IncomePlus Fund

The Origin IncomePlus Fund is a private commercial real estate fund designed to deliver stable, passive income and appreciation. The Fund’s strategy entails building, buying, owning, and operating multifamily properties which are supplemented by strategic debt and preferred equity investments.

The Fund is structured as a limited liability company (LLC) with a real estate investment trust (REIT) subsidiary. You will make your investment in the LLC which owns 100% of the REIT. The REIT subsidiary enables you to invest in the Fund with your IRA or 401k without having to worry about unrelated business income tax (UBIT). Properties are owned by the REIT and cash flow passes from the property to the REIT subsidiary, which pays dividends to the Fund, which then makes distributions to you based on the number of units you own.

An evergreen structure means the Fund has no expiration date.

The Fund was created to deliver both current income and appreciation in a tax-efficient manner. The Fund’s strategy is “build, buy, fix, and hold,” which means that we build and acquire assets that have the potential to grow in value, renovate and make capital improvements those assets over time, and then hold them for an indefinite period. This strategy allows us to build and acquire high-quality assets with greater long-term growth potential and deliver an efficient after-tax return. Combining debt and equity investments in one Fund also provides downside

The Fund has no target equity limit but only add properties that meet the Fund’s risk and return objectives. Origin intends to hold between 30 and 50 assets in the Fund.

$100,000

Accredited investors can invest in the Fund. This is a threshold set by the federal government. To be an accredited investor, you must meet one of the following criteria:

• Have an individual net worth, or joint net worth with your spouse, that exceeds $1 million (excluding the value of your primary residence).
• Have individual income exceeding $200,000 in each of the past two years and expect to reach the same this year.
• Have combined income with your spouse exceeding $300,000 in each of the past two years and expect to reach the same this year.
• Invest on behalf of a business or investment company with more than $5 million in assets and/or all of the equity owners are accredited.

You can indicate your interest by contacting your dedicated Origin investment representative via email or phone. If you don’t know your dedicated representative, you can log in to your Origin account and select “Contact” then “Investor Relations.” Your representative will walk you through the investment process. We will provide an electronic subscription agreement and a form to verify your accreditation status. We may also need certain additional documents if you plan to invest through a Trust, Self-Directed IRA, LLC, Corporation, or other related entity.

You must be an “accredited investor” under Rule 501(a) of Regulation D to purchase units of the Fund. You can verify your accredited investor status by forwarding Origin’s certification form to a licensed attorney, CPA, or financial advisor that is privy to your financial status as an accredited investor.

The licensed individual will then need to complete the form on your behalf. Or, you can utilize a third-party service provider to verify your accreditation status, such as VerifyInvestor. The accreditation form must be completed for the entity that the investor invests through. For example, if your name is John Smith, then the accreditation form must refer to you as “John Smith.” If you invest through an LLC called “John Smith Investments, LLC,” the accreditation form must state “John Smith Investments, LLC.”

Yes, you can invest in the IncomePlus Fund as an individual, jointly with your spouse or other related person, through several different types of retirement accounts, or through an LLC, Corporation, Trust, and many other types of entities. There’s no penalty for how you choose to invest in the Fund, as long as you coordinate with your custodian appropriately.

The Fund is targeting a net annual return between 9% and 11%, inclusive of 5-7% in annual distributions, paid monthly.

Distributions will come from cash flow generated by the Fund’s properties and interest payments from the Fund’s real estate debt investments.

Distributions are paid twelve times per year to IncomePlus Fund members who are owners of record on the payment date. The distribution is typically made 30 days after the record date. It’s important to note that you must be invested for the entire month to receive the distribution. For example, if you fund your capital call on July 15th you will be assigned a trade date of August 1st. Although you funded your commitment in July, your trade date of August 1st and record date of August 31st means you will not receive a distribution until the end of September. As such, you will have a payment date of September 30th.

You can receive your distribution in cash and we will send it straight to your bank account, or you can take advantage of compounding returns through our distribution reinvestment plan (DRIP). Distributions will be automatically reinvested if you opt into the DRIP when completing your subscription agreement. The DRIP allows you to use the distribution proceeds to automatically acquire new units each quarter.

The IncomePlus Fund’s distribution reinvestment plan means that you can automatically elect to reinvest your monthly distributions rather than taking them in cash. If you opt into the DRIP you will see your total units increase each quarter as a result. The distributions that are reinvested will be used by the Fund to improve existing properties or will be invested in new properties.

Yes. You can opt in or out of the distribution reinvestment plan at any time by emailing your Origin investment contact.

The unit price is the determined valuation in the month prior to the applicable record date. If you opt in for the DRIP, you can expect to have your distribution reinvested on a monthly basis at the unit price established in the month preceding the record date. For example, a record date of August 31st means you will receive the corresponding payment on September 30th, at the unit price established at the end of July.

