Vii Capital CBM Fund LLC, a Delaware limited liability company (“we”, “our”, us”, or the “Fund”) is a private real estate investment company formed by our Managing Member, Vii Global CBM LLC. The Fund is a special purpose entity formed by our Managing Member to provide a secured credit facility, either directly or indirectly through one or more Affiliate entities, for one or more loans of up to USD $31,715,000 (the “Loan(s)”) to LM Constructores S.A.S., a Colombia simplified stock company and/or its Affiliates (the “Borrower(s)”), in connection with their current development of a new-construction multi-family housing development called “Brisa Marina” (the “Project”).

The Project currently contemplates the construction of up to 920 residential apartment units, including green park-like common areas, multi-functional sports courts, and recreational trails and playgrounds (the “Project”) to be constructed on approximately 16.37 acres, more or less, of prime development property (the “Property”) on the outskirts of the rapidly-growing municipality of Sincelejo in northern Colombia.

The Project is designed to fill the demand for affordable housing in Sincelejo, where it has been determined by the Colombia national government that up to 41% of the city’s estimated 300,000 inhabitants lack access to adequate housing. For location maps and details regarding the Project and Property, please see the Exhibit section of the Memorandum.

The Fund expects to provide the Loan(s) to our Borrower(s) either directly or through a controlled subsidiary entity legally authorized to facilitate commercial and/or real estate loans in Colombia. We shall endeavor to ensure that our Loan(s) to our Borrower(s) are secured with “first position” or equivalent liens against the Property, Project, and other available collateral including, but not limited to, equipment, tangible and financial assets of our Borrower(s), personal guarantees our Borrower(s)’s principals or Affiliates, etc.

While it is possible that we may also take a direct or indirect equity or profits interest position in connection with the Property and/or Project, we expect that our Investment(s) in the Property and Project will be structured as one or more Loan(s) secured by a recorded trust deed (or its equivalent) position in the underlying real estate as collateral which we expect will include the power to foreclose, take possession of, and/or sell in the event of default. Unless additional adequate collateral is provided by our Borrower(s), we do not expect that our Loan(s) will exceed a maximum loan-to-value (LTV) ratio of 65% in terms of valued real property or furniture, fixtures and equipment (FF&E).

The Fund’s interests in any FF&E will likely be secured through security agreements and associated public filings as may be warranted in Colombia under the circumstances. There can be no assurance these objectives will be achieved. (See “Objectives, Strategies, and Proposed Activities” and “Risk Factors”).

The primary uses of this funding include:

• Refinance of land $2.750,000

• Development Costs $173,000

• Hard Construction Costs $25,118,000

• Operating Costs $2,074,000

• Project Contingency Costs $500,000

• Closing Costs (RE) $100,000 

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Vii Capital CBM Fund, LLC is offering for sale up to 31,715 Units of Investing Membership Interest (the “Units”) at USD $1,000 per Unit, aggregating USD $31,715,000, unless expanded up to USD $50,000,000 in our Managing Member’s sole discretion.

“Unit” means an Investing Membership Interest in the Fund purchased by an investor. Purchasers of Units in this offering are referred to as “Investing Members”. This interest is the right and obligation to share in a proportional part of the Fund’s distributions, revenue, income, expenses, assets and liabilities, less the Managing Member’s annual Asset Management Fee (billed quarterly, ranging from 0.75% up to 2.5% of the Fund’s capitalization or aggregate asset value), according to the following terms:

• CLASS A UNITS: For Investing Members making investments in the Fund of up to 50 Units (i.e., up to USD $50,000), Class A Units will be issued. Class A Units entitle the holder thereof to receive 100% of the Fund’s net profits, pro rata to their number of Units in the Fund, until they’ve realized distributions equal to 6% per annum on their Capital Investment (the “Preferred Return” of such Class of Unit), PLUS a proportional share of the Performance Bonus (see description below). 100% of the Performance Bonus is passed through to the Investing Members, pro rata. Any excess shall be allocated to the Managing Member.

• CLASS B UNITS: For Investing Members making investments in the Fund of between 51 to 100 Units (i.e., USD $51,000 to USD $100,000), Class B Units will be issued. Class B Units entitle the holder thereof to receive 100% of the Fund’s net profits, pro rata to their number of Units in the Fund, until they’ve realized distributions equal to 7% per annum on their Capital Investment (the “Preferred Return” of such Class of Unit), PLUS  a proportional share of the Performance Bonus (see description below). 100% of the Performance Bonus is passed through to the Investing Members, pro rata. Any excess shall be allocated to the Managing Member.

