PART II 2 ea177885-1k_landaappllc.htm ANNUAL REPORT

 

 

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, 2022

 

LANDA APP LLC

(Exact name of issuer as specified in its charter)

 

Commission File Number: 024-11377

 

Delaware   85-1099443

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

6 W. 18th Street

New York, NY 10011

 

10011

(Address of principal executive offices)   (Zip Code)

 

646-905-0931

Issuer’s telephone number, including area code

 

Landa App LLC - 1394 Oakview Circle Forest Park GA LLC membership interests

Landa App LLC - 1701 Summerwoods Lane Griffin GA LLC membership interests

Landa App LLC - 1741 Park Lane Griffin GA LLC membership interests

Landa App LLC - 115 Sardis Street Barnesville GA LLC membership interests(*)

Landa App LLC - 209 Timber Wolf Trail Griffin GA LLC membership interests(*)

Landa App LLC - 2505 Oak Circle Ellenwood GA LLC membership interests(*)

Landa App - 271 Timber Wolf Trail Griffin GA LLC membership interests(*)

Landa App - 29 Holly Grove Road Griffin GA LLC membership interests(*)

Landa App LLC - 1703 Summerwoods Lane Griffin GA LLC membership interests

Landa App LLC – 1712 Summerwoods Lane Griffin GA LLC membership interests

Landa App LLC - 1743 Summerwoods Lane Griffin GA LLC membership interests

Landa App LLC - 1750 Summerwoods Lane Griffin GA LLC membership interests

Landa App LLC - 4267 High Park Lane East Point GA LLC membership interests

Landa App LLC - 4474 Highwood Park Drive East Point GA LLC membership interests

Landa App LLC - 8569 Creekwood Way Jonesboro GA LLC membership interests

Landa App LLC - 9439 Lakeview Road Union City GA LLC membership interests

Landa App LLC - 10167 Port Royal Court Jonesboro GA LLC membership interests

Landa App LLC - 1246 Elgin Way Riverdale GA LLC membership interests

Landa App LLC - 1910 Grove Way Hampton GA LLC membership interests

Landa App LLC - 593 Country Lane Jonesboro GA LLC membership interests

Landa App LLC - 6436 Stone Terrace Morrow GA LLC membership interests

Landa App LLC - 6440 Woodstone Terrace Morrow GA LLC membership interests

Landa App LLC - 6848 Sandy Creek Drive Riverdale GA LLC membership interests

Landa App LLC - 687 Utoy Court Jonesboro GA LLC membership interests

Landa App LLC - 729 Winter Lane Jonesboro GA LLC membership interests

Landa App LLC - 7349 Exeter Court Riverdale GA LLC membership interests

Landa App LLC – 8645 Embrey Drive Jonesboro GA LLC membership interests

Landa App LLC - 8780 Churchill Place Jonesboro GA LLC membership interests

Landa App LLC - 8796 Parliament Place Jonesboro GA LLC membership interests

Landa App LLC - 8641 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8651 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8652 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8653 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8654 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8655 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8659 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8662 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8668 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8670 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8674 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8675 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8677 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8678 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8679 Ashley Way Douglasville GA LLC membership interests

Landa App LLC - 8683 Ashley Way Douglasville GA LLC membership interests

(*) the offering of this class of securities was withdrawn before any securities were issued

 

 

 

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

 

 

 

 

TABLE OF CONTENTS

 

Cautionary Statement Regarding Forward-Looking Information 1
Business 1
Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
Directors and Officers 31
Security Ownership of Management and Certain Securityholders 33
Interest of Management and Others in Certain Transactions 33
Other Information 34
Financial Statements F-1
Exhibits 35

 

Capitalized terms used but not defined herein have the meanings given to them in Landa App LLC’s offering circular (the “Offering Circular”) most recently qualified by the Securities and Exchange Commission (the “SEC”), dated March 28, 2023, which can be found here.

 

i

 

 

Part II.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

The information contained in this report includes some statements that are not historical and that are considered “forward-looking statements.” A cautionary statement regarding forward-looking statements applicable to forward-looking statements found herein can be found under “Cautionary Statement Regarding Forward-Looking Statements” of the Company’s latest Offering Circular, which can be found here and is incorporated herein by reference.

 

Item 1. Business

 

Company Overview

 

Landa App LLC (the “we, “us,” “our” or the “Company”) was formed on November 25, 2019 as “Landa Properties A LLC”, a Delaware limited liability company pursuant to Section 18-201 of the Delaware Limited Liability Company Act (the “LLC Act”) in order to offer a unique investment opportunity for eligible investors to benefit from the performance of curated and fully managed rental real estate properties. The Company was subsequently renamed “Landa App LLC” on April 30, 2020, and became a series limited liability company pursuant to Sections 18-215 and 18-218 of the LLC Act on May 22, 2020.

 

From time to time, the Company will form separate series of membership interests (each a “Series,” and collectively, the “Series”) for the purpose of offering a unique investment opportunity for eligible investors to benefit from the performance of curated and fully managed rental real estate properties. Each Series is formed to hold a residential rental property as its primary asset (each a “Property,” and collectively, the “Properties”).

 

The Company generally offers 10,000 membership interests (each a “Share” and collectively, the “Shares”) in each of the Series (the respective offerings of Shares of each Series each individually referred to herein as an “Offering”). Investors that purchase Shares in any Series acquire a right to receive monthly distributions (which we also refer to as “dividends”) of a portion of the net rental income of such Series. The total distribution amount by a Series, if any, will be calculated by the Manager, acting in its sole discretion, and will be based on a number of factors, including, but not limited to, the total number of Shares sold, fees, expenses, taxes, amounts allocated to reserves, economic conditions, debt service requirements, actual and accrued cash flows of the applicable Series, and other factors that could differ materially from our current expectations. The total distribution amount, if any, will be allocated to each holder of Shares of the applicable Series on a pro-rata basis based on the number of Shares of that Series held.

 

The Company and each Series is managed by Landa Holdings, Inc. (the “Manager”).

 

All Shares are offered through the Landa Mobile App.

 

1

 

 

Series Offering Table

 

The table below shows key information related to the Offering of each Series pursuant to Regulation A of the Securities Act of 1933, as amended, (“Regulation A”), as of December 31, 2022. Please also refer to “—Properties” below for further details.

 

Series  Offering
Status
  Qualification
Date
  Opening
Date
  Closing
Date
  Total
Number of
Shares Outstanding(5)
Landa Series 115 Sardis Street (1)  Withdrawn  6/29/2021  7/1/2021  (1)  (1)
Landa Series 1394 Oakview Circle  Closed  6/29/2021  7/1/2021  8/9/2021  -
Landa Series 1701 Summerwoods Lane (2)  Closed  6/29/2021  7/1/2021  9/3/2021  8,265 (3)
Landa Series 1741 Park Lane (2)  Closed  6/29/2021  7/1/2021  9/3/2021  3,518 (4)
Landa Series 209 Timber Wolf Trail (1)  Withdrawn  6/29/2021  7/1/2021  (1)  (1)
Landa Series 2505 Oak Circle (1)  Withdrawn  6/29/2021  7/1/2021  (1)  (1)
Landa Series 271 Timber Wolf Trail (1)  Withdrawn  6/29/2021  7/1/2021  (1)  (1)
Landa Series 29 Holly Grove Road (1)  Withdrawn  6/29/2021  7/1/2021  (1)  (1)
Landa Series 1703 Summerwoods Lane  Closed  1/7/2022  1/9/2022  7/20/2022  -
Landa Series 1712 Summerwoods Lane  Closed  1/7/2022  1/9/2022  8/9/2022  -
Landa Series 1743 Summerwoods Lane  Closed  1/7/2022  1/9/2022  7/31/2022  -
Landa Series 1750 Summerwoods Lane  Closed  1/7/2022  1/9/2022  8/26/2022  -
Landa Series 4267 High Park Lane  Closed  1/7/2022  1/9/2022  8/15/2022  -
Landa Series 4474 Highwood Park Drive  Closed  1/7/2022  1/9/2022  8/9/2022  -
Landa Series 8569 Creekwood Way  Closed  1/7/2022  1/9/2022  4/26/2022  -
Landa Series 9439 Lakeview Road  Closed  1/7/2022  1/9/2022  8/25/2022  -
Landa Series 10167 Port Royal Court  Closed  1/7/2022  1/9/2022  7/20/2022  -
Landa Series 1246 Elgin Way  Closed  1/7/2022  1/9/2022  7/29/2022  -
Landa Series 1910 Grove Way  Closed  1/7/2022  1/9/2022  2/15/2022  -
Landa Series 593 Country Lane Drive  Closed  1/7/2022  1/9/2022  2/17/2022  -
Landa Series 6436 Stone Terrace  Closed  1/7/2022  1/9/2022  2/3/2022  -
Landa Series 6440 Woodstone Terrace  Closed  1/7/2022  1/9/2022  2/17/2022  -
Landa Series 6848 Sandy Creek Drive  Closed  1/7/2022  1/9/2022  2/13/2022  -
Landa Series 687 Utoy Court  Closed  1/7/2022  1/9/2022  4/19/2022  -
Landa Series 729 Winter Lane  Closed  1/7/2022  1/9/2022  3/4/2022  -
Landa Series 7349 Exeter Court  Closed  1/7/2022  1/9/2022  4/20/2022  -
Landa Series 8645 Embrey Drive  Closed  1/7/2022  1/9/2022  4/18/2022  -
Landa Series 8780 Churchill Place  Closed  1/7/2022  1/9/2022  3/7/2022  -
Landa Series 8796 Parliament Place  Closed  1/7/2022  1/9/2022  3/11/2022  -
Landa Series 8641 Ashley Way  Closed  1/7/2022  1/9/2022  8/22/2022  -
Landa Series 8651 Ashley Way  Closed  1/7/2022  1/9/2022  4/19/2022  -
Landa Series 8652 Ashley Way  Closed  1/7/2022  1/9/2022  10/14/2022  -
Landa Series 8653 Ashley Way  Closed  1/7/2022  1/9/2022  8/8/2022  -
Landa Series 8654 Ashley Way  Closed  1/7/2022  1/9/2022  12/02/2022  -
Landa Series 8655 Ashley Way  Closed  1/7/2022  1/9/2022  10/10/2022  -
Landa Series 8659 Ashley Way  Closed  1/7/2022  1/9/2022  10/10/2022  -
Landa Series 8662 Ashley Way  Closed  1/7/2022  1/9/2022  9/21/2022  -
Landa Series 8668 Ashley Way  Closed  1/7/2022  1/9/2022  10/14/2022  -
Landa Series 8670 Ashley Way  Closed  1/7/2022  1/9/2022  11/30/2022  -
Landa Series 8674 Ashley Way  Closed  1/7/2022  1/9/2022  8/8/2022  -
Landa Series 8675 Ashley Way  Closed  1/7/2022  1/9/2022  8/19/2022  -
Landa Series 8677 Ashley Way  Closed  1/7/2022  1/9/2022  4/20/2022  -
Landa Series 8678 Ashley Way  Closed  1/7/2022  1/9/2022  12/02/2022  -
Landa Series 8679 Ashley Way  Closed  1/7/2022  1/9/2022  8/3/2022  -
Landa Series 8683 Ashley Way  Closed  1/7/2022  1/9/2022  12/02/2022  -

 

(1)Before any securities were issued, the Company withdrew the following Series:

 

Landa Series 115 Sardis Street

Landa Series 209 Timber Wolf Trail

Landa Series 2505 Oak Circle

Landa Series 271 Timber Wolf Trail

Landa Series 29 Holly Grove Road  

 

2

 

 

(2)

This Series closed its Offering prior to selling all 10,000 of its Shares and made a liquidating distribution of expected proceeds from the sale of the underlying Property. For additional information, see the Form 1-U filed on March 11, 2022 available here

   
(3)

Includes an additional thirty-three (33) Shares of this Series that remain unallocated in the books and records of the Series.

   
(4)

Includes an additional fifteen (15) Shares of this Series that remain unallocated in the books and records of the Series.

   
(5) Reflected as of May 8, 2023

 

Properties

 

Descriptions of the Properties as of December 31, 2022 can be found under “Description of the Properties” of the Company’s latest Offering Circular, which can be found here and is incorporated herein by reference.

 

Investment Objectives

 

Our primary investment objectives are to:

 

  realize growth in the value of our Property investments;

 

  maximize net rental income in each of the Properties; and

 

  preserve, protect and return investor capital contribution.

 

We cannot assure you that we will attain these objectives or that the value of our assets will not decrease. 

 

Investment Strategy

 

Our investment strategy is to acquire, invest in, manage, and operate properties on an opportunistic basis, which may consist of a wide variety of residential rental properties. We intend to leverage our industry expertise, as well as our proprietary technology, to help streamline our property acquisition process.

 

We will focus on acquiring market ready properties, which may include existing income-producing properties or newly constructed properties, in neighborhoods with growing rental demand, strong rental history and in geographic regions which provide steady real estate asset growth. Our acquisition strategy does not include major rehabilitation or repurposing of existing structures, or new ground-up development. Our target markets are neighborhoods surrounding metropolitan statistical areas of at least one million residents, which we estimate having historical capitalization rates ranging from approximately four percent (4%) to seven percent (7%) for residential properties. In addition, we expect to target cities with growing populations or cities that have evidenced strong rental demand.

 

Governmental Regulation

 

Each Series’ respective business practices and Properties are subject to regulation by numerous federal, state and local authorities. See the description of certain applicable regulations under “Regulations” of the Company’s latest offering circular filed March 28, 2023 with the SEC, which can be found here and is incorporated herein by reference, for a discussion of applicable governmental regulations. 

 

Industry

 

Residential Housing

 

Residential housing is the largest real estate asset class in the United States, with approximately 140 million total housing units and a total value of more than $43.4 trillion according to Zillow.com as of Debember 31, 2022. The single-family rental market has grown in recent years as homeownership rate has declined following the global financial crisis. We believe this decline in homeownership is due to a number of factors. First, mortgage financing for the consumer is now harder to obtain due to conservative mortgage underwriting standards which arose after the global financial crisis. Many Americans have limited credit and do not have the liquidity required to put a down payment on a home. Second, the U.S. is undergoing a demographic shift away from the desire to own a home. Americans are looking for more flexibility and mobility in their housing. Finally, over the recent years, home prices have increased faster than wage growth which has created an affordability problem for potential homeowners. These factors have shifted the landscape in the U.S. housing market over the recent years and have contributed to the rise in the demand for rental housing.

 

3

 

 

We believe that the increased demand for rental housing has created the institutionalization of single-family investment ownership. Prior to 2012, the single-family rental sector primarily consisted of smaller, non-institutional owners and managers, however, larger institutional investors have emerged in recent years. Despite this growth, it is estimated that institutional owners only represent approximately 375,000 units or 2.5% of all single-family rental units in the United States, according to Institutional Real Estate, Inc. The expansion of institutional owners into this asset class has led to management efficiency and technology development in the industry which has improved the cost to manage a rental home. Operating metrics for institutionally managed single-family rentals are now comparable to traditional multi-family properties as single-family rental properties exhibit similar occupancy levels to multi-family properties with lower turnover rates. In addition, according to the National Association of Realtors, the single-family housing market is the most liquid real estate asset class in the United States, with an average of 5.2 million sales of existing homes per year from 2005 to 2021.

 

Supply: Historically Low and Favorable Conditions Are Expected to Continue

 

The housing market in the United States has not kept pace with population growth and household formation resulting in a shortage in supply. We believe that this supply imbalance has led to higher demand for housing across the country which ultimately affects housing prices. Due to this shortage of housing, the median home prices have increased much faster than what the consumer can afford creating an affordability problem for many Americans, exemplified in the home price to income ratio. In 1995, the home price to income ratio was 4.24, meaning the median cost of a single-family home in the U.S. was 4.24x the average median income. As of December 31, 2021, the home price to income ratio was 7.58, according to the Federal Reserve Bank of St. Louis. We believe that the “American Dream” of owning is starting to fade from the psychology of the U.S. consumer due to the hurdles associated with purchasing a home and the limited affordable supply available. This is exemplified by changes in the homeownership over the past 15 years where the homeownership rate across the country decreased in 90% of U.S. metropolitan areas. As of the end of 2022, the homeownership rate was 65.9% compared to 69% at its all-time high in 2004, according to a report by the U.S. Census Bureau.

 

We believe that the single-family rental industry is well-positioned to provide Americans, who prefer the lifestyle associated with being in a single-family home, an affordable housing solution.

 

Demand: Demographic Shifts and Professionally Managed Services

 

As the hurdles of homeownership continue to grow for the average American, we believe that the demand for rental housing has increased. This shift in demand for rental housing is one of the financial components driven by affordability, however, there is also a demographic shift in the perspective of housing. Delayed household formation, desired mobility, and the illiquidity associated with owning a home are large contributors to the increasing demand for rental housing in the U.S., specifically in the “millennial” population. Millennials, while potentially experiencing higher wage growth compared to previous generations, are also plagued with student debt. According to the Department of Education, as of December 2021, borrowers between ages 24-35 have an average outstanding loan balance of $33,600. This amounts to roughly 8% of the $408,100 median home price in the U.S. Said differently, many millennials have outstanding debt instead of liquidity that could be utilized for a down payment of a home. Millennials are also forming households much later than previous generations, meaning marriage and children are coming later in life. Typically, as these life events happen, the demand for more square footage and transition from apartment living to a single-family household occurs. We believe that the combination of student debt and the delay in household formation amongst the millennial population have contributed to the demand for single-family rental housing.

