Investment Overview

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US Capital Investment Management

US CAPITAL RESIDENTIAL REAL ESTATE INCOME FUND, LP


FUND SUMMARY


Fund Name: US Capital Residential Real Estate Income Fund, LP (the "Fund")

Target Size: $250,000,000

Fund Type: Open-ended private investment fund

Target Net Returns: 6.75% per annum

Investment Objective: To preserve principal, provide current income and capital appreciation, and achieve consistent attractive returns primarily by making senior secured debt investments directly or indirectly through residential real estate funds and real estate development and operating companies.

General Partner and Investment Adviser: US Capital Investment Management, LLC

Placement Agent: US Capital Global Securities, LLC, member FINRA, SIPC

Fund Administrator: Core Fund Solutions


EXECUTIVE OVERVIEW


Fund Manager: US Capital Investment Management, LLC

  • San Francisco-based alternative asset manager (the "General Partner") focused on the small and lower middle market
  • Specialists in asset-based lending to SMBs, with over 10 ten years in underwriting debt and monitoring collateral
  • Flexibility and structuring expertise across a broad range of transaction types
  • Third-party funds custodian and administrator in place, as well as finance lender and broker license registration

The Fund: US Capital Residential Real Estate Income Fund, LP

  • $250 million open-ended private investment partnership (the "Fund") providing capital to highly promising residential real estate funds and strategies.
  • 6.75% target preferred return to investors before any profit share for General Partner*
  • 100% quarterly income distributions in cash available

* Structured as a quarterly 1.6875% preferred return for Limited Partners. See offering documents of US Capital Residential Real Estate Income Fund, LP for full details.


MANAGEMENT TEAM


US Capital Investment Management, LLC is led by industry veterans with deep investment banking, financial advisory, operational, and direct lending experience. Importantly, this includes a strong specialization in underwriting and collateral management.


Jeffrey Sweeney
Founder and Co-Managing Partner, Chairman of Investment Committee

  • 20 years of investment experience, with particular expertise in SMB structured finance, SMB due diligence and monitoring, and investment banking services
  • Founder, Chairman and CEO of US Capital Partners Inc., a private investment bank with over $4 billion in potential funding opportunities each year
  • Previous growth opportunity fund delivered fund-level net internal rate of return since inception on realized and unrealized investments of 25.9%, with no down quarters during 6-year history
  • Regular author of articles in leading business journals, including The Secured Lender, ABF Journal, Inc. Magazine, and Mergers & Acquisitions
  • B.A. in Business Economics from the University of California, Santa Barbara

Charles Towle
Co-Managing Partner and Division Head of Placement Agent

  • Over 10 years of business development, asset management, corporate finance, capital markets, and general business management experience
  • Managing Partner at US Capital Partners Inc.; helped grow the firm into an established private investment bank for small and medium-sized businesses in the United States
  • Gained extensive entrepreneurial and investment experience, serving as a limited partner, financial officer, or board member of various investment and endowment funds and SMBs, both in the United States and abroad
  • Holds Series 24 and 79 registrations from FINRA
  • B.S. in Business Administration (emphasis in Corporate Finance and International Business) and an M.B.A. (emphasis in Sustainable Business) from San Francisco State University

Ish Spencer
Member of Investment Committee

  • Managing Director and Partner at US Capital Partners Inc.
  • Oversees the firm's deal teams at San Francisco headquarters, made up of banking professionals, business analysis, and underwriters
  • Over 15 years of business development, asset management, private investment, asset and market evaluation, business analysis, and general business management and operations experience
  • Head of family office business, Spencer Family Investments, LLC, which focuses on syndicated investments in real estate, stockholdings, and other investment funds
  • B.S. in Chemistry from the University of California, Berkeley, his M.S. in Chemistry from the University of California, San Diego, and his M.B.A. from San Diego State University

SUMMARY OF FUND TERMS


  • Minimum commitment of $1,000,000 for individuals and $5,000,000 for institutional investors, subject to lesser amounts being accepted at the discretion of the General Partner
  • Preferred net return of 1.6875% per quarter in favor of investors
  • Performance carry of 20% of returns, but only if investors have received their preferred net return for the calendar quarter
  • Initial five-year lock-up in custodial account
  • Management fee of 1.75% per annum on invested capital, paid quarterly
  • In general, realized gains income will be allocated in the following sequence every quarter:
    1. 1.6875% preferred return, if any, per quarter to the Limited Partners
    2. After the 1.6875% preferred return hurdle has been met for the quarter, the General Partner will receive a "catch-up" of 0.421875%
    3. Thereafter, 80% to Limited Partners and 20% to the General Partner

Full details provided in the offering documents of the Fund, which include a confidential private placement memorandum, limited partnership agreement, and subscription agreement.


RISK FACTORS


You should be aware that an investment in the Partnership involves considerable risks, including the possible loss of all or a material portion of your investment. The abbreviated risks set forth below, as well as the detailed risk factors set forth in the Confidential Offering Memorandum and Supplement, are not the only risks facing investors.

