PART II – INFORMATION REQUIRED IN OFFERING CIRCULAR

 As filed with the Securities and Exchange Commission on May 17, 2021

An Offering Statement pursuant to Regulation A of the Securities Act of 1933 relating to these securities has been filed with the Securities and Exchange Commission (“SEC”). Information contained in this Preliminary Offering Circular (“Offering Circular”) is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering Circular filed with the SEC is qualified. This Preliminary Offering Circular does 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 any state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our 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.

AMENDMENT NO. 3

TO THE

PRELIMINARY OFFERING CIRCULAR

CAPVIEW RESIDENTIAL INCOME – FUND VII, LP

Offering Units of

Limited Partnership Units at $1,000 per Unit

Maximum Offering: $50,000,000

Minimum Subscription: $25,000

Capview Residential Income – Fund VII, LP (“CRI7,” “we,” “us,” or the “Fund”) is a newly organized Delaware limited partnership formed to purchase, lease and sell single family residential rental (“SFR”) properties (the “Properties”). The Fund will acquire SFR properties and lease such properties to an affiliated entity, Capview Exchange Residential, LLC, a Delaware limited liability company (the “Master Tenant”) under long-term master leases. The Master Tenant will, in turn, endeavor to lease the SFR Properties directly to individuals and families desiring to rent single family residences. We are managed by our general partner, CRI Fund VII GP, LLC, a Texas limited liability company ("General Partner"), which is wholly-owned by Capview Holdings, LLC, a Delaware limited liability company.

We are offering for sale up to 50,000 limited partnership units of the Fund (the “Units”) at $1,000 per Unit, for an aggregate, maximum gross dollar offering amount of $50,000,000 (the “Maximum Offering”). There is no minimum offering amount and the Fund will accept subscriptions as they are received after the offering is qualified. The offering is being made pursuant to Tier 2 of Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act"). Investors purchasing the Units will become limited partners of the Fund (the “Limited Partners”). The minimum investment in our Units is $25,000 for 25 Units. See “Securities Being Offered” for further information.

The proposed offering will begin as soon as practicable after this Offering Circular has been qualified by the Securities and Exchange Commission. The offering will continue until the date which is one year from the date on which this offering is so qualified (the “Offering Termination Date”), unless terminated earlier if all of the Units are sold or if the General Partner decides to close the offering at its sole discretion (the “Offering Period”). Notwithstanding the foregoing, the General Partner may, in its discretion, elect to extend the Offering for an additional twelve (12) months. We will have periodic closings of the Offering throughout the Offering Period. Until the initial closing occurs, and thereafter prior to each additional closing, we intend to keep the proceeds received in the offering in an FDIC-insured escrow account held by a third party escrow agent. We expect to hold closings for the purchase of Units on a rolling basis, as needed to finance property acquisitions and working capital. At each closing date, the escrow agent will disburse the proceeds for such closing to the Fund and the Fund will issue the Units relating to such proceeds to investors participating in such closing. The General Partner has the right to accept or reject any subscription, in whole or in part, for any reason or for no reason. If the General Partner rejects a subscription, it will return all monies from rejected subscriptions, generally without interest and without deduction. Once received and accepted, subscriptions are irrevocable.

This Offering Circular follows the Offering Circular disclosure format.

Investing in our Units is speculative and involves substantial risks. You should purchase these securities only if you are capable of evaluating the risks and merits of this investment and have sufficient resources to bear the entire loss of your investment, should that occur. See “Risk Factors” beginning on page 4 to read about the more significant risks you should consider before buying our Units.

The SEC 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 selling literature. 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 hereunder are exempt from registration.

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

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 hereof or such other dates as are stated herein or as of the respective dates of any documents or other information incorporated herein by reference.

This Offering Circular is part of an offering statement that we filed with the SEC. Periodically, as we make material investments, update our capital contribution 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 “Additional Information” 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.

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Offering Circular constitute “forward-looking statements.” When used in this Offering Circular, the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “plan,” “potential,” “should,” “will,” “could,” “would likely,” “should,” “seeks,” “intends,” and similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others:

This list of factors is not exhaustive and should be read with the other cautionary statements that are included in this Offering Circular. See “Risk Factors.”

The forward-looking statements contained in this Offering Circular are based on current beliefs, assumptions and expectations, taking into account information that we reasonably believe to be reliable. You should not rely upon forward-looking statements as predictions of future events as we cannot guarantee that the future results, levels of activity, performance and events reflected in the forward-looking statements will be achieved or occur. Should one or more of the risks or uncertainties described in this Offering Circular occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this Offering Circular to reflect any change in expectations or any change in events, conditions or circumstances upon which any forward-looking statement is based.

SUMMARY OF THE OFFERING

The following summary does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by, the more detailed information appearing elsewhere in this Offering Circular, including the information contained in the “Risk Factors” section herein.

RISK FACTORS

An investment in the Fund involves significant risk. You should carefully consider the following risk factors in addition to the remainder of this Offering Circular before making an investment decision. In addition, you should ask questions of and investigate us as you deem necessary to satisfy yourself that you understand the benefits and risks of an investment in the Fund. Although we describe below certain risks and uncertainties, we currently believe are material, such risks and uncertainties may not be the only ones we face. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected, and you may lose all or part of your investment.

PROSPECTIVE SUBSCRIBERS FOR INTERESTS SHOULD BE AWARE THAT THE INTERESTS ARE SPECULATIVE IN NATURE AND INVOLVE SIGNIFICANT RISK. INVESTORS SHOULD CAREFULLY READ THIS OFFERING CIRCULAR AND ALL EXHIBITS HERETO BEFORE MAKING AN INVESTMENT AND SHOULD BE ABLE TO BEAR THE COMPLETE LOSS OF THEIR INVESTMENT.

Risks Relating to the Offering

The Units are a speculative investment. The business objectives discussed herein must be considered speculative. No assurance can be given that you will realize your investment objectives or will realize a substantial return (if any) on your investment or that you will not lose your entire investment in the Fund. For this reason, you should carefully read this Offering Circular and all exhibits to this Offering Circular. You should consult with YOUR attorneys, accountants and business advisors prior to making an investment.

We have no prior operating history. We are recently formed 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 no significant assets. Our lack of an operating history significantly increases the risk and uncertainty you face in making an investment in our Units.

An investment in Units is an illiquid investment. Because no public trading market for the Units currently exists, it will be difficult for you to sell your Units and, if you are able to sell your Units, you will likely sell them at a substantial discount. There is no public market for our Units and we currently have no plans to list our Units on a stock exchange or other trading market. Therefore, it will be difficult for you to sell your Units promptly or at all. If you are able to sell your Units, you would likely have to sell them at a substantial discount to the offering price. Because of the illiquid nature of our Units, you should purchase our Units only as a long-term investment and be prepared to hold them for an indefinite period of time. You cannot expect to be able to liquidate your investment in case of an emergency.

The Units are not a diversified investment. Because an investment in Units represents an investment in a single entity, which will invest directly in single family residential real estate assets leased to an affiliated entity, such an investment is not a diversified investment. Although the Fund intends to geographically diversify its real estate assets by investing in Properties throughout the United States, and the Master Tenant has diversified its subleases to some extent subleasing each property to a unique subtenant, there can be no assurance that its subleases will be sufficiently diversified to provide diversified income to the Master Tenant and the Fund.

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-1 or S-11 or listing on a national stock exchange would be. For example, we are not required to have (i) a board of directors of which a majority consists of "independent" directors, (ii) an audit committee composed entirely of independent directors and a written audit committee charter, (iii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter, (iv) a compensation committee composed entirely of independent directors and a written compensation committee charter, or (v) independent audits of our internal controls. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of a national stock exchange.

This offering is focused on attracting a large number of investors that plan on making 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 Units are being offered and sold only to “qualified purchasers” (as defined in Regulation A) and the minimum subscription amount is $25,000. It is possible that certain economic, geopolitical and social conditions may influence the investing habits and risk tolerance of these smaller investors to a greater extent than larger, institutional 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.

Maintenance of our exemption from the Investment Company Act of 1940 imposes limits on our operations, which may adversely affect our operations. The Company will accept 100 or more limited partners. The Investment Company Act requires that any issuer that is beneficially owned by 100 or more persons and that owns certain securities be registered as required under the Investment Company Act. We believe that, because the Fund will be purchasing fee simple interests in the Properties, the ownership of the Properties will not be deemed to be securities for purposes of the Investment Company Act. However, if such Properties fail to qualify as real estate acquisitions for purposes of such act, we could potentially lose our exemption and be required to register under the Investment Company Act. In the event we are required to register under the Investment Company Act, the returns to our investors will likely be significantly reduced.

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 any Properties, 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. We will seek to invest the offering proceeds available for investment, after the payment of fees and expenses, in single family residential properties for rental income. However, because you will be unable to evaluate the economic merit of assets before we invest in them, you will have to rely entirely on the ability of our General Partner to select suitable and successful investment opportunities. These factors increase the risk that your investment may not generate returns comparable to our competitors.

Risks Relating to the Fund

The Investors will rely on the General Partner and its affiliates for all investment and management decisions. The General Partner will be solely responsible for all Property acquisition, management and disposition decisions. Investors in the Units will have no power over such decisions. Therefore, you will rely on the ability of the General Partner to select Properties in which to invest. There can be no assurance that the General Partner will be able to identify Properties that will provide long-term capital appreciation or that will be tenantable, and there can be no assurance that the General Partner’s due diligence processes will uncover all relevant facts regarding such Properties. You must be willing to entrust the General Partner with all aspects of these decisions. If the General Partner does not effectively select or manage our investments, you may lose your complete investment. Potential subscribers for Units must carefully evaluate the personal experience and business performance of the General Partner, its affiliates and the principals of each. See “Business – Management.”

The Sponsor and Master Tenant have limited experience in managing residential properties for an extended period. Although the Sponsor and its affiliates have significant experience in managing single tenant retail leases since 2010, we have limited experience managing and leasing single tenant residential properties. The Master Tenant will rely on third-party property management companies to manage the residential property leases. Numerous or extended vacancies with the Properties in the portfolio could have a material adverse effect on the Master Tenant’s ability to meet its lease obligations to the Fund. Further, there is no assurance the Master Tenant will be successful at managing, leasing and re-leasing residential properties. If the Master Tenant is unable to manage and lease the residential properties efficiently, its ability to make rental payments to us under the Master Lease may be hindered. Any reduction in the amount of rent paid to us by the Master Tenant will decrease our profitability and our distributions to investors.

The General Partner and its affiliates will receive certain compensation, regardless of the profitability of the Fund and the Properties. The General Partner and its affiliates is entitled to receive certain substantial fees and other significant compensation, payments and reimbursements regardless of whether we operate at a profit. These compensation arrangements have been agreed upon by the General Partner and the Fund and are not the result of arms-length negotiations. In addition, the General Partner is entitled to receive an acquisition fee upon acquisition of a Property and a disposition fee upon the disposition of a property. Accordingly, the General Partner may receive significant acquisition fees and disposition fees despite the fact that we may experience a net loss from our ownership of Properties. See "Compensation of the General Partner and its Affiliates"

The Fund’s and the Master Tenant’s success depends to a significant degree upon the contributions of certain key personnel. Neither the General Partner nor the Master Tenant have employees but instead use the services of employees of the Sponsor. The Sponsor has no employment agreements with any key personnel, and we cannot guarantee that all or any of these individuals will remain affiliated with the Sponsor, or that the Sponsor will be successful in attracting replacements for any such persons if necessary. If any of the key personnel were to cease their affiliation with the Sponsor, the Master Tenant’s operations could suffer. If we lose or are unable to obtain the services of key personnel, our ability to implement the investment strategies discussed herein could be delayed or hindered, which could adversely affect the value of an investment in the Units.

The liability of the General Partner is limited. The General Partner will not be liable to us or the Limited Partners for any loss or liability caused by any act or failure to act, unless loss or liability arising from the General Partner’s fraud, intentional misconduct, knowing violation of the law, or gross negligence. Subject to certain conditions, the Fund will indemnify any partner, officer, affiliate, employee or agent against certain claims or lawsuits related to the Fund’s and Master Tenant’s operations. A successful claim for such indemnification would deplete assets by the amount paid.

Any transfer of Units will be significantly restricted. Limited Partners may not transfer their Units without the approval of the General Partner, subject to certain permitted transfers described in the Partnership Agreement. The General Partner may deny a request for approval to transfer Units in its sole discretion.

If we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay distributions. Our ability to achieve our investment objectives and to pay distributions depends upon our ability to source and acquire Properties. The more money we raise in this offering, the greater our challenge will be to invest all of the net offering proceeds on attractive terms. We cannot assure you that we will be successful in obtaining suitable investments on financially attractive terms. If we are unable to find suitable investments promptly, we may be unable or limited in our ability to pay distributions and we may not be able to meet our investment objectives.

The Fund may not be able to sell and liquidate successfully its portfolio of Properties at the end of the term. Unless dissolved earlier as permitted or required by the Partnership Agreement, the Fund will begin the process of dissolving and winding up its affairs on fifth anniversary of the date on which we accept our first subscription and admit our first investor as a Limited Partner; provided, however, that the General Partner may extend the Fund’s term for up to one additional year. We cannot assure potential Investors that we will be able to sell our portfolio of Properties for attractive prices, or even for prices above the prices we paid for such Properties. Adverse market conditions may materially and adversely affect, among other things, our ability to sell under favorable terms, achieve target earnings or returns or make distributions to the Limited Partners.

Risks Relating to the Business

We have minimal operating capital, no significant assets and no revenue from operations. We have minimal operating capital and for the foreseeable future will be dependent upon our ability to finance our operations from the sale of equity or other financing alternatives. There can be no assurance that we will be able to successfully raise operating capital. The failure to raise operating capital could result in our bankruptcy or other event which would have a material adverse effect on us and our Limited Partners. We have no significant assets or financial resources, so such adverse event could put your investment dollars at significant risk.

Technology disruptions including a cybersecurity incident could negatively impact our business. We and our affiliates, including the Master Tenant, use technology in substantially all aspects of our business operations. Such uses give rise to potential cybersecurity risks, including security breach, espionage, system disruption, theft, and inadvertent release of information. These business operations involve the storage and transmission of numerous classes of sensitive and confidential information and intellectual property, including tenant and supplier information, private information about employees of its affiliates, and financial and strategic information about us and our affiliates. If we fail to assess and identify cybersecurity risks associated with operations, we may become increasingly vulnerable to such risks. Additionally, the measures we and our affiliates have implemented to prevent security breaches and cyber incidents may not be effective. The theft, destruction, loss, misappropriation, or release of sensitive or confidential information or intellectual property, or interference with information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of tenants, potential liability, and competitive disadvantage, any of which could result in a material adverse effect on our and our affiliates’, including the Master Tenant’s, financial condition or results of operations.

Failure to maintain effective internal controls could have a material adverse effect on our business and operations. Effective internal controls over cash management, financial reporting, disclosures, and operations are necessary for us and our affiliates, including the Master Tenant, to provide reliable financial reports and disclosures, effectively prevent fraud and operate successfully. Our and our affiliates’, including the Master Tenant‘s, internal controls over financial reporting and its operating internal controls may not prevent or detect financial misstatements or loss of assets because of inherent limitations, including the possibility of human error, management override of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to financial statement accuracy, disclosures, and safeguarding of assets. Any failure of these internal controls, including any failure to implement required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their implementation, could result in decreased investor confidence in the accuracy and completeness of financial reports and disclosures, civil litigation, or investigations by regulatory authorities, which may adversely impact our business, reputation, financial condition, and results of operations and we could fail to meet its reporting obligations.

Disruptions in the financial markets or deteriorating economic conditions could adversely impact the single family residential rental market, which could hinder our ability to implement our business strategy and generate returns to you. The success of our business is significantly related to general economic conditions and, accordingly, our business could be harmed by any economic slowdown and downturn in real estate asset values and property sales. Periods of economic slowdown or recession, significantly rising interest rates, declining employment levels, decreasing demand for real estate, declining real estate values, or the public perception that any of these events may occur can reduce the volume of potential investments. These economic conditions could continue to result in a general decline in acquisition and disposition activities. In addition, these conditions could continue to lead to a decline in property sales prices. During an economic downturn, it may also take longer for us to dispose of the Properties or the selling prices may be lower than originally anticipated. As a result, the carrying value of the Properties may become impaired and we could record losses as a result of such impairment or we could experience reduced profitability related to declines in real estate values. Further, we intend to finance approximately 65-67.5% of the purchase price of the Properties with debt. As a result of our target leverage, our exposure to adverse general economic conditions is heightened. These negative general economic conditions could reduce the overall amount of sale activity in the single family residential home industry, and hence the demand for our services. All of the conditions described above could adversely impact our business performance and profitability, which could result in our failure to make distributions to our Limited Partners and could decrease the value of an investment in us. In addition, in an extreme deterioration of our business, we could have insufficient liquidity to meet our debt service obligations when they come due in future years. If we fail to meet our payment or other obligations under our credit facilities, the lenders under those agreements will be entitled to proceed against the collateral granted to them to secure the debt owed.

Our dependence on third parties for key services may have an adverse effect on the Fund’s economic performance or reputation if such third parties fail to perform. We and the Master Tenant intend to use third party property managers to provide certain services for the Properties. For example, we may use property managers to assist us in selecting and acquiring Properties. The Master Tenant intends to use third party property managers to manage the day-to-day operations of the Properties and to source third party service providers to provide renovations and certain maintenance and specialty services, such as HVAC, roofing, painting, and floor installations. Selecting, managing, and supervising these third-party service providers requires significant resources and expertise. In addition, the Master Tenant generally does not have exclusive or long-term contractual relationships with the property managers, and it can provide no assurance that it will have uninterrupted or unlimited access to their services. The inability or unwillingness of the property managers or these third-party service providers to provide these services on acceptable terms or at all could have a material adverse effect on the operations of the Master Tenant and, ultimately, the Fund.

The Master Tenant relies on the lease execution payment it will receive from the Fund and its ongoing collection of rents from the subtenants to provide operating income. Master Tenant has limited capitalization and, in the event of high vacancies or tenant payment defaults, there is no guaranty that the Master Tenant can meet its lease payment obligations to the Fund under the Master Leases. Further, if the Master Tenant becomes insolvent or bankrupt, the Master Tenant will be unable to perform its obligations under the Master Lease. To protect against insolvency issues, the Master Tenant will hold reserves in support of its lease payment obligations under the Master Lease. In addition, if the Master Tenant defaults on its payment obligations, the General Partner has the right to terminate the Master Lease and collect rents directly from the sub tenants occupying the Properties. Despite these measures, Investors could still lose all or part of their investment in the event the Master Tenant experiences adverse financial conditions and is unable to make the necessary rental payments to the Fund.

Real Estate Risks

The market in which we participate is competitive and, if we do not compete effectively, our operating results could be harmed. Most of our current or potential competitors have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the acquisition of real estate assets. Larger real estate programs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable properties may increase. Any such increase would result in increased demand for these assets and therefore increased prices paid for them. If we pay higher prices for our Properties, our profitability will be reduced and you may experience a lower return on your investment.

An investment in the Fund is subject to numerous real estate risks that are outside our control. Our investments are in SFR property, and, as a result, an investment in the Units will be subject to the risks generally incident to the ownership of improved real property, including changes in national and local economic conditions, changes in the demand for or supply of competing properties in an particular geographic area, changes in local market conditions, unanticipated holding costs, the availability and cost of necessary utilities and services, changes in real property rates and other operating expenses, changes in governmental rules and fiscal policies, changes in zoning and other land use regulations, environmental controls, natural disasters (which may result in uninsured losses) and other factors beyond our control.

Local regulations, including municipal or local ordinances, restrictions, and restrictive covenants may place restrictions on the Properties. Our acquisition of the Properties may require the approval of local officials or community standards organizations and the Master Tenant may be required to obtain permits, licenses and approvals in connection with any renovations or improvements. Additionally, such local regulations may cause the Master Tenant to incur additional costs to renovate or maintain the Properties in accordance with applicable rules and regulations. We cannot assure you that existing regulatory policies will not have an adverse economic effect on the Properties or your investment, or that additional regulations will not be adopted in the future that would impose additional costs on the Properties. Any failure by the Master Tenant to obtain such permits, licenses, and approvals or any increase in the cost of complying with such permits and licenses could have a material adverse effect on its operations and, consequently, on the Fund’s financial condition.

