Form 1-K Multi-Housing Income For: Dec 31

  
    1-K
    
      LIVE
      
        
          0001722266
          XXXXXXXX
        
      
      
        N
        N
      
      12-31-2021
    
  
  
    
      Annual Report
      12-31-2021
      9050 N. CAPITAL OF TEXAS HIGHWAY
      SUITE 320
      AUSTIN
      TX
      78759
      512-872-2898
      Common Stock
    
    
      Multi-Housing Income REIT, LLC
      0001722266
      DE
      82-3405225
    
    
      false
    
    
      024-10764
      06-18-2018
      06-18-2018
      50000000
      6555485
      10.0000
      Cohn Reznick
      52900.00
      Locke Lord LLP /Lex Nova Law
      21868.00
      All shares were sold at $10/share.
    
  

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 1-K

ANNUAL REPORT

  

ANNUAL REPORT PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933

For the fiscal year ended December 31, 2021

   

Multi-Housing Income REIT, LLC

(Exact name of registrant as specified in its charter)

 

Commission File Number: 024-10764

 

Delaware		82-3405225
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

 

9050 North Capital of Texas Highway Suite 320 Austin, TX		78759
(Address of principal executive offices)		(Zip Code)

  

(512) 872-2898
Registrant’s telephone number, including area code 

 

Common Stock
(Title of each class of securities issued pursuant to Regulation A)

 

 

 

Table of Contents

 

The Company and its Affiliates	1
Caution Regarding Forward-Looking Statements	2
Item 1. Business	4
Overview	4
Regulation A Offering	4
Investment Objectives and Strategy	4
REIT Status	6
Opportunity and Market Overview	6
Lack of Allocation Requirements	6
Risk Management	6
Borrowing and Leverage Policy	6
Liquidity Event	7
Competition	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Operating Results	8
Item 3. Directors and Officers	10
Management Team	10
Our Manager	13
Management Agreement	14
Term and Termination of Management Agreement	14
Responsibilities of Manager	15
Executive Officers of Manager	18
Compensation of Executive Officers	19
Support Agreement	19
Investment Committee of Manager	19
Management Compensation	20
Item 4. Interest of Management and Others in Certain Transactions	20
Allocation of Investment Opportunities	21
Competition for Potential Investors by Affiliates of the Sponsor	21
Allocation of Sponsor’s and Affiliates’ Time	21
Duties Owed by Some of Our Affiliates to Our Manager and our Manager’s Affiliates	22
Receipt of Fees and Other Compensation by our Manager and its Affiliates	22
No Independent Underwriter	22
Item 5. Security Ownership of Management and Certain Security Holders	23
Item 6. Other Information	23
Item 7. Financial Statements	F-1
Exhibits	24
Signatures	25

 

 

Part II

 

The Company and its Affiliates

 

Multi-Housing Income REIT, Inc., is a Delaware limited liability company formed to invest in real property, which we refer to as the “Company” or by words like “we” or “us”. We were originally formed as a Maryland corporation, but on March 18, 2022, we completed our reorganization to become a Delaware limited liability company.

 

The Company has engaged the services of Casoro Investment Advisory Firm, LLC, a Texas limited liability company, which we refer to as our “Manager”. Our Manager is owned by Casoro Capital Partners, LLC.

 

Casoro Capital Partners, LLC is a Texas limited liability company, which we refer to as our “Sponsor”. Our Sponsor is a real estate investment firm that creates discretionary funds suitable for high net worth individuals. Our Sponsor is owned by Casoro Capital, LLC, which is in turn owned by Monte K. Lee-Wen and Yuen Yung, whom we refer to as the “Principals”.

 

Mr. Lee-Wen also owns 50% of Casoro Group LLC, a real estate investment company that we refer to as “Casoro Group,” and is its Chairman.

 

 

Caution Regarding Forward-Looking Statements

 

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

 

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

 

●

our ability to effectively deploy capital;

 

●

risks associated with COVID-19 generally and its substantial negative impacts on the labor and real estate markets;

 

●

changes in economic conditions generally and the real estate and securities markets specifically;

 

●

risks associated with geographic and asset class markets where we may have – or end up having – a high concentration of investments;

 

●

risks associated with ownership of real estate in general, and residential properties in particular;

 

●

limited ability to dispose of assets because of the relative illiquidity of real estate investments;

 

●

intense competition in the real estate market that may limit our ability to attract or retain residents or re-lease space;

 

●

defaults on or non-renewal of leases by residents;

 

●

increased interest rates and operating costs;

 

●

our failure to obtain necessary outside financing;

 

●

decreased rental rates or increased vacancy rates;

 

 

●

difficulties in identifying properties, and consummating real estate acquisitions, joint ventures and dispositions;

 

●

our failure to successfully operate acquired properties and operations;

 

●

exposure to liability relating to environmental and health and safety matters;

 

●

changes in real estate and zoning laws and increases in real estate property tax rates;

 

●

our failure to qualify as a REIT;

 

●

our failure to successfully implement a liquidity transaction, including listing our shares of common stock on a securities exchange;

 

●

loss of key personnel;

 

●

risks associated with breaches of our data security;

 

●

exposure to litigation or other claims;

 

●

legislative or regulatory changes impacting our business or our assets;

 

●

changes in business conditions and the market value of our assets, including changes in interest rates, market rents, resident defaults or bankruptcy, and generally the increased risk of loss if our investments fail to perform as expected;

 

●

our ability to implement effective conflicts of interest policies and procedures among the various real estate investment opportunities sponsored by our Sponsor;

 

●

our ability to access sources of liquidity when we have the need to fund redemptions of shares of our common stock in excess of the proceeds from the sales of shares of our common stock in our continuous offering and the consequential risk that we may not have the resources to satisfy redemption requests;

 

●

our compliance with applicable local, state and federal laws, including the Investment Advisers Act, the Investment Company Act and other laws; and

 

●

changes to generally accepted accounting principles, or GAAP.

  

 

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

 

Item 1. Business

 

Overview

 

The Company was formed to invest in and manage a portfolio of real estate properties. We expect to acquire a diversified portfolio of primarily multi-housing properties with a focus on markets where we feel that the risk-return characteristics are favorable. We may also invest, to a limited extent, in other real estate-related assets. We plan to diversify our portfolio by investment risk with the goal of attaining a portfolio of real estate assets that provide attractive cash yields paid as dividends to our shareholders with the potential for capital appreciation.

 

Regulation A Offering

 

The Company conducted an offering to the public of shares of its common stock pursuant Regulation A (the “Offering”) and an Offering Circular dated May 4, 2018 (the “Offering Circular”). As of December 3, 2021, the Offering had been terminated. The Offering Circular is available through the SEC’s EDGAR site, www.sec.gov/edgar, and may also be obtained by contacting the Company. The Company sold 614,001 shares of common stock in the Offering. We refer to the purchasers of common stock as “Investors.”

 

Investment Objectives and Strategy

 

We were formed to invest in and manage a portfolio of real estate properties. Our investment objectives are capital appreciation through growth in the value of our properties, and income from cash flow that can be paid as dividends to our investors. Our investment strategies center on multi-housing within the continental U.S. in the areas of student housing, multi-housing, conventional apartments, and senior living (existing and new development projects). We are using the proceeds of the Offering to source, acquire, develop, manage, operate, selectively leverage, and sell a diversified portfolio of primarily residential properties. Our Manager looks to leverage its financial expertise and operational experience in acquiring and repositioning multi-housing properties with upside potential within the continental U.S. We are targeting mid-single digit cap rates with an IRR of 10 - 15%. The expected typical holding period is between 4 to 7 years. We do not expect to invest more than 50% of our assets in any one property.

 

Our strategies include the following:

 

●

Core Plus Strategy – Focused on quality multi-housing properties with quality residents in primary and secondary markets with an opportunity to increase net operating income.

 

●

Value Add Strategy – Focused on increasing occupancy and net operating income on multi-housing properties through renovations and repositioning of the property.

 

●

Opportunistic Strategy – Finding opportunities to participate in multi-housing new development, distressed sales and/or bankruptcy auctions.

