CONFIDENTIAL

PRIVATE PLACEMENT MEMORANDUM

DATED: December 26, 2016

ACCREDITED INVESTORS ONLY

NO. ______

____________________________________
Name of Recipient (Intended Recipient)

FIRST FINANCIAL INVESTMENT GROUP, LLC,

a California limited liability company

MAXIMUM OFFERING $60,000,000

CLASS B MEMBERSHIP INTERESTS AND REGISTERED PROMISSORY NOTES
Minimum Offering:
Minimum Investment:
Maximum Offering:

N/A
$200,000
$60,000,000

THIS PRIVATE PLACEMENT MEMORANDUM IS CONFIDENTIAL AND IS NOT TO BE

SHOWN OR GIVEN TO ANY PERSON OTHER THAN THE INTENDED RECIPIENT (AS
NAMED ABOVE). NEITHER THE INTENDED RECIPIENT NOR ANY OTHER PERSON IS
AUTHORIZED TO COPY OR OTHERWISE REPRODUCE ANY PORTIONS OF THIS
PRIVATE PLACEMENT MEMORANDUM. FAILURE TO COMPLY WITH THIS
INSTRUCTION AND DIRECTIVE COULD RESULT IN A VIOLATION OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT).
THE OFFERING DESCRIBED IN THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT
CONSTITUTE A SOLICITATION OR AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION IN WHICH SUCH A SOLICITATION OR OFFER IS NOT
AUTHORIZED.
This numbered copy of the Private Placement Memorandum is for the sole and exclusive use of the
Intended Recipient and shall be returned to First Financial Investment Group, LLC immediately
upon request. The Intended Recipient must not forward, transmit, distribute, copy or otherwise
reproduce this Private Placement Memorandum in any manner whatsoever.
If this Private Placement Memorandum has been received by any person other than the Intended
Recipient or from any sender other than First Financial Investment Group, LLC, then there is a
presumption that this Private Placement Memorandum has been improperly reproduced and
distributed, in which case, First Financial Investment Group, LLC may disclaim any responsibility
for its content and use.
Statements in this Private Placement Memorandum are made as of December 26, 2016, unless
stated otherwise, and nothing contained herein should be construed to imply that the information
and disclosures herein are correct as of any subsequent date.
Page 1 of 54

PRIVATE PLACEMENT MEMORANDUM

CONFIDENTIAL

FIRST FINANCIAL INVESTMENT GROUP, LLC

Maximum Offering $60,000,000
Class B Membership Interests and Registered Promissory Notes
December 26, 2016
First Financial Investment Group, LLC, a California limited liability company (the Company) has been formed
for the following purposes (the Business): to invest funds received from this Offering (the Offering Proceeds) in
order to primarily purchase foreclosure properties, bank-owned properties, or any under-valued real estate
properties, and hire third-party companies to handle both the renovation and resale of the purchased properties for a
profit, if any. The Company may also use the Offering Proceeds in order to make both consumer and commercial
loans. The Company is in the process of applying for, and intends to obtain and operate under, a California Finance
Lenders License (the License). Until the License is obtained, the Company will limit its activities to making
loans that are exempt under the California Finance Lenders License laws.
The Company is offering, to non- U.S. investors only, registered non-negotiable promissory notes which are exempt
from withholding requirements per the Portfolio Interest Exemption under Internal Revenue Code Section 871(h)
(Registered Notes) for a minimum loan amount of $200,000 (which loan amount shall only be in whole
increments of $200,000), up to a total of $60,000,000.00, and, to U.S. investors only, up to 300 Class B nonvoting
membership interest in the Company (the Class B Units), with a minimum purchase of one unit ($200,000), to
accredited investors who meet the suitability requirements established for this offering (the Offering). The
number of Class B units available for purchase shall be reduced by the sums raised under the Registered Notes, such
that the total sums raised under the Registered Notes and the Class B Units collectively shall be no more than
$60,000,000.00 Each Class B Unit represents 0.330% Membership Interest in the Company, assuming that all 300
Class B units are subscribed. Should not all 300 Class B Units be subscribed, each subscribed Class B unit shall
own a pro-rata portion of the 99% total Company Membership Units evidenced by Class B Membership Units
_____________________________________________________________________________________________
Price to
Placement
Subscription
Investors(1)
Commissions(2)
Fee(3)(4)
_____________________________________________________________________________________________
Per Unit ................... .. $ 200,000
$0
$ 150
Per Registered Note (minimum)

$ 200,000

$0

$ 150

Maximum (Registered Notes and $60,000,000

$0
$45,000
Units total)
_____________________________________________________________________________________________
_________________________________
(1)

The minimum subscription for Class B Units is one (1) unit ($200,000); provided, however, that the
Company reserves the right to sell less than the minimum subscription. The purchase price of $200,000 per
Class B Unit is payable in cash, check, or other form of payment acceptable by the Company at the time of
subscription. The minimum amount that Company shall borrow under a Registered Note shall be
Page 2 of 54

$200,000, which amount is payable in cash, check, or other form of payment acceptable by the Company at
the time of subscription
(2)
The Class B Units and Registered Notes are being offered for sale on a best efforts basis through the
Company.
(3)
Before legal, accounting, printing and other expenses associated with the formation of the Company and
the Offering. See ESTIMATED USE OF PROCEEDS.
(4)
All accepted subscription proceeds will be deposited into the Companys operating bank account.
_____________________________
This Private Placement Memorandum (this Memorandum) is furnished on a confidential basis for the purpose of
evaluating an investment in the Class B Units in First Financial Investment Group, LLC, a California limited
liability company (the Company), as well as Registered Notes issued by the Company, and may not be used for
any other purpose. This Memorandum and the information contained herein may not be reproduced, or distributed,
in whole or in part, for any other purpose without the prior written consent of First Financial Management Group,
LLC, a California limited liability company (the Managing Member), and all recipients agree they will keep
confidential all information contained herein not already in the public domain and will use this Memorandum for the
sole purpose of evaluating a possible investment in the Company. Acceptance of this Memorandum by prospective
investors constitutes an agreement to be bound by the foregoing terms. AS OF THIS DATE, NO INVESTMENTS
HAVE BEEN MADE AND ALL DECISIONS REGARDING INVESTMENT OF THE OFFERING PROCEEDS
WILL BE MADE IN THE SOLE DISCRETION OF THE MANAGING MEMBER.
EACH RECIPIENT OF THIS MEMORANDUM AGREES TO RETURN IT AND ALL RELATED MATERIALS
TO THE MANAGING MEMBER IF SUCH RECIPIENT DOES NOT PURCHASE ANY OF THE CLASS B
UNITS OR REGISTERED NOTES.
THE OFFERED CLASS B UNITS AND REGISTERED NOTES (COLLECTIVELY, THE SECURITIES) HAVE
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE SECURITIES
ACT), OR THE SECURITIES LAWS OF ANY STATE, ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND STATE
SECURITY LAWS, AND MAY NOT BE TRANSFERRED, ASSIGNED OR RESOLD EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS, AND IN ACCORDANCE WITH
COMPANYS GOVERNING DOCUMENTS.
THIS OFFERING IS BEING MADE IN RELIANCE UPON THE AVAILABILITY OF AN EXEMPTION
FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS FOR TRANSACTIONS NOT INVOLVING A PUBLIC OFFERING BY AN ISSUER.
IT IS INTENDED THAT: (I) IN THE UNITED STATES THIS OFFERING COMPLY WITH THE
PROVISIONS OF SECTION 4(2) OF THE SECURITIES ACT, AND THAT THE UNITS BE OFFERED
AND SOLD ONLY TO ACCREDITED INVESTORS WITHIN THE MEANING OF REGULATION D,
AND/OR WHO HAVE A PRE-EXISTING RELATIONSHIP WITH THE COMPANY AND HAVE SUCH
EXPERIENCE IN ASSESSING THE RISKS AND MERITS OF SUCH INVESTMENTS SUCH THAT
THEY ARE CAPABLE OF ASSESSING THE LIKELIHOOD OF PROFIT OR LOSS, AND (II) OUTSIDE
OF THE UNITED STATES, THIS OFFERING COMPLY WITH THE PROVISIONS OF RULE 903 OF
REGULATION S, 17 C.F.R. 230.901 ET. SQ., PROMULGATED UNDER THE SECURITIES ACT, AND
THAT THE UNITS BE OFFERED AND SOLD ONLY TO INVESTORS WHO CONSTITUTE NON-U.S.
PERSONS WITHIN THE MEANING OF REGULATION S. ACCORDINGLY, PROSPECTIVE
INVESTORS WILL BE REQUIRED TO MAKE CERTAIN REPRESENTATIONS REGARDING, AMONG
OTHER THINGS, THEIR STATUS AS A U.S. PERSON, THEIR QUALIFICATIONS AS ACCREDITED
INVESTORS, INCLUDING THEIR INCOME AND NET WORTH, THEIR UNDERSTANDING OF THE
TERMS AND CONDITIONS OF THIS OFFERING, THEIR KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS, AND THEIR ABILITY TO SUSTAIN AND MAINTAIN AN
ILLIQUID INVESTMENT AND TO SUSTAIN A LOSS OF ALL OR SUBSTANTIALLY ALL OF THEIR
INVESTMENT IN THE CLASS B UNITS OR REGISTERED NOTES. A PERSON WHO ACQUIRES
REGISTERED NOTES PURSUANT TO REGULATION S SHALL MAKE FURTHER
Page 3 of 54

