While there is a massive demand for housing, approximately 5.5 million in the US, we

don’t know what the future may bring. If there was a recession, decreased demand for

housing, increased building costs and rising interest rates these could all affect the

returns of the investment. However, if there is continued demand for housing and the

builders and buying land to build homes to meet the demand this model works very

well. Based on the shortage of housing the predictions are 3-5 years to catch up with

demand.

This fund is “evergreen”, which means that there is no set timeline for the fund. This

provides flexibility for the manager. If the market and demand are still going strong in 7

years, the fund can continue. If demand is waning, at the discretion of the manager the

fund can be dissolved, and capital returned to investors.

Principal protection is foremost. If the Fund is not producing expected profits the Fund

will be closed at the discretion of the manager and principal returned to the investors.

The money invested starts to accrue the day it is received into the Fund. Profit sharing

for the quarter will be pro-rated based on the date of investment as well. The preferred

return of 10% and profit-sharing are distributed quarterly, approximately mid-month

following the quarter end. For example, Q1 payments will go out mid-April by ACH.

No, you shares cannot be diluted. The value remains constant at $10, 000 and $1000 Share/ Unit.

Rockstar Capital Fund Group is a lending fund. It partners closely with an operator that has 2

arms to their business. Buller River Development Land and Investment (BRDL) is a land

development company specializing in the creation of Permitted Real Estate lots for raw

land. This is also called Land Entitlement. They prepare raw land for building by obtaining sub divisional approval by the local municipality with all land disturbance permits in hand (i.e., Shovel Ready, dirt can be moved). Estero Development Partners is focused on the entire process of developing homes to be sold as “Build For Rent”. Demand for rental homes is high, and Estero sells a great deal of their inventory to investment groups, as well as several National Funds, REITs and Family Offices. Rockstar Capital Fund Group provides BRDL and Estero with the capital they need to grow their business, for both Land Entitlement and Build For Rent development.

Charlotte, NC, Southwest Florida, Charleston, SC and Phoenix AZ (March 2022).

$10,000 and increments of 1K thereafter.

Since this Fund is focused on lending, there is no depreciation. The PPM allows for

purchase of real property, such as Build For Rent. This would provide depreciation but is

not currently a part of the Fund. Additionally, raw land is not depreciable.

Not currently but we are considering setting this up in 2023. Alternatively, additional

10K shares can be purchased with distributions in a very simple process.

Dissolution of the fund at the discretion of the manager will trigger the payout of the

principal.

While this is not considered a liquid investment like the stock market, the shares

purchased are redeemable. The investor, upon redemption, will receive all their original

principal back. There is a cap of 10% redemption from the fund per year. This is not an

equity deal, so the investor receives high annual cash flow anticipated to be 16%+, and

upon exit receives their original investment amount.

While the PPM allows for leverage the Fund does not intend to use leverage.

Capital preservation is #1. The Fund is in first lien position on the property acquired.

Additionally, for Land Entitlement, the due diligence process is extensive, and the land

will not be purchased until multiple hurdles are met and BRDL is confident they will sell,

and they typically have a LOI from a national home builder before they start the due

diligence process, and definitely before purchasing the land.

This is a Regulation A, 506 (c) fund. Each investor in the fund is a part owner (member) in

the entity. The entity files a partnership tax return which is a pass-through entity where

each individual owner is responsible for his/her proportionate share of the net income

of the entity each tax year. Each investor’s investment into the entity is considered a

partner or owner contribution. When the owner receives a distribution (i.e. the

preferred return or the profit sharing), these distributions are treated as a partner or

owner distributions.

The distributions (preferred and profit sharing) will be treated as a return of capital.

That is the structure of the partnership - each partner's capital account on the K-1 will

show a decrease based on the distributions received the prior year. This is a common

method used in partnerships.

In addition, the partnership will also pass through any income (or loss) to the investors

on a pro-rata basis. Any income will be passive income and considered taxable. Any

income will also increase the basis in the capital account.

Based on the fund being primarily a lending fund, we do anticipate there will be income

and minimal losses. Therefore, the investor can expect some amount of passive taxable

income to be on the K-1, at ordinary rates. This income could be offset by passive losses

if available.

If the capital account (basis)is not diminished because of the ongoing income to the

fund, then the return of capital upon exit will be tax free. On the other hand, if the

capital account was decreased to zero during the investment, upon return of capital the

original principal would be taxable. The reduction of the capital account to zero is

unlikely in this Fund due to anticipated income.

In addition, the method in calculating the actual K-1 figures when preparing the annual

tax return is a separate process from the quarterly preferred returns as well as

a separate process from the profit-sharing calculation. These figures will be close, but

rarely will match exactly.

Regarding any chance of phantom income, yes there could be a possibility of that.

To speak as to how that will happen, let me try and explain it this way. The method for

calculating the distributions and the method for calculating the share of net income is

different. For example, a $100,000 distribution would generate $12,000 in distributions,

at 12%.

The percent ownership for this person would be 0.0073 (assuming a total amount of

$7.5 million in contributions in the company and 55% to the preferred members). If the

same company had $1,000,000 in net income, that partners share in the taxable income

would be $7,333.33. In this case the distribution would cover it, even if there was not a

profit-sharing distribution. However, what if the net income were $3,000,000, these

partners share of taxable income would be $21,990. If there were only distributions of

$12,000 then the difference would be this phantom income as was described.

Using the same scenario, if the decision was to distribute $1.5 million of the net income

as profit sharing distributions and leave half in the company, then profit sharing

distribution for this member would be $10,995. This would create a total amount of

distributions of $22,995 and with a taxable income of $21,990, the partner would be ok.

Still using the same assumptions above, but the decision was to only distribute $1

million of the net income for profit sharing and leave the rest in the company, the

profit-sharing distribution for this member would be $7,330. Under this situation the

total distributions would be $19,330 ($12,000 + $7,330) and the taxable income would

be $21,990, creating a small amount of phantom income.