 

 

We may also invest, to a limited extent, in other real estate-related assets. We plan to diversify our portfolio’s investment risk with the goal of attaining a portfolio of real estate assets that provides attractive cash yields to our shareholders with the potential for capital appreciation. Insofar as consistent with the REIT statutory restrictions, we may invest, to a limited extent, in other assets, including asset-backed and mortgage-backed obligations; loans; credit paper; accounts and notes receivable and payable held by trade or other creditors; trade acceptances; contract and other claims; executory contracts; participations obligations of the United States or any state thereof, foreign governments and instrumentalities of any of them; commercial paper; certificates of deposit; bankers’ acceptances; trust receipts; and any other obligations and instruments or evidences of indebtedness. We may selectively leverage any and all of our acquired properties. The number of mortgages which may be placed on any one property is capped at three.

 

We may invest in private issuances of equity or debt securities of public companies; and in a loan, security or other full recourse obligations for which the business of the related obligor is significantly related to real estate. We may offer our own securities or the securities of our affiliates, alone or in combination with cash or other assets in exchange for real estate and related investments.

 

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

 

Our corporate office is located at 9050 N. Capital of Texas Highway, Suite 320, Austin, TX 78759. Our telephone number is: 512-872-2898. Information regarding our company is also available on our website at www.upsideavenue.com.

 

Information contained on or accessible through, our website is not incorporated by reference into and does not constitute a part of this Annual Report or any other report or documents we file with or furnish to the SEC.

 

Prior to acquiring an asset, our Manager committee will perform an individual analysis of the asset to determine whether it meets our investment guidelines.

 

We cannot assure you that we will attain these objectives or that the value of our assets will not decrease. Furthermore, within our investment objectives and policies, our Manager will have substantial discretion with respect to the selection of specific investments, the management of our portfolio and the purchase and sale of our assets. We may choose to invest in an asset that does not meet all of the stated objectives. Our Manager’s investment committee will review our investment guidelines at least annually to determine whether our investment guidelines continue to be in the best interests of our shareholders, and our investment guidelines may be revised from time to time.

 

Any or all of the investments, investment strategies and activities described here may be pursued by the REIT directly, by the Manager or Sponsor or by other affiliated or third-party investment managers, if any, engaged by the Sponsor to manage REIT capital.

 

 

REIT Status

 

We were formed with the intention of qualifying as a real estate investment trust, or “REIT,” under section 856 of the Internal Revenue Code. Since inception we have operated our business in accordance with the requirements for REITs and will continue to do so. However, we did not qualify as a REIT until January 1, 2022, because the ownership of the corporation is more concentrated than the applicable tax rules require.

 

Because the corporation has realized tax losses since inception, the failure to qualify as a REIT has not caused any harm to date.

 

Opportunity and Market Overview

 

Investing with us offers investors the opportunity to gain exposure to high-quality real estate investments with lower fees and higher returns relative to public non-traded REITs.

 

Lack of Allocation Requirements

 

Nothing in our charter, organizational documents or otherwise provides for restrictions or limitations on the percentage of our investments that must be (i) in a given geographic area, (ii) of a particular type of real estate, or (iii) acquired utilizing a particular method of financing. The board of directors may change our targeted investments and investment guidelines without specific restrictions or limitations related to geographic location, diversification, or otherwise.

 

Risk Management

 

We will seek to manage risk through monitoring and analysis by the Manager of our portfolio. Although the Manager may commit a large portion of the REIT’s capital to one or more specific real estate assets, the Manager will also seek to mitigate risk through portfolio diversification.

 

Borrowing and Leverage Policy

 

We may utilize leverage in our investment program when the Manager considers it appropriate, including to acquire portfolio investments. Additionally, we may incur indebtedness: (i) to pay expenses of the REIT, (ii) to purchase the shares of any withdrawing shareholder, (iii) to finance improvements to a portfolio investment and (iv) to otherwise protect any portfolio investment or other asset as determined by the Manager in its sole discretion.

 

Currently, the REIT’s investment guidelines limit the use of leverage is limited to a maximum of 80% of net asset value. The use of leverage may, in certain circumstances, increase the adverse impact to which the REIT’s investment portfolio may be subject. Our Manager may from time to time modify our leverage policy in its discretion.

 

 

Liquidity Event

 

Our Manager has the discretion to consider a liquidity transaction at any time if it determines such event to be in our best interests. A liquidity transaction could consist of a sale or partial sale of our assets, a sale or merger of the company, a consolidation transaction with other companies managed by our Manager or its affiliates, a listing of our shares on a national securities exchange or a similar transaction. We do not have a stated term, as we believe setting a finite date for a possible, but uncertain future liquidity transaction may result in actions that are not necessarily in the best interest or within the expectations of our shareholders.

 

Our redemption plan may provide an opportunity for you to have your common shares redeemed, subject to certain restrictions and limitations.

 

Competition

 

Our net income depends, in large part, on our ability to source, acquire and manage investments with attractive risk-adjusted yields. We compete with many other entities engaged in real estate investment activities, including individuals, corporations, insurance company investment accounts, other REITs, private real estate funds, and other entities engaged in real estate investment activities, many of which have greater financial resources and lower costs of capital available to them than we have. This can be particularly problematic for us in an environment such as the one we currently face with inflated property values that favor buyers with greater access to liquidity and financial resources. However, we believe the market may soon face a significant correction as forbearance programs and foreclosure moratoriums imposed as a response to COVID-19 are lifted and new properties come onto the market, which may lower property values.

 

In addition, there are numerous REITs with asset acquisition objectives similar to ours, and others may be organized in the future, which may increase competition for the investments suitable for us. Competitive variables include market presence and visibility, amount of capital to be invested per investment and underwriting standards. To the extent that a competitor is willing to risk larger amounts of capital in a particular transaction or to employ more liberal underwriting standards when evaluating potential investments than we are, our investment volume and profit margins for our investment portfolio could be impacted.

 

Our competitors may also be willing to accept lower returns on their investments and may succeed in buying the assets that we have targeted for acquisition. Although we believe that we are well positioned to compete effectively in each facet of our business, there is enormous competition in our market sector and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Operating Results

 

The Company was formed on October 17, 2017. As of December 31, 2021, the Company had invested a total of $4,568,858 in 7 separate real estate project investment, six of which are invested in multi-family projects, and one is invested in a land development project:

 

Name of Project		Amount of Investment				Nature of Investment
The Quinn at Westchase		$	2,000,000			Equity
Water Ridge Apartments		$	540,000			Equity
Capitol on 28th		$	210,000			Equity
Newport Apartments		$	115,000			Equity
Lookout at Comanche Hill Apartments		$	780,500			Equity
The Jax Apartments		$	391,875			Equity
CG Sunset Land, LLC		$	531,483			Equity

 

For the 12-month period ending December 31, 2021 we had net income of $139,208.

 

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

 

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

 

Material Changes in Financial Line Items from 2020 to 2021

 

On the Balance Sheet,

 

●

Notes receivable decreased $450,000 due to the note receivable made to Highland Cross Apartments being paid off.

 

●

Deferred offering cost line item decreased as a result of amortization.

 

●

Asset management fees payable increased due to accruing asset management fees for 2021.

 

●

There were no subscriptions received in advance for contributions at year end for 2021.

 

●

Real estate investments at cost decreased by $600,000 due to a return of capital from the sale of Casoro Chronos LLC.

 

●

Real Estate investments equity method increased by $459,525 by investing in CG Sunset Land for $531,483.

 

●

Decrease in notes interest receivable of $98,825 due to the payoff of the Highland Cross Note Receivable.

 

●

Decrease in redemptions payable of $11,585 due to investors redeeming shares in 2021, with a balance at year-end of $63,634 in redemptions payable.

 

 

On the Income Statement,

 

●

Total Revenue decreased due to reduced interest and distribution income for 2021.

 

Net Income increased by $110,477 for 2021 due to a realized gain of $303,099 from the sale of the Chronos asset.

 

Liquidity and Capital Resources

 

	●	The Company is seeking to raise up to $75,000,000 of capital in the Offering by selling shares of common stock to Investors.

	●	We will obtain the capital required to purchase new investments from the proceeds of the Offering and any future offerings we may conduct

	●	Further, we will have certain fixed operating expenses, regardless of whether we are able to raise substantial funds in the Offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to pay dividends.