REPRESENTATIONS AND ADHERE TO THE RULES REGARDING REGULATION S AS STATED IN

SUCH PROSPECTIVE INVESTORS SUBSCRIPTION AGREEMENT.
THE OFFERED CLASS B UNITS AND REGISTERED NOTES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (SEC), ANY STATE SECURITIES
COMMISSION, OR ANY OTHER LOCAL OR FOREIGN REGULATORY AUTHORITY, NOR HAVE ANY OF
THESE AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE
ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
IN MAKING AN INVESTMENT DECISION, YOU MUST RELY ON YOUR OWN EXAMINATIONS OF THE
COMPANY AND THE MANAGING MEMBER, THE SECURITIES DESCRIBED IN THIS MEMORANDUM,
AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE
SECURITIES DESCRIBED IN THIS MEMORANDUM HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES DESCRIBED IN THIS MEMORANDUM ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION, OR AN EXEMPTION FROM SUCH SECURITIES
LAWS. YOU SHOULD BE AWARE THAT IF YOU INVEST YOU WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
WHILE THE INFORMATION PROVIDED HEREIN IS BELIEVED TO BE ACCURATE AND RELIABLE,
NEITHER THE COMPANY, ITS MANAGING MEMBER, NOR ITS AFFILIATES MAKES ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR
COMPLETENESS OF THE INFORMATION CONTAINED IN THIS MEMORANDUM, AND NOTHING
HEREIN IS OR SHALL BE RELIED UPON AS A PROMISE OR REPRESENTATION OR WARRANTY
WHETHER AS TO THE PAST OR TO THE FUTURE. IN ALL CASES, PROSPECTIVE INVESTORS SHOULD
CONSULT WITH THEIR ADVISORS AND CONSULTANTS AND CONDUCT THEIR OWN INVESTIGATION
AND ANALYSIS OF THE COMPANY, AND THE INFORMATION CONTAINED IN THIS MEMORANDUM.
IN FURNISHING THIS MEMORANDUM, THE COMPANY AND THE MANAGING MEMBER RESERVE
THE RIGHT TO SUPPLEMENT, AMEND, OR REPLACE THE MEMORANDUM AT ANY TIME, BUT
NEITHER HAS ANY OBLIGATION TO PROVIDE THE RECIPIENT WITH ANY SUPPLEMENTAL,
AMENDED, REPLACEMENT OR ADDITIONAL INFORMATION.
THE CLASS B UNITS AND REGISTERED NOTES ARE BEING OFFERED FOR SALE ONLY TO PERSONS
THAT ARE ACCREDITED INVESTORS, AS THAT TERM IS DEFINED UNDER THE SECURITIES ACT
AND REGULATION D PROMULGATED THEREUNDER. THE CLASS B UNITS AND REGISTERED NOTES
ARE BEING OFFERED HEREBY ONLY TO A LIMITED NUMBER OF PROSPECTIVE INVESTORS. IN
MAKING AN INVESTMENT DECISION, PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE TERMS OF THE OFFERING INCLUDING THE MERITS AND RISKS INVOLVED.
THE OFFERING DESCRIBED IN THIS MEMORANDUM DOES NOT CONSTITUTE A SOLICITATION OR
AN OFFER TO SELL SECURITIES TO ANY PERSON WHO IS NOT AN ACCREDITED INVESTOR. THE
CLASS B UNITS AND REGISTERED NOTES ARE OFFERED SUBJECT TO THE RIGHT OF THE
MANAGING MEMBER TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART.
AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A SIGNIFICANT DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD HAVE THE FINANCIAL ABILITY AND WILLINGNESS TO
ACCEPT SUCH RISKS. THERE WILL BE NO PUBLIC MARKET FOR THE CLASS B UNITS OR
REGISTERED NOTES AND, SUBJECT TO CERTAIN LIMITED EXCEPTIONS, THEY WILL NOT BE
TRANSFERABLE.
Page 4 of 54

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR

OTHER JURISDICTION IN WHICH AN OFFER OR SOLICITATION IS NOT AUTHORIZED.
NO TRADING MARKET IN THE UNITED STATES IS EXPECTED TO DEVELOP FOR THE SECURITIES
DESCRIBED IN THIS MEMORANDUM. SUBSTANTIAL RESTRICTIONS WILL BE IMPOSED ON ANY
SALE OR TRANSFER OF ANY OF THE SECURITIES OFFERED HEREBY.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR
ANY OTHER COMMUNICATION FROM THE COMPANY, OR ANY OF ITS RESPECTIVE MEMBERS,
EMPLOYEES, AFFILIATES OR REPRESENTATIVES AS PROVIDING ASSURANCES, WHETHER
EXPRESSED OR IMPLIED, THAT THE INVESTMENT OBJECTIVES OF THE COMPANY WILL BE
REALIZED, OR THAT ANY BENEFITS OR ADVANTAGES TO PROSPECTIVE INVESTORS OF AN
INVESTMENT IN THE COMPANY SUGGESTED, IMPLIED OR ADVOCATED IN THIS MEMORANDUM,
WILL BE AVAILABLE OR ACCOMPLISHED.
IN ORDER TO INVEST IN AN INTEREST IN THE COMPANY, EVIDENCED BY THE CLASS B UNITS,
EACH PROSPECTIVE INVESTOR AS A MEMBER WILL BE REQUIRED TO EXECUTE THE COMPANYS
LIMITED LIABILITY COMPANY OPERATING AGREEMENT, A POWER OF ATTORNEY, AND A
SUBSCRIPTION AGREEMENT. IN THE EVENT THAT ANY TERMS, CONDITIONS OR OTHER
PROVISIONS OF SUCH AGREEMENTS (OR ANY RELATED AGREEMENTS) ARE INCONSISTENT WITH
OR CONTRARY TO THE DESCRIPTION OF TERMS SET FORTH IN THIS MEMORANDUM, THE TERMS,
CONDITIONS AND OTHER PROVISIONS OF SUCH AGREEMENTS SHALL CONTROL.
NO PERSON OTHER THAN THE MANAGING MEMBER HAS BEEN AUTHORIZED TO MAKE ANY
REPRESENTATION OR PROVIDE ANY INFORMATION REGARDING THE CLASS B UNITS OR THE
REGISTERED NOTES BEYOND THE REPRESENTATIONS AND INFORMATION CONTAINED IN THIS
MEMORANDUM.
PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS
LEGAL, TAX, INVESTMENT OR OTHER ADVICE. EACH PROSPECTIVE INVESTOR SHOULD MAKE ITS
OWN INQUIRIES AND CONSULT ITS OWN ADVISORS AS TO THE APPROPRIATENESS AND
DESIRABILITY OF AN INVESTMENT IN COMPANY AND AS TO LEGAL, TAX, AND RELATED MATTERS
CONCERNING AN INVESTMENT IN THE CLASS B UNITS AND BECOMING A MEMBER OF THE
COMPANY.