 

In addition to these structural hurdles that millennials face with respect to homeownership, we believe that there are psychological and geographic factors that play a part in the demand for rental housing. Psychologically, many millennials do not place as high of a value on homeownership as compared to previous generations. The purchase of a house is typically the largest investment that occurs in an individual’s lifetime and millennials are the generation that witnessed this class of investment depreciate during the financial recession. In addition, many millennials have more mobility due to remote working and improved technology. As commerce, industry and technology improve, fewer Americans will be required to be in an office which may lead to an increase in moving – especially in light of the recent move by many businesses to institute “work from home” policies as a result of the outbreak of COVID-19. The flexibility of being on an annual lease compared to owning a home allows for this optionality and thus, aids to drive demand for single family rentals. 

 

Lastly, we believe demand for single-family rentals will increase as the sophistication of the companies offering housing solutions improves. As of December 2021, single-family rental homes are not uncommon as there are roughly 17.5 million single-family rental homes across the U.S. and the industry has rapidly evolved since the 2008 recession. Since the recession, there has been an influx of institutional capital into the single-family rental space which has changed the general landscape of rental housing. As of December 2021, these institutions only account for less than 3% of the single-family rental industry, according to MetLife Investment Management.  We believe they have played a significant role in changing the product. Institutional ownership of single-family rental homes has provided services, technology and convenience to those looking to rent a single-family home and these institutions have been well-positioned to experience the demographic shift away from homeownership. We believe that the institutionalization of the single-family rental industry provides professional management services that make the renting process even easier for many Americans.

 

4

 

 

We believe that these drivers have impacted the single-family rental industry positively already. Single-family rental demand has increased by 31% in the past 10 years according to the Census American Community Survey, compared to 14% for multifamily properties. Additionally, single-family properties have outperformed multifamily properties with respect to rent growth, vacancies, and rent payment delinquencies. As consumer preferences related to housing evolve, we expect that the demand for single-family rental housing will increase and outpace other housing sectors.

 

Our Manager

 

Services Provided

 

Each Series has entered into a management agreement (each, a “Management Agreement”). Pursuant to the Management Agreement, the Manager, among other things, provides certain property management, consulting, Landa Mobile App hosting and support and legal and accounting services to each Series, as well as provides each Series with a management team and the appropriate support personnel to meet our operational needs. Under the Management Agreement, the Manager’s services include, but are not limited to, identifying properties for potential acquisition, conducting any required due diligence with respect to each property, obtaining property appraisals, coordinating inspections and financing (if needed), negotiating the purchase of the properties, arranging for rental of any properties, undertaking, and providing customized advisory services. In addition, the Manager granted each Series a license to use the Landa Mobile App. While we expect each Series to hold its Property indefinitely, the Manager may also coordinate the disposition of a Property, pursuant to the Management Agreement.

 

Investment Decisions and Asset Management 

 

Within our investment policies and objectives, the Manager has discretion with respect to the selection of specific investments and the purchase and sale of the Properties. We believe that successful real estate investment requires the implementation of strategies that permit favorable purchases, effective property management and timely disposition of such Properties. As such, the Manager employs a disciplined investment approach that utilizes its experience with a structure that emphasizes thorough market research, stringent underwriting standards and an extensive down-side analysis of the risks of each investment. The approach also includes active management of each Property acquired.

 

To execute our disciplined investment approach, the Manager takes responsibility for the business plan of each investment. The following practices summarize our investment approach:

 

Local Market Research – The Manager extensively researches the acquisition and underwriting of each transaction, utilizing both real time market data and the transactional knowledge and experience of our network of professionals and in market relationships.

 

Underwriting Discipline – The Manager follows a tightly controlled and managed process to examine all elements of a potential investment, including its location, income-producing capacity, prospects for long-range appreciation, tax considerations and liquidity.

 

Risk Management – Risk management is a fundamental principle in the management of each of the Properties. Operating or performance risks arise at the investment level and often require real estate operating experience to cure. The Manager reviews the operating performance of investments against projections and provides the oversight necessary to detect and resolve issues as they arise.

 

Property Management – Prior to the purchase of a Property, the Manager develops an asset business strategy which is customized based on the acquisition and underwriting data. This is a forecast of the action items to be taken and the capital needed to achieve the anticipated returns. The Manager reviews asset business strategies regularly to anticipate changes or opportunities in the market during a given phase of a real estate cycle.

 

5

 

 

Investments in Property

 

Our investment in real estate generally takes the form of holding fee simple title to the Properties.

 

Our obligation to purchase any Property generally is conditioned upon the delivery and verification of certain documents from the seller or developer, including, where appropriate:

 

  plans and specifications;

 

  evidence of marketable title subject to such liens and encumbrances as are acceptable to the Manager;

 

  auditable financial statements covering recent operations of Properties having operating histories;

 

  title and liability insurance policies; and

 

  any other documents or materials required in order to evaluate an investment in a property.

 

In purchasing, leasing and developing Properties, we are subject to risks generally incident to the ownership of real estate. For more information, please see the section entitled “Risk Factors – Risks Related to the Properties and the Offered Seriesof the Company’s latest Offering Circular, which can be found here and is incorporated herein by reference. 

 

Investment Process

 

The Manager has the authority to make all the decisions regarding the Series’ investments consistent with the investment objectives and leverage policies approved by the Manager and subject to the limitations in each Series’ Operating Agreement.

 

The Manager focuses on the sourcing, acquisition and management of residential properties. The Manager sources investments from former and current financing and investment partners, third-party intermediaries, competitors looking to share risk and investment, and securitization or lending departments of major financial institutions. 

  

In selecting investments, the Manager utilizes its investment and underwriting process, which focuses on ensuring that each prospective investment is being evaluated appropriately. The criteria that the Manager will consider when evaluating prospective opportunities include:

 

  macroeconomic conditions that may influence operating performance;

 

  real estate market factors that may influence real estate valuations, real estate financing or the economic performance of real estate generally;

 

  fundamental analysis of the real estate, including tenant rosters, lease terms, zoning, operating costs and the asset’s overall competitive position in its market;

 

  real estate and leasing market conditions affecting the Properties;

 

  the cash flow in place and projected to be in place over the expected holding period of the Properties;

 

  the appropriateness of estimated costs and timing associated with capital improvements of the Properties;

 

  a valuation of the investment, investment basis relative to its value and the ability to liquidate an investment through a sale or refinancing of the Properties;

 

6

 

 

  review of third-party reports, including appraisals, engineering and environmental reports;

 

  physical inspections of the real estate and analysis of markets; and

 

  the overall structure of the investment and rights in the transaction documentation.

 

The Manager analyzes each potential investment’s risk-return profile and reviews financing sources, if applicable, to ensure that the investment fits within the parameters of financing facilities and to ensure performance of the real estate asset. 

 

Disposition Policies 

 

We intend to hold and manage the Properties we acquire for an indefinite period of time.  If the Manager, acting in its sole discretion, decides to sell a particular property, it will seek to achieve a selling price that maximizes the distributions to investors based on then-current market conditions. We cannot assure you that this objective will be realized.

 

The determination of when a particular Property should be sold or otherwise disposed of will be made by the Manager, acting in its sole discretion, after consideration of relevant factors, including, but not limited to, prevailing and projected economic conditions, whether the value of the Property is anticipated to appreciate or decline substantially, how any existing leases on a Property may impact the potential sales price, and any other factors that the Manager may deem relevant. Pursuant to the applicable Series’ operating agreement, as well as the Company’s operating agreement, the Manager may determine that it is in the best interests of members to dispose of a Property.

 

Following the sale of a Property, the Manager will distribute the proceeds of such sale pro-rata to the holders of the Shares of the given Series (after payment of any accrued liabilities or debt on the Property or of the Series at that time).

 

Operating Expenses

 

Each Series is responsible for certain expenses related to such Series or the Property held by such Series (hereinafter “Operating Expenses”), including, but not limited to:

 

  interest expense under the applicable acquisition note issued by such Series to the Manager (each an “Acquisition Note”) and refinance note (each a “Refinance Note”) to the Manager and/or Lending One LLC (“Lending One”), as applicable;

 

  any and all fees, costs and expenses incurred in connection with the management of a Property, including Monthly Management Fees, Home Ownership Association fees, taxes, marketing fees, and security and maintenance fees;

 

  any and all insurance premiums or expenses, including property insurance in connection with the Series’ Property;

 

  any withholding or transfer taxes imposed on the Company or a Series as a result of its or their earnings, investments or withdrawals in connection with the Property;

 

  any governmental fees imposed on the capital of the Company or a Series or incurred in connection with compliance with applicable regulatory requirements in connection with the Property;

 

  any legal fees and costs (including settlement costs) arising in connection with any disputes with tenants, litigation or regulatory investigation instituted against the Series or a Manager in connection with the affairs of the Series;

 

7

 

 

  any fees, costs and expenses of engaging a third-party registrar and transfer agent appointed by the Manager in connection with a Series;

 

  any indemnification payments to be made pursuant to the obligations of the Series’ Operating Agreement;

 

  the fees and expenses of the Company’s or a Series’ counsel in connection with advice directly relating to the Series’ legal affairs;

 

  the costs of any other outside appraisers, inspectors, valuation firms, accountants, attorneys or other experts or consultants engaged by the Manager in connection with the operations of the Series; and

 

  any similar expenses that may be determined to be Operating Expenses, as determined by the Manager in its reasonable discretion.

 

The Manager bears its own expenses of an ordinary nature, including all administrative, operating and personnel costs and expenses, taxes, remuneration and expenses paid to employees and utilities expenditures.

 

If the Operating Expenses exceed the amount of revenues generated from a Series and cannot be covered by any Reserves of such Series’ Property, the Manager may (a) pay such Operating Expenses and seek reimbursement and/or (b) loan the amount of the Operating Expenses to the applicable Series and be entitled to reimbursement of such amount from future revenues generated by such Series. In the case that the Manager provides a loan to a Series, the Series will be obligated to pay interest no greater than 7% on that loan at a rate to be determined solely by the Manager. See “Description of Our Business—Our Manager—Manager Compensation.”

 

Further, if the Operating Expenses exceed the amount of revenues generated from a Series and cannot be covered by any remaining Reserves of such Series, then you may be unable to receive distributions until the Series can generate revenue.

 

The Landa Mobile App

 

The Manager owns and operates a mobile app-based investment platform, which we call the “Landa Mobile App.” Through the Landa Mobile App, investors can:

 

  browse Series’ Offerings and obtain information about a Series and/or Property, including location, property type and projected rental income;

 

  analyze Properties by reviewing neighborhood statistics and comparable properties in the relevant market;

 

  connect a bank account to the Landa Mobile App, transfer funds to their Landa Account and monitor their Landa Account balance;

 

  review the Series Materials for the applicable Series;

 

  transact entirely online, including executing digital legal documentation, funds transfer and ownership recordation; and

 

  manage and track investments through an online portfolio; and receive distributions and regular financial and tax reports.

 

We intend to offer and sell the Shares in our Offerings exclusively through the Landa Mobile App. The Landa Mobile app is available for download on iOS and Android devices.

 

8

 

 

Competition

 

There is significant competition in the real estate industry, including numerous REITs with property acquisition objectives similar to the Series. In addition, we face competition primarily from other real estate investment platform companies such as Roofstock, Inc., Fundrise LLC, Arrived Homes, LLC and Compound Projects, LLC, as well as a range of emerging new companies providing real estate investment products and services. 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.

 

Employees

  

We do not have any employees and are externally managed by the Manager. Currently, no Series has employees and we do not expect that any Series will have any employees. Employees of the Manager will provide all operational, administrative, and managerial services to the Company and each Series.

 

Legal Proceedings

 

There are no legal proceedings material to our business or financial condition pending and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

 

Risk Factors

 

We face risks and uncertainties that could affect us and our business as well as the real estate industry generally. These risks are outlined under the heading “Risk Factors” contained in the Company’s latest Offering Circular, which can be found here and is incorporated herein by reference, as the same may be updated from time to time by our future filings under Regulation A. In addition, new risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. These risks could result in a decrease in the value of our common shares.

 

9

 

 

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

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report. As noted in the independent auditor’s report, the audit of our financial statements was conducted for the purpose of forming an opinion on the combined financial statements as a whole. The series-level consolidating supplemental information is presented for purposes of additional analysis of the combined financial statements rather than to present the financial position, results of operations and cash flows of the individual series. The following discussion contains series-level detail that has not been audited. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

 

Overview

 

Since their formation in 2020, each Series has been engaged primarily in acquiring its underlying Property from Landa Properties, LLC (“Landa Properties”) financed initially through promissory notes issued to the Manager and developing the financial, offering and other materials to begin offering membership interests, or “Shares,” in such Series through the Landa Mobile App. See the Company’s latest Offering Circular under the headings “Description of the Properties” and “Use of Proceeds”, which can be found here, and are incorporated herein by reference, for a description of each of the Properties and information about their acquisition and financing. 

 

We are a development-stage company, since we are devoting substantially all our efforts to establishing and maintaining our business and planned principal operations have only recently commenced. As such, the reported financial information herein will likely not be indicative of future operating results or operating conditions. Because of our corporate structure, we are in large part reliant on the Manager and its employees to grow and support our business. There are a number of key factors that will have large potential impacts on our operating results going forward, including, but not limited to, the Manager’s ability to:

 

continue to identify and acquire high quality, attractive Properties at competitive prices to securitize on the Landa Mobile App;
   
market the Landa Mobile App and the Offerings in individual Series and attract investors to the Landa Mobile App;
   
continue to develop the Landa Mobile App and provide the information and technology infrastructure to support the issuance of interests; and
   
continue to build our existing infrastructure to manage the Properties at a decreasing marginal cost per Property.

 

The following Series were each organized in May 2020, acquired title to its underlying Property from Landa Properties on July 10, 2021, and commenced operations on July 10, 2021: Landa Series 115 Sardis Street, Landa Series 1394 Oakview Circle, Landa Series 1701 Summerwoods Lane, Landa Series 1741 Park Lane, Landa Series 209 Timber Wolf Trail, Landa Series 2505 Oak Circle, Landa Series 271 Timber Wolf Trail, and Landa Series 29 Holly Grove Road.

 

The following Series were each organized in May 2020, acquired title to its underlying Property from Landa Properties on January 10, 2022, and commenced operations on January 10, 2022: Landa Series 1703 Summerwoods Lane, Landa Series 1712 Summerwoods Lane, Landa Series 1743 Summerwoods Lane, Landa Series 1750 Summerwoods Lane, Landa Series 4267 High Park Lane, Landa Series 4474 Highwood Park Drive, Landa Series 8569 Creekwood Way, and Landa Series 8439 Lakeview Road.

 

The following Series were each organized in July 2021, acquired title to its underlying Property from Landa Properties on January 10, 2022, and commenced operations on January 10, 2022: Landa Series 10167 Port Royal Court, Landa Series 1246 Elgin Way, Landa Series 1910 Grove Way, Landa Series 593 Country Lane, Landa Series 6436 Stone Terrace, Landa Series 6440 Woodstone Terrace, Landa Series 6848 Sandy Creek Drive, Landa Series 687 Utoy Court, Landa Series 729 Winter Lane, Landa Series 7349 Exeter Court, Landa Series 8645 Embrey, Landa Series 8780 Chuchill Place, and Landa Series 8796 Parliament Place.

 

The following Series were each organized in September 2021, acquired title to its underlying Property from Landa Properties on January 10, 2022, and commenced operations on January 10, 2022: Landa Series 8641 Ashley Way, Landa Series 8651 Ashley Way, Landa Series 8652 Ashley Way, Landa Series 8653 Ashley Way, Landa Series 8654 Ashley Way, Landa Series 8655 Ashley Way, Landa Series 8659 Ashley Way, Landa Series 8662 Ashley Way, Landa Series 8668 Ashley Way, Landa Series 8670 Ashley Way, Landa Series 8674 Ashley Way, Landa Series 8675 Ashley Way, Landa Series 8677 Ashley Way, Landa Series 8678 Ashley Way, Landa Series 8679 Ashley Way, and Landa Series 8683 Ashley Way.

 

Recent Developments

 

On March 28, 2023, the Company commenced the offer and sale of 10,000 membership interests (each a “Share” and collectively, the “Shares”) in one-hundred eighty-one (181) additional Series, for an aggregate total of 1,810,000 Shares, pursuant to the Company’s latest qualified offering statement under Regulation A, which can be found here. As of May 5, 2023 42,400 shares in the aggregate were sold

 

10

 

 

Between March 31, 2023 and April 28, 2023, Landa Properties transferred title to the following Properties to the applicable Series, as set forth in the table below.