• CLASS C UNITS: For Investing Members making investments in the Fund of between 101 to 150 Units (i.e., USD $101,000 to USD $150,000), Class C Units will be issued. Class C Units entitle the holder thereof to receive 100% of the Fund’s net profits, pro rata to their number of Units in the Fund, until they’ve realized distributions equal to 8% per annum on their Capital Investment (the “Preferred Return” of such Class of Unit), PLUS a proportional share of the Performance Bonus (see description below). 100% of the Performance Bonus is passed through to the Investing Members, pro rata. Any excess shall be allocated to the Managing Member.

• CLASS D UNITS: For Investing Members making investments in the Fund of between 151 to 200 Units (i.e., USD $151,000 to USD $200,000), Class D Units will be issued. Class D Units entitle the holder thereof to receive 100% of the Fund’s net profits, pro rata to their number of Units in the Fund, until they’ve realized distributions equal to 9% per annum on their Capital Investment (the “Preferred Return” of such Class of Unit), PLUS a proportional share of the Performance Bonus (see description below). 100% of the Performance Bonus is passed through to the Investing Members, pro rata. Any excess shall be allocated to the Managing Member.

• CLASS E UNITS: For Investing Members making investments in the Fund of 201 Units or more (i.e., USD $201,000 or more), Class E Units will be issued. Class E Units entitle the holder thereof to receive 100% of the Fund’s net profits, pro rata to their number of Units in the Fund, until they’ve realized distributions equal to 10% per annum on their Capital Investment (the “Preferred Return” of such Class of Unit), PLUS a proportional share of the Performance Bonus (see description below). 100% of the Performance Bonus is passed through to the Investing Members, pro rata. Any excess shall be allocated to the Managing Member.

The recommended minimum investment by an investor is USD $200,000 (200 Units), although the Fund reserves the right to accept lesser amounts from qualified persons.

The Fund will allocate 10% of all profits realized from our Investments in excess of the applicable Preferred Return to the Investing Members (the “Performance Bonus”). 100% of the Performance Bonus, when realized, will be passed through to the Investing Members, pro rata. 

Investing Members have no voting rights under the Limited Liability Company Agreement, although they do have certain limited consent rights. For a more detailed treatment of the rights and duties of Investing Members, please refer to the Fund’s Limited Liability Company Agreement included in the exhibit section of this Memorandum.

No Units may be redeemed unless they’ve been held for at least a five (5) year period.

Liquidation of the Fund

It is contemplated that upon any liquidation of the Fund, the Units held by the Fund will be sold or distributed in kind.

Accordingly, upon liquidation, each of the Members will receive cash and/or an undivided interest in the Units and related tangible personal property in accordance with the proportion in which each Member holds an ownership interest in the Fund. In addition, leasehold interests and other property owned by the Fund, or the proceeds from the sale thereof, will be distributed to the Members, in amounts equivalent to their respective interest therein on the date of distribution, subject to liens, and outstanding contracts.

Upon such liquidation, an Investing Member will recognize a capital gain to the extent that the cash received in the liquidation exceeds the Investing Member’s tax basis of their Units. A capital loss generally will be recognized to the extent that their basis, as adjusted, exceeds the liquidating cash distribution. In addition, each Investing Member may be in receipt of income from the normal operations of the Fund during the year of dissolution. Such income will constitute ordinary income, and the full amount of any capital loss realized by such Investing Member on liquidation of the Fund may not be available to offset the full amount of taxable income recognized by the Investing Member from operations of the Fund during the year of liquidation.  To the extent the Fund distributes cash from any other source, distribution will reduce the Investing Member’s basis in their Units, and any amount in excess of such basis will constitute taxable income.

An Investing Member’s basis in Fund assets received in liquidation from the Fund will be the same as its basis in the Fund interest at the time of liquidation decreased by the amount of cash received. Accordingly, if there are no obligations to be assumed and no cash is available for distribution, assets distributed will have the same basis in the hands of the Investing Members as their basis in the Fund.

If you should have extra questions on this offering please sign in and use the Forum tab. The project issuer and or project attorney will get back to you with an answer.