.

We also plan to invest in development and redevelopment projects that have the potential for long-term capital appreciation, so as to afford investors the opportunity to realize tax-free capital gains on any investment held more than ten years, according to the rules affording such preference to Opportunity Funds.

In addition to financial returns, The Company will focus on single- and multi-family commercial real estate investment opportunities that have a high potential to generate positive social and environmental impact.

Our Manager intends to directly structure, underwrite and manage most of the investments we make, whether in development or redevelopment projects, common or preferred equity, alone or in partnership with others. Our underwriting process will involve comprehensive and systematic financial, structural, operational and legal due diligence of our partners and the underlying projects, in order to identify and structure investments that meet our investment requirements. We feel the market environment offers a broad range of opportunities to source compelling investments with attractive risk-return profiles.

Investment Objectives

Our primary investment objectives are:

Market Opportunities

The TCJA established a new program called Qualified Opportunity Funds to provide tax benefits for investments in certain designated low-income and distressed communities in the United States. Qualified Opportunity Funds have the potential to be a major catalyst for investment to spur the redevelopment and economic growth of these communities across the country.

As of this date of the offering circular, there is considerable uncertainty regarding the Qualified Opportunity Zone program, as the U.S. Department of the Treasury has released only limited guidance regarding the implementation of the applicable provisions of TCJA. Accordingly, the discussion below of various aspects of the Opportunity Zone program is based upon analysis that our Manager believes to be reasonable given the statute as currently written, and considering prior Treasury and IRS precedent; however, we cannot assure you that the information below will ultimately prove to be accurate, as the Service begins to issue new guidance affecting these matters.

Investors receive the following three potential tax benefits when investing in Qualified Opportunity Funds:

We believe that the near- and medium-term market for investment in single- and multi-family real estate preferred and common equity and real estate related securities is compelling from a risk-return perspective. The tax preference created by the TCJA may prove to be unprecedented in modern times. In addition to allowing investors the opportunity to defer taxes owed on capital gains realized from any source up to December 31, 2026 if the proceeds are reinvested in a Qualified Opportunity Fund, any gains related to the investment in such a fund are exempt from U.S. federal income tax if the investment is held for at least ten years. We believe that our investment strategy, combined with the investment expertise of the Manager’s management team, and the unique tax preferences available to Qualified Opportunity Funds, will provide opportunities to originate investments with attractive expected returns and strong structural features, in order to seek an attractive risk-return profile for the Company and our shareholders. We also believe that we will be able to create a favorable social and/or environmental impact through our investments. 

Our Manager

North Capital, Inc., the Manager, manages our day-to-day operations. Our Manager is an affiliate of our Sponsor. A team of investment professionals, acting through the Manager, will make all the decisions regarding the selection, negotiation, financing and disposition of our investments, subject to the limitations in our operating agreement. Our Manager will also be responsible for asset management, marketing, investor relations and other administrative services on our behalf with the goal of maximizing our operating cash flow and preserving our invested capital. NCIT, our Sponsor, is also able to exercise significant control over our business. North Capital, Inc. is an SEC-registered investment advisor. Registration with the SEC does not imply a certain level of skill or training.

About the REITless Platform

The Company is an affiliate of the Sponsor, which is the owner and operator of an online financial platform focused on real estate investments, which may be found on the website: www.reitless.com (the “REITless Platform”).

James P. Dowd is the founder and Chief Executive Officer of NCIT, our Sponsor. Mr. Dowd is responsible for overseeing the day-to-day operations of the Sponsor, the Manager, and their affiliates.

Our Structure

The chart below shows the relationship among various NCIT affiliates and the Company as of the date of this offering circular.

Management Compensation

Our Manager and its affiliates will receive fees and expense reimbursements for services relating to this offering and the investment and management of our assets. The items of compensation are summarized in the following table. Neither the Manager nor its affiliates will receive any selling commissions or dealer manager fees in connection with the offer and sale of our common shares.

No portion of the fees detailed below will be allocated to any individual in his or her capacity as an executive officer of our Sponsor or Manager.

See “Management Compensation” for a more detailed explanation of the fees and expenses payable to the Manager and its affiliates.

Summary of Risk Factors

Investing in our common shares involves a high degree of risk. You should carefully review the “Risk Factors” section of this offering circular, beginning on page 26, which contains a detailed discussion of the material risks that you should consider before you invest in our common shares.

 Conflicts of Interest

Our Manager and its affiliates will experience conflicts of interest in connection with the management of our business. Some of the material conflicts that the Manager and its affiliates will face include the following:

Distributions

We expect the Manager to declare and pay distributions quarterly in arrears commencing in the second full year after the year in which we make our first real estate-related investment; however, the Manager may declare other periodic distributions as circumstances dictate. In order that investors may generally begin receiving distributions immediately upon our acceptance of their subscription, we expect to authorize and declare distributions based on daily record dates.

Any distributions we make will be at the discretion of the Manager, and will be based on, among other factors, our present and reasonably projected future cash flow. Distributions will be paid to shareholders as of the record dates selected by the Manager. In addition, the Manager’s discretion as to the payment of distributions will be limited by the REIT distribution requirements, which generally require that we make aggregate annual distributions to our shareholders of at least 90% of our REIT taxable income, computed without regard to the dividends paid deduction and excluding net capital gain. Moreover, even if we make the required minimum distributions under the REIT rules, we will be subject to U.S. federal income and excise taxes on our undistributed taxable income and gains. As a result, the Manager intends to make such additional distributions, beyond the minimum REIT distribution, to avoid such taxes. See “Description of Our Common Shares — Distributions” and “U.S. Federal Income Tax Considerations.”

Any distributions that we make will directly impact our NAV, by reducing the amount of our assets. Our goal is to provide a reasonably predictable and stable level of current income, through quarterly or other periodic distributions, while at the same time maintaining a fair level of consistency in our NAV. Over the course of your investment, your distributions plus the change in NAV per share (either positive or negative) will produce your total return.

Our distributions will generally constitute a return of capital to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. To the extent that a distribution is treated as a return of capital for U.S. federal income tax purposes, it will reduce a holder’s adjusted tax basis in the holder’s shares, and to the extent that it exceeds the holder’s adjusted tax basis will be treated as gain resulting from a sale or exchange of such shares.

Borrowing Policy

We intend to employ conservative levels of borrowing in order to provide additional funds to support our investment activities. Our target portfolio-wide leverage after we have acquired an initial substantial portfolio of diversified investments is between 0-75% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. During the period when we are beginning our operations and growing our portfolio, we may employ greater leverage on individual assets (that will also result in greater leverage of the initial portfolio) in order to quickly build a diversified portfolio of assets. Our Manager may from time to time modify our leverage policy in its discretion in light of then-current economic conditions, relative costs of debt and equity capital, market values of our properties, general conditions in the market for debt and equity securities, growth and acquisition opportunities or other factors. However, other than during our initial period of operations, it is our policy to not borrow more than 75% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. We cannot exceed the leverage limit of our leverage policy unless any excess in borrowing over such level is approved by the Manager’s Research Committee. See “Investment Objectives and Strategy” for more details regarding our leverage policies.

Valuation Policies

We expect to engage an independent valuation agent with expertise in appraising commercial real estate and other real estate-related financial assets to provide annual valuations of the investments of the Company, including related liabilities, to be set forth in reports of the underlying investments, and to adjust those valuations for events known to the independent valuation agent that it believes are likely to have a material impact on previously provided estimates of the value of the affected investments and related liabilities. Our Manager will inform the independent valuation expert if a material event occurs between scheduled annual valuations that the Manager believes may materially affect the value of our assets.

At the end of each fiscal quarter, beginning with the first fiscal quarter following the commencement of this offering, our internal accountants will calculate our NAV per share using a process that reflects (1) estimated values of each of our investments, including related liabilities provided periodically by our independent valuation expert in reports of the underlying real estate, as they may be updated upon certain material events described below, (2) quarterly updates in the price of liquid assets for which third party market quotes are available, (3) accruals of our quarterly or other periodic distributions, and (4) estimates of quarterly accruals, on a net basis, of our operating revenues, expenses and fees.

The independent valuation expert will not be responsible for, and will not prepare, our quarterly aggregate NAV or NAV per share.

Our goal is to provide a reasonable estimate of the market value of the Company’s shares on a quarterly basis. However, the majority of our assets will consist of commercial real estate and other real estate-related assets. As with any non-traded investment valuation protocol, the conclusions reached by our independent valuation expert will be based on a number of judgments, assumptions and opinions about future events that may or may not prove to be correct. The use of different judgments, assumptions or opinions would likely result in different estimates of the value of our commercial real estate assets and investments. In addition, for any given quarter, our published NAV per share may not fully reflect certain material events, to the extent that the financial impact of such events on our portfolio is not immediately quantifiable. As a result, the quarterly calculation of our NAV per share is unlikely to reflect the precise amount that might be paid for the Company’s shares in a market transaction, and any potential disparity in our NAV per share may be in favor of either shareholders who redeem their shares, or shareholders who buy new shares, or existing shareholders. However, to the extent quantifiable, if a material event occurs in between quarterly updates of NAV that would cause our NAV per share to change by 5% or more from the last disclosed NAV, we will disclose the updated price and the reason for the change in an offering circular supplement as promptly as reasonably practicable and will update the NAV information provided on our website.

Impact Assessment

Quantifying the social and environmental impact of investments made by the Company is inherently subjective, because there is no market benchmark and generally no directly comparable investments that can be used for comparative analysis. The Company will produce a quarterly report that describes all of its investments during the quarter, along with the qualitative impact on the communities where they have been made. The Company may, in its sole discretion, engage outside advisors or consultants to report upon the impact of the Company’s investments. The report will be publicly available on the public REITless Platform, www.reitless.com, and will be distributed to shareholders of record.

Quarterly Share Price Adjustments

Our Manager set our initial offering price at $10.00 per share, which will continue to be the purchase price of our common shares until the date that is one year from the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC. Thereafter, the per share purchase price in this offering will be adjusted every fiscal quarter and, as of January 1st, April 1st, July 1st and October 1st of each year (or as soon as commercially reasonable and announced by us thereafter), will be equal to the greater of (i) $10.00 per share or (ii) our NAV divided by the number of shares outstanding as of the close of business on the last business day of the prior fiscal quarter, in each case prior to giving effect to any share purchases or redemptions to be effected on such day.

Beginning after the date that is one year from the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC, we will file with the SEC on a quarterly basis an offering circular supplement disclosing the quarterly determination of our NAV per share that will be applicable for such fiscal quarter, which we refer to as the pricing supplement. We will also post that fiscal quarter’s NAV on the public REITless Platform, www.reitless.com. The REITless Platform will also contain this offering circular, including any supplements and amendments. We will disclose, on a quarterly basis in an offering circular supplement filed with the SEC, the principal valuation components of our NAV. In addition, if a material event occurs in between quarterly updates of NAV that would cause our NAV per share to change by 5% or more from the last disclosed NAV, we will disclose the updated price and the reason for the change in an offering circular supplement as promptly as reasonably practicable and will update the NAV information provided on our website.

Any subscriptions that we receive prior to the end of a fiscal quarter will be executed at a price equal to our NAV per share applicable to such fiscal quarter. See “Description of Our Common Shares—Quarterly Share Price Adjustments” for more details.

Quarterly Redemption Plan

Our common shares are not currently listed on a national securities exchange or included for quotation on a national securities market, and currently there is no intention to list our common shares. While shareholders should view this investment as long-term, with poor liquidity, we have adopted a redemption plan whereby, on a quarterly basis, an investor may have the opportunity to obtain limited liquidity. The Manager has designed our redemption plan with a view towards offering investors with an initial period during which to decide whether a long-term investment in the Company is appropriate for their portfolio. In addition, despite the illiquid nature of the assets expected to be held by the Company, the Manager believes it is in the best interest of all shareholders to provide the opportunity for limited quarterly liquidity in the event a shareholder needs it, by offering a discounted redemption price prior to year 5. The difference between the NAV and the discounted value would accrue to shareholders who have not requested redemption. Neither the Manager nor our Sponsor receives any economic benefit as a result of the discounted redemption price through year 5.

Pursuant to our redemption plan, shareholders may request that we redeem at least 10% of their shares. In addition, the redemption plan is subject to certain aggregate redemption limits, which may fluctuate depending on the liquidity of the real estate assets held by us.

For the first quarter following the settlement of the common shares subject to the redemption request (the “Preliminary Investment Period”), the per share redemption price will be equal to the purchase price of the shares being redeemed reduced by

In other words, a shareholder would receive back their original investment amount, from the redemption price paid, prior distributions received and distributions that have been declared (and that will be received when paid), but would not receive any amounts in excess of their original investment amount.

Beginning with the first day of the second quarter following the settlement of the common shares subject to the redemption request (the “Regular Investment Period”), the per share redemption price will be calculated based on a declining discount to the per share price for our common shares in effect at the time of the redemption request, and rounded down to the nearest cent. In addition, the redemption plan is subject to certain aggregate liquidity limitations, which may vary depending on the underlying liquidity of the real estate assets held by us. During the Regular Investment Period, the redemption price with respect to the common shares that are subject to the redemption request will not be reduced by the aggregate sum of distributions, if any, that have been (i) paid with respect to such shares prior to the date of the redemption request or (ii) declared but unpaid on such shares with record dates during the period between the redemption request date and the redemption date.

Because our NAV per share will be calculated at the end of each quarter beginning on the date that is one year from the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC, the redemption price for shares held at least ninety (90) days may change between the date we receive the redemption request and the date on which redemption proceeds are paid. As a result, the redemption price that a shareholder will receive may be different from the redemption price on the day the redemption request is made.

Redemption of our common shares will be made quarterly upon written request to us at least 15 days prior to the end of the applicable calendar quarter; provided, however, written requests for common shares to be redeemed during the Preliminary Investment Period must be delivered to the Manager prior to the end of such common shares’ Preliminary Investment Period; provided, further, such redemption request must be presented to the Company at least 10 business days prior to the end of each calendar quarter (e.g., if an investment in common shares settled on March 30, 2019, a redemption request for June 30, 2019 must be delivered to the Manager no later than June 16, 2019). The Manager intends to provide notice of redemption by the last business day of each quarter, with an effective redemption date as of the last business day of such quarter, and to endeavor to remit the redemption proceeds within 10 business days of the end of such quarter; although payment of the redemption proceeds may be delayed until 31 calendar days after the end of such quarter, due to exigent circumstances, including, without limitation, (1) our project sponsor(s), partners, or vendors fail to provide adequate information regarding the Company’s investments within a time frame that allows us to perform our NAV calculation, which in turn would prevent us from determining redemption prices applicable to the shares being redeemed; (2) macro-economic crises or micro-level events, such as damage to a property that could impair one or more of our investments, that may affect our ability to make redemptions or determine NAV; and (3) our payment processing provider chooses to discontinue service or has technical outages that prevent us from processing share redemptions in a timely manner. Shareholders may withdraw their redemption request at any time up to five (5) business days prior to the end of the calendar quarter in which the redemption request was submitted.

We cannot guarantee that the funds set aside for the redemption plan will be sufficient to accommodate all requests made in any calendar quarter. In the event the Manager determines, in its sole discretion, that we do not have sufficient funds available to redeem all of the common shares for which redemption requests have been submitted in any given calendar quarter, such pending requests will be honored on a pro rata basis. In the event that not all redemptions are being honored in a given quarter, the pro rata distributions will be rounded down to the nearest share for each shareholder. For investors who hold common shares with more than one record date, redemption requests will be applied to such common shares in the order in which they settled, on a last in first out basis – meaning those common shares that have been continuously held for the shortest amount of time will be redeemed first. We intend to limit common shareholders to one (1) redemption request outstanding at any given time, meaning that, if a common shareholder desires to request more or less shares be redeemed, such common shareholder must first withdraw the first redemption request, which may affect whether the request is considered in the “Preliminary Investment Period” or “Regular Investment Period.”

In accordance with the SEC’s current guidance on redemption plans contained in T-REIT Inc. (June 4, 2001) and Wells Real Estate Investment Trust II, Inc. (Dec. 3, 2003), we are prohibited from redeeming more than 5.0% of the weighted average number of common shares outstanding during the prior calendar year. Accordingly, we presently intend to limit the number of shares to be redeemed during any calendar quarter to 1.25% of the common shares outstanding, with excess capacity carried over to later calendar quarters in that calendar year. However, as we intend to make a number of commercial real estate investments of varying types, the Manager may elect to increase or decrease the amount of common shares available for redemption in any given calendar quarter, as these commercial real estate assets are sold, but in no event will we redeem more than 5.0% during any calendar year. Notwithstanding the foregoing, we are not obligated to redeem common shares under the redemption plan.

There is no fee in connection with a redemption of our common shares, and the discount applied to the redemption price is for the sole benefit of shareholders who remain as shareholders of the Company, and does not provide any economic benefit to the Manager or Sponsor; however, a shareholder requesting redemption will be responsible for reimbursing us for any third-party costs incurred as a result of the redemption request, including but not limited to, bank transaction charges, custody fees, and/or transfer agent charges.

In addition, the Manager may, in its sole discretion, amend, suspend, or terminate the redemption plan at any time without notice, in order to protect our operations and/or our non-redeeming shareholders, to prevent an undue burden on our liquidity, to preserve our status as a REIT, following any material change in our NAV, or for any other reason. However, in the event that we amend, suspend or terminate our redemption plan, we will file an offering circular supplement and/or Form 1-U, as appropriate, to disclose such amendment. The Manager also may, in its sole discretion, decline any particular redemption request if it believes such action is necessary to preserve the Company’s status as a REIT. Therefore, you may not have the opportunity to make a redemption request prior to any potential termination of our redemption plan. 

Please refer to the section entitled “Description of Our Common Shares—Quarterly Redemption Plan” for more information.

Liquidity Event

Subject to then existing market conditions, we expect to consider options for providing liquidity to our shareholders beginning five years from the completion of this offering. While we expect to seek a liquidity transaction during this time frame, we cannot assure you that a suitable opportunity to obtain liquidity on acceptable terms will be available or that market conditions for a transaction will be favorable during this time frame. Our Manager has the discretion to consider a liquidity transaction at any time if it determines such event to be in the best interests of the Company’s shareholders. A liquidity transaction could consist of a sale or a roll-off to scheduled maturity of our assets, a sale or merger of the Company, a consolidation transaction with other companies managed by the Manager or its affiliates, a listing of our common shares on a national securities exchange or a similar transaction. The Company does not have a stated term, as we believe setting a finite date for a possible, but uncertain, future liquidity transaction may result in actions that are not necessarily in the best interest or within the expectations of our shareholders.

Voting Rights

Our common shareholders will have voting rights only with respect to certain matters, primarily relating to amendments to our operating agreement that would, if adopted, adversely change the rights of the common shares, and removal of the Manager for “cause.” Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of common shareholders. Our shareholders do not elect or vote on retention of the Manager, and, unlike the holders of common shares in a corporation, have only limited voting rights on other key matters affecting our business, and therefore limited ability to influence decisions regarding our business. For additional information, see “Description of Our Common Shares—Voting Rights.”

Other Governance Matters

Other than the limited shareholder voting rights described above, our operating agreement vests most other decisions relating to our assets and to the business of the Company, including decisions relating to acquisitions, originations and dispositions, the engagement of asset managers, the issuance and redemption of securities in the Company, including additional common shares, mergers, dispositions, roll-up transactions, and other decisions relating to our business, in the Manager. See “Management” for more information about the rights and responsibilities of the Manager.

Investment Company Act Considerations

We intend to conduct our operations so that neither we, nor any of our subsidiaries, will be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis, which we refer to as “the 40% test.” Excluded from the term “investment securities,” among other things, are U.S. Government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

We anticipate that we will hold real estate and real estate-related assets described below (i) directly, (ii) through wholly owned subsidiaries, (iii) through majority-owned joint venture subsidiaries, and (iv) to a lesser extent through minority-owned joint venture subsidiaries.

We intend to, directly or through our subsidiaries, originate, invest in and manage a diversified portfolio of single-family and multi-family development and redevelopment projects and other real estate-related assets. We expect to use substantially all of the net proceeds from this offering to identify, structure and invest in single- and multi-family commercial real estate projects and other real estate related investments.

We will monitor our compliance with the 40% test and the holdings of our subsidiaries (if any) to ensure that each of our subsidiaries is in compliance with an applicable exemption or exclusion from registration as an investment company under the Investment Company Act.

The securities issued by any wholly owned or majority-owned subsidiary that we may form and that are excluded from the definition of “investment company” based on Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, may not have a value in excess of 40% of the value of our total assets on an unconsolidated basis.

The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person. We intend to treat companies in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries. The determination of whether an entity is a majority-owned subsidiary of the Company is made by us. We also intend to treat subsidiaries of which we or our wholly owned or majority-owned subsidiary is the manager (in a manager-managed entity) or managing member (in a member-managed entity) or in which our agreement or the agreement of our wholly owned or majority-owned subsidiary is required for all major decisions affecting the subsidiaries (which we refer to as “Controlled Subsidiaries”), as majority-owned subsidiaries even though none of the interests issued by such Controlled Subsidiaries meets the definition of voting securities under the Investment Company Act. We reached our conclusion on the basis that the interests issued by the Controlled Subsidiaries are the functional equivalent of voting securities. We have not asked the SEC staff for concurrence of our analysis and it is possible that the SEC staff could disagree with any of our determinations. If the SEC staff were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets. Any such adjustment in our strategy could have a material adverse effect on us.

We believe that neither we nor certain of our subsidiaries will be considered investment companies for purposes of Section 3(a)(1)(A) of the Investment Company Act because we and they will not engage primarily or hold themselves out as being primarily in the business of investing, reinvesting or trading in securities. Rather, we and such subsidiaries will be primarily engaged in non-investment company businesses related to real estate. Consequently, we and our subsidiaries expect to be able to conduct our operations such that none will be required to register as an investment company under the Investment Company Act.

Certain of our subsidiaries may also rely upon the exclusion from the definition of investment company under Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires an entity to invest at least 55% of its assets in "mortgages and other liens on and interests in real estate", which we refer to as "qualifying real estate interests", and at least 80% of its assets in qualifying real estate interests plus "real estate-related assets".

Qualification for exemption from registration under the Investment Company Act will limit our ability to make certain investments. To the extent that the SEC staff provides more specific guidance regarding any of the matters bearing upon such exclusions, we may be required to adjust our strategy accordingly, which may include further limitations. Any additional guidance from the SEC staff could provide additional flexibility to us, or it could further inhibit our ability to pursue the strategies we have chosen. 

The loss of our exclusion from regulation pursuant to the Investment Company Act could require us to restructure our operations, sell certain of our assets or abstain from the purchase of certain assets, which could have an adverse effect on our financial condition and results of operations. See “Risk Factors—Risks Related to Our Organizational Structure—Maintenance of our Investment Company Act exemption imposes limits on our operations, which may adversely affect our operations.”

RISK FACTORS

An investment in our common shares involves substantial risks. You should carefully consider the following risk factors in addition to the other information contained in this offering circular before purchasing shares. The occurrence of any of the following risks might cause you to lose all or a significant part of your investment. The risks and uncertainties discussed below are not the only ones we face, but do represent those risks and uncertainties that we believe are most significant to our business, operating results, prospects and financial condition. Some statements in this offering circular, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Statements Regarding Forward-Looking Information.”

Risks Related to an Investment in REITless Impact Opportunity Zone Strategies

We have no prior operating history, and the prior performance of our Sponsor or other real estate investment opportunities sponsored by our Sponsor may not predict our future results. 

We are a recently formed company and have no operating history. As of the date of this offering circular, we have not made any investments, and prior to our initial closing, have approximately $1,000 in cash. You should not assume that our performance will be similar to the past performance of our Sponsor or other real estate investment opportunities sponsored by our Sponsor. Our limited operating history significantly increases the risk and uncertainty you face in making an investment in our shares.

We cannot assure you that we will be successful in meeting the requirements to be classified as a Qualified Opportunity Fund under the TCJA.

We were organized with the express purposes of being classified as a Qualified Opportunity Fund under the TCJA. However, the TCJA is a relatively new law and its provisions regarding Qualified Opportunity Funds are as yet untested. In addition, future legislation or guidance from the IRS may negatively affect our ability to be classified as a Qualified Opportunity Fund. As of the date of this offering circular, we have not made or located any potential investments in Opportunity Zones. Therefore, you should not assume that we will be successful in achieving our investment objectives.

Because no public trading market for the Company’s shares currently exists, it will be difficult for you to sell the Company’s shares and, if you are able to sell your shares, you will likely sell them at a substantial discount to the public offering price. The limited Quarterly Redemption Plan offers limited liquidity for shareholders.

Our operating agreement does not require the Manager to seek shareholder approval to liquidate our assets by a specified date, nor does our operating agreement require the Manager to list the Company’s shares for trading on a national securities exchange by a specified date. There is no public market for the Company’s shares and we currently have no plans to list the Company’s shares on a stock exchange or other trading market. Until the Company’s shares are listed, if ever, you may not sell the Company’s shares unless the buyer meets the applicable suitability and minimum purchase standards. In addition, our operating agreement prohibits the ownership of more than 9.8% in value or number of our shares, whichever is more restrictive, or more than 9.8% in value or number of our common shares, whichever is more restrictive, unless exempted by the Manager, which may inhibit large investors from purchasing your shares. In its sole discretion, to protect our operations and our non-redeeming shareholders, to prevent an undue burden on our liquidity or to preserve our status as a REIT, the Manager may amend, suspend or terminate our redemption plan without notice. Further, the redemption plan includes numerous restrictions that limit your ability to sell your shares. We describe these restrictions in more detail under “Description of Our Common Shares — Quarterly Redemption Plan.” Therefore, it will be difficult for you to sell the Company’s shares at the time you wish to do so, if you are able to sell them at all. If you are able to sell your shares, you would likely have to sell them at a substantial discount to their public offering price. It is also likely that the Company’s shares would not be accepted by any lender as the primary collateral for a loan. Because of the illiquid nature of our shares, you should purchase the Company’s shares only as a long-term investment and be prepared to hold them for an indefinite period of time.

If we are unable to find suitable investments in Opportunity Zones for the Company, we may not be able to achieve our investment objectives or pay distributions to shareholders.

Our ability to achieve our investment objectives and to pay distributions to shareholders depends upon the performance of the Manager in identifying, structuring, and/or acquiring our investments in Opportunity Zones. The more money we raise through the sale of shares in this offering, the greater the challenge is for us to invest all of the net proceeds on suitable terms, and in particular to ensure that the Company holds at least 90% of its assets in Qualified Property. In some cases we may also depend upon the performance of third-party brokers and sponsors to identify suitable opportunities. Except for investments that may be described in supplements to this offering circular prior to the date you subscribe for our shares, you will have no opportunity to evaluate the economic merits or the terms of our investments before making a decision to invest in the Company. You must rely entirely on the abilities of the Manager and the partners and vendors with which Manager chooses to work.

To the extent that our Manager’s real estate professionals face competing demands upon their time in instances when we have capital ready for investment, we may face delays in execution. Further, because we are raising a “blind pool” whereby we are not committed to investing in any particular assets, it may be difficult for us to invest the net offering proceeds promptly, on attractive terms, or in a way that meets our social impact goals.

We cannot assure you that the Manager will be successful in obtaining suitable investments on financially attractive terms or that, if the Manager makes investments on our behalf, our objectives will be achieved. If we, through the Manager, are unable to find suitable investments in Opportunity Zones promptly, we will hold the proceeds from this offering in an interest-bearing account or will invest the proceeds in liquid investments in a manner that is consistent with our classification as a Qualified Opportunity Fund. If, over an extended period, we continue to be unsuccessful in sourcing suitable investments, we may decide to liquidate the Company. In the event we are unable to locate suitable investments on a timely basis after receiving subscriptions for our shares, we may be unable or limited in our ability to pay distributions, and we may not be able to meet our investment objectives. Further, the failure of our management to apply the net proceeds of this offering effectively or to find investments that meet our investment criteria, including our social impact criteria, in sufficient time or on acceptable terms could cause the value of our common shares to decline.

