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RSM

FM

FYNTEX Media

Transcript

RSM

DST Secondary Market

Transaction Processing

Fyntex Confidential Information

Our Mission

Realized

To increase the liquidity of DST interests and provide more options for 1031 exchange investors

Fyntex

To create the documents, processes, and platform necessary to enable transaction processing for the DST secondary market

Fyntex Confidential Information

Key Elements for Secondary Transactions

Transaction Scenarios

Documents

Process Flows

Processing Platform

Fyntex Confidential Information

Secondary Transaction Scenarios

Scenario #3

Scenario #1

Scenario #2

Seller - 1031 - Fyntex QI

Buyer - 1031 - Fyntex QI

Buyer - 1031 - Ext. QI

Buyer - No 1031

Scenario #4

Scenario #5

Scenario #6

Seller - No 1031

Seller - No 1031

Buyer - 1031 - Ext. QI

Buyer - No 1031

Buyer - 1031 - Fyntex QI

Fyntex Confidential Information

Key Documents

Fyntex

Escrow

Realized

Phase 1 Exchange Agreement

Phase 2 Exchange Agreement

DST Purchase Agreement

Settlement Statement

W-9

Assignment of Beneficial Ownership Agreement

Qualified Escrow Agreement

All Realized Documents

Statement of DST Ownership

ID Form

All Fyntex Documents

Escrow Instructions

Pro forma Settlement Statement

Fyntex Fee Invoice

Closing Instructions

Realized Fee Invoice

DST Transfer Agreement

Form 593 (CA only)

Document requirements are scenario driven

Fyntex Confidential Information

Document Matrix

Six scenarios require the use of four unique document sets

Fyntex Confidential Information

Integrated Document Process

Fyntex/Realized

Data Collection

Document flow will be largely independent of the scenario selected

Fyntex/Realized

Data Input

Fyntex/Realized

Fyntex Delivers Draft and Signed Docs

Escrow

Doc Generation

Fyntex/Realized

Doc Signature

All documents will be stored and tracked on the Fyntex Exchange Center platform

Fyntex/Realized

Doc Archival

Fyntex Confidential Information

Transaction Flow

PERFORMED BY FYNTEX

SELLER

1031 P1

PHASE 1: QEA created, 1031 Exchange documents added to FEXC for distribution

05

FEXC creates all Seller/Buyer Assignment documents

FEXC distributes all docs & settlement statement to Seller/Buyer for e-sig

DST and Seller Assignment info and Sponsor confirmation entered into FEXC

FEXC/escrow completes DST interest assignment, notifies sponsor for title update and distributes Seller proceeds*

01

07

03

PERFORMED BY FYNTEX/ESCROW

ADDED BY REALIZED

PERFORMED BY FYNTEX

ADDED BY REALIZED

PERFORMED BY FYNTEX

FEXC/escrow receives all executed docs from Seller/Buyer

FEXC/escrow receives Buyer purchase or 1031 wire

06

04

02

DST and Buyer Assignment info entered into FEXC

PERFORMED BY FYNTEX

1031 P2

BUYER

PHASE 2: 1031 Exchange docs (either Fyntex or Ext QI) added to FEXC for distribution and Phase 2 purchase wire received by escrow**

Fyntex Confidential Information

* In Phase One 1031 exchange Seller proceeds are wired to 1031 QEA for Exchanger

** In Phase Two 1031 exchange Seller proceeds are wired to 1031 QEA from Escrow

Following the Money Trail

DST Buyer

Phase 2

Fyntex QEA

Scenario 1

DST Interest

Seller

DST Sale

Escrow

Buyer to Relinquished Escrow

DST Sale

Escrow

Fyntex QEA

DST Seller

Phase 1

Fyntex QEA

Buyer QI

Scenario 2

DST Sale

Escrow

Replacement Escrow

Fyntex Confidential Information

Following the Money Trail

Fyntex QEA

Scenario 3

Buyer to DST Sale Escrow

Replacement Escrow

Replacement

Seller

DST Sale Escrow

Buyer Escrow

Fyntex QEA

Scenario 4

DST Interest Seller

Fyntex Confidential Information

Following the Money Trail

DST Sale Escrow

Scenario 5

DST Interest Seller

Buyer's QI

Buyer

DST Sale Escrow

Scenario 6

DST Interest Seller

Fyntex Confidential Information

Fyntex Exchange Center

Requirements for Processing DST Secondary Transactions

Daily Funds Status

Auto Doc Generation

Balance and Activities

Scenario Driven Data Set

Secure Processing

Transaction Visibility

Fully Encrypted Process

Clients, Realized , Escrow, Fyntex

Secure Messaging

Analytics

Transaction Monitoring

Clients, Realized, Escrow, Fyntex

Fyntex Confidential Information

How to Start a Transaction - Realized

Step 1 - Notify Fyntex with Name

Step 2 - Select Transaction

Step 1 - Select Exchange

Step 3 - Click on Details

Step 4 - Click on Add Docs

Step 5 - Add Documents

Fyntex Confidential Information

Implementation Tasks

Fyntex Exchange Center - Content and Workflow Enhancements

  • Create a new database module dedicated to DST Secondary Transaction processing - leverage the current FEXC platform
  • Create new document sets with integrated e-Sig capability
  • Create new data input forms with scenario driven data fields
  • Create new logic for automated document generation driven by scenario selection
  • Create new work flow for data input and processing
  • Implement TBD data analytics
  • Etc, etc

Fyntex Confidential Information

Implementation Tasks

Documents

  • Create DST Transfer Agreement and review with legal
  • Modify Phase 1 & 2 Exchange Agreements and review with legal
  • Create new escrow instruction set
  • Etc, etc

Pricing Structure

  • Fyntex 1031 Exchange/DST Transfer Fee
  • Third Party Escrow Fee
  • Realized/Fyntex "Engagement" Fee

Fyntex Confidential Information

Next Steps

  • What is the per transaction cost for Fyntex support? - DONE
  • 1031 Exchange w/DST Transfer
  • DST Transfer with no exchange
  • What is the non-recurring developement cost for Fyntex? - DONE
  • Realized to send Fyntex a set of their secondary docs plus process or procedures - DONE
  • Realized to set up meeting with closing team - DONE
  • Fyntex to discuss this activity with their Escrow partner - DONE

Fyntex Confidential Information

DST Secondary Market

Addressable Market Analysis

  • 2015-2020 Equity Raised* - $13B
  • Estimated average deal size - $750k
  • Estimated number of investors over past 6 years - 17,333
  • Estimated number of investors seeking liquidity at any given time
  • 5% - 867
  • 10 %- 1733
  • 20% - 3466

* Assumes $2.5B for 2020

Fyntex Confidential Information

DST Secondary Market

Addressable Market Analysis

  • 2015-2020 Equity Raised* - $13B
  • Estimated average deal size - $500k
  • Estimated number of investors over past 6 years - 26,000
  • Estimated number of investors seeking liquidity at any given time
  • 5% - 1,300
  • 10 %- 2,600
  • 20% - 5,200

* Assumes $2.5B for 2020

Fyntex Confidential Information

DST Secondary Market

Addressable Market Analysis

  • 2015-2020 Equity Raised* - $13B
  • Estimated average deal size - $250k
  • Estimated number of investors over past 6 years - 52,000
  • Estimated number of investors seeking liquidity at any given time
  • 5% - 2,600
  • 10 %- 5,200
  • 20% - 10,400

* Assumes $2.5B for 2020

Fyntex Confidential Information