	●	In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make certain payments to our Manager. During our organization and offering stage, these payments will include payments for reimbursement of certain organization and offering expenses. During our acquisition and development stage, we expect to make payments to our Manager in connection with the management of our assets and costs incurred by our Manager in providing services to us.

●

The Company had no material commitments for capital expenditures as of December 31, 2021 and has none today. Capital expenditures required by the individual real estate projects are raised during the initial acquisition of the property. Generally, no further capital is required from the Company during the operations and enhancement of each real estate project.

 

Trend Information

 

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

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

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

●

While we expect at least some of these trends to continue in the short term, we believe there is significant cause for optimism regarding the Company’s potential moving forward.

 

 

Among these reasons:

 

	●	According to Federal Reserve data during the fourth quarter of 2021, as it specifically pertains to our largest two markets where our investments are located:

	o	San Antonio unemployment rate dropped from 6.5% to 4.8% over the last 12 months

	o	Wages in San Antonio increased by 18% over the last 5 years

	o	San Antonio population grew by 9% over the last 5 years

	o	DFW unemployment rate dropped from 6.4% to 4.8% over the last 12 months

	o	Wages in DFW increased by 25% over the last 5 years

	o	DFW population grew by 9% over the last 5 years

●

Although we have no way of knowing if these trends will continue in the future, we believe that the balance of the evidence shows favorable operating conditions for the Company moving forward.

 

Item 3. Directors and Officers

 

Management Team

 

Full Name		Position(s)		Employed By		Duration of Employment		Hours Per Week for Issuer
Yuen Yung		Chief Executive Officer		Casoro Group		Indefinite		40+
Rosch Wadera		Finance & Investor Relations		Casoro Group		At will		40+
Jessica Lee-Wen		Chief Marketing Officer		Casoro Group		At will		40+
Chirag Hathiramani		Chief Investment Officer		Casoro Group		At will		40+
Lea Allen		Controller		Casoro Group		At will		40+
Lauren Olmos		Sales & Marketing		Casoro Group		At will		40+

 

 

Yuen Yung

CEO

 

As CEO, Yuen is responsible for the overall leadership, growth, and business development. Since joining the firm in 2013, specializes in structuring investments that are suitable, attractive, and efficient for high net worth individuals, family offices, and institutions. With Yuen at the helm of Casoro Group the company has successfully achieved over $1.5 billion in multifamily transactions.

 

Yuen brings a wealth of experience across a broad range of disciplines, among them: finance, investment management, capital raising, wealth planning, venture capital, portfolio management, alternative investments, commodities, strategic planning, leadership and training, sales, and organizational structuring.

 

Prior to joining Casoro Group, Yuen was the founder and CEO of the franchisor How Do You Roll? a fast-casual sushi restaurant. In 2013, he appeared on ABC’s Shark Tank where the franchise received a $1 million offer from investor Kevin O’Leary — the highest investment offer in the history of the show at the time. Yuen previously spent 13 years in the investment management and advisory industry as the Managing Partner of Kenty, Yung, Ozias & Associates, where he oversaw 90 advisors and was responsible for the capital raise and management of more than $300 million in funds raised from high-net-worth individuals, families, corporations, and charitable organizations.

 

Yuen currently sits on the board of Greater Austin Asian Chamber and Casoro Group Education Foundation. He also volunteers as a mentor for Ignite Accelerator, an Austin-based business incubator.

 

Yuen is the author of two books, The Blind Grind – Success: It’s Not Hard Work, and Business Model Blueprint. Yuen holds a Bachelor of Business Administration from the McCombs School of Business at The University of Texas at Austin. He is also a graduate of MIT’s Entrepreneurship Masters Program and has professional certifications as a Chartered Mutual Fund Counselor (CMFC®) and Board Certified Financial Planner (CFP®).

 

Rosch Wadera

Finance & Investor Relations

 

Rosch manages capital raising activities for the Multi-Housing Income REIT since September of 2021. His role includes quarterly financial reporting to current and prospective investors, as well as SEC filing and other corporate administration. Rosch is also Managing Member of Space City Abodes, LLC, a provider of affordable, luxury single-family rental homes in Houston, TX.

 

Prior to the formation of Space City Abodes, LLC, Rosch worked for Wholesale & MFR PVF Inc., a public works contractor and developer of pre-engineered metal buildings from 2018 to 2020. At Wholesale, Rosch completed the supply and build-out of three prefabricated restroom buildings placed in Downtown Austin, an industrial building in Fort Worth, and commercial garages for the Austin-Bergstrom International Airport.

 

From 2015 to 2017, Rosch was a financial analyst at PPHB Energy Investment Banking, where he worked on corporate divestitures for publicly-traded oilfield service providers such as Technip FMC (NYSE: FTI) and NexTier Oilfield (NYSE: NEX) and acquisitions for Steel Partners Holdings (NYSE: SPLP). He is a graduate of the University of Texas at Austin, where he was President of the University Investors Association, with a Bachelors in Business Administration and is a Texas Real Estate Commission license holder.

 

 

Jessica Lee-Wen

Chief Marketing Officer

 

As CMO, Jessica plays a leading role in driving growth, championing the company brand and vision, and being the voice of the people we serve. As a seasoned, award-winning marketing executive, she is passionate about shaping the vision and brand of organizations that promote impactful growth and change within the company, the community, and beyond. A trusted leader and marketing influencer in the commercial real estate industry, she specializes in brand development and brand repositioning of corporate organizations, portfolios, and individual assets. Jessica also serves as CMO for Casoro Group’s public, non-traded multifamily REIT, Upside Avenue.

 

Prior to joining Casoro Group, Jessica worked with national and global clients like Canada Post, McGraw-Hill, and Intuit at McMillan, a notable marketing agency headquartered in Ontario, Canada. Jessica has been recognized by GlobeSt as an Influencer in Commercial Real Estate Marketing in 2019. She was also awarded the Canada Millennium in Excellence Award in 2005 for her leadership skills, community involvement, innovation, and academic achievement.

 

Jessica currently sits on the board of Rio Valley Relief Project, a non-profit organization that provides support to Texas foundations assisting asylum seekers and refugees. She also sits on the board of Casoro Group Education Foundation, and volunteers much of her time as a youth leader.

 

Chirag Hathiramani

Chief Investment Officer

 

Chi specializes in identifying and acquiring multifamily investments throughout the United States sunbelt region for Casoro Group’s institutional, family office, and high-net-worth clients, as well as its discretionary non-traded REIT, Upside Avenue.

 

With more than 13 years of commercial transaction experience, Chi brings deep expertise in the acquisition and asset management of multiple asset types, including multifamily, student housing, office, and retail. At Casoro Group, Chi plays a crucial role in developing the firm’s market presence, uncovering profitable opportunities, leading the underwriting, structuring, negotiation, and closing of new acquisitions. Chi also provides support for the company’s equity and debt capital raising activities.

 

Chi was acknowledged by GlobeSt as a Top 50 Under 40 in Commercial Real Estate in 2020 for his influence and contributions in the industry and within the community. He currently sits on the board of Chinmaya Mission Austin, a nonprofit organization dedicated to the service of humankind, and Casoro Group Education Foundation.

 

He holds a B.S. in Property Management from Virginia Tech, an M.S. in Real Estate from Johns Hopkins University, and an MBA from Georgetown University.

 

 

Lea Allen

Controller

 

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

 

Prior to joining Casoro Group, Lea served as Controller for Secured Investment Corp, a top peer to peer real estate lending company and private equity fund manager. During this time, Lea was responsible for leading the accounting and reporting functions for the corporate family of companies as well as for the private equity funds managed by the company. Her tenure at Secured Investment Corp spanned from 2012 through 2021 where she held multiple accounting positions. During her time there she worked on both funds they had since inception, totaling in millions of loans originated and hundreds of SFR assets purchases and fixed. Her private equity fund experience spans both Regulation D and Regulation A+ funds and her investment fund experience includes a portfolio of first trust deeds (mortgages) and single-family residences.

 

Lea holds a BBA in Accountancy from Gonzaga University.

 

Legal Proceedings

 

None of our management team has been involved in any material legal proceedings during the past ten years. All of our directors are also partners of our Sponsor. All of our directors have invested in projects and/or affiliates of the Sponsor. As a result, we do not have any independent directors or management and conflicts of interest may arise.