The Master Tenant depends on subtenants and their willingness to meet their lease obligations and renew their leases to generate revenue. Poor subtenant selection, defaults, and non-renewals by subtenants may adversely affect financial performance and ability to make payments under the Master Lease to the Fund and ultimately, the Investors. The Fund’s rental income is to be solely paid by the Master Tenant, which depends on rental income from subtenants to generate revenue. As a result, the Master Tenant’s success depends in large part upon the property managers’ ability to attract and retain qualified subtenants for the Properties. The Master Tenant’s reputation, financial performance, and ability to make payments under the Master Lease to Investors would be adversely affected if a significant number of subtenants fail to meet their lease obligations or fail to renew their leases. For example, subtenants may default on rent payments, make unreasonable and repeated demands for services or improvements, make unsupported or unjustified complaints to regulatory or political authorities, use the Properties for illegal purposes, damage or make unauthorized structural changes to the Properties that are not covered by security deposits, refuse to vacate the Properties upon termination of their lease, engage in domestic violence or similar disturbances, disturb nearby residents with noise, trash, odors or eyesores, fail to comply with homeowners’ association regulations, sublet to less desirable individuals in violation of their lease agreements with the Master Tenant, or permit unauthorized persons to live at the Properties with them. Damage to the Properties may delay re-leasing after eviction, necessitate expensive repairs, or impair the rental income or value of the Properties resulting in a lower than expected rate of return. Increases in unemployment levels and other adverse changes in economic conditions could result in substantial subtenant defaults. The Master Tenant holds cash reserves to pay for vacancy costs and cost to re-lease the Properties; however, in the event of a substantial number of subtenant defaults or bankruptcies, the Master Tenant may exhaust its reserves, potentially causing a significant decrease in the rental income payments to the Fund.

Rental leases are relatively short-term, exposing the Master Tenant to the risk that it may have to re-lease the Properties frequently, which it may be unable to do on attractive terms, on a timely basis, or at all. We expect substantially all new leases to have a lease duration of one year or less. As such leases permit the subtenants to leave at the end of the lease term, we anticipate rental revenues may be affected by declines in market rental rates more quickly than if leases were for longer terms. Short-term leases may result in high turnover, which involves costs such as restoring the properties, marketing costs, and lower occupancy levels. The subtenant turnover rate and related cost estimates may be less accurate than if we had more operating data upon which to base such estimates. In addition, disputes may arise between the Master Tenant and the subtenant that result in the subtenant withholding rent payments. If the rental rates for the Properties decreases or the subtenants do not renew their leases, the Master Tenant’s operating results and ability to make payments under the Master Lease to the Fund and ultimately, the Limited Partners, could be adversely affected.

The Master Tenant does not have control over timing and costs arising from capital expenditures on the Properties, and the cost of maintaining the Properties is generally higher than the cost of maintaining owner-occupied homes, which will affect the Master Tenant’s economic performance and may adversely impact the Master Tenant’s ability to make payments under the Master Lease to the Fund. Renters impose additional risks to owning real property. Renters do not have the same interest as an owner in maintaining a property and its contents and generally do not participate in any appreciation of the property. Accordingly, subtenants may damage the Properties and its contents, and may not be forthright in reporting damage or amenable to repairing it completely, or at all. A Properties may require repairs and/or improvements after each subtenant vacates the premises, the costs of which may exceed any security deposit provided to us by the subtenant when the Properties was originally leased. Accordingly, the cost of maintaining the Properties can be higher than the cost of maintaining owner-occupied homes, which will affect the Master Tenant’s economic performance and may adversely impact the Master Tenant’s ability to make payments under the Master Lease to the Fund and ultimately, the Limited Partners.

 The Master Tenant is subject to additional risks particular to single-tenant leases that may reduce the Fund’s cash flow and ability to sell the Properties. The Properties are leased to single subtenants. Therefore, lease defaults, vacancies or terminations may occur with the Properties and the Properties may remain vacant until a suitable subtenant is found. In addition, adverse economic conditions may affect the Properties and lead to a lower return. Adverse economic conditions may increase the likelihood of Properties experiencing a vacancy as a result of a subtenant not renewing their lease at expiration. Adverse economic conditions may also lengthen the time to re-tenant the Properties.

Re-tenanting Properties could result in a lower rent, which may reduce the value of the Properties when sold. The General Partner believes that over the long-term, market rents will generally increase. The General Partner intends to target Properties with rents at or below market rates; however, in the event of a vacancy, the General Partner may need to accept a lower rent in order to re-lease the Properties. Although the Master Tenant will be obligated to continue to make rental payments to the Fund at the original rate, the value of the Properties may be significantly reduced at a lower rent, potentially lowering the sale price of the Properties and potentially leading to a loss on the sale of the Properties.

The Master Tenant faces significant competition in the leasing market for quality subtenants, which may limit the ability to lease single-family homes. The Master Tenant depends on rental income from subtenants for its revenue. As a result, the Master Tenant’s success depends upon the property managers’ ability to attract and retain qualified subtenants for the Properties. The Master Tenant faces competition for subtenants from other lessors of single-family properties, apartment buildings, and condominium units, which could adversely affect its ability to obtain quality residents and lease single-family properties on favorable terms. In addition, increases in unemployment levels and other adverse changes in economic conditions may adversely affect the creditworthiness of potential subtenants, which may decrease the overall number of qualified subtenants for the Properties.

The Master Tenant could also be adversely affected by overbuilding or high vacancy rates of homes, which could result in an excess supply of homes and reduce occupancy and rental rates. In addition, improving economic conditions, along with the availability of low residential mortgage interest rates and government sponsored programs to promote home ownership, have made home ownership more accessible for potential renters who have strong credit. These factors may encourage potential subtenants to purchase residences rather than lease them, thereby causing a decline in the number and quality of potential available subtenants. No assurance can be given to attracting and retaining suitable subtenants. If the Master Tenant is unable to lease the Properties to suitable subtenants, its economic performance and ability to make payments under the Master Lease to the Fund, and ultimately, the Limited Partners could be adversely affected.

The Master Tenant’s cash flows are subject to economic downturns and extended adverse economic conditions may deplete its cash reserves beyond its ability to meet its lease obligations. U.S. markets may experience increased levels of volatility due to a combination of many factors, including fluctuating values of home prices, limited access to credit markets, the risk of rising interest rates, geopolitical issues, pandemics, and civil unrest. These factors can produce economic fluctuations that can negatively impact demand for SFR properties and rents and property values. The timing, length and severity of any economic downturn cannot be predicted with certainty. Although the Master Tenant intends to maintain cash reserves, should such reserves be insufficient to cover the costs of vacancy, an economic downturn could have a material adverse effect on the Master Tenant’s cash reserves and ability to meet its lease obligations to the Fund. Although the Fund will have the right to terminate the Master Lease under a default by the Master Tenant, the Fund will lose the protections provided under the Master Lease and the Fund will become the direct landlord to any subtenant leasing the Properties, responsible for any costs to re-tenant the Properties should it be or become vacant.

Tenant relief laws, including laws regulating evictions, rent control laws, and other regulations that limit the Master Tenant’s ability to increase rental rates may negatively impact rental income and profitability. The Master Tenant’s contracted property managers may from time to time be involved in evicting residents who are not paying their rent or who are otherwise in material violation of the terms of their lease. Eviction activities impose legal and managerial expenses that raise costs to the Master Tenant. The eviction process is typically subject to legal barriers, mandatory “cure” policies, and other sources of expense and delay. Additionally, state and local landlord-tenant laws may impose legal duties to assist subtenants in relocating to new housing, or restrict a property manager’s ability to remove the subtenant on a timely basis or to recover certain costs or charge subtenants for damage subtenants cause to the Properties. Because such laws vary by state and locality, the property managers must be familiar with and take all appropriate steps to comply with all applicable landlord-tenant laws. To the extent of non-compliance with state or local laws, the Master Tenant or its affiliates may be subjected to civil litigation filed by individuals, in class actions or actions by state or local law enforcement. The Master Tenant may be required to pay its adversaries’ litigation fees and expenses if judgment is entered against it in such litigation or if the Master Tenant settles such litigation. Furthermore, state and local governmental agencies may introduce rent control laws or other regulations that limit the Master Tenant’s ability to increase rental rates, which may affect the Master Tenant’s rental income. Especially in times of recession and economic slowdown, rent control initiatives can acquire significant political support. If rent controls unexpectedly became applicable to certain of the Properties leased by the Master Tenant, its economic performance could be adversely affected, which could adversely affect the economic performance of the Fund.

Public health risks may affect the Fund’s economic performance. Public health concerns related to any outbreak of an infectious disease, such as severe acute respiratory syndrome, avian flu, H1N1/09 flu and COVID-19, or any other serious public health concern could have a negative impact on the economy. The Fund’s business activities and economic performance could also be negatively impacted by the government's response to any such pandemic or other public health concern, such as restrictions on travel, quarantines or other directives designed to reduce the effects of such public health concern. The full extent of the impact of such an event on the future financial performance of the Fund, as a whole, and, specifically, on its investments, real estate acquisitions, construction and tenants of real estate properties. A public health concern could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. Even if federal, state or municipal governments intervene and provide aid to the industries negatively affected by a pandemic or public health concern, there can be no assurances provided that such aid would be received by the Fund, the Master Tenant, or any of their affiliates or service providers, or that any amount of such aid would mitigate any negative economic impact.

The Properties may incur uninsured losses. Although we believe that the Properties will be adequately covered by insurance, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism or acts of war that may be uninsurable or not economically insurable. Changes in building codes and ordinances, environmental considerations and other factors, including civil unrest, terrorism or acts of war, also might make the insurance proceeds insufficient to repair or replace one or more of the Properties if damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the Fund’s economic position with respect to the affected Properties. Any uninsured loss could result in both loss of cash flow from, and the asset value of, the affected Properties. Insurance companies are limiting and charging significant premiums to cover acts of terrorism in insurance policies. As a result, although we and/or the subtenants on the Properties may carry terrorism insurance, the Fund’s Properties may suffer a loss in value from acts of terrorism that are not covered by insurance.

Real estate investments are long-term illiquid investments and may be difficult to sell in response to changing economic conditions. Real estate investments are generally long-term investments that cannot be quickly converted to cash. Therefore, the Fund’s ability to sell promptly in response to economic or other conditions will be limited. Real estate investments are also subject to adverse changes in general economic conditions or local conditions that may reduce the demand. Although there is a large established market for SFR properties, it may be more difficult to sell an property that is encumbered by a long term lease. Our inability to sell our investments to generate cash to satisfy our obligations could have a material adverse effect on our business, financial condition, liquidity and results of operations.

Competitive properties could adversely impact the value of the Properties. Real estate that is competitive with the Properties may increase vacancy rates, reduce rental rates, and reduce demand for the Properties. In a competitive market, the Master Tenant may need to accept a lower rent in order to re-tenant the Properties. Although the Master Tenant will continue to be obligated to pay the lease payment set forth in the Master Lease, the value of the Properties may be significantly reduced at a lower rent, potentially lowering the sale price and leading to a loss on the future sale of the Properties.

Costs of complying with governmental laws and regulations may adversely affect the Fund’s results of operations. State and local fire, life-safety, building codes, land use regulations, and similar requirements, as they may be adopted by governmental agencies and bodies from time to time, regulate the use of the Properties. We cannot predict what other regulations will be enacted in the future, how future laws or regulations will be administered or interpreted, or how future laws or regulations will affect the Properties. Compliance with new laws or regulations, or stricter interpretation of existing laws, may require us to incur significant expenditures or liability. The Master Tenant may be required to make substantial expenditures to comply with these regulations, which could significantly reduce the reserves it holds for vacancy costs and capital expenditures.

We may obtain only limited warranties when we purchase the Properties. The seller of a property often sells such property in its “as is” condition on a “where is” basis and “with all faults,” without any express or implied warranties. Alternatively, purchase and sale agreements may contain only limited warranties, representations, and indemnifications that will expire at the closing or only survive for a limited period after the closing. The purchase of Properties with no warranties or only limited warranties may cause the Fund or the Master Tenant to incur unanticipated expenses and repair. If the cost of additional expenses or repairs the Master Tenant is required to make exceeds the amounts the Master Tenant holds in reserve, our cash flow and ability to make distributions could be negatively impacted.

Environmental liabilities could significantly decrease the value of the Properties. Under various federal, state, and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Even if more than one person may have been responsible for the contamination, each person covered by applicable environmental laws may be held responsible for all of the clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages based on personal injury, natural resources, or property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination. The presence of hazardous or toxic substances on the Properties, or the failure to properly remediate a contaminated Properties, could give rise to a lien in favor of the government for costs it may incur to address the contamination or otherwise adversely affect the ability to sell or lease the Properties or borrow using the Properties as collateral. Environmental laws also may impose restrictions on the manner in which the Properties may be used. A property owner who violates environmental laws may be subject to sanctions which may be enforced by governmental agencies or, in certain circumstances, private parties. In connection with the acquisition and ownership of the Properties, the Master Tenant and/or the Fund may be exposed to such costs. The cost of defending against environmental claims, of compliance with environmental regulatory requirements, or of remediating any contaminated Properties could materially and adversely affect the Master Tenant and ultimately, the Fund.

Compliance with new or more stringent environmental laws or regulations or stricter interpretation of existing laws may require material expenditures by the Master Tenant and/or the Fund. The Master Tenant is subject to environmental laws or regulations relating to the Properties, such as those concerning lead-based paint, mold, asbestos, proximity to power lines, or other issues. We cannot assure you that future laws, ordinances, or regulations will not impose any material environmental liability or that the current environmental condition of the Properties will not be affected by the activities of residents, existing conditions of the land, operations in the vicinity of the Properties, or the activities of unrelated third parties. In addition, we may be required to comply with various local, state, and federal fire, health, life-safety, and similar regulations. Failure to comply with applicable laws and regulations could result in fines and/or damages, suspension of personnel, civil liability, or other sanctions.

Mold contamination in the Properties would materially decrease the value of the Properties. Mold contamination has been linked to a number of health problems, resulting in litigation by tenants seeking various remedies, including damages and ability to terminate their leases. No assurance can be given that an undetected mold condition will not exist in the Properties at the time of investment or will not arise in the future, with the risk of substantial damages, legal fees, and an inability to lease, sell, finance, or refinance the Properties. It is unknown at this time whether such mold claims would be covered by the customary insurance policies to be obtained on the Properties.

Borrowing Risks

Federal Reserve Bank policy and other factors may adversely affect our ability to obtain reasonably priced financing. Federal Reserve Bank policy and improvements in the U.S. economy could result in a gradual increase in interest rates. Additionally, the COVID-19 pandemic has caused certain lenders to reduce lending and/or increase the interest rates on their loans. Further expansion of the spread of COVID-19 or other diseases could result in lenders further reducing loan availability and increasing interest rates charged. Should the overall cost of borrowings increase, we may be unable to economically leverage our portfolio of Properties to the extent we currently anticipate, and such debt financing may become unavailable at prices we find acceptable. In addition, the state of the debt markets could have an impact on the overall amount of capital investing in real estate, which may result in price or value decreases of real estate assets. Consequently, there is greater uncertainty regarding our ability to access credit markets in order to attract financing on reasonable terms, or at all. Returns on our investments and our ability to make acquisitions could be adversely affected by an increase in our financing costs and our inability to secure financing on reasonable terms, if at all.

Unfavorable financing terms or the inability to obtain financing will adversely affect the operating results of the Fund. There can be no assurance that we will be able to obtain financing on favorable terms, or at all. If we are unable to negotiate favorable interest rates, or if there is a general increase in interest rates, the higher debt service payments will reduce the amount of distributions to the Limited Partners. If we are unable to obtain mortgage, line of credit or other necessary financing at all, our ability to execute our investment strategy will be materially and adversely affected.

A Property will be subject to foreclosure following a default under a first-lien mortgage loan. A first-lien mortgage loan secured by the Properties will contain various covenants and default provisions, including payment defaults, operating restrictions, reporting requirements, transfer restrictions, capital improvement and maintenance obligations, and restrictions on our ability to enter into or amend leases. Our ability to meet some of our covenants, including those related to the condition of the Properties or payment of real estate taxes, may depend on the performance by tenants under their leases. In addition, first lien lenders will likely require cross default provisions, meaning that a loan default on one Property may constitute a loan default on one or more other Properties in which we have invested. Upon an uncured default under a loan, the lender may declare the entire amount of the loan, including principal, interest and other charges, to be immediately due and payable. If a first-lien mortgage lender declares a loan to be immediately due and payable, we will have the obligation to immediately repay the loan in full. If repayment does not occur, the lender may invoke its remedies under the loan documents, including proceeding with one or more foreclosure sales that are likely to result in our losing our entire investment in a significant number of our Properties.  

First-lien mortgage loan terms will likely restrict the ability of the Fund to transfer the Properties and refinance the loans. We expect the terms of the first-lien mortgage loans secured by a Property will materially restrict the common privileges that an owner of property has to exercise control over its property. Typical restrictions are expected to include limitations on our ability to transfer a Property without satisfying the first mortgage. Each first-lien mortgage loan will also likely limit our ability to prepay or otherwise refinance the loan, which may or may not be partially offset by certain prepayment premiums or defeasance rights. Such restrictions, while relatively common in today’s real estate financing market, increase the risks of ownership beyond those of a cash purchaser. In addition to the restrictions placed on us, these restrictions may also make a Property less attractive as an acquisition target for third party purchasers, particularly due to the absence of the ability to prepay a first-lien mortgage loan. The right of defeasance (i.e. the substitution of U.S. treasury obligations as substitute collateral) may exist under a loan as a partial substitute for prepayment rights, but the defeasance process is expensive and difficult to undertake, thereby making the sale of a Property, and the assumption of the corresponding loan, a process in which the first-lien mortgage lender will play a substantial, and sometimes antagonistic, role. As a lender may not always believe that a particular purchaser is an appropriate borrower for purposes of assuming its loan, and the process of selling a Property may be more difficult than would be the case if no financing existed. A subscriber for the Units should understand these limitations on our freedom of ownership and our ability to cause the sale of a Property before subscribing for Units, as each of the foregoing may materially and adversely affect our investment in a particular Property.

The high level of leverage on the Properties increases the debt service risks and the likelihood of foreclosure. The Properties are expected to have a substantial mortgage debt-to-acquisition cost ratio of approximately 65% to 67.5%. Even though cash reserves are being held by the Master Tenant in an amount expected to be sufficient to pay the master lease payments over the 15-year lease term, any interruptions in payment of the master lease payments may harm the Fund’s ability to make debt service payments, which could materially and adversely affect the financial viability of the Fund. No assurance can be given that future cash flow of the Master Tenant and underlying subtenants will be sufficient to allow us to receive a significant (or any) return on our investment in such Properties. If the revenue from the Properties is not sufficient for us to pay debt service, we would be required to use working capital, seek additional funds, seek to refinance existing indebtedness, or sell the underlying Properties. There can be no assurance that additional funds would be available, if needed or, if such funds were available, that they would be available on terms acceptable to us. If we are unable to pay debt service, the lender could proceed with one or more foreclosure sales that would likely result in our losing our entire investment in a significant number of our Properties.

The borrowing of funds increases the risks of adverse effects on the Fund’s financial condition. We expect to incur significant indebtedness described in this Offering Circular. Interest payments on such indebtedness will reduce cash available for distributions to the Limited Partners. if we are required to repay existing indebtedness we could be required to liquidate our Properties at a time which may not permit realization of the maximum return on each such Properties. Further, the lenders under such loans may impose restrictions affecting our ability to make distributions to the Limited Partners during the continuance of an event of default, our ability to incur additional indebtedness, and/or our operating policies. Failure to satisfy these restrictions could result in a default, and the lender could elect to declare all borrowed amounts to be immediately due and payable, foreclose on a significant number of our Properties and restrict our ability to make additional borrowings. In addition, if the Fund is unable to fully liquidate its Properties prior to the maturity date of the loan, the General Partner will need to refinance the debt or pay it using the liquidation proceeds of other properties. These and other factors related to our indebtedness could have a material adverse effect on our financial condition and results of operations.

Tax Risks

THERE WILL BE TAX CONSEQUENCES ASSOCIATED WITH AN INVESTMENT IN CRI7. BECAUSE THE TAX ASPECTS OF THIS OFFERING ARE COMPLEX AND CERTAIN OF THE TAX CONSEQUENCES MAY DIFFER DEPENDING ON INDIVIDUAL TAX CIRCUMSTANCES, EACH PROSPECTIVE INVESTOR FOR UNITS MUST CONSULT WITH AND RELY ON HIS OWN, INDEPENDENT TAX ADVISOR CONCERNING THE TAX ASPECTS OF THIS OFFERING AND HIS INDIVIDUAL SITUATION. NO REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER IS MADE WITH RESPECT TO THE ACCEPTANCE BY THE IRS OF THE TREATMENT OF ANY ITEM BY CRI7 OR ANY INVESTOR.