[THIS PORTION IS LEFT INTENTIONALLY BLANK]

Page 5 of 54

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS7

INVESTOR SUITABILITY STANDARDS8
SUMMARY OF THE OFFERING..10
THE COMPANY14
THE OFFERING.27
FINANCIAL PROJECTIONS AND ESTIMATED USE OF PROCEEDS..29
RISK FACTORS.32
COMPENSATION AND FEES...42
CONFLICTS OF INTEREST ..42
SUMMARY OF THE RIGHTS OF THE UNITS.44

Exhibit
A

Operating Agreement

Form of Registered Note

Subscription Documents

Page 6 of 54

FORWARD-LOOKING STATEMENTS
CERTAIN INFORMATION PRESENTED IN THIS MEMORANDUM CONSTITUTE FORWARD-LOOKING
STATEMENTS, WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY
SUCH AS MAY, MIGHT, EXPECT, BELIEVE, ANTICIPATE, ESTIMATE, PLAN, OR
CONTINUE, OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE
TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS REPRESENT THE SUBJECTIVE VIEWS OF
COMPANYS MANAGEMENT AND COMPANYS CURRENT ESTIMATES OF FUTURE PERFORMANCE
ARE BASED ON ASSUMPTIONS WHICH MANAGEMENT BELIEVES ARE REASONABLE BUT WHICH
MAY OR MAY NOT PROVE TO BE CORRECT. THERE CAN BE NO ASSURANCE THAT MANAGEMENTS
VIEWS ARE ACCURATE OR THAT MANAGEMENTS ESTIMATES WILL BE REALIZED, AND NOTHING
CONTAINED HEREIN IS OR SHOULD BE RELIED ON AS A PROMISE AS TO THE FUTURE
PERFORMANCE OR CONDITION OF THE COMPANY. INDUSTRY EXPERTS MAY DISAGREE WITH
THESE ASSUMPTIONS AND WITH MANAGEMENTS VIEW OF THE MARKET AND THE PROSPECTS OF
THE COMPANY. ANY SUCH STATEMENTS INHERENTLY ARE SUBJECT TO A VARIETY OF RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS OR EVENTS TO DIFFER MATERIALLY
FROM THOSE RESULTS OR EVENTS PREDICTED OR ANTICIPATED BY THESE STATEMENTS,
INCLUDING ANY RESULTS DESCRIBED HEREIN. ACCORDINGLY, THE INTENDED RECIPIENT
SHOULD NOT RELY ON THESE STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG
OTHERS, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN LOCAL, STATE OR
FEDERAL LAWS AND REGULATIONS; CHANGES IN BANKING COMPLIANCE AND OVERSIGHT
PROCEDURES, CHANGES IN POLITICAL, SOCIAL AND ECONOMIC CONDITIONS, ENVIRONMENTAL
RISKS, INTEREST RATE RISKS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND
THE COMPANYS CONTROL. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE
DATE OF THIS MEMORANDUM. THE COMPANY AND THE MANAGING MEMBER EXPRESSLY
DISCLAIM ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR
REVISIONS TO ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN TO REFLECT ANY
CHANGE IN THE EXPECTATIONS OF THE COMPANY OR THE MANAGING MEMBER WITH REGARD
THERETO, OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH
STATEMENT IS BASED. THE RISKS AND UNCERTAINTIES ATTRIBUTABLE TO THESE FORWARDLOOKING STATEMENTS MAY ADVERSELY AFFECT THE DISTRIBUTIONS TO BE MADE ON, OR THE
RATE OF RETURN ON, THE CLASS B UNITS. THE INTENDED RECIPIENT SHOULD CAREFULLY
CONSIDER THE RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION PROVIDED HEREIN.
FOR ALL NON-U.S. INVESTORS GENERALLY
NEITHER THE COMPANY, THE MANAGING MEMBER, NOR ANY OTHER PARTY HAS DONE
ANYTHING THAT WOULD PERMIT THIS OFFERING, OR POSSESSION OR DISTRIBUTION OF THIS
DOCUMENT, IN ANY JURISDICTION OTHER THAN IN THE UNITED STATES. IT IS THE
RESPONSIBILITY OF ANY PERSONS WISHING TO SUBSCRIBE FOR THE PURCHASE OF THE
SECURITIES OFFERED HEREBY TO FULLY AND COMPLETELY INFORM THEMSELVES OF AND
OBSERVE ALL APPLICABLE LAWS AND REGULATIONS OF ANY AND ALL RELEVANT
JURISDICTIONS. PROSPECTIVE INVESTORS SHOULD INFORM THEMSELVES AS TO THE LEGAL
REQUIREMENTS AND TAX CONSEQUENCES WITHIN THE COUNTRIES OF THEIR CITIZENSHIP,
RESIDENCE, DOMICILE, AND PLACE OF BUSINESS WITH RESPECT TO THE ACQUISITION, HOLDING,
OR DISPOSAL OF THE CLASS B UNITS AND REGISTERED NOTES OFFERED HEREBY, AND ANY
RESTRICTIONS, INCLUDING, WITHOUT LIMITATION, ANY FOREIGN EXCHANGE RESTRICTIONS
THAT MAY BE RELEVANT THERETO.
THE SECURITIES SOLD HEREUNDER HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
US SECURITIES ACT OF 1933, AS AMENDED (THE ACT) AND MAY NOT BE OFFERED OR SOLD
Page 7 of 54

WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT
IN CERTAIN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
EACH PLACEMENT AGENT SELLING SECURITIES OUTSIDE OF THE UNITED STATES HAS AGREED
THAT IT WILL NOT OFFER, SELL OR DELIVER THE SHARES (A) AS PART OF ITS DISTRIBUTION AT
ANY TIME OR (B) OTHERWISE UNTIL SIX MONTHS AFTER THE LATER OF THE COMMENCEMENT OF
THIS OFFERING AND THE CLOSING DATE OF THIS OFFERING, WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS AND IT WILL HAVE SENT TO EACH BROKERDEALER TO WHICH IT SELLS SHARES IN RELIANCE ON REGULATION S DURING SUCH SIX-MONTH
PERIOD, A CONFIRMATION OR OTHER NOTICE DETAILING THE RESTRICTIONS ON OFFERS AND
SALES OF THE SHARES WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS.
HEDGING TRANSACTIONS INVOLVING ANY SECURITIES SOLD OUTSIDE OF THE UNITED STATES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

THE TERMS USED IN THIS LEGEND HAVE THE MEANINGS ASCRIBED TO THEM IN REGULATION S
AND THE DEFINITIONS OF SUCH TERMS CONTAINED IN REGULATION S ARE HEREBY
INCORPORATED HEREIN BY REFERENCE.
IRS CIRCULAR 230 NOTICE
THE DISCUSSION CONTAINED IN THIS MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE
USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING U.S. FEDERAL, STATE, OR LOCAL
TAX PENALTIES. THIS MEMORANDUM IS WRITTEN IN CONNECTION WITH THE PROMOTION OR
MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THIS MEMORANDUM. EACH
TAXPAYER SHOULD SEEK INDIVIDUAL AND INDEPENDENT ADVICE BASED ON THE TAXPAYERS
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

INVESTOR SUITABILITY STANDARDS

Page 8 of 54

This is a private offering that is being made only by delivery of a copy of this Memorandum. Sales of the
Class B Units and Registered Notes will be made only to a limited number of selected purchasers for investment
only.
There currently exists no public market for the Class B Units or the Registered Notes, and the Company is
uncertain when or if such market might develop. The Class B Units and the Registered Notes have not been
registered under the Securities Act of 1933, as amended (the Act), or the securities laws of any state, and may not
be transferred or resold except as permitted under the Act, the Internal Revenue Code, and such laws pursuant to
registration or exemption therefrom. Accordingly, investors must bear the economic risk of an investment in the
Class B Units or Registered notes for an indefinite period of time and may not be able to liquidate their investment
in the event of an emergency or for any other reason. An investment in the Class B Units or the Registered Notes is
subject to substantial risks as described below under the caption Risk Factors.
The Class B Units and Registered Notes will be sold only to investors who are Accredited Investors as
defined in Rule 501(a) of Regulation D (Regulation D) promulgated by the Securities and Exchange Commission
under the Act. An investment in the Class B Units or the Registered Notes, for the reasons set forth above, is
suitable only for investment by persons who have sufficient financial means to bear the risk of the investment and
who have no need for liquidity with respect to that investment. The Class B Units will be sold only to U.S.
investors, while the Registered Notes will be sold only to non-U.S. investors.
Accredited Investors
Accredited Investors are those investors who meet at least one of the following standards or others set forth
in Rule 501(a) of Regulation D, which are described in more detail in the Subscription Agreement:
(a)

The investor is a natural person and such investors Net Worth (as defined below) either
individually or jointly with such investors spouse, exceeds $1,000,000, inclusive of home, home
furnishings and automobiles;

(b)

The investor is a natural person who has had Individual Income (as defined below) from all
sources, without including any income of such investors spouse, in excess of $200,000, or with
such investors spouse of $300,000, in each of the two most recent years and reasonably expects to
have Individual Income in excess of $200,000 or $300,000, as applicable, in the current year;

(c)

Any entity (a partnership, limited liability company, corporation, trust or unincorporated

association) in which all of the equity owners of that entity qualify as Accredited Investors. A
trust will qualify as an Accredited Investor if: (x) it is an irrevocable trust and it qualifies under
clause (e) below; or (y) it is a revocable trust and each person with the power to revoke the trust
qualifies under clause (a) or (b) above;

(d)

A corporation or partnership, not formed for the specific purpose of acquiring the Units, that has
total assets in excess of $5,000,000;

(e)

A trust, not formed for the specific purpose of acquiring the Units, that has total assets in excess of
$5,000,000 and is directed by a sophisticated person as defined in Rule 506(b)(2) of Regulation D;
or

(f)

Any manager or executive officer of the Company.