We may invest the net proceeds from this offering in investments with which you do not agree and would not make directly.

We will have a high degree of autonomy in investing the net proceeds of this offering. You will be unable to evaluate the manner in which the net proceeds of this offering are invested and will have no opportunity to assess our prospective investments. As a result, we may use the net proceeds from this offering to invest in investments with which you may not agree and would not support if you were evaluating the investment directly. This may be true for financial or social reasons. Our determination that an investment has the potential to produce a positive social or environmental impact may differ from your assessment, or our perspective on the entire landscape of “impact investments” may be different than yours.

If we pay distributions from sources other than cash flow from operations, we will have less capital available for investments and your overall return is likely to be reduced.

Although our distribution policy is to use our cash flow from operations to make distributions to shareholders, our operating agreement permits us to pay distributions from any source, including offering proceeds, borrowings, or sales of assets. We have not placed a cap on the use of proceeds to fund distributions. Until the proceeds from this offering are fully invested and from time to time during the operational stage, we may not generate sufficient cash flow from operations to fund distributions. If we pay distributions from sources other than our cash flow from operations, we will have less capital available to make investments, and your overall return is likely be reduced.

There is a risk that you may not receive distributions at all, or that distributions may not grow over time.

We intend to make distributions on a quarterly basis from assets legally available therefor to our shareholders in amounts such that all or substantially all of our REIT taxable income in each year, subject to certain adjustments, is distributed. We have not established a minimum distribution payment level and the amount of our distributions will vary over time. Our ability to pay distributions may be adversely affected by a number of factors, including the risk factors described in this offering circular. All distributions will be made at the discretion of our Manager and will depend on our earnings, our financial condition, maintenance of our REIT status and other factors that our Manager may deem to be relevant from time to time. Among the factors that could adversely affect our results of operations and impair our ability to pay distributions to our shareholders are:

A change in any one of these factors could affect our ability to make distributions. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions.

We may not be able to make distributions in the future or our Manager may change our distribution policy in the future. In addition, some of our distributions may include a return of capital. To the extent that we decide to pay distributions in excess of our current and accumulated tax earnings and profits, such distributions would generally be considered a return of capital for U.S. federal income tax purposes. A return of capital reduces the basis of a shareholder’s investment in our common shares to the extent of such basis and is treated as capital gain thereafter.

Future disruptions in the financial markets or deteriorating economic conditions could adversely impact the commercial real estate market, which could hinder our ability to implement our business strategy and generate returns to you.

We intend to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, and to invest in other real estate-related assets. Economic conditions greatly increase the risks of these investments, including the risk of price declines and vacancy rates that are greater than anticipated (see “— Risks Related to Our Investments”). If the value of individual projects or the portfolio as a whole were to decline, the Company could face pressure from lenders to repay its borrowings or increase the equity investment in the projects to reduce the leverage ratio. Depending on the Company’s liquidity position at the time, the Company might be forced to liquidate investments, which could reduce the value of your investment in our common shares.

In addition, revenues from the properties and other assets supporting any investments made by the Company could decrease, making it more difficult for the Company to cover its expenses and make distributions. Each of these factors would likely have a negative impact on the value of our common shares.

More generally, the risks arising from the financial market and economic conditions are applicable to all of the investments we may make. The risks apply variously to single- and multi-family real estate investments, and to preferred and common equity. They also apply to the debt and equity securities of companies that have investment objectives similar to ours, which could adversely affect the liquidity and value of our investments.

Future disruptions in the financial markets or deteriorating economic conditions may also impact the market for our investments and the volatility of our investments. The returns available to investors are determined, in part, by: (i) the supply and demand for such investments and (ii) the existence of a market for such investments, which includes the ability to sell or finance such investments. During periods of volatility, the number of investors participating in the market and amount of risk capital deployed may quickly change. If demand for these investments increases, the cost of our targeted investments may increase and the expected returns may decline. If demand for these investments decreases, or liquidity declines, expected returns on new investments will increase but the value of the Company’s existing portfolio is likely to fall, adversely affecting the NAV of current shareholders.

All of the factors described above could adversely impact our ability to implement our business strategy and make distributions to our investors and could decrease the value of an investment in common shares of the Company.

We may suffer from delays in locating suitable investments in Opportunity Zones, which could limit our ability to make distributions and lower the overall return on your investment.

We rely upon the Manager’s real estate professionals to identify and structure suitable investments for the Company. Our Sponsor and its affiliates also rely on these professionals to vet and conduct due diligence on investment opportunities. To the extent that the Manager’s and the Sponsor’s investment professionals face competing demands upon their time in instances when we have capital ready for investment, we may face delays in execution. Delays we encounter in the selection and origination of suitable projects would likely limit our ability to pay distributions to our shareholders and lower their overall returns. The fact that the Company is also focused on identifying investments with the potential to create a positive social and environmental impact exacerbates the difficult in sourcing suitable investments.

Additionally, the current market for single- and multi-family investment properties that meet our objectives is highly competitive. The more shares we sell in this offering, the greater our challenge will be to invest all of the net proceeds on favorable terms. Except for investments that may be described in supplements to this offering circular prior to the date you subscribe for our shares, you will have no opportunity to evaluate the terms of transactions or other economic or financial data concerning our investments. You must rely entirely on the management and oversight of our Manager, and the performance of any property manager hired by the Manager. We cannot be sure that our Manager will be successful in obtaining investments for the Company on suitable terms. We could also suffer from delays in locating suitable investments as a result of the limited scope of our intended investments in Opportunity Zones and our reliance on our Manager at times when its officers, employees, or agents are simultaneously seeking to locate suitable investments for other REITless investment programs.

Furthermore, where we acquire properties prior to the start of construction or during the early stages of construction, it will typically take several months to complete construction and rent the completed property. Therefore, you could suffer delays in the receipt of distributions attributable to those particular properties.

Opportunity Zones present unique risks due to their geographic locations.

The federal government created Opportunity Zones, and the TCJA created Qualified Opportunity Funds, in order to encourage new investment in areas that are economically distressed or under-developed and were previously relatively unattractive to investors. Specific Opportunity Zones are geographic regions that are designated by the governors of each state, and may include buildings that are run down and populations that are economically insecure. The investments that we plan to make, and the terms on which we will make them, will be investments that a traditional REIT or private or public real estate investor might not make absent the tax preference afforded to investors in Qualified Opportunity Funds.

Existing buildings may require substantially more attention and investment, the occupancy rates may be lower and more volatile, the credit risk of tenants may be higher, and it may be more difficult to hire contractors and other trade personnel to complete the work required to effect the Company’s investment strategy, reducing the return to our shareholders. The returns may not be as attractive as for investments that are not located in Opportunity Zones, because our expenses are going to be higher and our revenues not as high. The competitive environment for single- and multi-family investment properties located in Opportunity Zones means that we may end up overpaying for assets that are, relative to assets located outside Opportunity Zones, unattractive.

Because this is a blind pool offering, you will not have the opportunity to evaluate our investments before we make them, which makes your investment more speculative.

Because we have not yet acquired or identified any investments that we may make, we are not able to provide you with any information to assist you in evaluating the merits of any specific investments that we may make, except for investments that may be described in supplements to this offering circular. We will seek to invest substantially all of the offering proceeds available for investment, after the payment of fees and expenses, single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, and other real estate-related assets. However, because you will be unable to evaluate the economic merit or social impact of assets before we invest in them, you will have to rely entirely on the ability of our Manager to select suitable and successful investment opportunities. Furthermore, our Manager will have broad discretion in implementing policies regarding the criteria used to evaluate particular investment projects, and you will not have the opportunity to review or evaluate the criteria. These factors increase the risk that your investment may not generate returns comparable to our competitors, or meet our social impact objective.

You may be more likely to sustain a loss on your investment because our Sponsor does not have as strong an economic incentive to avoid losses as do sponsors who have made significant equity investments in their companies.

Upon the commencement of operations, our Sponsor, its directors and officers, will have only invested approximately $500,000 in us through the purchase of 50,000 of our common shares at $10.00 per share. Therefore, our Sponsor will have limited exposure to loss in the value of our shares. Without this exposure, our investors may be at a greater risk of loss because our Sponsor does not have as much to lose from a decrease in the value of the Company’s shares as do those sponsors who make more significant equity investments in their companies.

Because we are limited in the amount of funds we can raise, we will be limited in the number and type of investments we make and the value of your investment in us will fluctuate with the performance of the specific assets we acquire.

This offering is being made on a “best efforts” basis and we may begin to invest net proceeds from this offering immediately after the commencement of this offering. Further, under Regulation A, we are only allowed to raise up to $50 million in any 12-month period (although we may raise capital in other ways). We expect the size of the investments that we will make will average about $50,000 to $5 million per asset. As a result, the amount of proceeds we raise in this offering may be substantially less than the amount we would need to achieve a well-diversified portfolio of investments, even if we are successful in raising the maximum offering amount. If we are unable to raise substantial funds, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments that we make. In that case, the likelihood that any single asset’s performance would adversely affect our profitability will increase. Your investment in the Company’s shares will be subject to greater risk to the extent that we lack a diversified portfolio of investments. Further, we will have certain fixed operating expenses, including certain expenses in connection with certain SEC filings, regardless of whether we are able to raise substantial funds in this offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

Any adverse changes in our Sponsor’s financial position or our relationship with our Sponsor or its affiliates could hinder our operating performance and could adversely affect the return on your investment.

At this early stage in its development, NCIT has funded substantially all of its operations with proceeds from private financings. To meet its financing requirements in the future, it may raise funds through equity offerings, debt financings or strategic alliances. Raising additional funds may involve agreements or covenants that restrict NCIT’s business activities and options. Additional funding may not be available to it on favorable terms, or at all. If NCIT is unable to obtain additional funds, it may be forced to reduce or terminate its operations. Any inability for our Sponsor to fund its operations could have a material adverse effect on our business and operations.

We have engaged the Manager to manage our operations and our portfolio of single-family, multi-family, and other commercial real estate investments. Our Manager has a limited number of employees and relies upon our Sponsor’s personnel to perform certain services on its behalf for us. Our ability to achieve our investment objectives and to pay distributions is dependent upon the performance of our Manager, our Sponsor and their affiliates as well as our Sponsor’s and our Manager’s investment professionals to identify, structure, and acquire investments, to manage our assets and to ensure the regular operation of our day-to-day activities. Any adverse changes in our Sponsor’s financial condition or our relationship with our Sponsor could hinder the Manager’s ability to successfully manage our operations and our portfolio of investments.

Our ability to implement our investment strategy is dependent, in part, upon our ability to successfully conduct this offering through the REITless Platform, which makes an investment in us more speculative.

We will conduct this offering primarily through the REITless Platform, which is owned by NCIT, our Sponsor. Only a limited number of real estate investment opportunities have been offered through the REITless Platform prior to this offering. Our Sponsor has sponsored other real estate investment opportunities under other formats prior to this offering, but this is only the second REIT offering being offered through the REITless Platform. The success of this offering, and our ability to implement our business strategy, is dependent upon our ability to sell the Company’s shares to investors through the REITless Platform. If we are not successful in selling the Company’s shares through the REITless Platform, our ability to raise proceeds through this offering will be limited and we may not have adequate capital to implement our investment strategy. If we are unsuccessful in implementing our investment strategy, you could lose all or a part of your investment.

If we do not successfully implement a liquidity transaction, you may have to hold your investment for an indefinite period.

Although we presently intend to complete a transaction providing liquidity to shareholders in the future, our operating agreement does not require the Manager to pursue such a liquidity transaction. Market conditions and other factors could cause us to delay the listing of the Company’s shares on a national securities exchange, delay developing a secondary market, or delay the commencement of a liquidation or other type of liquidity transaction, such as a merger or sale of assets, beyond five years from the termination of this offering. If the Manager does decide to pursue a liquidity transaction, we would be under no obligation to conclude the process within a set time. If we adopt a plan of liquidation, the timing of the sale of assets will depend on real estate and financial markets, economic conditions in areas in which properties are located, and U.S. federal income tax effects on shareholders, that may prevail in the future. We cannot guarantee that we will be able to liquidate all assets. After we adopt a plan of liquidation, we would likely remain in existence until all of our investments are liquidated. If we do not pursue a liquidity transaction, or if we delay such a transaction due to market conditions, the Company’s shares may continue to be illiquid and you may, for an indefinite period of time, be unable to convert your investment to cash easily and could suffer losses on your investment.

We may change our targeted investments and investment guidelines without shareholder consent.

Our Manager may change our targeted investments and investment guidelines at any time without the consent of our shareholders, which could result in our making investments that are different from, and possibly more risky than, the investments described in this offering circular. A change in our targeted investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market volatility, all of which could adversely affect the value of our common shares and our ability to make distributions to you.

We have minimal capital, no significant assets and no revenue from operations.

We have minimal capital and for the foreseeable future will be wholly dependent upon our ability to finance our operations from the sale of equity or other financing alternatives. We cannot assure you that we will be able to successfully raise capital. The failure to successfully raise capital could result in our bankruptcy or other event that would have a material adverse effect on us and on the value of your shares. We have no significant assets or financial resources, so such adverse event could put your investment at significant risk.

The market in which we participate is competitive and, if we do not compete effectively, our results could be adversely affected.

The single- and multi-family commercial real estate market is competitive and rapidly changing, and the attention that Opportunity Zones are receiving is significant, as sponsors and managers seek to capitalize on this major new tax program. We expect competition to persist and intensify in the future, which could harm our ability to increase volume on our platform.

Our principal competitors include major banking institutions, private equity funds, real estate investment trusts, insurance companies, private lending funds, hedge funds, specialty finance companies, as well as online lending platforms that compete with the REITless Platform. Competition could result in fewer investment opportunities available to the Company, reduced margins, overpaying for the asset, or the failure of the REITless Platform to achieve or maintain more widespread market acceptance, any of which could harm our business. In addition, in the future we and the REITless Platform may experience new competition from more established internet companies possessing large, existing customer bases, substantial financial resources and established distribution channels. If any of these companies or any major financial institution decided to enter the real estate business, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed, adversely affecting your investment in the Company.

Most of our current or potential competitors listed above have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their platforms and distribution channels. We may not be able to compete successfully with our competitors for investments. In addition, the number of entities and the amount of funds competing for suitable investments may increase. If we pay higher prices for investments, our returns will be lower and the value of our assets may not increase or may decrease significantly below the amount we paid for such assets. If such events occur, you may experience a lower return on your investment or your per share NAV may decline.

Our potential competitors may also have longer operating histories, more extensive customer bases, greater brand recognition and broader customer relationships than we have. These competitors may be better able to develop new products, to respond quickly to new technologies and to undertake more extensive marketing campaigns. The online real estate investing industry is driven by constant innovation. If we or the REITless Platform are unable to compete with such companies and meet the need for innovation, the demand for the REITless Platform and the resultant opportunity to the Company could stagnate or substantially decline.

Our Sponsor may change our corporate structure and our Sponsor and Manager may change our investment guidelines without shareholder consent in order to maintain our status as a Qualified Opportunity Fund. 

While we were formed as a Delaware limited liability company, will initially elect to be treated as a taxable corporation, intend to elect to be taxed as a REIT and intend to invest primarily in assets located in Opportunity Zones, we cannot assure you that our Sponsor and Manager, as applicable, will maintain our organizational structure and investment guidelines in the future. There is a significant risk that our Sponsor and Manager, as applicable, may be required to change our organizational structure (including electing to be treated as a taxable corporation instead of as a REIT) or our investment guidelines without the consent of investors in order to maintain our status as a Qualified Opportunity Fund. Even then, we cannot assure you that we will qualify or maintain our status as a Qualified Opportunity Fund in the future.

We rely on third-party banks and on third-party computer hardware and software, in addition to software developed by the Sponsor and its affiliates. If we are unable to continue utilizing these services, our business and our ability to service the corresponding projects may be adversely affected.

We, the Sponsor, and the Manager all rely on third-party technology vendors and FDIC-insured depository institutions to process our transactions, including payments related to the development or redevelopment, leasing, and maintenance of projects in which the Company invests, processing of subscriptions under this offering and distributions to our shareholders. Under the Automated Clearing House (ACH) rules, if we experience a high rate of reversed transactions (known as “chargebacks”), we may be subject to sanctions and potentially disqualified from using the system to process payments. We also rely on leased computer services and software licensed from third parties. Hardware and software may be physically located off-site, as is often the case with “cloud services.” This leased or licensed hardware and software may not continue to be available on commercially reasonable terms, or at all. If we cannot continue to obtain such services elsewhere, or if we are not able to transition to another payment processor quickly, our ability to maintain the Platform will suffer and your ability to receive distributions will be delayed or impaired.

We are dependent on our Sponsor’s and our Manager’s key personnel, including all investment personnel, for our success.

Our future depends, in part, on the Manager’s ability to attract and retain key personnel. Our future also depends on the continued contributions of the executive officers and other key personnel of the Manager, each of whom would be difficult to replace. In particular, the Founder/Chief Executive Officer James Dowd, of our parent company and Sponsor, North Capital Investment Technology, Inc., who is also the Chief Executive Officer of the Manager, is critical to the management of our business and operations and the development of our strategic direction. The loss of the services of Mr. Dowd or other executive officers or key personnel of the Manager and the process to replace any of the Manager’s key personnel would involve significant time and expense and may significantly delay or prevent the achievement of our business objectives.

If our techniques for managing risk are ineffective, we may be exposed to unanticipated losses.

In order to manage the significant risks inherent in our business, we must maintain effective policies, procedures and systems that enable us to identify, monitor and control our exposure to market, operational, legal and reputational risks. Our risk management methods may prove to be ineffective due to their design or implementation or as a result of the lack of adequate, accurate or timely information. If our risk management efforts are ineffective, we could suffer losses or face litigation, particularly from our clients, and sanctions or fines from regulators.

Our techniques for managing risks may not fully mitigate the risk exposure in all economic or market environments, or against all types of risk, including risks that we might fail to identify or anticipate. Any failures in our risk management techniques and strategies to accurately quantify such risk exposure could limit our ability to manage risks or to seek positive, risk-adjusted returns. In addition, any risk management failures could cause fund losses to be significantly greater than historical measures predict. Our more qualitative approach to managing those risks could prove insufficient, exposing us to unanticipated losses in our Net Asset Value and therefore a reduction in our revenues.

This offering is focused on attracting a large number of investors who plan to make relatively small investments. An inability to attract such investors may have an adverse effect on the success of our offering, and we may not raise adequate capital to implement our business strategy.

Our common shares are being offered and sold only to “qualified purchasers” (as defined in Regulation A). “Qualified purchasers” include: (i) “accredited investors” under Rule 501(a) of Regulation D (which, in the case of natural persons, (A) have an individual net worth, or joint net worth with the person’s spouse, that exceeds $1,000,000 at the time of the purchase, excluding the value of the primary residence of such person, or (B) earned income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year) and (ii) all other investors so long as their investment in the particular issuer does not represent more than 10% of the greater of their annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). However, our common shares are currently being offered and sold only to those investors that are within the latter category (i.e., investors whose investment in our common shares does not represent more than 10% of the applicable amount), regardless of an investor’s status as an “accredited investor.” Therefore, our target investor base inherently consists of persons that may not have the high net worth or income that investors in a traditional initial public offerings have, where the investor base is typically composed of “accredited investors.”

Our reliance on attracting investors that may not meet the net worth or income requirements of “accredited investors” carries certain risks that may not be present in traditional initial public offerings. For example, certain economic, geopolitical and social conditions may influence the investing habits and risk tolerance of these smaller investors to a greater extent than “accredited investors,” which may have an adverse effect on our ability to raise adequate capital to implement our business strategy. Additionally, our focus on investors that plan on making, or are able to make, relatively small investments requires a larger investor base in order to meet our annual goal of raising $50,000,000 in our offering. We may have difficulties in attracting a large investor base, which may have an adverse effect on the success of this offering, and a larger investor base involves increased transaction costs, which will increase our expenses.

 Risks Related to our Sponsor, our Manager and the REITless Platform

Our Sponsor has a limited operating history and no profits to date. As a result, our Sponsor faces increased risks, uncertainties, expenses and difficulties.

Our Sponsor has a limited operating history. In order for us to be successful, the volume of investments and financings originated through the REITless Platform will need to increase, which may require our Sponsor to increase its facilities, personnel and infrastructure to accommodate the greater obligations and demands on the REITless Platform. The REITless Platform is dependent upon the website to maintain current listings and transactions in real estate-related assets. Our Sponsor also expects to constantly update its software and website, expand its customer support services and retain an appropriate number of employees to maintain the operations of the REITless Platform. If our business grows substantially, our Sponsor may need to make significant new investments in personnel and infrastructure to support that growth. If our Sponsor is unable to increase the capacity of the REITless Platform and maintain the necessary infrastructure, or if our Sponsor is unable to make significant investments on a timely basis or at reasonable costs, you may experience delays in receipt of distributions on our common shares, periodic downtime of the REITless Platform or other disruptions to our business and operations.

Our Sponsor may need to raise substantial additional capital to fund its operations, and if it fails to obtain additional funding, it may be unable to continue operations.

At this early stage in its development, our Sponsor has funded substantially all of its operations with proceeds from private equity investments from individual investors and venture capital funds. To continue the development of its business, including the sponsorship of the Company and operation of the REITless Platform, our Sponsor will require substantial additional funds. To meet such financing requirements in the future, our Sponsor may raise funds through equity offerings, debt financings or strategic alliances. Raising additional funds may involve agreements or covenants that restrict our Sponsor’s business activities and options. Additional funding may not be available to it on favorable terms, or at all. If our Sponsor is unable to obtain additional funds for its operations, it may be forced to reduce or terminate its business, which may adversely affect our business and results of operations.

If our Sponsor were to enter bankruptcy proceedings, the operation of the REITless Platform and the activities with respect to our operations and business would be interrupted.

If our Sponsor were to enter bankruptcy proceedings or to cease operations, we would be required to find other ways to meet obligations regarding our operations and business. Such alternatives could result in delays in the disbursement of distributions or the filing of reports or could require us to pay significant fees to another company that we engage to perform services for us.

If the security of our investors’ confidential information stored in our Sponsor’s systems is breached or otherwise subjected to unauthorized access, your secure information may be stolen.

The Sponsor or the Manager may collect and store investors’ confidential information including bank information and other personally-identifiable sensitive data. The REITless Platform is hosted in data centers that are compliant with payment card industry security standards and Sponsor uses security protocols and monitoring services provided by GoDaddy, Symantec Corporation, EphronTech, and others. However, any accidental or willful security breach or other unauthorized access could cause your secure information to be stolen and used for criminal purposes, and you would be subject to increased risk of fraud or identity theft. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they have been successfully used and are launched against a target, the REITless Platform and its third-party hosting facilities may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, many states have enacted laws requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause our investors and our partner real estate operators to lose confidence in the effectiveness of our data security measures. Any security breach, whether actual or perceived, would harm our reputation, resulting in a potential loss of investors and adverse effect on the value of your investment in us.

Any significant disruption in service on the REITless Platform or in its computer systems could reduce the attractiveness of the REITless Platform and result in a loss of users.

If a catastrophic event resulted in a platform outage and physical data loss, the REITless Platform’s ability to perform its functions would be adversely affected. The satisfactory availability, reliability, and performance of our Sponsor’s technology and its underlying hosting services infrastructure are critical to our Sponsor’s operations, level of customer service, reputation and ability to attract new users and retain existing users. Our Sponsor’s hosting services infrastructure is provided by third party hosting providers (the “Hosting Providers”). Our Sponsor also maintains a backup system at a separate location that is owned and operated by a third party. The Hosting Providers do not guarantee that users’ access to the REITless Platform will be uninterrupted, secure, or error-free. Our Sponsor’s operations depend on the Hosting Providers’ ability to protect their and our Sponsor’s systems in their facilities against damage or interruption from natural disasters, power or telecommunications failures, air quality, temperature, humidity and other environmental concerns, computer viruses or other attempts to harm our systems, criminal acts and similar events. If our Sponsor’s arrangements with any of the Hosting Providers are terminated, or there is a lapse of service or damage to any of their facilities, our Sponsor could experience interruptions in its service as well as delays and additional expense in arranging new facilities. Any interruptions or delays in our Sponsor’s service, whether as a result of an error by a Hosting Provider or other third-party error, our Sponsor’s own error, natural disasters or security breaches, whether accidental or willful, could harm our ability to perform any services for corresponding project investments or maintain accurate accounts, our Sponsor’s relationships with users of the REITless Platform and our Sponsor’s reputation. Additionally, in the event of damage or interruption, our Sponsor’s insurance policies may not adequately compensate our Sponsor for any losses that we may incur. Our Sponsor’s disaster recovery plan has not been tested under actual disaster conditions, and it may not have sufficient capacity to recover all data and services in the event of an outage at a facility operated by a Hosting Provider. Any of these factors could prevent us from processing or posting payments on the corresponding investments, damage our Sponsor’s brand and reputation, divert our Sponsor’s or Manager’s employees’ attention, and cause users to abandon the REITless Platform.

Our Manager’s due diligence of potential investments may not reveal all of the risks associated with such investments and may not reveal other weaknesses in such investments, including fraudulent misrepresentations by project sponsors, which could lead to investment losses.

Before making an investment, our Manager assesses the strengths and weaknesses of a particular project sponsor, in conjunction with its financial analysis of the project. In making the assessment and otherwise conducting customary due diligence, our Manager relies on resources available to it and, in some cases, an investigation by third parties. This process is particularly important with respect to newly formed originators, because there may be little or no information publicly available about these entities and their investment experience. We cannot assure you that our Manager’s due diligence process will uncover all relevant facts, that records in Opportunity Zones will be well-kept, or that any investment will be successful.

Future offerings of debt securities, which would rank senior to our common shares upon our liquidation, and future offerings of equity securities, which would dilute our existing shareholders and may be senior to our common shares for the purposes of dividend and liquidating distributions, may cause the value of our common shares to decline.

In the future, we may raise capital through the issuance of debt or additional equity securities. Upon liquidation, holders of our debt securities and preferred stock, if any, and lenders with respect to other borrowings will be entitled to our available assets prior to the holders of our common shares. Additional equity offerings may dilute the holdings of our existing shareholders or cause the value of our common shares to decline, or both. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to pay dividends to the holders of our common shares. Sales of substantial amounts of our common shares, or the perception that these sales could occur, could have a material adverse effect on the price of our common shares, even if there is no effect on the NAV, and even though there is no liquid market for our shares. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings, if any. Thus, holders of our common shares will bear the risk of our future offerings reducing the value of our common shares and diluting the value of their shareholdings in us.

We have the authority to enter into unsecured related party loans that, in the aggregate, do not exceed $20 million and do not carry an interest rate that exceeds the then current applicable prime rate without the approval of an Independent Representative. If we choose to raise debt capital and there is an economic slowdown or recession that would force us to liquidate, this debt would be paid back prior to distributions on our equity. Further, if we incur debt, we may choose to pay back such debt rather than offering redemptions to our shareholders. If we prioritize paying debt over offering redemptions, fewer, if any, funds would be available for redemptions and your investment would be less liquid.

The REITless Platform may not be effective as a source of capital or as a source of prospective investments for the Company.