PLEASE CONSULT WITH YOUR OWN TAX ADVISORS REGARDING THE FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN CRI7. YOU SHOULD READ THE FOLLOWING SUMMARY OF CERTAIN FEDERAL INCOME TAX RISKS ASSOCIATED WITH AN INVESTMENT IN CRI7 IN CONJUNCTION WITH THE DISCUSSION SET FORTH UNDER THE CAPTION “CERTAIN TAX ASPECTS OF THE OFFERING.”

An investment in the Units involves numerous income tax risks. There are risks associated with the federal income tax aspects of an investment in CRI7. The Internal Revenue Service (“IRS”) has continued to examine numerous tax issues that could affect us. Moreover, the income tax consequences of an investment in the Units are complex, and tax legislation could be enacted in the future to the detriment of the Investors. The following paragraphs summarize some of the tax risks to the Limited Partners who own Units.

As a limited partnership, the Fund has a more complex tax treatment than entities taxed as corporations.   The Fund is organized and operated as a limited partnership in accordance with the provisions of the Partnership Agreement and applicable state law.   The Fund pays no U.S. federal income tax on its income. Instead, the Fund will furnish its limited partners each year with tax information on IRS Schedule K-1 (Form 1065) and each U.S. limited partner is required to report on its U.S. federal income tax return its allocable share of the income, gain, loss and deduction of the Fund. Limited Partners must report these amounts regardless of the amount (if any) of distribution they receive from the Fund during the taxable year. A Limited Partner, therefore, may be required to pay taxes on its portion of such income and/or gains and the amount of those taxes may exceed their distributions from the Fund or the amount they receive when they sell their Units. Because our Limited Partners will be required to report their allocable share of each item of our income, gain, loss, deduction, and credit on their tax returns, tax reporting for the Limited Partners will be significantly more complicated than for shareholders in a REIT or corporation. Limited Partners may wish to seek advice from tax advisors with respect to their Schedule K-1 and may incur additional costs in connection with such advice from tax advisors.   Finally, we will use reasonable efforts to furnish our Limited Partners with tax information (including IRS Schedule K-1) as promptly as possible, which describes their allocable share of such items for our preceding taxable year. However, we may not be able to provide such information on a timely basis.   It is therefore possible that, in any taxable year, our Limited Partners will need to apply for extensions of time to file their tax returns.

The Fund may be audited by the IRS. Our federal information returns may be audited by the IRS. Such audit may result in the challenge and disallowance of some of the deductions claimed in such returns. No assurance or warranty of any kind can be made with respect to the deductibility of any such items in the event of either an audit or any litigation resulting from an audit. Our Partnership Agreement contains provisions relating to the audit of our information returns in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), and requires the Limited Partners who were partners in the year under review to include their allocable share of adjustments to such information returns and to indemnify us against any loss we incur should such Limited Partners fail to pay the resulting tax deficiency.

Limited Partners may be adversely affected if the Fund is taxed as a corporation. The General Partner intends for us to be taxed as a partnership for federal income tax purposes. If we were to be treated for tax purposes as a corporation, the tax benefits associated with an investment in the Fund, if any, would not be available to the Limited Partners. We would, among other things, pay income tax on our earnings in the same manner and at the same rate as a corporation, and losses, if any, would not be deductible by the Limited Partners. In addition, profits would be subject to a second tax when distributed to the Limited Partners.

The Fund may generate Unrelated Business Taxable Income (“UBTI”). Your investment in the Units of the Fund may generate UBTI. Tax-exempt entities must consult their own tax counsel regarding the effect of any UBTI. DUE TO THE POSSIBLE PRESENCE OF UBTI, AN INVESTMENT IN THE UNITS IS NOT APPROPRIATE FOR A CHARITABLE REMAINDER TRUST OR A CHARITABLE REMAINDER UNITRUST.

Allocations of profits and losses may be challenged. The IRS may successfully challenge the allocations in the Partnership Agreement and reallocate items of income, gain, loss, deduction and credit in a manner inconsistent with the allocation provisions contained in the Partnership Agreement.

A Limited Partner’s tax liability in certain years may exceed his cash distributions. Although the Partnership Agreement provides for the General Partner to distribute cash (if available) to satisfy any tax obligations of the Limited Partners arising as a result of the allocation of taxable income, it is possible that such tax obligations may exceed the cash distributions made to Limited Partner. This may occur because funds received by us may be taxable income to us while we may use such funds for nondeductible operating or capital expenses, thus causing taxable income to be allocated to the Limited Partners without a proportionate distribution of cash. Thus, there may be years in which a Limited Partner’s tax liability exceeds his share of cash distributions from us. The same tax consequences may result from the sale or transfer of a Limited Partner’s Units, whether voluntary or involuntary, and may produce ordinary income or capital gain or loss.

Limited Partners may be subject to penalties and interest if our tax returns are adjusted. In the event of an audit that disallows our tax deductions, Limited Partners should be aware that the IRS could assess significant penalties and interest on tax deficiencies. The Code provides for penalties relating to the accuracy of tax returns equal to 20% of the portion of the underpayment to which the penalty applies. The penalty applies to any portion of any understatement that is attributable to: (i) negligence or disregard of rules or regulations; (ii) any substantial understatement of income tax; or (iii) any substantial valuation overstatement. Additional interest may be imposed on underpayments relating to tax shelters. The General Partner believes that we are not a “tax shelter,” as defined, and that there is substantial support for the positions to be taken by us on our returns. However, no assurance can be given that the IRS will agree with these positions.

Limitations on losses and credits from passive activities. Your taxable income and loss (if any) will likely be considered to be derived from a passive activity. Deductions in excess of income (i.e., losses) from passive trade or business activities generally may not be used to offset “portfolio income,” i.e., interest, dividends and royalties, or salary or other active business income. Deductions from passive activities generally may be used only to offset income from passive activities. Interest deductions attributable to passive activities are treated as passive activity deductions, and not as investment interest. Thus, such interest deductions are subject to limitation under the passive activity loss rule and not under the investment interest limitation. Credits from passive activities generally are limited to the tax attributable to the income from passive activities. Passive activities include trade or business activities in which the taxpayer does not materially participate and any rental activity, which would include holding Units in a Fund. Thus, your net income and net loss likely will constitute income and loss from a passive activity. A taxpayer may deduct passive losses from rental real estate activities against other income if: (i) more than half of the personal services performed by the taxpayer in trades or businesses are performed in a real estate trade or business in which the taxpayer materially participates and (ii) the taxpayer performs more than 750 hours of service during the tax year in real property trades or businesses in which the taxpayer materially participates. Prospective Investors should also be aware that Investors will only be able to use net loss, if any, up to the amount of the tax basis in their Units.

Limitation on excess business losses. Under the Tax Cuts and Jobs Act of 2017 (the “TCJA”), excess business losses of a taxpayer other than a corporation are not allowed for the taxable year. Such losses are carried forward and treated as part of the taxpayer’s net operating loss carryforward in subsequent taxable years. An excess business loss for the taxable year is the excess of aggregate deductions of the taxpayer attributable to trades or businesses of the taxpayer over the sum of aggregate gross income or gain of the taxpayer plus a threshold amount. The threshold amount is $250,000 (or twice the applicable threshold amount in the case of a joint return), subject to adjustment for inflation each year. The provision applies after the application of the passive loss rules and applies at the partner or shareholder level in the case of a partnership or S corporation.

Limitation on business interest deductions. An Investor may be required to make an election if the Investor wishes to avoid the limit on business interest deductions. Under the TCJA, Code Section 163(j) provides interest deductions for taxpayers with average annual gross receipts in excess of $25 million. Such deductions are generally deferred to the extent that annual business interest expense exceeds business interest income plus 30% of taxable income, subject to certain adjustments (“ATI”). A real estate trade or business, however, may elect out of the deferral regime, in which case the business must depreciate certain types of real property by the straight-line method over slightly longer recovery periods under the alternative depreciation system (i.e., 40 years for nonresidential property, 30 years for residential rental property, and 20 years for qualified interior improvements). While Investors may be eligible to make this election, there is considerable uncertainty as to the application of the new rules, which may depend in part upon an Investor’s specific circumstances. Prospective Investors should consult their own tax advisors as to the applicability of the new rules to them with respect to their particular circumstances. See “Tax Aspects of the Offering.”

Limitation on losses under the at-risk rules. An Investor that is an individual or closely held corporation will be unable to deduct losses, if any, to the extent such losses exceed the amount such Investor has “at risk.” Losses not allowed under the at-risk provisions may be carried forward to subsequent taxable years and used when the amount at risk increases. See “Tax Aspects of the Offering.”

The Alternative Minimum Tax may limit deductions. The alternative minimum tax applies to certain items of tax preference. The limitations on the deduction of passive losses also apply for purposes of computing alternative minimum taxable income. Prospective Investors should consult with their own tax advisors concerning the applicability of the alternative minimum tax.

Future changes in U.S. Federal income tax laws could adversely affect Investors. The discussion of tax aspects contained in this Offering Circular is based on law presently in effect and certain final and proposed Treasury Department regulations (“Treasury Regulations”). Nonetheless, Investors should be aware that new administrative, legislative or judicial action could significantly change the tax aspects of your investment. Any such change may or may not be retroactive with respect to transactions entered into or contemplated before the effective date of such change and could have a material adverse effect on your investment.

The rules dealing with U.S. Federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department, resulting in revisions of resolutions and revised interpretations of established concepts as well as statutory changes. In particular, the TCJA made many significant changes to the U.S. Federal income tax laws. To date, the IRS has issued only limited guidance with respect to certain of the new provisions, and there are numerous interpretive issues that will require guidance. Technical corrections legislation may be needed to clarify certain aspects of the new law and give proper effect to Congressional intent. There can be no assurance, however, that technical clarifications or changes needed to prevent unintended or unforeseen tax consequences will be enacted by Congress in the near future.

As of the date of this Offering Circular, President Biden has proposed a tax plan that if adopted could result in material changes to the current tax laws. It is unclear whether President Biden’s proposed tax plan would be approved by Congress, and if approved, when the proposed tax plan would take effect. A material change in the manner in which real property investments and their returns are taxed could significantly adversely affect the value of such investments.

Tax-exempt Investors must comply with certain restrictions. In considering an investment on behalf of a pension or profit-sharing plan qualified under Section 401(a) of the Code, the assets of which are held in a trust that is exempt from tax under Section 501(a) of the Code, the fiduciary of each such plan must consider whether the investment in Units satisfies the fiduciary standards set forth in Section 404 of ERISA, including the requirements that the assets of the plan remain sufficiently diversified and that the investment be prudent. Furthermore, such plans and such other plans and accounts described in Section 4975(e)(1) of the Code, including individual retirement accounts, must consider whether the investment in Units will result in a prohibited transaction by the plan or account. The scope of the foregoing considerations may be affected if the “plan asset rule” is implicated by virtue of the aggregate investments in Units by the plan and other benefit plans.

The Fund’s ability to should recognize capital gains upon the sale of its Properties is not guaranteed. The treatment of any gain or loss of the Fund allocable to a Partner on the sale, exchange or other disposition of a Property will be dependent upon all of the facts and circumstances existing at the time of disposition. Depending upon decisions of the Fund with respect to the use and disposition of a Property, the Property should be classified as either: (i) a capital asset held for investment; (ii) property held for use in a trade or business; or (iii) property held primarily for sale to customers in the ordinary course of the Fund's business. The characterization of a Property upon its sale or other disposition will depend upon all of the facts and circumstances at the time of disposition. If a Property is treated as held for sale to customers in the ordinary course of business, and therefore the Fund is treated as a dealer, the gains or losses on the sale will be ordinary income or loss. If the Property is treated as held for investment, the gains or losses will be capital gains or losses, which gain or loss will be "long-term" if the Property is held for more than one year. If a property is treated as held for use in a trade or business, it may be treated as capital gain or ordinary income depending on the nature of other such income of a Partner.

We intend to classify all of the Fund’s Properties as capital assets held for investment. However, because we anticipate the periodic sale of Properties as part of its management of the Property portfolio, and to generate cash to fund redemptions of Units, there can be no assurance that the IRS will not take the position that some or all of the Fund’s Properties are held primarily for sale to customers in the ordinary course of the Fund’s business. Because the determination of treatment of the gains or losses depends on the facts and circumstances, we cannot offer any conclusions as to the treatment of the gains and losses from the sale of Properties by the Fund.

PLAN OF DISTRIBUTION

The Offering

We are offering for sale up to 50,000 Units at an offering price of $1,000 per Unit, for an aggregate, maximum gross dollar offering amount of $50,000,000. There is no minimum offering amount and the Fund will accept subscriptions as they are received after the offering is qualified. Investors purchasing the Units will become Limited Partners. The minimum investment in our Units is $25,000 for 25 Units.

The proposed offering will begin as soon as practicable after this Offering Circular has been qualified by the SEC. The offering will continue until the date which is one year from the date on which this offering is so qualified, unless terminated earlier if all of the Units are sold or if the General Partner decides to close the offering at its sole discretion. Notwithstanding the foregoing, the General Partner may, in its discretion, elect to extend the Offering for an additional 12 months. We will have periodic closings of the Offering throughout the Offering Period. Until the initial closing occurs, and thereafter prior to each additional closing, we intend to keep the proceeds received in the offering in an FDIC-insured escrow account held by a third party escrow agent. At each closing date, the escrow agent will disburse the proceeds for such closing to the Fund and the Fund will issue the Units relating to such proceeds to investors participating in such closing. The General Partner has the right to accept or reject any subscription, in whole or in part, for any reason or for no reason. If the General Partner rejects a subscription, it  will return all monies from rejected subscriptions, generally without interest and without deduction. Once received and accepted, subscriptions are irrevocable.

We will offer the Units through our owners, managers, and other representatives. We intend to sell the Units directly to investors and may sell the Units through registered investment advisors registered with the Securities and Exchange Commission and/or securities broker-dealers registered with the Financial Industry Regulatory Authority, or FINRA.

The offering price is arbitrary with no relation to the value of the Fund. The purchasers in this offering will own 100% of the Units outstanding.

Our Offering Circular will be furnished to prospective investors in this offering through the SEC’s Edgar site or on our website www.capviewpartners.com.

WHO MAY INVEST

The Units 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 the Units offered hereby are offered and sold only to “qualified purchasers.” In order to be a “qualified purchaser,” a purchaser of Units must satisfy one of the following:

“Net Worth” is defined as the difference between total assets (excluding the estimated fair market value of the individual’s primary residence) and total liabilities (excluding the amount of indebtedness secured by the individual’s primary residence, up to its estimated fair market value); or

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 stockholder is not a “qualified purchaser” for purposes of Regulation A.

How to Invest

Subscription Agreement. All investors will be required to complete and execute a Subscription Agreement, the form of which is attached as Appendix A to this Offering Circular, concurrently with payment in full via wire transfer, electronic funds transfer via ACH, or check deposit with the subscription purchase price in accordance with the instructions in the Subscription Agreement. All Subscription Agreements are irrevocable.  The General Partner has  the right to accept or reject any subscription in whole or in part, for any reason or for no reason. If the General Partner rejects any subscription received, it will return all monies from rejected subscriptions, generally without interest and without deduction. Once received and accepted, subscriptions are irrevocable.

Escrow Account. Until the initial closing occurs, and thereafter prior to each additional closing, we intend to keep the proceeds received in the offering in an FDIC-insured escrow account held by a third party escrow agent. Acceptance by the escrow agent of investor funds into the escrow account does not necessarily result in such investor’s receiving Units and, as a result, escrowed investor funds may be returned to such investors.

Closings. After the SEC has qualified the Offering Circular, the Fund will accept tenders of funds to purchase the Units. We will have periodic closings of the Offering throughout the Offering Period. At each closing date, the escrow agent will disburse the proceeds for such closing to the Fund and the Fund will issue the Units relating to such proceeds to investors participating in such closing. The General Partner has the right to accept or reject any subscription, in whole or in part, for any reason or for no reason. If the General Partner rejects a subscription, it will return all monies from rejected subscriptions, generally without interest and without deduction. Once received and accepted, subscriptions are irrevocable.

USE OF PROCEEDS

We plan to use the proceeds of the Offering to acquire SFR Properties and pay the operating expenses of the Fund (including the cost of the Offering). If the Maximum Offering is sold, we expect to acquire approximately 200 to 250 of the Properties in targeted markets across the United States. See “Business.”

The following table below sets forth certain information about the anticipated use of proceeds of the Offering:

Property Acquisitions. Assuming the Offering is fully subscribed, the Fund anticipates using a combination of the proceeds from the Offering and debt to finance the purchase between 400 and 500 SFR Properties for purchase prices between $175,000 and $325,000. The Fund anticipates it will be able to secure sufficient debt to acquire the SFR Properties and plans to maintain a level of debt between 65% to 67.5% of the value of the SFR Properties.

 Third Party Transaction Expenses. The Fund estimates that transaction expenses payable to unaffiliated third parties will be equal to approximately 1.5% of the purchase price of each Property. These expenses consist of third party closing costs, legal fees, property insurance, document recording fees, wiring fees and appraisals that occur during acquisition of the Properties and fees related to sourcing, reviewing and inspecting the Properties, due diligence, contract negotiation, closing, renovation bids and oversight, pre-leasing fees. In addition, the Fund estimates that third party lender charges on loans used to finance the acquisition of the Properties will be equal approximately 1.5% of the amount of debt incurred in connection with the purchase of the Property. 

For descriptions of the remaining fees, see “Compensation to the General Partner and its Affiliates.”

The above amounts represent only estimates. The expected use of proceeds from this Offering represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. The Fund reserves the right to change the above uses of proceeds if the General Partner believes it is in the best interests of the Limited Partners.

BUSINESS

Investment Strategy

CRI7 is a Delaware limited partnership recently formed to purchase, lease and sell SFR properties. Our primary investment strategy is generate stable and predictable rental income through the purchase, lease and sale of single family residential rental properties. The Fund will acquire SFR properties and lease such properties to the Master Tenant under long-term Master Leases. The Master Tenant will, in turn, endeavor to sublease the SFR Properties directly to individuals and families desiring to rent single family residences. The Fund anticipates using a combination of the proceeds from the Offering and debt to finance the purchase between 400 and 500 SFR Properties for purchase prices between $175,000 and $325,000. The Fund anticipates it will be able to secure sufficient debt to acquire the SFR Properties and plans to maintain a level of debt between 65% to 67.5% of the value of the SFR Properties. 

The Master Tenant will use the property manager’s determination of the expected net operating income and expected annual regional growth rate to calculate the first-year rent payment to the Fund. For each SFR Property lease, the first-year rent paid to the Fund is expected to be approximately 110% of the expected net operating income (based on a standard 3.0% annual market growth rate assumption) and will be adjusted up or down if the expected net operating income growth for that geographic region is higher or lower than the 3.0% standard growth rate. The rent paid to the Fund for each SFR Property will increase by 1.0% each year on the anniversary of such Master Lease. The Master Tenant pays an above-market rate early in the lease because it expects that the annual growth in market rents and the net operating income the Master Tenant receives from the SFR Properties will outpace the 1% annual increase it pays to the Fund and subsequent owners over the life of the master lease.

Under the Master Lease, the Master Tenant is obligated to provide rental payments to the Fund regardless of whether or not the Properties are occupied by a subtenant. Further, the Master Tenant will be obligated to pay all fixed property costs and continue making rental payments during any periods of vacancy. Such fixed property costs include but are not limited to property taxes, insurance, homeowner’s association fees and maintenance, as well as any capital expenditures to the Properties.

Whereas property owners of single-family rental properties can generally only obtain one-year leases from individual families with varying degrees of credit, the Master Lease structure provides the Fund, as the owner of the Properties, with 15-year absolute triple-net leases, which is intended to provide a stable, predictable contractual rental rate while absorbing the risks and costs of vacancy, short-term subleases, fixed property costs, and capital expenditures.  Though the Fund plans to liquidate its portfolio within approximately five years, there will be at least ten years remaining on the master lease, which is expected to make the Fund's portfolio of Properties more attractive to buyers than portfolios of SFR properties for sale without master leases.

We generally seek SFR properties in communities that attract high-credit workforce residents with features that include proximity to employment centers, schools, and transportation corridors in markets identified by steady population growth, consistent rental income growth, and attractive rental market supply and demand fundamentals. Properties are typically located in the suburbs within and/or near major arteries in primary, secondary, and tertiary markets in the United States. We intend to acquire free-standing homes but will consider all dwelling types that are leased to one household, including, but not limited to, condos, townhouses and duplexes.

We seek to build a portfolio comprised of homes squarely within affordable definitions (per Government Sponsored Enterprise lenders). These homes attract a resident base largely within the 3rd income quartile ($60,000 to $110,000) and require an average minimum household income above $60,000 to meet average rent-to-income thresholds. Applicants must have a minimum combined gross income of three times the monthly rent. Cosigners on applications are required to earn an income of four times the monthly rental obligation. Single community risk is mitigated as homes are generally spread over many communities.