As used in the foregoing description, the term Net worth means the excess of total assets at fair market
value over total liabilities, and the term Individual Income means adjusted gross income, as reported for Federal
Income Tax purposes, less any income attributable to a spouse or to a property owned by a spouse unless such
Page 9 of 54

spouse is a co-investor, increased by the following amounts (but not including any amounts attributable to a spouse
or to property owned by a spouse unless such spouse is a co-purchaser): (i) the amount of any interest income
received which is tax-exempt under Section 103 of the Internal Revenue Code (the Code); (ii) the amount of
losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040); (iii) any
deduction claimed for depletion under Section 611 et seq. of the Code; and (iv) any amount by which income from
long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section
1202 of the Code.
Each investor will be required to represent that such investor is acquiring the Class B Units or the
Registered Notes for such investors own account or for a fiduciary account for which the investor either directly or
indirectly supplies the funds, for investment, and not with any intention of making a distribution or resale of such
securities either in whole or in part. Further, each investor will also be required to represent in writing, among other
things, that such investor has such knowledge and experience in financial and business matters, either alone or
together with such investors purchaser representative, if any, that such investor is capable of evaluating the merits
and risks of an investment in the Class B Units or Registered Notes and of making an informed investment decision.
The Company reserves the right to declare any prospective investor ineligible to purchase Class B Units or
Registered Notes based on information provided (or not provided) in the Subscription Agreement or on any other
information which may become known or available to the Company concerning the suitability of such prospective
investor or for any other reason.
In the case of fiduciary accounts, the net worth and/or income suitability requirements must be met by the
beneficiary of the account, or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase
of the Units. In order to create an Individual Retirement Account, a person must comply with the provisions of
Section 408 of the Code and an investment in the Units does not, in and of itself, create an Individual Retirement
Account for any person.

[THIS PORTION IS LEFT INTENTIONALLY BLANK]

SUMMARY OF THE OFFERING

Page 10 of 54

The following Summary of Principal Offering Terms is by its nature incomplete and is therefore subject to the
detailed provisions of the Operating Agreement (Attached hereto as Exhibit A). This Summary of Principal Offering
Terms is qualified in its entirety by reference to the Operating Agreement. In the event that the description of terms
in this Summary of Principal Offering Terms is inconsistent with or contrary to the description in, or terms of, the
Operating Agreement or related documents (including the Subscription Agreement), the terms of the Operating
Agreement and the related documents will control. All undefined terms herein shall have the definitions set forth in
the Operating Agreement.
Company

First Financial Investment Group, LLC (the Company) is a California limited

liability company. The Companys address and telephone number are:
7000 E. Slauson Ave., Commerce, CA 90040; T: 323-201-0001.

Overview

The Company has been formed for the following purposes (the Business): to
invest funds received from this Offering (the Offering Proceeds) to primarily
purchase foreclosure properties, bank-owned properties, or any under-valued
real estate properties, and hire third-party companies to handle both the
renovation and resale of the purchased for a profit, if any. The Company may
also use the Offering Proceeds in order to make both consumer and commercial
loans.

Management

First Financial Management Group LLC, a California limited liability company

(the Managing Member), is the Managing Member of the Company. The
management, control and operation of, and the determination of policy with
respect to the Company and its affairs is vested exclusively in the Managing
Member. The Managing Member shall own 100% of the Class A Membership
Interest in the Company, which shall represent 1% of the total Company
Membership Interest.

OFFERING
Size of Offering

The Company is offering for sale Registered Non-Negotiable Promissory Notes

(the Registered Notes, in a form substantially similar to Exhibit B, attached
hereto and made apart hereof) to accredited non-U.S. investors, as well as up to
300 Class B Membership Units (Class B Units) in aggregate to accredited
U.S. investors. Each Class B Unit has a purchase price of $200,000 with a
minimum investment of $200,000, and each Registered Note has a minimum
obligation amount of $200,000, for a maximum aggregate Offering of
$60,000,000. Assuming all 300 Class B Membership Units are sold, the Class B
Members shall cumulatively own 100% of the Class B Membership Interest in
the Company, where each Class B Unit represents 0.33% Membership Interest
in the Company, for a total of 99% overall Membership Interest in the Company.
The number of available Class B units shall be reduced accordingly in
proportion with the amount of debt evidenced by the Registered Notes. Each
Class B Unit will allow the investor to choose one of three Investment Terms as
described in this Memorandum, and each Registered Note shall be made in
accordance with one of the three Investment Terms.

Investment Requirements

Each purchaser of Class B Units (each, a Class B Member) and each holder of
a Registered Note (each, a Noteholder) must be an Accredited Investor as
such term in defined in Rule 501 of Regulation D under the Securities Act of
1933, as amended (the Securities Act). Class B units will only be offered to
U.S. Accredited Investors, while Registered Notes will only be offered to nonU.S. Accredited investors.
Page 11 of 54

Class B Preferred Return

Each Purchaser of Class B Units shall be a Class B Member and shall receive
monthly cash distributions on the preferred return (as defined in the Operating
Agreement) of the Class B Members Capital Contribution, based on available
distributable funds, as determined according to the provisions of the Operating
Agreement. Each Class B Member will have the option to elect one of three
different investment terms (the Investment Term(s)) for each Class B Unit,
and each option will have different preferred percentage returns. Currently,
investors will have the option to choose from the following Investment Terms
for the Class B Units:

Registered Note Return

Each purchaser of a Registered Note shall be a Noteholder and shall receive

monthly interest payments in accordance with the terms of the respective
Registered Note. Upon the maturity date of such Registered Note, the
Noteholder shall have the option to either obtain a balloon payment of all
principal and interest due thereunder, or, request that the Company reinvest such
principal for another Investment Term, which reinvestment Company may
refuse to effectuate in its sole and absolute discretion. Each Noteholder shall
have the option to choose from the following three Investment Terms for each
Registered Note issued by the Company:

Portfolio Interest Exemption

Six-Month Investment Term, yielding a 6.75% annual preferred return,

payable monthly
One-Year Investment Term, yielding a 7.25% annual preferred return,
payable monthly; and
Two-Year Investment Term, yielding a 8.0% annual preferred return,
payable monthly

Six-Month Investment Term, yielding 6.75% interest annually,

payable monthly
One-Year Investment Term, yielding 7.25% interest annually, payable
monthly; and
Two-Year Investment Term, yielding 8.0% interest annually, payable
monthly

Each Registered Note is intended to comply with the requirements of the

Portfolio Interest Exemption (PI Exemption) under Internal Revenue Code
(IRC) Section 871(h), and thus avoid tax withholding requirements. A 30
percent tax is generally imposed on U.S. source Fixed or Determinable Annual
or Periodic (FDAP) income not effectively connected with a U.S. trade or
business (e.g., interest, dividends, and royalties) paid to non-resident aliens and
corporations. [IRC 871(a), 881(a).] The tax is reduced under most tax treaties.
Under the right circumstances, and only if certain rules are observed, some nonresidents can be exempt from the U.S. tax on FDAP interest income from U.S.
sources without regard to the respective tax treaty. [IRC 871(h), 881(c)]
This vehicle is called "Portfolio Interest" (PI) and is described in IRC Sections
871(h) and 881(c) for the cases of non-resident aliens and corporations,
respectively. The favorable treatment of this special kind of interest under the
IRC also extends to the estate tax regime as the underlying loan instruments are
Page 12 of 54

exempt from the estate tax. PI is also exempt from the reporting requirements of
IRC Section 6049, and the corresponding Treasury Regulation Section 1.60495(b)(8). No Form 1042 (Annual Withholding Tax Return for U.S. Source
Income of Foreign Persons, or Form/1042(S) (Foreign Person's U.S. Source
Income Subject to Withholding) is necessary for PI. Requirements for the PI
Exemption are discussed further in the Risk Factors section of this
Memorandum.