 

Our Manager

 

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

 

Our Manager performs its duties and responsibilities pursuant to our management agreement. Our Manager maintains a contractual, as opposed to a fiduciary relationship, with us and our shareholders. Furthermore, we have agreed to limit the liability of our Manager and to indemnify our Manager against certain liabilities.

 

 

Management Agreement

 

We have entered into a management agreement with our Manager, pursuant to which it provides the day-to-day management of our operations. The management agreement requires our Manager to manage our business affairs in conformity with the investment guidelines and policies that are approved and monitored by our board of directors. Our Manager’s role as manager is under the supervision and direction of our board of directors.

 

Term and Termination of Management Agreement

 

The management agreement may be amended or modified by agreement between us and our Manager. The initial term of the management agreement expires on the third anniversary of the effective date of the agreement and will be automatically renewed for a one-year term each anniversary date thereafter unless previously terminated as described below. Our board of directors will review our Manager’s performance and the management fee annually and, following the initial term, the asset management agreement may be terminated annually upon the affirmative vote of at least two-thirds of our directors, based upon (a) unsatisfactory performance that is materially detrimental to us taken as a whole, or (b) our determination that the management fee payable to our Manager is not fair, subject to our Manager’s right to prevent such termination due to unfair fees by accepting a reduction of the management fee agreed to by at least two-thirds of our directors. We must provide 180 days’ prior notice of any such termination. During the initial three-year term of the management agreement, we may not terminate the management agreement except for cause.

 

We may also terminate the management agreement at any time, including during the initial term, with 30 days’ prior written notice from our board of directors for cause, which is defined as:

 

●

our Manager’s continued breach of any material provision of the management agreement following a period of 30 days after written notice thereof (or 45 days after written notice of such breach if our Manager, under certain circumstances, has taken steps to cure such breach within 30 days of the written notice);

 

●

the commencement of any proceeding relating to the bankruptcy or insolvency of our Manager, including an order for relief in an involuntary bankruptcy case or our Manager authorizing or filing a voluntary bankruptcy petition;

 

●

any change of control of our Manager which our Independent Representative determines is materially detrimental to us taken as a whole;

 

●

our Manager committing fraud against us, misappropriating or embezzling our funds, or acting, or failing to act, in a manner constituting bad faith, willful misconduct, gross negligence or reckless disregard in the performance of its duties under the management agreement; provided, however, that if any of these actions is caused by an employee, personnel and/or officer of our Manager or one of its affiliates and our Manager (or such affiliate) takes all necessary and appropriate action against such person and cures the damage caused by such actions within 30 days of our Manager’s actual knowledge of its commission or omission, the management agreement shall not be terminable; in addition, if our Manager (or such affiliate) diligently takes necessary and appropriate action to cure the damage caused by such actions in the first 30 days of our Manager’s actual knowledge of its commission or omission, our Manager (or such affiliate) will have a total of 180 days in which to cure such damage before the management agreement shall become terminable; or

 

●

the dissolution of our Manager.

 

 

Our Manager may assign the agreement in its entirety or delegate certain of its duties under the management agreement to any of its affiliates without the approval of our board of directors so long as our Manager remains liable for any such affiliate’s performance, and if such assignment or delegation does not require our approval under the Investment Advisers Act.

 

Our Manager may terminate the management agreement if we become required to register as an investment company under the Investment Company Act, with such termination deemed to occur immediately before such event. Our Manager may decline to renew the management agreement by providing us with 180 days’ written notice prior to the expiration of the initial term or the then current automatic renewal term. In addition, if we default in the performance of any material term of the agreement and the default continues for a period of 30 days after written notice to us specifying such default and requesting the same be remedied in 30 days, our Manager may terminate the management agreement upon 60 days’ written notice.

 

We may not assign our rights or responsibilities under the management agreement without the prior written consent of our Manager, except in the case of assignment to another REIT or other organization which is our successor, in which case such successor organization will be bound under the management agreement and by the terms of such assignment in the same manner as we are bound under the management agreement.

 

Responsibilities of Manager

 

The responsibilities of our Manager include the following:

 

Investment Advisory, Origination and Acquisition Services

 

●

approve and oversee our overall investment strategy, which will consist of elements such as investment selection criteria, diversification strategies and asset disposition strategies;

 

●

serve as our investment and financial manager with respect to sourcing, underwriting, acquiring, financing, originating, servicing, investing in and managing a diversified portfolio of multi-housing rental properties and development projects, including commercial real estate equity, commercial real estate loans, and other real estate-related assets;

 

●

adopt and periodically review our investment guidelines;

 

 

●

structure the terms and conditions of our acquisitions, sales and joint ventures;

 

●

enter into leases and service contracts for the properties and other investments;

 

●

approve and oversee our debt financing strategies;

 

●

approve joint ventures, limited partnerships and other such relationships with third parties;

 

●

approve any potential liquidity transaction;

  

●

obtain market research and economic and statistical data in connection with our investments and investment objectives and policies;

 

●

oversee and conduct the due diligence process related to prospective investments;

 

●

prepare reports regarding prospective investments that include recommendations and supporting documentation necessary for our Manager’s investment committee to evaluate the proposed investments; and

 

Offering Services

 

●

the development of our Regulation A Offering, including the determination of its specific terms;

 

●

preparation and approval of all marketing materials to be used by us relating to the Offering;

 

●

the negotiation and coordination of the receipt, collection, processing and acceptance of subscription agreements, commissions, and other administrative support functions;

 

●

creation and implementation of various technology and electronic communication related to our initial Offering; and

 

●

all other services related to the Offering

 

Asset Management Services

 

●

investigate, select, and, on our behalf, engage and conduct business with such persons as our Manager deems necessary to the proper performance of its obligations under our management agreement, including but not limited to consultants, accountants, lenders, technical managers, attorneys, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies and any and all persons acting in any other capacity deemed by our Manager necessary or desirable for the performance of any of the services under our management agreement;

 

●

monitor applicable markets and obtain reports (which may be prepared by our Manager or its affiliates) where appropriate, concerning the value of our investments;

 

●

monitor and evaluate the performance of our investments, provide daily management services to us and perform and supervise the various management and operational functions related to our investments;

 

●

formulate and oversee the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of investments on an overall portfolio basis; and

 

●

coordinate and manage relationships between us and any joint venture partners.

 

 

Accounting and Other Administrative Services

 

●

manage and perform the various administrative functions necessary for our day-to-day operations;

 

●

arrange for third-party service providers to assist with administrative services and legal services;

 

●

provide or arrange for office space, office furnishings, personnel and other overhead items necessary and incidental to our business and operations;

 

●

provide or arrange for financial and operational planning services and portfolio management functions;

 

●

maintain accounting data and any other information concerning our activities as will be required to prepare and to file all periodic financial reports and returns required to be filed with the SEC and any other regulatory agency, including annual financial statements;

 

●

maintain all appropriate company books and records;

 

●

oversee tax and compliance services and risk management services and coordinate with appropriate third parties, including independent accountants and other consultants, on related tax matters;

 

●

supervise the performance of such ministerial and administrative functions as may be necessary in connection with our daily operations;

 

●

provide us with all necessary cash management services;

 

●

manage and coordinate with the transfer agent, if any, the process of making distributions and payments to shareholders;

 

●

evaluate and obtain adequate insurance coverage based upon risk management determinations;

 

●

provide timely updates related to the overall regulatory environment affecting us, as well as managing compliance with regulatory matters;

 

●

evaluate our corporate governance structure and appropriate policies and procedures related thereto; and

 

●

oversee all reporting, record keeping, internal controls and similar matters in a manner to allow us to comply with applicable law.

 

Shareholder Services

 

●

determine our distribution policy and authorizing distributions from time to time;

 

●

approve amounts available for redemptions of our common shares;

 

 

●

manage communications with our shareholders, including answering phone calls, preparing and sending written and electronic reports and other communications; and

 

●

establish technology infrastructure to assist in providing shareholder support and services.

 

Financing Services

 

●

identify and evaluate potential financing and refinancing sources, engaging a third-party broker if necessary;

 

●

negotiate terms of, arrange and execute financing agreements;

 

●

manage relationships between us and our lenders, if any; and

 

●

monitor and oversee the service of our debt facilities and other financings, if any.

