NOTE 6 –RELATED PARTY TRANSACTIONS

Advisory Agreements:

As discussed in Note 1, on January 26, 2021, the Board of Directors of the Company approved, effective January 1, 2021, two advisory agreements, an Advisory Management Agreement with the Real Estate Adviser and the Amended and Restated Investment Advisory Agreement with the Investment Adviser.

The terms of the Advisory Management Agreement with the Real Estate Adviser provide that the Company will continue to pay an Asset Management Fee on essentially the same terms as it was paying the Investment Adviser prior to 2021, namely based upon a percentage of Invested Capital (3% of the first $20 million, 2% of the next $80 million, and 1.5% over $100 million). Invested Capital is equal to the amount calculated by multiplying the total number of outstanding Shares, Preferred Shares, and Partnership Units issued by the Company by the price paid for each or the value ascribed to each in connection with their issuance. The Advisory Management Agreement also provides for a 2.5% Acquisition Fee on new (non-security) purchases, subject to certain limitations designed to eliminate incentives to “churn” Company assets. The new Advisory Management Agreement also provides for an incentive management fee that is equal to 15% of all distributions once shareholders have received cumulative distributions equal to 6% from the effective date of the Agreement. The Company will not pay any Property Management Fees, Debt Financing Fees, or Disposition Fees to the Real Estate Adviser.

The Investment Adviser will receive an annual fee equal to $100 for providing the investment advice to the Company as to its securities portfolio under the Amended and Restated Investment Advisory Agreement.

As of December 31, 2020, the Company incurred the following expenses under the previous advisory agreement with the Investment Adviser:

The portfolio structuring fees for the three and six months ended December 31, 2020 were $1,827 and $6,679, respectively. The portfolio structuring fees for the three and six months ended December 31, 2019 were $165,981 and $361,592.

The base management fees for the three and six months ended December 31, 2020, were $677,490 and $1,335,376, respectively. The base management fees for the three and six months ended December 31, 2019, were $630,285 and $1,240,280, respectively. These base management fees were based on the following quarter ended Gross Invested Capital segregated in two columns based on the annual fee rate:

Base Management Fee Annual %		3.0%		2.0%		1.5%	Total Gross Invested Capital

For the Year Ended June 30, 2021
Quarter ended:
September 30, 2020	$	20,000,000	$	80,000,000	$	28,769,486	$	128,769,486
December 31, 2020		20,000,000		80,000,000		33,997,317		133,997,317

For the Year Ended June 30, 2020
Quarter ended:
September 30, 2019	$	20,000,000	$	80,000,000	$	15,998,789	$	115,998,789
December 31, 2019		20,000,000		80,000,000		21,409,289		121,409,289

The Company records the Capital Gains Fee accrual on the consolidated statements of operations and statements of assets and liabilities when net realized capital gains less unrealized capital depreciation on its investments exceed the incentive fee threshold of 7% of Contributed Capital. However, the actual incentive fee payable to the Investment Adviser related to capital gains will be determined and payable in arrears at the end of each fiscal year. Accordingly, the Company accrues the capital gains fees in the quarter it exceeds the threshold and increases or decreases the accrual in subsequent quarters if the fiscal year-to-date fee changes.

The Company did not accrue Income Fee or Capital Gains Fee for the three or six months ended December 31, 2020, or December 31, 2019.

Organization and Offering Costs Reimbursement:

As provided in the previous advisory agreement with the Investment Adviser and the prospectus of the Company, offering costs incurred and paid by the Company in excess of $1,650,000 on the third public offering will be reimbursed by the Investment Adviser except to the extent that 10% in broker fees are not incurred (the “broker savings”). In such case, the broker savings will be available to be paid by the Company for marketing expenses or other non‑cash compensation. Total offering costs incurred on the third public offering as of December 31, and June 30, 2020, were $624,188 and $560,194, respectively, both of which were also below the reimbursement threshold. Therefore, there were no amounts reimbursable from the Investment Adviser as of December 31, 2020, and June 30, 2020.