 

Series   Property
Landa App LLC - 10121 Morris Drive SW Covington GA LLC   10121 Morris Drive SW, Covington, GA 30014
Landa App LLC - 10183 Starr Street SW Covington GA LLC   10183 Starr Street SW, Covington, GA 30014
Landa App LLC - 103 Starlake Drive Jackson GA LLC   103 Starlake Drive, Jackson, GA 30260
Landa App LLC - 10433 Candlelight Road Jonesboro GA LLC   10433 Candlelight Road, Jonesboro, GA 30238
Landa App LLC - 110 Shenandoah Drive Covington GA LLC   110 Shenandoah Drive, Covington, GA 30016
Landa App LLC - 111 Fir Drive McDonough GA LLC   111 Fir Drive, McDonough, GA 30253
Landa App LLC - 112 Ridge Street Locust Grove GA LLC   112 Ridge Street, Locust Grove, GA 30248
Landa App LLC - 11322 Michelle Way Hampton GA LLC   11322 Michelle Way, Hampton, GA 30228
Landa App LLC - 1147 Village Way Stone Mountain GA LLC   1147 Village Way, Stone Mountain, GA 30088
Landa App LLC - 1160 Gable Terrace Jonesboro GA LLC   1160 Gable Terrace, Jonesboro, GA 30236
Landa App LLC - 1201 Kilrush Drive Mableton GA LLC   1201 Kilrush Drive, Mableton, GA 30126
Landa App LLC - 124 Libby Lane Jonesboro GA LLC   124 Libby Lane, Jonesboro, GA 30238
Landa App LLC - 1320 Winona Avenue Griffin GA LLC   1320 Winona Avenue, Griffin, GA 30223
Landa App LLC - 137 Southern Shores Road Jackson GA LLC   137 Southern Shores Road, Jackson, GA 30233
Landa App LLC - 138 Sandalwood Circle Lawrenceville GA LLC   138 Sandalwood Circle, Lawrenceville, GA 30046
Landa App LLC - 140 High Ridge Road Covington GA LLC   140 High Ridge Road, Covington, GA 30014
Landa App LLC - 146 Crystal Brook Griffin GA LLC   146 Crystal Brook, Griffin, GA 30223
Landa App LLC - 153 Cliffside Court Riverdale GA LLC   153 Cliffside Court, Riverdale, GA 30274
Landa App LLC - 1666 W Poplar Street Griffin GA LLC   1666 W Poplar Street, Griffin, GA 30224
Landa App LLC - 168 Brookview Drive Riverdale GA LLC   168 Brookview Drive, Riverdale, GA 30274
Landa App LLC - 1689 Viceroy Way Riverdale GA LLC   1689 Viceroy Way, Riverdale, GA 30296
Landa App LLC - 181 Watercress Court Stockbridge GA LLC   181 Watercress Court, Stockbridge, GA 30281
Landa App LLC - 188 Timberline Road Jackson GA LLC   188 Timberline Road, Jackson, GA 30233
Landa App LLC - 189 Shenandoah Drive Riverdale GA LLC   189 Shenandoah Drive, Riverdale, GA 30274
Landa App LLC - 195 Hunters Trace Covington GA LKC   195 Hunters Trace, Covington, GA 30014
Landa App LLC - 196 Montego Circle Riverdale GA LLC   196 Montego Circle, Riverdale, GA 30274
Landa App LLC - 212 Fleeta Drive Covington GA LLC   212 Fleeta Drive, Covington, GA 30016
Landa App LLC - 217 Glenloch Court Stockbridge GA LLC   217 Glenloch Court, Stockbridge, GA 30281
Landa App LLC - 2264 Chestnut Hill Circle Decatur GA LLC   2264 Chestnut Hill Circle, Decatur, GA 30032
Landa App LLC - 25 Pleasant Valley Road McDonough GA LLC   25 Pleasant Valley Road, McDonough, GA 30253
Landa App LLC - 253 Marco Drive Social Circle GA LLC   253 Marco Drive, Social Circle, GA 30025
Landa App LLC - 258 Rocky Point Road Covington GA LLC   258 Rocky Point Road, Covington, GA 30016
Landa App LLC - 268 Brookview Drive Riverdale GA LLC   268 Brookview Drive, Riverdale, GA 30274
Landa App LLC - 270 Mountain Lane Covington GA LLC   270 Mountain Lane, Covington, GA 30016
Landa App LLC - 270 Pleasant Hill Drive Covington GA LLC   270 Pleasant Hill Drive, Covington, GA 30016
Landa App LLC - 2813 Vicksburg Court Decatur GA LLC   2813 Vicksburg Court, Decatur, GA 30034
Landa App LLC - 2933 Coffer Drive Ellenwood GA LLC   2933 Coffer Drive, Ellenwood, GA 30294
Landa App LLC - 30 High Ridge Road Covington GA LLC   30 High Ridge Road, Covington, GA 30014
Landa App LLC - 30 Roosevelt Road Covington GA LLC   30 Roosevelt Road, Covington, GA 30016
Landa App LLC - 3011 Raintree Drive SE Conyers GA LLC   3011 Raintree Drive SE, Conyers, GA 30013
Landa App LLC - 3043 Highway 81 S Covington GA LLC   3043 Highway 81 S, Covington, GA 30016
Landa App LLC - 313 Blue Heron Drive Jonesboro GA LLC   313 Blue Heron Drive, Jonesboro, GA 30236
Landa App LLC - 3202 Chippewa Drive Rex GA LLC   3202 Chippewa Drive, Rex, GA 30273
Landa App LLC - 35 Clay Court Covington GA LLC   35 Clay Court, Covington, GA 30016
Landa App LLC - 350 Cadiz Lane S College Park GA LLC   350 Cadiz Lane S, College Park, GA 30349
Landa App LLC - 351 Wesley Park Drive Jonesboro GA LLC   351 Wesley Park Drive, Jonesboro, GA 30238
Landa App LLC - 43 Darwin Drive Jonesboro GA LLC   43 Darwin Drive, Jonesboro, GA 30238
Landa App LLC - 45 Blue Jay Drive Covington GA LLC   45 Blue Jay Drive, Covington, GA 30016
Landa App LLC - 4702 Saint James Way Decatur GA LLC   4702 Saint James Way, Decatur, GA 30035
Landa App LLC - 4732 Pinedale Drive Forest Park GA LLC   4732 Pinedale Drive, Forest Park, GA 30297
Landa App LLC - 5040 Huntshire Lane Lilburn GA LLC   5040 Huntshire Lane, Lilburn, GA 30047
Landa App LLC - 513 Jarrett Court McDonough GA LLC   513 Jarrett Court, McDonough, GA 30253

 

11

 

 

Series   Property
Landa App LLC - 5143 Pinecrest Drive SW Covington GA LLC   5143 Pinecrest Drive SW, Covington, GA 30014
Landa App LLC - 540 Cowan Road Covington GA LLC   540 Cowan Road, Covington, GA 30016
Landa App LLC - 565 Mountainview Drive Covington GA LLC   565 Mountainview Drive, Covington, GA 30016
Landa App LLC - 5801 Strathmoor Manor Circle Lithonia GA LLC   5801 Strathmoor Manor Circle, Lithonia, GA 30058
Landa App LLC - 6107 Shadow Glen Court Covington GA LLC   6107 Shadow Glen Court, Covington, GA 30014
Landa App LLC - 6111-6113 Pine Glen Circle SW Covington GA LLC   6111-6113 Pine Glen Circle SW, Covington, GA 30014
Landa App LLC - 615 Barshay Drive Covington GA LLC   615 Barshay Drive, Covington, GA 30016
Landa App LLC - 6168 Wheat Street NE Covington GA LLC   6168 Wheat Street NE, Covington, GA 30014
Landa App LLC - 6178 Green Acres Drive SW Covington GA LLC   6178 Green Acres Drive SW, Covington, GA 30014
Landa App LLC - 643 Sycamore Drive Jonesboro GA LLC   643 Sycamore Drive, Jonesboro, GA 30238
Landa App LLC - 65 Freedom Court Covington GA LLC   65 Freedom Court, Covington, GA 30016
Landa App LLC - 6635 Kimberly Mill Road College Park GA LLC   6635 Kimberly Mill Road, College Park, GA 30349
Landa App LLC - 6653 Bedford Road Rex GA LLC   6653 Bedford Road, Rex, GA 30273
Landa App LLC - 6762 Bent Creek Drive Rex GA LLC   6762 Bent Creek Drive, Rex, GA 30273
Landa App LLC - 709 Georgetown Court Jonesboro GA LLC   709 Georgetown Court, Jonesboro, GA 30236
Landa App LLC - 7107 Geiger Street NW Covington GA LLC   7107 Geiger Street NW Covington GA 30016
Landa App LLC - 750 Georgetown Court Jonesboro GA LLC   750 Georgetown Court, Jonesboro ,GA 30236
Landa App LLC - 752 Chestnut Drive Jackson GA LLC   752 Chestnut Drive, Jackson, GA 30233
Landa App LLC - 773 Villa Way Jonesboro GA LLC   773 Villa Way, Jonesboro, GA 30238
Landa App LLC - 7781 Mountain Creek Way Douglasville GA LLC   7781 Mountain Creek Way, Douglasville, GA 30134
Landa App LLC - 7950 Woodlake Drive Riverdale GA LLC   7950 Woodlake Drive, Riverdale, GA 30274
Landa App LLC - 80 High Ridge Road Covington GA LLC   80 High Ridge Road, Covington, GA 30014
Landa App LLC - 808 Hillandale Lane Lithonia GA LLC   808 Hillandale Lane, Lithonia, GA 30058
Landa App LLC - 8110 Devonshire Drive Jonesboro GA LLC   8110 Devonshire Drive, Jonesboro, GA 30238
Landa App LLC - 8121 Spillers Drive SW Covington GA LLC   8121 Spillers Drive SW, Covington, GA 30014
Landa App LLC - 8233 Creekline Court Riverdale GA LLC   8233 Creekline Court, Riverdale, GA 30274
Landa App LLC - 843 Tramore Drive Stockbridge GA LLC   843 Tramore Drive, Stockbridge, GA 30281
Landa App LLC - 85 Kirkland Court Covington GA LLC   85 Kirkland Court, Covington, GA 30016
Landa App LLC - 85 Thorn Thicket Way Rockmart GA LLC   85 Thorn Thicket Way, Rockmart, GA 30153
Landa App LLC - 8855 Rugby Court Jonesboro GA LLC   8855 Rugby Court, Jonesboro, GA 30238
Landa App LLC - 9434 Cedar Creek Place Douglasville GA LLC   9434 Cedar Creek Place, Douglasville, GA 30135
Landa App LLC - 9597 Pintail Trail Jonesboro GA LLC   9597 Pintail Trail, Jonesboro, GA 30238
Landa App LLC - 1701 Summerwoods Lane Griffin GA LLC   1701 Summerwoods Lane, Griffin, GA 30224
Landa App LLC - 1741 Park Lane Griffin GA LLC   1741 Park Lane, Griffin, GA 30224

 

12

 

 

Each of the following Series issued an Acquisition Note to the Manager in connection with the acquisition of its Property, the terms of which are listed in the table below. Each of these Acquisition Notes represents a related-party loan between each respective Series and the Manager. The Acquisition Notes are interest-bearing, have a five (5) year term from their respective Loan Date (listed below), and are an unsecured obligation of the applicable Series.

 

Series  Principal
Amount (1)
   Annual
Interest
Rate
   Loan
Date (2)
Landa Series 10 Oak Wood Lane  $254,456    4.50%  7/1/2022
Landa Series 10 Windridge Drive  $256,422    4.50%  7/1/2022
Landa Series 1000 Fox Valley Trail  $297,984    4.50%  7/1/2022
Landa Series 1007 Leeward Way  $300,157    4.50%  7/1/2022
Landa Series 10119 Commons Way  $306,450    4.50%  7/1/2022
Landa Series 10121 Morris Drive SW  $278,235    4.50%  7/1/2022
Landa Series 10183 Starr Street SW  $268,383    4.50%  7/1/2022
Landa Series 103 Starlake Drive  $267,883    4.50%  7/1/2022
Landa Series 104 Summerfield Drive  $300,059    4.50%  7/1/2022
Landa Series 10433 Candlelight Road  $305,757    4.50%  7/1/2022
Landa Series 105 Anne Street  $253,115    4.50%  7/1/2022
Landa Series 107 Oakwood Circle  $198,781    4.50%  7/1/2022
Landa Series 109 Amberwood Lane  $216,284    4.50%  7/1/2022
Landa Series 110 Shenandoah Drive  $310,797    4.50%  7/1/2022
Landa Series 111 Fir Drive  $240,106    4.50%  7/1/2022

 

13

 

 

Series  Principal
Amount (1)
   Annual
Interest
Rate
   Loan
Date (2)
Landa Series 1110 Parkview Drive  $260,727    4.50%  7/1/2022
Landa Series 11187 Shannon Circle  $310,885    4.50%  7/1/2022
Landa Series 112 Ridge Street  $309,709    4.50%  7/1/2022
Landa Series 11322 Michelle Way  $250,982    4.50%  7/1/2022
Landa Series 114 Starlake Drive  $253,436    4.50%  7/1/2022
Landa Series 11447 S Grove Drive  $284,781    4.50%  7/1/2022
Landa Series 1147 Village Way  $301,010    4.50%  7/1/2022
Landa Series 115 Lakeview Drive  $285,786    4.50%  7/1/2022
Landa Series 1160 Gable Terrace  $301,175    4.50%  7/1/2022
Landa Series 1190 Kirkland Road  $323,791    4.50%  7/1/2022
Landa Series 12 Mintz Street  $264,035    4.50%  7/1/2022
Landa Series 120 Rosewood Drive  $286,873    4.50%  7/1/2022
Landa Series 1201 Kilrush Drive  $535,920    4.50%  7/1/2022
Landa Series 124 Libby Lane  $240,485    4.50%  7/1/2022
Landa Series 126 E Mimosa Drive  $256,451    4.50%  7/1/2022
Landa Series 12641 Alcovy Road  $307,481    4.50%  7/1/2022
Landa Series 1320 Winona Avenue  $220,795    4.50%  7/1/2022
Landa Series 133 Dove Landing  $227,058    4.50%  7/1/2022
Landa Series 137 Southern Shores Road  $240,268    4.50%  7/1/2022
Landa Series 138 Sandalwood Circle  $253,616    4.50%  7/1/2022
Landa Series 140 High Ridge Road  $285,784    4.50%  7/1/2022
Landa Series 141 Longstreet Circle  $331,402    4.50%  7/1/2022
Landa Series 1443 Pebble Ridge Lane  $319,610    4.50%  7/1/2022
Landa Series 1445 Maple Valley Court  $200,632    4.50%  7/1/2022
Landa Series 146 Crystal Brook  $212,200    4.50%  7/1/2022
Landa Series 1473 Brownleaf Drive  $282,588    4.50%  7/1/2022
Landa Series 1485 Bola Court  $258,597    4.50%  7/1/2022
Landa Series 1490 Diplomat Drive  $354,470    4.50%  7/1/2022
Landa Series 153 Cliffside Court  $185,856    4.50%  7/1/2022
Landa Series 157 Wells Road  $221,620    4.50%  7/1/2022
Landa Series 160 Chimney Ridge Trail  $286,873    4.50%  7/1/2022
Landa Series 164 Longstreet Circle  $289,049    4.50%  7/1/2022
Landa Series 1666 W Poplar Street  $231,406    4.50%  7/1/2022
Landa Series 168 Brookview Drive  $132,243    4.50%  7/1/2022
Landa Series 1683 Spoonbill Road  $244,459    4.50%  7/1/2022
Landa Series 1689 Viceroy Way  $280,628    4.50%  7/1/2022
Landa Series 171 Davidson Drive  $303,132    4.50%  7/1/2022
Landa Series 1768 Glen View Way  $250,620    4.50%  7/1/2022
Landa Series 181 Watercress Court  $274,908    4.50%  7/1/2022
Landa Series 188 Timberline Road  $161,802    4.50%  7/1/2022
Landa Series 189 Shenandoah Drive  $256,420    4.50%  7/1/2022
Landa Series 1903 Old Concord Drive SE  $308,568    4.50%  7/1/2022
Landa Series 195 Branchwood Drive  $316,179    4.50%  7/1/2022
Landa Series 195 Fairclift Drive  $285,786    4.50%  7/1/2022
Landa Series 195 Hunters Trace  $316,955    4.50%  7/1/2022
Landa Series 196 Montego Circle  $267,295    4.50%  7/1/2022
Landa Series 20 Chimney Smoke Drive  $286,873    4.50%  7/1/2022
Landa Series 204 N Main Court  $227,058    4.50%  7/1/2022
Landa Series 2055 Grove Way  $248,809    4.50%  7/1/2022
Landa Series 212 Fleeta Drive  $233,632    4.50%  7/1/2022
Landa Series 215 Central Lake Circle  $267,251    4.50%  7/1/2022
Landa Series 217 Glenloch Court  $308,621    4.50%  7/1/2022
Landa Series 2177 E Chester Circle SE  $312,950    4.50%  7/1/2022
Landa Series 221 Lakeview Drive  $297,749    4.50%  7/1/2022
Landa Series 2264 Chestnut Hill Circle  $379,313    4.50%  7/1/2022
Landa Series 235 Lazy Hollow Lane  $299,259    4.50%  7/1/2022

