iintoo

NPL5

Short-Term Senior Debt Fund

NPL-5 Senior Debt Fund

Participate in a highly-selective short-term fund to acquire a portfolio of non-performing real estate backed loans.

Investment Type

Short-Term Senior Debt Notes

Exit Strategy

Default Interest + Servicing Fees

Estimated Holding Period

24 Months

Collateral

First Lien Position

LTV

70%

Expected # of Loans in Fund

2-3

Asset Types

Multifamily, Retail, Mixed-use, Industrial

Geographic Markets

NYC and East Coast Markets

Investment Strategy

Opportunistic

NPL Pipeline

Notes Closed To Date (NPL-1, NPL-2, NPL-3, NPL-4)

Debt Note	Date Closed	Status	Details
1. Lincoln Highway, Edison, NJ	3/08/2022	Active	Default interest 19.75%.
2. 89th Ave, Queens, NY	6/07/2022	Exited	The borrower refinanced the loan, and the sponsor successfully exited the deal, yielding an IRR of 22.02% to the iintoo partnership. Since this deal was exited earlier than expected, on 8/10/22, funds were partially rolled over to the Vyse Ave debt note, and the remaining funds were held in an interest-bearing escrow account until the close of Sandford Ave on 3/23/23.
3. Vyse Ave, Bronx, NY	7/21/2022	Active	Default interest 20.0%.
4. Sandford Ave, Kearney, NJ	3/23/2023	Active	Default interest 18.0%.
5. Sterling Place, Brooklyn, NY	6/6/2023	Exited	The borrower refinanced the loan, and the sponsor successfully exited the deal, yielding an IRR of 21.76% to the iintoo partnership.

(1) Date mortgage was assigned

Investment Highlights

Fund Strategy

Through the fund, investors will gain exposure to 2-3 defaulted senior debt notes (known as non-performing loans, or NPLs), and will potentially benefit from high default interest.

• Risk mitigation includes first lien right on the asset and a maximum LTV of 70%.
• The title on the asset must be clear, and all loans must be in material default due to non payment or loan maturity, with notice already served, and cure period complete.
• The average holding period for each loan is expected to be up to 2 years.

Once a note is acquired, the sponsor will file for foreclosure and in parallel negotiate with the borrower.

There are three typical outcomes:

• The borrower successfully refinances, and the sponsor collects principal, default interest and fees;
• The sponsor completes the foreclosure process. The property is sold at auction and the proceeds are collected, including the principal, default interest, and fees;
• The sponsor takes ownership of the property, selling the asset on the open market.

Investment Criteria

Criteria	Benchmark
LTV	70%
Default Interest Rate	Minimum 18%
Location & Asset Type	Sponsor must have prior experience in location and asset type*
Default Status	Uncontested Material Default Due to Non Payment or Loan Maturity (Notice already served, cure period complete)
Title	Clean
Liens	Any lien above ours (e.g. tax lien) must be within LTV of 70%

*Investment committee may consent to accepting sufficient legal experience of the sponsor's local counsel.

Sponsor Expertise

Specialized Sponsor

Kassin Sabbagh Realty (KSR) is a fully-integrated real estate services and investment firm that focuses primarily on East Coast markets but has a presence nationally where opportunities are identified.

The sponsor has a strong relationship with originating institutional lenders who want to sell their NPLs, giving them access to deals that are otherwise unavailable. The sponsor has a proven track record in closing on NPLs, managing the legal process, and negotiations with the borrower. This is iintoo's fifth NPL fund and eighth commercial real estate project with the sponsor.

In addition to their core commercial brokerage business, they are actively engaged in real estate acquisition, financing, property management, development, and construction management.