In coordination with our property managers, we intend to select markets and submarkets through a combination of quantitative and qualitative factors relevant to the workforce strategy and availability of Properties with favorable home price appreciation potential, rental income growth, compelling amenities, and a focus on safety and low relative crime rates. Geographically speaking, our current target markets for SFR acquisitions include, but are not limited to, Atlanta, Tampa, Orlando, Jacksonville, Dallas, San Antonio, Houston, Birmingham, Charlotte, Nashville, Phoenix, Las Vegas, Indianapolis, St. Louis, Minneapolis, and Milwaukee. We will monitor economic indicators in these markets and other markets and consider other trends that could affect the current list of targets. In addition, the property managers will analyze potential subtenants for stable employment, good credit and sufficient income to rent the Properties. Affordable, high quality homes are anticipated to be in demand by other tenants in the event the subtenant does not renew the sublease when the sublease expires, or they default on the sublease.

We intend to hold the Properties for a period of three to five years, although we may buy and sell individual Properties during such period. At the end of such period. we plan to sell the Properties individually in the real estate market with the Master Lease in effect or as a portfolio to another real estate investor, a real estate investment trust, a Delaware Statutory Trust or other third party in exchange for cash or securities.

SFR properties have attributes that make them a good alternative to commercial and multi-family real estate. They are readily sellable in real estate markets, trade at a low cost per property as compared to commercial real estate, easily diversified and generally appreciate in value. An SFR property is leased to a single household in exchange for monthly rent payments. The tenants of SFR properties generally enter into a short-term base lease with renewal options. National market data indicates that the SFR sector has historically maintained stable occupancy levels and low average rent growth volatility, resulting in income that has a low correlation with broad economic downturns. SFR properties, as an asset class, are generally financeable with favorable rates and terms correlated to the loan-to-cost/loan-to-value and the borrower’s credit.

Competition

The real estate industry and investment management industry are intensely competitive, and we expect them to remain so. We face competition both in the pursuit of fund investors and investment opportunities. 

Organizational Charts

Management

The Fund operates under the direction of the General Partner, which is responsible for the management of and control of our general business affairs. The General Partner is ultimately controlled by John Hammill, who is responsible for the day-to-day management of the General Partner.

The General Partner and Master Tenant do not employ their own personnel. Instead, the Sponsor makes its personnel and other management assets available to the General Partner and Master Tenant for the operation and maintenance of the Fund and Master Tenant. The Fund pays the General Partner fees for its services. See “Compensation of the General Partner and its Affiliates.”

The Master Tenant will engage property managers with substantial experience and proprietary systems to select, acquire and renovate single-family residential properties. The property managers will also tenant the Properties, collect rents, pay property expenses, and manage maintenance and capital improvements.

Capview Partners, LLC

The Sponsor’s predecessor company under the same name, Capview Partners, LLC, was originally formed in 2010. Capview Partners creates and structures unique income-producing asset-based investment strategies, designed with the intent to deliver excellent risk-adjusted income and distributions while providing superior control and independence. The Sponsor is an experienced real estate investment manager that executes investment strategies. The Sponsor has completed over $770 million in principal transactions in the single tenant net lease retail sector of commercial real estate since 2010. In addition to these principal transactions, the Sponsor sold the management of its last fund with $341 million in assets to an institutional manager. The senior management of the Sponsor has a combined 100+ years and $10 billion of transaction experience. The Sponsor employs six full-time personnel and outsources most of its administrative functions including, human resources, information technologies, investment management and accounting services.

Property Management and Property Acquisition

The Sponsor has engaged RENU Management, LLC (“RENU”) and its affiliates to manage, rent, lease, operate and maintain Properties pursuant to an Exclusive Management Agreement. Under the Exclusive Management Agreement, RENU will advertise the availability of a Property for rent; handle property showing; negotiate and execute leases, renewals and cancellations; serve notices on behalf of the Master Tenant; institute legal actions in the name of the Master Tenant, evict delinquent tenants and recover possession of properties, recover rents and sums due; settle, compromise and release such actions. In addition, RENU will provide and supervise all renovations, maintenance and repairs at the properties for which is serves as property manager. The Master Tenant will pay RENU a management fee equal to between 6% and 8% of collected rents (the percentage of such fee to be calculated on a sliding scale based on the number of properties under management). RENU will also receive 50% of any late fees received from tenants and will be entitled to receive a fee equal to 4.5% of the gross sales price of any property sold to a RENU-placed tenant. The Exclusive Management Agreement has a one-year initial term and renews automatically for additional one year periods unless a party provides proper notice of termination to the other party. In addition, the Sponsor may terminate the Exclusive Management Agreement at any time by paying an early termination fee.

In addition, the Sponsor has engaged RENU to identify, source and acquire target properties pursuant to a non-exclusive Real Estate Acquisition Services Agreement. Under the Real Estate Acquisition Services Agreement, RENU will identify, source and acquire SFR Properties on behalf of the Fund as a licensed real estate broker in good standing in thirteen metropolitan areas around the United States. Upon approval by the Fund of a specific SFR Property that is offered for sale, RENU will use commercially reasonable efforts to acquire such property on behalf of the Fund. In exchange for such services, RENU will be entitled to receive a commission paid by the seller.

RENU is an experienced SFR operator with proprietary technology to maximize operational efficiency. RENU was formed in 2009 to manage thousands of REO properties for Fannie Mae and Freddie Mac. Later, the Department of Housing and Urban Development engaged RENU to optimize the disposition of a 25,000-house portfolio that led to the development of RENU’s underwriting valuation platform. RENU developed and offers underwriting services for single-asset acquisitions and portfolios to serve institutional clients, including large public REITs and national investment managers. RENU has completed over $3.1 billion in SFR acquisitions in SFR assets for long-term hold and rent with sustained monthly volumes as high as $100 million plus over two years.

RENU built a proprietary analytics platform enabling their team to underwrite in real-time quickly and accurately. Following the General Partner’s acquisition criteria, RENU updates the status of over 25 million properties every 90 seconds. RENU then presents underwritten assets to the General Partner with the goal of delivering the first offer on target properties. RENU also efficiently manages the rehab and construction process. Through its use of technology and by leveraging local relationships, RENU provides oversight and accountability with regard to the Properties.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and plan of operation together with financial information included elsewhere in this Offering Circular. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this Offering Circular for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Operating Results

CRI7 was formed on January 25, 2021 and has no assets or no operating results to report.

Sources of Financing

We intend to enter into a senior secured credit facility with a financial institution, the proceeds of which will be used to acquire Properties and pay third party transaction expenses, lease execution payments, sponsor operating expenses and acquisition fees. We expect the loan to be secured by first liens on each of the Properties acquired by the Fund. We anticipate that the loan will have a three-year to five-year term and the loan payments are expected to be interest-only at a floating rate of interest. We intend to finance approximately 65% to 67.5% of the purchase price of the Properties with the proceeds of this loan. The loan is expected to be subject to customary loan covenants.

Plan of Operations

We will use property managers to select properties that meet our requirements and to determine the appropriate bid price and renovation costs and attempt to place the properties under contract. Upon closing on the acquisition of each property, the Fund will begin to receive monthly rent payments from the Master Tenant prorated to the day of the lease execution. The Fund will pay debt service costs to the Lender monthly. Except for certain fees described in “Compensation to the General Partner and its Affiliates,” the Fund has no obligation to pay management fees to or the expenses of the Master Tenant or General Partner and will not to incur any property costs, including fees to the property managers, which are the responsibility of the Master Tenant. The Fund will pay incidental costs to operate the fund such as franchise taxes and regulatory costs. Cash flows from the rents less debt service costs and other operating costs will be used to pay make distributions to the Limited Partners.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES OF OUR SPONSOR

We are managed by our General Partner, which is responsible for directing the management of our business and affairs, managing our day-to-day affairs, and implementing our investment strategy. The General Partner does not employ its own management personnel. Instead, the Sponsor makes its personnel and other management assets available to the General Partner for the operation and maintenance of the Fund. These responsibilities include:

Key Personnel

The following are the key personnel of the Sponsor:

The following is a brief overview of the education and business experience of such key personnel:

John A. Hammill, Chief Executive Officer and Managing Partner

Mr. Hammill is Chief Executive Officer and Managing Partner of the Sponsor, responsible for overseeing all facets of the company’s operating activities and strategy. He has over 20 years of experience in real estate and private equity offerings.

Mr. Hammill originally formed Capview Partners, LLC in 2010 to provide investors with access and expertise in the single tenant net lease retail segment of commercial real estate. The Sponsor offers acquisition, asset management, property management, accounting and reporting, disposition, and strategic advisory services in discretionary funds and separately managed accounts. While affiliated with the Sponsor, Mr. Hammill has been involved with nearly $800 million of transactions that have provided investors with capital preservation and attractive risk adjusted yields and total returns.

Mr. Hammill started his career at The Staubach Company where he served as a Managing Director. While with Staubach, Mr. Hammill was involved in over 550 single tenant net lease transactions along with many other asset types with transaction experience totaling over $3.25 billion in value. Mr. Hammill was also involved in many private equity investments, structured debt offerings, and structured equity offerings.

Mr. Hammill completed his Master of Business Administration and Bachelor of Science degrees at The University of Miami and Southern Methodist University, respectively.

Kevin M. Connelly, CPA, Chief Financial Officer and Managing Director

Mr. Connelly joined the Sponsor in April 2014 and currently serves as the Chief Financial Officer and Managing Director. Mr. Connelly is responsible for overseeing the finance and administration functions of the company including the finance, treasury, legal, accounting, human resources and information technologies functions and is heavily involved in the company’s business development efforts.

In this role Mr. Connelly has been instrumental in growing the company’s assets under management from $12 million to $350 million, successfully converting the Sponsor’s flagship fund into an open-end structure and completing the capital transactions effectively transferring the fund business to a subsidiary of a Global Fortune 500 company.

Mr. Connelly has over 25 years of finance and accounting experience in high growth small and mid-cap companies after starting his career at the ‘Big Four’ accounting firm, KPMG. Prior to joining Capview Partners, Mr. Connelly served as Vice President, Finance for Martek Biosciences where he implemented a world-class finance infrastructure to support revenue growth of $18 million to $450 million worldwide and the successful sale of the company to global conglomerate Royal DSM for $1.1 billion. He has held financial leadership positions in Storage USA, Aether Systems, and Integrated Health Services where he assumed key roles in the raising of over $2.4 billion in public debt and equity markets and private ventures, including two IPOs. During his tenure at Storage USA, self-storage REIT, the company grew to become the second largest REIT of its kind with the acquisition of over 300 properties valued at over $600 million.

Mr. Connelly is a Certified Public Accountant and graduated Summa Cum Laude from James Madison University with a BBA in Accounting.

Paul Dauterive, Managing Director, Asset Management 

Mr. Dauterive joined the Sponsor in 2021 and serves as the Managing Director , Asset Management.  Mr. Dauterive is responsible for developing and overseeing nationwide asset management and strategy.  He has over 20 years’ experience in single-family residence management and national real estate platforms and his experience has centered around all facets of mass property management, technology, nationwide real estate transactions, valuation, vendor management, stabilization, disposition, and property rehab.

Mr. Dauterive previously worked for The First American Corporation, a Fortune 500 company, where he held multiple CEO and COO divisional leadership positions running large operating divisions and interacting directly with the nation’s top lenders and mortgage holders.  More recently, he spent several years as an entrepreneur successfully contracting with multiple private equity real estate groups holding from $1billion to $10 billion in single family real estate assets.

Mr. Dauterive received a bachelor’s degree from Louisiana State University.

PRIOR PERFORMANCE SUMMARY

The sponsor of the Fund is Capview Partners, LLC and the manager of the Sponsor is John Hammill.  The Sponsor is a privately-held company that operates as a real estate investment firm. The Sponsor’s predecessor company under the same name, Capview Partners, LLC, was originally formed in 2010 to engage in the business of acquiring, investing in, managing and selling single-tenant net lease retail properties leased to commercial tenants.  Tenants to such lease properties included retailers such as Walgreen’s, Dollar General, AutoZone, Taco Bell, CVS and Starbuck’s. The Sponsor solely acquired stable, tenant-occupied properties. From 2010 to 2018, the Sponsor sponsored seven real estate programs (the “Programs”) that invested a total of approximately $201 million of equity from approximately 420 investors.  Through these real estate programs, Capview acquired 195 single-tenant net lease retail properties in 31 states and sold 78 properties in transactions totaling over $780 million.  In mid-2018, the Sponsor sold the management of its last fund with $341 million in assets to an institutional manager. 

Prior Performance Tables

We are providing one prior performance table, Table III, to illustrate the results of the Programs in compliance with SEC rules and regulations.  No additional disclosure is required in this Offering Circular regarding previous Programs.  The information presented in this section represents the historical operating results of the Sponsor’s Programs. Investors in our Units should not assume that they will experience returns, if any, comparable to those experienced by investors in our Sponsor’s previous Programs. Investors who purchase Units will not acquire any ownership interest in any of the entities to which the following information relates.  Further, the returns to our investors will depend in part on the mix of assets in which we invest. As CRI7 is focused on SFR properties, rather than single tenant net lease retail commercial properties, CRI7’s portfolio will not mirror the portfolios of the Sponsor’s Programs in any respect and the returns to CIR7’s Limited Partners may vary from those generated by the other Programs.  As a result, you should not assume the past performance of our Sponsor or the Programs described below will be indicative of our future performance.

Table III – Operating Results of Prior Programs

Table III below summarizes the operating results for the last five years of Capview Income & Value Fund IV, LP, a previous Program sponsored by the Sponsor.  The Sponsor sold the management of this fund in June, 2018 to an institutional manager and was no longer responsible for its management and operations.

COMPENSATION OF EXECUTIVE OFFICERS

We do not currently have any employees and we do not currently intend to hire any employees who will be compensated directly by us. All individuals performing work for the Fund are employees of the Sponsor and will receive compensation, including for services performed for us, from our Sponsor. As executive officers of our Sponsor, these individuals will serve 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 our Sponsor, we do not intend to pay any compensation directly to these individuals.

COMPENSATION TO THE GENERAL PARTNER AND ITS AFFILIATES

The General Partner and its affiliates, including the Sponsor, shall receive the following fees and compensation:

(1) This chart assumes the Offering is fully subscribed and the Fund acquires $109,969,453 in SFR Properties using maximum leverage of 67.5% loan to value (approximately $74,229,381 in debt).  It also assumes no SFR Properties are sold or otherwise disposed during the first year of operations.  The Fund does not anticipate selling any SFR Properties during the first year of operation.

Organization and Offering Expenses. Each Unit sold will bear an organizational and offering expense of 1.0% of the per Unit Offering Price, payable to the General Partner. The General Partner will use these funds to pay for expenses incurred in connection with establishment of the Fund and the preparation of the Offering, including, but not limited to, legal, finance, accounting, and printing fees and expenses, graphic design services for brochures and other marketing materials, travel expenses, third party due diligence reports and other related costs with respect to organization of the Fund and this Offering. The actual amount of these costs may be higher or lower than anticipated. If actual organization and offering expenses are less than budgeted, the excess funds will be retained by the General Partner. The General Partner will pay for any organizational and offering expenses in excess of 1.0% of the per Unit Offering Price.

Sponsor Operating Expense Fee. A sponsor operating expense fee of 2.0% of the purchase price of each Property acquired is payable to the Sponsor for its management services and the use of its personnel. The actual amount of these costs may be higher or lower than anticipated. If actual sponsor operating expenses are less than budgeted, the excess funds will be retained by the General Partner. The General Partner will pay for any sponsor operating expenses in excess of 2.0% of the per Unit Offering Price.

Acquisition Fees. Property acquisition fees payable to the General Partner equal 4.0% of the purchase price of each Property acquired. The Sponsor charges this fee for its acquisition and due diligence services, which include daily screening the available properties on the market, preparing preliminary due diligence materials, preparing the letter of intent, preparing and negotiating the contract, obtaining and reviewing due diligence materials, obtaining the survey and verifying the information against the title commitment, physically visiting the site, confirming the renovation budget, approving the construction team, obtaining required insurance policies, coordinating attorneys, preparing the final due diligence memo, and coordinating the closing and funding process with the title company, lender, seller, and attorneys. CRI7 will directly pay or reimburse the Sponsor and/or its affiliates for customary third-party acquisition expenses such as legal fees and expenses, costs of third-party due diligence materials (including, as necessary, updated appraisals and surveys), travel expenses, and other closing costs related to the acquisition of real estate properties.

Lease Execution Payment. The Fund will pay the Master Tenant a lease execution payment equal to 4.0% of the purchase price of each Property for which a Master Lease is executed. This Master Tenant will use the lease execution payments to fund potential deficits between the rents it collects from subtenants and its cash outflows. The Master Tenant will manage the proceeds received from the lease execution payment as a reserve for any future cash deficits.

Disposition Fee.  The General Partner will be entitled to receive a disposition fee equal to 1.50% of the gross sale proceeds of any Property sold or otherwise transferred by the Fund for its disposition services, including such services as marketing the SFR properties to be sold, identifying suitable buyers including REITs, Delaware Statutory Trusts, private owners, contracting with brokerage firms, preparing sales materials, negotiating sales contracts, preparing requested due diligence materials, engaging attorneys, and coordinating the closing process with the title company, lender, buyer, and attorneys.

Carried Interest Upon Liquidation of Properties.  General Partner is entitled to receive 20% of the net cash proceeds from a Liquidating Event (as defined below), after establishing reserves to pay the expenses of liquidation and returning to the Limited Partners aggregate distributions sufficient to cause each Limited Partner to realize a 6.0% internal rate of return on its capital contributions to the Fund.

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Transactions with Affiliates

The General Partner is subject to various conflicts of interest arising out of the General Partner’s business dealings with its affiliates. The General Partner determines the amount of proceeds from the sale of the Properties to transfer to the reserve fund of the Master Tenant to cover future estimated Properties-related expenses of the Master Tenant, which could lower the profits of the General Partner. However, the General Partner uses historical data and actuary-derived future cost estimates to mitigate certain potential conflicts of interest.

In addition, the General Partner will seek to liquidate the Fund prior to the end of the Hold Period. The possible liquidation scenarios include selling the Properties either individually through the real estate market, a portfolio sale to a REIT or Delaware Statutory Trust (DST), or through a securitized product offered through an affiliate of the GP. Some of these transactions may be with an affiliate of the General Partner. The General Partner may cause the Fund to sell one or more of the Properties to affiliated entities and may do so on such terms and conditions as the General Partner believes are reasonable for the Fund. The General Partner will use reasonable efforts to ensure that the terms and conditions of such transactions will not be materially more or less favorable to the Fund than the terms and conditions that could have been obtained, under similar circumstances, from unaffiliated entities. Such transactions may entitle affiliates of the General Partner to receive remuneration in the form of acquisition fees, percentages of net profits and other similar remuneration.

Management of the General Partner may have conflicting fiduciary obligations if we engage in other transactions with affiliates of the General Partner. The General Partner does not prohibit engaging in such transactions, but the General Partner will only make payments to affiliates of the General Partner to the extent those payments are on terms and conditions that are substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties.

If disputes arise between us, on the one hand, and affiliates of the General Partner, on the other hand, the resolution of those disputes may not be as favorable to us as would be achieved with a third party. A single legal counsel will represent us, the General Partner, and certain of the General Partner’s affiliates, which may result in further conflicts of interest.

Other Activities

Each Limited Partner and the General Partner may engage in or have other business interests or other activities other than those relating to the Fund (including business interests or other activities that are competitive with the business of the Fund). Capview and its affiliates currently manage other real estate-related programs and may organize and manage new real estate-related programs in the future. The Partnership Agreement does not limit the activities of affiliates, partners, shareholders, members, managers, officers, directors or employees, of the Limited Partners or the General Partner. The General Partner and its affiliates have no obligation to offer any future investment opportunity to any of the Limited Partners, and no Limited Partner, by virtue of its purchase of Units, will have any right to invest in any future investment opportunity created by the General Partner or any of its affiliates.

SECURITIES BEING OFFERED

The Units represent equity interests in the Fund and entitle the holder thereof to participate in certain allocations and distributions. Persons who purchase Units from the Fund will become Limited Partners in the Fund and be entitled to vote on certain Fund matters. See “Summary of the Limited Partnership Agreement.”

Units may not be freely assigned and are subject to restrictions on transfer by law, by regulation in the state where they are sold, and by our Partnership Agreement, and may be subject to restrictions on transfer imposed by lenders. It is not anticipated that a public trading market in the Units will develop. See “Risk Factors.”