We intend to distribute our shares to the public primarily through the REITless Platform. We also expect that the REITless Platform will be a principal source of investment leads for the Company. Potential sponsors of real estate opportunities and other borrowers come directly to the REITless Platform to seek debt financing for their projects. We also anticipate that we will be able to use the REITless Platform to sell our shares, and that sponsors and borrowers of real estate opportunities will continue to seek financing for their projects through the REITless Platform. If the REITless Platform experiences technical challenges that inhibit our ability to sell shares through the platform or if sponsors and borrowers fail to continue to seek financing through the REITless Platform, we may need to implement more manpower-intensive strategies to sell our shares or source investments, which could lead to an increase in expenses and a corresponding decrease in the value of our common shares. 

Risks Related to Compliance and Regulation

We are offering our common shares pursuant to amendments to Regulation A promulgated pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we cannot be certain if the reduced ongoing disclosure requirements applicable to Tier 2 issuers will make our common shares less attractive to investors as compared to a traditional initial public offering.

As a Tier 2 issuer, we will be subject to scaled disclosure and reporting requirements, which may make an investment in our common shares less attractive to investors who are accustomed to enhanced disclosure and more frequent financial reporting. In addition, given the relative lack of regulatory precedence regarding the amendments to Regulation A, there are ongoing compliance issues that we may be subject to. If our scaled disclosure and reporting requirements, or regulatory uncertainty regarding Regulation A, reduces the attractiveness of our common shares, we may be unable to raise the necessary funds necessary to commence operations, or to develop a diversified portfolio of real estate investments, which could severely affect the value of our common shares.

Under Section 107 of the JOBS Act, we are permitted to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits us to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standard that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B). By electing to extend the transition period for complying with new or revised accounting standards, our financial statements may not be comparable to companies that comply with all public accounting standards.

Our use of Form 1-A and our reliance on Regulation A for this offering may make it more difficult to raise capital as and when we need it, as compared to if we were conducting a traditional initial public offering on Form S-11.

Because of the exemptions from various reporting requirements provided to us under Regulation A and because we are only permitted to raise up to $50 million in any 12-month period under Regulation A (although we may raise capital in other ways), we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

There may be deficiencies with our internal controls that require improvements, and if we are unable to adequately evaluate internal controls, we may be subject to sanctions.

As a Tier 2 issuer, we will not need to provide a report on the effectiveness of our internal controls over financial reporting, and we will be exempt from the auditor attestation requirements concerning any such report so long as we are a Tier 2 issuer. We are in the process of evaluating whether our internal control procedures are effective and therefore there is a greater likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers that have completed such evaluations.  

Maintenance of our Investment Company Act exemption imposes significant limits on our operations, which may adversely affect our operations.

We intend to conduct our operations so that neither we nor any subsidiaries we may establish will be required to register as an investment company under the Investment Company Act. We may hold preferred or common equity in real estate entities, together with other real estate-related assets described below (i) directly, (ii) through wholly-owned subsidiaries, (iii) through majority-owned joint venture subsidiaries, and (iv) to a lesser extent through minority-owned joint venture subsidiaries. The Company expects to hold all real estate located in Opportunity Zones, directly, in one or more limited partnerships of which the Company is the primary limited partner and the General Partner, or in one or more limited liability companies.

We intend, directly or through subsidiaries and affiliated partnerships, to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, together with other real estate-related assets.

In connection with the Section 3(a)(1)(C) analysis, the determination of whether an entity is a majority-owned subsidiary of the Company is made by us. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person. The Investment Company Act further defines voting security as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We intend to treat companies in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries. We also intend to treat subsidiaries of which we or our wholly-owned or majority-owned subsidiary is the manager (in a manager-managed entity) or managing member (in a member-managed entity) or in which our agreement or the agreement of our wholly-owned or majority-owned subsidiary is required for all major decisions affecting the subsidiaries (which we refer to as “Controlled Subsidiaries”), as majority-owned subsidiaries even though none of the interests issued by such Controlled Subsidiaries meets the definition of voting securities under the Investment Company Act. We reached our conclusion on the basis that the interests issued by the Controlled Subsidiaries are the functional equivalent of voting securities. We have not asked the SEC staff for concurrence of our analysis, our treatment of such interests as voting securities, or whether the Controlled Subsidiaries, or any other of our subsidiaries, may be treated in the manner in which we intend, and it is possible that the SEC staff could disagree with any of our determinations. If the SEC staff were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets. Any such adjustment in our strategy could have a material adverse effect on us.

Certain of our subsidiaries may also rely on the exclusion from the definition of investment company provided by Section 3(c)(5)(C) under the Investment Company Act. Section 3(c)(5)(C) of the Investment Company Act is designed for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion generally requires that at least 55% of the entity’s assets on an unconsolidated basis consist of qualifying real estate interests and at least 80% of the entity’s assets consist of qualifying real estate interests or real estate-related assets. These requirements limit the assets those subsidiaries can own and the timing of sales and purchases of those assets.

To classify the assets held by our subsidiaries as qualifying real estate interests or real estate-related assets, we will rely on no- action letters and other guidance published by the SEC staff regarding those kinds of assets, as well as upon our analyses (in consultation with outside counsel) of guidance published with respect to other types of assets. We cannot assure you that the laws and regulations governing the Investment Company Act status of companies similar to ours, or the guidance from the SEC or its staff regarding the treatment of assets as qualifying real estate interests or real estate-related assets, will not change in a manner that adversely affects our operations. In fact, in August 2011, the SEC published a concept release in which it asked for comments on this exclusion from regulation. To the extent that the SEC staff provides more specific guidance regarding any of the matters bearing upon our exemption from the need to register or exclusion under the Investment Company Act, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC staff could further inhibit our ability to pursue the strategies that we have chosen.

Furthermore, although we intend to monitor the assets of our subsidiaries regularly, we cannot assure you that our subsidiaries will be able to maintain their exclusion from registration. Any of the foregoing could require us to adjust our strategy, which could limit our ability to make certain investments or require us to sell assets in a manner, at a price or at a time that we otherwise would not have chosen. This could negatively affect the value of our common shares, the sustainability of our business model and our ability to make distributions.

Registration under the Investment Company Act would require us to comply with a variety of substantive requirements that impose, among other things:

If we were required to register as an investment company but failed to do so, we could be prohibited from engaging in our business, and criminal and civil actions could be brought against us.

Registration with the SEC as an investment company would be costly, would subject us to a host of complex regulations and would divert attention from the conduct of our business, which could materially and adversely affect us. In addition, if we purchase or sell any real estate assets to avoid becoming an investment company under the Investment Company Act, our NAV, the amount of funds available for investment and our ability to pay distributions to our shareholders could be materially adversely affected.

We are not subject to the banking regulations of any state or federal regulatory agency.

We are not subject to the periodic examinations to which commercial banks and other thrift institutions are subject. Consequently, our financing decisions are not subject to periodic review by any governmental agency. Moreover, we are not subject to regulatory oversight relating to our capital, asset quality, management or compliance with laws. As such, we are solely reliant on the judgment of the Manager to determine and manage the risk profile, exposure, liquidity, and leverage of the Company.

Recent legislative and regulatory initiatives have imposed restrictions and requirements on financial institutions that could have an adverse effect on our business.

The financial industry has recently become more highly regulated. There has been, and may continue to be, a related increase in regulatory investigations of the trading and other investment activities of alternative investment funds and companies. Such investigations may impose additional regulatory burdens and expenses on us, may require the attention of senior management of the Manager and may result in fines if we are deemed to have violated any regulations. In addition, the cost to maintain regulatory compliance has risen in the past few years and is likely to continue to rise.

As internet commerce in regulated financial services continues to develop, federal and state governments may adopt new laws to regulate internet such commerce and services, which may negatively affect our business.

As internet commerce related to regulated financial services — the sale of securities and the offering of specialized investment management through pooled investment vehicles—continues to evolve, increasing regulation by federal and state governments becomes more likely. Our business could be negatively affected by the application of existing laws and regulations or the enactment of new laws applicable to lending and securities markets. The cost to comply with such laws or regulations could be significant and would increase our operating expenses, and we may be required to pass along those costs in the form of increased fees, which could negatively impact our ability to make other real estate investments. In addition, federal and state governmental or regulatory agencies may decide to impose taxes on services provided over the internet. These taxes could discourage the use of the internet as a means of commercial financing, which would adversely affect the viability of the REITless Platform and the Company.

Laws intended to prohibit money laundering may require us to disclose investor information to regulatory authorities.

The Uniting and Strengthening America By Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “PATRIOT Act”) requires that financial institutions establish and maintain compliance programs to guard against money laundering activities, and requires the Secretary of the U.S. Treasury (“Treasury”) to prescribe regulations in connection with anti-money laundering policies of financial institutions. The Financial Crimes Enforcement Network (“FinCEN”), an agency of the Treasury, has announced that it is likely that such regulations would subject certain pooled investment vehicles to enact anti-money laundering policies. It is possible that there could be promulgated legislation or regulations that would require the Company or our service providers to share information with governmental authorities with respect to prospective investors in connection with the establishment of anti-money laundering procedures. Such legislation and/or regulations could require us to implement additional restrictions on the transfer of our common shares to comply with such legislation and/or regulations. We reserve the right to request such information as is necessary to verify the identity of prospective shareholders and the source of the payment of subscription monies, or as is necessary to comply with any customer identification programs required by FinCEN and/or the SEC. In the event of delay or failure by a prospective shareholder to produce any information required for verification purposes, an application for, or transfer of, our common shares may be refused. We will not have the ability to reject a transfer of our common shares where all necessary information is provided and any other applicable transfer requirements, including those imposed under the transfer provisions of our operating agreement, are satisfied.

The process by which investors elect to defer capital gains by investing in qualified opportunity funds has not been finalized by the IRS.

While the IRS has issued the Proposed Regulations, it has not definitively established all the requirements for deferring capital gains by investing in Qualified Opportunity Funds such as our Company. As a result, investors may not be able to determine the complexity of or costs associated with complying with the process as ultimately implemented by the IRS. It is possible, therefore, that an investor may determine that complying with the procedures required to be able to defer capital gains are too burdensome after the investor has subscribed to acquire our common shares. Because no public trading market for our common shares will exist following this offering, it will be difficult for an investor to sell our common shares promptly, resulting in the possibility that an investor will hold an investment that does not provide him or her the tax benefits that he or she contemplated receiving at the time of subscription for our common shares.

Evolving regulation of Qualified Opportunity Funds and Opportunity Zones may adversely affect us and our investors.

The Qualified Opportunity Fund and Opportunity Zone provisions of the Code were adopted as part of the TCJA, which was enacted on December 22, 2017. As a result of its recent enactment, the related Treasury regulations continue to evolve. As a result, we cannot assure you that the regulations relating to investments in Qualified Opportunity Funds, such as the Company, will remain the same in the future. In addition, subsequent regulations could restrict our operations or require us to modify our investment objectives in a manner that would harm our business. Moreover, because this statute and the related regulations are relatively untested, they will likely be subject to varying interpretations and their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated to comply with any revisions in the provisions or interpretation of the rules. If we fail to address and comply with these regulations and any subsequent changes, the results of our operations may be adversely affected.

Risks Related to Conflicts of Interest

There are conflicts of interest between us, the Manager, the Sponsor and their affiliates.

Our executive officers, including our Chief Executive Officer, James Dowd, are principals in the Manager, which provides asset management and other services to individuals, families, businesses, non-profit organizations, qualified plans, and us. Our executive officers are also principals of the Sponsor and its affiliates. Prevailing market rates for contracts between affiliates are determined by management based on industry standards and expectations of what management would be able to negotiate with a third party on an arm’s length basis. All of the agreements and arrangements between such parties, including those relating to compensation, are not the result of arm’s length negotiations. Some of the conflicts inherent in the Company’s transactions with the Manager, the Sponsor and their affiliates, and the limitations on such parties adopted to address these conflicts, are described below. The Company, the Manager, the Sponsor and their affiliates will try to balance our interests with their own. However, to the extent that such parties take actions that are more favorable to them than to us, these actions could have negative impact on our financial performance and, consequently, on distributions to shareholders and the value of our common shares. We have adopted a conflicts of interest policy. See “Conflicts of Interest—Certain Conflict Resolution Measures—Independent Representative” and “—Our Policies Relating to Conflicts of Interest.”

The interests of the Manager, the Sponsor, their principals, and their other affiliates may conflict with your interests.

The operating agreement provides the Manager with broad powers and authority, which may result in one or more conflicts of interest between your interests and those of the Manager, its principals and its other affiliates. This risk is increased by the Manager being controlled by James Dowd, who is a principal in our Sponsor and who participates, or expects to participate, directly or indirectly in other offerings by our Sponsor and its affiliates. Potential conflicts of interest include, but are not limited to, the following:

We have agreed to limit remedies available to us and our shareholders for actions by the Manager.

The Manager is a fiduciary to the Company and as such, is required to act in our best interests. But we and our shareholders will only have recourse and be able to seek remedies against the Manager to the extent it breaches its obligations pursuant to our operating agreement. Furthermore, we have agreed to limit the liability of the Manager and to indemnify the Manager against certain liabilities. These provisions are detrimental to shareholders because they restrict the remedies available to them for actions that without those limitations might constitute breaches of duty, including fiduciary duties, and could reduce shareholder returns. By purchasing our common shares, you will be treated as having consented to the provisions set forth in the operating agreement. In addition, we may choose not to enforce, or to enforce less vigorously, our rights under the operating agreement because of our desire to maintain our ongoing relationship with the Manager.

Risks Related to Our Investments

Our investments in single- and multi-family real estate projects, including preferred and common equity, other real estate-related assets will be subject to the risks typically associated with real estate.

Our commercial real estate investments will generally be financed by one or more loans that are directly or indirectly secured by a lien on the real property that, upon the occurrence of a default on the loan, could result in our loss of ownership of the property through a foreclosure process. We will not know whether the values of the properties securing such loans will remain at the levels existing on the dates of origination of those loans. If the values of the mortgaged properties drop, our risk will increase because of the lower value of the security associated with such loans. In this manner, a decline in real estate values could adversely impact the leverage of our portfolio and substantially increase the risk of loss. Therefore, our investments will be subject to the risks typically associated with real estate.

The value of real estate may be adversely affected by a number of risks, including:

The value of each property is affected significantly by its ability to generate cash flow and net income, which in turn depends on the amount of rental or other income that can be generated net of expenses required to be incurred with respect to the property. Many expenditures associated with properties (such as operating expenses and capital expenditures) cannot be reduced when there is a reduction in income from the properties. These factors may have a material adverse effect on the value that we can realize from assets we originate, own or acquire.

The actual rents we receive for properties in which we invest may be less than estimated market rents, and we may experience a decline in realized rental rates from time to time, which could adversely affect our financial condition, results of operations and operating cash flow.

A wide array of factors, including competitive pricing pressure in our markets, a general or regional economic downturn and the lack of desirability of our properties compared to other properties in our markets, may limit our ability to realize our target rents across our portfolio. In addition, depending on market rental rates at any point in time, compared to rates on existing leases in our portfolio, from time to time rental rates for expiring leases may be higher than starting rental rates for new leases. If we are unable to obtain sufficient rents across our entire portfolio, or if our rents are consistently below market, then our ability to generate cash flow in line with our objectives will be negatively impacted.

Properties that have significant vacancies could be difficult to sell, which could reduce the return on these properties.

A property may realize vacancies either by the expiration of tenant leases or the continued default of tenants under their leases. If vacancies persist for a long period of time, we may suffer reduced revenues resulting in less cash available for distribution to our shareholders. In addition, the resale value of such properties could be diminished because the market value depends principally on the value of the cash flow generated by the leases on that property. Such a reduction in resale values could also reduce the value of your investment.

Further, a decline in general economic conditions in the markets in which our investments are located or in the U.S. generally could lead to an increase in tenant defaults, lower rents, higher vacancies, and less demand for commercial real estate in those markets. In such a scenario, we may be inclined to provide leasing incentives to our tenants in order to compete in a more competitive leasing environment, which could result in reduced revenue and lower resale value of properties, reducing the value of your shares in the Company.

We may enter into long-term leases with tenants in certain properties, which may become below-market rentals over time.

We may enter into long-term leases with tenants of certain of our properties, or we may include renewal options that specify a maximum rental rate increase. These leases generally provide for rent to increase over time; however, if we do not accurately judge the potential for increases in market rental rates, we may set terms at levels that are below the then-prevailing market, even after contractual rent increases. Moreover, we may have no ability to terminate those leases or to adjust the rent to then-prevailing market rates. As a result, our cash available for distribution could be lower than if we had not entered into such long-term leases.

Certain property that we acquire may require significant rezoning and require significant capital expenditures prior to leasing.

Certain property types, such as industrial properties, may be strong candidates for redevelopment, provided the Company can secure appropriate rezoning permissions, which may be difficult or time consuming to obtain. In addition, such projects may require significant capital expenditures to convert them to multi-family residential. These properties generally have received significant tenant-specific improvements that have little or no value if the intention is to repurpose the property. This expense of redevelopment and improvement may decrease cash available for distribution, as we likely would have to (i) pay for the improvements up-front or (ii) finance the improvements at potentially unattractive terms.

Our investment criteria increases the concentration risk of our investment portfolio because we intend to invest only in qualified opportunity zones.

Our investments in single- and multi-family real estate will be located in Opportunity Zones. These investments may carry the risks associated with the concentration of real property in economically depressed areas. We have not established and do not plan to establish any investment criteria to limit our exposure to these risks for future investments. As a result, our investments will be almost exclusively concentrated in Opportunity Zones, and we may experience losses as a result of such concentration. A worsening of economic conditions in Opportunity Zones specifically, or across the country generally, could have an adverse effect on our business and the value of your shares, by reducing the demand for new housing, limiting the ability of tenants to pay market rents, and reducing investor demand for properties of the type we intend to hold in our portfolio.

Potential development and construction delays and resultant increased costs and risks may hinder our operating results and decrease our net income.

Because we intend to substantially improve any properties that we acquire in order for them to qualify as assets that satisfy the requirements for us to be treated as a Qualified Opportunity Fund, we may acquire unimproved real property or properties that are under development or construction, or that require extensive redevelopment in order to be habitable. Investments in such properties will be subject to the inherent risks and uncertainties associated with the development and construction of real property, including those related to re-zoning land for development, environmental concerns of governmental entities and/or community groups and our builders’ ability to complete projects in conformance with plans, specifications, budgeted costs and timetables. If a builder fails to perform according to the terms of a contract, we may resort to legal action to rescind the purchase or the construction contract or to compel performance. A builder’s performance may also be affected or delayed by conditions beyond the builder’s control. Delays in completing construction could also give tenants the right to terminate preconstruction leases. We may incur additional risks when we make periodic progress payments or other advances to builders before they complete construction. These and other factors can result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly-constructed projects. We also must rely on projected rental income, expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a purchase price at the time we acquire the property. If our forecasts are inaccurate, we may pay too much for a property, and the return on our investment could suffer. In addition, to the extent we acquire loans to finance construction or renovation projects, the risk of cost overruns and non-completion of the construction or renovation of the properties underlying such loans may materially adversely affect our investment. The foregoing risks apply to projects we undertake directly, or in partnership with others, or to any projects in which we invest that are managed by others.

Actions of any joint venture partners that we may have in the future could reduce the returns on joint venture investments and decrease our shareholders’ overall return.

We may enter into joint ventures to acquire properties and other assets. We also may purchase and develop properties in joint ventures or in partnerships, co-tenancies or other co-ownership arrangements. Such investments may involve risks not otherwise present with other methods of investment, including, for example, the following risks:

Any of the foregoing risks might subject a property to liabilities not previously contemplated and thus reduce our return on that investment and the value of your investment in the Company.

Costs imposed by regulators or incurred by the Company or its subsidiaries or partnerships in order to comply with governmental laws and regulations may reduce our net income and the cash available for distributions to our shareholders.

Real property and the operations conducted on real property are subject to federal, state and local laws and regulations related to protection of the environment and human health. We could be subject to liabilities in the form of fines, penalties or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials and other health and safety-related concerns.

Some of these laws and regulations may impose joint and several liability on the tenants, owners or operators of real property for the costs to investigate or remediate contaminated properties, regardless of fault, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. Activities of our tenants, the condition of properties at the time we buy them, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.

The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder our ability to sell, rent or pledge such property as collateral for future borrowings. Any material expenditures, fines, penalties or damages we must pay will reduce our ability to make distributions and may reduce the value of your investment in the Company.

Uninsured losses relating to real property or excessive premiums for insurance coverage could reduce our cash flows and the value of our shareholders’ investment.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to significant limitations, such as large deductibles or co-payments. Insurance risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate coverage for such losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of your investment. In addition, other than any working capital reserve or other reserves that we may establish and maintain, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to you.

Risks of cost overruns and non-completion of the construction or renovation of the investment properties may materially adversely affect our investment.

The renovation, refurbishment or expansion of an investment property involves risks of cost overruns and non-completion. Costs of construction or improvements to bring a property up to standards established for the market position intended for that property may exceed original estimates, possibly making a project uneconomical. Other risks may include environmental risks and construction, rehabilitation and subsequent leasing of the property not being completed on schedule. If such construction or renovation is not completed in a timely manner, or if it costs more than expected, the property may experience a prolonged impairment of net operating income and may not be meet the return requirements of the Manager.

We have no contractual limits on the geographic concentration of our investments in commercial real estate and other real estate-related debt assets. If our investments are concentrated in an area that experiences adverse economic conditions, our investments may lose value and we may experience losses.

Certain investments in commercial real estate and other real estate-related assets in which we invest may be in or secured by a single property or properties in one geographic location. These investments may carry the risks associated with significant geographical concentration. We have not established any investment limits to our exposure to these risks for future investments. As a result, properties underlying our investments may be overly concentrated in certain geographic areas, and we may experience losses as a result. A worsening of economic conditions in the geographic area in which our investments may be concentrated could have an adverse effect on our business, including reducing the demand for real estate and depressed rental values.

Changes in interest rates and/or credit spreads could negatively affect the value of our investments, which could result in reduced earnings or losses and negatively affect the cash available for distribution to our shareholders.

Among other investments, we will invest in preferred equity investments with minimum fixed distribution amounts. These investments have fixed income attributes. Under a normal yield curve, an investment in these instruments will decline in value if long-term interest rates increase or if credit spreads widen. Even though an investment may be performing in accordance with its stated terms and the underlying collateral has not changed, the economic value of the investment may be negatively impacted by the incremental interest foregone from the changes in interest rates or credit spreads. Declines in market value may ultimately reduce earnings or result in losses to us, which may negatively affect cash available for distribution to our shareholders.

Hedging against interest rate exposure may adversely affect our earnings, limit our gains or result in losses, which could adversely affect cash available for distribution to our shareholders.

We may enter into interest rate swap agreements or pursue other interest rate hedging strategies. Our hedging activity will vary in scope based on the level of interest rates, the type of portfolio investments held, and other changing market conditions. Interest rate hedging may fail to protect or could adversely affect us because, among other things: 

Any hedging activity we engage in may adversely affect our earnings, which could adversely affect cash available for distribution to our shareholders. Therefore, while we may enter into such transactions to seek to reduce interest rate risks, unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss.

Our investment objective includes both a financial return on investment and a social impact, which may be competing goals that are difficult to reconcile.

In targeting non-financial objectives, namely investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return, the Company may forego a financially attractive investment opportunity, or may make an investment with an expected positive social impact but a below-market financial return. In either instance, it is difficult to quantify the financial opportunity loss, if any, or the expected social gain, if any, for a particular investment.

Many of our investments are illiquid and we may not be able to vary our portfolio in response to changes in economic and other conditions.

The illiquidity of our target investments may make it difficult for us to sell such investments if the need or desire arises. The preferred and common equity investments that we make will be particularly illiquid investments due to their unregistered status and the lack of secondary markets for such investments. In addition, even if there were secondary markets, the securities would be subject to restrictions on resale. As a result, we expect many of our investments will be illiquid, and if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments and our ability to vary our portfolio in response to changes in economic and other conditions may be relatively limited, which could adversely affect our results of operations and financial condition.

Declines in the market values of our investments may adversely affect periodic reported results of operations and credit availability, which may reduce earnings and, in turn, cash available for distribution to our shareholders.

Some of our assets will be classified for accounting purposes as “available-for-sale.” These investments are carried at estimated fair value and temporary changes in the market values of those assets will be directly charged or credited to shareholders’ equity without impacting net income on the income statement. Moreover, if we determine that a decline in the estimated fair value of an available-for-sale security falls below its amortized value and is not temporary, we will recognize a loss on that security on the income statement, which will reduce our earnings in the period recognized.

A decline in the market value of our assets may adversely affect us particularly in instances where we have borrowed money based on the market value of those assets. If the market value of those assets declines, the lender may require us to post additional collateral to support the loan. If we were unable to post the additional collateral, we may have to sell assets at a time when we might not otherwise choose to do so. A reduction in credit available may reduce our earnings and, in turn, cash available for distribution to shareholders.

Further, credit facility providers may require us to maintain a certain amount of cash reserves or to set aside unlevered assets sufficient to maintain a specified liquidity position, which would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would choose, which could reduce our return on equity. In the event that we are unable to meet these contractual obligations, our financial condition could deteriorate rapidly.

Market values of our investments may decline for a number of reasons, such as changes in prevailing market rates, increases in defaults, increases in voluntary prepayments for those investments that we have that are subject to prepayment risk, widening of credit spreads and downgrades of ratings of the securities by ratings agencies.

Some of our portfolio investments will be carried at estimated fair value as determined by us and, as a result, there may be uncertainty as to the value of these investments.

Some of our portfolio investments will be in the form of securities that are recorded at fair value but that have limited liquidity or are not publicly traded. The fair value of securities and other investments that have limited liquidity or are not publicly traded may not be readily determinable. We estimate the fair value of these investments on a quarterly basis. Because such valuations are inherently uncertain, may fluctuate over short periods of time and may be based on numerous estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. The value of our common shares could be adversely affected if our determinations regarding the fair value of these investments are materially higher than the values that we ultimately realize upon their disposal.

Competition with third parties in sourcing and acquiring investments may reduce our profitability and the return on your investment.

We have significant competition with respect to our acquisition and origination of assets with many other companies, including other REITs, insurance companies, commercial banks, private investment funds, hedge funds, specialty finance companies and other investors, many of which have greater resources than us. We may not be able to compete successfully for investments. In addition, the number of entities and the amount of funds competing for suitable investments may increase. If we pay higher prices for investments, our returns will be lower and the value of our assets may not increase or may decrease significantly below the amount we paid for such assets. If such events occur, you may experience a lower return on your investment.

Insurance may not cover all potential losses on our properties, which may harm the value of our assets.

We will obtain comprehensive insurance covering each of our properties, including liability, fire and extended coverage. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods and hurricanes that may be uninsurable or not economically insurable. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace a property if it is damaged or destroyed. Under such circumstances, the insurance proceeds, if any, might not be adequate to restore the economic value of a property, which might impair our security and decrease the value of the property.

The leases on the properties underlying our investments may not be renewed on favorable terms.

The Company’s properties could be negatively impacted by the deteriorating economic conditions and weaker rental markets. Upon expiration or earlier termination of leases on these properties, the space may not be relet or, if relet, the terms of the renewal or reletting (including the cost of required renovations or concessions to tenants) may be less favorable than current lease terms. In addition, the poor economic conditions may reduce a tenants’ ability to make rent payments under their leases. Any of these situations may result in extended periods where there is a significant decline in revenues or no revenues generated by these properties. Additionally, if market rental rates are reduced, property-level cash flows would likely be negatively affected as existing leases renew at lower rates. If the leases for these properties cannot be renewed for all or substantially all of the space at these properties, or if the rental rates upon such renewal or reletting are significantly lower than expected, our ability to repay principal and interest on a loan backed by such properties may be impaired, and value of our investments may be adversely effected.

A sponsor’s form of entity may cause special risks or hinder our recovery.