Acceptance of Subscription

The execution of a Subscription Agreement by a subscriber constitutes a binding

offer to buy Class B Units or Registered Notes, as applicable, and an agreement
to hold the offer open until the Subscription Agreement is accepted or rejected
by the Managing Member. The Managing Member has the discretion to refuse
to accept any Subscription Agreement without liability to the subscriber. In the
case of a purchase of a Class B Unit, the execution of the Subscription
Agreement and its acceptance by the Managing Member (an Agreed
Subscription) will also constitute the execution of the Companys Operating
Agreement and an agreement to be bound by the terms thereof as a Class B
Member. In the case of the purchase of a Registered Note, an Agreed
Subscription will constitute the subscribers agreement to the terms and
conditions of the respective Registered Note.

Payment of Subscription

Agreed Subscriptions are payable in cash, check, or any other form of payment
accepted by the Company, and all subscriptions, once made, are irrevocable.

Transfers

A Class B Member may not sell, assign, pledge, hypothecate, or transfer any
Class B Units without the prior written consent of the Managing Member.
Transfers of Class B Units which are affected without compliance with the
Operating Agreement will be void and will not be recognized by the Company.
A Noteholder may not sell, assign, pledge, hypothecate, or transfer any
Registered Note without the presentation and surrender of the original
Registered Note to the Company. Each Registered Notes obligations shall run
only to the registered owner of such Registered Note, and such Registered Note
may only be transferred on the registry of the Company. The foregoing is
required for the Registered Notes to remain in compliance with the PI
Exemption and thus avoid tax withholding.

Members Status

Except as may otherwise be provided for in the Operating Agreement, the

liability of each Class B Member to the Company is limited to the amount of its
Capital Contributions, and no Class B Member will otherwise be personally
liable for any debt, obligation or liability of the Company.

FINANCIALS
Use of Proceeds

The net proceeds of this Offering will be used by the Company to effectuate the
Business.

Capital Contributions

In the case of a purchase of Class B Units, at the time of the acceptance of an

executed Subscription Agreement by the Managing Member and admission to
the Company, each Class B Member will be required to contribute to the
Company the entirety of its Agreed Subscription (such amount, a Capital
Contribution).
Page 13 of 54

Additional Contributions

No Class B Member shall be required or permitted to make any additional

Capital Contributions to the Company except as approved by the Managing
Member.

Option to Extend Term

As set forth in the Registered Notes, each Noteholder may, upon written notice
to the Company no later than 60 days before the Maturity Date of such
Registered Note (as defined therein) request that Company extend the Maturity
Date for another Investment Term. Should the Noteholder provide the Company
with such valid notice, the Managing Member may, in its sole and absolute
discretion, choose to either extend such Registered Notes Maturity Date or pay
Noteholder all sums due thereunder in accordance with the provisions of the
Registered note.

Option to Withdraw

As set forth in the Operating Agreement, each Class B Member shall have the
option to request a withdrawal of all their Capital Contribution, along with all
undistributed return payable within 90 days after the Class B Members
applicable Lockup Period expires, provided that the Class B Member provides
60 days advance written notice from the Class B Members applicable
withdrawal date. Class B Members who have been with the Company for longer
than 6 months are also permitted to request an extension of their investment of
an additional 6 months or any other Investment Term available, which extension
shall be granted or denied in the Managing Members sole and absolute
discretion. If the investor elects, and the Company agrees, to extend his/her
investment for an additional 6 months, there will be no capital transactions
between the Company and the investor.
The duration of the Lockup Period depends on the Investment Term the Class B
Member chooses. Such Lockup period can be either for 180 days for Six-Month
Investment Term; 365 days for One-Year Investment Term; or 730 days for TwoYear Investment Term. All Lockup Periods shall commence upon the date the
Member becomes a Class B Member.

Timing of Distributions
Members Withdrawal of
Capital Contribution

Allocations of
Gains And Loses

The Class B Member must give a 60 day prior written notice before the
applicable Lockup Period expires in order to withdraw all of the investors
capital contribution. After the Company receives the investors prior written
notice, the Class B Member shall receive his/her capital account balance within
90 days after the date of the applicable Lockup Period expires. If the Class B
Member does not provide his/her 60 day advance written notice to the Company,
the Managing Member, in its sole discretion, may either reinvest the Class B
Members investment for another applicable term, or distribute the Class B
Members Capital Contribution at any time after the 90 day Lockup Period
expires.
Net profits and net losses will be allocated to the Members at the end of the
Companys fiscal year.
In addition to the allocation of the net profit and net loss at the end of the
Companys fiscal year, for those Class B Members who have delivered their 60Page 14 of 54

day prior written notices before the applicable Lockup Period expires in order to
withdraw all of their capital contribution, net profits and net losses will also be
allocated to the Members through the day that the Class B Membership Interest
is reacquired by Company by payment of Company to the Class B Member the
full balance of such members Capital Account.
After giving effect to the distributions set forth in the Operating Agreement,
including but not limited to interest and principal payments to Noteholders and
preferred returns to Class B Members, any remaining profits shall be allocated
to the Class A Member.
With regard to losses, after giving effect to the regulatory allocations set forth in
the Operating Agreement, net losses will be allocated to Members based on the
following terms:

First, to the extent that a Members Capital Account exceeds its

unrecovered Capital Contribution (an Excess Profit Balance) as of
the last day of such applicable Lockup Period expires or as of the last
day of the fiscal year, in the same proportion that such Members
Excess Profit Balance bears to the Excess Profit Balance of all
Members, until all such Excess Profit Balances are reduced to zero;

Second, to the Members in proportion to their positive Capital Account

balances as of the last day of such applicable Lockup Period expires, or
as of the last day of the fiscal year, until such balances are reduced to
zero; and

The balance, if any, to the Members in proportion to their Capital

Contribution, as finally calculated and determined as of the last day of
such applicable Lockup Period expires or as of the last day of the fiscal
year.

No Losses shall be allocated to any Member to the extent that such Losses
would result in an adjusted capital account deficit. Any Losses disallowed under
the foregoing sentence shall be reallocated among the remaining Members.
Company Expenses

In addition, available cash and proceeds of this Offering and the Companys
Business may be used by the Company to cover any operation costs incurred by
the Company or to reimburse the Managing Member for expenses incurred by
the Managing Member for the benefit of the Company.
There will be a one-time $150 subscription fee per Class B Unit or Registered
Note that will be charged at the initial subscription which will be used to cover
expenses and costs regarding the offering documents and related legal services.
If the Company does not have available cash at the time of distribution, the
Company will distribute such available cash at the first available date.

MISCELLANEOUS
Reports to Members

The Company will use commercially reasonable efforts to prepare and mail to
each of the Members, within 45 days after the end of each fiscal year, an
unaudited financial statement of the Company setting forth the assets, liabilities
Page 15 of 54

and capital of the Company as of the end of such fiscal year, the net profit or net
loss of the Company for such fiscal year, a statement of the cash flows of the
Company for such fiscal year, and such Members closing Capital Account as of
the end of such fiscal year for the preparation of the Federal Income tax returns
of the investors; provided, however, that such financial statement need not be
prepared in accordance with generally accepted accounting procedures
(GAAP). Members will be provided with the opportunity to audit the books
and records of the Company in accordance with the terms of the Operating
Agreement.
No Participation in
Management

Indemnification and
Exoneration of the
Managing Member

Only the Managing Member shall take part in the management or control of the
Companys affairs, transact any business in the Companys name, or have the
power to sign documents for or otherwise bind the Company. No Class B
Member shall have the right to vote for the removal or replacement of the
Managing Member.

The Managing Member will have no liability whatsoever to the Company or to

any Member for any loss or damages suffered by the Company unless
occasioned by the fraud, gross negligence of, willful and material violation of
known law by, or, if applicable, willful breach of fiduciary duty by the
Managing Member. The Company has agreed to indemnify and hold the
Managing Member and its affiliates, and the members, shareholders, controlling
persons, officers, directors, partners, employees and agents of the Managing
Member and its affiliates, harmless to the fullest extent permitted by applicable
law.