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

None of the Units will be owned by the management. The Fund does not anticipate that any investors participating in the Offering will beneficially own greater than 10% of the outstanding Units.

SUMMARY OF THE LIMITED PARTNERSHIP AGREEMENT

The following summary does not purport to be complete, should be read in conjunction with, and is qualified in its entirety by, the Partnership Agreement, which is attached to this Offering Circular as Appendix B.

Partnership Agreement

We will issue Units pursuant to the Amended and Restated Limited Partnership Agreement of Capview Residential Income - Fund VII, LP. Purchasers of Units will become Limited Partners of CRI7 and will be entitled to the rights and subject to the restrictions set forth in the Partnership Agreement.

Management

The Fund will be managed by the General Partner. The General Partner has very broad management and operational authority over the Fund and its activities and will be solely responsible for the operation and management of the Fund and its business and affairs.

Term, Dissolution

Unless dissolved earlier as permitted or required by the Partnership Agreement, the Fund will begin the process of dissolving and winding up its affairs on fifth anniversary of the date on which we accept our first subscription and admit our first investor as a Limited Partner; provided, however, that the General Partner may extend the Fund’s term for up to one additional year.

The Fund will dissolve, and its affairs wound up, upon the first to occur of (i) the expiration of the term of the Partnership as described above; (ii) a sale of all or substantially all of the assets of the Fund or other similar transaction before the end of the Hold Period; (iii) the bankruptcy, insolvency, withdrawal or removal from the Partnership of the General Partner; (iv) the entry of a decree of judicial dissolution of the Partnership; or (v) the General Partner elects to dissolve the Partnership

Capital Contributions

Each Limited Partner shall, with respect to each Unit or partial Unit acquired by such Limited Partner, make a Capital Contribution of $1,000.00 in cash or property (or such applicable fraction of $1,000.00 for each partial Unit) payable in full upon subscription and admittance to the Partnership as a Limited Partner by the General Partner. No Partner will be required to make any additional capital contributions to the Fund in excess of such initial capital contribution

Distributions

Distribution of Partnership Receipts. The Fund will distribute all Partnership Cash Flow Receipts (as defined below) no less often than quarterly (within 30 days following the end of each calendar quarter) to the Limited Partners pro rata based on their respective ownership percentages. The General Partner may, but is not obligated to, distribute Partnership Capital Event Receipts (as defined below) to the Limited Partners. If the General Partner determines to distribute Partnership Capital Event Receipts, it will used commercially reasonable efforts to make such distribution no later than 30 days after the closing of the capital transaction that results in such receipts. Any distribution of Partnership Capital Event Receipts will be made to the Limited Partners pro rata based on their respective ownership percentages.

“Partnership Cash Flow Receipts” means all cash funds actually received by the Fund from the cash flow attributable to the conduct of its operations, less operating expenses and reserves established by the General Partner. However, Partnership Cash Flow Receipts does not include capital contributions received by the Fund or Partnership Capital Event Receipts.

“Partnership Capital Event Receipts” means all cash funds actually received by the Fund from a capital transaction, less all expenses, financing obligations, closing costs, fees and commissions and reserves established by the General Partner. Partnership Capital Event Receipts may, at the General Partner's discretion, be reinvested to acquire new Properties, used to repay debt financings or distributed to the Limited Partners.

Distribution of Partnership Liquidating Event Receipts. All proceeds from a Liquidating Event (as defined below) shall be distributed in the following order of priority:

“Liquidating Event” means the sale or exchange of all or substantially all of the assets of the Fund, or any other transaction which, individually or together with any similar transaction or transactions, results in the disposition of all or substantially all of the assets of the Fund.

Tax Distributions

To the extent a Partner receives an allocation of income or gain and would not otherwise receive a distribution of Partnership Cash Flow Receipts and Partnership Capital Event Receipts sufficient to pay such Partner’s estimated federal income tax liability, the Fund will, to the extent cash is available, distribute sufficient cash to reimburse the Partners for such estimated tax liabilities. Such distributions will be considered an advance against future distributions per the Fund’s standard distribution priorities. The General Partner shall use commercially reasonable efforts to reserve sufficient funds out of Partnership Cash Flow Receipts and Partnership Capital Event Receipts each year to fund the contemplated tax distributions.

Allocation of Profits and Losses

The Partnership Agreement provides that, subject to certain allocations required under federal income tax laws and regulations, profits and losses will be allocated among the Partners as follows:

Net Profits shall be allocated among the Partners as follows:

Net Losses shall be allocated among the Partners as follows:

Partnership Expenses

The General Partner and its affiliates will bear all of operating expenses and all other costs and expenses relating to the activities and operations of the Fund, including the costs and expenses incurred by it or the General Partner in connection with any offering of the Units.

Voting

The following actions must be approved by the Limited Partners:

The term “Approved by the Limited Partners” means he affirmative vote of Limited Partners holding in excess of 50% of the Units (excluding from this calculation Units held by the General Partner, management of the General Partner or any of the General Partner’s affiliates).

Removal of the General Partner

If Approved by the Limited Partners, the General Partner may be removed as general partner of the Fund for its bankruptcy, insolvency or if the General Partner is found guilty by a court of competent jurisdiction of fraud, intentional misconduct, knowing violation of the law, gross negligence or fraud, or if the General Partner becomes subject to certain bankruptcy or insolvency events.

Restrictions on Transferability

Except for certain permitted transfers to certain family members, family trusts, and family limited partnerships and affiliates, a Limited Partner may not transfer its Units without the General Partner’s consent, which may be granted or withheld in the General Partner’s sole discretion.  The transferor will remain a limited partner, and a transferee will only have the rights of an assignee, until such transferee is admitted as a limited partner of the Fund by the General Partner, at which time the transferor will cease to be a limited partner.

Reporting

We will be required to make the following annual and semi-annual filings with the SEC, which will be available on the SEC’s EDGAR filing system:

We will be required to continue filing these reports unless we file a Form 1-Z to exit the SEC’s reporting system, which we will only be able to do if we have less than 300 limited partners of record and have filed at least one Form 1-K. If we exit the SEC’s reporting system, we will continue to provide financial statements to the Limited Partners semi-annually.

The General Partner will use reasonable efforts to deliver K-1s to the Limited Partners by March 31st of each year.

Amendments

The Partnership Agreement may not be amended without the prior written consent of the General Partner and the Approval of the Limited Partners, except that the General Partner may amend and update the Partnership Agreement to reflect admissions, substitutions or withdrawals of Partners upon the issuance, redemption or transfer of Units without the Approval of the Limited Partners. Notwithstanding the foregoing, (a) any amendment that would materially adversely affect the rights of a Limited Partner in a manner that is disproportionate to the other Limited Partners must be approved by the disproportionately-affected Limited Partner, and (b) any amendment that would require a Limited Partner to make capital contributions in excess of its initial capital contribution must be approved by such Limited Partner.

SUMMARY OF MASTER LEASE

The following summary does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by, the more detailed information appearing elsewhere in this Offering Circular, including the form of Master Lease attached as Appendix C to this Offering Circular.

Lease Type

Triple-net absolute net lease; the Master Tenant assumes all expenses of operating the Properties, including both fixed and variable expenses, taxes, insurance, maintenance, property management, homeowner’s association fees as well as any capital expenditures to the property.

Lease Term

15-year initial term with the ability for the lease term to be extended for up to seven additional periods of five years each. The Master Tenant must elect to renew for the next extension at least 30 days before the expiration of the current term, subject to a 5-day grace period if Fund elects to supply Master Tenant notice of its failure to renew.

Master Lease Payments

The Master Tenant will pay the Fund monthly lease payments sufficient to provide the Fund’s Limited Partners with a 6.0% return on invested capital (calculated using the XIRR function in Microsoft Excel. Lease rates will increase by 1.0% annually. The Master Lease rent payment will be paid by the 15th of each month.

Debt Service Payments

The Master Tenant will make debt service payments directly to any lender and will deduct any such payments from the Master Lease payments.

Obligations upon Default or Termination of Lease by Subtenant

If the subtenant does not renew the sublease after the sublease expires, or if the subtenant defaults under the sublease, the Master Tenant will be obligated to continue to make all lease payments to the Fund and to pay all property operating costs during the period of vacancy, using its professional property managers to re-tenant the Properties.

Permitted Use

Residential purposes only and any uses permitted under any approved sublease and not prohibited by any restrictive covenants or loan documents.

Maintenance and Repairs

The Master Tenant will keep (or will cause its subtenant to keep) the Properties in good condition and repair at the Master Tenant’s (or subtenant’s) sole cost and expense. If applicable, the Master Tenant will be responsible (or will cause its subtenant to be responsible) for any assessments and charges from any condominium association, subdivision association or homeowner’s association.

Properties Taxes

The Master Tenant is obligated to pay all taxes and assessments and other governmental charges related to the Properties.

Utilities

The Master Tenant is responsible (or will cause its subtenant to be responsible) for all charges for water, gas, heat, light, electricity, telephone, sewer, sprinkler, trash removal and other utilities and services used on or from the Properties, including any penalties, surcharges, and any maintenance charges for such utilities.

Insurance

The Master Tenant will provide property insurance related to the Properties. The Master Tenant has rights to the insurance proceeds from a casualty event damaging or destroying the Properties in order to reconstruct and/or repair the affected Properties.

Casualty

If the Properties are damaged or destroyed by fire or other casualty, the Master Lease will remain in effect, and all rental payments will continue to be paid to the Fund. Upon such circumstances, the Master Tenant will rebuild (or will cause its subtenant to rebuild) the Properties to substantially the same condition within a commercially reasonable period of time with the insurance proceeds from such destruction.

Condemnation

In the event of a substantial condemnation or taking, Master Tenant may terminate the Master Lease. In the event of a non-substantial taking, the Master Lease will remain in effect, and all rental payments will continue to be paid to the Fund for the remaining term, subject to reduction only if applicable in sublease.

Termination by the Master Tenant

The Master Tenant may terminate the Master Lease for cause only if (i) the Fund breaches the representations, warranties and covenants provided in the Master Lease; (ii) a full or substantial condemnation or taking occurs; (iii) the Fund defaults under the Master Lease; (iv) the Fund fails to refinance the Properties after default or maturity under any applicable loan documents; or (v) in the event of a casualty, Master Tenant does not receive the entire insurance proceeds or sufficient proceeds to rebuild the Properties.

The Master Tenant may not terminate the Master Lease without cause.

Termination by the Fund

The Fund may terminate the Master Lease for cause if (i) the Master Tenant fails to perform all covenants relating to the operation, leasing, and maintenance of the Properties and the Fund declares a default under any applicable loan documents (subject to cure), (ii) the Master Tenant commits an “Event of Default” under the Master Lease (subject to cure), or (iii) the Master Tenant defaults under the sublease (subject to cure).

Alterations

Master Tenant or subtenant, at Master Tenant’s or subtenant’s sole cost and expense, may make alterations to the Properties that do not cause the fair market value and fair rental value of the Properties to be reduced, subject to Fund’s prior consent for any structural or major alterations.

Assignment

Master Tenant may assign the Master Lease without Fund’s consent to an affiliate of Master Tenant.

Contractual Lien

In addition to any statutory lien, the Fund will have a contractual lien in order to secure rentals under the Master Lease.

Premises Exchange

Upon a subtenant default or subtenant nonrenewal and either (i) a vacancy in such premises for over one year, (ii) the rent payable upon re-tenanting is less than 80% of that paid by the original subtenant, or (iii) Master Tenant believes (i) or (ii) will occur, Master Tenant shall have the right to convey to Fund, in exchange for Fund’s interest in such premises, a substitute premises and shall lease such substitute premises from Fund under the same terms and conditions of the Master Lease, subject to Fund approval.

CERTAIN TAX ASPECTS OF THE OFFERING

The following discussion is not intended or written to be legal or tax advice to any person. Each Investor should seek advice based on his particular circumstances from an independent tax advisor. No opinion has been requested from tax counsel, and none is provided, on the classification of the Fund as a partnership or on any other tax matters. Persons owning partnership interests in the Fund, whether general or limited, are collectively referred to as "Partners" and are individually referred to as a "Partner" in this section.

General

The following is a general summary of the material federal income tax consequences of an investment in the Fund. No information regarding state and local taxes is provided, other than a brief summary of some aspects of state tax law set forth under the heading "State and Local Taxes" below. Each prospective Investor should consult his tax advisor concerning the impact that an investment in the Fund may have on his federal income tax liability and the application of state and local income and other tax laws to his participation in the Fund. Although the Fund will furnish its Partners with such information regarding the Fund as is required for income tax purposes, each Partner will be responsible for preparing and filing his own tax returns.

The following summary of the tax aspects is based on the Code, on existing Treasury Regulations, and on administrative rulings and judicial decisions interpreting the Code. Significant uncertainty exists regarding certain tax aspects of limited partnerships. Such uncertainty is due, in part, to continuing changes in federal tax law that have not fully been interpreted through Treasury Regulations or judicial decisions. Tax legislation may be enacted in the future that will affect the Fund and a Partner's investment in Units. Legislative or administrative changes and judicial decisions could modify or change completely the statements expressed below concerning the federal income tax consequences of an investment in the Fund. Additionally, the interpretation of existing laws and Treasury Regulations described below may be challenged by the IRS during an audit of the Fund's information return. If successful, such a challenge would likely result in adjustment of a Partner's individual return. No assurances can be given that the IRS will agree with the federal income tax consequences described. We do not intend to request a ruling from the IRS with respect to any of the federal income tax matters discussed in this Offering Circular, and on certain matters, no ruling could be obtained even if requested.

This discussion covers only income tax matters and does not address any other United States federal, state, local or foreign tax considerations. This discussion is necessarily general, and the actual tax and financial consequences for each prospective Investor will vary depending upon each Investor's individual circumstances. This discussion does not consider the particular circumstances of each prospective Investor and is not intended to be applicable to all categories of Investors, some of which may hold their Units as other than a capital asset, such as banks, thrifts, insurance companies, dealers in securities or persons who adopt a mark-to-market method of accounting. Furthermore, this discussion does not address the tax consequences relating to every potential investment the Fund may make.

The following summary of tax aspects generally assumes that the Investor is an individual and is a United States citizen or resident. The following discussion is only a summary and is limited to those areas of federal income tax law that are considered to be material to individual Investors. Accordingly, prospective Investors are urged to consult their tax advisors about their individual circumstances (especially if the prospective Investor is not an individual) and the federal, state, local and other tax consequences arising out of their participation as a Limited Partner in the Fund. In evaluating an investment in the Fund, a prospective Investor should take into account the cost of obtaining such advice.

Classification as a Partnership

An entity classified as a "partnership" for federal income tax purposes generally incurs no federal income tax liability. Instead, each partner is required to take into account an allocable share of the partnership's net income or loss and an allocable share of certain specially characterized items (e.g., capital gains and losses) in computing the partner's income tax liability. Distributions by a partnership to a partner generally are not taxable unless the distributions exceed the partner's adjusted basis in his partnership interest. The availability to Limited Partners of most of the tax treatment described in this summary requires that the Fund be classified as a partnership for federal income tax purposes rather than as an association taxable as a corporation under the federal income tax laws.

The Fund should be classified for federal income tax purposes as a partnership and not as an association taxable as a corporation. The Treasury Regulations provide that a domestic unincorporated organization, such as a limited partnership, will be treated as a partnership for federal income tax purposes absent an affirmative election to be taxed as a corporation. If the Fund is operated in the manner contemplated by the Partnership Agreement, the Fund should qualify as a partnership for federal income tax purposes.

The General Partner does not plan to request a ruling from the IRS regarding the Fund's status for federal income tax purposes. Thus, despite the General Partner's conclusion that the Fund should be classified as a partnership for federal income tax purposes, there is no assurance that the IRS will not challenge such classification. For example, the Code reclassifies certain "publicly traded" limited partnerships as corporations for federal income tax purposes. The definition of "publicly traded" in the Code is very broad and includes any situation in which a market is effectively made in limited partner interests, including on a “secondary market (or any substantial equivalent thereof).” The Partnership Agreement prohibits the Fund from recognizing transfers of Units unless approved by the General Partner, except for certain permitted transfers to family members and entities for the benefit of family members, or if a Limited Partner is an entity, to another entity wholly-owned by such Limited Partner. Additionally, it is not anticipated that there will be any market made in the. Accordingly, it is not anticipated that the Fund will be treated as a “publicly traded” partnership for federal income tax purposes.

The effect of a partnership being classified as a corporation for federal income tax purposes is that its partners would be treated as shareholders of a corporation, with the result, among other things, that: (i) items of income, gain, loss, deduction and credit of the partnership would not flow through to its partners for reporting on their individual federal income tax returns; (ii) cash distributions, if any, would be treated as distributions by a corporation in respect of its stock, and such distributions would be taxable to the partners as dividends to the extent of current or accumulated earnings and profits of the partnership; and (iii) the taxable income of the partnership would be subject to the federal income tax on corporations thereby reducing cash distributions.

The discussion that follows is based on the assumption that the Fund will be classified as a partnership and not as a corporation for federal income tax purposes. The discussion also assumes that if the Fund has 100 or more partners, the Fund will not elect under Code Section 773 the special tax reporting and computation methods of large partnerships. Electing large partnerships combine most items of partnership income, deduction, credit and loss at the partnership level and pass through that amount to the partners.

Tax Consequences of Unit Ownership

General

No federal income tax is generally paid by a partnership as an entity. Instead, each partner is required to report on his income tax return his distributive share of a partnership's income, gain, loss, deduction or credit (and items of tax preference), regardless of whether any actual distribution is made to that partner during his taxable year. Consequently, a partner's share of a partnership's taxable income (and the tax liability thereon) may exceed the cash, if any, actually distributed to that partner. Conversely, actual (or constructive) distributions of cash from a partnership will be taxable only to the extent that such distributions exceed the adjusted basis of the partner's interest in the partnership, regardless of whether the partnership has current income. The characterization of an item of income or loss generally will be the same for the partners as it is for the partnership.

A Partner's distributive share of items of income, gain, loss, deduction or credit will be determined in accordance with the allocations set forth in the Partnership Agreement as long as such allocations are recognized for federal income tax purposes. See "Tax Consequences of Unit Ownership - Allocations of Income and Losses" below. Subject to the at-risk rules, the passive activity loss limitation and the investment interest limitation, each Partner will be entitled to claim as a deduction his distributive share of the Fund's net losses, if any, to the extent of that Partner's adjusted basis in his Units as of the end of such taxable year. See "Tax Consequences of Unit Ownership – Tax Basis of Units" below. To the extent that a Partner's share of Fund losses exceeds the adjusted basis of the Partner's Units, such excess losses cannot be utilized in that year by that Partner for any purpose, but are allowed as a deduction (subject to the limitations described above) only when that Partner's adjusted basis for his Units at the end of any year exceeds zero (before reduction by the suspended loss).

Tax Basis of Units

A Partner's basis for his interest in the Fund initially will be equal to the amount of his cash contributions to the Fund. Subsequently, a Partner's basis will adjust to reflect certain Fund transactions. A Partner's basis will be increased by: (i) any additional capital actually paid to the Fund by that Partner; (ii) that Partner's distributive share of the Fund's income; (iii) that Partner's distributive share (based on that Partner's ongoing interest in Fund profits) of any Fund indebtedness with respect to which no Partner bears the economic risk of loss ("non-recourse debt"), but such increase will be limited to the fair market value of the properties securing such indebtedness; and (iv) that Partner's share of the Fund's recourse indebtedness, if any, with respect to which that Partner bears the economic risk of loss. A Partner's basis will be decreased, but not below zero, by: (A) the amount of that Partner's distributive share of items of Fund loss and deduction; (B) the amount of any money distributed, or constructively distributed, to that Partner; and (C) the adjusted basis of properties other than money distributed to that Partner. A reduction in the amount of a Partner's share of Fund indebtedness will be treated as a constructive cash distribution to that Partner and will reduce the basis of that Partner's interest in the Fund.

Income and Losses from Passive Activities

The Code characterizes certain investment activities as producing either passive or portfolio income or loss. Passive income and loss arise from a passive activity, which is any activity that involves the conduct of any trade or business and in which the taxpayer does not materially participate. No Limited Partner will be deemed to materially participate in the activities of the Fund, and therefore, the income from the Fund will be passive income, and any loss will be a passive loss. To the extent that a Limited Partner has passive losses from other activities, he should be able to offset those passive losses against his allocable share of the Fund's income. The Code limits the ability to deduct passive losses; generally, losses and credits from passive activities may not be offset against income or tax attributable to active or portfolio activities but may only be offset against income and tax attributable to other passive activities. Interest expense attributable to passive activities will not be subject to the limitation on investment interest expense deductions. See "Tax Consequences of Unit Ownership - Limitation on Interest Deductions" below.