The bankruptcy of a sponsor, or a general partner or managing member of a sponsor of a project in which the Company invests, may impair out ability to enforce our rights and remedies under the operating agreement of the project. Projects that are not single-purpose entities structured to limit the possibility of becoming insolvent or bankrupt, may be more likely to become insolvent or the subject of a voluntary or involuntary bankruptcy proceeding because the sponsor may be (i) operating entities with a business distinct from the operation of the property with the associated liabilities and risks of operating an ongoing business or (ii) individuals that have personal liabilities unrelated to the property.

We may be exposed to environmental liabilities with respect to properties in our investment portfolio.

In the course of our business, we will take title to real estate, and, if we do take title, we could be subject to environmental liabilities with respect to these properties. In such a circumstance, we may be held liable to a governmental entity or to third parties for property damage, personal injury, and investigation and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to investigate or clean up hazardous or toxic substances, or chemical releases, at a property. The costs associated with investigation or remediation activities could be substantial. If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity and results of operations could be materially and adversely affected.

Risks Relating to Economic Conditions

Economic recessions or downturns may have an adverse effect on our business, financial condition and results of operations.

Economic recessions or downturns may result in a prolonged period of market illiquidity, which could have an adverse effect on our business, financial condition and results of operations. Unfavorable economic conditions also could reduce investments on the REITless Platform by investors and engagement by real estate operators. Periods of economic slowdown or recession, significantly rising interest rates, declining employment levels, decreasing demand for real estate, or the public perception that any of these events may occur, have resulted in and could continue to result in a general decline in acquisition, disposition and leasing activity, as well as a general decline in the value of real estate and in rents. These events could adversely affect our demand among investors, which will impact our results of operations.

During an economic downturn, it may also take longer for us to dispose of real estate investments, or the disposition prices may be lower than originally anticipated. As a result, the carrying value of such investments may become impaired and we could record losses as a result of such impairment or could experience reduced profitability related to declines in investment values. These events could adversely affect our performance and, in turn, our business, and negatively impact our results of operations.

Negative general economic conditions could continue to reduce the overall amount of sale, leasing, and financing activity in the commercial real estate industry, and could also reduce the demand for our securities, which may in turn adversely affect our ability to manage the Company profitably. We are unable to predict the likely duration or severity of any disruption in financial markets and the resultant adverse economic conditions in the United States and other countries that would likely ensue.

Further downgrades of the U.S. credit rating, impending automatic spending cuts or a government shutdown could negatively impact our liquidity, financial condition and earnings.

Over the past few years, U.S. debt ceiling and budget deficit concerns have increased the possibility of additional credit rating downgrades and economic slowdowns, or a recession in the United States. Although U.S. lawmakers have passed legislation to raise the federal debt ceiling on multiple occasions, ratings agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States. The impact of this or any further downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect the United States and global financial markets and economic conditions. With the improvement of the U.S. economy, the Federal Reserve may continue to raise interest rates, which would increase borrowing costs and may negatively impact our ability to access the debt markets on favorable terms. In addition, disagreement over the federal budget has, in the past, caused the U.S. federal government to essentially shut down for periods of time. Continued adverse political and economic conditions could have an adverse effect on our business and financial condition.

Global economic, political and market conditions and economic uncertainty could adversely affect our business and financial condition.

The current worldwide financial market situation, as well as various social and political tensions in the United States and around the world, may contribute to increased market volatility, and could have long-term negative effects on the United States and worldwide financial markets, causing further economic uncertainty or deterioration in the United States and worldwide. Economic uncertainty is likely to have a negative impact on our business through changing spreads, structures and purchase multiples, as well as creating volatility in the overall supply of investment capital. Since 2010, several European Union, or EU, countries, including Greece, Ireland, Italy, Spain, and Portugal, have faced budget issues, some of which may have negative long-term effects for the economies of those countries and other EU countries. Additionally, the impact of the United Kingdom’s decision to leave the EU, commonly referred to as “Brexit,” is impossible to ascertain at this point. The ultimate effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU following its exit, a matter that has yet to be negotiated. The decision may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time. Further, there is continued concern about national-level support for the Euro and the accompanying coordination of fiscal and wage policy among European Economic and Monetary Union member countries. In addition, the fiscal policy of foreign nations, such as China, may have a severe impact on the worldwide and United States financial markets. Finally, the administration in the United States may create uncertainty for financial markets and businesses, since future policy initiatives and their potential effects on financial assets and market sectors is unknown. We do not know how long the financial markets will continue to be affected by these events and cannot predict the effects of these or similar events in the future on the United States economy and securities markets or on our investments. As a result of these factors, we cannot assure you that we will be able to successfully navigate these developments and manage our investments in a manner consistent with achieving our investment objectives.

Risks Related to Our Organization and Structure

We do not have a board of directors and are managed by the Manager. Our shareholders do not elect or vote on the Manager and have limited ability to influence decisions regarding our business.

Our operating agreement provides that the assets, affairs and business of the Company will be managed under the direction of the Manager. Our shareholders do not elect or vote on the Manager, and, unlike the holders of common shares in a corporation, have only limited voting rights on matters affecting our business, and therefore limited ability to influence decisions regarding our business. In addition, our operating agreement provides that the Manager will generally operate in a manner that is appropriate to maintain our REIT status, which may further limit decisions regarding our business.

If our shareholders are dissatisfied with the performance of the Manager, they have little ability to remove the Manager. Our shareholders may only remove the Manager with 30 days prior written notice for “cause,” following the affirmative vote of two-thirds of our shareholders. Unsatisfactory financial performance of the Company does not constitute “cause” under our operating agreement.

Our common shareholders will have limited voting rights and may be bound by either a majority or supermajority vote.

Our common shareholders will have voting rights only with respect to certain matters, primarily relating to amendments to our operating agreement that would adversely change the rights of the common shares and removal of the Manager for “cause.” Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of common shareholders. Generally, matters to be voted on by our shareholders must be approved by a majority of the votes cast by all common shares present in person or represented by proxy, although the vote to remove the Manager for “cause” requires a two-thirds vote. If any vote occurs, you will be bound by the majority or supermajority vote, as applicable, even if you did not vote with the majority or supermajority.

As a non-listed company conducting an exempt offering pursuant to Regulation A, we are not subject to a number of corporate governance requirements, including the requirements for a board of directors or independent board committees.

As a non-listed company conducting an exempt offering pursuant to Regulation A, we are not subject to a number of corporate governance requirements that an issuer conducting an offering on Form S-11 or listing on a national stock exchange would be. Accordingly, while we have retained the Independent Representative to review certain conflicts of interest, we do not have a board of directors, nor are we required to have (i) a board of directors of which a majority consists of “independent” directors under the listing standards of a national stock exchange, (ii) an audit committee composed entirely of independent directors and a written audit committee charter meeting a national stock exchange’s requirements, (iii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting a national stock exchange’s requirements, (iv) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of a national stock exchange, and (v) independent audits of our internal controls. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of a national stock exchange.

If our Sponsor establishes additional REIT offerings and the Manager is engaged in managing portfolios for other customers in the future, there may be conflicts of interests among the various REIT offerings, which may result in opportunities that would benefit the Company being allocated disproportionately or entirely to the other offerings.

Our Sponsor has sponsored another REIT, REITless Impact Income Strategies LLC, and expects to establish and sponsor additional REIT offerings in the future, which will be offered through the REITless Platform, including offerings that may manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects. In addition, the Manager may manage client portfolios or separately managed account portfolios for other advisors, for which investments such as the debt investments made by the Company would be appropriate. Our Sponsor’s real estate professionals acting on behalf of the Manager must determine which investment opportunities to recommend to us and other REITless entities.

These additional REITs may have investment criteria that compete with us. If a sale, financing, investment or other business opportunity would be suitable for more than one of these investment vehicles or investors, the Manager will allocate it using its business judgment. Any allocation of this type may involve the consideration of a number of factors that our Sponsor and its officers and directors determine to be relevant. Except under any policies that may be adopted by the Manager or Sponsor, no REIT (including us) will have any duty, responsibility or obligation to refrain from:

In addition, any decisions by our Sponsor or Manager to renew, extend, modify or terminate an agreement or arrangement, or enter into similar agreements or arrangements in the future, may benefit one REIT more than another REIT or limit or impair the ability of any REIT to pursue business opportunities. In addition, third parties may require as a condition to their arrangements or agreements with or related to any one particular REIT that such arrangements or agreements include or not include another REIT, as the case may be. Any of these decisions may benefit one REIT more than another REIT.

The conflicts of interest policies we have adopted may not adequately address all of the conflicts of interest that may arise with respect to our activities and are subject to change or suspension.

In order to avoid any actual or perceived conflicts of interest among the REITs and with the Manager’s and Sponsor’s directors, officers and affiliates, we have adopted a conflicts of interest policy to specifically address some of the conflicts relating to our activities. We cannot assure you that these policies will be adequate to address all of the conflicts that may arise or will address such conflicts in a manner that is favorable to the Company. Our Manager may modify, suspend or rescind the policies set forth in the conflicts policy, including any resolution implementing the provisions of the conflicts policy, in each case, without a vote of our shareholders.

Certain provisions of our operating agreement and Delaware law could hinder, delay or prevent a change of control of the Company.

Certain provisions of our operating agreement and Delaware law could have the effect of discouraging, delaying or preventing transactions that involve an actual or threatened change of control of the Company. These provisions include the following:

You are limited in your ability to sell your common shares pursuant to our redemption plan. You may not be able to sell any of your shares back to us, and if you do sell your shares, you may not receive the price you paid upon subscription.

Our redemption plan may provide you with a limited opportunity to have your common shares redeemed by us. We anticipate that our common shares may be redeemed by us on a quarterly basis, and shareholders may require that we repurchase up to 10% of their shares quarterly while this offering is ongoing. However, our redemption plan contains certain restrictions and limitations, including those relating to the number of our common shares that we can redeem at any given time and limiting the redemption price. Specifically, we are required to limit the number of shares to be redeemed during any calendar year to no more than 5.0% of the weighted average number of common shares outstanding during the prior calendar year (or 1.25% per calendar quarter, with excess capacity carried over to later calendar quarters in that calendar year). However, as we intend to make a number of commercial real estate investments of varying types, the Manager may elect to increase or decrease the amount of common shares available for redemption in any given calendar quarter, as these commercial real estate assets are sold, so long as, in the aggregate, we do not redeem more than 5.0% in any calendar year.

Further, due to the operational requirements for the Company to qualify as an “opportunity fund,” it is likely that the redemption plan will be limited in its availability. Accordingly, investors should not rely on such redemption plan being readily available in the future and should be prepared to hold their common shares for an indefinite period of time.

Upon conclusion of this offering, shares may be redeemed by us on a quarterly basis as cash flows are available as determined by the Manager. In addition, the Manager reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the redemption plan without notice. Therefore, you may not have the opportunity to make a redemption request prior to a potential termination of the redemption plan and you may not be able to sell any of your common shares back to us pursuant to the redemption plan. Moreover, if you do sell your common shares back to us pursuant to the redemption plan, you will not receive the same price you paid for the common shares being redeemed other than during your Preliminary Investment Period. See “Description of Our Common Shares — Quarterly Redemption Plan.”

The offering price of the Company’s shares was not established on an independent basis; the actual value of your investment may be substantially less than what you pay. Until _______, we expect to use the price paid to acquire a share in our offering as the estimated value of our shares. Thereafter, when determining the estimated value of our shares, the value of the Company’s shares will be based upon a number of assumptions that may not be accurate or complete.

We established the offering price of the Company’s shares on an arbitrary basis. The selling price of the Company’s shares bears no relationship to our book or asset values or to any other established criteria for valuing shares. Because the offering price is not based upon any independent valuation, the offering price may not be indicative of the proceeds that you would receive upon liquidation. Further, the offering price may be significantly more than the price at which the shares would trade if they were to be listed on an exchange or actively traded by broker-dealers.

After _________, 2020, the per share purchase price for this offering will be adjusted every fiscal quarter and, as of January 1st , April 1st , July 1st and October 1st of each year (or as soon as commercially reasonable and announced by us thereafter), will equal the greater of (i) $10.00 per share or (ii) the sum of our Net Asset Value, or NAV, divided by the number of our common shares outstanding as of the end of the prior fiscal quarter (NAV per share). Estimates of our NAV per share are based on available information and judgment. Therefore, actual values and results could differ from our estimates and that difference could be significant. This approach to valuing the Company’s shares may bear little relationship and will likely exceed what you might receive for the Company’s shares if you tried to sell them or if we liquidated our portfolio. In addition, the price you pay for the Company’s shares in this offering may be more or less than shareholders who acquire their shares in the future.

Your interest in us will be diluted if we issue additional shares, which could reduce the overall value of your investment.

Potential investors in this offering do not have preemptive rights with respect to any shares we may issue in the future. Under our operating agreement, we have authority to issue an unlimited number of additional common shares or other securities, although, under Regulation A, we are only allowed to sell up to $50 million of the Company’s shares in any 12 month period (although we may raise capital in other ways). In particular, the Manager is authorized, subject to the restrictions of Regulation A and other applicable securities laws, to provide for the issuance of an unlimited amount of one or more classes or series of shares in the Company, including preferred shares, and to fix the number of shares, the relative powers, preferences and rights, and the qualifications, limitations or restrictions applicable to each class or series thereof by resolution authorizing the issuance of such class or series, without shareholder approval. After your purchase in this offering, the Manager may elect to (i) sell additional shares in this or future public offerings, (ii) issue equity interests in private offerings, or (iii) issue shares to the Manager, or its successors or assigns, in payment of an outstanding fee obligation. To the extent we issue additional equity interests after your purchase in this offering, your percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our investments, you may also experience dilution in the book value and fair value of your shares.

Risks Related to Our Intended Status as a Qualified Opportunity Fund

We may not meet the requirements to be treated as a Qualified Opportunity Fund.

We intend to operate in conformance with the requirements to be classified as a “qualified opportunity fund” pursuant to Section 1400Z-2 of the Code and any subsequently issued guidance thereunder. In general, a Qualified Opportunity Fund is any investment vehicle organized as a corporation or a partnership for the purpose of investing in Qualified Property and that holds at least 90% of its assets in Qualified Property. We generally are required to test for compliance with these requirements twice a year, after the end of the second quarter and at year-end. Qualified Property includes “qualified opportunity zone business property,” as well as certain interests in entities that are treated as a “qualified opportunity zone business.” Generally, qualified opportunity zone business property is tangible property used in a trade or business that meets certain specified requirements and is located in areas designated as an Opportunity Zone by a state (including possessions of the United States and the District of Columbia) pursuant to certain requirements in the Code. The Code specifies that investments must be acquired for cash, and in the case of qualified opportunity zone business property, the original use of the property must begin with the investor or substantial improvements must be made by the investor.

The Opportunity Zone rules were recently enacted as part of the TCJA. There is only limited IRS guidance and there are no final implementing regulations at this time. Accordingly, while we intend to meet the requirements to be treated as a Qualified Opportunity Fund, our ability to be treated as a Qualified Opportunity Fund is subject to considerable uncertainty that may not be resolved in the foreseeable future. It is possible that we may fail to meet the requirements to be treated as a Qualified Opportunity Fund, and there can be no guarantee that any investor will realize any tax advantages of investing in a Qualified Opportunity Fund as a result of their investment in the Company.

In the event that we are not properly classified as a Qualified Opportunity Fund, we generally would be subject to certain penalties unless we can establish that the failure is due to reasonable cause. These penalties are calculated based on the extent to which our assets fall beneath the threshold of Qualified Property required to be held in order to meet the Qualified Opportunity Fund requirements, multiplied by an interest rate set by the IRS. In the event that we were subject to these penalties, the amount of the penalty would be treated as a Company expense, which could adversely impact the returns of the Company, perhaps substantially. For additional information, please see “U.S. Federal Income Tax Considerations— Qualified Opportunity Fund Considerations.”

Our investment decisions are highly likely to be affected by our efforts to be classified as a Qualified Opportunity Fund.

Because we intend to be classified as a Qualified Opportunity Fund and to meet the requirements to allow investors in the Company who invest qualifying gains to defer taxes under the Qualified Opportunity Fund section of the Code, we may make investment decisions that are different from those we would make if we were not intending to be established as an Qualified Opportunity Fund. For example, we intend to invest substantially all of the Company’s commitments in qualified properties located within Opportunity Zones. We may also hold investments for longer periods than if we were not intending to be classified as a Qualified Opportunity Fund, in order to take advantage of certain tax benefits that provide for the exclusion of future capital gains (if any) from investing in a Qualified Opportunity Fund. In order to take advantage of the permanent capital gain exclusion that may be available, each investor must hold its shares in the Company for at least 10 years. This long-term holding requirement may lead the Company to make purchase and sale decisions at inopportune times and may result in lower returns than if the Company were to sell each investment when market conditions are most favorable.

Investors must make appropriate, timely investments and tax elections in order to take advantage of the potential benefits of a Qualified Opportunity Fund.

In order for an investor to receive the Qualified Opportunity Fund tax benefits that an investment in the Company is intended to afford, each such investor must make a timely investment of gains in the Company and timely election to treat such investment as a Qualified Opportunity Fund investment under Section 1400Z-2 of the Code. In particular, any gain deferred by investing in the Company must have been generated from a sale to an unrelated party within 180 days of investment in the Company. The Company has no control over these circumstances, and investors will have to rely on their own tax advisors and determinations.

We may elect to qualify as a REIT or to be treated as a taxable corporation.

As part of our general approach to be established as a Qualified Opportunity Fund, we currently intend to qualify and to elect treatment as a REIT for U.S. federal income tax purposes, which introduces a number of additional risks and tax considerations which are addressed in the additional risk factors below and further below under “U.S. Federal Income Tax Considerations.” Alternatively, we may determine to elect to be treated as a taxable corporation for U.S. federal income tax purposes for all or a portion of the Company’s term, if we determine that such treatment is appropriate, consistent with our intention to be classified as a Qualified Opportunity Fund, and ultimately beneficial to the Company’s shareholders. If we were to elect to be treated as a taxable corporation, then our returns to investors could be reduced significantly by corporate income taxes that we would be required to pay.

Risks Related to Our Status as a REIT

Failure to qualify as a REIT would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distributions to our shareholders.

We believe that our organization, prior and proposed ownership and method of operation have enabled and will continue to enable us to meet the requirements for qualification and taxation as a REIT. However, we cannot assure you that we will qualify as such. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Code as to which there are only limited judicial and administrative interpretations and involves the determination of facts and circumstances not entirely within our control. Future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws or the application of the tax laws with respect to qualification as a REIT or the U.S. federal income tax consequences of such qualification.

If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our shareholders because:

In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect the value of our common shares. See “U.S. Federal Income Tax Considerations” for a discussion of certain U.S. federal income tax considerations relating to us and our common shares.

Even if we qualify as a REIT, we may owe other taxes that will reduce our cash flows.

Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and assets, on taxable income that we do not distribute to our shareholders, on net income from certain “prohibited transactions,” and on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes. For example, to the extent we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. We also will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our shareholders in a calendar year is less than a minimum amount specified under the Code. As another example, we are subject to a 100% “prohibited transaction” tax on any gain from a sale of property that is characterized as held for sale, rather than investment, for U.S. federal income tax purposes, unless we comply with a statutory safe harbor or earn the gain through a taxable REIT subsidiary (“TRS”). Further, any TRS that we establish will be subject to regular corporate U.S. federal, state and local taxes. Any of these taxes would decrease cash available for distribution to shareholders.

REIT distribution requirements could adversely affect our liquidity and may force us to borrow funds during unfavorable market conditions.

In order to maintain our REIT status and to meet the REIT distribution requirements, we may need to borrow funds on a short-term basis or sell assets, even if the then-prevailing market conditions are not favorable for these borrowings or sales. In addition, we may need to reserve cash (including proceeds from this offering) to satisfy our REIT distribution requirements, even though there are attractive investment opportunities that may be available. To qualify as a REIT, we generally must distribute to our shareholders at least 90% of our net taxable income each year, excluding capital gains. In addition, we will be subject to corporate income tax to the extent we distribute less than 100% of our taxable income including any net capital gain. We intend to make distributions to our shareholders to comply with the requirements of the Code for REITs and to minimize or eliminate our corporate income tax obligation to the extent consistent with our business objectives. Our cash flows from operations may be insufficient to fund required distributions, for example as a result of differences in timing between the actual receipt of income and the recognition of income for U.S. federal income tax purposes, the effect of non-deductible capital expenditures, the creation of reserves or required debt service or amortization payments. The insufficiency of our cash flows to cover our distribution requirements could have an adverse impact on our ability to raise short- and long-term debt or sell equity securities in order to fund distributions required to maintain our REIT status. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. To address and/or mitigate some of these issues, we may make taxable distributions that are in part paid in cash and in part paid in our common shares. In such cases our shareholders may have tax liabilities from such distributions in excess of the cash they receive. The treatment of such taxable share distributions is not clear, and it is possible the taxable share distribution will not count towards our distribution requirement, in which case adverse consequences could apply.

We intend to distribute our REIT taxable income to our shareholders in a manner intended to satisfy the 90% distribution requirement and to avoid both corporate income tax and the 4% nondeductible excise tax. However, there is no requirement that TRSs distribute their after-tax net income to their shareholders. Our taxable income may substantially exceed our net income as determined in accordance with U.S. generally accepted accounting principles, or GAAP, because, for example, realized capital losses will be deducted in determining our GAAP net income, but may not be deductible in computing our taxable income. In addition, we may invest in assets that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets. To the extent that we generate such non-cash taxable income in a taxable year, we may incur corporate income tax and the 4% nondeductible excise tax on that income if we do not distribute such income to our shareholders in that year. As a result of the foregoing, we may generate less cash flow than taxable income in a particular year. In that event, we may be required to use cash reserves, incur debt, or liquidate non-cash assets at rates or at times that we regard as unfavorable to satisfy the distribution requirement and to avoid corporate income tax and the 4% nondeductible excise tax in that year.

If we fail to invest a sufficient amount of the net proceeds from selling our common shares in real estate assets within one year from the receipt of the proceeds, we could fail to qualify as a REIT.

Temporary investment of the net proceeds from sales of our common shares in short-term securities and income from such investment generally will allow us to satisfy various REIT income and asset requirements, but only during the one-year period beginning on the date we receive the net proceeds. If we are unable to invest a sufficient amount of the net proceeds from sales of our common shares in qualifying real estate assets within such one-year period, we could fail to satisfy one or more of the gross income or asset tests and/or we could be limited to investing all or a portion of any remaining funds in cash or cash equivalents. If we fail to satisfy any such income or asset test, unless we are entitled to relief under certain provisions of the Code, we could fail to qualify as a REIT. See “U.S. Federal Income Tax Considerations.”

If we form a taxable REIT subsidiary (TRS), our overall tax liability could increase.

Any TRS we form will be subject to U.S. federal, state and local income tax on its taxable income. Accordingly, although our ownership of any TRSs may allow us to participate in the operating income from certain activities that we could not participate in without violating the REIT income tests requirements of the Code or incurring the 100% tax on gains from prohibited transactions, the TRS through which we earn such operating income or gain will be fully subject to corporate income tax. The after-tax net income of any TRS would be available for distribution to us; however, any dividends received by us from our domestic TRSs will only be qualifying income for the 95% REIT income test, not the 75% REIT income test. If we have any non-U.S. TRSs, then they may be subject to tax in jurisdictions where they operate and under special rules dealing with foreign subsidiaries, and they may generate income that is non-qualifying for either of the REIT income tests.

Although our use of TRSs may partially mitigate the impact of meeting certain requirements necessary to maintain our qualification as a REIT, there are limits on our ability to own and engage in transactions with TRSs, and a failure to comply with the limits would jeopardize our REIT qualification and may result in the application of a 100% excise tax.

A REIT may own up to 100% of the stock or securities of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. A TRS also may sell assets without incurring the 100% tax on prohibited transactions. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. In addition, the rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis (for example if we charged our TRS interest in excess of an arm’s length rate). We may jointly elect with one or more subsidiaries for those subsidiaries to be treated as TRSs for U.S. federal income tax purposes. These TRSs will pay U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us but is not required to be distributed to us. We will monitor the value of our respective investments in any TRSs we may form for the purpose of ensuring compliance with TRS ownership limitations and intend to structure our transactions with any such TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above. We cannot assure you, however, that we will be able to comply with the 20% TRS limitation or to avoid application of the 100% excise tax.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or to liquidate otherwise attractive investments.

To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our shares. We may be required to make distributions to our shareholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may, for instance, hinder our ability to make certain otherwise attractive investments or undertake other activities that might otherwise be beneficial to us and our shareholders, or may require us to borrow or liquidate investments in unfavorable market conditions and, therefore, may hinder our investment performance. As a REIT, at the end of each calendar quarter, at least 75% of the value of our assets must consist of cash, cash items, U.S. Government securities and qualified “real estate assets.” The remainder of our investments in securities (other than cash, cash items, U.S. Government securities, securities issued by a TRS and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our total assets (other than cash, cash items, U.S. Government securities, securities issued by a TRS and qualified real estate assets) can consist of the securities of any one issuer, and no more 20% of the value of our total securities can be represented by securities of one or more TRSs, and no more than 25% of the value of our total assets may be represented by debt instruments of publicly offered REITs that are not secured by mortgages on real property or real property interests. After meeting these requirements at the close of a calendar quarter, if we fail to comply with these requirements at the end of any subsequent calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate from our portfolio or forego otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.

You may be restricted from acquiring, transferring or redeeming certain amounts of our common shares.

In order to maintain our REIT qualification, among other requirements, no more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals, as defined in the Code to include certain kinds of entities, during the last half of any taxable year, other than the first year for which a REIT election is made. To assist us in qualifying as a REIT, our operating agreement contains an aggregate share ownership limit and a common shares ownership limit. Generally, any of the Company’s shares owned by affiliated owners will be added together for purposes of the aggregate share ownership limit, and any common shares owned by affiliated owners will be added together for purposes of the common shares ownership limit.

If anyone attempts to transfer or own shares in a way that would violate the aggregate share ownership limit or the common shares ownership limit (or would prevent us from continuing to qualify as a REIT), unless such ownership limits have been waived by the Manager, those shares instead will be deemed transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by us or sold to a person whose ownership of the shares will not violate the aggregate share ownership limit or the common shares ownership limit and will not prevent us from qualifying as a REIT. If this transfer to a trust fails to prevent such a violation or our disqualification as a REIT, then the initial intended transfer or ownership will be null and void from the outset. Anyone who acquires or owns shares in violation of the aggregate share ownership limit or the common shares ownership limit, unless such ownership limit or limits have been waived by the Manager, or the other restrictions on transfer or ownership in our operating agreement, bears the risk of a financial loss when the shares are redeemed or sold, if the NAV of the Company’s shares falls between the date of purchase and the date of redemption or sale.

Our limits on ownership of the Company’s shares also may require us to decline redemption requests that would cause other shareholders to exceed such ownership limits. In addition, in order to comply with certain of the distribution requirements applicable to REITs we will decline to honor any redemption request that we believe is a “dividend equivalent” redemption as discussed in “U.S. Federal Income Tax Considerations—Taxation of Taxable U.S. shareholders—Redemptions of Common Shares.”

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Generally, income from a hedging transaction we enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets or to offset certain other positions does not constitute “gross income” for purposes of the 75% or 95% gross income tests, provided certain circumstances are satisfied. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRS would be subject to tax on income or gains resulting from hedges entered into by it or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our TRSs will generally not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs.

The ability of the Manager to revoke our REIT qualification without shareholder approval may cause adverse consequences to our shareholders.

Our operating agreement provides that the Manager may revoke or otherwise terminate our REIT election, without the approval of our shareholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for dividends paid to shareholders in computing our taxable income and will be subject to U.S. federal income tax at regular corporate rates, as well as state and local taxes, which may have adverse consequences on our total return to our shareholders.