Tax Considerations

An investment in the Company is not expected to yield significant tax benefits

for a typical investor, and an investor solely seeking such benefits should not
invest in the Company. Nevertheless, investment in the Company requires
careful consideration of the tax consequences and the risks attendant thereto.
EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT WITH SUCH
INVESTORS OWN TAX ADVISOR IN ORDER TO FULLY UNDERSTAND
HOW SUCH CONSEQUENCES AND RISKS AFFECT SUCH INVESTORS
PARTICULAR SITUATION.

Conflicts of Interest

The Company may be subject to various conflicts of interest. See

CONFLICTS OF INTEREST.

THE COMPANY
First Financial Investment Group, LLC, a California limited liability company (the Company) has been formed to
identify potential growth opportunities in the real estate auction market and purchase mostly foreclosure and undervalued properties for further renovation, decoration, and/or resale of the property. The enhancement and
improvements conducted by the real estate management companies that the Company intends to retain should add
value to the property. As a result of the market analysis conducted by the Company, the Company believes that
updated properties can be resold for a profit. In addition, the Company may make short- to mid-term commercial
Page 16 of 54

loans to firms in the real estate auction, renovation, or development business to support the day-to-day operations of
those entities. The Company also plans to acquire a California Finance Lenders License so it can be in compliance
with certain state and regulatory laws in order to make such commercial loans to these businesses.
The principal office and place of business of the Company is located at 7000 E. Slauson Ave., Commerce, CA
90040. The Managing Member of the Company is First Financial Management Group, LLC a California limited
liability company. A copy of the Companys Operating Agreement is attached to and made a part of this
Memorandum as Exhibit A. The description of the Operating Agreement in this Memorandum is qualified in its
entirety by reference to Exhibit A.
This Memorandum sets forth the investment objective, strategy and investment program of the Company, the
principal terms of the Operating Agreement, and certain other pertinent information. However, this Memorandum
does not set forth all the provisions and distinctions of the Operating Agreement that may be significant to a
particular prospective investor. Each prospective investor should examine this Memorandum, the Operating
Agreement, and the Subscription Agreement accompanying this Memorandum in order to assure
himself/herself/itself that the terms of the Operating Agreement and the investment objective and method of
operations are satisfactory.
Purchase of Class B Units in the Company or that of a Registered Note is a speculative investment. Investment in
the Company is designed only for sophisticated persons who are able to bear a loss of their Capital Contributions in
the Company. Each prospective investor should review carefully and understand the risks described in this
Memorandum.
Each Registered note shall be an unsecured note, and will therefore have no security interest guaranteeing its
repayment.

ORGANIZATION STRUCTURE
The Company is managed by First Financial Management Group, LLC (FFMG), a California limited liability
company (the Managing Member). FFMG is the sole Managing Member of the Company, holding 100% of Class
A Units. FFMG is a management company formed to be responsible for the day-to-day management and operation
of the Company. FFMG, acting as the Managing Member of the Company, will make all investment and other major
decisions of the Company in its sole discretion.
An overview of the organizational structure of the Company is depicted below:

Page 17 of 54

Mr. Edward Chen is the manager and President of FFMG, the managing member of the Company. The success of
the fund will partially rely on Mr. Chens ability, previous experience, and personal connections as further explained
below.
Mr. Chen majored in international trade as an undergraduate, and entered into the international trade business in the
U.S. in 1993 where he has over 20 years of experience in this field. In addition, he simultaneously gained experience
in the field of real estate development in China, entering the real estate development business in the U.S. in 1997.
Mr. Chen has over 15 years of experience in real estate development and construction, which provides him with an
understanding and knowledge of the real estate industry. He has handled the development and construction of major
mixed-use properties and residential properties including condominiums, apartments, and retirement homes at more
than 50 locations in Southern California.
In addition to development and construction, Mr. Chen also has over 10 years of experience in the remodeling and
flipping industries. He has attended many trustee auctions, and as of the date of this offering, he has remodeled and
flipped several hundred properties. Mr. Chen has extensive experience in real estate property sales, possessing a real
estate agent license and having transacted hundreds of residential real estate deals.
Mr. Chen also has experience in the field of interior design, having opened and operated interior design
establishments in major high-end shopping malls such as Westfield, Simon, and Macerich in different locations
across Southern California. These establishments provide a one-stop shop for customers looking to decorate or
design their homes. With his strong command of multiple areas of the real estate industry, Mr. Chen also has years of
experience in the finance industry with regard to funding large-scale real estate development projects as he has
succeeded in raising millions of dollars for various projects. In this way, Mr. Chen has extensive experience in the
real estate industry with regard to construction, development, remodeling, flipping, sales and interior design, while
also maintaining a background in financing for real estate development projects.
Mr. Chen has over five years of experience in the EB-5 industry, having successfully managed multiple EB-5 real
estate development projects during this period. He also has extensive knowledge of Chinas market, and the needs of
Page 18 of 54

Chinese investors, especially with regard to investing in the U.S. real estate market and settling in the U.S. Along
with Mr. Chens firm grasp of securities, immigration, and business laws in the U.S., he is familiar with the money
market in the U.S. as well as other areas of the finance industry. In addition, Mr. Chen has vast experience at
providing a high-quality and full range of services to his clients in many areas including immigration and real estate.
INVESTMENT STRATEGY
The Company will primarily focus on foreclosure, bank-owned, or any under-valued real estate properties that the
Company believes to have potential growth opportunities value. The Company will purchase these identified real
estate properties in order to renovate and resale the property, which the Company believes can be resold for a profit.
All the renovation, decoration and any enhancement will be conducted through a professional real estate
management company retained by the Company to ensure the quality of the improvement. In addition, the Company
also expects to enter an agreement with a third party management company and authorize it to handle the resale of
the property at a price the Company believes will be higher than the purchase price of the property.
Due to the current market analysis and previous experience of the Company, it is expected that the Company will
operate within the terms set forth below in order to meet its targeted return:

Typical Acquisition Value: $0.2M-$1M for regular properties; $1M-2.5$ for high value properties
Target Return: Around 9.5%-13.5% (varies according to different types of properties)
Investment Turnover: 6 months - 12 months
Management Company Retainer: We will enter into an agreement with a professional real estate
management company to conduct all renovation services for our properties. All such expenses will come
from their own available cash flow. The management company will be compensated by a portion of the
income from the resale of the property.
Supervision: Because of the management teams experience in the business, the Company may supervise
the real estate management firm to ensure performance.
Short-Term Flipping Investment: We expect that our primary investment will apply short-term core plus
and value added strategies through the acquisition, renovation, and resale of real estate property (more
commonly known as flipping). The typical flipping business turnover is less than 9 months, or 6 months
if we purchase the property through professional foreclosure buyers and utilize property management
companies. Due to this intriguing characteristic of the flipping business, the Companys management
believes that it could make a profit during this 6-9 month period of time when compared to other similar
private real estate equity funds.

MARKET ANALYSIS PROPERTY ACQUISITIONS

Economic Overview
Based on the Companys general research, economic activity in the United States was positive across multiple
indices and data points for the past few years. For instance, the manufacturing sector experienced rising new orders
and shipments, residential real estate sales gained momentum during the first six months of 2014 as tight inventory
Page 19 of 54

pushed prices upwards, mortgage rates remained near historic lows, and consumer credit eased during the year, as
banks returned to the market pursuing growth opportunities.
The upbeat business sentiment was reflected positively in the employment figures as well. Payroll employment
followed recent years trends, gaining momentum toward the half point of 2014. The second quarter saw the creation
of 831,000 new jobs, which was the strongest quarterly increase since the first quarter of 2006, well before the Great
Recession. Total net new jobs for the first six months of the 2014 calendar year stood at 1.4 million, with another
354,000 positions created in July and August.

The unemployment rate declined from 6.7 percent in the first quarter of 2014, to 6.2 percent in the second quarter.
However, the labor force participation rate continued compressing during the period, declining to 62.8 percent. The
figure underscores the fact that a large proportion of Americans remain outside of the labor force, leading to a loss of
economic opportunities and potential growth. Employee compensation increased by 2.6 percent in real terms during
the second quarter.
Commercial Real Estate Fundamentals
Commercial real estate continued on an upward trajectory in 2014, building on improving fundamentals and
investment momentum. In tandem with rising economic conditions, fundamentals strengthened during the year, as
vacancies continued declining and rent growth accelerated.
According to the data revealed by the National Association of Realtors, the apartment sector was the best performer,
as national vacancies hovered around 4.0 percent. With expectations for increased demand, significant new
inventory of apartment units entered the market during the year, leading to concerns about oversupply. As household
formation advanced, demand remained brisk, keeping rent growth at a 4.0 percent rate.
Industrial properties proved well-suited to meet the gains in international trade and higher consumer spending. The
industrial sector also received a welcome boost from steady increases in online retail sales, as employment growth in
the warehousing and storage industries advanced by 4.6 percent on a year-over-year basis during the second quarter.
National vacancies for industrial buildings dropped in the single digits during the year, leading to higher rents.
Professional and business services added 377,000 new jobs in the first half of 2014, with information and financial
services industries contributing an additional 36,000 new jobs over the period. The improving employment
Page 20 of 54

landscape in office-using industries offered a much needed boost to demand for office space. However, as the slack
in inventory combined with a shrinking worker footprint, office vacancies remained at a fairly elevated level.

