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LEGACYHUB MULTIFAMILY REIT I, LLC

Sponsored by LegacyHub Capital·

Unknown· LLC · 1 class· ● Low· PPM v1· Updated 26d ago
3 data notes▶
Unusual structureLow Confidence Extraction: Platform Admin Fee Has Conflicting 3% Vs 4% Disclosure Between Operating Agreement And Offering CircularUnscored: absolute lp take
Run the numbers
Composite
19.3
median 45 −25
Pref Returnⓘ
—
median 9.0% · Multifamily / Apartments
LP Take (Base)ⓘ
—
median 82.1% · Multifamily / Apartments
GP Commitⓘ
0.0%
median 0.0% +0.0%
Min Investment
$3K
ticket size
Offering Size
$50M
target raise
Cascade · Distributions

Where each dollar goes

$875K
LP $815K · Fees $60K · GP $0
GROSS PROCEEDS$875KGPFFees to Manager$60,000 · 6.9% of grossLPT1Return of Capital$500,000 · 57.1% of grossLPGPT4Residual Split (100% / 0%) · 36.0%Limited Partners · $315KGeneral Partner · $0pool fully distributed
Standard scenario · $500K equity · 5y hold · 1.75× exitRun your own cascade →

Deal diligence23 findings · worst high

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

Document quality

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

Document-quality defect — Signature date predates company formation (July 20, 2020 vs. Sept 24, 2020)

High

The offering statement is certified as signed on July 20, 2020, but the Company was not formed until September 24, 2020 -- the issuer purportedly signed before it existed (logically impossible date).

“has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, on July 20, 2020. || The Company was formed on September 24, 2020 to acquire Class B and C Multifamily real estate assets.”
PPM p.5988% confidence

Numeric inconsistency — Asset management fee basis (net offering proceeds vs. net asset value)

High

The 2.00% annualized asset management fee is described as based on 'net offering proceeds' in the Q&A but on 'the Company's net asset value' in the financial-statement notes -- two materially different fee bases for the same fee.

“We will pay our Manager a quarterly asset management fee at an annualized rate of 2.00%, which will be based on our net offering proceeds (' Asset Under Management ') as of the end of each quarter. || The Company will pay the Investment Manager a quarterly asset management fee of 2% per annum, which is based on the Company’s net asset value, as further detailed in the Company’s Operating Agreement.”
PPM p.1692% confidence

Numeric inconsistency — Platform Administration Fee (4% vs. 3%)

High

The Sponsor's platform fee is stated as 4% (annualized) of gross revenue in the management-compensation section but as 3% of gross annual revenue in the financial-statement notes.

“Fee of 4%(annualized) on the gross revenue receipt from the MultiFamily assets owned in this Offering. For example, if the Company Gross annual revenue is $10,000; The Company will pay a platform fee of $400 || The Company will pay the Sponsor a platform fee of 3% of gross annual revenue, as further detailed in the Company’s Operating Agreement.”
PPM p.5093% confidence

Numeric inconsistency — Initial fixed offering price end date (Dec 31, 2021 vs. Sep 30, 2021)

Medium

The cover/price-table footnote says the $10.00 fixed price applies 'until December 31, 2021,' while the Q&A says it is the purchase price 'until September 30, 2021' -- conflicting dates for when NAV-based pricing begins.

“the table above was arbitrarily determined by our Manager and applicable until December 31, 2021. || Our Manager set our initial offering price at $10.00 per share, which will be the purchase price of our shares until September 30, 2021.”
PPM p.390% confidence

Numeric inconsistency — Ownership limit (9.99% vs. 9.8%)

Medium

The Risk Factors disclose a REIT ownership limit of 9.99% of shares, but the Operating Agreement's Article XIII defines the Aggregate Ownership Limit and Common Share Ownership Limit as 9.8 percent.

“no person may own, or be deemed to own by virtue of the attribution provisions of the Code, either more than 9.99% in value or in the number of our common shares || “Aggregate Ownership Limit” shall mean not more than 9.8 percent (in value or in number of shares, whichever is more restrictive) of the aggregate of the Outstanding Shares”
PPM p.2893% confidence

Numeric inconsistency — REIT qualification taxable year (2021 vs. 2022)

Medium

The document variously states REIT qualification begins with 'our 2021 taxable year' and 'our taxable year ended December 31, 2022' / 'our 2022 taxable year,' an internal contradiction about the first REIT year.

“We expect that we are organized in conformity with the requirements for qualification as a REIT under the Code beginning with our 2021 taxable year || we expect that we are organized in conformity with the requirements for qualification as a REIT under the Code beginning with our 2022 taxable year. We expect the REIT election to be effective from February 15, 2022”
PPM p.2990% confidence

Numeric inconsistency — Targeted portfolio leverage range (50-80% vs. 60-75%)

Medium

Targeted portfolio-wide leverage is stated as 'between 50-80%' in the Q&A but as 'between 60-75%' in the Plan of Operation.

“Our targeted portfolio-wide leverage, after we have acquired a substantial portfolio, is between 50-80% of the greater of cost || Our targeted portfolio-wide leverage after we have acquired a substantial initial portfolio of diversified investments is between 60-75% of the greater of the cost”
PPM p.1695% confidence

Unfilled placeholder text — [____________]

Medium

The Operating Agreement title block ships with an unfilled date placeholder ('Dated as of [____________]'), indicating the governing agreement was not finalized.

“OPERATING AGREEMENT OF LEGACYHUB MULTIFAMILY REIT I, LLC Dated as of [____________]”
PPM p.6390% confidence

Broken cross-reference — Exhibit 7 / Exhibit 8 (NAV and escrow references)

Low

The NAV Q&A cites 'See Exhibit 7' for NAV information and the escrow narrative says the escrow agreement 'can be found in Exhibit 8,' but the exhibit index lists Exhibit 7 as 'Tax opinion' and Exhibit 8 as 'NAV Disclosure' -- both pointers resolve to the wrong exhibit (and there is no escrow-agreement exhibit).