 

14

 

 

Series  Principal
Amount (1)
   Annual
Interest
Rate
   Loan
Date (2)
Landa Series 2425 Cornell Circle  $331,464    4.50%  7/1/2022
Landa Series 2443 Hodges Farm Road  $245,546    4.50%  7/1/2022
Landa Series 25 Pleasant Valley Road  $283,609    4.50%  7/1/2022
Landa Series 253 Marco Drive  $232,761    4.50%  7/1/2022
Landa Series 255 Countryside Lane  $294,486    4.50%  7/1/2022
Landa Series 258 Rocky Point Road  $315,147    4.50%  7/1/2022
Landa Series 263 Rocky Point Road  $279,261    4.50%  7/1/2022
Landa Series 268 Brookview Drive  $188,408    4.50%  7/1/2022
Landa Series 270 Mountain Lane  $291,683    4.50%  7/1/2022
Landa Series 270 Mountain Way  $287,961    4.50%  7/1/2022
Landa Series 270 Pleasant Hill Drive  $273,208    4.50%  7/1/2022
Landa Series 2794 Norfair Loop  $233,583    4.50%  7/1/2022
Landa Series 2813 Vicksburg Court  $337,986    4.50%  7/1/2022
Landa Series 2933 Coffer Drive  $281,715    4.50%  7/1/2022
Landa Series 30 High Ridge Road  $332,846    4.50%  7/1/2022
Landa Series 30 Roosevelt Road  $284,696    4.50%  7/1/2022
Landa Series 3011 Raintree Drive SE  $310,013    4.50%  7/1/2022
Landa Series 304 Deerfield Drive  $291,845    4.50%  7/1/2022
Landa Series 3043 Highway 81 S  $216,225    4.50%  7/1/2022
Landa Series 313 Blue Heron Drive  $271,457    4.50%  7/1/2022
Landa Series 3202 Chippewa Drive  $298,834    4.50%  7/1/2022
Landa Series 35 Clay Court  $303,197    4.50%  7/1/2022
Landa Series 350 Cadiz Lane S  $277,083    4.50%  7/1/2022
Landa Series 351 Wesley Park Drive  $260,770    4.50%  7/1/2022
Landa Series 3603 Manhattan Drive  $326,027    4.50%  7/1/2022
Landa Series 3667 Patti Parkway  $379,317    4.50%  7/1/2022
Landa Series 404 Barberry Lane  $285,892    4.50%  7/1/2022
Landa Series 412 Kendall Lane  $296,763    4.50%  7/1/2022
Landa Series 416 Autumn Lake Court  $266,210    4.50%  7/1/2022
Landa Series 43 Darwin Drive  $252,069    4.50%  7/1/2022
Landa Series 432 Manor Estates Drive  $314,170    4.50%  7/1/2022
Landa Series 440 Freestone Drive  $331,496    4.50%  7/1/2022
Landa Series 4447 Lake Breeze Drive  $342,340    4.50%  7/1/2022
Landa Series 445 Independence Drive  $298,780    4.50%  7/1/2022
Landa Series 449 Kara Lane  $265,401    4.50%  7/1/2022
Landa Series 45 Blue Jay Drive  $353,211    4.50%  7/1/2022
Landa Series 45 Laurel Way  $340,100    4.50%  7/1/2022
Landa Series 4702 Saint James Way  $267,453    4.50%  7/1/2022
Landa Series 4732 Pinedale Drive  $234,719    4.50%  7/1/2022
Landa Series 497 Highway 212  $279,211    4.50%  7/1/2022
Landa Series 5039 East Street  $207,482    4.50%  7/1/2022
Landa Series 5040 Huntshire Lane  $444,985    4.50%  7/1/2022
Landa Series 513 Jarrett Court  $289,113    4.50%  7/1/2022
Landa Series 5143 Pinecrest Drive SW  $227,104    4.50%  7/1/2022
Landa Series 524 Sawmill Road  $283,679    4.50%  7/1/2022
Landa Series 5329 Shirewick Lane  $337,990    4.50%  7/1/2022
Landa Series 540 Cowan Road  $299,557    4.50%  7/1/2022
Landa Series 5411 Rocky Pine Drive  $309,885    4.50%  7/1/2022
Landa Series 55 Myrtle Grove Lane  $291,224    4.50%  7/1/2022
Landa Series 550 Cowan Road  $250,783    4.50%  7/1/2022
Landa Series 5581 Fox Glen Circle  $434,715    4.50%  7/1/2022
Landa Series 565 Mountainview Drive  $283,236    4.50%  7/1/2022

 

15

 

 

Series  Principal
Amount (1)
   Annual
Interest
Rate
   Loan
Date (2)
Landa Series 5737 Strathmoor Manor Circle  $254,247    4.50%  7/1/2022
Landa Series 5801 Strathmoor Manor Circle  $262,945    4.50%  7/1/2022
Landa Series 6104-6106 Oakwood Circle SW  $247,853    4.50%  7/1/2022
Landa Series 6107 Shadow Glen Court  $212,961    4.50%  7/1/2022
Landa Series 6111-6113 Pine Glen Circle SW  $456,530    4.50%  7/1/2022
Landa Series 6119 Pineneedle Drive SW  $166,154    4.50%  7/1/2022
Landa Series 615 Barshay Drive  $291,964    4.50%  7/1/2022
Landa Series 6168 Wheat Street NE  $187,898    4.50%  7/1/2022
Landa Series 6178 Green Acres Drive SW  $223,434    4.50%  7/1/2022
Landa Series 6386 Forester Way  $296,833    4.50%  7/1/2022
Landa Series 6404 Walnut Way  $279,261    4.50%  7/1/2022
Landa Series 643 Sycamore Drive  $270,184    4.50%  7/1/2022
Landa Series 65 Freedom Court  $293,884    4.50%  7/1/2022
Landa Series 653 Georgetown Lane  $285,870    4.50%  7/1/2022
Landa Series 6635 Kimberly Mill Road  $328,712    4.50%  7/1/2022
Landa Series 6653 Bedford Road  $278,623    4.50%  7/1/2022
Landa Series 6710 Sunset Hills Boulevard  $236,846    4.50%  7/1/2022
Landa Series 6762 Bent Creek Drive  $279,258    4.50%  7/1/2022
Landa Series 683 Wood Path Court  $328,476    4.50%  7/1/2022
Landa Series 70 Shenandoah Lane  $335,751    4.50%  7/1/2022
Landa Series 709 Georgetown Court  $276,058    4.50%  7/1/2022
Landa Series 7107 Geiger Street NW  $160,714    4.50%  7/1/2022
Landa Series 7205 Lakeview Drive SW  $292,311    4.50%  7/1/2022
Landa Series 750 Georgetown Court  $227,055    4.50%  7/1/2022
Landa Series 752 Chestnut Drive  $197,731    4.50%  7/1/2022
Landa Series 773 Villa Way  $119,844    4.50%  7/1/2022
Landa Series 7781 Mountain Creek Way  $301,080    4.50%  7/1/2022
Landa Series 7950 Woodlake Drive  $250,982    4.50%  7/1/2022
Landa Series 80 High Ridge Road  $302,097    4.50%  7/1/2022
Landa Series 800 Mills Drive  $336,839    4.50%  7/1/2022
Landa Series 808 Hillandale Lane  $285,336    4.50%  7/1/2022
Landa Series 8110 Devonshire Drive  $212,961    4.50%  7/1/2022
Landa Series 8121 Spillers Drive SW  $244,946    4.50%  7/1/2022
Landa Series 8233 Creekline Court  $293,652    4.50%  7/1/2022
Landa Series 8302 Sterling Lakes Drive  $305,362    4.50%  7/1/2022
Landa Series 843 Tramore Drive  $195,489    4.50%  7/1/2022
Landa Series 85 Kirkland Court  $331,460    4.50%  7/1/2022
Landa Series 85 Thorn Thicket Way  $294,552    4.50%  7/1/2022
Landa Series 8658 Ashley Way  $190,908    4.50%  7/1/2022
Landa Series 8667 Ashley Way  $136,737    4.50%  7/1/2022
Landa Series 8671 Ashley Way  $200,777    4.50%  7/1/2022
Landa Series 8676 Ashley Way  $205,683    4.50%  7/1/2022
Landa Series 8691 Ashley Way  $148,555    4.50%  7/1/2022
Landa Series 8692 Ashley Way  $145,859    4.50%  7/1/2022
Landa Series 8693 Ashley Way  $220,464    4.50%  7/1/2022
Landa Series 8694 Ashley Way  $200,996    4.50%  7/1/2022
Landa Series 8697 Ashley Way  $218,458    4.50%  7/1/2022
Landa Series 8819 Leafwood Court  $282,606    4.50%  7/1/2022
Landa Series 8855 Rugby Court  $221,665    4.50%  7/1/2022
Landa Series 9020 Sterling Ridge Lane  $236,659    4.50%  7/1/2022
Landa Series 9150 Spillers Drive SW  $253,159    4.50%  7/1/2022
Landa Series 925 Mote Road  $311,830    4.50%  7/1/2022
Landa Series 9409 Forest Knoll Drive  $307,642    4.50%  7/1/2022
Landa Series 9434 Cedar Creek Place  $331,780    4.50%  7/1/2022
Landa Series 9597 Pintail Trail  $301,292    4.50%  7/1/2022
Landa Series 974 Laurel Street  $278,298    4.50%  7/1/2022
Landa Series 1701 Summerwoods Lane  $172,405    4.50%  7/1/2022
Landa Series 1741 Park Lane  $195,085    4.50%  7/1/2022

 

(1)The principal amount will be due and payable by the Series within 30 days after demand by the Manager, as lender, at any time prior to the liquidation, dissolution or winding up of the Series.

 

(2)Each Acquisition Note was entered into on the date set forth in the table above. Interest began to accrue on the Acquisition Notes when title to the Property was transferred to the Series.

 

16

 

 

On April 28 2023, each of the following Series entered into Additional Borrowings (as such term is defined in the Company’s latest Offering Circular, which can be found here) with L Finance LLC, the terms of which are listed in the table below. Each Additional Borrowing is secured by the Property underlying the respective Series, and bears interest at a rate that is the higher of SOFR+7%, or 12.5%.

 

Series  Principal
Amount
   Maturity
Date
Landa Series 10121 Morris Drive SW  $160,225   04/28/2024
Landa Series 10183 Starr Street SW  $172,550   04/28/2024
Landa Series 103 Starlake Drive  $145,000   04/28/2024
Landa Series 10433 Candlelight Road  $170,375   04/28/2024
Landa Series 110 Shenandoah Drive  $192,125   04/28/2024
Landa Series 111 Fir Drive  $145,000   04/28/2024
Landa Series 112 Ridge Street  $178,350   04/28/2024
Landa Series 11322 Michelle Way  $137,750   04/28/2024
Landa Series 1147 Village Way  $148,625   04/28/2024
Landa Series 1160 Gable Terrace  $203,000   04/28/2024
Landa Series 1201 Kilrush Drive  $322,625   04/28/2024
Landa Series 124 Libby Lane  $160,950   04/28/2024
Landa Series 1320 Winona Avenue  $106,038   04/28/2024
Landa Series 137 Southern Shores Road  $159,500   04/28/2024
Landa Series 138 Sandalwood Circle  $163,125   04/28/2024
Landa Series 140 High Ridge Road  $174,000   04/28/2024
Landa Series 146 Crystal Brook  $141,375   04/28/2024
Landa Series 153 Cliffside Court  $94,250   04/28/2024
Landa Series 1666 W Poplar Street  $155,875   04/28/2024
Landa Series 1689 Viceroy Way  $188,500   04/28/2024
Landa Series 181 Watercress Court  $142,100   04/28/2024
Landa Series 188 Timberline Road  $72,500   04/28/2024
Landa Series 189 Shenandoah Drive  $143,550   04/28/2024
Landa Series 195 Hunters Trace  $177,625   04/28/2024
Landa Series 196 Montego Circle  $159,500   04/28/2024
Landa Series 212 Fleeta Drive  $170,375   04/28/2024
Landa Series 217 Glenloch Court  $232,000   04/28/2024
Landa Series 2264 Chestnut Hill Circle  $226,200   04/28/2024
Landa Series 25 Pleasant Valley Road  $159,500   04/28/2024
Landa Series 253 Marco Drive  $148,625   04/28/2024
Landa Series 258 Rocky Point Road  $184,875   04/28/2024
Landa Series 270 Mountain Lane  $185,600   04/28/2024
Landa Series 270 Pleasant Hills Drive  $170,375   04/28/2024
Landa Series 2813 Vicksburg Court  $210,250   04/28/2024
Landa Series 2933 Coffer Drive  $174,000   04/28/2024
Landa Series 30 High Ridge Road  $163,125   04/28/2024
Landa Series 30 Roosevelt Road  $184,875   04/28/2024
Landa Series 3011 Raintree Drive SE  $184,875   04/28/2024
Landa Series 3043 Highway 81 S  $155,875   04/28/2024
Landa Series 313 Blue Heron Drive  $174,000   04/28/2024
Landa Series 3202 Chippewa Drive  $152,250   04/28/2024
Landa Series 35 Clay Court  $174,000   04/28/2024
Landa Series 350 Cadiz Lane S  $163,125   04/28/2024
Landa Series 351 Wesley Park Drive  $152,250   04/28/2024

 

17

 

 

Series  Principal
Amount
   Maturity
Date
Landa Series 43 Darwin Drive  $163,125   04/28/2024
Landa Series 45 Blue Jay Drive  $222,575   04/28/2024
Landa Series 4702 Saint James Way  $145,725   04/28/2024
Landa Series 4732 Pinedale Drive  $123,250   04/28/2024
Landa Series 5040 Huntshire Lane  $308,125   04/28/2024
Landa Series 513 Jarrett Court  $181,250   04/28/2024
Landa Series 5143 Pinecrest Drive SW  $130,500   04/28/2024
Landa Series 540 Cowan Road  $188,500   04/28/2024
Landa Series 565 Mountainview Drive  $188,500   04/28/2024
Landa Series 5801 Strathmoor Manor Circle  $143,550   04/28/2024
Landa Series 6107 Shadow Glen Court  $131,225   04/28/2024
Landa Series 6111-6113 Pine Glen Circle SW  $181,250   04/28/2024
Landa Series 615 Barshay Drive  $174,000   04/28/2024
Landa Series 6168 Wheat Street NE  $108,750   04/28/2024
Landa Series 6178 Green Acres Drive SW  $130,500   04/28/2024
Landa Series 643 Sycamore Drive  $178,350   04/28/2024
Landa Series 65 Freedom Court  $159,500   04/28/2024
Landa Series 6635 Kimberly Mill Road  $176,900   04/28/2024
Landa Series 6653 Bedford Road  $159,500   04/28/2024
Landa Series 6762 Bent Creek Drive  $192,125   04/28/2024
Landa Series 709 Georgetown Court  $170,375   04/28/2024
Landa Series 7107 Geiger Street NW  $126,875   04/28/2024
Landa Series 750 Georgetown Court  $152,250   04/28/2024
Landa Series 752 Chestnut Drive  $105,125   04/28/2024
Landa Series 7781 Mountain Creek Way  $202,928   04/28/2024
Landa Series 7950 Woodlake Drive  $142,100   04/28/2024
Landa Series 80 High Ridge Road  $184,875   04/28/2024
Landa Series 808 Hillandale Lane  $171,000   04/28/2024
Landa Series 8110 Devonshire Drive  $134,125   04/28/2024
Landa Series 8121 Spillers Drive SW  $126,875   04/28/2024
Landa Series 8233 Creekline Court  $152,119   04/28/2024
Landa Series 85 Kirkland Court  $206,625   04/28/2024
Landa Series 85 Thorn Thicket Way  $172,550   04/28/2024
Landa Series 8855 Rugby Court  $123,250   04/28/2024
Landa Series 9434 Cedar Creek Place  $195,750   04/28/2024
Landa Series 9597 Pintail Trail  $163,125   04/28/2024

 

18

 

 

Lastly, subsequent to the qualification of the Company’s latest Offering Circular (which can be found here), the Company reported recent developments on Form 1-U, including dividend payments, lease renewals, or other developments with respect to certain Series. These can be found here (dividend payments), here (lease renewals), here (transfer of title), and here (issuance of notes), each of which are incorporated by reference to their respective hyperlinked Form 1-U.

 

Market Outlook—Real Estate Finance Markets 

 

While the ongoing impact of COVID-19 has created uncertainty about the overall stability of the economic and financial market, we remain encouraged by the fundamentals of the residential housing market and believe there will be an increased demand for residential rentals. As we look ahead the next three years, we believe improving fundamentals, transactions, and residential real estate lending activities will continue to strengthen in core United States metro markets. We also expect high foreign direct investment in United States markets and real estate assets to continue. Further, the assistance provided by governmental support programs and commitments is expected to support U.S. capital markets over the immediate future. 