Source: National Association of Realtors

With consumers continually spending on an upward trajectory, the retail sector posted positive demand matched by
restrained supply, leading to declining vacancies and moderately growing rents. Coastal markets provided the
strongest performance, leading to projections for rent growth at a 2.0 percent annual rate.
Commercial Real Estate Investments
Investment trends showed positive signs in 2014, following on last years tail winds. Sales of major properties (over
$2.5M) advanced 19 percent year-over-year in 2013, totaling $355.4 billion, based on Real Capital Analytics (RCA)
data. The main theme of 2013 proved to be broad-based improvement in markets across the U.S., including
secondary and tertiary markets which had slower rebounds. Investors found favorable economic conditions in these
markets and pursued the higher yields offered by performing properties. In the first quarter of 2014, sales volume
reached $87 billion, a 15 percent year-over-year increase. Prices for major commercial properties rose 14.8 percent
in the first quarter. Prices in the six major markets tracked by RCA rose at a faster 17.1 percent rate than in the
secondary/tertiary markets (13.6%).
Based on National Association of REALTORS (NAR) data, sales increased 11 percent on a yearly basis in the first
quarter, followed by a 7 percent advance in the second quarter of the year. Prices for REALTORS commercial
transactions advanced 4 percent year-over-year in the first quarter, and an additional 3 percent in the second quarter.
Inventory shortage surfaced as a main issue for commercial markets during the first half of the year.
U.S. Home Flipping Overview
The third quarter of the 2014 U.S. Home Flipping Report released by the nations leading source for comprehensive
housing data, RealtyTrac, shows that 26,947 single family homes were flipped nationwide in the third quarter of
2014 where a home is purchased and subsequently sold again within 12 months representing 4.0 percent of all
Page 21 of 54

U.S. single family home sales, down from 4.6 percent in the second quarter of 2014 and down from 5.6 percent in
the third quarter of 2013 to the lowest level since the second quarter of 2009.
Investors averaged a gross profit of $75,990 per flip on homes flipped in the third quarter of 2014, a 36 percent gross
return on the initial investment not including rehab costs and other expenses. The average gross return was up
from 35 percent in the second quarter but down from 37 percent a year ago.

U.S. Home Flipping Characters

According to the data provided by RealtyTrac, metro areas with the most flips in the third quarter were Miami
(1,190 flips), Los Angeles (1,170 flips), Phoenix (1,147 flips), New York (1,070 flips) and Tampa (789 flips).
Among these top five, Tampa was the only city to post an increase in the share of home flips compared to a year
ago.
Metros with an increasing share of home flips compared to a year ago included Louisville, Ky. (up 117 percent),
Kansas City (up 66 percent), Boston (up 40 percent), New Orleans (up 38 percent), and Indianapolis (up 35 percent).
Markets with the best return on flips in the third quarter included Baltimore (88 percent), Pittsburgh (79 percent),
Detroit (61 percent), Richmond, Va. (60 percent) and Mobile, Ala. (59 percent).
Metros with the highest dollar amount of average gross profit on home flips included San Francisco, San Jose, Los
Angeles, New York, Seattle and San Diego, all of which had an average gross profit of more than $125,000 per flip.
Flips completed in the third quarter took an average of 185 days to complete, down slightly from 187 days in the
previous quarter but up from an average of 133 days for flips completed in the third quarter of 2013.

Page 22 of 54

Homes priced below $100,000 represented 20 percent of all homes flipped during the quarter, up from 19 percent of
all sales in the second quarter and up from 18 percent of all sales in the third quarter of 2013.
Homes priced $100,000 to $400,000 represented 64 percent of all homes flipped during the quarter, down from 65
percent of all flips a year ago, while homes with a flipped price of $400,000 to $750,000 represented 12 percent of
all flips, down from 13 percent a year ago. Flips on homes priced above $750,000 accounted for nearly 4 percent of
all flips in the third quarter, down slightly from a year ago.
The best returns on homes flipped in the third quarter were on homes with a flipped sale price between $1 million
and $2 million, yielding a 45 percent average gross return on investment. Homes in the $100,000 to $200,000 price
range had the second best return at 43 percent followed by homes in the $200,000 to $300,000 price range with an
average gross return of 41 percent.
Homes built before 1990 accounted for 73 percent of all home flips in the third quarter, up from 69 percent of all
homes flipped a year ago. Homes built from 1990 to 1999 accounted for 10 percent of all homes flipped in the third
quarter, while homes built in 2000 or later accounted for 17 percent of all homes flipped in the third quarter.
Homes built from 1930 to 1939 yielded a 53 percent gross return on investment for flips in the third quarter, the
highest gross return of any decade going back to 1930. Homes built from 1950 to 1959 came in second with a 47
percent return.

Page 23 of 54

Local Market Demographics

CA annual population growth rate = 0.934%
CA Unemployment rate = 9.98%
Unemployment Trend:

Source: Bureau of Labor Statistics Local Area Unemployment Statistics

Currently, there are over 40 million people in the state of California and over 10 million people in the greater Los
Angeles area. The population growth rate in California is higher than the US average of 0.892%. The population of
both LA and CA has experienced a sharp turn up since 2006. (Source, US Census)
The historical unemployment data shows that the unemployment rate in Los Angeles has been consistently above the
national average and below the rest of California. During the latest recession, the study areas unemployment rate
Page 24 of 54

had risen along with the rest of California and later separated from the national measure. As the data suggests, the
Los Angeles area possesses nearly 26.94% of the states workers, therefore the almost identical unemployment rates
shown for the two regions in the graph above is not surprising.
According to the US Census, more than half of the housing units in Los Angeles County were built before 1969,
almost a half-decade ago, among which some are in need of replacements or renovation. Combined with the low
vacancy rate of both homeowners and rentals, L.A. is definitely expecting a short supply and booming demand of
residential houses. In addition, there are potentially great needs for old housing replacements and renovation, which
is strong evidence that supports the Companys investment strategy in real estate areas such as auctioneering,
renovation and development.
California Home Flipping
RealtyTrac data shows that for three years running, more homes were flipped in California than in any other state. In
addition, the number of homes flipped has increased over the last three years from 14,490 homes in 2011 to 21,152
just last year. Although California trails Massachusetts in average gross profit on home flips, the states metro areas
dominate urban home flipping markets across the nation. Of the 10 most lucrative metro areas for home flipping,
seven are in California. Home flippers in San Jose, for example, made more than $160,000 on average reselling
homes last year, the most of any city nationwide. Profits may be high in the state because home prices are very high.
Flipped homes were more expensive than those in any other state last year, selling for more than $381,000 on
average. In addition, home flippers may be drawn to California because of the states many foreclosed homes. One
out of 100 of the states 37 million housing units were in foreclosure last year, which was in the top third
for foreclosure rates nationwide.