The Fund’s goal is to maintain a regular annual distribution yield of 5-7% based on the net asset value of your account.

The Fund is structured as a partnership for tax purposes. In a partnership, you are taxed based on your share of taxable income or loss from the Fund, rather than on actual cash distributions. The nature of income at the Fund-level determines whether the income will be taxed as ordinary income or capital gains.

The Fund will be investing through its REIT subsidiary, and distributions received from the REIT will be treated as either ordinary income, return of capital or capital gains. Distributions, to the extent that they are from current or accumulated earnings and profits, will generally be taxed as ordinary income. However, we anticipate that the depreciation available to the REIT subsidiary will reduce the amount of its taxable income and profit, and that this reduction will enable the REIT subsidiary to make distributions that will be treated as a return of capital. Any portion of the distribution that is in excess of current and accumulated earnings and profits is considered a return of capital for U.S. federal income tax purposes and will reduce the tax basis of the investment. Once your tax basis has been reduced to zero, any further distributions will result in capital gains.

Furthermore, for taxable years beginning after December 31, 2017 and before January 1, 2026, pursuant to the Tax Cuts and Jobs Act, individual…

Since the Fund’s distributions all originate at the REIT subsidiary, investors are subject to a special deduction that allows you to deduct up to 20% of your taxable distributions from the Fund on an annual basis. An investor in the highest tax bracket who is eligible for this deduction can effectively reduce the federal tax rate on this income from 37% to 29.6%. Below is an example:

Yes. Investors in the Fund for more than one year will generally be eligible for a long-term capital gains tax rate on the capital gains achieved by the Fund.

The Fund intends to invest primarily through and derive income from dividends paid by its REIT subsidiary. Dividends from a REIT are excluded from UBTI. However, to the extent the Fund invests in an asset outside of the REIT subsidiary, you may realize UBTI as a result of your investment in the

The Fund will issue federal K1s to all investors on an annual basis. Since the Fund utilizes a REIT subsidiary, the burden of having to file K-1s in each state that the Fund owns property is alleviated.

We make every effort to provide K1s to investors in early April.

The trade date is the date when you officially become a member of the Fund from an accounting standpoint. This is the date you will begin to pay fees, accrue a preferred return and dividend, and is the first day of the month. For example, if you fund your investment on July 15th, you will be assigned a trade date of August 1st. Between the time of the investment date and the trade date, you will not pay any fees and won’t accrue a dividend. The IncomePlus Fund offers twelve trade dates throughout the year and each one corresponds to the first day of each month.

The record date is the last day of the month and establishes when you are eligible to receive a distribution. Investors who are official members as of the record date (“owners of record”) will receive a distribution on the payment date which is 30 days after the record date. You become an official member when your subscription agreement is signed, and your capital has been funded. Simply committing to the Fund does not make you an official member and you will not be assigned a trade date, investment date, record date or unit price.

The IncomePlus Fund’s unit price is the price per each share in the Fund. Each share is representative of a unit of ownership in the Fund’s properties. The unit price is determined by the fair market value of the underlying Fund assets and is updated monthly. Your unit price will be determined based on the month that precedes your investment date. For example, if your capital is called on July 15th, you will acquire units at the price established on June 30th which will be finalized around the third week of July. You will know the price of your units and the number of units no later than the trade date. On an ongoing basis, the unit price is the determined valuation in the month prior to the applicable record date.

The net asset value of the IncomePlus Fund will be calculated by our Asset Management team as of the last day of each calendar month and finalized two to three weeks thereafter. The valuation of your account will be determined by your respective unit holdings. Net asset value is calculated by utilizing best practice valuation methods to value the Fund’s assets, including real estate, credit related investments, cash, and other various assets that may be owned by the Fund.

The IncomePlus Fund and associated net asset value will be audited by a third-party accounting firm each calendar year.

After you complete the subscription process, you will lock in your place in the funding queue. Our Investor Relations team will keep you updated on the estimated timing of your capital call. You will have at least seven business days to fund once the capital call is issued. The date your money is received for a capital call marks your official “investment date”.

After you complete the subscription process and when you get to the front of the funding queue, you will fund 100% of your commitment at once.

Yes. You can increase your commitment to the IncomePlus Fund at any time by contacting your dedicated investment contact. There’s no minimum amount required to increase your commitment to the Fund.

Preferred equity and mezzanine debt investments function differently than typical equity ownership of a property. Preferred equity and mezzanine debt investments are typically less risky than equity investments and they come with regular interest payments from the borrower. Thus, these investments are included in the IncomePlus portfolio in order to diversify risk in the portfolio and to supplement cash flow that each property generates with their associated interest income.