 

If markets continue to strengthen, the competition for risk-adjusted yield will become increasingly fierce. We believe that innovative funding options and quicker closing timelines from the Manager allow for greater financing availability in a period of rising competition amongst capital providers. 

 

However, risks related to inflation, interest rate hikes and regulatory uncertainty could adversely affect growth and the values of our investments. In the event market fundamentals deteriorate, our real estate portfolio may be impaired as a result of lower occupancy, lower rental rates, and/or declining values. Further, these circumstances may materially impact the cost and availability of credit to borrowers, hampering the ability of the Manager to acquire new investments with attractive risk-reward dynamics. 

 

Over the short term, we remain cautiously optimistic about the opportunity to acquire investments offering attractive risk-adjusted returns in our targeted investment markets. However, we recognize disruptions in financial markets can occur at any time. By targeting modest leverage and short target investment durations, we believe we will remain well positioned, as compared to our competitors, in the event current market dynamics deteriorate. 

 

Recently, the US experienced the fastest increase in prices since 1981, leading to inflation exceeding nine percent (9%) in June 2022 and six and a half percent (6.5%) in December 2022, according to the U.S. Bureau of Labor Statistics. In response, the Federal Reserve raised interest rates by the largest amount since 1994, ending a near four-decade trend of falling, near-zero interest rates. This shift in interest rates drove mortgage rates to their highest levels in nearly 14 years. We believe that the net result of these increases in interest rates further deter home purchase activity generally, but particularly among millennials who are more likely to require debt, which ultimately may lead to an increase in demand for rentals. 

 

Rising inflation may adversely affect a Series by increasing costs of goods, materials, labor, and fuel, which may increase such Series’ operating expenses. In addition, higher interest rates, may make it difficult or expensive for a Series to refinance any outstanding indebtedness, including the Acquisition Notes (as defined in the Offering Circular) or the Additional Borrowings, with a new mortgage or other debt financing. As of the date hereof, neither the Company nor any of the Series has been materially impacted by inflationary pressures or rising interest rates. The Manager will continue to monitor and assess economic conditions, and intends to take reasonable steps to mitigate any impact on a Series and/or its underlying Property, or the Company in general.

 

Impact of Coronavirus Pandemic

 

The international spread of COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. The extent to which this pandemic could continue to affect our financial condition, liquidity, and results of operations is difficult to predict and depends on evolving factors, including, but not limited to, duration, scope, government actions, and other social responses. Beginning in March 2020, many states in the U.S., including Georgia, where our current Properties are located, implemented stay-at-home and shutdown orders for all “non-essential” business and activity in an aggressive effort to mitigate the spread of COVID-19. These orders have continued to evolve resulting in a full or partial lifting of these restrictions at various points over the past two years. Vaccinations for the COVID-19 virus have been widely distributed among the general U.S. population which has resulted in a loosening of previously mandated restrictions. However, the potential emergence of vaccine-resistant variants of COVID-19 could trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements.

 

The pandemic’s duration and severity and the extent of the adverse health impact on the general population and on the local population where our Properties are and will be located are unknown. These, among other items, will likely impact the economy, the unemployment rate and our operations, and could materially affect our future combined results of operations, financial condition, liquidity, investments and overall performance. In addition, our business may be affected by our ability to hire and/or maintain adequate staffing and by disruption in the supply chain for building, construction and related goods and materials. For more information, please see the section entitled “Risk Factors – The COVID-19 pandemic may adversely affect our businessof our Offering Circular, which is incorporated herein by reference.

 

19

 

 

Results of Operations

 

The following table sets forth key components of our results of operations during the years ended December 31, 2022 and 2021. 

 

Category  Year
Ended
December 31,
2022
   Year
Ended
December 31,
2021
 
Rental Income  $512,735   $78,454 
Gain on Sale of Real Estate   142,750    - 
Management Fee   39,888    6,254 
Repairs and Maintenance   117,194    12,168 
Homeowners Association Fee   15,274    1,330 
Insurance Expense   15,551    3,360 
Real Estate Taxes   70,129    10,197 
Depreciation   161,513    26,115 
Interest Expense   172,141    16,232 
Bad Debt Expense   -    1,997 
Other Expense   2,630    264 
Net Operating Income (Loss) before income taxes   61,165    537 
Provision for income taxes   28,720    2,453 
Net Income/(Loss)  $32,445   $(1,916)

 

Revenues

 

Revenues are generated at the Series level. Each Series generates revenue through rental income earned from its underlying Property. Our total revenue for all Series in the aggregate increased by $434,281, or 554%, to $512,735 for the year ended December 31, 2022 from $78,454 for the year ended December 31, 2021.

 

Operating Expenses

 

The Operating Expenses incurred by each Series prior to such Series acquiring title to its underlying Property from Landa Properties are paid by the Manager. For more information about the operating expenses of the Series and the Properties, please see “Description of our Business – Operating Expenses” in the Company’s latest Offering Circular, which can be found here and is incorporated herein by reference.

 

Each Series is responsible for its own Operating Expenses once it acquires title to its underlying Property.

 

For the years ended December 31, 2022 and 2021, the Series in the aggregate incurred $594,320 and $77,917, respectively, in Operating Expenses (on a total combined basis).

 

The following table summarizes the Operating Expenses by category:

 

Operating Expenses  Year
Ended
December 31,
2022
   Year
Ended
December 31,
2021
 
Management Fee  $39,888   $6,254 
Repairs and Maintenance   117,194    12,168 
Homeowners Association Fees   15,274    1,330 
Insurance Expense   15,551    3,360 
Real Estate Taxes   70,129    10,197 
Depreciation Expense   161,513    26,115 
Interest Expense   172,141    16,232 
Bad Debt Expense   -    1,997 
Other Expenses   2,630    264 
Total Operating Expenses  $594,320   $77,917 

 

20

 

 

The following table summarizes the Operating Expenses for each Series:

 

Series  Year
ended
December 31,
2022
   Year
ended
December 31,
2021
 
Landa Series 115 Sardis Street  $11,816   $12,900 
Landa Series 1394 Oakview Circle   7,557    6,367 
Landa Series 1701 Summerwoods Lane   3,139    9,083 
Landa Series 1741 Park Lane   3,294    10,127 
Landa Series 209 Timber Wolf Trail   11,364    7,939 
Landa Series 2505 Oak Circle   11,850    13,619 
Landa Series 271 Timber Wolf Trail   11,999    8,821 
Landa Series 29 Holly Grove Road   11,057    9,061 
Landa Series 1703 Summerwoods Lane   12,197    - 
Landa Series 1712 Summerwoods Lane   11,399    - 
Landa Series 1743 Summerwoods Lane   11,195    - 
Landa Series 1750 Summerwoods Lane   11,278    - 
Landa Series 4267 High Park Lane   14,899    - 
Landa Series 4474 Highwood Park Drive   25,744    - 
Landa Series 8569 Creekwood Way   9,415    - 
Landa Series 9439 Lakeview Road   17,928    - 
Landa Series 10167 Port Royal Court   11,843    - 
Landa Series 1246 Elgin Way   15,377    - 
Landa Series 1910 Grove Way   23,279    - 
Landa Series 593 Country Lane Drive   10,030    - 
Landa Series 6436 Stone Terrace   11,739    - 
Landa Series 6440 Woodstone Terrace   23,050    - 
Landa Series 6848 Sandy Creek Drive   12,672    - 
Landa Series 687 Utoy Court   14,325    - 
Landa Series 729 Winter Lane   15,059    - 
Landa Series 7349 Exeter Court   10,929    - 
Landa Series 8645 Embrey Drive   13,737    - 
Landa Series 8780 Churchill Place   18,237    - 
Landa Series 8796 Parliament Place   11,064    - 
Landa Series 8641 Ashley Way   12,564    - 
Landa Series 8651 Ashley Way   16,930    - 
Landa Series 8652 Ashley Way   16,034    - 
Landa Series 8653 Ashley Way   10,496    - 
Landa Series 8654 Ashley Way   12,839    - 
Landa Series 8655 Ashley Way   17,488    - 
Landa Series 8659 Ashley Way   12,106    - 
Landa Series 8662 Ashley Way   11,236    - 
Landa Series 8668 Ashley Way   12,464    - 
Landa Series 8670 Ashley Way   13,458    - 
Landa Series 8674 Ashley Way   14,804    - 
Landa Series 8675 Ashley Way   14,462    - 
Landa Series 8677 Ashley Way   10,894    - 
Landa Series 8678 Ashley Way   13,217    - 
Landa Series 8679 Ashley Way   12,408    - 
Landa Series 8683 Ashley Way   15,447    - 
Total Operating Expenses  $594,320   $77,917 

 

21

 

 

Gain on Sale

 

On April 15, 2022, in connection with the planned sale of the Property underlying Landa Series 1701 Summerwoods Lane, located at 1701 Summerwoods Lane, Griffin, GA 30224, and the Property underlying Landa Series 1741 Park Lane, located at 1741 Park Lane, Griffin, GA 30224, each Series recognized a gain on sale, which is summarized in the table below:

 

The following table summarizes the gain on sale:

    For the Year Ended
December 31,
 
Series   2022     2021  
Gain on Sale of Real Estate   $ 142,750     $ -  
Total Gain on Sale   $ 142,750     $        -  

 

The following table summarizes the gain on sale for each Series:

 

   For the Year Ended
December 31,
 
Series  2022   2021 
Landa Series 115 Sardis Street  $-   $- 
Landa Series 1394 Oakview Circle   -    - 
Landa Series 1701 Summerwoods Lane   70,269    - 
Landa Series 1741 Park Lane   72,481    - 
Landa Series 209 Timber Wolf Trail   -    - 
Landa Series 2505 Oak Circle   -    - 
Landa Series 271 Timber Wolf Trail   -    - 
Landa Series 29 Holly Grove Road   -    - 
Landa Series 1703 Summerwoods Lane   -    - 
Landa Series 1712 Summerwoods Lane   -    - 
Landa Series 1743 Summerwoods Lane   -    - 
Landa Series 1750 Summerwoods Lane   -    - 
Landa Series 4267 High Park Lane   -    - 
Landa Series 4474 Highwood Park Drive   -    - 
Landa Series 8569 Creekwood Way   -    - 
Landa Series 9439 Lakeview Road   -    - 
Landa Series 10167 Port Royal Court   -    - 
Landa Series 1246 Elgin Way   -    - 
Landa Series 1910 Grove Way   -    - 
Landa Series 593 Country Lane Drive   -    - 
Landa Series 6436 Stone Terrace   -    - 
Landa Series 6440 Woodstone Terrace   -    - 
Landa Series 6848 Sandy Creek Drive   -    - 
Landa Series 687 Utoy Court   -    - 
Landa Series 729 Winter Lane   -    - 
Landa Series 7349 Exeter Court   -    - 
Landa Series 8645 Embrey Drive   -    - 
Landa Series 8780 Churchill Place   -    - 
Landa Series 8796 Parliament Place   -    - 
Landa Series 8641 Ashley Way   -    - 
Landa Series 8651 Ashley Way   -    - 
Landa Series 8652 Ashley Way   -    - 
Landa Series 8653 Ashley Way   -    - 
Landa Series 8654 Ashley Way   -    - 
Landa Series 8655 Ashley Way   -    - 
Landa Series 8659 Ashley Way   -    - 
Landa Series 8662 Ashley Way   -    - 
Landa Series 8668 Ashley Way   -    - 
Landa Series 8670 Ashley Way   -    - 
Landa Series 8674 Ashley Way   -    - 
Landa Series 8675 Ashley Way   -    - 
Landa Series 8677 Ashley Way   -    - 
Landa Series 8678 Ashley Way   -    - 
Landa Series 8679 Ashley Way   -    - 
Landa Series 8683 Ashley Way   -    - 
Total gain on sale  $142,750   $- 

 

22

 

 

Net Income/(Loss)

 

As a result of the cumulative effect of the foregoing factors, we generated aggregate net income (loss) of $32,445 and $(1,916) for the years ended December 31, 2022 and 2021, respectively.

 

The following table summarizes net income (loss) by each Series:

 

Series  Year
Ended
December 31,
2022
   Year
Ended
December 31,
2021
 
Landa Series 115 Sardis Street  $(1,521)  $(3,200)
Landa Series 1394 Oakview Circle   2,208    2,200 
Landa Series 1701 Summerwoods Lane   56,896    1,880 
Landa Series 1741 Park Lane   57,964    (1,427)
Landa Series 209 Timber Wolf Trail   (2,064)   1,021 
Landa Series 2505 Oak Circle   3,338    (4,067)
Landa Series 271 Timber Wolf Trail   (2,522)   2,258 
Landa Series 29 Holly Grove Road   (2,253)   (581)
Landa Series 1703 Summerwoods Lane   (489)   - 
Landa Series 1712 Summerwoods Lane   (581)   - 
Landa Series 1743 Summerwoods Lane   1,958    - 
Landa Series 1750 Summerwoods Lane   1,089    - 
Landa Series 4267 High Park Lane   (3,097)   - 
Landa Series 4474 Highwood Park Drive   (11,823)   - 
Landa Series 8569 Creekwood Way   (657)   - 
Landa Series 9439 Lakeview Road   (2,748)   - 
Landa Series 10167 Port Royal Court   678    - 
Landa Series 1246 Elgin Way   (417)   - 
Landa Series 1910 Grove Way   (11,014)   - 
Landa Series 593 Country Lane Drive   2,099    - 
Landa Series 6436 Stone Terrace   955    - 
Landa Series 6440 Woodstone Terrace   (16,588)   - 
Landa Series 6848 Sandy Creek Drive   2,321    - 
Landa Series 687 Utoy Court   (2,943)   - 
Landa Series 729 Winter Lane   (11,058)   - 
Landa Series 7349 Exeter Court   2,273    - 
Landa Series 8645 Embrey Drive   429    - 
Landa Series 8780 Churchill Place   (2,016)   - 
Landa Series 8796 Parliament Place   2,498    - 
Landa Series 8641 Ashley Way   (209)   - 
Landa Series 8651 Ashley Way   (4,761)   - 
Landa Series 8652 Ashley Way   (7,218)   - 
Landa Series 8653 Ashley Way   1,575    - 
Landa Series 8654 Ashley Way   (161)   - 
Landa Series 8655 Ashley Way   (5,553)   - 
Landa Series 8659 Ashley Way   (1,559)   - 
Landa Series 8662 Ashley Way   244    - 
Landa Series 8668 Ashley Way   355    - 
Landa Series 8670 Ashley Way   (1,074)   - 
Landa Series 8674 Ashley Way   (3,065)   - 
Landa Series 8675 Ashley Way   (5,030)   - 
Landa Series 8677 Ashley Way   1,754    - 
Landa Series 8678 Ashley Way   (658)   - 
Landa Series 8679 Ashley Way   (1,534)   - 
Landa Series 8683 Ashley Way   (3,576)   - 
Total Net Income/(Loss)  $32,445   $(1,916)

 

23

 

 

Liquidity and Capital Resources

 

The Company did not commence its operations prior to the qualification of its initial Offering Statement. In addition, no Series commences its operations prior to the qualification of an offering statement (or amendment) in which the Series is included and the transfer of title of each of the Properties from Landa Properties to the applicable Series. Once a Series commences its planned principal operations, it will incur significant additional expenses. Until such time as a Series has the capacity to generate cash flows from operations, it may seek additional capital, including from the Manager.

 

Cash Balances

 

As of December 31, 2022 and 2021, the Company itself had no cash or cash equivalents on hand. On a total combined basis, as of December 31, 2022, the Series, had $177,654 on hand, as compared to $79,897 on hand as of December 31, 2021.

 

The following table summarizes the cash by Series:

 

Series  As of
December 31,
2022
   As of
December 31,
2021
 
Landa Series 115 Sardis Street  $583   $3,270 
Landa Series 1394 Oakview Circle   3,259    3,148 
Landa Series 1701 Summerwoods Lane   1,930    38,376 
Landa Series 1741 Park Lane   1,996    21,582 
Landa Series 209 Timber Wolf Trail   2,379    3,148 
Landa Series 2505 Oak Circle   2,836    3,723 
Landa Series 271 Timber Wolf Trail   7    3,649 
Landa Series 29 Holly Grove Road   199    3,001 
Landa Series 1703 Summerwoods Lane   2,886    - 
Landa Series 1712 Summerwoods Lane   4,253    - 
Landa Series 1743 Summerwoods Lane   4,285    - 
Landa Series 1750 Summerwoods Lane   3,560    - 
Landa Series 4267 High Park Lane   110    - 
Landa Series 4474 Highwood Park Drive   366    - 
Landa Series 8569 Creekwood Way   9,301    - 
Landa Series 9439 Lakeview Road   5,268    - 
Landa Series 10167 Port Royal Court   2,227    - 
Landa Series 1246 Elgin Way   1,974    - 
Landa Series 1910 Grove Way   8,525    - 
Landa Series 593 Country Lane Drive   2,528    - 
Landa Series 6436 Stone Terrace   1,009    - 
Landa Series 6440 Woodstone Terrace   1,179    - 
Landa Series 6848 Sandy Creek Drive   1,225    - 
Landa Series 687 Utoy Court   3,056    - 
Landa Series 729 Winter Lane   9,547    - 
Landa Series 7349 Exeter Court   2,756    - 
Landa Series 8645 Embrey Drive   1,007    - 
Landa Series 8780 Churchill Place   1,474    - 
Landa Series 8796 Parliament Place   4,641    - 
Landa Series 8641 Ashley Way   6,303    - 
Landa Series 8651 Ashley Way   5,323    - 
Landa Series 8652 Ashley Way   3,646    - 
Landa Series 8653 Ashley Way   4,715    - 
Landa Series 8654 Ashley Way   5,037    - 
Landa Series 8655 Ashley Way   10,649    - 
Landa Series 8659 Ashley Way   8,336    - 
Landa Series 8662 Ashley Way   7,032    - 
Landa Series 8668 Ashley Way   12,577    - 
Landa Series 8670 Ashley Way   1,739    - 
Landa Series 8674 Ashley Way   3,025    - 
Landa Series 8675 Ashley Way   2,573    - 
Landa Series 8677 Ashley Way   6,789    - 
Landa Series 8678 Ashley Way   3,761    - 
Landa Series 8679 Ashley Way   3,717    - 
Landa Series 8683 Ashley Way   7,141    - 
Total Cash  $176,729   $79,897 

  

24

 

 

On a total combined basis, as of December 31, 2022, the Series, had $39,291 of restricted cash, as compared to $0 on hand as of December 31, 2021.