Losses and credits disallowed by the passive activity rules are suspended and may be carried forward and treated as losses and credits from passive activities in each successive taxable year until offset by income from passive activities or allowed against other income as a result of the complete disposition of the taxpayer's interest in that activity. When a taxpayer's entire interest in an activity is disposed of in a taxable transaction (other than to a related party), any remaining suspended loss incurred in connection with that specific activity is allowed in full, first against income or gain from such activity during the year of disposition, second against net income or gain from all other passive activities and thereafter against income from all sources, including active income. A disposition can occur through a partnership's disposition of a passive activity or through a partner's disposition of his entire partnership interest.

Section 1411 of the Code imposes an additional 3.8% net investment income tax on the lesser of (i) an individual or entity’s net investment income for the tax year, or (ii) the excess, if any, of modified adjusted gross income (as defined by Section 1411 and the Treasury Regulations thereunder) for the tax year, over the applicable threshold amount. Net investment income includes income passed through by a partnership to its partners (less any deductions properly allocable to such income) which is attributable to passive activities. Section 469 of the Code defines passive activities to mean generally activities in which the taxpayer does not materially participate. Any taxable income allocated to Partners will be characterized as passive income, and accordingly, such income may be subject to the net investment income tax under Section 1411. Net investment income also includes gain on the sale of a passive activity partnership interest and gross income from the investment of working capital, which may be allocated to Investors.

Portfolio income generally includes interest, dividends and royalties, as well as the gain or loss attributable to the disposition of property that produces such interest, dividends or royalties, or gain or loss attributable to the disposition of property that is held for investment. Interest earned by the Funds on funds held in reserve, on mortgage loans, or mezzanine debt financing will be characterized as portfolio income, and this characterization will be passed on to the Partners.

Application of At-Risk Limitations

Generally, Code Section 465 limits losses that a taxpayer can claim in certain enumerated activities to the amount that the taxpayer has at risk with respect to such activities. Losses that are disallowed in any year because of the at-risk limitations are carried over to succeeding years and can be used in those years to the extent that the Partner's at-risk amount has increased. A taxpayer is considered at risk in any activity with respect to (i) the net amount of money and the adjusted basis of property contributed by the taxpayer to the activity and (ii) any amount with respect to the activity if the taxpayer is considered personally liable for the repayment of that amount. A taxpayer's at-risk amount is increased by profits earned in the activity and decreased by losses occurring in the activity. If a taxpayer's amount at risk at the end of any tax year is less than zero, the taxpayer is required to include such amount in gross income.

Limitation on Interest Deductions

The deductibility of a taxpayer's investment interest expense generally is limited to the amount of such taxpayer's net investment income. Investment interest expense does not include any interest expense that is taken into account in determining the income or loss from a passive activity, but does include: (i) interest on indebtedness incurred or continued to purchase or carry property held for investment; (ii) a partnership's interest expense attributable to portfolio income under the passive loss rules; and (iii) the portion of interest expense incurred or continued to purchase or carry an interest in a passive activity to the extent attributable to portfolio income (within the meaning of the passive loss rules). A partner would treat as investment interest his allocable portion of the partnership's total interest expense attributable to the partnership's gross portfolio income less deductible expenses directly connected with that portfolio income. Under the Treasury Regulations, indebtedness of a taxpayer generally is allocated among the taxpayer's activities by tracing the proceeds of such indebtedness. A detailed discussion of the tracing rules contained in the Treasury Regulations is beyond the scope of this discussion. Consequently, Limited Partners who intend to finance the purchase of Units with borrowed funds should consult their own tax advisors before borrowing such funds and should maintain careful records of any indebtedness they incur to carry or acquire Units, because the interest on such indebtedness may be investment interest to the extent the Fund does not engage in a passive activity or to the extent of any portfolio income received from the Fund. See "Tax Consequences of Unit Ownership - Income and Losses From Passive Activities" above.

Net investment income includes gross income from property held for investment and amounts treated as gross portfolio income pursuant to the passive loss rules, less deductible expenses (other than interest) directly connected with the production of investment income. Net capital gain attributable to the disposition of property held for investment is excluded from investment income for purposes of computing the investment income limitation, except that a taxpayer may elect to include the net capital gain in investment income if the taxpayer also reduces his net capital gain by the same amount. Investment interest deductions that are disallowed may be carried forward and deducted in subsequent years to the extent of net investment income in such years.

Cash Distributions

Under Code Section 731, cash distributions by the Fund to a Partner will generally not result in taxable gain to that Partner unless the distributions exceed the Partner's adjusted basis for his Units in the Fund, in which case the Partner will recognize gain in the amount of such excess. Gain, if any, resulting from Fund cash distributions will be treated as a gain from the sale or exchange of the Fund Units. See "Transfers and Liquidation – Sale of Units" below.

A reduction in a Partner's share of Fund non-recourse indebtedness or of any Fund recourse indebtedness for which such Partner may bear ultimate liability will be treated as a constructive cash distribution to such Partner to the extent of such reduction. If a constructive distribution exceeds a Partner's adjusted basis in such Partner's Units in the Fund at that time, such Partner will recognize gain as described above. The Fund will not have an obligation to distribute any money to assist the Partners in paying the tax on any such gain.

Economic Motivation of the Transaction

Code Section 183 provides that deductions attributable to "activities not engaged in for profit" are allowed only to the extent of (i) interest, taxes and other deductions allowable under the Code without regard to whether a profit motive exists ("Special Deductions"), and (ii) gross income in excess of Special Deductions in connection with such activity. The Treasury Regulations issued under Code Section 183 list the following factors that normally are taken into account in determining whether an activity is engaged in for profit: (A) the manner in which the taxpayer conducts the activities; (B) the expertise of the taxpayer or the taxpayer's advisor; (C) the time and effort the taxpayer spends in the activity; (D) the taxpayer's success in similar activities; (E) the taxpayer's history of income or loss with respect to the activity; (F) the profits earned; (G) the taxpayer's financial status; and (H) the expectation that the assets used in the activity may appreciate in value. Additional factors also may be considered. Finally, Code Section 183 contains a safe harbor provision, which may be applicable to the Fund, which presumptively treats an activity as engaged in for profit if the Fund's activities generate a profit for tax purposes in any three of five consecutive taxable years.

Ultimately, whether a taxpayer possesses the requisite profit motive in making an investment is a question of fact. With respect to a limited partnership, the profit expectations of the limited partnership, rather than those of the partners, generally are determinative. The ultimate economic effect of an investment in the Fund depends primarily on the ability of the Fund to make investments that are profitable. Although the Fund believes that its investments will be profitable, the IRS may challenge the Fund's deductions based upon an assertion that the activities contemplated herein are not engaged in for profit.

Unrelated Business Taxable Income

Organizations generally exempt from federal income taxation under Code Sections 501(a) and 401 (including qualified pension, profit-sharing and stock-bonus plans, Keogh plans and individual retirement accounts (IRAs)) may, nevertheless, be taxable on their allocable share of income to the extent such income constitutes "unrelated business taxable income" ("UBTI"). Subject to certain exceptions described below, UBTI is defined as the gross income derived by such a tax-exempt entity from an unrelated trade or business (including a trade or business conducted by a partnership of which the tax-exempt entity is a partner), less the deductions directly connected with that trade or business. UBTI generally does not include dividends, interest, certain types of rents from real property and gain or loss derived from the sale of property (other than gain or loss derived from the sale of inventory and property sold to customers in the ordinary course of a trade or business), but does include operating income from certain businesses owned directly or through entities treated as transparent for United States federal income tax purposes. Fee income actually received or deemed to be received by the Fund or a tax-exempt Limited Partner may be treated as UBTI in certain circumstances.

If a tax-exempt entity's acquisition of Units is debt-financed, or the Fund or any subsidiary of the Fund incurs "acquisition indebtedness" that is allocated to the acquisition of a Property (which the Fund anticipates), then UBTI includes a percentage of gross income (less the same percentage of deductions) derived from such acquisition or acquired Property, regardless of whether such income would otherwise be excluded from UBTI as dividends, interest, rents, gain or loss from the sale of eligible property or similar income. The percentage referred to above is, in the case of operating income, the average amount of acquisition indebtedness for a taxable year with respect to a property over the average adjusted basis for such year for the property or, in the case of a sale of a property, is the highest amount of indebtedness outstanding for the 12-month period prior to the sale with respect to the property over the average adjusted basis for such year for the property. Acquisition indebtedness includes the amount of (i) any mortgage or lien to acquire property or to which the property is subject at the time of its acquisition, and (ii) indebtedness incurred after the acquisition or improvement of any property if (A) the indebtedness would not have been incurred but for such acquisition or improvement and (B) the incurrence of the indebtedness was reasonably foreseeable at the time of the acquisition or improvement.

Although we have attempted to structure the Fund and its operations in a manner intended to avoid the realization of UBTI, there can be no assurance that such attempt will be successful if challenged by the Internal Revenue Service. Tax-exempt Investors are urged to consult with their own tax advisor in this regard.

To the extent that the Fund's investments generate UBTI, such UBTI would flow through to IRAs or other qualified retirement plans, such as Keogh Plans. An IRA, Keogh Plan or other tax-exempt entity may be required to make payments, including estimated payments, and file an income tax return for any taxable year in which it has UBTI. To file an income tax return, it may be necessary for an IRA, Keogh Plan or other tax-exempt entity to obtain an employer identification number. The Fund is not required to avoid creating UBTI or to mitigate the effects of UBTI on its Partners. As such, Benefit Plan Investors and any other tax-exempt Investors are strongly encouraged to consult their own tax advisors regarding the advisability of an investment in the Fund.

SINCE THE FUND IS GENERALLY NOT REQUIRED TO AVOID CREATING UBTI, TAX-EXEMPT INVESTORS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE ADVISABILITY OF, AND REPORTING REQUIREMENTS ASSOCIATED WITH, AN INVESTMENT IN THE FUND.

Ordinary Income or Capital Gain

The Code contains a progressive tax rate structure. The maximum stated federal tax rate applicable to individuals for ordinary income for tax years beginning after December 31, 2017 and before January 1, 2026 is 37%. Capital gains, i.e., gains realized with respect to capital assets held for more than 12 months for years commencing after December 31, 2012, however, are taxed at a maximum marginal rate of 20% for individuals. The Code also provides, however, that the portion of long-term capital gain arising from the sale or exchange of depreciable real property that constitutes unrecaptured Section 1250 gain will be taxed at a maximum marginal rate of 25% rather than 20%. Individual taxpayers and corporations may generally use capital losses to offset capital gains. Individual taxpayers may, in the absence of capital gains, deduct capital losses against ordinary income on a dollar-for-dollar basis up to a maximum annual deduction of $3,000 ($1,500 in the case of a married individual filing a separate return). An individual taxpayer may carry an excess capital loss forward (but not back) until the loss is used. Any excess capital loss of a corporation may not be carried back but may be carried forward indefinitely following the loss year. The rates in this paragraph do not include the net investment income tax of 3.8% that may apply to a Limited Partner's income or gain from the Fund.

The treatment of any gain or loss of the Fund to a Partner on the sale, exchange or other disposition of a Property will be dependent upon all of the facts and circumstances existing at the time of disposition. Depending upon decisions of the Fund with respect to the use and disposition of a Property, the Property should be classified as either: (i) a capital asset held for investment; (ii) property held for use in a trade or business; or (iii) property held primarily for sale to customers in the ordinary course of the Fund's business. The characterization of a Property upon its sale or other disposition will depend upon all of the facts and circumstances at the time of disposition. If a Property is treated as held for sale to customers in the ordinary course of business, and therefore the Fund is treated as a dealer, the gains or losses on the sale will be ordinary income or loss. If the Property is treated as held for investment, the gains or losses will be capital gains or losses, which gain or loss will be "long-term" if the Property is held for more than one year. If a property is treated as held for use in a trade or business, it may be treated as capital gain or ordinary income depending on the nature of other such income of a Partner.

The General Partner intends to classify all of the Fund’s Properties as capital assets held for investment. However, because the General Partner anticipates the periodic sale of Properties as part of its management of the Property portfolio, and to generate cash to fund redemptions of Units, there can be no assurance that the IRS will not take the position that some or all of the Fund’s Properties are held primarily for sale to customers in the ordinary course of the Fund’s business. Because the determination of treatment of the gains or losses depends on the facts and circumstances, the Fund cannot offer any conclusions as to the treatment of the gains and losses from the sale of Properties by the Fund.

Alternative Minimum Tax

Individual taxpayers are subject to an "alternative minimum tax" if such tax exceeds the individual's regular income tax. Generally, alternative minimum taxable income is the taxpayer's adjusted gross income increased by the amount of certain preference items less certain itemized deductions. The Fund will likely generate certain preference items. Depending on a Partner's other items of income, gain, loss, deduction and credit, the impact of the alternative minimum tax on a Partner's overall federal income tax liability may vary from no impact to a substantial increase in income tax. Accordingly, each prospective Investor should consult with his tax advisor regarding the impact of an investment in the Fund on the calculation of his alternative minimum tax, as well as on his overall federal income tax liability.

Allocations of Income and Losses

Under Code Section 704(b), a Partner's distributive share of income, gain, loss, deduction or credit (or any item thereof) will be determined in accordance with the Partnership Agreement only if that allocation under the agreement has "substantial economic effect." In determining whether an allocation has substantial economic effect, the principal considerations are (i) whether the allocation actually affects the eventual amount of money or other property allocable to a partner (i.e., has economic effect), without regard to tax consequences, and (ii) whether the effect described in (i) is substantial. If an allocation under a Partnership Agreement does not have substantial economic effect, the IRS will reallocate profits and losses among the Partners in accordance with their respective interests in the Fund, determined by taking into consideration all facts and circumstances.

The allocations of profits and losses under the Partnership Agreement should be deemed to have "substantial economic effect," as that term is defined in the Treasury Regulations. In addition, the Treasury Regulations require a limited partnership, in which the limited partners are not required to make up their deficit capital accounts, to have a "qualified income offset," as that term is used in the Treasury Regulations. The Partnership Agreement contains such a provision.

Although an allocation of losses attributable to non-recourse liabilities cannot technically have economic effect because no partner bears the actual risk of economic loss, an allocation of such losses is deemed to have economic effect if four requirements are met: (i) the economic effect requirements listed above are satisfied throughout the full term of the partnership; (ii) the allocation of non-recourse deductions among the partners is reasonably consistent with allocations of other significant partnership items; (iii) a "minimum gain charge-back" (as defined in the Treasury Regulations) is provided for in the Partnership Agreement; and (iv) all other material allocations and capital account adjustments under the Partnership Agreement are recognized under the Treasury Regulations. These requirements are satisfied under the terms of the Partnership Agreement, and if the Fund has non-recourse deductions, the allocation will have economic effect.

Tax Treatment of Fund Operations

Taxable Year and Method of Accounting

Under the Code, the Fund will be required to report its operations on a calendar year basis and will be required to use the accrual method of accounting. Under the accrual method of accounting, income is included in the taxable year when "all events" have occurred which fix the right to receive such income and the amount thereof can be determined with reasonable accuracy. Consequently, taxable income is required to be recognized as it is earned, notwithstanding the fact that the cash associated with such income may have not been received. Thus, a Partner's share of the Fund's taxable income for a period may be in excess of the cash actually received by that Partner.

In general, deductions under the accrual method are allowed for the taxable year in which "all events" have occurred that establish the fact of the liability giving rise to such deduction, so long as the amount thereof can be determined with reasonable accuracy. Thus, interest and other expenses, to the extent not capitalized, must be deductible or amortized as accrued, regardless of when paid. Certain liabilities are not considered to be incurred, however, any earlier than the time that "economic performance" with respect to such item occurs. As an example, economic performance for property or services to be provided to the Fund by another person should occur when such person actually provides such property or services.

Sale of Properties

The income and loss of the Fund in connection with the sale of Properties may be treated as ordinary income or loss or capital gain or loss. See "Tax Consequences of Unit Ownership - Ordinary Income or Capital Gain" above.

Fund Development Expenses

The Fund will likely take the position that it is an investor in real estate and not a dealer. Nevertheless, there may be investments made by the Fund where the Fund may be treated as a dealer in real estate. Any costs associated with the acquisition and improvement of a Property that is held as a dealer must be capitalized. In addition, the interest expense with respect to such activities will not be deductible, but must be capitalized. These capitalized costs must be apportioned among the various parcels comprising any property. The income or loss of the Fund with respect to a specific parcel will equal the difference between the selling price for the parcel and the portion of the capitalized costs allocated to that parcel. In the case where the Fund is not a dealer, the costs associated with the acquisition and improvement of the property will also be capitalized. However, interest, other than interest accrued during the construction period, may be deductible.

Fees Payable to the General Partner

The IRS has challenged successfully the deduction by partnerships of certain guaranteed payments made to general partners. The General Partner will receive various fees for services to be rendered in administering the Fund's business and affairs. If questioned, the deduction for the fees would depend, in part, on a factual determination as to the nature of the services actually performed, an inquiry which cannot be predicted with certainty. As a consequence of the factual nature of the question, no assurances can be given with respect to the deductibility of such fees. See "Tax Treatment of Fund Operations - Organizational and Syndication Costs" below. Although the General Partner believes that the amount of the fees charged is reasonable based on the services and intends to deduct rather than capitalize such fees to the extent properly deductible, no assurance can be given that the IRS will not seek to treat the various fees that the Fund deducts as constituting an allocation of income, a distribution of capital, or a capitalizable expense.

Organizational and Syndication Costs

Code Section 709(a) requires that expenses paid in connection with the organization and syndication of a partnership be capitalized without the benefit of amortization. Regulations under Section 709(a) include within the definition of organization and syndication expenses legal fees of the issuer (the General Partner) for securities law advice and for tax advice pertaining to the adequacy of tax disclosures in the placement memorandum and accounting fees for the preparation of representations to be included in the Offering materials.

Notwithstanding the foregoing, the Fund may elect to treat certain organizational expenses (but not syndication expenses, such as selling commissions, professional fees for preparing this Offering Circular and printing costs) as deferred expenses and amortize them over a period of 180 months. It is within the General Partner's discretion whether such an election will be made for the Fund.

Some of the expenses that will be incurred by the Fund will be difficult to classify under the Treasury Regulations. Accordingly, no opinion has been or will be received from counsel regarding the capitalization, deduction or amortization of the various organizational and syndication fees.

Transfers and Liquidation

Sale of Units

The treatment of the gain or loss from the sale of Units by a Limited Partner will depend on whether the appreciation on the Units is attributable to appreciation of property treated as property held for use in a trade or business, held for investment or held for sale to customers in the ordinary course of business. This will depend on the facts and circumstances of the holding of the property by the Fund. See "Tax Consequences of Unit Ownership - Ordinary Income or Capital Gain" above. The amount of income realized on the sale of Units will be the sales price received by the Limited Partner, plus that Limited Partner's allocable share of Fund indebtedness relieved, less the adjusted basis of the Units in the Limited Partner's hands. A portion of any gain may also be characterized as recapture of depreciation.

In the event of a Limited Partner's sale or other transfer of Units, the distributive share of Fund income, gain, loss, deduction or credit for the entire year allocable to such Units generally will be allocated between the transferor and the transferee, based upon the period of time during the taxable year that each owned such Units, notwithstanding the timing or amounts of any Fund distributions.

The Limited Partners may not be able to sell their Units. It is not anticipated that a market will develop for Units, and the Partnership Agreement contains severe restrictions on their sale. See "Summary of the Limited Partnership Agreement."

Gift of Units

Generally, no gain or loss is recognized for income tax purposes as a result of a gift of property. If a gift of Units is made at a time when a Partner's allocable share of the Fund's indebtedness exceeds the adjusted basis of the Units in the Limited Partner's hands, that Limited Partner will realize gain for income tax purposes to the extent of such excess. Such gain generally will be treated as ordinary income. Gifts of Units also may be subject to a gift tax.

Liquidation of the Fund

Upon the Fund's liquidation, gain to a Partner on the distribution will be recognized to the extent that any money received, together with any reduction in such Partner's share of Fund indebtedness, exceeds such Partner's adjusted basis in the Units. A loss will not be recognized unless the Partner receives no property in the distribution other than money, unrealized receivables or appreciated inventory, and then only to the extent that the money and the basis to the Partner of the unrealized receivables and appreciated inventory are less than the adjusted basis of the Units in the Partner's hands.