Investments outside the U.S. could present additional complications to our ability to satisfy the REIT qualification requirements and may subject us to additional taxes.

Although we do not expect to invest in non-U.S. real estate or other non-U.S. real estate-related assets, if we were to make such investments, operating in functional currencies other than the U.S. dollar and in environments in which real estate transactions are customarily structured differently than they are in the U.S. or are subject to different legal rules may complicate our ability to structure non-U.S. investments in a manner that enables us to satisfy the REIT qualification requirements. In addition, non-U.S. investments may subject us to various non-U.S. tax liabilities, including withholding taxes.

The IRS may take the position that gains from sales of property and other assets are subject to a 100% prohibited transaction tax.

We may have to sell assets from time to time to fund redemption requests, to satisfy our REIT distribution requirements, to satisfy other REIT requirements, or for other purposes. It is possible that the IRS may take the position that one or more sales of our properties may be a prohibited transaction, which is a sale of property held by us primarily for sale in the ordinary course of our trade or business. If we are deemed to have engaged in a prohibited transaction, our gain from such sale would be subject to a 100% tax. The Code sets forth a safe harbor under which a REIT may, under certain circumstances, sell property without risking the imposition of the 100% tax, but there is no assurance that we will be able to qualify for the safe harbor. We do not intend to hold property for sale in the ordinary course of business, but there is no assurance that the IRS will not challenge our position, especially if we make frequent sales or sales of property in which we have short holding periods.

Possible legislative, regulatory or other actions affecting REITs could adversely affect our shareholders and us.

The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect our shareholders or us. We cannot predict whether, when, in what forms, or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or decided, which 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.

Shareholders are urged to consult with their own tax advisors with respect to the impact that legislation may have on their investment and the status of legislative, regulatory or administrative developments and proposals and their potential effect on their investment in our shares.

A portion of our distributions may be treated as a return of capital for U.S. federal income tax purposes, which could reduce the basis of a shareholder’s investment in our common shares and may trigger taxable gain.

A portion of our distributions may be treated as a return of capital for U.S. federal income tax purposes. As a general matter, a portion of our distributions will be treated as a return of capital for U.S. federal income tax purposes if the aggregate amount of our distributions for a year exceeds our current and accumulated earnings and profits for that year. To the extent that a distribution is treated as a return of capital for U.S. federal income tax purposes, it will reduce a holder’s adjusted tax basis in the holder’s shares, and to the extent that it exceeds the holder’s adjusted tax basis will be treated as gain resulting from a sale or exchange of such shares. See “U.S. Federal Income Tax Considerations.”

Our Manager and its affiliates have limited prior experience managing a portfolio of assets owned by a REIT.

REITs are subject to numerous complex requirements in order to maintain their REIT status, including income and asset composition tests. The Manager and its affiliates have limited prior experience managing a portfolio in the manner intended to comply with such requirements. To the extent the Manager and its affiliates manage us in a manner that causes us to fail to be a REIT, it could adversely affect the value of our common shares.

Potential characterization of distributions or gain on sale may be treated as unrelated business taxable income to tax-exempt investors.

If (1) all or a portion of our assets are subject to the rules relating to taxable mortgage pools, (2) a tax-exempt shareholder has incurred debt to purchase or hold our common shares, or (3) the residual Real Estate Mortgage Investment Conduit interests, or REMIC residual interests, we buy generate “excess inclusion income,” then a portion of the distributions to and, in the case of a shareholder described in clause (2), gains realized on the sale of common shares by such tax-exempt shareholder may be subject to U.S. federal income tax as unrelated business taxable income, or UBTI, under the Code.

We could fail to qualify as a REIT or we could become subject to a penalty tax if income we recognize from certain investments that are treated or could be treated as equity interests in a foreign corporation exceeds 5% of our gross income in a taxable year.

We may invest in securities that are treated or could be treated for U.S. federal (and applicable state and local) corporate income tax purposes as equity interests in foreign corporations. Categories of income that qualify for the 95% gross income test include dividends, interest and certain other enumerated classes of passive income. Under certain circumstances, the U.S. federal income tax rules concerning controlled foreign corporations and passive foreign investment companies require that the owner of an equity interest in a foreign corporation include amounts in income without regard to the owner’s receipt of any distributions from the foreign corporation. Amounts required to be included in income under those rules are technically neither actual dividends nor any of the other enumerated categories of passive income specified in the 95% gross income test. Furthermore, there is no clear precedent with respect to the qualification of such income under the 95% gross income test. Due to this uncertainty, we intend to limit our direct investment in securities that are or could be treated as equity interests in a foreign corporation such that the sum of the amounts we are required to include in income with respect to such securities and other amounts of non-qualifying income do not exceed 5% of our gross income. We cannot assure you that we will be successful in this regard. To avoid any risk of failing the 95% gross income test, we may be required to invest only indirectly, through a domestic TRS, in any securities that are or could be considered to be equity interests in a foreign corporation. This, of course, will result in any income recognized from any such investment becoming subject to U.S. federal income tax in the hands of the TRS, which may, in turn, reduce our yield on the investment. For further information, see “U.S. Federal Income Tax Considerations.”

If we were considered to actually or constructively pay a “preferential dividend” to certain of our shareholders, our status as a REIT could be adversely affected. 

As stated above, in order to qualify as a REIT, we must distribute as dividends to our shareholders at least 90% of our annual REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains.  Historically, in order for dividends to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the dividends could not be “preferential dividends.”  A dividend is not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class and in accordance with the preferences among different classes of stock as set forth in a REIT’s organizational documents.  We intend to make dividends pro rata by class as disclosed under “Description of Our Common Shares — Distributions” and “U.S. Federal Income Tax Considerations.” Nevertheless, if the IRS were to take the position that we paid a preferential dividend while we were subject to the preferential dividend rule, such dividends would not qualify for the dividends paid deduction, we may be deemed to have failed the 90% distribution test, and our status as a REIT could be terminated for the year in which such determination is made.

Risks Related to Retirement Plans 

The Company is not eligible for investment by retirement plans, due to the potential tax advantages of the Qualified Opportunity Fund structure.

The Sponsor believes this is a key potential benefit of the Company, and since retirement plans would not be able to benefit, it has decided not to permit investment by retirement plans. 

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

We make statements in this offering circular that are forward-looking statements within the meaning of the federal securities laws. The words “believe,” “estimate,” “expect,” “anticipate,” “intend,” “plan,” “seek,” “may,” and similar expressions or statements regarding future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this offering circular or in the information incorporated by reference into this offering circular.

The forward-looking statements included in this offering circular are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:

Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this offering circular. All forward-looking statements are made as of the date of this offering circular and the risk that actual results will differ materially from the expectations expressed in this offering circular will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this offering circular, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this offering circular, including, without limitation, the risks described under “Risk Factors,” the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this offering circular will be achieved.

ESTIMATED USE OF PROCEEDS

The table below sets forth our estimated use of proceeds from this offering and the private placements described below, assuming we sell in this offering: (i) $500,000 in shares (not including the $500,000 to be received from our Sponsor and its affiliates in private placements when the minimum offering amount is met), the amount we needed to start operations, and (ii) $50,000,000 in shares, the maximum offering amount. Our common shares will be offered at $10.00 per share until the date that is one year after the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC. Thereafter, our price per share will be adjusted every fiscal quarter and will be based on our NAV as of the end of the prior fiscal quarter.

We expect to use substantially all of the net proceeds from this offering (after paying or reimbursing organization and offering expenses) to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, and other real estate- related assets. We expect that any expenses or fees payable to the Manager for its services in connection with managing our daily affairs, including but not limited to, the selection and acquisition or origination of our investments, will be paid from cash flow from operations. If such fees and expenses are not paid from cash flow (or not waived) they will reduce the cash available for investment and distribution and will directly impact our quarterly NAV. See “Management Compensation” for more details regarding the fees that will be paid to the Manager and its affiliates. Many of the amounts set forth in the table below represent the Manager’s best estimate since they cannot be precisely calculated at this time.

We may not be able to promptly invest the net proceeds of this offering in single-family, multi-family, and other commercial real estate projects. In the interim, we may invest in short-term, highly liquid or other authorized investments, subject to the requirements for qualification as a REIT. Such short-term investments will not earn as high of a return as we expect to earn on our real estate-related investments.

After we raise an aggregate of $1,000,000 from this offering and the private placements to our Sponsor and its officers and directors and have begun our operations, we will begin to reimburse the Manager, without interest, for these organization and offering costs incurred both before and after that date. Reimbursement payments will be made in quarterly installments, but the aggregate quarterly amount reimbursed can never exceed 0.50% of the aggregate gross offering proceeds from this offering. If the sum of the total unreimbursed amount of such organization and offering costs, plus new costs incurred since the last reimbursement payment, exceeds the reimbursement limit described above for the applicable quarterly installment, the excess will be eligible for reimbursement in subsequent quarters (subject to the 0.50% limit), calculated on an accumulated basis, until the Manager has been reimbursed in full.

MANAGEMENT

Our Manager

We operate under the direction of the Manager, North Capital, Inc., which is responsible for directing the management of our business and affairs, managing our day-to-day affairs, and implementing our investment strategy. Our Manager will establish a Research Committee to establish investment guidelines and maintain ultimate responsibility for making decisions with respect to all acquisitions and dispositions of investment assets. See “—Research Committee of the Manager” below. The Company does not have any employees. Instead, the Manager and the Sponsor will act for and on behalf of the Company through their officers and directors. The Manager, the Sponsor and their officers and directors are not required to devote all of their time to our business and are only required to devote such time to the Company’s affairs as their duties require.

We will follow investment guidelines adopted by the Manager and the investment and borrowing policies set forth in this offering circular, unless they are modified by the Manager. Our Manager may establish further written policies on investments and borrowings and will monitor our administrative procedures, investment operations and performance to ensure that the policies are fulfilled. Our Manager may change our investment objectives at any time without approval of our shareholders.

As a fiduciary, our Manager is required to put our interests before its own. Our Manager performs its duties and responsibilities pursuant to our operating agreement. Our Manager maintains a contractual relationship with us and our shareholders, and we have agreed to limit the liability of the Manager and to indemnify the Manager against certain liabilities. Our manager has agreed to operate under the CFA Institute Asset Manager Code of Professional Conduct.

Responsibilities of the Manager

The responsibilities of the Manager include:

Investment Advisory, Origination and Acquisition Services

Offering Services

Asset Management Services

Accounting and Other Administrative Services

Shareholder Services

Financing Services

Disposition Services

Our Manager may hire affiliates (provided the services are provided on an arms-length basis on such terms as would be obtained from a third party) or third parties to assist with the performance of the aforementioned services.

Allocation of Investment Opportunities

Our Sponsor expects to establish and sponsor additional REIT offerings in the future, and to continue to offer such investment opportunities through the REITless Platform. Our Sponsor has previously organized, as of the date of this offering circular, REITless Impact Income Strategies LLC, which was formed to originate, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate loans. These additional investment vehicles may have investment criteria that compete with us. In addition, the Manager may manage client portfolios or separately managed account portfolios for other advisors, for which investments such as the debt investments made by the Company would be appropriate. If a sale, financing, investment or other business opportunity would be suitable for more than one of these investment vehicles or investors, the Manager will allocate it using its business judgment. Any allocation of this type may involve the consideration of a number of factors that the Manager determines to be relevant, including:

See also “Conflicts of Interest – Allocation of Investment Opportunities.”

Shared Services Agreement

The Manager will enter into a shared services agreement with NCIT, our Sponsor, effective as of the commencement of this offering. Pursuant to this agreement, the Manager will be provided with access to, among other things, our Sponsor’s portfolio management, asset valuation, risk management and asset management technology and services as well as administration services addressing legal, compliance, investor relations and information technologies necessary for the performance by the Manager of its duties under the operating agreement in exchange for a fee representing the Manager’s allocable cost for these services. The fee paid by the Manager pursuant to the shared services agreement will not constitute a reimbursable expense under our operating agreement. However, under the shared services agreement, our Sponsor will be entitled to receive reimbursement of expenses incurred on behalf of us or the Manager that we are required to pay to the Manager under our operating agreement.

Executive Officers and Directors of the Sponsor

As of the date of this offering circular, the executive officers and directors of the Sponsor and their positions and offices are as follows:

James P. Dowd

James P. Dowd is the founder and CEO of the North Capital companies (as defined below under “Conflicts of Interest”), including the Sponsor, NCIT. He has 32 years of experience in global financial markets, including twenty one years as a portfolio manager. Jim is a CFA charter holder and is a Certified Public Accountant registered with the State of Illinois. He is a registered principal with North Capital Private Securities Corp and has passed the FINRA Series 3, 7, 24, 57, 63, 65 and 79 exams. He is registered with the NFA and with FINRA. Prior to forming North Capital, Inc. in October 2008, Mr. Dowd was a Senior Managing Director at Bear Stearns & Company, from September 2003 to September 2008. At Bear he led the portfolio management team allocating firm and customer capital to non-affiliate hedge funds. Before Bear, Jim also held senior positions with Tokai Asia Ltd. and Bankers Trust Company, where he was Managing Director and Head of Derivatives Trading for Asia. Jim is a magna cum laude graduate of Georgetown University School of Foreign Service.

Stephanie Holt

Stephanie Holt is CFO and a Managing Director at the North Capital companies (as defined below under “Conflicts of Interest”), including of the Sponsor, NCIT. She has over 25 years of experience in finance. Stephanie holds the FINRA Series 99 license and is registered with FINRA. Prior to joining the North Capital companies in 2011, she held management and executive positions in the finance, high tech, medical, and manufacturing industries. Stephanie graduated from University of California, Riverside, where she earned a Bachelor of Science in Business Economics with a concentration in Accounting. She also holds an MBA from University of Redlands.

Michael Weaver

Michael Weaver is a Director-Principal at North Capital Private Securities, including of the Sponsor, NCIT, and has been at the North Capital companies since 2015. He has over 10 years of experience in financial markets. Michael has passed the FINRA Series 3, 7, 24, 63 and 65 exams and is registered with FINRA. Michael started his career in 2004 as an Analyst in the Fixed-Income Sales & Trading (“S&T”) Program at Banc of America Securities, working in the Structured Securities Group and the Central Funding Group, where he was an interest rate trader of Agency Specials, Strips, TIPS, Off-the-run Treasuries and the on-the-run 30 year US Treasury bond in repo. Michael also has experience as a Summer Analyst in Investment Banking at Goldman Sachs, a Summer Associate in S&T at Deutsche Bank and an Intern at MKP Capital Management. Michael graduated magna cum laude from Morehouse College, where he earned a Bachelor of Arts in Business Administration with a concentration in Finance. While at Morehouse, he was inducted into Phi Beta Kappa and Beta Gamma Sigma. Mr. Weaver also holds an MBA from Cornell University where he was a Roy H. Park Leadership Fellow. Mr. Weaver is a CFA charter holder.

Richard “Grant” Nelson

Grant Nelson is a Director-Principal at North Capital Private Securities, including of the Sponsor, NCIT. Grant has passed the FINRA Series 7, 24 and 63 exams and is registered with FINRA. Prior to joining North Capital in 2015, Grant served in the United States Air Force as an avionics technician from 2007 to 2011, earning the rank of Senior Airman. His experience also includes an internship as an analyst for the Utah Shakespeare Festival, during which time he specialized in statistics. Grant is a graduate of the University of Utah, where he graduated summa cum laude with a BS in Economics. Grant also received his MS in Finance from the University of Utah.

Peter K. Tomozawa

Peter Tomozawa is a Visiting Scholar at the International Monetary Fund in Washington DC and currently serves as an Advisor to the LA 2028 Organizing Committee in Los Angeles, California. Prior to this he served for two years on the Olympic and Paralympic bid committee’s executive team that successfully brought the 2028 Games to Los Angeles. He is a trustee of The Nature Conservancy in Honolulu, Hawaii. He previously served as Executive Director, Business Development, with the Office of the Mayor of Honolulu. Prior to that he served as a director of several private companies and non-profit organizations. He retired as a Partner and Managing Director at Goldman Sachs in 2010, after a seventeen-year career in New York, Tokyo, and London. Mr. Tomozawa earned his MBA in Finance from The Wharton School at University of Pennsylvania, and his BS in Industrial and Operations Engineering from the University of Michigan.

Federico F. Soddu

Federico F. Soddu is corporate counsel at ConsenSys, a blockchain software company, and is based in Brooklyn. Mr. Soddu works closely with ConsenSys leadership on a broad variety of legal, business and strategic matters. Prior to joining ConsenSys, Mr. Soddu was an associate in the New York office of Latham & Watkins LLP, where he practiced in the Emerging Companies Group and represented investors and start-up companies in a variety of private securities transactions. Prior to that, he was a member of the Financial Institutions Group of Latham & Watkins LLP, where he primarily focused on public equity-linked derivatives transactions (e.g. registered/144A convertible notes, margin loans, OTC trades and special situations) for the world’s largest financial institutions and both U.S. and foreign issuers listing on U.S. exchanges. Mr. Soddu is a graduate of Northwestern University School of Law (J.D., cum laude) and the University of Pennsylvania (B.A., magna cum laude). He is a member of the New York Bar.

Research Committee of the Manager

The Research Committee of the Manager is a standing committee, established to assist the Manager in fulfilling its oversight responsibilities by (1) considering and approving of investments made by us or on our behalf, (2) establishing our investment guidelines and overseeing our investment portfolio, and the investment activity of other accounts and funds held for our benefit and (3) overseeing the investment activities of our subsidiaries (if any). The Research Committee will consist of at least three members, each of whom will be appointed by the Manager, who will serve until such time as such Research Committee member resigns or is replaced by the Manager, in its sole and absolute discretion. The initial Research Committee will be comprised of Mr. Dowd, Ms. Holt, Mr. Weaver, and Mr. Nelson. In the event that two or more members of the Research Committee are interested parties in a transaction, the Independent Representative (defined below) will be required to approve the transaction. See “Conflicts of Interest— Certain Conflict Resolution Measures—Our Policies Relating to Conflicts of Interest.”

Underwriting Standards

The evaluation of a particular investment generally commences with a development or redevelopment opportunity that is identified directly by the Company or referred by a broker or project sponsor. The amount of a particular investment financed is generally no less than $50,000 and no more than $5 million. Opportunities should typically have the following elements in order to be eligible for consideration: development or redevelopment project in single- or multi-family housing; located in a designated Opportunity Zone in a geographic region with strong demographics (including but not limited to population growth, job growth, wage growth, increasing home values, stable or growing rental cap rates), favorable regulatory environment, solid infrastructure, and reliable services (contractors and skilled trades, property management).

The Research Committee reviews each investment opportunity after an analysis of underlying values (acquisition, cost plus basis, after repair value), cash flows, budgets, capital structure, partnership qualifications (if any), vendors, rent rolls, and any other factors that the Research Committee determines to be relevant to its evaluation.

Underwriting Parameters

The Research Committee will sometimes require a licensed independent appraiser or broker to assist with its confirmation of a property’s fair market value under different assumptions. In other cases, the Research Committee may rely on opinions of value from other sources, such as the price of a recent sale of that particular property or comparable properties and an opinion of value from the Company itself, the opinion of value provided by a lender that offered to provide financing to a project in which the Company invested, or a real estate broker knowledgeable in the area where the property is located. In some cases, however, the Research Committee will determine that the cost or time to obtain an independent certified appraisal or price opinion is not warranted.

The appraisal or evaluation for construction loans, rehabilitation loans and entitlement loans will be prepared on either an “after-completed” basis, i.e., assuming that the entitlements or the improvements for which the loan is obtained will be completed, or on an “as-is” basis. The appraiser may also assume that all public improvements to be funded by special assessment district bonds will be completed as proposed and that the property will be marketed and sold in the manner planned by the borrower. In the case of a construction loan, rehabilitation loan or entitlement loan, the loan-to-value ratio as estimated in the appraisal or evaluation and the budget for the project may exceed the loan-to-value ratios listed above at times during the term of the loan. This may occur because the appraisal or evaluation may be based upon the value of the property when the construction or improvements are completed or the entitlements obtained; however, before the construction, improvements or entitlements are completed, the value of the property will generally be less than the “as completed” appraised or evaluated value.

The Research Committee performs its own underwriting analysis, in its sole discretion, with respect to all underlying investment opportunities. However, Investors should perform their own respective due diligence and should not rely on any evaluation or analysis performed by the Company. Investors should independently assess the prospects of risks associated with any investment, including, without limitation, all of the risks detailed in this offering circular.

Each project must carry appropriate property casualty insurance, and the Company may (but will not always) be named as loss payee on any such. Any payment made on such policies may be used to repair the property or to reduce the outstanding balance on any underlying financing. The Company does not generally require property damage coverage for landslides, earthquakes, floods, or similar natural disaster events. Any hazard losses not then covered by a policy would result in losses which would not be reimbursed, and investors could sustain a significant reduction, or complete elimination of, the return and a total loss of their investment.

Compensation of Executive Officers

We do not currently have any employees nor do we currently intend to hire any employees who will be compensated directly by us. Each of the executive officers of our Sponsor receives compensation for his or her services, including services performed for us on behalf of the Manager, from our Sponsor. As executive officers of the Sponsor, these individuals will perform the duties of the Manager to manage our day-to-day affairs, oversee the review, selection and recommendation of investment opportunities, service acquired investments and monitor the performance of these investments to ensure that they are consistent with our investment objectives. Although we will indirectly bear some of the costs of the compensation paid to these individuals, through fees we pay to the Manager, we do not intend to pay any compensation directly to these individuals.

Limited Liability and Indemnification of the Manager and Others

Subject to certain limitations, our operating agreement limits the liability of the Manager, its officers and directors, our Sponsor and our Sponsor’s officers, directors, shareholders and affiliates, for monetary damages and provides that we will indemnify and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to the Manager, its officers and directors, our Sponsor and our Sponsor’s officers, directors, shareholder and affiliates.

Our operating agreement provides that to the fullest extent permitted by applicable law the Manager, its officers and directors, our Sponsor, its officers and directors, and our Sponsor’s shareholders and affiliates will not be liable to us. In addition, pursuant to our operating agreement, we have agreed to indemnify the Manager, its officers and directors, our Sponsor and our Sponsor’s officers, directors, shareholders and affiliates, to the fullest extent permitted by law, against all expenses and liabilities (including judgments, fines, penalties, interest, amounts paid in settlement with the approval of the company and attorney’s fees and disbursements) arising from the performance of any of their obligations or duties in connection with their service to us or the operating agreement, including in connection with any civil, criminal, administrative, investigative or other action, suit or proceeding to which any such person may hereafter be made party by reason of being or having been the Manager, one of the Manager’s directors or officers or one of the Sponsor’s directors or officers.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Term and Removal of the Manager

Our operating agreement provides that the Manager will serve as our manager for an indefinite term, but that the Manager may be removed by us, or may choose to withdraw as the Company’s manager, under certain circumstances.

Our shareholders may only remove the Manager at any time with 30 days prior written notice for “cause,” following the affirmative vote of two-thirds of our shareholders. If the Manager is removed for “cause,” the members will have the power to elect a replacement Manager upon the affirmative vote or consent of the holders of a majority of our common shares. “Cause” is defined as:

Unsatisfactory financial performance of the Company does not constitute “cause” under the operating agreement.

In the event that shareholders vote to remove the Manager, the Company may incur additional costs associated with installing a new third party as manager, including, among other costs, paying asset management, servicing, property management or other operating expenses that would be negotiated at arms’ length, which could be higher than the rates currently agreed to with the Manager.

Our Manager may assign its rights under our operating agreement in its entirety or delegate certain of its duties under the operating agreement to any of its affiliates, including pursuant to the shared services agreement described above under “—Shared Services Agreement” without the approval of our shareholders so long as the Manager remains liable for any such affiliate’s performance, and if such assignment or delegation does not require our approval under the Advisers Act. Our Manager may withdraw as the Manager if we become required to register as an investment company under the Investment Company Act, with such withdrawal deemed to occur immediately before such event. Our Manager will determine whether any succeeding manager possesses sufficient qualifications to perform the management function. In the event of the removal or withdrawal of the Manager, the Manager will cooperate with us and take all reasonable steps to assist in making an orderly transition of the management function.

Holdings of our Common Shares

Our Sponsor, its officers and directors have committed to invest $500,000 in us through the purchase of 50,000 common shares in a private placement once the minimum threshold is met at the same $10.00 per share price as in this offering. The Sponsor previously acquired 100 common shares in connection with our formation in a private placement at $10.00 per share.

REITless Platform

We will conduct this offering primarily via the REITless Platform, which will host this offering in connection with the distribution of the common shares offered pursuant to this offering circular. The REITless Platform is owned and operated by NCIT, our Sponsor. We will not pay the Sponsor any sales commissions or other remuneration for hosting this offering on the REITless Platform, other than reimbursable expenses under the shared services agreement. The REITless Platform has previously hosted private and public offerings of other affiliates of the Sponsor under similar arrangements.

License Agreement

We will enter into a license agreement with our Sponsor effective upon the commencement of this offering, pursuant to which our Sponsor will grant us a non-exclusive, royalty free license to use the name “REITless.” Other than with respect to this license, we will have no legal right to use the “REITless” name. In the event that the Manager ceases to manage us, we would be required to change our name to eliminate the use of “REITless.”

MANAGEMENT COMPENSATION

The Manager and its affiliates will receive fees and expense reimbursements for services relating to this offering and the investment and management of our assets. The items of compensation are summarized in the following table.

No portion of the fees detailed below will be allocated to any individual in his or her capacity as an executive officer of our Sponsor or Manager.

PRINCIPAL SHAREHOLDERS

The following table sets forth the beneficial ownership of our common shares as of the date that we raise the minimum offering amount and complete the private placement of securities to our Sponsor, its affiliates and other investors, for each person or group that holds more than 5% of our common shares, for each director and executive officer of our Sponsor and for the directors and executive officers of our Sponsor as a group. To our knowledge, each person that will beneficially own our common shares will have sole voting and disposition power with regard to such shares.

Unless otherwise indicated below, each person or entity has an address in care of our principal executive offices at 623 E Fort Union Blvd., Suite 101, Salt Lake City, UT 84047.

CONFLICTS OF INTEREST

We are subject to various conflicts of interest arising out of our relationship with the Manager and its affiliates. We discuss these conflicts below and conclude this section with a discussion of the corporate governance measures we have adopted to mitigate some of the risks posed by these conflicts.

Our Affiliates’ Interests in Other Entities

General

The officers and directors and the key investment professionals of our Sponsor who perform services for us on behalf of the Manager are also officers, directors, managers, and/or key professionals of other affiliated entities. These persons have legal obligations with respect to the Sponsor and those entities that are similar to their obligations to us. In the future, these persons and other affiliates of our Sponsor may organize other real estate-related investment programs and acquire for their own account real estate-related investments that may be suitable for us. In addition, our Sponsor may grant equity interests in the Manager to certain of its management personnel performing services for the Manager. At the date of this offering circular, the Sponsor is involved with one other real estate-related program, REITless Impact Income Strategies LLC, an investment vehicle that intends to qualify as a REIT that makes loans to real estate developers and invests in other real estate related debt securities.

Allocation of Investment Opportunities

Our Sponsor’s real estate professionals acting on behalf of our Manager must determine which investment opportunities to recommend to us and other REITless entities. Our Manager and its affiliates may allocate investments that are located in Opportunity Zones between us and other REITs formed by our Sponsor. Our Sponsor has previously organized, at the date of the offering circular, REITless Impact Income Strategies LLC, which was formed to originate, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate loans, and is expected to establish and sponsor additional REITs and continue to offer investment opportunities through the REITless Platform. These additional investment vehicles may have investment criteria that compete with us. In addition, the Manager may manage client portfolios or separately managed account portfolios for other advisors, for which investments such as the debt investments made by the Company would be appropriate.