 

Disposition Services

 

●

evaluate and approve potential asset dispositions, sales or liquidity transactions; and

 

●

structure and negotiate the terms and conditions of transactions pursuant to which our assets may be sold.

 

Financial Reporting and Investor Relations

 

●

Our Manager intends to distribute financial reports on a quarterly basis disclosing major financial transactions and performance.

 

Executive Officers of Manager

 

Name		Age		Position		Term of Office
Yuen Yung		49		Chief Executive Officer; Investment Committee; Director		From October 2017
Chirag Hathiramani		38		Chief Investment Officer		From January 2019
Monte K. Lee-Wen		45		Principal		From October 2017
Lea Allen		34		Controller, Accounting		From February 2022
Jessica Lee-Wen		44		Chief Marketing Officer		From January 2013
Rosch Wadera		30		Director, Finance & Investor Relations		From September 2021

 

 

Compensation of Executive Officers

 

We do not currently have any employees nor do we currently intend to hire any employees who will be compensated directly by us. Each of the executive officers of our Sponsor also serves as an executive officer of our Manager. Each of these individuals receives compensation for his or her services, including services performed for us on behalf of our Manager, from our Sponsor. As executive officers of our Manager, 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 Manager, we do not intend to pay any compensation directly to these individuals.

 

Support Agreement

 

Our Manager has entered into a support agreement with our Sponsor. Pursuant to this agreement, our Manager will be provided with access to, among other things, our Sponsor’s portfolio management, asset valuation, risk management and asset management services as well as administration services addressing legal, compliance, investor relations and information technologies necessary for the performance by our Manager of its duties in exchange for a fee paid by the Manager representing our Manager’s allocable cost for these services. Under the support agreement, our Sponsor will be entitled to receive reimbursement of expenses incurred on behalf of us or our Manager that the REIT is required to reimburse / pay to our Manager under the management agreement (including reimbursement of the organizational and offering expenses, and payment of the asset management fee). Such payments would be made indirectly by the REIT to the Manager and directly by the Manager to the Sponsor.

 

Investment Committee of Manager

 

The investment committee of our Manager is a standing committee, established to assist our Manager in fulfilling its oversight responsibilities by: (1) considering and approving of each investment made by us, (2) establishing our investment guidelines and overseeing our investments, and the investment activity of other accounts and funds held for our benefit and (3) overseeing the investment activities of certain of our subsidiaries. The investment committee will consist of three members, each of whom will be appointed by our Manager, who will serve until such time as such investment committee member resigns or is replaced by our Manager, in its sole and absolute discretion. The initial investment committee will be comprised of Mr. Yung and Mr. Lee-Wen. In the event that two or more members of the investment committee are interested parties in a transaction, the Independent Representative (defined below) will be required to approve the transaction. See “Conflicts of Interest and Related Party Transactions-Certain Conflict Resolution Measures-Our Policies Relating to Conflicts of Interest”. The investment committee may request information from third parties in making its recommendations.

 

Management Compensation

 

We do not expect to maintain an office or directly employ personnel. Instead, we rely on the facilities and resources of our Manager to manage our day-to-day operations.

 

Our Manager and its affiliates will receive the fees and expense reimbursements described in the chart below. Neither our Manager nor its affiliates will receive any selling commissions or dealer manager fees in connection with the offer and sale of shares of our common stock.

 

 

Stage		Description		Determination of Amount		Actual or Estimate Amount
Organization and Offering		Reimbursement of Organization and Offering Expenses		The Company is responsible to pay or reimburse the Sponsor for organizational and offering costs in an amount not to exceed 3% of the gross proceeds of the offering, which if the maximum offering is raised would equal up to $1,500,000 to the Sponsor.		$172,904 since inception.
Acquisition of Investments		Reimbursement of Acquisition Expenses		The Company will reimburse the Manager and/or Sponsor for actual expenses incurred in connection with the selection or acquisition of an investment, whether or not the investment is actually acquired.		None
Operations		Asset Management Fee		2% of the net asset value of the Company per year, paid at the rate of 0.5% per quarter.		$298,974 since inception.
		Reimbursement of Fees		The Company will reimburse the Manager and/or Sponsor for out-of-pocket expenses paid to third parties in connection with providing services to the Company.		None
Liquidation		Disposition Fees		2% of total equity value at sale		$30,411 during 2021

 

Item 4. Interest of Management and Others in Certain Transactions

 

The Company has engaged the Manager to perform certain services, as discussed in “Management – Management Agreement.”

 

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

 

●

Our Sponsor’s real estate professionals acting on behalf of our Manager must determine which investment opportunities to recommend to us and other entities affiliated with our Sponsor. Our Sponsor has previously sponsored, as of the date of this offering circular, one privately offered real estate fund that may have similar investment criteria to our own. It is possible that this fund could compete with us for investment opportunities.

 

●

Our Sponsor’s real estate professionals acting on behalf of our Manager will have to allocate their time among us, our Sponsor’s business and other programs and activities in which they are involved, including, potentially, additional private or publicly offered investment funds.

 

●

The terms of our management agreement (including our Manager’s rights and obligations and the compensation payable to our Manager and its affiliates) were not negotiated through the benefit of arm’s length negotiations of the type which are normally conducted between unaffiliated parties.

 

 

Allocation of Investment Opportunities

 

We rely on our Sponsor’s executive officers and key real estate professionals who act on behalf of our Manager to identify suitable investments. Our Sponsor has in the past established and sponsored closed-end private equity real estate funds, and in the future, expects to establish and sponsor additional closed-end private equity real estate funds and additional REIT offerings, as well as other potential investment vehicles (including open-end funds and separate accounts). The existing closed-end private equity real estate funds do, and any future investment vehicles may, have investment criteria similar to ours. If a sale, investment or other business opportunity would be suitable for more than one investment vehicle sponsored by our Sponsor, our Manager’s investment committee will allocate it according to the policies and procedures adopted by our Manager. Any allocation of this type may involve the consideration of a number of factors that our Manager’s investment committee may determine to be relevant. The factors that our Sponsor’s real estate professionals could consider when determining the particular investment vehicle for which an investment opportunity would be the most suitable include the following:

 

●

the investment objectives and criteria of our Sponsor’s various investment vehicles;

 

●

the cash requirements of our Sponsor’s various investment vehicles;

 

●

the effect of the investment on the diversification of the portfolios of our Sponsor’s various investment vehicles by type of investment, and risk of investment;

 

●

the policy of our Sponsor’s various investment vehicles relating to leverage;

 

●

the anticipated cash flow of the asset to be acquired;

 

●

the income tax effects of the purchase on our Sponsor’s various investment vehicles;

 

●

the size of the investment; and

 

●

the amount of funds available to our Sponsor’s various investment vehicles.

 

Competition for Potential Investors by Affiliates of the Sponsor

 

The Casoro Capital Real Estate Fund I, LP and the Casoro Group could compete with us for potential investors, although both of these entities impose different criteria with regard to investor eligibility than we do. There may be sufficient overlap between investment programs that all of our affiliates compete for certain investors. The limited partnership interests offered by the Casoro Capital Real Estate Fund I, LP are available only to accredited investors. However, it is possible that the private Fund could compete with us for some investor capital.

 

Allocation of Sponsor’s and Affiliates’ Time

 

We rely on our Sponsor’s key real estate professionals who act on behalf of our Manager, including Mr. Yung and Mr. Lee-Wen, for the day-to-day operation of our business. Mr. Yung and Mr. Lee-Wen are also managing members of our Sponsor. As a result of their interests in other affiliates of our Sponsor, including the Casoro Group and the Casoro Capital Real Estate Fund I, LP, their obligations to other investors, and the fact that they engage in and will continue to engage in other business activities on behalf of themselves and others, Mr. Yung and Mr. Lee-Wen will face conflicts of interest in allocating their time among us, our Manager and other affiliates of our Sponsor and other business activities in which they are involved. However, we believe that our Manager and its affiliates have sufficient real estate professionals to fully discharge their responsibilities to the affiliates of our Sponsor for which they work.