Sponsor Track Record

Exited NPLs

Property	Purchase Date	Sale Date	IRR*	Purchase Price	Sale Price
Sterling Place, Brooklyn, NY – iintoo deal	06/06/23	09/07/23	25%	$2,104,077	$2,225,839
89th Ave, Queens, NY - iintoo deal	06/07/22	08/31/22	40%	$1,903,165	$2,032,623
W Highway 89A, Sedona, AZ	09/25/21	11/17/22	51%	$1,325,000	$1,794,478
Rutland, Brooklyn, NY	07/08/21	05/31/22	26%	$381,600	$510,550
Concord Avenue, Bronx, NY	04/14/21	02/28/22	35%	$3,500,000	$4,549,147
Carroll Street, Brooklyn NY	08/07/20	12/17/21	25%	$2,700,000	$3,593,000
Erasmus Street, Brooklyn, NY	01/16/20	11/09/21	20%	$3,768,706	$4,750,000
Broadway, NY, NY	05/20/21	06/29/21	167%	$2,320,000	$5,567,930
Route 111, Hauppage, NY	08/23/18	08/23/20	73%	$500,000	$1,500,000
Wythe Ave, Brooklyn, NY	08/13/20	08/14/20	4%	$3,844,727	$4,000,000
Mill Rd, Westhampton Beach, NY	07/30/19	08/01/20	30%	$100,000	$140,000
Bedford Avenue, Brooklyn, NY	05/10/19	06/29/20	28%	$16,500,000	$20,703,060
S. Dixie, West Palm Beach, FL	03/08/18	06/19/20	10%	$588,750	$873,146
Lenox, NY, NY	05/22/18	03/12/20	11%	$1,900,000	$2,334,136
Atlantic Ave, Brooklyn, NY	11/13/19	03/04/20	48%	$7,351,267	$8,203,666
Old Country Road, Carle Place, NY – Mezz Loan	12/18/19	02/19/20	82%	$16,585,250	$18,036,474
Old Country Road, Carle Place, NY – Senior Loan	10/23/19	02/19/20	23%	$2,450,000	$2,661,585
39th Street, Brooklyn, NY	08/16/19	12/19/19	22%	$1,593,451	$1,770,601
Jamaica Ave, Jamaica, NY & Farmer's Boulevard, St. Albans, NY	11/05/19	11/26/19	254%	$2,500,000	$2,796,638
Route 37 East, Toms River, NJ	12/20/18	11/25/19	14%	$362,122	$435,457
Grand Street, Brooklyn, NY	06/25/19	11/12/19	25%	$1,541,767	$1,743,508
MacDougal St & 88th Street, NY, NY	05/22/18	10/29/19	19%	$739,683	$1,067,423
East 53rd Street, NY, NY	02/20/19	08/20/19	24%	$2,071,000	$3,200,000
Seiler Road, New Haven, IN	07/03/19	07/30/19	1184%	$1,320,000	$1,765,876
Ave A & 1st Ave, NY, NY	01/30/19	06/19/19	31%	$9,300,000	$10,837,915
Middle Country Road, Smithtown, NY	02/08/19	06/13/19	397%	$1,380,038	$2,390,038
3rd Ave, Bronx, NY	02/15/19	04/29/19	12%	$805,763	$835,527
Keyland Court, Bohemia, NY	04/27/18	04/09/19	129%	$170,000	$373,075
Meadow Lane, Southampton, NY	03/18/19	03/28/19	18%	$3,500,000	$4,130,000
Greene Ave, Brooklyn, NY	12/01/14	02/01/19	17%	$1,300,000	$2,500,000
Jefferson Avenue, Brooklyn, NY	12/12/18	01/03/19	62%	$1,119,277	$1,180,112
Merrick Boulevard, Jamaica, NY	07/17/18	12/28/18	312%	$225,000	$425,000
East 170th Street, Bronx, NY	09/27/18	11/19/18	157%	$4,684,100	$5,372,307
West 127th Street, NY, NY	02/20/18	11/02/18	387%	$775,000	$968,954
Lafayette Avenue, Brooklyn, NY	12/14/17	10/22/18	31%	$2,650,000	$3,329,956
103rd Avenue, Jamaica, NY	08/13/18	09/20/18	540%	$847,000	$1,027,587
Boston Road, Bronx, NY	05/30/17	05/09/18	189%	$530,000	$1,440,530
East Shore Road, Great Neck, NY	04/01/17	04/09/18	20%	$5,000,000	$6,000,000
Van Burren Street, Nashville, IN	05/01/17	11/01/17	21%	$4,000,000	$4,400,000
Norwood Avenue, Long Branch, NJ	10/01/16	11/01/17	43%	$700,000	$1,000,000
Liberty Avenue, Jamaica, NY	04/28/17	08/23/17	97%	$535,000	$665,058
Grand Concourse, Bronx, NY	12/01/14	07/01/17	55%	$3,000,000	$9,300,000
Arthur Ave, Bronx, NY	05/20/16	05/24/17	74%	$6,000,000	$10,500,000
East Bay Ave, Manahawkin, NJ	11/01/16	05/01/17	26%	$4,150,000	$4,650,000
137 Street, Bronx, NY	08/04/16	02/01/17	535%	$800,000	$2,000,000
Dianes Ct. Dix Hills, NY	01/01/15	11/15/16	80%	$310,000	$935,000
Union Street, Brooklyn, NY	09/01/14	10/31/16	49%	$575,000	$1,370,000
Convent Avenue, Manhattan, NY	07/22/14	08/12/16	22%	$610,000	$913,000
Plainfield Pike, Cranston, RI	01/13/16	05/20/16	97%	$3,550,000	$4,500,000
East 30th Street, NY, NY	09/01/14	04/01/16	13%	$6,000,000	$7,298,000
Great Pasture Road, Danbury, CT	02/26/16	03/26/16	73%	$5,600,000	$5,850,000
Building Portfolio, Ridgewood, Queens, NY	03/01/16	03/22/16	77%	$4,100,000	$7,600,000
Avenue X, Brooklyn, NY	09/01/15	03/01/16	29%	$370,000	$420,000
CVS & FedEx, NY	08/01/15	02/01/16	38%	$18,025,000	$21,225,000
West 95th Street, NY, NY	10/22/15	11/24/15	1208%	$6,387,737	$8,059,101
Flatlands Ave, Brooklyn, NY	09/01/15	09/08/15	22%	$475,000	$525,000
SW College Road, Ocala, FL	03/01/15	09/01/15	35%	$9,000,000	$9,700,000
Jefferson Ave, Brooklyn, NY	09/23/14	05/20/15	102%	$1,500,000	$2,375,000
East 58th Street, NY, NY	05/01/12	03/12/15	30%	$3,000,000	$6,300,000
Henry Street, Brooklyn, NY	06/01/14	12/16/14	131%	$1,175,000	$1,850,000
Nostrand Ave, Brooklyn, NY	10/01/14	12/12/14	187%	$1,950,000	$2,400,000
Pulaski Street, Brooklyn NY	05/01/14	05/22/14	724%	$1,550,000	$1,750,000