If a subsequent event or development causes any investment, in the opinion of our Sponsor’s real estate professionals, to be more appropriate for another REITless entity, they may offer the investment to such entity.

Except under any policies that may be adopted by our Manager, which policies will be designed to minimize conflicts among the programs and other investment opportunities provided on the REITless Platform, no REITless Platform investment opportunity (including us) will have any duty, responsibility or obligation to refrain from:

In addition, any decisions by our Manager to renew, extend, modify or terminate an agreement or arrangement, or enter into similar agreements or arrangements in the future, may benefit one REIT more than another REIT or limit or impair the ability of any REIT to pursue business opportunities. In addition, third parties may require as a condition to their arrangements or agreements with or related to any one particular program that such arrangements or agreements include or not include another REIT, as the case may be. Any of these decisions may benefit one REIT more than another REIT.

Allocation of Our Affiliates’ Time

We rely on our Manager’s executive officers and our Sponsor’s key real estate and investment professionals who act on behalf of the Manager, including Mr. James P. Dowd, for the day-to-day operation of our business. Mr. Dowd is also the Chief Executive Officer of our Sponsor. As a result of his competing responsibilities, his obligations to other investors and the fact that he engages in and he will continue to engage in other business activities on behalf of himself and others, Mr. Dowd will face conflicts of interest in allocating his time among us, the Manager and other entities and other business activities in which he is involved. However, we believe that the Manager and its affiliates have sufficient depth of investment professionals to fully discharge their responsibilities to the Company and the other entities for which they work.

Receipt of Fees and Other Compensation by the Manager and its Affiliates

Our Manager and its affiliates will receive substantial fees from us, which fees will not be negotiated at arm’s length. These fees could influence the Manager’s advice to us as well as the judgment of affiliates of the Manager, some of whom also serve as the Manager’s officers and directors and as the key real estate, debt finance, and investment professionals of our Sponsor. Among other matters, these compensation arrangements could affect their judgment with respect to:

Duties Owed by Some of Our Affiliates to Our Manager and the Manager’s Affiliates

The officers and directors and the key real estate and investment professionals of our Sponsor performing services on behalf of the Manager are also officers, directors, managers and/or key professionals of the following companies, which we collectively refer to as the “North Capital companies”:

As a result, they owe duties to each of these entities, their shareholders, members and limited partners. These duties may from time to time conflict with the duties that they owe to us.

No Independent Underwriter

As we are conducting this offering without the aid of an independent underwriter, you will not have the benefit of an independent due diligence review and investigation of the type normally performed by an independent underwriter in connection with the offering of securities. See “Plan of Distribution.”

License Agreement

We have entered into a license agreement with our Sponsor effective upon the commencement of this offering, pursuant to which our Sponsor granted us a non-exclusive, royalty free license to use the name “REITless” and certain marketplace technology owned by the Sponsor. See “Management—License Agreement.”

Certain Conflict Resolution Measures

Independent Representative

If our Sponsor, Manager or their affiliates have a conflict of interest with us that is not otherwise covered by an existing policy we have adopted or a transaction is deemed to be a “principal transaction,” the Manager will appoint an independent representative (the “Independent Representative”) to protect the interests of the shareholders and review and approve such transactions. Any compensation payable to the Independent Representative for serving in such capacity on our behalf will be payable by us. Principal transactions are defined as transactions between our Sponsor, Manager or their affiliates, on the one hand, and us or one of our subsidiaries, on the other hand. Our Manager is only authorized to execute principal transactions with the prior approval of the Independent Representative and in accordance with applicable law. Such prior approval may include but not be limited to pricing methodology for the acquisition of assets and/or liabilities for which there are no readily observable market prices.

Our Policies Relating to Conflicts of Interest

In addition to the provisions in our operating agreement described below and the Manager’s investment allocation policies described above, we have adopted the following policies prohibiting us from entering into certain types of transactions with the Manager, our Sponsor, their officers or any of their affiliates in order to further reduce the potential for conflicts inherent in transactions with affiliates.

Pursuant to these conflicts of interest policies, we may not engage in the following types of transactions unless such transaction is approved by the Independent Representative:

In addition, pursuant to these conflicts of interest policies, we will neither make any loans to the Manager, our Sponsor, their officers or any of their affiliates but we may borrow money from the Manager, our Sponsor, their officers or any of their affiliates to fund short-term liquidity needs. These restrictions on loans will only apply to advances of cash that are commonly viewed as loans, as determined by the Manager. By way of example only, the prohibition on loans would not restrict advances of cash for legal expenses or other costs incurred as a result of any legal action for which indemnification is being sought nor would the prohibition limit our ability to advance reimbursable expenses incurred by the Manager, our Sponsor, their officers or any of their affiliates.

These conflicts of interest policies may be amended at any time in the Manager’s discretion.

Other Operating Agreement Provisions Relating to Conflicts of Interest

Our operating agreement contains many other restrictions relating to conflicts of interest including the following:

Term of the Manager. Our operating agreement provides that the Manager will serve as our manager for an indefinite term, but that the Manager may be removed by us, or may choose to withdraw as manager, under certain circumstances. Our shareholders may remove the Manager at any time with 30 days prior written notice for “cause,” following the affirmative vote of two-thirds of our shareholders. Unsatisfactory financial performance does not constitute “cause” under the operating agreement. Our Manager may withdraw as manager if we become required to register as an investment company under the Investment Company Act, with such withdrawal deemed to occur immediately before such event. In the event of the removal of the Manager, the Manager will cooperate with us and take all reasonable steps to assist in making an orderly transition of the management function. Our Manager will determine whether any succeeding manager possesses sufficient qualifications to perform the management function. See “Management—Term and Removal of the Manager.”

Other Transactions Involving Affiliates. Before engaging in a transaction involving an affiliate, the Manager must conclude that all other transactions between us and our Sponsor, the Manager, any of their officers or directors, or any of their affiliates are fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties. See “Management—Research Committee of the Manager.”

INVESTMENT OBJECTIVES AND STRATEGY

Investment Objectives

Our investment objectives are:

We cannot assure you that we will realize these objectives or that the value of our assets will not decrease. Furthermore, within our investment objectives and policies, the Manager will have broad discretion with respect to the selection of specific investments and the purchase and sale of our assets. Our Manager’s Research Committee will review our investment guidelines at least annually to determine whether our investment guidelines continue to be in the best interests of our shareholders. See “Management—Research Committee of the Manager.”

Investment Strategy

We intend to use substantially all of the proceeds of this offering to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, and to invest in other estate-related assets in qualified opportunity zones. We will seek to create and maintain a diversified portfolio of investments that generate cash flows through the periodic payment of rents and/or preferred dividends, allowing us to make regular dividend distributions to our shareholders. We also plan to invest in development and redevelopment projects that have the potential for long-term capital appreciation, so as to afford investors the opportunity to realize tax-free capital gains on any investment held more than ten years, according to the rules affording such preference to Qualified Opportunity Funds. We expect the portfolio to be diversified by investment type, property type, and geographic region. Within this investment universe, we intend to identify and invest in projects and companies that have the potential to provide a significant positive social and/or environmental impact in the communities where the investments are made. We intend to hold at least 90% of our assets in Qualified Property.

Our Manager intends to directly structure, underwrite and manage most of the investments we make, whether in development or redevelopment projects, common or preferred equity, alone or in partnership with others. Our underwriting process will involve comprehensive and systematic financial, structural, operational and legal due diligence of our partners and the underlying projects, in order to identify and structure investments that meet our investment requirements. We feel the market environment offers a broad range of opportunities to source compelling investments with attractive risk-return profiles. 

We plan to employ leverage to enhance the total return to our shareholders through loans from banks or other lenders, or by issuing short-term debt or preferred equity or other capital markets transactions backed by the Company’s portfolio of assets. Our target leverage ratio after we have acquired an initial substantial portfolio of diversified investments is between 0-75% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. During the period when we are acquiring our initial portfolio, we may employ greater leverage if the Manager determines that it is in our best interest. We will seek to secure leverage that is non-recourse, non-mark-to-market financing to the extent obtainable on a cost effective basis. Our Manager may from time to time modify our leverage policy in its discretion. However, other than during our initial period of operations, it is our policy not to borrow more than 75% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. We cannot exceed the leverage limit of leverage policy unless any excess in borrowing over such level is approved by the Manager’s Research Committee.

In executing our investment strategy, we believe that we will benefit from the Manager’s affiliation with our Sponsor, given our Sponsor’s extensive experience and capabilities as a provider of marketplace technology services and, through its broker-dealer subsidiary, broker-dealer services for many of the leading online real estate funding platforms. These competitive advantages include:

Market Overview and Opportunity

The TCJA established a new investment incentive program called Qualified Opportunity Funds, to provide tax benefits for investments in low-income and distressed communities in the United States. Qualified Opportunity Funds have the potential to be a major catalyst for the redevelopment of such communities across the country.

As of this date of this offering circular, there is significant uncertainty regarding the qualified opportunity zone program, as the U.S. Department of the Treasury has not released guidance beyond the Proposed Regulations to clarify many of the issues introduced by the new legislation. Accordingly, the discussion below of various aspects of the qualified opportunity zone program, and the related issues affecting Qualified Opportunity Zone Property, is based upon positions that our Manager believes to be reasonable given the statute as currently written, the Proposed Regulations and prior Treasury and IRS precedent. However, we cannot assure you that the discussion below will ultimately prove to be correct or complete, as the Treasury issues further guidance on these various matters.

The key aspects of the programs are:

Opportunity Zones – Opportunity Zones are census tracts designated by each state governor and certified by the U.S. Department of the Treasury, into which investors can invest in new projects to spur economic development, in exchange for certain U.S. federal income tax preferences.

Qualified Opportunity Funds – Qualified Opportunity Funds are investment entities (typically a corporation or partnership) that invest at least 90% of their capital in Qualified Property, which includes qualified opportunity zone stock, qualified opportunity zone partnership interests and qualified opportunity zone business property. The model enables a broad array of investors to pool their resources to invest in Qualified Property, increasing the scale of capital available for such investments. In the event that we do not meet the requirement that at least 90% of our assets be Qualified Property, we would be subject to a penalty for each month we do not meet the 90% test. The penalty is an amount calculated as the (i) the excess of the amount equal to 90% of the Company’s aggregate assets, over the aggregate amount of Qualified Property held by the Company, multiplied by (ii) the federal short-term rate (as determined by the IRS) plus 3 percentage points. It is unclear how this determination will be made. No penalty would be imposed with respect to a failure to meet the 90% requirement if we were able to show that the failure is due to reasonable cause, though there is no guidance regarding what a determination of reasonable cause would require

To capture the full potential tax benefits offered by a Qualified Opportunity Fund, an investor must invest the realized gains from a sale of a prior investment into a Qualified Opportunity Fund within 180 days of the sale of that investment (e.g., stock, bonds or real estate). The investor must roll over only the gain into a Qualified Opportunity Fund, not the full sale proceeds. For example, if an investor realizes a capital gain of $100,000 from the sale of a $500,000 investment in an equity mutual fund, the investor has 180 days following the date of disposition to reinvest the $100,000 into a Qualified Opportunity Fund. While we believe it is reasonable that the capital gains from the fund sale would be eligible for the deferral benefit offered by the Qualified Opportunity Fund investment program, absent additional guidance from the U.S Department of the Treasury or the IRS, there remains uncertainty as to the accuracy of this view.

Investors have the potential to receive the following three tax incentives when investing in Qualified Opportunity Funds:

On October 19, 2018, the Department of the Treasury issued the Proposed Regulations to provide guidance under the new section of the Code establishing qualified opportunity zones. Concurrently with the publication of the Proposed Regulations, the IRS noted that it currently anticipates that taxpayers will make deferral elections on IRS Form 8949, which will be attached to their U.S. federal income tax returns for the taxable year in which the capital gain would have been recognized if the gain had not been deferred. Subsequent changes in the tax laws or the adoption of new regulations, as well as early dispositions of our common shares, could cause the loss of the anticipated tax benefits. As a result, you are urged to consult with your tax advisors regarding the tax consequences of (1) purchasing, owning or disposing of our common shares, including the U.S. federal, state and local tax consequences of investing capital gains in our shares, (2) our election to be taxed as a REIT and our election to be organized as a Qualified Opportunity Zone and (3) potential changes in the interpretation of the existing tax laws or the adoption of new laws or regulations. While the IRS has stated that eligible taxpayers may rely on the Proposed Regulations with respect to eligible gains that would be recognized before the final regulations are adopted if the taxpayer applies the rules in their entirety, the Proposed Regulations have not been formally adopted and the IRS has indicated that it will be releasing a second round of proposed regulations to address issues relating to investments in Qualified Opportunity Funds, which may modify or revise the guidance provided in the Proposed Regulations. As a result, investors may not be able to completely determine the cost or complexity of complying with these investment rules prior to acquiring common shares in this offering.

Source: Economic Innovation Group

The figure above and table below, produced by Economic Innovation Group, illustrate how an investor’s potential after-tax returns would compare under different scenarios, assuming various holding periods, annual investment appreciation of 7%¹, and a U.S. federal income tax rate on long-term capital gains of 23.8% (U.S. federal income tax rate on long-term capital gains tax of 20% and net investment income tax of 3.8%). For instance, based on these assumptions, after 10 years an investor would potentially earn an additional $44 for every $100 of capital gains reinvested into an Opportunity Fund in 2018, compared to an equivalent investment in a more standard portfolio investment generating the same annual appreciation. The table below provides additional information on the tax liabilities and differences in the after-tax annual rates of return. Note, however, that the performance assumptions shown below are for illustrative purposes only, and are not intended to reflect the actual experience of any individual investor.

We believe that the near and intermediate-term market for investment in commercial real estate properties and other real-estate related assets in Opportunity Zones could be compelling from a risk-return perspective. Our investment strategy, combined with the experience and expertise of our Manager’s management team, will provide opportunities to originate investments that could potentially bring appropriate risk-adjusted returns for our shareholders.

We believe the following conditions should create a favorable investment environment for us.

¹ S&P500 30-year average return; Yahoo Finance

Millennials are turning to the suburbs with their families – As millennials are now hitting their 30s, many are relocating from the city to the suburbs. According to a survey conducted by Urban Land Institute ("ULI"), 13 percent of millennials live in or near downtown areas. A study in 2018 from Ernst & Young based on a survey of more than 1,200 millennials reported that 38% of millennials live in the suburbs, compared to 37% in the city. The move to the suburbs allows millennials to purchase more affordable homes. As a result, adequate single-family and multifamily housing will be necessary, and development of retail properties is expected to follow in order to meet the new demands. The figures below show the rise in growth rates for the suburbs and exurbs areas in the last five years. According to the U.S. Census Bureau, city growth during the 2015-2016 period was 0.82% compared to a suburban growth rate of 0.89% during the same period. These suburban markets have historically been the focus of the previous investments and experience of our Manager’s management team.

 Concentration of fundraising among the largest private funds has made it difficult for real estate sponsors to raise equity less than $10,000,000 — One of the responses to the 2008 recession, according to Preqin Global Private Equity Report, has been growth in the average size of investment funds, whereby large investors have been investing more of their capital with managers that have extensive track records, and are therefore, by nature, raising much larger funds. According to 2017 Private Equity International Ranking, the 300 top private equity funds that make up the ranking have a five-year fundraising total of $1.5 trillion, with the top 10 funds accounting for almost $400 billion or approximately 27% of the fundraising total. In 2016 and 2017, the top 10 funds only accounted for 22.9% and 23.8%, respectively, of the total capital raised. Consequently, larger funds focus on larger deals in order to deploy their capital fully and effectively.

Our Business Plan – The Company intends to acquire, improve, and manage a portfolio of real estate properties, but in order to be treated as a Qualified Opportunity Fund under the Opportunity Zone program, our investments must clearly meet the following requirements, including (among others):

Over the coming months, the U.S. Department of the Treasury and the IRS plan to release additional guidance on the implementation of the new opportunity zone program. The Sponsor and the Manager intend to follow these updates closely in order to maintain compliance and refine the structure and operations of the Company to take advantage of the available incentives offered under the program.

Market Outlook

Over the past few years, the commercial real estate market has benefited from a slow but constant job growth. There were 176,000 new jobs added in November 2018 according to the Bureau of Labor Statistics. While job growth has fallen short of expectations, the U.S. unemployment rate stayed steady at around 3.9%.² As we look ahead over the next five years, continued improvements in U.S. macroeconomic factors, coupled with a healthier commercial real estate lending market, points to an optimistic outlook for the commercial real estate market in the United States.

² http://www.us.jll.com/united-states/en-us/research/employment-rate-data-trends https://data.bls.gov/timeseries/lns14000000

In 2017, foreign investment in U.S. real estate surged to an all-new high. According to the 2017 Profile of International Activity in U.S. Residential Real Estate from the National Association of Realtors (NAR), foreign investors purchased $153 billion in residential property between April 2016 and March 2017, representing an increase of 49% from 2016. Foreign investors purchased 284,455 residential properties in 2017, representing a 32% increase from 2016 and accounting for 10% of the dollar volume of existing home sales.³ Moving forward, with the stable growth of the U.S. economy and the strengthening of the U.S. dollar, we expect that more foreign investors continue to consider the U.S. commercial real estate market as a safe place to store their wealth. We believe that the U.S. real estate market could benefit from this continuation of high foreign direct investment.

Risks related to rising interest rates and regulatory uncertainty could adversely affect our ability to originate new investments or adversely impact the values of our existing investment portfolio. In the event that real estate market fundamentals deteriorate, the collateral security backing our investments may be impaired as a result of lower rental rates, reduced occupancy levels, and/or declining collateral values. Furthermore, such an adverse market environment could materially impact the cost and availability of long-term credit, hampering the ability of our partners to initiate and complete the types of development and redevelopment projects that create investment opportunities for the Company. Similarly, a decline in real estate values reflecting an imbalance in supply and demand could lead to a reduction in marginal development and redevelopment efforts, adversely affecting the prospects of the Company. In addition, with political uncertainty in the federal government, there could be negative consequences to the overall economy and the U.S. real estate market when a new policy is enacted.

Social and Environmental Impact of our Investments

Impact investing is the idea of investing to generate not only a return on investment but social and environmental impact. Impact investments have attracted the attention as well as capital from a variety of investors, from nongovernmental organizations and religious institutions to financial institutions, banks, and fund managers. According to the Annual Impact Investor Survey in 2018, Global Impact Investing Network (GIIN), a total of 226 fund managers, banks, insurance companies, and foundations and found that there was $228.1 billion in impact investment assets under management (AUM) at the end of 2017. The survey also reports that among the 81 asset managers that shared AUM numbers for 2013 and 2017, AUM grew from only $30.8 billion in 2013 to approximately $51 billion in 2017, representing a 13% compound annual growth rate.

In 2017, GIIN reported that among 225 respondents, a total of $35.5 billion was invested in 11,136 impact-related investments. The same set of respondents said they planned to invest approximately $38 billion into more than 11,700 impact investments in 2018. That presents an annual growth rate of 7% in terms of capital invested and 5% in terms of number of investments. In addition, the majority of asset managers expect to increase or maintain the amount of capital invested in impact investments.

³ US Residential Real Estate report from NAR

The Company intends to focus on investments that have the potential to make a positive social or environmental impact, in addition to providing the financial risk and return profile detailed above. Some of the impact objectives that we focus on include:

The Manager will implement impact criteria and guidelines, apart from the investment financial guidelines, to ensure that the Company’s impact objective is factored into its overall investment objectives. The Company may utilize outside consultants or service providers, such as Global Impact Investing Ratings System (GIIRS) or other rating services, to help evaluate its relative effectiveness in meeting its impact objectives, compared to other investments with similar attributes. The relative importance of the Company’s impact objective, compared to financial objectives, is expected to vary over the duration of each investment life cycle, and we cannot assure you that the Company will be able to source investments that meet its social impact criteria and guidelines, or that it will fulfill its social and environmental impact objectives.

Investments in Government Sponsored Programs

If we meet the qualifications established by the FDIC for investment in certain government sponsored programs, we may elect to invest in any existing or future programs sponsored by the government to facilitate the investment in assets of the type we seek to acquire for our portfolio, to the extent consistent with our investment strategies and objectives.

Other Possible Investments

Although we expect that most of our investments will be of the types described above, we may make other investments, including investing in other assets or the originally-issued equity of companies located in Opportunity Zones that will be treated as Qualified Property. In fact, we may invest in whatever types of interests in real estate-related assets or other investments that we believe are in our shareholders’ best interests, consistent with the guidelines and disclosures contained in this offering circular. Our conflicts of interest policy and operating agreement do limit certain types of investments involving the Manager, our Sponsor, their officers or any of their affiliates. See “Conflicts of Interest—Certain Conflict Resolution Measures.” 

Investment Process

Our Manager has the authority to make all the decisions regarding our investments consistent with the investment guidelines and borrowing policies approved by the Manager’s Research Committee and subject to the limitations in our operating agreement and the direction and oversight of the Manager’s Research Committee. Our Manager’s Research Committee must approve all investments. We will not purchase or lease assets in which the Manager, any of our officers or any of their affiliates has an interest without a determination by the Independent Representative that such transaction is fair and reasonable to us and at a price to us that is not materially greater than the cost of the asset to the affiliated seller or lessor. In the event that two or more members of the Research Committee are interested parties in a transaction, the Independent Representative will consider and vote upon the approval of the transaction. Our Manager’s Research Committee will formally review at a duly called meeting our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, more often as they deem appropriate. Changes to our investment guidelines must be approved by the Manager’s Research Committee.

In selecting investments for us, the Manager will utilize an established underwriting and investment process that focuses on ensuring that each prospective investment is being evaluated using a consistent process and with regard to all relevant, available information. The criteria that the Manager will consider when evaluating prospective investment opportunities include:

If a potential investment meets the Manager’s underwriting criteria, the Manager will review the proposed transaction structure, including related collateral, guarantees, other security, reserve requirements, cash flow sweeps, and call protection. Our Manager will evaluate the asset’s position within the overall capital structure of the issuer, and the rights accruing to the asset in relation to other parts of the capital stack. Our Manager will evaluate each potential investment’s risk-return profile in comparison to other investments available, and will consider alternative financing sources, if applicable, to ensure that the investment fits within the parameters of the Company’s financing facilities (if any) and to ensure performance of the underlying real estate collateral.

Borrowing Policy

We believe that the Company’s ability to obtain competitive financing, through the Sponsor’s relationship with top-tier financial institutions and other lenders, should allow the Company to successfully employ moderate levels of borrowing in order to enhance the Company’s investment returns to shareholders. Although our investment strategy is not contingent on financing our assets in whole or in part through the capital markets, our Sponsor’s and its principals’ ability and experience in securing and structuring flexible financing should provide the Company with an advantage in potentially obtaining attractive term financing to support our investment strategy.

We intend to employ leverage in order to provide more funds available for investment. We believe that careful use of leverage will help us to achieve our investment goals. We expect that once we have fully invested the proceeds of this offering, our debt financing, on a portfolio-wide basis, will be between 0% and 75% of the fair market value of our assets, although it may exceed this level during our offering stage. Our Manager may from time to time modify our leverage policy in its discretion, with the approval of the Research Committee. However, other than during our initial period of operations, it is our policy to not borrow more than 75% of the fair market value of our assets. We cannot exceed the leverage limit of our leverage policy unless any excess in borrowing over such level is approved by the Manager’s Research Committee.

Operating Policies

Credit Risk Management. We may be exposed to various types and levels of credit and special hazard risk depending on the nature of our underlying assets and the nature and level of credit enhancements supporting our assets. Our Manager and its executive officers will review and monitor credit risk and other risks of loss associated with each investment. In addition, we will seek to diversify our portfolio to avoid undue geographic, issuer, industry and certain other types of concentrations. Our Manager’s Research Committee will monitor the overall portfolio risk, including concentration risk, and levels of provision for loss.

Interest Rate Risk Management. To the extent consistent with maintaining our qualification as a REIT, we will follow an interest rate risk management policy intended to mitigate the negative effects of major interest rate fluctuations. We intend to manage our interest rate risk from borrowings by managing the overall duration risk in the Company’s portfolio, thereby limiting the Company’s overall exposure to interest rate moves. The interest rate risk of the portfolio will be monitored by the Research Committee, which will establish interest rate risk guidelines for the Manager.

Hedging Activities. We may engage in hedging transactions to protect our investment portfolio from interest rate fluctuations and other changes in market conditions. These transactions may include the purchase or sale of listed interest rate futures or options, interest rate swaps, the purchase or sale of over-the-counter interest rate collars, caps or floors, options, mortgage derivatives and other hedging instruments. These instruments may be used to hedge as much of the interest rate risk as we determine is in the best interest of our shareholders, given the cost of such hedges and the need to maintain our qualification as a REIT. We may from time to time enter into interest rate swap agreements to offset the potential adverse effects of rising interest rates under certain short-term repurchase agreements. We may elect to bear a level of interest rate risk that could otherwise be hedged when the Manager believes, based on all relevant facts, that bearing such risk is either advisable or economically unavoidable. The Research Committee will review the hedging activity of the Company in the context of its overall monitoring of the Company’s investments.

Equity Capital Policies. Under our operating agreement, we have authority to issue an unlimited number of additional common shares or other securities. In particular, the Manager is authorized to provide for the issuance of an unlimited amount of one or more classes or series of shares in the Company, including preferred shares, and to fix the number of shares, the relative powers, preferences and rights, and the qualifications, limitations or restrictions applicable to each class or series thereof by resolution authorizing the issuance of such class or series, without shareholder approval. After your purchase in this offering, the Manager may elect to: (i) sell additional shares in this or future public offerings (whether on Form S-11, Form 1-A or otherwise), (ii) issue equity interests in private offerings or (iii) issue shares to the Manager, or its successors or assigns, in payment of an outstanding fee obligation. To the extent we issue additional equity interests after your purchase in this offering, your percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our investments, you could also experience dilution in the book value and fair value of your shares. However, the Company intends to issue its shares at NAV, and to repurchase shares at or around NAV (See “Description of our Common Shares—Quarterly Redemption Plan”) for the foreseeable future. Such an approach would not cause any dilution of the fair value (as determined by the NAV) of your shares.

Disposition Policies

The period that we will hold our investments in commercial real estate projects and other real estate-related assets will vary depending on the type of asset, interest rates and other factors. However, in order to take advantage of the Opportunity Fund tax preference, the Company is expected to hold most assets for at least ten years. Our Manager will develop a well-defined exit strategy for each investment we make. Our Manager will continually perform a hold versus sell analysis on each asset in order to determine the optimal time to hold the asset, including consideration of the potential tax benefits to the Company and its shareholders. Macro- and microeconomic and market conditions may lead us to hold different investments for different periods of time. We may sell an asset before the end of the expected holding period if we believe that a sale of the asset would be in our best interests, irrespective of the tax consequences.

Liquidity Event

Subject to then-prevailing market conditions, we expect to consider options for providing liquidity to our shareholders beginning five years from the completion of this offering. While we expect to seek a liquidity transaction during this time frame, we cannot assure you that a suitable opportunity to obtain liquidity on acceptable terms will be available or that market conditions for a transaction will be favorable during that time frame. Our Manager has broad discretion to consider a liquidity transaction at any time if it determines such event to be in the best interests of the Company’s shareholders. A liquidity transaction could consist of a sale or roll-off to scheduled maturity of our assets, a sale or merger of the Company, a consolidation transaction with other companies managed by the Manager or its affiliates, a listing of the Company’s shares on a national securities exchange or a similar transaction. We do not have a stated term for the Company, as we believe setting a finite date for a possible, but uncertain, future liquidity transaction may result in actions that are not necessarily in the best interest or within the expectations of our shareholders.