 

 

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

 

Our Manager’s officers and directors and the key real estate and debt finance professionals of our sponsor performing services on behalf of our Manager are also officers, directors, managers and/or key professionals of:

 

●

Casoro Capital Partners, our sponsor;

 

●

Casoro Investment Advisory Firm, our Manager;

 

●

Casoro Group

 

●

The Casoro Capital Real Estate Fund I, LP

 

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

 

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

 

Our Manager and its affiliates will receive an asset management fee from us, which fee has not been negotiated at arm’s length with an unaffiliated third party. This fee could influence our Manager’s advice to us as well as the judgment of affiliates of our Manager, some of whom also serve as our Manager’s officers and directors and the key real estate professionals of our Sponsor. Among other matters, these compensation arrangements could affect their judgment with respect to:

 

●

the continuation, renewal or enforcement of provisions in our management agreement involving our Manager and its affiliates, or the support agreement between our Manager and our Sponsor;

 

●

public offerings of equity by us, which will likely entitle our Manager to an increase in the asset management fee;

 

●

acquisitions of investments from other Sponsor entities, which might entitle affiliates of our Manager or Sponsor to profit participations or to fees in connection with services for the seller;

 

●

whether and when we seek to list shares of our common stock on a stock exchange or other trading market;

 

●

whether we seek shareholder approval to internalize our management, which may entail acquiring assets (such as office space, furnishings and technology costs) and the key real estate professionals of our Sponsor who are performing services for us on behalf of our Manager for consideration that would be negotiated at that time and may result in these real estate professionals receiving more compensation from us than they currently receive from our Sponsor;

 

●

whether and when we seek to sell the company or its assets; and

 

●

whether and when we merge or consolidate our assets with other companies, including companies affiliated with our Manager.

 

No Independent Underwriter

 

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

 

 

Item 5. Security Ownership of Management and Certain Security Holders

 

The Company has outstanding only one class of stock: voting common stock. The following chart reflects the ownership of certain persons and groups of persons as of December 31, 2021:

  

Name and Address		Number of Shares				Percent of Total
Principals			200,576				32.67	%
Monte K. Lee-Wen 9050 North Capital of Texas Highway Suite 320 Austin, Texas 78759			200,000				32.57	%

 

As of December 31, 2021, the Company had invested in the following entities in which the Sponsor, the Manager, and/or the Principals have an interest:

 

Name of Entity		Amount of Company’s Investment				General Partner/Manager		General Partner/Manager’s Relationship to Company
Houston Flats JV, LLC (Quinn at Wetchase)		$	2,000,000			CG Quinn Partners LP, by WFOF Investors GP LLC		PPA Group is the sole member of the General Partner. The Principals are the owners of WFOF Investors GP LLC.
CG Sunset Land, LLC		$	531,483			Casoro Group,  LLC		Casoro Group, LLC is the sole member of the General Partner. The Principals are the owners of Casoro Group, LLC
PPA Water Ridge LP		$	540,000			PPA-LRE Water Ridge GP LLC		PPA Group is the sole member of the General Partner. The Principals are the owners of Casoro Capital Partners, LLC.
Casoro Capital on 28th, LP		$	210,000			Casoro Capital Partners, LLC		Casoro Capital LLC is the sole member of Casoro Capital Partners LLC. The Principals are the owners of Casoro Capital Partners, LLC.
Newport Apartments LP		$	115,000			Newport Apartments GP LLC		PPA Group is the sole member of the General Partner. The Principals are the owners of Newport Apartments GP LLC.
Casoro LACH LP		$	780,500			LACH JV GP LLC		CGGP Management, LLC is the sole member of the Co-General Partner. The Principals are the owners of CGGP Management, LLC.
Casoro Jax, L.P.		$	391,875			CGGP Management, LLC		Casoro Group is the sole member of the General Partner. The Principals are the owners of CGGP Management, LLC.

  

Item 6. Other Information

 

None.

  

 

Item 7. Financial Statements

  

 

Multi-Housing Income REIT, Inc.

 

CONSOLIDATED FINANCIAL STATEMENTS

AND

INDEPENDENT AUDITOR’S REPORT

 

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

 

 

 

 

Multi-Housing Income REIT, Inc.

 

Table of Contents

 

Independent Auditor’s Report	F-3
Consolidated Financial Statements
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations	F-5
Consolidated Statements of Shareholders’ Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8 - F-15

 

 

 

Independent Auditor’s Report

 

To the Board of Directors
Multi-Housing Income REIT, Inc.

 

Opinion

 

We have audited the financial statements of Multi-Housing Income REIT, Inc., which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

 

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Multi-Housing Income REIT, Inc. as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

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

 

Responsibilities of Management for the Financial Statements

 

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

 

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

 

Auditor’s Responsibilities for the Audit of the Financial Statements

 

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

 

In performing an audit in accordance with GAAS, we:

 

	●	Exercise professional judgment and maintain professional skepticism throughout the audit.

	●	Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

	●	Obtain an understanding of internal control relevant to the audit 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 Multi-Housing Income REIT, Inc.’s internal control. Accordingly, no such opinion is expressed.

	●	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

●

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Multi-Housing Income REIT, Inc.’s ability to continue as a going concern for a reasonable period of time.

 

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

 

/s/ CohnReznick LLP

Atlanta, Georgia

May 16, 2022

 

Multi-Housing Income REIT, Inc.

 

CONSOLIDATED BALANCE SHEETS

As of December 31, 2021 and December 31, 2020

 

		2021				2020
Assets
Cash and cash equivalents		$	835,028				327,368
Real estate investments, at cost			2,325,000				2,925,000
Real estate investments, equity method			2,091,890				1,632,365
Notes receivable, at cost			-				450,000
Deferred offering costs, net			-				130,010
Notes interest receivable			-				98,825
Other assets			32,819				706
Total Assets		$	5,284,737			$	5,564,274
Liabilities and Stockholders’ Equity
Liabilities
Asset management fee payable		$	265,320				165,606
Due to affiliate			6,547				6,546
Deferred revenue			670				1,535
Accrued expenses			147,624				38,920
Redemption payable			63,634				75,219
Subscriptions received in advance			-				201,500
Distribution payable			10,614				-
Deferred tax liabilty			30,426				-
Total Liabilities			524,835				489,326
Commitments			-				-
Shareholders’ Equity
Common shares, $.001 per share; 10,000,000 shares authorized; 614,001 and 586,709 shares issued and outstanding at December 31, 2021 and 2020, respectively			614				587
Additional paid-in capital			4,682,469				5,136,750
Retained earnings (accumulated deficit)			76,819				(62,389	)
Total Shareholders’ Equity			4,759,902				5,074,948
Total Liabilities and Shareholders’ Equity		$	5,284,737			$	5,564,274

 

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

 

 

Multi-Housing Income REIT, Inc.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31, 2021 and 2020

 

		2021				2020
Revenue:
Interest and distribution income		$	122,097			$	282,418
Gain from equity method investees			14,009				5,579
Redemption fee income			5,349				994
Total Revenue			141,455				288,991
Expenses:
Asset management fee			99,714				105,068
Disposition fee			30,411				-
Marketing costs			27,927				-
Professional fees			71,861				90,439
General and administrative expenses			41,544				63,816
Other expenses			3,463				937
Deferred tax expense			30,426				-
Total Expenses			305,346				260,260
Other Income:
Realized gain on sale of investment			303,099				-
Net Income		$	139,208			$	28,731

 

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

 

 

Multi-Housing Income REIT, Inc.

 

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the years ended December 31, 2021 and 2020

 

		Common Shares								Additional Paid-in				Retained earnings (Accumulated				Total Shareholders’ Equity
		Shares				Amount				Capital				Deficit)				(Deficit)
Balance as of December 31, 2019			535,411			$	535			$	5,124,281			$	(91,120	)		$	5,033,696
Proceeds from issuance of common shares			54,789				55				547,839				-				547,894
Re-Investments of common shares			8,845				9				88,444				-				88,453
Redemptions of common shares			(12,336	)			(12	)			(123,350	)			-				(123,363	)
Distributions declared on common shares			-				-				(279,092	)			-				(279,092	)
Amortization of deferred offering costs			-				-				(221,372	)			-				(221,372	)
Net income			-				-				-				28,731				28,731
Balance as of December 31, 2020			586,709				587				5,136,750				(62,389	)			5,074,948
Proceeds from issuance of common shares			46,580				46				465,754				-				465,800
Re-Investments of common shares			10,024				10				100,234				-				100,244
Redemptions of common shares			(29,312	)			(29	)			(293,083	)			-				(293,112	)
Distributions declared on common shares			-				-				(545,951	)			-				(545,951	)
Amortization of deferred offering costs			-				-				(181,235	)			-				(181,235	)
Net income			-				-				-				139,208				139,208
Balance as of December 31, 2021			614,001			$	614			$	4,682,469			$	76,819			$	4,759,902

 

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

 

 

Multi-Housing Income REIT, Inc.