The IncomePlus Fund will target sole ownership of the properties it acquires. However, the Fund may also enter into joint ventures or other co-investment opportunities with third parties for the acquisition and management of properties. Joint ventures and co-investments may allow the Fund to access unique resources and expertise of partners, gain access to projects and assets that it would not otherwise have, acquire assets at prices lower than they would transact in a marketed process, and share the risk of an investment with such partners. In situations in which the Fund enters into a joint venture, we will conduct an extensive analysis of each prospective partner’s management organization, performance in prior or existing transactions, and its current and past borrowing relationships. The Fund will retain substantive management and control rights in any joint venture vehicle.

The Fund will target a 60% to 70% loan-to-value ratio for multifamily equity investments in the Fund.

The Fund’s preferred equity investments are structured as interests in entities that own real estate investments, either directly or indirectly. The Fund’s interests are senior with respect to distributions, redemption rights, and liquidation rights compared to the entities’ common equity. In the event of a default, a change-of-control event occurs, allowing the Fund to assume control of the property-owning entity. Consequently, the common equity owners lose their operational input rights and become passive investors.

An acquisition fee of 0.50% percent is paid to us at the time a deal is acquired by the Fund. For example, if an asset were acquired for $40 million, the acquisition fee we earn would be $200,000. This fee is paid by the Fund and is used to cover costs and expenses incurred by us in pursuit of Fund properties.

The acquisition fee only applies to the acquisition of real property. In terms of debt investments, we are entitled to 50% of any origination fee paid by the borrower on a loan and the Fund receives the other 50%. For example, if a loan of $10 million were made with a 1% upfront fee payable by the borrower, then we would receive $50,000 and the Fund would receive the other $50,000. The Fund will receive 100% of the interest payments from the loan.

The administrative fee is used to pay our investor relations, marketing and technology costs associated with onboarding new investors. The administrative fee ranges between 0% and 2% depending on the size of the investment. We show every fee upfront because we want you to know what you are paying and believe the value we provide far exceeds the cost. We don’t pay third-party marketers because we believe it’s important to have a direct line of communication with our investment partners and it’s another example of how we keep fees to a minimum while also controlling the quality of the experience. Note that the administrative fee is taken off the front end of your investment. For example, if your investment is $100,000 with a 2% administrative fee, then the preferred return and dividend will be based on an investment value of $98,000.

The up-front administrative fee is charged when we collect your capital commitment.

The administrative fee is drawn directly from your capital account. All other fees are Fund-level fees and reflected in the net asset value of the Fund’s units.

We are compensated based on the performance of the Fund. On an annual basis, we are entitled to receive a percentage of net increase in the net asset value of Fund units, but only after the Fund investors have received a 6% return on their beginning net asset value for that year. The performance allocation is designed to provide us with 10% of the Fund’s increase in value, but only after delivering the 6% return to investors and subject to a “high water mark.”

The “catch-up” provision is a means by which we recoup the 10% performance allocation that was forgone to ensure the 6% return is met. After the 6% return is made to investors, 50% of the Fund’s profits are allocated to us until we have received an amount that equals 10% of the total increase in net asset value for that year. Once our performance allocation is “caught-up,” 90% of the increase in value is retained by the Fund for allocation to investors and 10% is allocated to us.

The “high water mark” assures that we only participate in net new incremental increases in the Fund’s net asset value. For example, if the Fund returns 10% in year one and -3% in year two, there is no catch up or performance allocation in year three until the Fund first returns 9% (6% annual return for the current year, plus the 3% shortfall from prior year) to investors.

The IncomePlus Fund intends to make quarterly tender offers to investors that elect to sell their investment back to the Fund at the investment’s net asset value through these offerings. The tender offers are subject to certain restrictions and limitations that are detailed in the IncomePlus Fund Private Placement Memorandum.

Investors who wish to have their units repurchased may notify their Origin investment contact in accordance with the written notice of the tender offer.

You may not tender any units for a period of 12 months after such units were purchased. Units held for less than five years will be subject to a discount, ranging from 2.5% to 10%, depending on the amount of time such units were held.

The Fund intends to limit the amount of each tender offer to 5% of the Fund’s net asset value, determined as of the end of the calendar quarter prior to the tender date.

With the Origin Incentive Referral program, if you invest in the Origin IncomePlus Fund or QOZ Fund and refer another investor, we will consider your investment amounts in aggregate so that you’re potentially able to reduce a one-time upfront administrative fee such that the person you refer and you will both benefit.

The administrative fee-break thresholds are:

For example, if you invest $200,000 in the Fund, then your investment would be subject to the 2% admin fee rate. However, if you refer an investor who invests $100,000, then your aggregate investment amount would be treated as a $300,00 investment and you’d both receive the 1.0% fee.

The investments don’t have to be made at the same time period either. We will credit your administrative fee back at any time in the future when you do refer someone.