“We will update the NAV information provided on our website. See Exhibit 7 || The escrow agreement can be found in Exhibit 8 to the Offering Statement || EXHIBIT 7: Tax opinion 126 EXHIBIT 8: NAV Disclosure 127”
PPM p.1685% confidence

Broken cross-reference — Redemption Plan definition -> Section 4.6 (actually Section 4.5)

Low

The Operating Agreement defines 'Redemption Plan' as having the meaning assigned in Section 4.6, but the provision actually establishing the Redemption Plan is captioned Section 4.5, while Section 4.6 is a separate provision -- a broken internal cross-reference.

““Redemption Plan” has the meaning assigned to such term in ‎Section 4.6. || Section 4.5. | Redemption Plan. The Manager may, in its sole discretion and to the fullest extent permitted by applicable laws and regulations, cause the Company to establish a redemption plan (a “Redemption Plan”)”
PPM p.6480% confidence

Defined-term defect — General Partner (in a Manager-managed LLC)

Low

A Risk Factors summary bullet refers to 'our General Partner,' a term inapplicable to this Manager-managed LLC (the entity is run by 'the Manager'), creating ambiguity about who owes/limits duties -- residual template language.

“We have agreed to limit remedies available to us and our investors for actions by our General Partner that might otherwise constitute a breach of duty.”
PPM p.1485% confidence

Document-quality defect — Entity type ('Delaware Corporation company' for an LLC)

Low

The cover page describes this LLC/REIT as 'a newly organized Delaware Corporation company,' an internally inconsistent entity description for an entity named and operated as an LLC.

“Legacyhub Multifamily REIT I, LLC (the “ Company ”), is a newly organized Delaware Corporation company formed to pool capital, invest, and manage a diversified portfolio of multifamily rental properties”
PPM p.182% confidence

Document-quality defect — Residual hotel-template language in property-management description

Low

The multifamily property manager's team is described with hotel-industry roles ('general hotel management, front office managerial skillset and room service cleaners'), residual template text inconsistent with a multifamily REIT.

“Legacyhub Management team comprises experienced individuals in general hotel management, front office managerial skillset and room service cleaners, etc.”
PPM p.1180% confidence

Numeric inconsistency — Redemption waiting period (60-day vs. 30-day)

Low

The redemption disclosure describes both a 'minimum 60 day waiting period' and a 'thirty (30) day waiting period' for the same redemption process.

“Even though we are providing a “Redemption Plan,” any purchaser or subscriber of our securities should be in a financial position to bear the risks of losing their entire investment”
PPM p.455% confidence

Spelling / typo — February 15, 021

Info

The independent auditor's consent references an Auditor's Report 'dated February 15, 021' -- a malformed/typo year (missing the '2' in 2021).

“of our Independent Auditor’s Report dated February 15, 021 relating to the balance sheet of Legacyhub MultiFamily REIT I, LLC as of September 24, 2020 (inception)”
PPM p.10488% confidence

Diligence gaps

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

DDQ gap: Does the fund engage an independent auditor?

High

The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

High

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

High

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

High

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

Medium

The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

Medium

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

Medium

The offering documents don't answer a standard institutional DDQ question (Structure). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

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

Medium

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ readiness

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

38%
Coverage
5 answered0 partial8 gaps13 questions
Governance
  • Does the fund use a third-party fund administrator?Gap
  • Does the fund engage an independent auditor?Gap
Economics
  • What is the preferred return (hurdle) rate offered to LPs?Gap
  • What is the LP/GP carried-interest split above the preferred return?Gap
  • Is there a GP catch-up, and at what rate?Gap
  • Does the fund have a GP clawback provision?Gap
  • What is the GP's capital commitment (skin in the game)?Gap
Structure
  • What distribution-waterfall structure does the fund use?Gap
  • What is the fund's investment strategy / asset class?UnknownAnswered
  • What is the fund's vintage year?Vintage 2020.Answered
  • What is the target offering size?Target offering of $50,000,000.Answered
  • What is the minimum LP investment?Minimum investment of $2,500.Answered
Fees & Expenses
  • Is the fund's fee schedule disclosed (management fee, etc.)?5 fee line item(s) extracted from the offering documents.Answered
Generate IC memo →

Fee scheduletaken before LP distributions

Total load 9.00%
Fee
Trigger
Basis
Rate
Asset Management Fee
Ongoing; quarterly
2.0% per annum of net offering proceeds (AUM / NAV), paid quarterly in arrears; beginning on the First NAV Reporting Date (September 30, 2021) based on total NAV at end of each prior semi-annual period
2.00%
Platform Administration Fee
Ongoing; quarterly
3.0% of gross revenue from using the Legacyhub Platform (Operating Agreement states 3%; offering circular body states 4% — Operating Agreement and financial statements notes control at 3%)
3.00%
Property Management Fee
Ongoing; monthly as properties are acquired
4% per annum of gross annual rent received from multifamily assets held by the Company, paid monthly
4.00%
Organization and Offering Cost Reimbursement
After SEC qualification; monthly installments
Reimbursement of actual org and offering expenses incurred by Manager/Sponsor; monthly installments capped at 0.50% of aggregate gross offering proceeds; estimated at $1,600,000 if fully subscribed
0.00%
Board of Directors Compensation
After SEC qualification; quarterly
$12,000 per year per director, distributed quarterly, after Reg A+ qualification
0.00%

Service providers3 gaps

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

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