 

CONSOLIDADTED STATEMENTS OF CASH FLOW

For the years ended December 31, 2021 and 2020

 

		2021				2020
OPERATING ACTIVITIES
Net Income		$	139,208			$	28,731
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain from equity method investees			(14,009	)			(5,579	)
Deferred taxes			30,426				-
Net change in asset management fee payable			99,714				85,370
Net change in accrued expenses			108,705				34,901
Net change in notes interest receivable			98,825				(59,356	)
Net change in other assets			(32,113	)			-
Net change in deferred revenue			(865	)			1,535
Net Cash Provided By Operating Activities			429,891				85,602
INVESTING ACTIVITIES
Investment in equity method investees, net of distributions			(445,516	)			(454,411	)
Return of investment in cost method investee			600,000				2,500,000
Investment in cost method investee			-				(2,222,464	)
Note receivable			450,000				(100,000	)
Net Cash Provided by (Used in) Investing Activities			604,484				(276,875	)
FINANCING ACTIVITIES
Proceeds from the issuance of common stock, inclusive of subscriptions in advance			264,300				614,594
Payment of redemptions			(304,697	)			(48,144	)
Payment of deferred offering costs			(51,225	)			(95,727	)
Payment of cash distributions			(435,093	)			(189,620	)
Net Cash (Used in) Provided by Financing Activities			(526,715	)			281,103
Net Change in Cash			507,660				89,830
Cash and cash equivalents, Beginning of year			327,368				237,538
Cash and cash equivalents, End of year		$	835,028			$	327,368
Non Cash financing activities
Redemptions payable			63,634				75,219
Reinvestment of common shares			100,244				88,453
Distributions payable			10,614				1,019
Change in contributions received in advance			201,500				(66,700	)

 

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

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

Note 1 - Organization and nature of operation

 

Multi-Housing Income REIT, Inc. (the “Company”) was formed as a Maryland corporation on October 17, 2017 to invest in and manage a diversified portfolio of multifamily properties located in target markets within the continental U.S. in the areas of student housing, multi- housing, conventional apartments and senior living. The Company is externally managed by Casoro Investment Advisory Firm, LLC (“Manager”), which is an affiliate of the sponsor, Casoro Capital Partners, LP (“Sponsor”). The Manager and Sponsor are each wholly-owned subsidiaries of Casoro Capital, LLC.

 

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

 

Pursuant to the Form 1-A filed with the SEC with respect to the offering (the “Offering”) of up to $50,000,000 in common shares, the initial purchase price for all shares was $10.00 per share as of December 31, 2021. The Offering was declared to be qualified by the SEC on June 18, 2018. The Offering expired during 2021. As of December 31, 2021, and 2020, the Company has issued 614,001 and 586,709 shares respectively.

 

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

 

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

 

Note 2 - Summary of significant accounting policies

 

Basis of presentation and principles of consolidation:

 

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

 

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

 

Use of estimates:

 

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

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

Cash and cash equivalents:

 

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

 

Subscriptions Received in Advance:

 

Subscriptions received in advance consists of amounts for shareholder subscriptions that have settled but not yet been admitted into the Company as of December 31, 2021 and 2020.

 

Commercial real estate investments:

 

The majority of the Company’s investments are limited partnership interests of entities that own commercial real estate and less than 10% of the net asset value of the entity the Company invested in. Therefore, the Company carries the value of these investments at cost, until there is an event that would require adjustment to the value, such as a return of capital in the form of a distribution. There are four investments that exceed 10% of the net asset value of the entity, Casoro JAX LP, Casoro LACH LP, PPA Water Ridge, LP, and CG Sunset Land LLC. Because these investments exceed 10% of the net asset value of the entity, the Company has accounted for these investments using the equity method reflecting equity in gains of the investee to the Company of $14,009 and $5,579 which is represented on statements of operations for the years ended December 31, 2021 and 2020.

 

The summarized balance sheet and statement of operations of the operating entities utilizing the equity method at December 31, 2021 and December 31, 2020 is as follows:

 

Summarized Balance Sheet

December 31, 2021

 

Assets
Cash		$	9,890
Investments in Real Estate			5,846,378
Total Assets		$	5,856,268
Liabilities
Accrued liabilities		$	21,340
Total Liabilities		$	21,340
Total Partners’ Equity		$	5,834,928

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

Summarized Income Statement

December 31, 2021

 

Revenue
Income from real estate investments		$	54,690
Total Revenue		$	54,690
Expense
Expense		$	16,108
Total Expense		$	16,108
Net Income		$	38,582

 

Summarized Balance Sheet

December 31, 2020

 

Assets
Cash		$	6,890
Investments in Real Estate			5,288,511
Total Assets		$	5,295,401
Liabilities
Accrued liabilities		$	6,340
Total Liabilities		$	6,340
Total Partners’ Equity		$	5,289,061

 

Summarized Income Statement

December 31, 2020

 

Revenue
Income from real estate investments		$	108,514
Total Revenue		$	108,514
Expense
Expense		$	5,354
Total Expense		$	5,354
Net Income		$	103,160

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

Income taxes:

 

The Company intends to operate and be taxed as a REIT for federal income tax purposes. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its taxable income to its shareholders. As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its taxable income that is currently distributed to shareholders. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. For the years ended December 31, 2021 and 2020, the Company has not qualified as a REIT and thus has not filed as a REIT.

 

The Company’s deferred tax assets and liabilities consisted of the following at December 31, 2021 and 2020:

 

		2021				2020
Noncurrent deferred tax assets		$	-			$	7,389
Noncurrent deferred tax liabilities		$	(30,426	)		$	-
Valuation allowance			-				(7,389	)
Net deferred tax asset (liability)		$	(30,426	)		$	-

 

The temporary differences that give rise to deferred income tax assets relate primarily to net operating losses generated by the Company. The amount of tax expense differs from the amount of expense that would result from applying the statutory rates to pre-tax income primarily due to certain nondeductible expenses and a valuation allowance.

 

The Company has no uncertain tax positions, as defined by US GAAP, as of December 31, 2021 and 2020.

 

Management believes it is more likely than not that there will be inadequate profits against which the deferred tax assets can be realized. Accordingly, the Company recognized a valuation allowance for the entire amount of the deferred tax assets as of December 31, 2021 and 2020.

 

At December 31, 2021 and 2020, the Company has net operating loss carryforwards of $1,286,568 and $575,495 respectively.

 

Organization and offering costs:

 

The Company expenses organization costs as incurred and offering costs, when incurred, will be deferred and charged to shareholders’ equity. The deferred offering costs will be charged against the gross proceeds of the offering when received or written off in the event that the offering is not successfully completed. Organization and offering costs of the Company are initially being paid by the Manager and/or affiliates on behalf of the Company. The Manager and/or affiliates will be reimbursed for organization and offering expenses incurred in conjunction with the offering subject to achieving a minimum capital raise of $3,000,000. As of December 31, 2021, and 2020, the Company had $459,951 and $408,726 in offering costs of which $0 and $130,010 has been deferred and $459,951 and $278,716 has been amortized.

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

Note 3 – Investments in Real Estate Related Assets

 

All investments in real estate related assets have been made with entities in which the Sponsor, Manager, and/or principals have an interest.

 

The following table presents the Company’s investments in real estate assets as of December 31, 2021 and December 31, 2020.