 

The following table summarizes the restricted cash by Series:

 

Series  As of
December 31,
2022
   As of
December 31,
2021
 
Landa Series 115 Sardis Street  $-   $        - 
Landa Series 1394 Oakview Circle   775    - 
Landa Series 1701 Summerwoods Lane   925    - 
Landa Series 1741 Park Lane   -    - 
Landa Series 209 Timber Wolf Trail   500    - 
Landa Series 2505 Oak Circle   1,250    - 
Landa Series 271 Timber Wolf Trail   -    - 
Landa Series 29 Holly Grove Road   600    - 
Landa Series 1703 Summerwoods Lane   950    - 
Landa Series 1712 Summerwoods Lane   875    - 
Landa Series 1743 Summerwoods Lane   1,225    - 
Landa Series 1750 Summerwoods Lane   -    - 
Landa Series 4267 High Park Lane   975    - 
Landa Series 4474 Highwood Park Drive   1,000    - 
Landa Series 8569 Creekwood Way   500    - 
Landa Series 9439 Lakeview Road   1,050    - 
Landa Series 10167 Port Royal Court   915    - 
Landa Series 1246 Elgin Way   1,150    - 
Landa Series 1910 Grove Way   1,523    - 
Landa Series 593 Country Lane Drive   971    - 
Landa Series 6436 Stone Terrace   1,000    - 
Landa Series 6440 Woodstone Terrace   -    - 
Landa Series 6848 Sandy Creek Drive   975    - 
Landa Series 687 Utoy Court   1,157    - 
Landa Series 729 Winter Lane   500    - 
Landa Series 7349 Exeter Court   1,000    - 
Landa Series 8645 Embrey Drive   1,050    - 
Landa Series 8780 Churchill Place   1,200    - 
Landa Series 8796 Parliament Place   975    - 
Landa Series 8641 Ashley Way   900    - 
Landa Series 8651 Ashley Way   800    - 
Landa Series 8652 Ashley Way   2,200    - 
Landa Series 8653 Ashley Way   700    - 
Landa Series 8654 Ashley Way   1,350    - 
Landa Series 8655 Ashley Way   -    - 
Landa Series 8659 Ashley Way   2,125    - 
Landa Series 8662 Ashley Way   925    - 
Landa Series 8668 Ashley Way   1,000    - 
Landa Series 8670 Ashley Way   975    - 
Landa Series 8674 Ashley Way   1,300    - 
Landa Series 8675 Ashley Way   1,100    - 
Landa Series 8677 Ashley Way   1,050    - 
Landa Series 8678 Ashley Way   900    - 
Landa Series 8679 Ashley Way   925    - 
Landa Series 8683 Ashley Way   925    - 
Total Restricted Cash  $40,216   $- 

 

25

 

 

Loans

 

Acquisition Notes

 

Each Series financed 100% of the costs associated with the acquisition of its Property, including an acquisition fee and expenses associated with sourcing its Property, with an Acquisition Note issued by such Series to the Manager, the terms of which are listed in the table below. Each of these Acquisition Notes represents a related-party loan between each respective Series and the Manager. The Acquisition Notes are either interest-bearing or non-interest-bearing (see table below) and are an unsecured obligation of the applicable Series The term of the Acquisition Notes are five (5) years from the Loan date.

 

Series   Principal
Amount (1)
    Annual
Interest Rate
    Loan
Date (2)
  Current
Outstanding
Amount (3)
 
Landa Series 115 Sardis Street(4)   $ 117,304       (6 )   7/10/2020   $ 117,304  
Landa Series 1394 Oakview Circle     80,088       0.00 %   7/10/2020     -  
Landa Series 1701 Summerwoods Lane(5)     95,491       0.00 %   7/10/2020     -  
Landa Series 1741 Park Lane(5)     116,574       0.00 %   7/10/2020     -  
Landa Series 209 Timber Wolf Trail(4)     119,827       0.00 %   7/10/2020     50,785  
Landa Series 2505 Oak Circle(4)     98,827       0.00 %   7/10/2020     11,210  
Landa Series 271 Timber Wolf Trail(4)     123,412       0.00 %   7/10/2020     52,160  
Landa Series 29 Holly Grove Road(4)     100,445       0.00 %   7/10/2020     9,229  
Landa Series 1703 Summerwoods Lane     113,697       4.50 %   7/12/2021     -  
Landa Series 1712 Summerwoods Lane     113,697       4.50 %   7/12/2021     -  
Landa Series 1743 Summerwoods Lane     113,697       4.50 %   7/12/2021     -  
Landa Series 1750 Summerwoods Lane     113,697       4.50 %   7/12/2021     -  
Landa Series 4267 High Park Lane     151,875       4.50 %   7/12/2021     -  
Landa Series 4474 Highwood Park Drive     136,648       4.50 %   7/12/2021     -  
Landa Series 8569 Creekwood Way     83,351       4.50 %   7/12/2021     -  
Landa Series 9439 Lakeview Road     181,134       4.50 %   7/12/2021     -  
Landa Series 10167 Port Royal Court     110,600       4.50 %   7/12/2021     -  
Landa Series 1246 Elgin Way     133,535       4.50 %   7/12/2021     -  
Landa Series 1910 Grove Way     104,562       4.50 %   7/12/2021     -  
Landa Series 593 Country Lane Drive     95,842       4.50 %   7/12/2021     -  
Landa Series 6436 Stone Terrace     60,479       4.50 %   7/12/2021     -  
Landa Series 6440 Woodstone Terrace     64,744       4.50 %   7/12/2021     -  
Landa Series 6848 Sandy Creek Drive     86,367       4.50 %   7/12/2021     -  
Landa Series 687 Utoy Court     115,422       4.50 %   7/12/2021     -  
Landa Series 729 Winter Lane     113,721       4.50 %   7/12/2021     -  
Landa Series 7349 Exeter Court     110,638       4.50 %   7/12/2021     -  
Landa Series 8645 Embrey Drive     118,895       4.50 %   7/12/2021     -  
Landa Series 8780 Churchill Place     132,557       4.50 %   7/12/2021     -  
Landa Series 8796 Parliament Place     109,839       4.50 %   7/12/2021     -  
Landa Series 8641 Ashley Way     146,307       4.50 %   10/1/2021     -  
Landa Series 8651 Ashley Way     122,325       4.50 %   10/1/2021     -  
Landa Series 8652 Ashley Way     136,029       4.50 %   10/1/2021     -  
Landa Series 8653 Ashley Way     121,183       4.50 %   10/1/2021     -  
Landa Series 8654 Ashley Way     136,029       4.50 %   10/1/2021     -  
Landa Series 8655 Ashley Way     132,552       4.50 %   10/1/2021     -  
Landa Series 8659 Ashley Way     145,165       4.50 %   10/1/2021     -  
Landa Series 8662 Ashley Way     140,597       4.50 %   10/1/2021     -  
Landa Series 8668 Ashley Way     157,614       4.50 %   10/1/2021     -  
Landa Series 8670 Ashley Way     158,870       4.50 %   10/1/2021     -  
Landa Series 8674 Ashley Way     134,887       4.50 %   10/1/2021     -  
Landa Series 8675 Ashley Way     132,603       4.50 %   10/1/2021     -  
Landa Series 8677 Ashley Way     124,609       4.50 %   10/1/2021     -  
Landa Series 8678 Ashley Way     168,006       4.50 %   10/1/2021     -  
Landa Series 8679 Ashley Way     134,887       4.50 %   10/1/2021     -  
Landa Series 8683 Ashley Way     128,971       4.50 %   10/1/2021     -  

 

(1) The principal amount is due and payable by the Series within 30 days after demand by the Manager, as lender, at any time prior to the liquidation, dissolution or winding up of the Series.

 

(2) Each Acquisition Note was entered into on the date set forth in the table above. Interest began to accrue on the Acquisition Notes when title to the Property was transferred to the Series.

 

(3)

 

The Current Outstanding Amount as of December 31, 2022.

 

26

 

 

(4)  

Before any securities were issued, the Company withdrew this Series.

 

(5) This Series closed its offering and made a liquidating distribution of expected proceeds from the sale of the underlying Property. For additional information, see the Form 1-U filed on March 11, 2022, available here.
   
(6) Of the $117,304 Principal Amount shown, $52,515 bears no interest and $64,789 of bears interest at 4.50% per annum.

 

Refinance Notes

 

Each Series may pay down, or otherwise discharge, a portion of the outstanding balance of its Acquisition Note with (i) the proceeds received in exchange for a commercial promissory note bearing interest at current market rates to be issued to a third party lender or the Manager after the qualification date of the offering statement of which the Series forms a part, and (ii) substantially all of the net proceeds from the Series’ Offering (each a “Refinance Note” and collectively, the “Refinance Notes”).

 

In January 2022, each of the following Series entered into a Refinance Note with Lending One, the terms of which are listed in the table below. Each Refinance Note is interest-bearing and is secured by the Property underlying the respective Series.

 

Series  Principal
Amount
   Annual
Interest Rate
   Loan Date  Maturity
Date
  Mortgage
Transfer(1)
   Transfer
Date(1)
   Current
Outstanding
Amount(2)
   Monthly
Mortgage
Interest
Expense
 
Landa Series 1394 Oakview Circle  $44,015    4.80%  1/18/22  *   -    -   $44,015   $179 
Landa Series 1701 Summerwoods Lane   52,703    4.80%  1/18/22  *   (52,703)   4/29/22    -    - 
Landa Series 1741 Park Lane   66,476    4.80%  1/18/22  *   (66,476)   4/29/22    -    - 
Landa Series 209 Timber Wolf Trail   61,750    4.80%  1/18/22  *   -    -    61,750    250 
Landa Series 2505 Oak Circle   76,700    4.80%  1/18/22  *   -    -    76,700    311 
Landa Series 271 Timber Wolf Trail   62,400    4.80%  1/18/22  *   -    -    62,400    253 
Landa Series 29 Holly Grove Road   84,500    4.80%  1/18/22  *   -    -    84,500    343 
Landa Series 1703 Summerwoods Lane   77,925    4.80%  1/12/22  *   -    -    77,925    316 
Landa Series 1712 Summerwoods Lane   67,535    4.80%  1/12/22  *   -    -    67,535    274 
Landa Series 1743 Summerwoods Lane   77,925    4.80%  1/12/22  *   -    -    77,925    316 
Landa Series 1750 Summerwoods Lane   77,925    4.80%  1/12/22  *   -    -    77,925    316 
Landa Series 4267 High Park Lane   104,250    4.80%  1/12/22  *   -    -    104,250    423 
Landa Series 4474 Highwood Park Drive   93,750    4.80%  1/12/22  *   -    -    93,750    380 
Landa Series 8569 Creekwood Way   49,400    4.80%  1/12/22  *   -    -    49,400    200 
Landa Series 9439 Lakeview Road   124,425    4.80%  1/12/22  *   -    -    124,425    505 
Landa Series 10167 Port Royal Court   82,500    4.80%  1/12/22  *   -    -    82,500    335 
Landa Series 1246 Elgin Way   95,250    4.80%  1/12/22  *   -    -    95,250    386 
Landa Series 1910 Grove Way   82,500    4.80%  1/13/22  *   -    -    82,500    335 
Landa Series 593 Country Lane Drive   71,250    4.80%  1/13/22  *   -    -    71,250    289 
Landa Series 6436 Stone Terrace   45,000    4.80%  1/13/22  *   -    -    45,000    183 
Landa Series 6440 Woodstone Terrace   46,500    4.80%  1/13/22  *   -    -    46,500    189 
Landa Series 6848 Sandy Creek Drive   64,500    4.80%  1/13/22  *   -    -    64,500    262 
Landa Series 687 Utoy Court   82,500    4.80%  1/13/22  *   -    -    82,500    335 
Landa Series 729 Winter Lane   82,500    4.80%  1/12/22  *   -    -    82,500    335 
Landa Series 7349 Exeter Court   71,500    4.80%  1/13/22  *   -    -    71,500    290 
Landa Series 8655 Ashley Way   71,500    4.80%  1/14/22  *   -    -    71,500    290 
Landa Series 8645 Embrey Drive   84,750    4.80%  1/13/22  *          -              -    84,750    344 
Landa Series 8780 Churchill Place   94,500    4.80%  1/13/22  *   -    -    94,500    383 
Landa Series 8796 Parliament Place   78,750    4.80%  1/13/22  *   -    -    78,750    319 
Landa Series 8641 Ashley Way   96,357    4.80%  1/13/22  *   -    -    96,357    391 
Landa Series 8651 Ashley Way   80,424    4.80%  1/13/22  *   -    -    80,424    326 
Landa Series 8652 Ashley Way   76,700    4.80%  1/14/22  *   -    -    76,700    311 
Landa Series 8653 Ashley Way   68,250    4.80%  1/14/22  *   -    -    68,250    277 
Landa Series 8654 Ashley Way   89,529    4.80%  1/14/22  *   -    -    89,529    363 
Landa Series 8655 Ashley Way   71,500    4.80%  1/14/22  *   -    -    71,500    290 

 

27

 

 

Series  Principal
Amount
   Annual
Interest Rate
   Loan Date  Maturity
Date
  Mortgage
Transfer(1)
   Transfer
Date(1)
   Current
Outstanding
Amount(2)
   Monthly
Mortgage
Interest
Expense
 
Landa Series 8659 Ashley Way   81,900    4.80%  1/14/22  *       -        -       81,900    332 
Landa Series 8662 Ashley Way   84,500    4.80%  1/14/22  *   -    -    84,500    343 
Landa Series 8668 Ashley Way   99,392    4.80%  1/14/22  *   -    -    99,392    403 
Landa Series 8670 Ashley Way   94,250    4.80%  1/14/22  *   -    -    94,250    382 
Landa Series 8674 Ashley Way   87,750    4.80%  1/14/22  *   -    -    87,750    356 
Landa Series 8675 Ashley Way   87,253    4.80%  1/14/22  *   -    -    87,253    354 
Landa Series 8677 Ashley Way   81,942    4.80%  1/14/22  *   -    -    81,942    332 
Landa Series 8678 Ashley Way   104,000    4.80%  1/14/22  *   -    -    104,000    422 
Landa Series 8679 Ashley Way   88,770    4.80%  1/13/22  *   -    -    88,770    360 
Landa Series 8683 Ashley Way   81,183    4.80%  1/12/22  *   -    -    81,183    329 
Total Refinance Note  $3,477,379              $(119,179)       $3,358,200   $13,622 

 

(1) On April 15, 2022, in connection with the planned sale of the Property underlying Landa Series 1701 Summerwoods Lane, located at 1701 Summerwoods Lane, Griffin, GA 30224, and the Property underlying Landa Series 1741 Park Lane, located at 1741 Park Lane, Griffin, GA 30224, each Series paid the holders of such Series a final distribution, based on such holder’s percentage ownership in such Series.

 

(2) The Current Outstanding Amount as of December 31, 2022.
   
* This Refinance Note matures on the earlier of (i) February 1, 2027 and (ii) the date on which the unpaid principal balance of this Refinance Note becomes due and payable by acceleration or otherwise or the exercise by Lending One of any right or remedy under the Refinance Note and/or any other document or agreement entered into in connection with the Refinance Note.

 

Plan of Operations

 

We plan to launch an as of yet undetermined number of additional Series and related offerings in the next twelve (12) months with properties that we acquire from our affiliates, including Landa Properties. The proceeds from any additional offerings closed during the next twelve (12) months will be used for, among other things, the acquisition of properties by the Series conducting the offerings. No investor in any Series will, by virtue of its interest in such Series, including its underlying Property, have any interest in, or rights to acquire an interest in, any other Series.

 

While each Series intends to hold its Property indefinitely, as each Property reaches what the Manager believes to be its optimum value, the Manager may consider disposing of such Property. Please see “Business – Our Manager – Disposition Policies” for more information about our disposition policy with respect to the Properties.