Prior to our completion of a liquidity transaction, our redemption plan may provide an opportunity for you to have your common shares redeemed, subject to certain restrictions and limitations. See “Description of our Common Shares—Quarterly Redemption Plan.”

PLAN OF OPERATION

General

We are a newly organized Delaware limited liability company formed to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity. The Company will focus its investment activity in designated Opportunity Zones, so as to allow the Company to be classified as a Qualified Opportunity Fund. A key objective of the Company is to generate positive social and environmental impact alongside a financial return. In addition, we may acquire equity securities of public or private REITs that, in the opinion of the Manager, meet our investment objectives.

We plan to diversify our portfolio by investment type, investment size and investment risk with the goal of constructing a portfolio of real estate assets that provides stable, attractive risk-adjusted returns to our investors. We may make our investments through direct origination, the acquisition of individual assets or by acquiring portfolios of assets, securities of other REITs or companies with investment objectives similar to ours. As of the date of this offering circular, we have not commenced operations nor have we identified any specific investments in which there is a reasonable probability that we will invest.

North Capital, Inc. is the Manager of the Company. The Manager is responsible for managing our day-to-day operations and our portfolio of commercial real estate and other real estate-related assets. Our Manager also has the authority to make all of the decisions regarding our investments, subject to the limitation in our operating agreement and the direction and oversight of the Manager’s Research Committee. The Manager, the Sponsor, and/or other affiliates of our Sponsor will provide marketing, investor relations and other administrative services on our behalf.

We intend to make an election to be taxed as a REIT under the Code, commencing with our taxable year ending December 31, 2019, which may be extended by our board of directors until the taxable year ending December 31, 2020. If we qualify as a REIT for U.S. federal income tax purposes, we generally will not be subject to U.S. federal income tax to the extent we distribute qualifying dividends to our shareholders. If we fail to qualify as a REIT in any taxable year after electing REIT status, we will be subject to U.S. federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and cash available for distribution. However, we believe that we will be organized and will be able to operate in a manner that will allow us to qualify for treatment as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2019, and we intend to continue to operate so as to remain qualified as a REIT for U.S. federal income tax purposes thereafter.

Competition

Our net income and overall investment success depend, in large part, on our ability to source investments with attractive risk-adjusted returns. In originating these investments, we compete with other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, private funds, private lenders, governmental bodies and other entities, as well as online platforms that compete with the REITless Platform, many of which have greater financial resources and a lower cost of capital than we have. In addition, there are numerous REITs and funds with asset acquisition objectives similar to ours, and others may be organized in the future, which may increase competition for the investments suitable for us. The tax preference available to Qualified Opportunity Funds has created a flood of new interest in such investment structures, and the sponsors and managers of competitive products may be more experienced, better resourced, and more able to execute their investment plan, which could make it more difficult for us. Competitive variables include market presence and visibility, size of investment and underwriting standards. To the extent that a competitor is willing to risk larger amounts of capital in a particular transaction or to employ more liberal underwriting standards when evaluating potential investments than we are, our investment volume and profit margins for our investment portfolio could be impacted. Our competitors may also be willing to accept lower returns on their investments and may succeed in buying the assets that we have targeted for acquisition. Although we believe that we are well positioned to compete effectively in each facet of our business, there is enormous competition in our market sector, it is likely to increase because of the interest in Opportunity Zones, and we cannot assure you that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.

Liquidity and Capital Resources

We are dependent upon the net proceeds from this offering to conduct our proposed operations. We will obtain the capital required to purchase and originate real estate-related investments and conduct our operations from the proceeds of this offering and any future offerings we may conduct, from secured or unsecured financing obtained from banks or other lenders, and from any undistributed funds from our operations. For information regarding the anticipated use of proceeds from this offering, see “Estimated Use of Proceeds.”

We will not commence operations unless we raise a minimum of $500,000 in gross offering proceeds from persons who are not affiliated with us or our Sponsor. If we raise substantially less than $50,000,000 in gross offering proceeds, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make, and the value of an investment in our equity will fluctuate with the performance of the specific assets we acquire. Further, we will have certain fixed operating expenses, including certain expenses related to operating as a publicly-offered REIT, regardless of whether we are able to raise substantial funds in this offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

We currently have no outstanding debt and we have received no commitment from any lender to provide us with financing. Our targeted portfolio-wide leverage after we have acquired an initial substantial portfolio of diversified investments is between 0% and 75% of the fair market value of our assets. During the period when we are acquiring our initial portfolio, we may employ greater leverage on individual assets (that will also result in greater leverage of the initial portfolio) in order to quickly build a diversified portfolio of assets. Our Manager may from time to time modify our leverage policy in its discretion, with approval of the Research Committee, in light of then-prevailing economic conditions, the relative cost of debt and equity capital, the market values of our assets, general conditions in the market for debt and equity securities, the Company’s growth and acquisition opportunities, or other factors. However, other than during our initial period of operations, it is our policy to not borrow more than 75% of the fair market value of the cost of our assets. We cannot exceed the leverage limit of our leverage policy unless any excess in borrowing over such level is approved by the Manager’s Research Committee.

In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make certain payments to the Manager. During our organization and offering stage, these payments will include reimbursements of certain organization and offering expenses advanced by the Manager on behalf of the Company. During our acquisition and development stage, we expect to make payments to the Manager in connection with the selection and origination or purchase of investments, the management of our assets and costs incurred by the Manager in providing services to us. For a discussion of the compensation to be paid to the Manager, see “Management Compensation.”

We intend to elect to be taxed as a REIT and to operate as a REIT commencing with our taxable year ending December 31, 2019, which may be extended by our board of directors until the taxable year ending December 31, 2020. To maintain our qualification as a REIT, we will be required to make aggregate annual distributions to our shareholders of at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). Our Manager may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as the Manager deems appropriate. Provided we have sufficient available cash flow, we intend to authorize and declare distributions based on weekly record dates and pay distributions on a quarterly or other periodic basis. We have not established a minimum distribution level, and we do not expect to establish a minimum distribution level until after the Company commences operations.

Related Party Loans and Warehousing of Assets

If we do not have sufficient funds to acquire an investment that the Manager would otherwise wish to make, then we may obtain a related party loan from, or issue a participation interest to, the Sponsor or an affiliate of the Sponsor. Our operating agreement expressly authorizes us to enter into such related party loans and to issue such participation interests. Each related party loan and participation interest will be an unsecured obligation of ours, that is payable solely to the extent that such related party loan or participation interest remains outstanding. Unsecured related party loans that, in the aggregate, do not exceed $20 million and do not carry an interest rate that exceeds the then current applicable prime rate with respect to such loans, can be entered into without the approval of an Independent Representative. As we sell additional common shares in this offering, generate income from operations, or secure third party financing from unrelated parties, we will use the proceeds of such activities to pay down the principal and interest of the related party loan or the principal of the outstanding participation interests, as appropriate, reducing the payment obligation of the related party loan or participation interest, and our obligation to the holder of the related party loan or participation interest.

In instances where a participation interest is outstanding, payments of the participation interest will be pari passu (i.e., of equal seniority) to our right to payment from the underlying asset, and any payments received from the underlying asset will be subsequently distributed pro rata (i.e., in equal proportion to their proportionate interest) among us and the participation interest holder. In the event that we generate funds from operations or from financing activities to fully extinguish the principal of an outstanding participation interest, we will repay the participation interest, and, other than any accrued but unpaid return due to it from the underlying asset, the holder of the participation interest will no longer hold any obligation of ours with regard to payment. It is anticipated that each participation interest will have a varying return that is dependent upon, and will generally be identical to, the projected return on the underlying asset.

As an alternative means of investments for which we do not yet have sufficient funds, the Sponsor or an affiliate of the Sponsor and Company may close and fund each investment prior to it being acquired by us. This ability to warehouse investments allows us the flexibility to deploy our offering proceeds as funds are raised. We may then acquire such investment at a price equal to the fair market value of such investment, which will generally equal the cost of the investment (including reimbursements for servicing fees and accrued interest, if any), so there is no mark-up (or mark-down) at the time of our acquisition.

Results of Operations

REITless Impact Opportunity Zone Strategies LLC was formed on January 8, 2019 and, as of the date of this offering circular, we have not commenced operations. We will not commence any significant operations until we have raised at least $500,000 from persons who are not affiliated with us or our Sponsor.

Market Outlook — Real Estate Capital Markets

We are encouraged by the improvements in commercial real estate capital and credit markets, as well as the positive macroeconomic factors supporting the commercial real estate industry. As we look ahead over the next five years, we believe strong economic fundamentals, higher transaction volume, and a healthier commercial real estate lending market will continue to support core United States metro markets. We also expect a continuation of the trend of high foreign direct investment in United States markets generally and real estate assets specifically, and we believe that the potential tax benefits offered by Opportunity Funds will lead to a marginal increase in asset allocation into real estate from other asset classes.

If the markets for risk assets continue to strengthen, the competition for yield will become increasingly competitive. We believe the Sponsor’s network of commercial real estate platform partners, together with its own experience in real estate transactions, provides us with a competitive advantage in identifying and originating attractive investment opportunities across commercial sub-markets during this period of heightened competition.

On the other hand, risks related to rising interest rates and regulatory uncertainty could adversely affect our ability to originate new investments or adversely impact the values of our existing investment portfolio. In the event that real estate market fundamentals deteriorate, our investments may be impaired as a result of lower rental rates, reduced occupancy levels, and/or declining collateral values. Furthermore, such an adverse market environment could materially impact the cost and availability of long-term credit, hampering our ability to initiate and complete the types of development and redevelopment projects contemplated herein. Similarly, a decline in real estate values reflecting an imbalance in supply and demand could lead to a reduction in marginal development and redevelopment efforts, adversely affecting the Company.

Investment Company Act Considerations  

The Company intends to conduct our business so that neither we, nor any of our subsidiaries, will be required to register as an investment company under the Investment Company Act. Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis, which is typically referred to as the “40% test.” Excluded from the term “investment securities,” among other things, are U.S. Government securities and securities issued by majority-owned subsidiaries that are not investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

We anticipate that we will hold real estate and real estate-related assets described below (i) directly, (ii) through wholly owned subsidiaries, (iii) through majority-owned joint venture subsidiaries, and (iv) through minority-owned joint venture subsidiaries.

We intend to, directly or through our subsidiaries, originate, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity, and other real estate-related investments. We expect to use substantially all of the net proceeds from this offering to identify, structure and invest in single- and multi-family commercial real estate projects and other real estate related investments.

The Company will monitor our compliance with the 40% test, including the holdings of our subsidiaries to ensure that each of our subsidiaries is in compliance with an applicable exemption or exclusion from registration as an investment company under the Investment Company Act. The securities issued by any wholly-owned or majority-owned subsidiary that we may form and that are excluded from the definition of   “investment company” based on Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, may not have a value in excess of 40% of the value of our total assets on an unconsolidated basis.

The securities issued by any wholly owned or majority-owned subsidiary that we may form and that are excluded from the definition of “investment company” based on Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, may not have a value in excess of 40% of the value of our total assets on an unconsolidated basis.

We anticipate that the Company will directly, or through one or more wholly owned subsidiaries, hold real estate and real estate-related assets described in this offering circular. It is possible that the Company also may own such assets through minority-owned joint venture subsidiaries.

We intend to identify, underwrite, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate development and redevelopment projects, including both preferred and common equity. The Company will focus its investment activity in designated Opportunity Zones, so as to allow the Company to be classified as an Opportunity Fund. A key objective of the Company is to generate positive social and environmental impact alongside a financial return.

In addition, we believe that neither the Company nor any subsidiaries we may establish will be considered an investment company under Section 3(a) (1)(A) of the Investment Company Act because we will not engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, the Company will be primarily engaged in non-investment company businesses related to real estate. Consequently, we expect to be able to conduct our operations such that the Company and our subsidiaries will not be required to register as an investment company under the Investment Company Act.

Certain of our subsidiaries may also rely upon the exclusion from the definition of investment company under Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires an entity to invest at least 55% of its assets in "mortgages and other liens on and interests in real estate", which we refer to as "qualifying real estate interests", and at least 80% of its assets in qualifying real estate interests plus "real estate-related assets".

The determination of whether an entity is a majority-owned subsidiary of the Company will be made by us. The Investment Company Act defines a majority-owned subsidiary as an entity where 50% or more of the outstanding voting securities are owned by the parent, or by another company which is itself a majority-owned subsidiary. The Investment Company Act further defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We will treat companies in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries. We also intend to treat subsidiaries of which we or our wholly-owned or majority-owned subsidiary is the manager (in a manager-managed entity) or managing member (in a member-managed entity) or in which our agreement or the agreement of our wholly-owned or majority-owned subsidiary is required for all major decisions affecting the subsidiaries (which we refer to as “Controlled Subsidiaries”), as majority-owned subsidiaries even though none of the interests issued by such Controlled Subsidiaries meets the definition of voting securities under the Investment Company Act. We will rely upon the advice and counsel of outside legal and accounting advisors in making such determinations, and based upon the substance and form of the organizational structure. The determination of whether an entity is a majority-owned subsidiary of the Company will be made by us, and we will not ask the SEC staff for concurrence of our analysis, our treatment of such interests as voting securities, or whether any Controlled Subsidiary, or any other of our subsidiaries, should be treated in the manner in which we intend. It is possible that the SEC staff could disagree with any of our determinations, which would require us to adjust our strategy and our assets. Any such adjustment in our strategy could have a material adverse effect on the Company.

The loss of our exclusion from regulation pursuant to the Investment Company Act could require us to restructure our operations, sell certain of our assets or abstain from the purchase of certain assets, which could have a material adverse effect on our financial condition, results of operations, or ability to continue as a going concern.

Critical Accounting Policies

Below is a general discussion of the accounting policies that management believes will be critical once the Company commences operations. We consider these policies critical because we believe that understanding these policies is critical to understanding and evaluating our reported financial results. Additionally, these policies may involve significant management assumptions and judgments, or require estimates about matters that are inherently uncertain and difficult to estimate. These judgments will affect the reported values of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Revenue

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured.

Accounting Pronouncements

Under Section 107 of the JOBS Act, we are permitted to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.  This permits us to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.  We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have difference effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B).  By electing to extend the transition period for complying with new or revised accounting standards, these financial statements may not be comparable to companies that adopt accounting standard updates upon the public business entity effective dates.

PRIOR PERFORMANCE SUMMARY 

We are a recently formed company and have no operating history. As a result, we do not have any prior performance or experience.

The information presented in this section represents the experience of real estate programs sponsored by our Sponsor, which we refer to as the “Prior Programs”. Investors in our common shares should not assume that they will experience returns, if any, comparable to those experienced by investors in our Sponsor’s affiliated Prior Programs. Investors who purchase our common shares will not acquire any ownership interest in any of the entities to which the following information relates. 

The returns to our shareholders will depend in part on the mix of assets in which we invest, the stage of investment and our place in the capital structure for our investments. As our portfolio may not mirror the portfolio of our Sponsor’s affiliated Prior Programs in any of these respects, the returns to our shareholders may vary from those generated by our Sponsor’s affiliated Prior Programs. The Prior Loan Program (defined below) was conducted through privately-held entities that were not subject to the fees and expenses associated with this offering or many of the laws and regulations to which we will be subject. In addition, our Sponsor is a self-managed, privately-held company with an indefinite duration. As a result, you should not assume the past performance of our Sponsor or the Prior Programs described below will be indicative of our future performance.

Overview of Our Sponsor 

Our Sponsor is a privately-held company that operates as a real estate investment and lending platform. Our Sponsor was formed in January 2014 to create technology applications for broker-dealers, banks, fund managers, funding platforms, and private issuers who wish to access private investment markets. Our Sponsor used this technology to create its own marketplace lending platform, REITless.com.

For purposes of this prior performance summary, our sponsor views its prior programs as investment opportunities originated by our Sponsor for which it or its affiliates serve as the issuer (the “Prior Programs”).

Our Sponsor’s Prior Programs

Prior Loan Program

Through wholly owned subsidiaries, our Sponsor began making hard money loans to real estate investors to facilitate the rehabilitation of single family properties. The subsidiaries would then allow investors to participate in the loans through Project Dependent Notes (defined below).

As of February 28, 2019, our sponsor has originated 12 real estate loans with aggregate purchase prices of approximately $1.6 million. All but $191,459 of the $1.6 million aggregate real estate purchase prices consisted of single-family residences. The remainder consisted of commercial real estate.

11 of the assets originated by the Sponsor have been repaid, totaling $1,503,910 in principal repayments. As of February 28, 2019, none of the loans originated by the Sponsor have experienced any losses or delinquencies. 3 borrowers elected to extend the original term of their loans as permitted by their loan documents.

Our Sponsor and its affiliates were responsible for origination, due diligence, structuring, closing, acquiring, and servicing all loans made. As of February 28, 2019, the loans were diversified across California, Colorado and Utah. Interest rates on the loans ranged from 12-14%.

REITless Impact Income Strategies LLC

As of the date of this offering circular, our Sponsor has previously organized REITless Impact Income Strategies LLC. REITless Impact Income Strategies is offering up to $50,000,000 in common shares. The offering is being made pursuant to Regulation A under the Securities Act and was qualified by the SEC on November 2, 2018. REITless Impact Income Strategies was formed to originate, invest in and manage a diversified portfolio of single-family, multi-family, and other commercial real estate loans, including senior and subordinated mortgage loans, mezzanine loans, and participations in such loans. REITless Impact Income Strategies also may invest in commercial real estate-related debt securities, including commercial mortgage-backed securities, collateralized debt obligations, REIT senior and junior debt and certain REIT preferred equity securities, and other real estate-related assets. As of the date of this offering circular, REITless Impact Income Strategies has not yet received sufficient subscriptions to meet its minimum offering amount of $500,000 and, therefore, has not yet held a closing nor made any investments.

Factors Differentiating Us from the Prior Programs 

Our investment objective, risk profile and investment strategy differs from the Prior Loan Program. Each of the 3 issuers affiliated with our Sponsor within the Prior Loan Program issued Project Dependent Notes. With respect to each issuer, our Sponsor originated loans that were either collateralized or backed by real estate assets and then offered investors the opportunity to invest in the economic performance of these real estate assets through the issuance of derivative debt that is wholly dependent upon the performance of such individual real estate asset. Our Sponsor refers to these derivative debt instruments as “Project Dependent Notes”. We do not expect to acquire an asset portfolio similar to that of the Prior Loan Program, however we intend to take advantage of modest leverage to potentially enhance estimated risk-adjusted returns relative to the Prior Loan Program portfolio. Furthermore, the Prior Loan Program offered identified single or multiple asset investment opportunities, whereas we are structured to be a diversified pool of multiple assets that will not be identified in advance. Unlike the Prior Loan Program, shareholders will not have the ability to select their own investments, and instead our Manager will select assets based on our investment criteria.

Additional Information 

Please see the tables under “Prior Performance Tables” in Appendix B to this offering circular for more information regarding our Sponsor’s prior performance.

DESCRIPTION OF OUR COMMON SHARES

The following descriptions of our common shares, certain provisions of Delaware law and certain provisions of our certificate of formation and operating agreement, which will be in effect upon consummation of this offering, are summaries and are qualified by reference to Delaware law, our certificate of formation and our operating agreement, copies of which are filed as exhibits to the offering statement of which this offering circular is a part. See “Where You Can Find More Information.”

General

The Company is a Delaware limited liability company organized on January 8, 2019 under the Delaware Limited Liability Company Act, or Delaware LLC Act, issuing limited liability company interests. The limited liability company interests in the Company will be denominated in common shares of limited liability company interests (“common shares”) and, if created in the future, preferred shares of limited liability company interests (“preferred shares”). Our operating agreement provides that we may issue an unlimited number of common shares with the approval of the Manager and without shareholder approval.

All of the common shares offered by this offering circular will be duly authorized and validly issued. Upon payment in full of the consideration payable with respect to the common shares, as determined by the Manager, the holders of such shares will not be liable to us to make any additional capital contributions with respect to such shares (except for the return of distributions under certain circumstances as required by Sections 18-215, 18-607 and 18-804 of the Delaware LLC Act). Holders of common shares have no conversion, exchange, sinking fund or appraisal rights, no pre-emptive rights to subscribe for any securities of the Company and no preferential rights to distributions. However, holders of our common shares will be eligible to participate in our quarterly redemption plan, as described below in “—Quarterly Redemption Plan.”

We intend to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2019, which may be extended by our board of directors until the taxable year ending December 31, 2020.

Distributions

We expect that our Manager will declare distributions with a weekly record date, and pay distributions quarterly in arrears commencing in the second full year after the year in which we make our first investment. Therefore, new investors will be entitled to distributions immediately upon the purchase of their shares. Shareholders will be entitled to declared distributions on each of their shares from the time the shares are issued to the shareholder until the redemption date as described below in “—Quarterly Redemption Plan.”

We are required to make distributions sufficient to satisfy the requirements for qualification as a REIT for U.S. federal income tax purposes. Generally, income distributed will not be taxable to us under the Code if we distribute at least 90% of our REIT taxable income each year (computed without regard to the dividends paid deduction and our net capital gain). Distributions will be authorized at the discretion of the Manager, in accordance with our earnings, present and reasonably projected future cash flows and general financial condition. Our Manager’s discretion will be directed, in substantial part, by its obligation to cause us to comply with the REIT requirements and to avoid U.S. federal income and excise taxes on retained income and gains.

We are not prohibited from distributing our own securities in lieu of making cash distributions to shareholders. Our operating agreement also gives the Manager the right to distribute assets other than cash. The receipt of our securities or assets in lieu of cash distributions may cause shareholders to incur transaction expenses in liquidating the securities or assets. We do not have any current intention to list our common shares on a stock exchange or other trading market, nor is it expected that a public market for the common shares will develop over the near term. We also do not anticipate that we will distribute other assets in kind (other than in the context of a roll up transaction).

Although our goal is to fund the payment of distributions solely from cash flow from operations, we may pay distributions from other sources, including the net proceeds of this offering, cash advances by the Manager or an affiliate of the Manager or the Company, cash resulting from a waiver of fees or reimbursements due to the Manager, borrowings in anticipation of future operating cash flow and the issuance of additional securities, and we have no limit on the amounts we may pay from such other sources. If we fund distributions from financings or the net proceeds from this offering, we will have less funds available for new investment in real estate, real estate-related securities and other investments. We expect that our cash flow from operations available for distribution will be lower in the initial stages of this offering until we have raised significant capital and made substantial investments. Further, because we may receive income at various times during our fiscal year and because we may need cash flow from operations during a particular period to fund expenses, we expect that during the early stages of our operations and from time to time thereafter, we may declare distributions in anticipation of cash flow that we expect to receive during a later period and these distributions would be paid in advance of our actual receipt of these funds. In these instances, we expect to look to third party borrowings, our offering proceeds or other sources to fund our distributions. Additionally, we will make certain payments to the Manager and dealer manager for services provided to us. See “Management Compensation.” Such payments will reduce the amount of cash available for distributions. Finally, payments to fulfill redemption requests under our redemption plan will also reduce funds available for distribution to remaining shareholders.

Our distributions will constitute a return of capital to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. To the extent that a distribution is treated as a return of capital for U.S. federal income tax purposes, it will reduce a holder’s adjusted tax basis in the holder’s shares, and to the extent that it exceeds the holder’s adjusted tax basis will be treated as gain resulting from a sale or exchange of such shares.

Voting Rights

Our common shareholders will have voting rights only with respect to certain matters, as described below. Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of common shareholders until the redemption date as described below in “—Quarterly Redemption Plan.” Generally, matters to be voted on by our shareholders must be approved by either a majority or supermajority, as the case may be, of the votes cast by all common shares present in person or represented by proxy. If any such vote occurs, you will be bound by the majority or supermajority vote, as applicable, even if you did not vote with the majority or supermajority.

The following circumstances will require the approval of holders representing a majority or supermajority, as the case may be, of the common shares:

General Procedures

Public Announcements; Notices. In the case of specified dispositions or a redemption, we will publicly announce or otherwise provide specified information to holders of common shares.

Meetings. Our operating agreement provides that special meetings of shareholders may only be called by the Manager. There will be no annual or regular periodic meetings of the members.

Fractional Shares. Our Manager will not have to issue or deliver any fractional shares to any holder of common shares upon any redemption or distribution under the provisions described under “—Redemptions.” Instead of issuing fractional shares, we will pay cash for the fractional share in an amount equal to the fair market value of the fractional share, without interest.

Adjustments for Distributions. Upon the redemption of any common shares, the redemption price will be reduced by the aggregate sum of distributions, if any, declared on the shares subject to the redemption request with record dates during the period between the quarter-end redemption request date and the date of redemption. If a redemption date with respect to common shares comes after the record date for the payment of a distribution to be paid on those shares but before the payment or distribution, the registered holders of those shares at the close of business on such record date will be entitled to receive the distribution on the payment date, notwithstanding the redemption of those shares or our default in payment of the distribution.

Payment of Taxes. If any person exchanging a certificate representing common shares wants us to issue a certificate in a different name than the registered name on the old certificate, that person must pay any transfer or other taxes required by reason of the issuance of the certificate in another name or establish, to the satisfaction of us or our agent, that the tax has been paid or is not applicable.

Liquidation Rights

In the event of a liquidation, termination or winding up of the Company, whether voluntary or involuntary, we will first pay or provide for payment of our debts and other liabilities, including the liquidation preferences of any class of preferred shares. Thereafter, holders of our common shares will share in our funds remaining for distribution pro rata in accordance with their respective interests in the Company.

Preferred Shares

Section 215(e) of the Delaware LLC Act also specifically authorizes the creation of ownership interests of different classes of limited liability company interests, having such relative rights, powers and duties as the limited liability company agreement may provide, and may make provision for the future creation in the manner provided in the limited liability company agreement of additional classes of membership interests. In accordance with this provision, our operating agreement provides that the Manager is authorized to provide for the issuance from time to time of an unlimited amount of one or more classes or series of preferred shares of limited liability company interests (“preferred shares”). Unless otherwise required by law or by any stock exchange, if applicable, any such authorized preferred shares will be available for issuance without further action by our common shareholders. Our Manager is authorized to fix the number of preferred shares, the relative powers, preferences and rights, and the qualifications, limitations or restrictions applicable to each class or series thereof by resolution authorizing the issuance of such class or series and without shareholder approval. As of the date of this offering circular, no preferred shares are outstanding and we have no current plans to issue any preferred shares.

We could issue a class or series of preferred shares that could, depending on the terms of the class or series, impede or discourage an acquisition attempt or other transaction that some, or a majority, of holders of common shares might believe to be in their best interests or in which holders of common shares might receive a premium for their common shares.

Transfer Agent and Registrar

The Manager has engaged Computershare Inc. to act as our transfer agent.

Operating Agreement

Non-Member Manager

Our operating agreement designates North Capital, Inc., an affiliate of the Sponsor, as our non-member manager. Our Manager will generally not be entitled to vote on matters submitted to our shareholders, although its approval will be required with respect to certain amendments to the operating agreement that would adversely affect its rights. Our Manager will not have any distribution, redemption, conversion or liquidation rights by virtue of its status as the Manager.

Organization and Duration

We were formed on January 8, 2019, as REITless Impact Opportunity Zone Strategies LLC, a Delaware limited liability company, and will remain in existence until dissolved in accordance with our operating agreement.

Purpose

Under our operating agreement, we are permitted to engage in any business activity that lawfully may be conducted by a limited liability company organized under Delaware law and, in connection therewith, to exercise all of the rights and powers conferred upon us pursuant to the agreement relating to such business activity; provided, however, that, the Manager may only revoke or otherwise terminate our REIT election, without approval of our shareholders, if it determines that it is no longer in our best interests to continue to qualify as a REIT.