The Fund will target multi-family residential properties located primarily in the United States. The Fund is subject to a number of significant risks that could result in a reduction in its value, potentially including, but not limited to:

  • The Fund may lack diversification which could increase the negative impact of the performance of a small number of investments.
  • The Fund's portfolio will lack liquidity.
  • The Fund has no operating history.
  • Partnership investments are subject to general credit and interest rate risk.
  • The Fund is subject to general risks of real estate ownership.
  • Investment in real estate can lead to substantial losses.
  • Investment in real estate entails valuation risk.
  • The Fund is subject to systems, accounting and internal control risks.
  • There is no participation by limited partner investors in the management of the Fund.
  • Limited transferability of the Partnership interests.
  • Leverage at portfolio company level increases Partnership's exposure.

The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Partnership. Prospective Limited Partners should read the entire Memorandum and the Partnership Agreement and consult with their own advisers before deciding whether to invest in the Partnership. In addition, as the Partnership's investment program develops and changes over time, an investment in the Partnership may be subject to additional and different risk factors.


SAMPLE ALLOCATIONS


US Capital Investment Management


Golden Pacific Capital, LLC


US Capital Investment Management


FUND ECONOMICS AND PERFORMANCE TO DATE


Commenced operations in June 2015

The maximum offering is $12,000,000, subject to increase by the Manager within the Offering Period. And minimum cash investment by an investor is $250,000.

$15MM in capital deployed (96 homes owned as of Nov 2016 and continuing to actively acquire).

US Capital Investment Management

* Information contained herein is unaudited and has not been verified by USCGS for accuracy.


Noble Capital


Organization & Management Team

Noble Capital Group is a vertically integrated cohort of real estate companies that are set up to handle all aspects of the small balance real estate lending business.

From loan originations (Streamline Funding), to loan servicing/foreclosure/disposition (Noble Capital Servicing), and fund management (Noble Capital Fund Management) Noble has covered all of the bases to ensure a smooth process for the borrower and investor alike. We also have a construction company to complete any unfinished properties we may be forced to repossess (Pinnacle Construction) and a brokerage firm to market and sell the finished REO quickly (Emerge Real Estate).

US Capital Investment Management

INVESTMENT STRATEGY


The Fund will only invest in one type of loan product as detailed below:

US Capital Investment Management


DISCLAIMER


The material in this presentation (this "Presentation") is presented in outline form only and is qualified in its entirety by the information included in the Confidential Private Placement Memorandum, Limited Partnership Agreement, and Subscription Agreement (the "Offering Documents") of US Capital Residential Real Estate Income Fund, LP (the "Fund"). This Presentation is for informational purposes only, and is neither an offer to sell nor a solicitation of an offer to buy limited partnership interests in the Fund. An offer can only be made by the Offering Documents and only in jurisdictions in which such an offer would be lawful.

Neither US Capital Investment Management, LLC (the "General Partner") nor the Fund offers any guarantee as to the Fund's performance. All investments involve risk, including the loss of principal. There can be no assurances that the Fund will achieve its objectives. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing to bear the high economic risks associated with such an investment. Investors should carefully review and consider potential risks before investing.

This Presentation may contain information regarding prior investment performance. Prospective investors should understand that past performance is not necessarily indicative of future results, and there can be no assurance that the Fund will achieve comparable results in the future. No representation or warranty, express or implied, is given by or on behalf of the Fund, the General Partner, US Capital Global Securities, LLC. ("USCGS"), or any of their affiliates or respective partners, members, employees, officers, directors, agents, or representatives as to the accuracy or completeness of the information or the opinions contained in this document. The information contained in this Presentation is provided as of the date hereof and is subject to change without notice to prospective investors.

Placement Agent Fee
Units in the Fund are being offered through USCGS, which is acting as the placement agent for the offering on a "best efforts" basis. USCGS is registered as a broker-dealer with the United States Securities and Exchange Commission and is regulated by FINRA. USCGS will receive a placement agent fee of 20% of the total carry paid to USCIM. Any such fee will be paid by the General Partner or its affiliates out of their own assets. No deduction will be made from a Limited Partner's subscription amount with respect to such fees.

Conflicts of Interest Disclosure
The General Partner and USCGS are affiliated entities. Charles Towle is Co-Managing Partner of the General Partner, the Division Head and licensed principal of USCGS, and a stockholder of the parent company of the General Partner and USCGS. Jeffrey Sweeney is Co-Managing Partner of the General Partner and is also Chairman, CEO, and the controlling stockholder of the parent company of the General Partner and USCGS. Conflicts of interest may arise in connection with Mr. Towle's and Mr. Sweeney's control of both the General Partner and USCGS. Investors should be aware that these conflicts of interest, and a number of other conflicts of interest relating to the General Partner and its affiliates, are permitted under the terms of the Fund's offering documents. You should not invest in the Fund unless you are willing to accept these conflicts of interest and the associated risk.

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BrokerCheck

Securities offered through US Capital Global Securities, LLC, member FINRA, SIPC.

IMPORTANT: All investing is risky, and no investor should decide to commit funds without first consulting with a competent professional adviser. Some or all invested funds can be lost. The past performance of any investment, investment strategy or investment style is not indicative of future performance. Future results may vary, and are not guaranteed. The value of investments and their income may increase or decrease, and a loss of principal – including all principal – may occur.

For more investor information or support please call 415-889-1010 or email support@uscgs.com