What is the legal structure of the investments on the HoneyBricks platform?

Investors receive membership interests in an LLC, which holds the underlying real estate investment.

The HoneyBricks legal structure is made up of two components:

1. The Individual LLCs that hold the real estate investments
2. The Managing Member of the LLCs which is a separate HoneyBricks entity

This structure allows:

• Individual investments to be legally independent
• You to own the real estate directly (and receive the tax benefits)
• Investors to be protected in the event that HoneyBricks ever ceases to exist.

Individual LLCs

Real estate projects listed on the HoneyBricks platform are investments with leading real estate companies throughout the US.

These companies use HoneyBricks to raise, manage and administer capital for their real estate projects.

Each investment on HoneyBricks is placed in a legally independent limited liability company (LLC).

Understanding Membership interests

• The LLC ownership is made up of membership interests
  
  • As they are many members, they are referred to as 'multi-member LLCs'
• The membership interests are like shares of a company
  • For example, there may be 1,000 membership interests in the company with 10 different members holding 100 interests
• Importantly, these interests give you directly ownership of the underlying real estate project, which provides tax advantages to investors (e.g. depreciation).
• You will see this outlined in the legal documents under 'Structure of the Offering'

Managing Member

• For multi-member LLCs to legally function, they require a Managing Member who is responsible for the LLC and can also be a member.
  • For each investment LLC, a separate HoneyBricks entity is the Managing Member
• You will see this outlined in the legal documents under 'Company & Related Entities'

• HoneyBricks Inc. owns the Managing Member, but this managing member can be removed at any time through a majority vote of the membership interests
  • You will see this outlined in the Manager Agreement under Section 9.3