All data provided by the Sponsor. * IRR received on project level

Active NPLs

Property	Purchase Date	Purchase Price
Sanford Ave, Kearny, NJ – iintoo deal	03/23/23	$3,950,000
Vyse Avenue, Bronx - iintoo deal	07/21/22	$1,000,653
Lincoln Highway, Edison, NJ – iintoo deal	03/08/22	$1,500,000
Santa Rosalia Dr, Los Angeles, CA	03/23/23	$1,380,000
37th Street, Queens, NY	09/29/22	$3,264,060
Atlantic Ave, Brooklyn, NY	01/31/22	$875,000
West 169th St, NY, NY	11/30/21	$4,002,794
Rockaway, Queen, NY	07/08/21	$378,400
Bushwick Avenue, Brooklyn, NY Dekalb Avenue, Brooklyn, NY
38th Avenue, Flushing, NY	01/16/20	$29,239,280
62nd Avenue, Flushing, NY	11/26/19	$6,080,000
Macon Street, Brooklyn, NY	03/19/19	$1,131,042

Deal Structure

Estimated Cash Distributions

Ongoing cash distributions and distributions from sale or refinance. Repayment of Capital Contributions of iintoo and the Sponsor pro rata; Then Hurdle Distributions (7.5%) to iintoo and the Sponsor pro rata; remainder until iintoo receives 17.5% IRR pro rata in accordance with ratio of 25% to Sponsor (Promote) and 75% to iintoo and Sponsor pro rata; remainder flips 70% to the Sponsor and 30% to iintoo and Sponsor pro rata. For further details see Schedule of Key Business Terms.

Legal Structure

SPV LLC NPL 5 LP — 90.01% SPONSOR — 9.99% NPL Asset

Ownership

The iintoo investor entity is expected to hold an 90.01% stake in the special purpose entity that owns the asset. The principal of the Sponsor provides a personal undertaking of the obligations of the Sponsor under the JV agreement. iintoo will oversee and monitor the project until its completion and provide investors with semi-annual progress reports.

Buyout

Starting at 12 months until 24 months from the acquisition of the asset, Sponsor is entitled to exercise a buyout right that should amount to a cash return to iintoo totaling its Closing Capital Contribution plus the target IRR of 16%, plus 5% of iintoo's Closing Capital Contribution amount.