Agreement to be Bound by our Operating Agreement; Power of Attorney

By purchasing a common share, you will be admitted as a member of the Company and will be bound by the provisions of, and deemed to be a party to, our operating agreement. Pursuant to this agreement, each shareholder and each person who acquires a common share from a shareholder grants to the Manager a power of attorney to, among other things, execute and file documents required for our qualification, continuance or dissolution. The power of attorney also grants the Manager the authority to make certain amendments to, and to execute and deliver such other documents as may be necessary or appropriate to carry out the provisions or purposes of, our operating agreement.

Limited Liability and Indemnification of the Manager and Others

Subject to certain limitations, our operating agreement limits the liability of the Manager, its officers and directors, our Sponsor and our Sponsor’s shareholders and affiliates, for monetary damages and provides that we will indemnify and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to the Manager, its officers and directors, our Sponsor and our Sponsor’s shareholders and affiliates.

Our operating agreement provides that to the fullest extent permitted by applicable law the Manager, its officers and directors, our Sponsor and our Sponsor’s shareholders and affiliates will not be liable to us. In addition, pursuant to our operating agreement, we have agreed to indemnify the Manager, its officers and directors, our Sponsor and our Sponsor’s shareholders and affiliates, to the fullest extent permitted by law, against all expenses and liabilities (including judgments, fines, penalties, interest, amounts paid in settlement with the approval of the company and attorney’s fees and disbursements) arising from the performance of any of their obligations or duties in connection with their service to us or the operating agreement, including in connection with any civil, criminal, administrative, investigative or other action, suit or proceeding to which any such person may hereafter be made party by reason of being or having been the manager or one of the Manager’s directors or officers.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Amendment of Our Operating Agreement; Exclusive Authority of the Manager to Amend our Operating Agreement

Amendments to our operating agreement may be proposed only by or with the consent of the Manager. Our Manager will not be required to seek approval of the shareholders to adopt or approve any amendment to our operating agreement, except to the extent that such amendment would limit the rights of the holders of any class or series of shares or would otherwise have an adverse effect on such holders. In such a case, the proposed amendment must be approved in writing by holders representing a majority of the class or series of shares so affected.

Termination and Dissolution

We will continue as a limited liability company until terminated under our operating agreement. We will dissolve upon: (1) the election of the Manager to dissolve us; (2) the sale, exchange or other disposition of all or substantially all of our assets; (3) the entry of a decree of judicial dissolution of the Company; or (4) at any time that we no longer have any shareholders, unless our business is continued in accordance with the Delaware LLC Act.

Books and Reports

We are required to keep appropriate books of our business at our principal offices. The books will be maintained for both tax and financial reporting purposes on a basis that permits the preparation of financial statements in accordance with GAAP. For financial reporting purposes and U.S. federal income tax purposes, our fiscal year and our tax year are the calendar year.

We will provide audited financial statements to investors within 120 days of our fiscal year end.

Determinations by the Manager

Any determinations made by the Manager under any provision described in our operating agreement will be final and binding on our shareholders, except as may otherwise be required by law.

Restrictions on Ownership and Transfer

In order for us to qualify as a REIT under the Code, shares of the Company must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). To qualify as a REIT, we must satisfy other requirements as well. See “U.S. Federal Income Tax Considerations—Requirements for Qualification as a REIT.”

To assist us in qualifying as a REIT, our operating agreement, subject to certain exceptions, contains restrictions on the number and value of our common shares and the number and value of shares of the Company that a person may own. Our operating agreement provides that generally no person may own, or be deemed to own by virtue of certain attribution provisions of the Code, either more than 9.8% in value or in number of our common shares, whichever is more restrictive, or more than 9.8% in value or in number of our shares, whichever is more restrictive. Accordingly, no person may own, or be deemed to own, more than 9.8% in value or in number of our shares, whichever is more restrictive. We refer to these limits collectively as the “ownership limit.” An individual or entity that becomes subject to the ownership limit or any of the other restrictions on ownership and transfer of the shares of the Company described below is referred to as a “prohibited owner” if, had the violative transfer or other event been effective, the individual or entity would have been a beneficial owner or, if appropriate, a record owner of shares.

The applicable constructive ownership rules under the Code are complex and may cause the Company’s shares owned actually or constructively by a group of individuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.8% by value or number of our common shares, whichever is more restrictive, or 9.8% by value or number of our shares, whichever is more restrictive, (or the acquisition of an interest in an entity that owns, actually or constructively, the Company’s shares by an individual or entity), could, nevertheless, cause that individual or entity, or another individual or entity, to own constructively in excess of the ownership limit.

Our Manager may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations and undertakings, prospectively or retroactively, waive the ownership limit or establish a different limit on ownership, or excepted holder limit, for a particular shareholder if the shareholder’s ownership in excess of the ownership limit would not result in the Company being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise would result in the Company failing to qualify as a REIT. As a condition of its waiver or grant of excepted holder limit, the Manager may, but is not required to, require the recipient to obtain an opinion of counsel or IRS ruling satisfactory to the Manager in order to determine or ensure the Company’s qualification as a REIT. In addition, the Manager will reject any investor’s subscription in whole or in part if it determines that such subscription would violate such ownership limits.

In connection with granting a waiver of the ownership limit, creating an excepted holder limit or at any other time, the Manager may from time to time increase or decrease the ownership limit for all other individuals and entities unless, after giving effect to such increase, five or fewer individuals could beneficially or constructively own in the aggregate, more than 49.9% in value of the shares then outstanding of the Company or the Company would otherwise fail to qualify as a REIT. Prior to the modification of the ownership limit, the Manager may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure our qualification as a REIT. A reduced ownership limit will not apply to any person or entity whose percentage ownership of our common shares or shares of the Company, as applicable, is in excess of such decreased ownership limit until such time as such individual’s or entity’s percentage ownership of our common shares or shares of the Company, as applicable, equals or falls below the decreased ownership limit, but any further acquisition of our common shares or shares of the Company, as applicable, in excess of such percentage ownership of our common shares or shares of the Company will be in violation of the ownership limit.

Our operating agreement further prohibits:

Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of the Company’s shares that will or may violate the ownership limit or any of the other foregoing restrictions on ownership and transfer of our shares, or who would have owned the Company’s shares transferred to a trust as described below, must immediately give us written notice of the event, or in the case of an attempted or proposed transaction, must give at least 15 days’ prior written notice to us and provide us with such other information as we may request in order to determine the effect of such transfer on our qualification as a REIT. The foregoing restrictions on ownership and transfer of the Company’s shares will not apply if the Manager determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance with the restrictions and limitations on ownership and transfer of the Company’s shares as described above is no longer required in order for us to qualify as a REIT.

If any transfer of the Company’s shares would result in the Company’s shares being beneficially owned by fewer than 100 persons, such transfer will be null and void and the intended transferee will acquire no rights in such shares. In addition, if any purported transfer of the Company’s shares or any other event would otherwise result in any person violating the ownership limit or an excepted holder limit established by the Manager or in the Company being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT, then that number of shares (rounded up to the nearest whole share) that would cause us to violate such restrictions will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us and the intended transferee will acquire no rights in such shares. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. Any dividend or other distribution paid to the prohibited owner, prior to our discovery that the shares had been automatically transferred to a trust as described above, must be repaid to the trustee upon demand for distribution to the beneficiary by the trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or the Company being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT, then our operating agreement provides that the transfer of the shares will be null and void.

Shares of the Company transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the event that resulted in the transfer to the trust did not involve a purchase of such shares at market price, the last reported NAV value for our common shares on the day of the event which resulted in the transfer of such shares to the trust) and (2) the last reported NAV value of our common shares on the date we accept, or our designee accepts, such offer (or $10.00 if no NAV has been reported). We may reduce the amount payable by the amount of any dividend or other distribution that we have paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed to the trustee as described above, and we may pay the amount of any such reduction to the trustee for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee has sold the shares held in the trust as discussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, the trustee must distribute the net proceeds of the sale to the prohibited owner and any dividends or other distributions held by the trustee with respect to such shares will be paid to the charitable beneficiary.

If we do not buy the shares, the trustee must, as soon as practicable after receiving notice from us of the transfer of shares to the trust, sell the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limit or the other restrictions on ownership and transfer of shares of the Company. After the sale of the shares, the interest of the charitable beneficiary in the shares transferred to the trust will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the event which resulted in the transfer to the trust did not involve a purchase of such shares at market price, the last reported NAV value for our common shares on the day of the event which resulted in the transfer of such shares to the trust) and (2) the sales proceeds (net of commissions and other expenses of sale) received by the trust for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of any dividend or other distribution that we paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed to the trustee as described above. Any net sales proceeds in excess of the amount payable to the prohibited owner will be immediately paid to the beneficiary of the trust, together with any dividends or other distributions thereon. In addition, if, prior to discovery by us that the Company’s shares have been transferred to a trust, such shares are sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount will be paid to the trustee upon demand. The prohibited owner has no rights in the shares held by the trustee.

The trustee will be designated by us and will be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the trust, the trustee will receive, in trust for the beneficiary of the trust, all dividends and other distributions paid by us with respect to the shares held in trust and may also exercise all voting rights with respect to the shares held in trust. These rights will be exercised for the exclusive benefit of the beneficiary of the trust. Any dividend or other distribution paid prior to our discovery that the Company’s shares have been transferred to the trust will be paid by the recipient to the trustee upon demand.

Subject to Delaware law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority, at the trustee’s sole discretion:

However, if we have already taken irreversible company action, then the trustee may not rescind and recast the vote.

In addition, if the Manager determines in good faith that a proposed transfer or other event would violate the restrictions on ownership and transfer of our shares, the Manager may take such action as it deems advisable to refuse to give effect to or to prevent such transfer, including, but not limited to, causing us to redeem our shares, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer.

Every owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of our shares, within 30 days after the end of each taxable year, must give us written notice, stating the shareholder’s name and address, the number of shares of each class of the Company that the shareholder beneficially owns and a description of the manner in which the shares are held. Each such owner must provide to us in writing such additional information as we may request in order to determine the effect, if any, of the shareholder’s beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limit. In addition, each shareholder must provide to us in writing such information as we may request in good faith in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

Any certificates representing the Company’s shares will bear a legend referring to the restrictions described above.

These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change in control that might involve a premium price for the common shares or otherwise be in the best interest of the holders of the common shares.

Personal Conduct Repurchase Right

Our operating agreement provides that we may elect to repurchase, at a price equal to $10.00 per share until ________, 2020, and equal to the NAV per share value thereafter, all of the common shares held by an investor in the event that such investor fails to conform its personal conduct to common and accepted standards of good citizenship or conducts itself in a way that reflects poorly upon us, as determined by the Manager in its sole and absolute discretion. The purchase price will be payable to the investor in a single payment, with the payment becoming due fifteen (15) business days following the date on which we provide notice to the investor of our decision to repurchase the common shares.

Prospect of roll-up/Public Listing

The Manager may determine that it is in the best interest of the Company to (i) contribute to, or convert the company into, an alternative vehicle, through consolidation, merger or other similar transaction with other companies, some of which may be managed by the Manager or its affiliates (a “Roll-Up”) or (ii) list the Company’s shares (or shares of the Roll-Up vehicle) on a national securities exchange. In connection with a Roll-Up, shareholders may receive from the Roll-Up vehicle cash, stock, securities or other interests or assets of such vehicle, on such terms as the Manager deems fair and reasonable, provided, however, that the Manager will be required to obtain approval of shareholders holding a majority of the outstanding common shares if required by applicable laws or regulations.

Anti-Takeover Effects of Our Operating Agreement and Delaware Law

The following is a summary of certain provisions of our operating agreement and Delaware law that may be deemed to have the effect of discouraging, delaying or preventing transactions that involve an actual or threatened change of control of the Company. These provisions include the following:

Authorized but Unissued Shares

Our operating agreement authorizes us to issue additional common shares or other securities of the Company for the consideration and on the terms and conditions established by the Manager without the approval of our shareholders. In particular, the Manager is authorized to provide for the issuance of an unlimited amount of one or more classes or series of shares of the Company, including preferred shares, and to fix the number of shares, the relative powers, preferences and rights, and the qualifications, limitations or restrictions applicable to each class or series thereof by resolution authorizing the issuance of such class or series. Our ability to issue additional shares and other securities could render more difficult or discourage an attempt to obtain control over us by means of a tender offer, merger or otherwise.

Delaware Business Combination Statute—Section 203

We are a limited liability company organized under Delaware law. Some provisions of Delaware law may delay or prevent a transaction that would cause a change in our control. Section 203 of the DGCL, which restricts certain business combinations with interested shareholders in certain situations, does not apply to limited liability companies unless they elect to utilize it. Our operating agreement does not currently elect to have Section 203 of the DGCL apply to us. In general, this statute prohibits a publicly held Delaware corporation from engaging in a business combination with an interested shareholder for a period of three years after the date of the transaction by which that person became an interested shareholder, unless the business combination is approved in a prescribed manner. For purposes of Section 203, a business combination includes a merger, asset sale or other transaction resulting in a financial benefit to the interested shareholder, and an interested shareholder is a person who, together with affiliates and associates, owns, or within three years prior did own, 15% or more of voting shares. Our Manager may elect to amend our operating agreement at any time to have Section 203 apply to us.

Valuation Policies

We expect to engage an independent valuation expert with expertise in appraising commercial real estate investments to provide annual valuations of certain commercial real estate assets and investments of the Company, including related liabilities, to be set forth in reports of the underlying real estate, and to adjust those valuations for events known to the independent valuation expert that it believes are likely to have a material impact on previously provided estimates of the value of the affected commercial real estate assets and investments and related liabilities. Our real estate assets will consist primarily of a diversified portfolio of single- and multi-family commercial real estate investments and other real estate-related assets. Our commercial real estate- related liabilities will consist primarily of loans and participation interests, as described in “Plan of Operation—Related Party Loans and Warehousing of Assets.” In addition, our assets are likely to include liquid assets and securities classified as held to maturity, which will not be valued by our independent valuation expert, and cash and cash equivalents. Our Manager will be responsible for ensuring that the independent valuation expert discharges its responsibilities in accordance with our valuation guidelines, and will periodically receive and review such information about the valuation of our assets and liabilities as it deems necessary to exercise its oversight responsibility.

At the end of each fiscal quarter, beginning ___________, 2020, our internal accountants will calculate our NAV per share using a process that reflects (1) estimated values of each of our commercial real estate assets and investments, including related liabilities provided periodically by our independent valuation expert in reports of the underlying real estate, as they may be updated upon certain material events described below, (2) quarterly updates in the price of liquid assets for which third party market quotes are available, (3) accruals of our quarterly or other periodic distributions, and (4) estimates of quarterly accruals, on a net basis, of our operating revenues, expenses and fees. The independent valuation expert will not be responsible for, or prepare, our quarterly NAV per share. If a material event occurs between scheduled annual valuations that the Manager believes may materially affect the value of any of our commercial real estate assets and investments, including related liabilities, the Manager anticipates informing the independent valuation expert so that, if appropriate, the independent valuation expert can adjust the most recent valuations provided in the applicable report, if any, to account for the estimated impact. Our internal accountants will determine our NAV per share by dividing our NAV in such fiscal quarter by the number of our common shares outstanding as of the end of such fiscal quarter, prior to giving effect to any share purchases or redemptions to be effected for such fiscal quarter.

Our goal is to provide a reasonable estimate of the net asset value of the Company’s shares on no less than a quarterly basis. However, the majority of our assets will consist of illiquid investments for which transparent pricing does not exist, such as commercial real estate investments. As with any commercial real estate valuation protocol, the conclusions reached by our independent valuation expert will be based on a number of judgments, assumptions and opinions about future events that may or may not prove to be correct. The use of different judgments, assumptions or opinions would likely result in different estimates of the value of our commercial real estate assets and investments. In addition, for any given quarter, our published NAV per share may not fully reflect certain material events, to the extent that the financial impact of such events on our portfolio is not immediately quantifiable or, based on GAAP rules, do not allow an adjustment to the value of a particular asset. As a result, the quarterly calculation of our NAV per share may not reflect the precise amount that might be paid for the Company’s shares in a market transaction, and any potential disparity in our NAV per share may be in favor of either shareholders who redeem their shares, or shareholders who buy new shares, or existing shareholders. However, to the extent quantifiable, if a material event occurs in between quarterly updates of NAV that would cause our NAV per share to change by 5% or more from the last disclosed NAV, we will disclose the updated price and the reason for the change in an offering circular supplement as promptly as reasonably practicable and will update the NAV information provided on our website.

Impact Assessment

Quantifying the social and environmental impact of investments made by the Company is inherently subjective, because there is no market benchmark and generally no directly comparable investments that can be used for comparative analysis. The Company will produce a quarterly report that describes all of its investments during the quarter, along with the qualitative impact on the communities where they have been made. The Company may, in its sole discretion, engage outside advisors or consultants to report upon the impact of the Company’s investments. The report will be publicly available on the public REITless Platform, www.reitless.com, and will be distributed to shareholders of record.

Quarterly NAV Share Price Adjustments

Our Manager set our initial offering price at $10.00 per share, which will continue to be the purchase price of the Company’s shares until the date that is one year from the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC. Thereafter, the per share purchase price in this offering will be adjusted every fiscal quarter and, as of January 1st, April 1st, July 1st and October 1st of each year (or as soon as commercially reasonable and announced by us thereafter), will be equal to the greater of (i) $10.00 per share or (ii) our NAV divided by the number of shares outstanding as of the close of business on the last business day of the prior fiscal quarter, in each case prior to giving effect to any share purchases or redemptions to be effected on such day. For example, during the fiscal quarter October 1 through December 31, 2019, the purchase price of shares will equal the Net Asset Value per share calculated as of the close of business on September 30, 2019, prior to giving effect to any share purchases or redemptions to be effected on September 30, 2019.

Beginning after the date that is one year from the date on which the Offering Statement of which this offering circular forms a part is qualified by the SEC, we will file with the SEC on a quarterly basis an offering circular supplement disclosing the quarterly determination of our NAV per share that will be applicable for such fiscal quarter, which we refer to as the pricing supplement. We will also post that fiscal quarter’s NAV on the public REITless Platform, www.reitless.com. The REITless Platform will also contain this offering circular, including any supplements and amendments. As long as this offering continues, we will disclose, on a quarterly basis in an offering circular supplement filed with the SEC, the principal valuation components of our NAV. We will use commercially reasonable efforts to monitor whether a material event occurs in between quarterly updates of NAV that would cause our NAV per share to change by 5% or more from the last disclosed NAV. While this offering is ongoing, if we reasonably believe that such a material event has occurred, we will calculate and disclose the updated price and the reason for the change in an offering circular supplement as promptly as reasonably practicable and will update the NAV information provided on our website. We will also use that updated NAV per share as the offering price for new shares for the remainder of that fiscal quarter.

Any subscriptions that we receive prior to the end of a fiscal quarter will be executed at a price equal to our NAV per share applicable to such fiscal quarter. Thus, even if settlement occurs in the following quarter, the purchase price for the shares will be the price in effect at the time the subscription was received.

Quarterly Redemption Plan

While shareholders should view this investment as long-term, with poor liquidity, we have adopted a redemption plan whereby, on a quarterly basis, an investor may have the opportunity to obtain liquidity. The Manager has designed our redemption plan with a view towards providing investors with an initial period during which to decide whether a long-term investment in the Company is appropriate for their portfolio. In addition, despite the illiquid nature of the assets expected to be held by the Company, the Manager believes it is in the best interest of all shareholders to provide the opportunity for limited quarterly liquidity in the event a shareholder needs it, by offering a discounted redemption price prior to year 5. The difference between the NAV and the discounted value would accrue to shareholders who have not requested redemption. Neither the Manager nor our Sponsor receives any economic benefit as a result of the discounted redemption price through year 5.

Pursuant to our redemption plan, shareholders may request that we redeem at least 10% of their shares. In addition, the redemption plan is subject to certain liquidity limitations, which may fluctuate depending on the liquidity of the real estate assets held by us.

For the first eighty-nine (89) days following the settlement of the common shares subject to the redemption request (the “Preliminary Investment Period”), the per share redemption price will be equal to the purchase price of the shares being redeemed reduced by

In other words, a shareholder would receive back their original investment amount, from the redemption price paid, prior distributions received and distributions that have been declared (and that will be received when paid), but would not receive any amounts in excess of their original investment amount.

Beginning with the first day of the second quarter following the settlement of the common shares subject to the redemption request (the “Regular Investment Period”), the per share redemption price will be calculated based on a declining discount to the per share price for our common shares in effect at the time of the redemption request, and rounded down to the nearest cent. In addition, the redemption plan is subject to certain aggregate liquidity limitations, which may vary depending on the underlying liquidity of the real estate assets held by us. During the Regular Investment Period, the redemption price with respect to the common shares that are subject to the redemption request will not be reduced by the aggregate sum of distributions, if any, that have been (i) paid with respect to such shares prior to the date of the redemption request or (ii) declared but unpaid on such shares with record dates during the period between the redemption request date and the redemption date.

The following is a brief comparison of our redemption plan during the Preliminary Investment Period (up to 90 days after settlement) and the Regular Investment Period (90 days or more after settlement), which is qualified in its entirety by the disclosure contained in this offering circular.

Because our NAV per share will be calculated at the end of each quarter beginning on __________, 2020, the redemption price for shares held ninety (90) days or longer may change between the date we receive the redemption request and the date on which redemption proceeds are paid. As a result, the redemption price that a shareholder will receive may be different from the redemption price on the day the redemption request is made.

We have the right to monitor the trading patterns of shareholders or their financial advisors and we reserve the right to reject any purchase or redemption transaction at any time based on what we deem to be a pattern of excessive, abusive or short-term trading. We expect that there will be no regular secondary trading market for our common shares. However, in the event a secondary market for the Company’s shares develops, we will terminate our redemption plan.

Redemption of our common shares will be made quarterly upon written request to us at least 15 days prior to the end of the applicable calendar quarter; provided, however, written requests for common shares to be redeemed during the Preliminary Investment Period must be delivered to the Manager prior to the end of such common shares’ Preliminary Investment Period and at least 10 business days prior to the end of the applicable quarter (e.g., if an investment in common shares settled on March 30, 2019, a redemption request for June 30, 2019 must be delivered to the Manager no later than June 16, 2019). The Manager intends to provide notice of redemption by the last business day of each quarter, with an effective redemption date as of the last day of each quarter, and to endeavor to remit the redemption proceeds within 10 business days of the end of such quarter; although payment of the redemption price may be delayed until 31 calendar days after the end of such quarter, due to exigent circumstances, including, without limitation, (1) our project sponsor(s), partners, or vendors fail to provide adequate information regarding the Company’s investments within a time frame that allows us to perform our NAV calculation, which in turn would prevent us from determining redemption prices applicable to the shares being redeemed ; (2) macro-economic crises or micro-level events, such as damage to a property that could impair one or more of our investments, that may affect our ability to make redemptions or determine NAV; and (3) our payment processing provider chooses to discontinue service or has technical outages that prevent us from processing share redemptions in a timely manner. Shareholders may withdraw their redemption request at any time up to five (5) business days prior to the end of the calendar quarter in which the redemption request was submitted.

We cannot guarantee that the funds set aside for the redemption plan will be sufficient to accommodate all requests made in any calendar quarter. In the event the Manager determines, in its sole discretion, that we do not have sufficient funds available to redeem all of the common shares for which redemption requests have been submitted in any given calendar quarter, such pending requests will be honored on a pro rata basis. In the event that not all redemptions are being honored in a given quarter, the pro rata distributions will be rounded down to the nearest share for each shareholder. For investors who hold common shares with more than one record date, redemption requests will be applied to such common shares in the order in which they settled, on a last in first out basis – meaning those common shares that have been continuously held for the shortest amount of time will be redeemed first. We intend to limit common shareholders to one (1) redemption request outstanding at any given time, meaning that, if a common shareholder desires to request more or less shares be redeemed, such common shareholder must first withdraw the first redemption request, which may affect whether the request is considered in the “Preliminary Investment Period” or “Regular Investment Period.”

In addition, if we redeem less than all of the shares subject to a redemption request in any applicable period, with respect to any unredeemed shares, you can: (i) withdraw your request for redemption; or (ii) ask that we honor your request in a future redemption period, if any, when such redemptions can be made pursuant to the limitations of the redemption plan when sufficient funds are available. Such pending requests will be honored, together with new requests, on a pro rata basis.

In accordance with the SEC’s current guidance on redemption plans contained in T-REIT Inc. (June 4, 2001) and Wells Real Estate Investment Trust II, Inc. (Dec. 3, 2003), we are prohibited from redeeming more than 5.0% of the weighted average number of common shares outstanding during the prior calendar year. Accordingly, we presently intend to limit the number of shares to be redeemed during any calendar quarter to 1.25% of the common shares outstanding, with excess capacity carried over to later calendar quarters in that calendar year. However, as we intend to make a number of commercial real estate investments of varying types, the Manager may elect to increase or decrease the amount of common shares available for redemption in any given calendar quarter, as these commercial real estate assets are sold, but in no event will we redeem more than 5.0% during any calendar year. Notwithstanding the foregoing, we are not obligated to redeem common shares under the redemption plan.

There is no fee in connection with a redemption of our common shares, and the discount applied to the redemption price is for the sole benefit of shareholders who remain as shareholders of the Company, and does not provide any economic benefit to the Manager or Sponsor; however, a shareholder requesting redemption will be responsible for reimbursing us for any third-party costs incurred as a result of the redemption request, including but not limited to, bank transaction charges, custody fees, and/or transfer agent charges.

In addition, the Manager may, in its sole discretion, amend, suspend, or terminate the redemption plan at any time without notice, including to protect our operations and/or our non-redeeming shareholders, to prevent an undue burden on our liquidity, to preserve our status as a REIT, following any material decrease in our NAV, or for any other reason. However, in the event that we amend, suspend or terminate our redemption plan, we will file an offering circular supplement and/or Form 1-U, as appropriate, to disclose such amendment. The Manager may also, in its sole discretion, decline any particular redemption request if it believes such action is necessary to preserve our status as a REIT (for example, if a redemption request would cause a non-redeeming shareholder to violate the ownership limits in our operating agreement or if a redemption constitutes a “dividend equivalent redemption” that could give rise to a preferential dividend issue, to the extent applicable). Therefore, you may not have the opportunity to make a redemption request prior to any potential termination of our redemption plan.

For more information about our redemption plan or to submit a redemption request, please contact us by email at info@reitless.com.

Reports to Shareholders

Our operating agreement requires that we prepare an annual report and deliver it to our common shareholders within 120 days after the end of each fiscal year. Our Manager is required to take reasonable steps to ensure that the annual report complies with our operating agreement provisions and with applicable securities laws.

Under the Securities Act, we must update this offering circular upon the occurrence of certain events, such as asset acquisitions. We will file updated offering circulars and offering circular supplements with the SEC. We are also subject to the informational reporting requirements of the Securities Act that are applicable to Tier 2 companies whose securities are offered pursuant to Regulation A, and accordingly, we will file annual reports, semi-annual reports and other information with the SEC. In addition, we will provide you directly with periodic updates, including offering circulars, offering circular supplements, quarterly pricing supplements, quarterly information statements and other information.

We will provide such periodic updates electronically through the REITless Platform website at www.reitless.com, and documents will be provided electronically. You may access and print all periodic updates provided through our website. As periodic updates become available, we will notify you of this by sending you an e-mail message that will include instructions on how to retrieve the periodic updates. If our e-mail notification is returned to us as “undeliverable,” we will contact you to obtain your updated e-mail address. We will provide you with paper copies at any time upon request. The contents of the REITless Platform website are not incorporated by reference in or otherwise a part of this offering circular.