Code Section 754 Election

A partnership is permitted to make an election under Code Section 754, which results in various items of partnership income, gain, loss, deduction and credit being treated differently for tax purposes than for accounting purposes. Under that election, the Code provides for adjustments to the basis of partnership property for measuring gain upon distributions of partnership property and transfers of any partnership interests. The general effect of such an election is that transferees of any partnership interests are treated, for purposes of computing depreciation and gain, as though they had acquired a direct interest in the partnership assets and the partnership is treated for such purposes, upon certain distributions to partners, as though the partnership had acquired a new cost basis for such assets. Any such election, once made, cannot be revoked without the IRS's consent.

In view of the inherent tax accounting complexities and the substantial expense that would be incurred in making a Code Section 754 election, the General Partner does not intend at present to make such an election on the Fund's behalf, although the Partnership Agreement empowers it to do so. Therefore, no benefits may be available to the Partners by reason of such adjustments.

Administrative and Compliance Matters

Audit Risk

The IRS has adopted a policy of auditing, selectively, a large number of partnership information returns. In view of the IRS's audit programs, the Fund's information return may be selected for audit. If the IRS audits the Fund's information return, it is likely that the IRS will make corresponding adjustments to the Partners' income tax returns. It is also more likely that the Limited Partners' returns also will be audited.

Resolution of Disputes Involving Fund Items

Partnerships generally are treated as separate entities for purposes of federal tax audits, judicial review of administrative adjustments by the IRS and tax settlement proceedings. The tax treatment of partnership items of income, gain, loss, deduction and credit are determined at the partnership level in a unified partnership proceeding rather than in separate proceedings with the partners. The Code provides for one partner to be designated as the “Partnership Representative” for these purposes. The Partnership Agreement appoints the General Partner as the Partnership Representative for the Fund.

The Partnership Representative is entitled to make certain elections on behalf of the Fund and Limited Partners and can extend the statute of limitations for assessment of tax deficiencies against Limited Partners with respect to Fund items. The Partnership Representative may bind the Fund and Limited Partners to a settlement with the IRS without the participation or consent of the Limited Partners in such proceeding. The Partnership Representative has the sole discretion whether to seek judicial review (to which all the Limited Partners are bound) of a final partnership administrative adjustment.

The Limited Partners generally will be required to treat Fund items on their personal federal income tax returns consistent with the treatment of the items on the Fund's information return. In general, this consistency requirement is waived if a Limited Partner files a statement with the IRS identifying the inconsistency. Failure to satisfy the consistency requirement, if not waived, will result in an adjustment to conform the Limited Partner's treatment of the item to its treatment on the Fund's information return. Even if the consistency requirement is waived, adjustments to a Limited Partner's tax liability with respect to Fund items may result from an audit of the Fund's or the Limited Partner's tax return. Intentional or negligent disregard of the consistency requirement may subject a Limited Partner to substantial penalties.

The Partnership Agreement provides that if the Fund is audited, each Limited Partner will take into account and report to the IRS any adjustment to their items for the reviewed year as notified to them by the Fund, even if such Limited Partner does not own an interest in the Fund in the year of notification. Any Limited Partner that fails to report its share of such adjustments on its tax return for such taxable year shall indemnify the Fund against any tax, interest and penalties collected by the IRS from the Fund as a result of such Limited Partner’s failure.

Potential Penalties

Taxpayers are subject to an understatement penalty if the taxpayer's actual federal income tax liability is understated by the greater of $5,000 or 10% of the tax required to be shown on the return. If applicable, the penalty is equal to 20% of the understatement. This penalty applies in the case of negligence, substantial understatements or substantial valuation misstatements. There are broad exceptions to this penalty provision, which applies different standards based on whether the item giving rise to the tax understatement resulted from a “tax shelter.” The term “tax shelter” is defined to include a partnership if a significant purpose of such partnership is the avoidance or evasion of federal income tax. Although the purpose of a partnership is a question of fact, the General Partner believes that a significant purpose of the Fund is not the avoidance or evasion of federal income tax. Therefore, the Fund should not be classified as a tax shelter for purposes of the understatement penalty.

Generally, if a tax shelter does not exist, the understatement penalty may be reduced by an amount attributable to the tax treatment of an item if (i) "substantial authority" supports such treatment, or (ii) the relevant facts affecting the item's tax treatment are adequately disclosed in the tax return and a reasonable basis for such tax treatment exists. The Code does not contain a definition of "substantial authority." The Treasury Regulations provide that "substantial authority" exists for the tax treatment of an item only if the weight of authorities supporting the treatment is substantial in relation to the weight of authorities supporting contrary positions. The standard of "substantial authority" is less stringent than "more likely than not" and more stringent than a "reasonable basis" standard. The position must be "stronger than one that is arguable but fairly unlikely to prevail in court." The General Partner could take legal positions in filing the Fund's federal income tax information return that authority for a particular legal position is substantial authority for purposes of the penalty. The IRS could challenge such a position, and no assurance can be given that the General Partner's judgment in such matters would be sustained if tested in court.

If a tax shelter does exist, the understatement penalty will not be reduced even with adequate disclosure of the relevant facts on the tax return. Rather, an understatement with respect to a tax shelter will be reduced only if, in addition to being supported by substantial authority, the taxpayer reasonably believed that treatment of such items on his return was "more likely than not" the proper treatment.

Several other penalties could be applicable to the Fund or Limited Partners. For example, the Code contains penalties for failing to include correct information on the Fund's information return and for failing to report on a Partner's income tax return any amount reported on the Fund's information return (which is considered negligence in the absence of clear and convincing evidence to the contrary).

Possible Changes in Federal Tax Laws

Significant changes have been made in the Code in recent years. The Treasury Department's position regarding many of those changes must await publication of interpretive and legislative regulations, some of which may not be forthcoming for some time. Generally, those interpretations then will be subject to review by the courts if taxpayers and their representatives believe the interpretations do not conform to the Code. Some Treasury Regulations, however, may have the force and effect of law and, as a result, may be beyond the judicial review powers of federal courts.

The Code is also subject to further change by Congress, and interpretations of the Code may be modified or affected by judicial decisions, by the Treasury Department through changes in Treasury Regulations and by the IRS through its audit policy, announcements and published and private rulings. Although significant changes historically have been given prospective application, no assurance can be given that any changes made in the tax law affecting an investment in the Fund would be limited to prospective, and not retroactive, effect. Accordingly, the ultimate effect on a Limited Partner's tax situation may be governed by laws, regulations or interpretations of laws or regulations that have not yet been proposed, passed or made, as the case may be.

Investment by Foreign Persons

The rules governing the federal income taxation of nonresident alien individuals, foreign corporations, foreign partnerships and other foreign Investors ("foreign persons") are complex, and no attempt has been made in this Offering Circular to provide a discussion of those rules. Prospective Investors that are foreign persons should consult with their tax advisors to fully determine the impact on them of United States federal, state and local income tax laws.

It should be noted, however, that there is imposed a withholding requirement on allocations of income by a partnership to a foreign partner where the partnership has effectively connected income to a United States trade or business. In addition, the disposition of the Fund's investments or disposition of Units will give rise to a withholding requirement.

State and Local Taxes

In addition to the federal income tax consequences described above, prospective Investors should consider potential state and local tax consequences of an investment in the Fund. State and local laws often differ from federal income tax laws with respect to the treatment of specific items of income, gain, loss, deduction and credit. The Fund may be subject to state and/or local tax (including unincorporated business tax), depending on the location and scope of the Fund's activities. In addition, a state in which a Partner is not a resident but in which the Fund may be deemed to be engaged in business may impose a tax on that Partner with respect to his share of Fund income derived from that state. Under some circumstances, a Partner with tax liabilities to more than one state may be entitled to a deduction or credit for taxes paid to one state against the tax liability to another.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING STATE AND LOCAL TAX MATTERS.

ERISA ASPECTS OF THE OFFERING

Introduction

The following is a brief summary of what the General Partner believes are the most significant risks under ERISA involved in an investment in the Fund. The Fund is not providing ERISA counsel or advice in an investment in the Fund and, as such, no representations or warranties are being made regarding the appropriateness of such investment by a prospective Investor. Each prospective Investor is strongly urged to review the material and to discuss with his ERISA advisors the consequences to him under ERISA of an investment in the Fund.

Generally, when an employee benefit plan, as defined in Section 3(3) of ERISA, a plan described in Section 4975(e)(1) of the Code (including an individual retirement account (“IRA”)), or an entity whose underlying assets include plan assets by reason of a plan’s investment in such entity (each a “Benefit Plan”) invests in another entity, the Benefit Plan’s assets include its investment, but do not, solely by reason of such investment, include any of the underlying assets of the entity. However, in the case of a Benefit Plan’s investment in an equity interest of an entity that is neither a publicly-offered security nor a security issued by an investment company registered under the Investment Company Act, both the equity interest, as well as an undivided interest in each of the underlying assets of the entity, may be considered assets of the Benefit Plan. This is generally referred to as the “plan asset rule.” Because the Units will not qualify as publicly-traded Units and will not be issued by an investment company registered under the Investment Company Act, the application of the plan asset rule has potentially unfavorable consequences for each Benefit Plan Investor and the General Partner, as the entity that controls the Fund.

Notwithstanding the foregoing, the plan asset rule will not apply to the investment in the Fund if the Units are treated as debt, if the aggregate investment by Benefit Plans is not substantial or if the Fund is determined to be an operating company. Based on discussions with counsel, the General Partner believes that the aggregate investment by Benefit Plans will not be substantial.

The assets of a Benefit Plan will not include the underlying assets of the Fund if the equity interests held by all Benefit Plans of any class of equity interests in the Fund is at all times less than 25% of the value of such class. (For purposes of this determination, the value of an equity interest in the Fund held by any person (or an affiliate of such person), other than a Benefit Plan, who has discretionary authority or control with respect to the assets of the Fund or any person who provided investment advice for a fee, direct or indirect, with respect to such assets, will be disregarded.) The General Partner does not anticipate that Units representing 25% or more of all outstanding Units will be owned by Benefit Plans. However, it is possible that future sales of Units may result in Benefit Plans owning 25% or more of the total value of the Units, upon the occurrence of which the aggregate investment by Benefit Plans would be considered “significant” and the plan asset rule, as described above, would apply. The Partnership Agreement provides the General Partner with the authority to redeem the Units of Benefit Plans if, in its sole and absolute discretion, it determines that such redemption is necessary to ensure that the investment by Benefit Plans is not substantial, thereby allowing the Fund and its Investors to avoid implicating the plan asset rule.

Alternatively, if the Fund is determined to be an operating company, the plan asset rule will not apply. An “operating company” is defined for these purposes as an entity primarily engaged in the production or sale of a product or service other than the investment of capital and includes a “real estate operating company.” To be classified as a real estate operating company, 50% or more of the assets of an entity must be invested in real estate that is managed or developed and with respect to which such partnership has the right to substantially participate directly in the management or development activities. It is not certain at this time whether 50% or more of the assets that the Fund will acquire will consist of real estate that is “managed or developed,” as that phrase is used in the regulatory exception for real estate operating companies. However, it is not anticipated that the Fund will qualify as an operating company. Therefore, the General Partner will exercise its authority to limit the sale of Units to Benefit Plans, or redeem a portion of the outstanding Units held by Benefit Plans, to ensure that the total investment by Benefit Plans in any class of equity interests in the Fund is not substantial.

ERISA Risks to Benefit Plans

Benefit Plans proposing to purchase Units should consider the risks under the provisions of ERISA on their proposed investment, including the possible impact of ERISA’s fiduciary responsibility, and the prohibited transaction rules under ERISA and the Code.

As a general matter, ERISA does not bar Benefit Plans from investing in any specific type of investment. Instead, ERISA requires, among other things, that a plan fiduciary invest plan assets prudently and in accordance with plan documents, and diversify the plan’s investment. For these purposes, a “fiduciary” includes any person who exercises authority or control respecting the management or disposition of plan assets and any person who provides investment advice with respect to such assets for a fee, whether received directly or indirectly from the plan. Therefore, a trustee or other fiduciary of a Benefit Plan (other than an IRA, church plan, a governmental plan or such other plan not subject to Title I, Part 4 of ERISA) should determine whether an investment in the Fund is appropriate for that particular plan in view of its overall investment policy, the composition and diversification of its portfolio of Properties and its anticipated liquidity needs. In addition, the fiduciary should consider whether such an investment is permissible under the terms of the plan and related trust agreement, and, if so, whether the investment is in accordance with the documents and instruments governing such qualified plan. In considering an investment in the Fund of a portion of the assets of a Benefit Plan (other than an IRA, church plan, a governmental plan or such other plan not subject to Title I, Part 4 of ERISA), a fiduciary should specifically consider (i) whether the investment satisfies the diversification requirements of Section 404(a)(1)(C) of ERISA, (ii) whether, under Section 404(a)(1)(B) of ERISA, the investment is prudent, considering the nature of the investment in the Fund and the compensation structure of the Fund, and the facts the Fund has had no history of operations and there is not expected to be a market created in which the fiduciary can sell or otherwise dispose of the Units and; (iii) whether the investment is made solely in the interest of plan participants and for the exclusive purpose of providing benefits to participants and their beneficiaries. If the plan asset rule described in the preceding section is applicable, this evaluation will require that the fiduciary determine whether the Benefit Plan’s undivided interest in the underlying assets of the Fund constitutes a prudent investment for such plan or entity, taking into account each of the foregoing considerations. Failure of a fiduciary of a Benefit Plan (other than an IRA, church plan, a governmental plan or such other plan not subject to Title I, Part 4 of ERISA) to abide by its duties under ERISA may result in personal liability of the fiduciary to a plan for any losses to the plan resulting from the fiduciary’s breach of responsibility, and for restoration to the plan of any profits of the fiduciary that were made through the use of the assets of the plan by the fiduciary, as well as various excise taxes and penalties that may be imposed upon the fiduciary under the Code and ERISA.

In the case of a Benefit Plan that is an individual account plan and is intended to constitute a Section 404(c) plan under ERISA where a participant is permitted to, and in fact does, exercise independent control over the assets in his individual account, ERISA provides that such participant shall not thereby be deemed a fiduciary and that the plan’s fiduciaries are generally not liable for any investment loss that results from such exercise and control by the participant. Under such circumstances, the considerations by a fiduciary in making an investment in the Fund should comply with the requirements of Section 404(c) of ERISA.

In addition to fiduciary responsibility rules under ERISA, both ERISA and the Code prohibit Benefit Plans from engaging in certain transactions with specified interested parties, including the fiduciaries of such plans. Such transactions include, but are not limited to, a sale or exchange of assets between a Benefit Plan and an interested party; the transfer to, or use by, an interested party of the income or assets of a Benefit Plan; or an act by a fiduciary whereby he deals with the income or assets of a Benefit Plan in his own interest. The Code imposes an excise tax upon certain interested parties who engage in such prohibited transactions. Accordingly, before purchasing Units, trustees and other fiduciaries of Benefit Plans should carefully consider whether such investment is consistent with their fiduciary responsibilities, to the extent applicable, and whether it could result in a prohibited transaction under ERISA and the Code. Additionally, the General Partner or its affiliates generally should not cause any Benefit Plan with respect to which they may be fiduciaries to purchase Units or otherwise invest in the Fund.

ERISA Risks to General Partner

If the plan asset rule described above applies and the assets of the Fund are deemed to be assets of a Benefit Plan, certain transactions between the Fund and the General Partner (or its affiliates) could be characterized as “prohibited transactions” under ERISA and the Code, including the payment of compensation to the General Partner. As a result of the prohibited transaction rules, the investment opportunities available to the Fund could be significantly limited. Additionally, if the assets of a Benefit Plan are deemed to include the underlying assets of the Fund, the fiduciary responsibility provisions of ERISA governing the investment of plan assets, as discussed above, would become equally applicable to the assets of the Fund. Consequently, the General Partner would be treated as a fiduciary with respect to the assets of the Fund and would therefore be required to be bonded with respect to such assets. Furthermore, in this situation, an investment in the Units by a Benefit Plan could also be deemed to be an improper delegation of investment authority to the General Partner and the trustee or other fiduciaries of such plan could become liable either directly, or under the co-fiduciary rules of ERISA, for the acts of the General Partner.

Redemption of Plan Units

The General Partner will use reasonable efforts to cause the Fund to be and remain organized in such a manner as to not be deemed to hold “plan assets” for purposes of ERISA. If at any time the General Partner reasonably believes that the assets of the Fund are, or are about to become, “plan assets” for purposes of ERISA, the General Partner shall take such actions within its powers as the General Partner reasonably believes to be appropriate to preclude the assets of the Fund from becoming “plan assets” under ERISA. If the General Partner reasonably determines that no such actions are reasonably available, the General Partner will promptly notify all of the Partners of the potential change in “plan assets” status for the Fund and will cause the Fund to redeem Units of Benefit Plans, pro rata (based upon each remaining Benefit Plan’s ownership interest in the redeeming entity) or on such other basis as may be required to cause the total value of the investment by all Benefit Plans in the Fund to be reduced below the applicable percentage threshold.

LEGAL MATTERS

Certain legal matters, including the validity of the Units being offered, have been passed upon for us by Hallett & Perrin, P.C.

ADDITIONAL INFORMATION

We have filed with the SEC an offering statement under the Securities Act on Form 1-A regarding this offering. This offering circular, which is part of the offering statement, does not contain all the information set forth in the offering statement and the exhibits related thereto filed with the SEC, reference to which is hereby made.

Upon the qualification of the offering statement, we will be subject to the informational reporting requirements of the Exchange Act that are applicable to Tier 2 companies whose securities are registered pursuant to Regulation A. Accordingly, we will be required to make annual and semi-annual filings with the SEC. We will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. We will make semi-annual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months from January 1st to June 30th. We will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising. We will be required to keep making these reports unless we file a Form 1-Z to exit the reporting system, which we will only be able to do if we have less than 300 limited partners of record and have filed at least one Form 1-K.

You may read and copy the offering statement, the related exhibits and the reports and other information we file with the SEC at the SEC’s public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information regarding the operation of the public reference rooms. The SEC also maintains a website at www.sec.gov that contains reports, information statements and other information regarding issuers that file with the SEC.

We may supplement the information in this Offering Circular by filing a Supplement with the SEC. We hereby incorporate by reference into this Offering Circular all such Supplements, and the information on any Form 1-K, 1-SA or 1-U filed after the date of this Offering Circular.

Additionally, we will provide to prospective Investors without charge, upon written request, a copy of any documents referred to in this Offering Circular and not attached as an exhibit. Any such request should be addressed to us at Capview Residential Income - Fund VII, LP, c/o Capview Holdings, LLC, 6119A Greenville Ave, Suite 434, Dallas, Texas 75206, (972) 587-9238, Attn: Kevin Connelly.

The Offering is made solely by this Offering Circular. You must not rely on any document or oral representation other than this Offering Circular in evaluating the Offering or making an investment decision.

FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS

CAPVIEW RESIDENTIAL INCOME – FUND VII, LP

Financial Statement

As of January 25, 2021 (inception) 

Capview Residential Income – Fund VII, LP

Table of Contents

Financial Statement:

INDEPENDENT AUDITOR'S REPORT

To the Partners

Capview Residential Income - Fund VII, LP
Dallas, Texas

We have audited the accompanying balance sheet of Capview Residential Income - Fund VII, LP (the ''Partnership'') as of January 25, 2021 (inception), and the related notes to the financial statements.

Management's Responsibility for the Balance Sheet

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

Auditor's Responsibility

Our responsibility is to express an opinion on this financial statement based on our audit.  We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether this financial statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement.  The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error.  In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.  Accordingly, we express no such opinion.  An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of Capview Residential Income - Fund VII, LP as of January 25, 2021 (inception), in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern.  As discussed in Note 3 to the financial statements, the Partnership is a real estate fund that has not commenced planned principal operations and will require significant capital in pursuit of its planned principal operations. The Partnership has not yet obtained capital from investors or debt from lenders and has not generated any revenues as of January 25, 2021 (inception).  These factors raise substantial doubt about the Partnership’s ability to continue as a going concern. Management's plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  Our opinion is not modified with respect to this matter.

1. Organization

Capview Residential Income - Partnership VII, LP (“CRI7” or the “Partnership”) is a Delaware limited partnership formed on January 25, 2021 and is governed under the Limited Partnership Agreement of Capview Residential Income - Partnership VII, LP dated January 25, 2021 (the “Partnership Agreement”).

CRI7 was formed to purchase, lease and sell single family residential rental (“SFR”) properties. The Partnership will acquire SFR properties and lease such properties to an affiliated entity, Capview Exchange Residential, LLC, a Delaware limited liability company (the “Master Tenant”) under long-term master leases. The Master Tenant will, in turn, lease the SFR Properties directly to individuals and families desiring to rent single family residences. The Partnership is managed by its general partner, CRI Fund VI GP, LLC, a Texas limited liability company ("General Partner"), which is wholly-owned by Capview Holdings, LLC, a Delaware limited liability company.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

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

Use of Estimates

The preparation of the balance sheet in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Partnership considers all cash balances and highly-liquid investments with original maturities of three months or less to be cash and cash equivalents. The Partnership deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation up to an insurance limit. From time to time, these deposits may exceed federally insured limits. The Partnership considers the risk of loss on such deposits to be minimal.