Deal Structure

• iintoo Preferred Equity*: $355,800
• Deal Initiation Costs: $14,200
• Total Targeted Capital Raise: $370,000
• iintoo Equity: $1,644,200
• Deal Initiation Costs+: $85,800
• Total Targeted Capital Raise: $1,730,000
• Sponsor: $222,000
• Total Capital: $2,100,000

Capital Stack

• Sponsor: $222,000
• iintoo Preferred Equity Investors*: $355,800
• iintoo Equity Investors: $1,644,200

Raised by overseas investors +Includes $20,000 Partnership expenses held in reserve

Appendix – NPL Progress as of Sep 2023

Debt Note	Current Status
1. Lincoln Highway, Edison, NJ	In January 2023, the borrower hired a new attorney who objected to the court's order granting summary judgment in our favor on the basis that the borrower's previous attorney failed to file an opposition to the motion for summary judgment despite knowing the motion was filed. The borrower's new attorney filed a motion to vacate the order granting summary judgement based on the arguments that the borrower had ineffective counsel and that loan was not in default when the foreclosure action commenced. The borrower has also filed a third-party complaint against their lender. In March 2023, the court granted the borrower's motion to vacate the order granting summary judgment by reasoning that the borrower's failure to file an opposition to the motion for summary judgment was through no fault of their own and that such exceptional circumstances warranted the court's decision. Fortunately, despite the borrower's argument that there was no default on the loan, the court ruled that the rent receiver would stay in place. The sponsor's attorney is working with the rent receiver and eviction attorney on removing all tenants that are not paying rent, including the owner-occupied space, to continue to put pressure on the borrower to refinance or sell. All funds from the income of the property are now being held in the Receiver account. In April 2023, the court issued a case management order ("CMO") outlining the discovery and trial procedures. The parties are in the process of discovery, to be concluded by July 31, 2023. In the CMO, the court also provided for another opportunity to file a motion for summary judgment and has set a trial date of 10/02/23.
2. 89th Ave, Queens, NY - Exited	The sponsor sought foreclosure proceedings, but the borrower successfully refinanced the loan. While the borrower refinanced the loan, the sponsor was able to still collect default interest and fees, resulting in a 22.02% IRR to the iintoo partnership. Since this deal was exited earlier than expected, on 8/10/22, funds were partially rolled over to the Vyse Ave debt note, and then the remaining funds were held in escrow until the close of Sandford Ave on 3/23/23. At this time, all escrow funds are deployed.
3. Vyse Ave, Bronx, NY	The court has received our motion for summary judgment as well as the borrower's cross-motion to dismiss and opposition to the motion for summary judgment, both of which are pending before the court. We expect a decision on the motion for summary judgment shortly and based on past experience, the sponsor's attorney believes that there is a high likelihood that it will be granted as these foreclosure cases are largely one and the same. The borrower's cross-motion has no merit and will likely be denied. The court denied the application to appoint a rent receiver and the sponsor filed a motion to reargue. Despite the arguments in the motion to reargue, the court denied the motion. The sponsor's attorney has sent demand letters to the property's tenants for payment of rents directly to sponsor. While this litigation is still pending, the deal closed approximately one year ago and we are still in a comfortable juncture considering the two-year exit timeframe.

Appendix – NPL Progress as of Sep 2023

Debt Note	Current Status
4. Sandford Ave, Kearney, NJ	In mid-April 2023, the sponsor filed a foreclosure complaint in state court and a collection complaint against the borrower in federal court. This strategy allows the sponsor's attorneys to pursue payment under the borrower's guaranty while simultaneously foreclosing on the property. This two-pronged approach is expected to speed up the process towards exit. The sponsor's attorney initially filed a motion for the appointment of a rent receiver; however, they have since withdrawn their motion and have come to the agreement that the tenant will pay rent directly to the sponsor as of August 1st, 2023. 50% of rent will be used to pay property taxes, with the remaining used to reduce accrued interest. If all interest is paid, any remaining rental income will be paid towards principal. The tenant did not have a current lease at the property and an agreement has been made to remove the tenant from litigation and to address their month-to-month tenancy after foreclosure is completed. At this time, the attorney is working to complete interrogatories and document requests so that they can finalize the motion for summary judgement in both the collection and foreclosure case.
5. Sterling Place, Brooklyn, NY - Exited	The sponsor began foreclosure proceedings in June 2023. However, the borrower was able to successfully refinance their loan and the exit occurred on September 7, 2023, resulting in a 21.76% IRR to the iintoo partnership.

Disclaimer

The indicative performance notifications herein above were determined based on the following stipulations: An investment's Estimated Operational Net Operating Income (NOI) amount that is generated to Equity Investors amount is determined by deducting fees and expenses from the current rent roll and other cashflows. We confirm these numbers by comparison with comps received from appraisers. The performance notifications are hypothetical based on the methodology herein above indicated and the actual performance of an investment as stated will vary over time and might not be attained.

The above may contain forward-looking statements. Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in the above depending on a variety of factors. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable laws, we undertake no obligation to update any information contained above or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of the publishing of the above.

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