 

As of December 31, 2021

 

												Allocation
				Principal								by
				Amount or				Carrying				Investment
Asset Type		Number		Cost				Value				Type
Limited Partnership Interests		1		$	115,000			$	115,000				4.76	%
Limited Partnership Interests		1			210,000				210,000				8.69	%
Limited Partnership Interests		1			391,875				391,875				16.21	%
Limited Partnership Interests		1			780,500				628,532				26.01	%
Limited Partnership Interests		1			540,000				540,000				22.34	%
Limited Partnership Interests		1			531,483				531,483				21.99	%
		6		$	2,568,858			$	2,416,890				100.00	%

 

As of December 31, 2021

 

												Allocation
				Principal								by
				Amount or				Carrying				Investment
Asset Type		Number		Cost				Value				Type
Preferred Senior Equity Position		1		$	2,000,000			$	2,000,000				100.00	%
		1		$	2,000,000			$	2,000,000				100.00	%

 

On November 29, 2021, the Company sold its interest in Chronos. The Company received proceeds totaling $903,099, and recognized a realized gain on sale of $303,099.

 

On November 12, 2021, the Company purchased $531,483 of limited partnership equity in CG Sunset Land LLC. The purpose of CG Sunset Land LLC is to engage in the business of acquiring, owning, holding, improving, operating, leasing, managing and selling property held in Dallas, Texas.

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

As of December 31, 2020

 

												Allocation
				Principal								by
				Amount or				Carrying				Investment
Asset Type		Number		Cost				Value				Type
Limited Partnership Interests		1		$	115,000			$	115,000				4.50	%
Limited Partnership Interests		1			210,000				210,000				8.21	%
Limited Partnership Interests		1			391,875				391,875				15.32	%
Limited Partnership Interests		1			780,500				700,490				27.39	%
Limited Partnership Interests		1			540,000				540,000				21.12	%
Limited Partnership Interests		1			600,000				600,000				23.46	%
		6		$	2,637,375			$	2,557,365				100.00	%

 

As of December 31, 2020

 

												Allocation
				Principal								by
				Amount or				Carrying				Investment
Asset Type		Number		Cost				Value				Type
Preferred Senior Equity Position		1		$	2,000,000			$	2,000,000				100.00	%
		1		$	2,000,000			$	2,000,000				100.00	%

 

On April 15, 2020 the company made a $2,000,000 investment in Houston Flats JV, LLC taking a senior preferred equity position.

 

On August 1, 2020 the company received a return of capital on the PPA-LRE Water Ridge JV, LLP apartments investment totaling $2,500,000 and then made a subsequent investment in the PPA Water Ridge LP in the amount of $540,000.

 

During 2019 and 2020 the Company made investments totaling $600,000 in Casoro Chronos, LP (Chronos). The company owns 100 percent of Chronos and has consolidated the entity. Chronos has a 9.465 percent ownership in CG CAI Dallas Portfolio JV, LLC which owns a portfolio of five separate multi-family apartment assets.

 

The following table presents the Company’s investments in real estate debt as of December 31, 2020.

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

 

As of December 31, 2020

 

												Allocation
				Principal								by
				Amount or				Carrying				Investment
Asset Type		Number		Cost				Value				Type
Debt Investment		1		$	350,000			$	350,000				78	%
Debt Investment		1			100,000				100,000				22	%
		2		$	450,000			$	450,000				100	%

 

On April 27, 2020, the Company made a Preferred Equity Loan of $100,000 to 411 Highland Cross LP, the owner of a 236-unit apartment building built in 1979. It is located in Houston, TX. The loan has an interest rate of 14 percent and shall not be compounded. Principal and interest are not due until maturity which is defined as the earlier of the sale of apartment building, the sale of the equity interests in the property owner, or March 31, 2039.

 

All debt investments were paid off during 2021.

 

Note 4- Related party transactions

 

Expense Reimbursements

 

During the year ended December 31, 2019, an affiliate of the Company paid for certain costs of the Company. The amounts that have not been repaid are included in due to affiliate in the accompanying balance sheet. The amounts will be repaid with offering proceeds when received, to the extent they don’t exceed three percent (3%) of the offering proceeds received at the time of repayment. The amount outstanding at December 31, 2021 and 2020 was $6,547 and $6,546, respectively.

 

Asset Management Fee

 

In consideration for the Manager’s services to the Company, the Company is responsible to pay the Manager a quarterly Asset Management Fee equal to 0.5% (2% annualized), paid quarterly to the Manager based upon the quarter end NAV of the Company. During the years ended December 31, 2021 and 2020, the Company was charged $99,714 and $105,068 respectively, which is included in the statement of operations. As of December 31, 2021, and 2020, there is $265,320 and $165,606 outstanding, respectively.

 

Note 5 - Equity

 

The Company is authorized to issue up to 10,000,000 shares of common stock, with $0.001 par value. Holders of the Company’s common stock are entitled to receive dividends when authorized by the Company’s Board of Directors.

 

Note 6 – Economic Dependency

 

Under various agreements, the Company has engaged or will engage Casoro Capital, LLC and its affiliates to provide certain services that are essential to the Company, including asset management services, asset acquisition and disposition decisions, the sale of the Company’s common shares available for issue, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon Casoro Capital, LLC and its affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

 

 

Multi-Housing Income REIT, Inc.

 

Notes to Consolidated Financial Statements

 

December 31, 2021 and 2020

 

Note 7 – Commitments and Contingencies

 

Legal Proceedings

 

As of December 31, 2021, the Company was not named as a defendant in any active or pending litigation. However, it is possible that the Company could become involved in various litigation matters arising in the ordinary course of business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, management is not aware of any litigation likely to occur that the Company currently assesses as being significant to us.

 

Note 8 – Concentrations of Credit Risk

 

The Company maintains its cash accounts with financial institutions.  At times, these balances may exceed the federal insurance limits; however, the Partnership has not experienced any losses with respect to its bank balances in excess of government provided insurance.  Management believes that no significant concentration of credit risk exists with respect to these balances at December 31, 2021.

 

Note 9 – Administration Agreement

 

The Company has entered into an administration agreement with Juniper Square Administration Services to provide accounting and administrative functions to the REIT which is effective through August 20, 2021, currently in the process of extending the agreement. The administration fees charged to the Company during the years ended December 31, 2021 and 2020 were $41,320 and $63,000, respectively, which are included in the general and administrative expenses in the statement of operations for 2021 and 2020. There was a one time set up fee of $20,000 set up fee charged for Juniper Square Administration Services. As of December 31, 2021 and 2020, $15,000 and $15,000, respectively, was due to Juniper Square Administration Services, and is included in accrued expenses in the balance sheet. The agreement provides for quarterly minimum fees that are the greater of $7,500 or a basis point charge based on the tiered fees listed in the agreement. As of each quarter in 2021, the minimum fee was higher than the basis point fee.

 

Note 10 – COVID-19

 

The effects of the COVID-19 virus has impacted many aspects of the U.S. economy. The Company recognizes that COVID-19 may have an adverse impact on its business and investments, however, as of December 31, 2021 there were no quantifiable measurements of adverse effects on the Company’s business or investments.

 

Note 11 - Subsequent events

 

Events that occur after the balance sheet date, but before the financial statements were available to be issued, must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date require disclosure in the accompanying notes. Management has evaluated the activity of the Company through May 16, 2022 (the date the financial statements were available to be issued) and determined that the Company did not have any material subsequent events that are required disclosure in the notes to the financial statements except as noted below.

 

Subsequent to the balance sheet date, on February 16, 2022, the Company made an additional investment in Casoro JAX LP totaling $534,500.

  

   

Exhibits

 

Exhibit 2		Articles of Incorporation; Bylaws*
Exhibit 4		Sample Subscription Agreement*
Exhibit 6		Management Agreement; Support Agreement*
Exhibit 8		Escrow Agreement*

 

*

Filed previously

 

 

Signatures

 

Pursuant to the requirements of Regulation A, the issuer has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 18, 2022.

 

	MULTI-HOUSING INCOME REIT, LLC
	By:	Casoro Capital Partners, LLC
	By	/s/ Yuen Yung
		Yuen Yung, Chief Executive Officer

 

This Offering Statement has been signed by the following persons in the capacities and on the dates indicated.

 

/s/ Yuen Yung
Yuen Yung, CEO
May 18, 2022
/s/ Chirag Hathiramani
Chirag Hathiramani, Principal Financial Officer
May 18, 2022
/s/ Lea Allen
Lea Allen, Principal Accounting Officer
May 18, 2022

 

 

P a g e | 25

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