Revenue Recognition

Rent from the tenant is recorded in accordance with the terms of each lease on a straight-line basis over the non-cancellable initial term of the lease from the latter of the date of the commencement of the lease or the date of acquisition of the property subject to the lease. Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Because the leases provide for rental increases at specified intervals, the Partnership records an unearned rent liability and recognizes revenue on a straight-line basis through the expiration of the non-cancellable term of the lease. The Partnership takes into account whether the collectability of rents is reasonably assured in determining the amount of straight-line rent to record. The Partnership defers rental revenue related to lease payments received from the tenant in advance of its due date.

Partners’ Capital

Capital Contributions

Capital contributions will be used to acquire properties and the related master lease, pay transaction fees, or to reimburse the general partner for costs related to the organization of the Partnership and the offering of units of limited partnership interest (“Units”). The Units are priced at $1,000 per unit.

Cash Flow Distributions

Distributions will be made in accordance with Article VI of the Partnership Agreement.

Income (Loss) Allocations

Net income (loss) is allocated to the limited partners in accordance with Article V of the Partnership Agreement.

Income Taxes

No provision for federal income taxes has been made in the balance sheet of the Partnership because, as a Partnership, it is not a federal taxable entity. The results of operations are included in the tax returns of the partners. The Partnership's tax return and the amount of allocable income or loss are subject to examination by federal and state taxing authorities. If such examinations result in changes to income or loss, the tax liability of the partners could be changed accordingly.

The Partnership applies FASB ASC Topic 740-10, Income Taxes (“ASC 740-10”) for accounting for uncertain tax positions. As of January 25, 2021, the Partnership has no uncertain tax positions. Accordingly, the Partnership has not recognized any penalty, interest or tax impact related to uncertain tax positions. Any such amounts would be expensed as incurred. The Partnership files federal, state and local income tax returns.

Fair Value Measurement 

The Partnership estimates fair value of financial and non-financial assets and liabilities based on the framework established in the fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1—Quoted prices in active markets for identical assets and liabilities that the Partnership has the ability to access at the measurement date.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3—Unobservable inputs that reflect the Partnership’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

3. Going Concern

The accompanying balance sheet has been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Partnership is a real estate fund that has not commenced planned principal operations, and will require significant capital in pursuit of its planned principal operations and has not generated any revenues as of January 25, 2021 (inception). The Partnership’s ability to continue as a going concern in the next twelve months is dependent upon its ability to obtain capital from investors and debt from lenders sufficient to meet current and future obligations and deploy such capital to produce profitable operating results. No assurance can be given that the Partnership will be successful in these efforts.

These factors, among others, raise substantial doubt about the ability of the Partnership to continue as a going concern for a reasonable period of time. The balance sheet does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

4. Related-Party Transactions

The Partnership Agreement provides for the following payments to the general partner or its affiliates, (i) organization and offering expense reimbursement of 0.5% of the capital contributed as reimbursement for expenses incurred in connection with establishment of the Fund and the preparation of the offering, (ii) marketing, distribution, and sponsorship expenses reimbursement of approximately 0.5% of the capital contributed as reimbursement of these costs incurred in connection with the offering, (iii) a reimbursement to an affiliate of the general partner for the use of personnel and internal resources in forming the Partnership and Master Tenant, securing the debt, and forming agreements for the distribution of equity in the fund fixed at 2.0% of the purchase price of the properties, (iv) an acquisition fee of 4.0% of the purchase price of the properties upon closing of the purchase of each property, and (vi) a disposition fee in an amount equal to 1.5% of the aggregate sales price of each property sold upon the closing of the sale of each property.

Upon the closing of a property, the Partnership enters into a 15-year lease with the affiliated Master Tenant for a purchase price of 4.0% of the purchase price of the property.

5. Subsequent Events

Management has evaluated subsequent events through March 5, 2021, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in these financial statements.

APPENDIX A

INSTRUCTIONS PAGE

Capview Residential Income - Fund VII, LP (the “Fund” or the “Partnership”) is offering up to 50,000 units of limited partnership interest (the “Units”) under the Offering Circular, dated ______, 2021 (the “Offering Circular”), which contains information regarding this offering (the “Offering”). Please read carefully the entire Offering Circular and the exhibits thereto, including the Amended and Restated Limited Partnership Agreement of the Fund, as amended from time to time (the “Partnership Agreement”).

PLEASE NOTE: Your subscription is not considered for review and acceptance into the Offering until complete and executed Subscription Agreement and funds are received by the Fund. The Fund reserves the right to reject the application of any subscriber for any reason or for no reason in its sole discretion.

INSTRUCTIONS TO SUBSCRIBERS

NON-CUSTODIAL OWNERSHIP

Accounts with more than one owner must have ALL PARTIES SIGN in Section 7. Be sure to attach copies of all plan documents for Pension Plans, Trust or Corporate Partnerships required in Section 2.

CUSTODIAL OWNERSHIP

For New IRA/Qualified Plan Accounts, please complete the form/application provided by your custodian of choice in addition to this Subscription Agreement and forward to the custodian for processing.

For existing IRA Accounts and other Custodial Accounts, information must be completed BY THE CUSTODIAN. Have all documents signed by the appropriate officers, as indicated in the corporate resolution, and include them with your Subscription Agreement.

(Minimum investment of $25,000 up to any multiple of $1,000)

Custodial Ownership

Custodian Information (to be completed by custodian)

Residential Address (No P.O. box permitted)

Mailing Address (if different from above – P.O. box allowed)

*If the co-investor resides at another address, please attach that address to the subscription agreement.

Distributions will be directly deposited into your checking, savings or brokerage account. If your investment is held through a custodial account, distributions will be paid to the custodian for the benefit of the investor.

Account Type ☐ Checking ☐ Savings ☐ Brokerage

A voided check must be submitted with your completed Subscription Agreement.

I authorize the Fund or its agent to deposit my distribution to the account indicated below. This authority will remain in force until I notify the Fund to change it. In the event that the Fund deposits funds erroneously into my account, the Fund is authorized to debit my account for the amount of the erroneous deposit.

I understand that to purchase Units, I must either be an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or I must limit my investment in the Units to a maximum of: (i) 10% of my net worth or annual income, whichever is greater, if I am a natural person; or (ii) 10% of my revenues or net assets, whichever is greater, for my most recently completed fiscal year, if I am a non-natural person.

I understand that if I am a natural person, I should determine my net worth for purposes of these representations by calculating the difference between my total assets and total liabilities. I understand this calculation must exclude the value of my primary residence and may exclude any indebtedness secured by my primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts, net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the Units.

I hereby represent and warrant that I meet the qualifications to purchase Units because (please mark one):

If you marked box 3, please complete Addendum A, attached hereto, and return it with this Subscription Agreement. If Addendum A is not received with this Subscription Agreement, your subscription will not be accepted.

Certification Instructions: You must cross out item (ii) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.

The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

I, ___________________________________________ (insert name of investor) acknowledge that I have received the Offering Circular, dated ___________, 2021, and all exhibits thereto, filed with the Securities and Exchange Commission (“SEC”) as part of the Offering Statement on Form 1-A, relating to the offering of units of limited partnership interest issued by Capview Residential Income - Fund VII, LP, a Delaware limited partnership. The Units are being offered on the terms and in the manner described in the Offering Circular to investors meeting the suitability requirements under Regulation A promulgated under Securities Act, who are acceptable to the Partnership. Investors subscribing for Units will be subject to the provisions of the Amended and Restated Limited Partnership Agreement of the Fund.

Capitalized terms used in this Subscription Agreement will have the meanings given to such terms in the Offering Circular. If I am executing this Subscription Agreement on behalf of a partnership, limited liability company, corporation, trust or other entity, representations, acknowledgments and warranties made by me herein are deemed to be representations, acknowledgments and warranties of such entity.

1. Subscription. Subject to the terms and conditions hereof and the provisions of the Offering Circular, I hereby irrevocably subscribe for and agree to purchase Units in accordance with the terms and conditions of the Offering Circular and this Subscription Agreement. I hereby irrevocably (a) tender payment to the Partnership in the amount set forth in Section 1 of this Subscription Agreement to cover the subscription price of the Units I intend to purchase along with (b) a duly completed and executed copy of this Subscription Agreement.

I acknowledge that the Signature Page in Section 8 of this Subscription Agreement will not become binding unless this Subscription Agreement is accepted by CRI Fund VII GP, LLC, the general partner of the Partnership. If this Subscription Agreement is accepted, I will be bound by the provision of the Partnership Agreement and the funds I have invested will be deposited into the Partnership’s operating account and will become available for use by the Partnership. If this Subscription Agreement is rejected, the funds I have invested will be returned promptly to me, without interest; and this Subscription Agreement will be rendered void and of no further force or effect.

I understand that (a) the General Partner will rely upon the accuracy and completeness of the information contained herein for the purposes of such determination, (b) the Units will not be registered under the Securities Act or any state securities registration statutes, (c) the completion of this Subscription Agreement does not constitute a binding commitment on the part of the General Partner to accept a subscription for Units from me, (d) the Units are subject to certain transfer restrictions and are not transferable and I will be required to hold the Units for an indefinite period of time, and (e) the Units will be subject to the provisions of the Partnership Agreement.

2. Acceptance of Subscription; Compliance with Partnership Agreement. I understand and agree that this Subscription Agreement is made subject to the following terms and conditions:

3. Representations and Warranties of Subscriber. I hereby represent and warrant to, and covenant with, the General Partner and the other Partners, and each governing person or equity owner of each of the foregoing, as applicable, that:

(a) I have all the requisite authority (and in the case of an individual, the capacity) to purchase the Units, enter into this Subscription Agreement and to perform all the obligations required to be performed by me under this Subscription Agreement and such actions have been authorized by all necessary corporate or other actions. Such purchase will not contravene any law, rule or regulation binding on me or any investment guideline or restriction applicable to me.

(b) I represent that either:

(c) In deciding to purchase the Units subscribed for hereby, I have relied solely upon my review of the Offering Circular and any supplemental information I received from the General Partner and independent investigations made by me, my purchaser representative(s), if any, and my advisors, if any, and have not relied upon oral statements of the General Partner or its agents.

(d) The Partnership has, during the course of the Offering and before the sale of the Units, afforded me and my advisors, if any, the opportunity to ask questions of and receive answers from the General Partner concerning the terms and conditions of the Offering and to obtain any additional information from the General Partner, to the extent the General Partner possesses such information or could have acquired it without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Offering Circular.

(e) I have received no written or oral representations or information from the General Partner which were in any way inconsistent with the information stated in the Offering Circular.

(f) No other person or entity has any right, title, interest, participation, or claim in or to the Units for which I am subscribing, except (as applicable) for any interest my spouse may have under community property laws.

(g) I am acquiring the Units for investment solely for my own account and without any intention of reselling, distributing, subdividing, or fractionalizing them, and have no present intention of reselling or otherwise disposing of any portion of the Units.

(h) I, either alone or together with my representatives, if any, have such knowledge and experience in financial and business matters, including the analysis of or participation in offerings of real estate investment programs, that I am capable of evaluating the merits and risks of an investment in the Units and have the ability to protect my interests in connection with such investment.

(i) If the undersigned is a partnership, corporation, trust or other entity, the undersigned was not organized for the specific purpose of acquiring the Units.

(j) I have carefully evaluated my financial resources and investments and am able to bear the economic risks of this investment for an indefinite period of time. I have a sufficient net worth to sustain a total loss of my entire investment in the Units if such loss should occur. My overall commitment to investments that are not readily marketable are not disproportionate to my individual net worth, and my investment in the Units will not cause such overall commitment to become excessive.

(k) I acknowledge that the purchase of the Units may involve legal, tax, and economic consequences and that the contents of the Offering Circular and any supplemental information I received from the General Partner does not contain tax advice. I am not relying on the Partnership, or any of its employees, agents or sub-agents with respect to the legal, tax, and economic considerations of an investment in the Units, and I have relied on the advice of, or have consulted with, only my own advisors, if any.

(l) If I am purchasing in an individual capacity, I am at least 21 years of age and a bona fide resident and domiciliary (not a temporary or transient resident) of the state or jurisdiction set forth in Section 3 hereto, have no present intention of becoming a resident of any other state or jurisdiction, and am not acquiring the Units as a nominee or agent or otherwise for any other person.

(m) I am not, nor will I at any time become, subject to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control List) that prohibits or limits the General Partner from making any advance or extension of credit to me or from otherwise conducting business with me. I agree to provide documentary and other evidence of my identity and the identity of any other joint subscriber as may be requested by the General Partner at any time to enable the General Partner to verify identity or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

(n) I understand that (i) the Partnership has no obligation or intention to register any Units for resale or transfer under the Securities Act or any state securities laws or to take any action (including the filing of reports or the publication of information as required by Rule 144 under the Securities Act) which would make available any exemption from the registration requirements of any such laws, and (ii) I therefore may be precluded from selling or otherwise transferring or disposing of any Units or any portion thereof for an indefinite period of time or at any particular time.

The foregoing representations and warranties, together with all other representations and warranties made or given by me in any other written statement or document delivered in connection with the Offering, are true and correct in all respects on and as of the date of the admission of the undersigned to the Partnership as if made on and as of such date and will survive such date indefinitely.

4. Acknowledgements. I hereby acknowledge and understand that:

(a) This Offering has not been approved by the SEC or any state securities agency and understand that no federal or state agency has passed upon the Offering or has made any finding or determination as to the fairness of the terms or the merits of an investment in the Partnership.

(b) Investment in the Partnership is speculative in nature and the involves significant risks, including the risk that I lose my entire investment.

(c) The Units have not been registered under the Securities Act, or under the securities laws of any state, and, therefore, cannot be re-sold unless they are subsequently so registered or an exemption from such registration is available. Additionally, I understand that the effectiveness of any sale or other disposition may be conditioned upon my providing to the Partnership an opinion of counsel satisfactory to the Partnership that such disposition can be made without registration under applicable securities statutes and laws.

(d) Any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the General Partner in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the General Partner, its management or its affiliates and should not be relied upon.

(e) The Partnership must generate cash flow from its operations to be able to make cash distributions to the Partners and that it is uncertain whether the Partnership can generate any cash flow.

(f) Any transfer of the Units is subject to the terms and restrictions set forth in the Partnership Agreement.

(g) The information and explanations related to the terms and conditions of the Units provided in the documents related to the Offering of Units is not investment advice or a recommendation to purchase the Units.

(h) No assurances have been made to me by the General Partner or its manager, or any of their representatives or agents, regarding the tax advantages, if any, that may inure to the benefit of the Partners, nor has any assurance been made by any of those persons that existing tax laws and regulations will not be modified in the future, thus denying the Partners all or a portion of any tax benefits which they may hope to receive. I understand that the discussion of the tax consequences in the Offering Circular is limited and general in nature and that the tax consequences to me will depend on my particular circumstances.

(i) I have been encouraged to and should obtain independent legal, income tax and investment advice with respect to its subscription for these Units and accordingly, have had the opportunity to obtain any necessary advice as to the meanings of all terms contained herein relevant to myself for purposes of giving representations, warranties and covenants under this Subscription Agreement and in the Partnership Agreement.

5. Representations and Warranties of the Partnership. The Partnership represents and warrants to the Subscriber that as of the date of the closing of this Offering (the “Closing Date”):

(a) The Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware. The Partnership has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement, the Partnership Agreement and any other agreements or instruments required hereunder. The Partnership is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary.

(b) The execution, delivery and performance of this Subscription Agreement by the Partnership have been duly authorized by the Partnership and all other partnership action required to authorize and consummate the offer and sale of the Units has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Partnership in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.

(c) The Partnership knows of no pending or threatened legal or governmental proceedings to which the Partnership is a party which would materially adversely affect the business, financial condition or operations of the Partnership.

6. Indemnification. I acknowledge and understand the meaning and legal consequences of the representations, warranties, acknowledgements and agreements set forth herein and that the Partnership, the General Partner, and each member, manager, officer, director, controlling person, representative, agent, and/or employee of the foregoing, have relied or will rely upon such representations, warranties, and agreements, and I hereby agree to indemnify and hold harmless such persons, and each of them, from and against any and all losses, claims, damages, liabilities, or expenses, and any actions in respect thereof, joint or several, to which any such person may become subject, due to or arising out of a breach of any such representation, warranty, or agreement, together with all reasonable costs and expenses (including attorneys’ fees) incurred by any such person in connection with any investigation, action, suit, proceeding, demand, assessment, or judgment incident to any of the matters so indemnified against. Notwithstanding the foregoing, however, no representation, warranty, acknowledgment, or agreement made herein by me shall in any manner be deemed to constitute a waiver of the rights granted to me under federal or state securities laws. All representations, warranties, and agreements contained in this Subscription Agreement, and the indemnification contained in this Section, will survive the acceptance of this Subscription Agreement and the sale of the Units.

7. Revocation. I agree that this Subscription Agreement may not be cancelled, terminated, or revoked, and will survive my death or disability and will be binding upon my heirs, executors, and administrators, and the successors and assigns of any entity on behalf of which I am executing this Subscription Agreement.

8. Assignment. I agree that I will not transfer or assign this Subscription Agreement, or any of my rights or interest herein or hereunder, and further agree that the transfer or assignment of any Units acquired pursuant hereto will be made only in accordance with the provisions hereof, the Partnership Agreement and all applicable laws.

9. General.

(a) All notices or other communications given or made hereunder shall be in writing and shall be delivered by hand delivery providing confirmation of receipt or by Federal Express or similar courier delivery or by U.S. Postal Service certified mail, return receipt requested, to the undersigned, at such address provide by the undersigned in Section 3 hereof, or to the General Partner, at 6119A Greenville Ave Suite 434, Dallas, TX 75206.

(b) An electronic signature or any electronic copy of a physical signature to this Agreement shall be given legal effect and deemed valid and binding on the person authorizing or transmitting such signature. and on any person or entity to whom the signature is attributable, whether or not such signature is encrypted or verified.

(c) This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Texas and the federal laws of the United States governing the private placement of securities, without reference to the laws of any other jurisdiction.               

10. Jurisdiction and Venue. I consent to the exclusive jurisdiction of the United States District Court for the Northern District of Texas, Dallas Division and irrevocably agree that all proceedings arising out of or relating to this Subscription Agreement and my purchase of any Units shall be litigated in such court. I accept, generally and unconditionally, the exclusive and irrevocable jurisdiction and venue of the aforesaid court and waive any defense of forum non conveniens. Notwithstanding the foregoing, these jurisdiction and venue provisions shall not apply to federal securities law claims.

11. Delivery of Information. I understand that the Partnership intends to provide me with information about my investment and Partnership activities via unencrypted email.

THIS PAGE WILL ALSO CONSTITUTE THE INVESTOR’S SIGNATURE PAGE TO THE PARTNERSHIP AGREEMENT.

The undersigned, desiring to become a limited partner of the Fund, does hereby:

I agree that (i) electronically signing and submitting any document(s) to the Fund legally binds me in the same manner as if I had signed in a non-electronic form, and (ii) the electronically stored copy of my signature, any written instruction or authorization and any other document provided to me by the Fund, is considered to be the true, accurate and complete record, legally enforceable in any proceeding to the same extent as if such documents were originally generated and maintained in printed form. I agree not to contest the admissibility or enforceability of the Fund’s electronically stored copy of this Subscription Agreement and any other documents. By using an electronic signature system to electronically sign and submit any document, I agree to the terms and conditions of this Subscription Agreement.

THE UNDERSIGNED HAS THE AUTHORITY TO ENTER INTO THIS SUBSCRIPTION AGREEMENT ON BEHALF OF THE PERSON(S) OR ENTITY REGISTERED ABOVE.

Executed on (date): ________________

THIS SECTION IS REQUIRED ONLY FOR ACCREDITED INVESTORS.

If you marked Box 3 in Section 5, Investor Eligibility Certifications, please complete this Addendum A.

If a natural person, I hereby represent and warrant that (check box as appropriate):

If other than a natural person, I represent and warrant that I am: (mark as appropriate):

THE UNDERSIGNED HAS THE AUTHORITY TO ENTER INTO THIS SUBSCRIPTION AGREEMENT ON BEHALF OF THE PERSON(S) OR ENTITY REGISTERED ABOVE.

Executed on (date): ________________

 APPENDIX B

FORM OF AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

OF

CAPVIEW RESIDENTIAL INCOME – FUND VII, LP,
a Delaware limited partnership

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