Of the cumulative offering costs incurred on the third public offering by the Company as of December 31 and June 30, 2020, MacKenzie had paid on behalf of the Company a total of $346,349 and $300,212, respectively. Of the amounts paid by MacKenzie, as of December 31 and June 30, 2020, the Company had not reimbursed MacKenzie in the amounts of $27,416 and $52,492. Therefore, those amounts were recorded as payable to MacKenzie and included as a part of due to related entities in the statements of assets and liabilities as of December 31, and June 30, 2020.

During the six months ended December 31, 2020 and December 31, 2019, total offering costs paid by MacKenzie on behalf of the Company were $46,136 and $269,107, respectively.

The third public offering terminated on October 31, 2020. Therefore, the remaining deferred offering costs that had not been amortized as of the termination date were fully expensed as of December 31, 2020. Total amortization of these deferred costs for the three and six months ended December 31, 2020, were $200,126 and $342,015, respectively. Total amortization for the three and six months ended December 31, 2019, were $446,516 and 640,208, respectively.

Administration Agreement:

Under the Administration Agreement, the Company reimburses MacKenzie for its allocable portion of overhead and other expenses it incurs in performing its obligations under the Administration Agreement, including furnishing the Company with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities, as well as providing the Company with other administrative services, subject to the independent directors' approval. In addition, the Company reimburses MacKenzie for the fees and expenses associated with performing compliance functions, and its allocable portion of the compensation of the Company's Chief Financial Officer, Chief Compliance Officer, Director of Accounting and Financial Reporting, and any administrative support staff.

Effective November 1, 2018, transfer agent services are also provided by MacKenzie and the costs incurred by MacKenzie in providing the services are reimbursed by the Company. No fee (only cost reimbursement) is being paid by the Company to MacKenzie for this service.

The administrative cost reimbursements for the three and six months ended December 31, 2020, were $155,200 and $310,400, respectively. The administrative cost reimbursements for the three and six months ended December 31, 2019, were $170,000 and $340,000, respectively. Transfer agent services cost reimbursement for the three and six months ended December 31, 2020, were $30,800 and $61,600, respectively. Transfer agent services cost reimbursement for the three and six months ended December 31, 2019, was $20,000 and $40,000, respectively.

The table below outlines the related party expenses incurred for the six months ended December 31, 2020, and 2019 and unpaid as of December 31, 2020, and June 30, 2020.

	Six Months Ended				Unpaid as of
Types and Recipient	December 31, 2020		December 31, 2019		December 31, 2020		June 30, 2020

Base Management fees- the Adviser	$	1,335,376		1,240,280	$	677,490	$	657,280
Portfolio Structuring fee- the Adviser		6,679		361,592		-		-
Administrative Cost Reimbursements- MacKenzie		310,400		340,000		-		-
Transfer agent cost reimbursements - MacKenzie		61,600		40,000		-		-
Organization & Offering Cost ⁽²⁾ - MacKenzie		46,136		269,107		27,416		52,492
Other expenses ⁽¹⁾- MacKenzie						691		8,492

Due to related entities					$	705,597	$	718,264

⁽¹⁾Expenses paid by MacKenzie on behalf of the Company to be reimbursed to MacKenzie.

⁽²⁾Offering costs paid by MacKenzie- discussed in Note 6 under organization and offering costs reimbursements. These are amortized over twelve-month period as discussed in Note 2.

Affiliated Investments:

Coastal Realty Business Trust ("CRBT"):

CRBT is a Nevada business trust whose trustee is MacKenzie. Each series of the trust has its own beneficiaries and own assets. The Company owns two series of CRBT and is the only beneficiary of such series. Under the terms of the agreement, there are no redemption rights to any of the series participants. The Company and TRS are the sole beneficiaries of the following series as of December 31, 2020, and June 30, 2020:

.	CRBT, REEP, Inc.--A, which has an ownership interest in one of three general partners of a limited partnership which owns one multi-family property located in Frederick, Maryland.