 

We expect that the rental income earned from each Series’ Property will satisfy each Series’ cash requirements. Each Series may seek additional capital in the form of debt financing from other financing sources to satisfy any additional cash requirements, including a related-party loan between each Series and the Manager.

 

Off-Balance Sheet Arrangements

 

Neither the Company nor any of the Series had during the periods presented, and does not currently have, any off-balance sheet arrangements.

 

28

 

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in conformity with GAAP requires the Manager to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.

 

Revenue Recognition

 

The Company adopted ASU 2014-09, Revenue from Contracts with Customers, and its related amendments, effective July 10, 2020.

 

We determine revenue recognition through the following steps:

 

identification of a contract with a customer;

 

identification of the performance obligations in the contract;

 

determination of the transaction price;

 

allocation of the transaction price to the performance obligations in the contract; and

 

recognition of revenue when or as the performance obligations are satisfied.

 

Operating Expenses

 

If the Operating Expenses exceed the amount of revenues generated from a Series and cannot be covered by any Reserves of such Series, the Manager may (a) pay such Operating Expenses and seek reimbursement and/or (b) loan the amount of the Operating Expenses to the applicable Series and be entitled to reimbursement of such amount from future revenues generated by such Series. In the case that the Manager provides a loan to a Series, the Series will be obligated to pay interest on that loan at a rate to be determined solely by the Manager, but which will be no greater than seven percent (7%).

 

Fees to the Manager

 

Monthly Management Fee: Each Series pays the Manager a monthly management fee ranging from five percent (5%) to ten percent (10%) of Gross Monthly Rent for each Property.

 

Acquisition Fee: The Acquisition Notes issued by each Series to the Manager in connection with the acquisition of its Property included amounts attributable to an acquisition fee due to the Manager ranging from five percent (5%) to ten percent (10%) of the purchase price of the Property.

 

Property Diligence Expenses: The Acquisition Notes issued by each Series to the Manager in connection with the acquisition of its Property included amounts attributable to any and all fees, costs and expenses incurred in connection with the evaluation, discovery, and investigation of such Property incurred prior to such acquisition, including legal fees associated with the title insurance, appraisal costs and inspection costs, and any other expenses associated with the acquisition of a Property.

 

29

 

 

Brokerage Fee: The broker of record for each Offering is expected to receive a brokerage fee equal to one percent (1%) of the amount raised from investors through each Series’ Offering. We comply with the requirements of FASB ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of a Series’ Offering, offering costs are capitalized. The deferred offering costs are charged to members’ equity upon the completion of an Offering or to expense if the Offering is not completed.

 

Administrative Costs: In accordance with FASB ASC 720, administrative costs, including accounting fees and legal fees, are expensed as incurred. See “Item 1. Business—Operating Expenses” for additional information.

 

For more information about the fees payable to the Manager, please see “Description of our Business – Our Manager – Manager Compensation” of our Offering Circular, which can be found here and is incorporated herein by reference.

 

Fair Value of Financial Instruments

 

FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

 

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

 

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

 

The carrying amounts reported in the balance sheets approximate their fair value.

 

Earnings (Loss) / Income per Membership Interest

 

Upon completion of an Offering, each Series intends to comply with accounting and disclosure requirements of ASC Topic 260, Earnings per Share. For each Series, earnings (loss) / income per interest will be computed by dividing net (loss) / income for a particular Series by the weighted average number of outstanding interests in that particular Series during the year.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the previous revenue recognition requirements in ASC Topic 605—Revenue Recognition and most industry-specific guidance throughout the ASC. The core principle within this ASU is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, which deferred the effective date for ASU 2014-09 by one year to fiscal years beginning after December 15, 2017, while providing the option to early adopt for fiscal years beginning after December 15, 2016. Transition methods under ASU 2014-09 must be through either (i) retrospective application to each prior reporting period presented or (ii) retrospective application with a cumulative effect adjustment at the date of initial application. We adopted this new standard upon formation in October 2019. The adoption of this standard did not have a material impact on our financial statements.

  

30

 

 

We do not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying combined financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

 

Item 3. Directors and Officers

 

Directors, Executive Officers and Significant Employees of the Company

 

Neither the Company, nor any Series, has any directors, executive officers, or employees, and we do not expect the Company or any Series to appoint or hire any directors, executive officers, or employees.

 

Directors, Executive Officers and Significant Employees of the Manager

 

The following individuals constitute the members of the board of directors (the “Board”), executive management and significant employees of the Manager:

 

Name   Position   Age   Term of Office
Directors and Executive Officers:            
Yishai Cohen   Chairman, Chief Executive Officer and President   27   Since September 2019
Amit Assaraf   Chief Technology Officer, Director   26   Since September 2019
 Charles Tomlinson   Head of Finance    58   Since February 2022
Non-Employee Directors:            
Arnon Dinur   Director   50   Since September 2019
Gigi Levy-Weiss   Director   50   Since September 2019
Yaniv Sarig   Director   43   Since September 2019

 

There are no family relationships between any director, executive officer or significant employee of the Manager.

 

Directors and Executive Officers

 

Yishai Cohen, Chairman, Chief Executive Officer and President. Mr. Cohen is the co-founder of Landa Holdings, Inc. and has served as its President and Chairman of the Board since September 2019, and its Chief Executive Officer since April 2020. Prior to founding Landa Holdings, Inc., Mr. Cohen was the founder of SmartBus, an Israeli-based business-to-business transportation platform, which was acquired in 2016. Mr. Cohen has extensive experience in internet and mobile products, marketplaces and technology.

 

Amit Assaraf, Chief Technology Officer and Director. Mr. Assaraf is the co-founder of Landa Holdings, Inc. and has served as its Chief Technology Officer and member of the Board of Landa Holdings, Inc. since September 2019. Mr. Assaraf has over 10 years of experience in software engineering and system architecture, specializes in consumer products and cyber security. Prior to co-founding Landa Holdings, Inc., Mr. Assaraf served as a technical lead of several high-tech companies, including Landbridge Ltd., Helpi Ltd., Genesis Labs Ltd., and CityPark Ltd. Mr. Assaraf is a graduate of the Elite Intelligence Unit 8200 of the Israeli Defense Forces.

 

Charles Tomlinson, Head of Finance Mr. Tomlinson has served as the Principal Financial Officer and Principal Accounting Officer of Landa Holdings, Inc. since February 2022. Mr. Tomlinson has over 30 years of experience in the real estate industry and has actively managed several real estate investment trusts. Prior to joining Landa Holdings, Inc., Mr. Tomlinson served as Director of REIT Compliance for Equus Capital Partners, Ltd. Mr. Tomlinson is a graduate of the University of Maryland with a B.S. in Accounting and Finance.

 

31

 

 

Non-Employee Directors

 

Arnon Dinur, Director. Mr. Dinur has served as a member of the Board of Landa Holdings, Inc. since September 2019. Mr. Dinur is a partner at 83North, and serves also as a director at Applicaster Ltd., Beach Bum Ltd., Lendbuzz, Inc., Marqeta, Inc., Mixtiles Ltd., EX.CO Ltd., Podimo ApS, Snappy App, Inc., Stuff That Works Ltd., Superplay Ltd., Terrascope Limited (Fatmap) and VIA Transportation, Inc. He also serves as a board observer at Bluevine Capital Inc. and Wolt Enterprises Oy. Mr. Dinur is also a board member at Lobby99, a non-profit organization. Mr. Dinur holds a LL.B. in Law and a BA in accounting from Tel Aviv University, and an MBA from the University of Texas at Austin.

 

Gigi Levy-Weiss, Director. Mr. Levy-Weiss has served as a member of the Board of Landa Holdings, Inc. since September 2019. Mr. Levy-Weiss is the founding partner of NFX, a $275 million leading seed venture firm. Prior to NFX, Gigi served as the CEO of 888 Holdings, PLC (LSE: 888.L). Mr. Levy-Weiss previously founded, and assumed senior positions at, a number of startups including Playtika and Inception, and has been an investor in companies such as Kenshoo, Moon Active, Plarium, MyHeritage, Optimove, Selina, Houseparty, R2Net, SimilarWeb, NanoRep, Replay Technology, and SpaceApe. Mr. Levy-Weiss currently serves on the Supervisory Board of Bertelsmann SE & Co. KGaA and on the Client Advisory Council of Facebook. In addition, Mr. Levy-Weiss is a member of the board of directors of the Middle East Entrepreneurs of Tomorrow and is a member of the advisory board of the Technology Management, Innovation and Entrepreneurship MBA at Tel Aviv University. Mr. Levy-Weiss served as a pilot in the Israeli Air Force and holds an MBA from the Kellogg School of Management at Northwestern University.

 

Yaniv Sarig, Director. Mr. Sarig has served as a member of the Board of Landa Holdings, Inc. since September 2019. Mr. Sarig is a co-founder, director and President and Chief Executive Officer of Mohawk Group, Inc. Prior to co-founding Mohawk, Mr. Sarig led the Financial Services Engineering department at Coverity, a leading software startup providing code quality and security solutions for top financial institutions and hedge funds in New York including NYSE, Nasdaq, JPMC and Barclays, from April 2012 to April 2014. Before joining Coverity, Mr. Sarig held lead technical roles at Bloomberg from October 2011 to April 2012 and EPIQ Systems, Inc. (Nasdaq: EPIQ), a legal process outsourcing company, from February 2006 to October 2011. Prior to moving to New York City, Mr. Sarig lived in Israel where he held various software engineering roles at startups from various industries including companies involved in digital printing solutions and military navigation systems. Mr. Sarig served in the IDF Special Forces where he obtained the rank of Sergeant First Class and holds a BS in Computer Science from Touro College.

 

Compensation of Executive Officers

 

Neither the Company, nor any Series has any executive officers or employees, nor does the Company or any Series currently intend to hire any executive officers or employees who will be compensated directly by us. Each of the executive officers of our Manager manages our day-to-day affairs; oversees the review, selection and recommendation of investment opportunities; services acquired investments; and monitors the performance of these investments to ensure that they are consistent with our investment objectives. Each of these individuals receives compensation for his or her services, including services performed for us on behalf of our Manager, from our manager. Although each Series indirectly bears some of the costs of the compensation paid to these individuals, through the monthly management fee that each Series pays to the Manager, we do not intend to pay any compensation directly to these individuals.

 

Compensation of our Manager

 

For information regarding the compensation of our Manager, please see “Description of our Business – Manager Compensation” in our Offering Circular, which can be found here and is incorporated herein by reference.

 

32

 

 

Item 4. Security Ownership of Management and Certain Securityholders

 

The Company and each Series are managed by the Manager and do not have directors or executive officers. The Manager is the sole member of the Company and neither the Manager nor any of its directors or executive officers own Shares in any of the Series.

 

Item 5. Interest of Management and Others in Certain Transactions Other Information

 

We are subject to various conflicts of interest arising out of our relationship with the Manager and its affiliates.

 

Please see “Interest of Management and Others in Certain Transactions Other Information” in our Offering Circular, which can be found here and is incorporated herein by reference .

 

Transactions

 

Property Acquisitions

 

Each Series previously issued an Acquisition Note to the Manager in connection with the acquisition of its property.

 

The acquisitions of the Properties by the Series were not, or will not be, arm’s length transactions. Each Series treated, or will treat, its acquisition as a transaction between entities under common control per Accounting Standards Codification (“ASC”) 805-50 and recorded, or will record, the transaction at its carryover basis.

 

Nevertheless, Landa Properties acquired each Property for either the same purchase price that each Series paid for such Property or the most recent appraisal value or broker price opinion, as applicable, for such Property.

 

For more information on the purchase prices of the Properties, please see “Use of Proceeds” in our Offering Circular, which can be found here and is incorporated herein by reference.

 

Loans

 

Acquisition Notes

 

Each Series financed 100% of the costs associated with the acquisition of its Property, including an acquisition fee and expenses associated with sourcing its Property, with an Acquisition Note issued by such Series to the Manager.

 

Refinance Notes

 

Each Series paid down, or otherwise discharged, a portion of the outstanding balance of its Acquisition Note with the proceeds from a Refinance Note.

 

See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Loans for information related to each of the Acquisition Notes and Refinance Notes.

 

33

 

 

Our Affiliates’ Interests

 

General

 

The Manager also serves as manager to Landa App 2 LLC and Landa App 3 LLC, each a Delaware series limited liability company also formed for the purpose of offering a unique investment opportunity for eligible investors to benefit from the performance of curated and fully managed rental real estate properties. Each series of Landa App 2 LLC and Landa App 3 LLC is similarly managed by the Manager. The Manager may also manage other affiliate companies in the future.

 

The executive officers of the Manager will also manage operations for each Series. These persons will have legal obligations with respect to those entities that are similar to their obligations to the Company. In the future, however, these persons and other affiliates of the Manager may organize other real estate-related programs and acquire for their own accounts real estate properties that may be suitable for us.

 

In addition, each of the Manager’s executive officers will also provide executive and management services to other affiliated entities. As a result, they will owe duties to each of these entities, their holders, members and partners. These duties may from time-to-time conflict with the duties that they owe to the Company and each Series. These persons will also have conflicts of interest with respect to our agreements and arrangements with the Manager and other affiliates of the Manager, which were not negotiated at arm’s length, and their terms may not have been as favorable to us as if they had been negotiated at arm’s length with an unaffiliated third party. Except as provided in the Master Agreement or the applicable Management Agreement, the Manager is not required to make available any particular individual personnel to us or any Series.

 

The Manager’s executive officers will not be required to devote a specific amount of time to our affairs. As a result, we cannot provide any assurances regarding the amount of time the Manager will dedicate to the management of our business. Accordingly, we may compete with the Manager and any of its current and future programs, funds, vehicles, managed accounts, ventures or other entities owned and/or managed by the Manager or one of its affiliates, including the Manager, which we refer to collectively as the Manager-sponsored vehicles, for the time and attention of these officers in connection with our business. We may not receive the level of support and assistance that we might otherwise receive if we were internally managed.

 

For more information related to the risks associated with the Manager’s management of our affiliates who operate competing businesses, please see the section entitled “Risk Factors—Risk Related to the Company and the Manager–The Manager may have a conflict of interest as it manages multiple Series, the Company, and an affiliate company of ours that leases residential properties and has a financial interest in certain agreements of the Series, any of which could result in the Manager not acting in the best interest of a particular Series” of our Offering Circular, which can be found here and is incorporated herein by reference.

 

Payment of Certain Fees and Expenses of the Manager

 

Each Series pays or reimburses the Manager for fees and expenses incurred by the Manager in connection with its management of the Series and the Properties, including, but not limited to, any ongoing expense of the Series or the Property that is paid by the Manager, expenses in connection with the special servicing of the non-performing Properties and the liquidation of the Properties, and, if applicable, interest payments on related-party loans for operations, issued by the Manager to a Series. These fees and expenses payable by the Series to the Manager and its affiliates were not determined on an arm’s length basis.

 

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Fees to the Manager” for more information about the fees and expenses payable to the Manager. See also “Interest of Management and Others in Certain Transactions Other Information” in our Offering Circular, which can be found here and is incorporated herein by reference.

 

Item 6. Other Information

 

None.

 

34

 

 

Item 7. Financial Statements

 

INDEX TO THE FINANCIAL STATEMENTS

 

    Page
Report of the Independent Auditors   F-2
     
Combined Balance Sheets as of December 31, 2022 and December 31, 2021   F-3
     
Combined Statements of Operations for the years ended December 31, 2022 and December 31, 2021   F-4
     
Combined Statements of Members’ Equity for the years ended December 31, 2022 and December 31, 2021   F-5
     
Combined Statements of Cash Flows for the years ended December 31, 2022 and December 31, 2021   F-6
     
Notes to the Financial Statements   F-75

 

F-1

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Members and Manager of

Landa App LLC

 

Opinion on the Financial Statements

 

We have audited the accompanying combined and combining balance sheets of Landa App LLC in total and for each series of Landa App LLC (collectively the “Series”): Series names referenced below in Note 2 Summary of Significant Accounting Policies, (collectively the “Company”) as of December 31, 2022 and 2021, the related combined and combining statements of operations, members’ equity and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph – Going Concern

 

The accompanying combined and combining financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, Landa App LLC has not commenced its planned principal operations and has not generated revenues or profits from inception. Once Landa App LLC commences its planned principal operations it will incur significant additional expenses and be dependent upon additional capital resources. In addition, each Series commenced operations and has incurred losses and is dependent upon additional capital resources. These conditions raise substantial doubt about Landa App LLC and each Series’ ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Marcum llp

 

Marcum llp

 

We have served as the Company’s auditor since 2020.

 

New York, NY

May 9, 2023

 

F-2

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINED BALANCE SHEET

 

   December 31, 
   2022   2021 
         
Assets        
Cash  $176,729   $79,897 
Restricted cash   40,216    - 
Escrow   6,173    - 
Accounts receivable, net   7,571    775 
Due from related party   44,248    25,956 
Investments in single-family residential properties   5,068,614    850,908 
Accumulated depreciation   (188,052)   (38,472)
           
Total Assets  $5,155,499   $919,064 
           
Liabilities          
Due to related party  $155,888   $- 
Other liabilities   57,958    24,459 
Security deposit   39,318    5,025 
Promissory note - related party   188,173    471,015 
Notes payable - related party   52,515    344,523 
Mortgage payable   3,358,200    - 
           
Total Liabilities  $3,852,052   $845,022 
           
Members’ equity   1,303,447    74,042 
           
Total Liabilities and Members’ Equity  $5,155,499   $919,064 

 

The accompanying notes are an integral part of these combined financial statements.

 

F-3

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINED STATEMENT OF OPERATIONS

 

  

Year Ended

December 31,

 
   2022   2021 
Revenue        
Rental income  $512,735   $78,454 
Gain on sale of real estate   142,750    - 
Total revenue   655,485    78,454 
           
Expenses          
Management fee   39,888    6,254 
Repairs & maintenance   117,195    12,168 
HOA fee   15,274    1,330 
Insurance expense   15,552    3,360 
Real estate taxes   70,129    10,197 
Depreciation expense   161,513    26,115 
Interest expense   172,141    16,232 
Bad debt expense   -    1,997 
Other expense   2,630    264 
           
Total expenses   594,322    77,917 
           
Income (loss) before income taxes  $61,163   $537 
           
Provision for income taxes   40,731    2,453 
           
Net income (loss)  $20,432   $(1,916)

 

The accompanying notes are an integral part of these combined financial statements.

 

F-4

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINED STATEMENT OF MEMBERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

   Total
Combined
Members’
Equity
 
      
Opening balance January 1, 2021  $ (10,586)
     
Proceeds from members’ interest   90,043 
      
Distributions   (3,499)
      
Net loss   (1,916)
      
Balance at December 31, 2021  $74,042 
      
Proceeds from members’ interest   1,537,625 
      
Distributions   (164,681)
      
Sale distribution   (128,537)
      
Distribution to manager   (35,434)
      
Net income   20,432 
      
Balance at December 31, 2022  $1,303,447 

 

The accompanying notes are an integral part of these combined financial statements.

 

F-5

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINED STATEMENT OF CASH FLOWS

 

   Year Ended December 31, 
   2022   2021 
Cash flows from operating activities:          
Net income (loss)  $20,432   $(1,916)
Adjustments to reconcile net income (loss) to net cash          
provided by operating activities:          
Depreciation   161,513    26,115 
Amortization of debt discount   -    4,928 
Bad debt expense   -    1,997 
Gain on sale of real estate   (142,750)   - 
Changes in assets and liabilities:          
Escrow   (6,173)   - 
Accounts receivable   (6,796)   (1,022)
Due from related party   (8,912)   (25,309)
Due to related party   146,506    (5,769)
Other liabilities   33,223    21,325 
Security deposit   34,568      
Net cash provided by operating activities   231,611    20,349 
           
Cash flows from investing activities:          
Purchase of real estate investments   (4,425,886)   (9,355)
Proceeds from sale of real estate investments   339,000    - 
Net cash used in investing activities   (4,086,886)   (9,355)
           
Cash flows from financing activities:          
Shareholder Proceeds   1,537,625    90,043 
Shareholder Dividends   (328,652)   (3,499)
Repayment of promissory note - related party   (203,865)   - 
Repayment of note - related party   (370,985)   (36,073)
Proceeds from mortgages   3,475,262    - 
Repayment of mortgages   (117,062)   - 
Net cash provided by financing activities   3,992,323    50,471 
           
Net increase in cash   137,048    61,465 
           
Cash and restricted cash at beginning of year  79,897   18,432 
           
Cash and restricted cash at end of year  $216,945   $79,897 
           
Supplemental disclosure of cash flow information:          
Cash paid for income taxes  $-   $- 
Cash paid for interest  $

139,972

  

$

- 

 

The accompanying notes are an integral part of these combined financial statements.

 

F-6

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

 

   Landa App LLC   Landa Series 115
Sardis Street
   Landa Series 1394
Oakview Circle
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $      -   $   -   $583   $3,270   $3,259   $3,148 
Restricted cash   -    -    -    -    775    - 
Escrow   -    -    -    -    -    - 
Accounts receivable   -    -    851    -    367    - 
Due from related party   -    -    2,255    -    3,706    7,451 
Investments in single-family residential properties, net of depreciation   -    -    105,330    109,298    72,931    75,155 
                               
Total Assets  $-   $-   $109,019   $112,568   $81,038   $85,754 
                               
Liabilities and Members’ Equity                              
Due to related party  $-   $-   $-   $463   $-   $- 
Other liabilities   -    -    -    1,564    986    2,946 
Security deposit   -    -    -    -    775    500 
Promissory note - related party   -    -    64,789    64,789    -    44,015 
Notes payable - related party   -    -    52,515    52,515    -    - 
Acquisition note payable   -    -    -    -    -    - 
Mortgage payable   -    -    -    -    44,015    - 
                               
Total Liabilities   -    -    117,304    119,331    45,776    47,461 
                               
Members’ Equity (Deficit)                              
Members’ equity (deficit)   -    -    (8,285)   (6,763)   35,262    38,293 
                               
Total Liabilities and Members’ Equity (Deficit)  $-   $-   $109,019   $112,568   $81,038   $85,754 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-7

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 1701
Summerwoods Lane
   Landa Series 1741
Park Lane
   Landa Series 209
Timber Wolf Trail
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $1,930   $38,376   $1,996   $21,582   $2,379   $3,148 
Restricted cash   925.00         -         500      
Escrow   -    -    -    -    -    - 
Accounts receivable   -    -    -    -    -    775 
Due from related party   11,369    6,551    12,500    5,490    1,216    7,802 
Investments in single-family residential properties, net of depreciation   -    89,660    -    108,782    109,600    113,038 
                               
Total Assets  $14,224   $134,587   $14,496   $135,854   $113,695   $124,763 
                               
Liabilities and Members’ Equity                              
Due to related party  $-   $-   $-   $-   $-   $- 
Other liabilities   17,780.00    3,169.00    18,115.00    2,649.00    1,016    2,453 
Security deposit   -    950    -    -    500    775 
Promissory note - related party   -    52,703    -    64,359    50,785    66,476 
Notes Payable - related party   -    42,788    -    52,215    -    53,351 
Acquisition note payable   -    -    -    -    -    - 
Mortgage payable  $-    -   $-    -   $61,750    - 
                               
Total Liabilities   17,780    99,610    18,115    119,223    114,051    123,055 
                               
Members’ Equity (Deficit)                              
Members’ equity (deficit)  $(3,556)   34,977   $(3,619)   16,631   $(356)   1,708 
                               
Total Liabilities and Members’ Equity (Deficit)  $14,224   $134,587   $14,496   $135,854   $113,695   $124,763 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-8

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 2505
Oak Circle
   Landa Series 271
Timber Wolf Trail
   Landa Series 29
Holly Grove Road
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $2,836   $3,723   $7   $3,649   $199   $3,001 
Restricted cash   1,250                   600      
Escrow   -    -    33    -    -    - 
Accounts receivable   -    -    -    -    -    - 
Due from related party   -    -    -    4,282    -    3,762 
Investments in single-family residential properties, net of depreciation   97,086    100,135    118,018    121,800    91,494    94,568 
                               
Total Assets  $101,172   $103,858   $118,058   $129,731   $92,293   $101,331 
                               
Liabilities and Members’ Equity                              
Due to related party  $14,453   $8,919   $8,928   $-   $1,813   $- 
Other liabilities   374.00    1,372.00    -    8,277.00    147    2,029 
Security deposit   1,250    1,250    -    950    600    600 
Promissory note - related party   11,210    54,728    52,160    68,227    9,229    55,718 
Notes Payable - related party   -    43,742    -    55,185    -    44,727 
Acquisition note payable   -    -    -    -    -    - 
Mortgage payable  $76,700    -   $62,400    -   $84,500    - 
                               
Total Liabilities   103,987    110,011    123,488    132,639    96,289    103,074 
                               
Members’ Equity (Deficit)                              
Members’ equity (deficit)  $(2,815)   (6,153.00)  $(5,430)   (2,908)  $(3,996)   (1,743.00)
                               
Total Liabilities and Members’ Equity (Deficit)  $101,172   $103,858   $118,058   $129,731   $92,293   $101,331 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-9

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 1703
Summerwoods Lane
   Landa Series 1712
Summerwoods Lane
   Landa Series 1743
Summerwoods Lane
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $2,886   $     -   $4,253   $    -   $4,285   $      - 
Restricted cash   950         875         1,225      
Escrow   123    -    133    -    117    - 
Accounts receivable   -    -    -    -    -    - 
Due from related party   629    -    -    -    -    - 
Investments in single-family residential properties, net of depreciation   108,069    -    108,069    -    108,069    - 
                               
Total assets  $112,657   $-   $113,330   $-   $113,696   $- 
                               
Liabilities and members’ equity                              
Due to related party  $-   $-   $2,713   $-   $550   $- 
Other liabilities   1,532    -    -    -    680    - 
Security deposit   950    -    875    -    1,225    - 
Promissory note - related party   -    -    -    -    -    - 
Notes payable - related party   -    -    -    -    -    - 
Acquisition note payable   -    -    -    -    -    - 
Mortgage payable   77,925    -    67,535    -    77,925    - 
                               
Total liabilities   80,407    -    71,123    -    80,380    - 
                               
Members’ equity (deficit)                              
Members’ equity (deficit)   32,250    -    42,207    -    33,316    - 
                               
Total liabilities and members’
equity (deficit)
  $112,657   $-   $113,330   $-   $113,696   $- 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-10

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 1750
Summerwoods Lane
   Landa Series 4267
High Park Lane
   Landa Series 4474
Highwood Park Drive
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $3,560   $   $110   $   $366   $ 
Restricted cash            975         1,000      
Escrow   253                     
Accounts receivable           4,830             
Due from related party   223                     
Investments in single-family residential properties, net of depreciation   108,069        144,354        129,882     
                               
Total assets  $112,105   $   $150,269   $   $131,248   $ 
                               
Liabilities and members’ equity                              
Due to related party  $   $   $3,683   $   $6,268   $ 
Other liabilities   566        700        858     
Security deposit           975        1,000     
Promissory note - related party                        
Notes payable - related party                        
Acquisition note payable                        
Mortgage payable   77,925        104,250        93,750     
                               
Total liabilities   78,491        109,608        101,876     
                               
Members’ equity (deficit)                              
Members’ equity   33,614        40,661        29,372     
                               
Total liabilities and members’ equity (deficit)  $112,105   $   $150,269   $   $131,248   $ 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-11

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 8569
Creekwood Way
   Landa Series 9439
Lakeview Road
   Landa Series 10167
Port Royal Court
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $9,301   $   $5,268   $   $2,227   $ 
Restricted cash   500         1,050         915      
Escrow   252        624             
Accounts receivable                        
Due from related party                        
Investments in single-family residential properties, net of depreciation   79,229        172,161        105,126     
                               
Total assets  $89,282   $   $179,103   $   $108,268   $ 
                               
Liabilities and members’ equity                              
Due to related party  $9,042   $   $5,723   $   $325   $ 
Other liabilities   81                465     
Security deposit   500        1,050        915     
Promissory note - related party                        
Notes payable - related party                        
Acquisition note payable                        
Mortgage payable   49,400        124,425        82,500     
                               
Total liabilities   59,023        131,198        84,205     
                               
Members’ equity (deficit)                              
Members’ equity   30,259        47,905        24,063     
                               
Total liabilities and members’ equity (deficit)  $89,282   $   $179,103   $   $108,268   $ 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-12

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 1246
Elgin Way
   Landa Series 1910
Grove Way
   Landa Series 593
Country Lane Drive
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $1,974   $   $8,525   $   $2,528   $ 
Restricted cash   1,150         1,523         971      
Escrow           66             
Accounts receivable           1,523             
Due from related party   305                249     
Investments in single-family residential properties, net of depreciation   126,923        99,387        91,099     
                               
Total assets  $130,352   $   $111,024   $   $94,847   $ 
                               
Liabilities and members’ equity                              
Due to related party  $   $   $19,770   $   $   $ 
Other liabilities   85        1,062        636     
Security deposit   1,150        1,523        971     
Promissory note - related party                        
Notes payable - related party                        
Acquisition note payable                        
Mortgage payable   95,250        82,500        71,250     
                               
Total liabilities   96,485        104,855        72,857     
                               
Members’ equity (deficit)                              
Members’ equity   33,867        6,169        21,990     
                               
Total liabilities and members’ equity (deficit)  $130,352   $   $111,024   $   $94,847   $ 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-13

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 6436
Stone Terrace
   Landa Series 6440
Woodstone Terrace
   Landa Series 6848
Sandy Creek Drive
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $1,009   $   $1,179   $   $1,225   $ 
Restricted cash   1,000                  975      
Escrow   603                     
Accounts receivable                        
Due from related party                   109     
Investments in single-family residential properties, net of depreciation   57,496        61,550        82,102     
                               
Total assets  $60,108   $   $62,729   $   $84,411   $ 
                               
Liabilities and members’ equity                              
Due to related party  $974   $   $17,916   $   $   $ 
Other liabilities   526                1,597     
Security deposit   1,000        27        975     
Promissory note - related party                        
Notes payable - related party                        
Acquisition note payable                        
Mortgage payable   45,000        46,500        64,500     
                               
Total liabilities   47,500        64,443        67,072     
                               
Members’ equity (deficit)                              
Members’ equity (deficit)   12,608        (1,714)       17,339     
                               
Total liabilities and members’ equity (deficit)  $60,108   $   $62,729   $   $84,411   $ 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-14

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 687
Utoy Court
   Landa Series 729
Winter Lane
   Landa Series 7349
Exeter Court
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                              
Cash  $3,056   $   $9,547   $   $2,756   $ 
Restricted cash   1,157         500         1,000      
Escrow   210        102             
Accounts receivable                        
Due from related party                   236     
Investments in single-family residential properties, net of depreciation   109,719        108,101        105,171     
                               
Total assets  $114,142   $   $118,250   $   $109,163   $ 
                               
Liabilities and members’ equity                              
Due to related party  $4,175   $   $18,613   $   $   $ 
Other liabilities           255        1,125     
Security deposit   1,157        500        1,000     
Promissory note - related party                        
Notes payable - related party                        
Acquisition note payable                        
Mortgage payable   82,500        82,500        71,500     
                               
Total liabilities   87,832        101,868        73,625     
                               
Members’ equity (deficit)                              
Members’ equity   26,310        16,382        35,538     
                               
Total liabilities and members’ equity (deficit)  $114,142   $   $118,250   $   $109,163   $ 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-15

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 8645
Embrey Drive
   Landa Series 8780
Churchill Place
   Landa Series 8796
Parliament Place
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $1,007   $   $1,474   $   $4,641   $ 
Restricted cash   1,050         1,200         975      
Escrow   54                     
Accounts receivable                        
Due from related party   34                     
Investments in single-family residential properties, net of depreciation   113,019        126,005        104,412     
                               
Total assets  $115,164   $   $128,679   $   $110,028   $ 
                               
Liabilities and members’ equity                              
Due to related party  $   $   $833   $   $1,522   $ 
Other liabilities   174        483        1,123     
Security deposit   1,050        1,200        975     
Promissory note - related party                        
Notes payable - related party                        
Acquisition note payable                        
Mortgage payable   84,750        94,500        78,750     
                               
Total liabilities   85,974        97,016        82,370     
                               
Members’ equity (deficit)                              
Members’ equity   29,190        31,663        27,658     
                               
Total liabilities and members’ equity (deficit)  $115,164   $   $128,679   $   $110,028   $ 

 

See accompanying notes, which are an integral part of these combining financial statements.

 

F-16

 

 

LANDA APP LLC (LANDA APP)

LANDA APP SERIES GROUP (SERIES)

COMBINING BALANCE SHEETS

(CONTINUED)

 

   Landa Series 8641
Ashley Way
   Landa Series 8651
Ashley Way
   Landa Series 8652
Ashley Way
 
   As of December 31,   As of December 31,   As of December 31, 
   2022   2021   2022   2021   2022   2021 
                         
Assets                        
Cash  $6,303   $           -   $5,323   $         -   $3,646   $          - 
Restricted cash   900         800         2,200      
Escrow   238    -    233    -    217    - 
Accounts receivable   -    -    -    -    -    - 
Due from related party   -    -    -    -    -    - 
Investments in single-family residential properties   135,359    -    113,181    -    125,855    - 
                               
Total assets  $142,800   $-   $119,537   $-   $131,918   $- 
                               
Liabilities and members’ equity                              
Due to related party  $50   $-   $6,160   $-   $8,576   $- 
Other liabilities   162    -    54    -    402    - 
Security deposit   900    -    800    -    2,200    - 
Promissory note - related party   -    -    -    -    -    - 
Notes payable - related party   -    -    -    -    -    - 
Acquisition note payable   -    -    -    -    -    - 
Mortgage payable   96,357    -    80,424    -    76,700    - 
                               
Total liabilities   97,469    -    87,438    -    87,878    - 
                               
Members’ equity (deficit)