LOANS
In the future (and subject to certain market conditions), the Company may also act as a finance lender making
unsecured and secured short-term loans/mid-term loans to real estate firms registered in California engaging in the
auction, renovation and development business. In return, the Company will be receiving preferred return and
possible participating profit distributions according to further loan terms under negotiation. The Company expects to
follow the outline below when it makes these commercial loans:

Typical Loan Amount: $1-5M for short-term loans; $5-10M for mid-term loans.
Interest rate: Around 8.5%-10.5% (varies according to different types of loan terms) with possible
participating profit distributions
Loan Term: 6 months - 24 months
Interest Payments: receive interest payments on a monthly basis
Prepayment: to ensure our investment return, prepayment is not allowed. If the borrower makes a
prepayment, it will have to pay certain penalties
Loan Security: For the loan terms, some of the commercial loans made will be used to support the
borrowers operations. Therefore these loans may not be fully or even partially secured by real estate
property.
Supervision: Because of the management teams experience in the business, the Company may supervise
the entity to ensure performance.
Possibility in investing in affiliated companies: The Company may offer financing solutions to some of
its affiliated firms for initial deals. By doing so, the Company believes it will have more flexible loan terms
and easier risk control considerations.
Mid-Term Residential Development Loans: A portion of the loans will be made to residential developers.
These types of loans will be subordinate to the acquisition and construction loans obtained by the borrower
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from institutional lenders. Such loans will be secured by a deed of trust recorded against the real property
that will be developed by the borrower and such deed of trust will be subordinate to the lien of the
construction lenders deed of trust.
Short-Term Real Estate Commercial Loans: A portion of the loans will be made to companies who
conduct auctions, interior design and renovation. Since these businesses typically have very short project
turnover time, the Company believes it will be possible to offer a short-term commercial loan. These loans
will not be secured.
MARKET ANALYSIS - LOANS

Lending Overview in Commercial Real Estate

According to the Commercial Real Estate 2014 Lending Survey, commercial real estate witnessed a noticeable
reversal in capital availability. Following exceedingly stringent capital standards and overly tight liquidity in the
wake of the 2008 recession, funding sources broadened. The trends accelerated during 2014, as most major capital
providers returned to the markets and actively competed, leading some investors to express concerns about an
overabundance of capital chasing too few deals in some markets. Both listed and non-listed REITs notched record
capital raising levels during 2013. Meanwhile, sovereign wealth funds, institutional funds and private investors
funneled ever-growing amounts into commercial assets.
Private investors accounted for the largest portion of acquisitions, making up 41 percent of the market in 2013,
based on data from Real Capital Analytics. With $146.4 billion in deals, private investors increased their acquisitions
by 20 percent year-over-year. Publicly-listed companies were the second largest group of investors, with deals
totaling $66.2 billion, a 50 percent jump on a yearly basis. Institutional funds closed $45.9 billion in commercial
deals during 2013, the only group to show a decline from 2012. With Asian investors, national pension funds, and
sovereign wealth funds chasing the stability and returns of U.S. assets, cross-border acquisitions rose 39 percent in
2013 compared with the prior year, totaling $35.6 billion.

The office sector displayed the most balanced funding picture, with investor types evenly distributed between
CMBS, government agencies, insurance and financial companies, national, regional and international banks and
private sources. The industrial and retail sectors relied on private funding, which made up between 40 and 44
percent of deals, as publicly-listed companies accounted for 21 percent and 29 percent, respectively. Apartment
sector financing was dominated by private investors, who accounted for about half of acquisitions. Cross-border
investors were active primarily in office and apartment deals.
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Source: National Association of Realtors

Commercial Real Estate Lending Market Analysis
The Commercial Lending Survey 2014 conducted by the National Association of REALTOR shows:

75% of respondents closed deals in 2013/14

93% of sales were valued at or below $5 million
Sales composition:
- Office CBD: 18%
- Office Suburban: 32%
- Industrial Warehouse: 36%
- Industrial Flex: 20%
- Multi-family: 30%
- Retail Strip Center: 26%
- Retail Mall: 4%
- Land: 40%
- Hotel: 6%
- Other: 18%
Capital availability eased in 39% of markets
Top sources of capital
- Local/community banks: 56%
- Regional banks: 43%
- Private investors: 19%
- Small Business Administration: 17%
- National banks: 15%
- Credit unions: 10%
- Life insurance companies: 7%
- International banks: 3%
- CMBS: 3%
- REITs: 2%
- Public companies: 1%
Page 27 of 54

Cash comprised 39% of all transactions

27% used the Small Business Administration refinance program
Debt-to-service coverage ratio (DSCR) was 1.4
47% of sales failed due to lack of financing
- Loan underwriting standards caused 63% of financing failures
- 20% caused by appraisals/valuation
- 17% due to financing availability
20% of deals failed to secure re-financing compared with 50% in the 2012 report
Causes of insufficient CRE bank capital:
- Legislative/regulatory initiatives: 27%
- U.S. Economic uncertainty: 22%
- Reduced NOI, values & equity: 19%
- Financial regulatory uncertainty: 19%
- Disposition of distressed assets: 6%
- Global economic uncertainty: 4%
- Pooling/packaging of CMBS: 4%
18% of respondents had international clients/investors

Source: National Association of Realtors

MARKETING STRATEGY
The Company will offer prospective investors an opportunity to share profit in real estate auction, renovation and
development industries. Initially, the Company plans to identify foreclosure and other under-valued properties to
acquire and then retain a third party professional property management company to carry out the core plus and value
added strategies. In the meantime, the Company can conduct easier budget control and more efficient risk
management. Compared to the typical real estate private fund, the Company believes it has a much shorter
investment term and a more flexible exit strategy.
Once the investments are made, the Company will actively engage in supervision of or even consultation with the
property management company. Under such policy, the Company would be able to have updated information about
the performance of the management company and make sure their strategy is carried out as expected, which will be
an effective way of risk management.
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Historically, real estate is more stable than other investments and is showing strong indications of recovery lately.
The Company believes this is an opportune time to get involved in real estate industry, and through the unique
business model employed by the Company, the Company believes it can avoid many of the drawbacks that a typical
real estate fund would have such as long investment terms and illiquidity.
Typical Characteristics of Prospective Investors

Sophisticated foreign investors, new immigrants and U.S. investors

Personal income and net worth qualifying him/her/it/them as accredited investors
Have previous experience investing in private funds in the U.S.
Keen sense in real estate industry
Agrees that real estate is a legitimate and worthwhile investment
Believes there is potential growth in California

Marketing Focus

Low Risk: Most of our investments will be made by initially acquiring real estate properties, which would
cause our fund to hold a lot of those properties on our balance sheet. The additional income from resale of
those properties will be the security of our set preferred return.
High Liquidity: Since the real estate renovation business typically has a short turnover rate, the Company
can offer its investors a short Lockup Period of 6 months. This is rarely seen as a characteristic of any
private real estate funds, serving as the Companys unique business model.

Marketing Channels
To find prospects we will focus on the following marketing channel:
Offshore Marketing Channels

Road shows, such as holding events through sponsoring marketing activities of financial institutions,
regional investors club, and real estate conference
Financial institutions such as banks and securities institutions in the finance industry that handle private
fund sales
Third-party wealth management institutions that also handle private fund sales
Retain licensed brokers
Personal networking events
Relationships with current investors
Approach investment clubs
Attend investors association events

Page 29 of 54

THE OFFERING
The Class B Units and Registered Notes offered hereby will be offered and sold by the Company on a best efforts
basis and there is no assurance that all of the Class B Units and Registered Notes will be sold. The Class B Units and
Registered Notes will be offered and sold to a limited number of investors, all of whom must meet the suitability
standards established for this Offering. The purchase price of each Class B Unit, and the minimum debt of a
Registered Note is $200,000 and is payable in cash, check, or other acceptable form of payment by the Company at
the time of subscription, with a minimum purchase requirement of one (1) Class B Unit or one Registered Note.
Subscriptions for additional Class B Units may be made in increments of one unit, and Registered Notes will only be
issued for debt in whole increments of $200,000. Each Class B Unit shall represent 0.33% Company Membership
Interest, provided that all 300 Class B Membership Units are subscribed. Should less than all 300 Class B Units be
subscribed, each Class B Membership Unit holder shall own a pro-rata share of the total Class B Membership Unit
Interest, which represents 99% of the total Company Membership Interest
The investor will have the option to elect one of three different investment terms (the Investment Term(s)) for
each Class B Unit, and each option will have different preferred returns. Currently, investors will have the option to
choose from the following Investment Terms for the Class B Units:
(1) Six-Month Investment Term, yielding a 6.75% annual preferred return, payable monthly
(2) One-Year Investment Term, yielding a 7.25% annual preferred return, payable monthly; and
(3) Two-Year Investment Term, yielding a 8.0% annual preferred return, payable monthly
The investor will receive monthly preferred return payments depending on the preferred return rate the investor
chose.
As stated above, each Class B Member shall have the option to request a withdrawal of all their Capital
Contribution, along with any allocated income and loss and all undistributed return payable within 90 days after the
Class B Members applicable Lockup Period expires, provided that the Class B Member provides 60 days advance
written notice from the Class B Members applicable withdrawal date. Investors who have been with the Company
for longer than 6 months are also permitted to request an extension of their investment of an additional 6 months or
any other Investment Term available. If the investor elects to extend his/her investment for an additional 6 months,
there will be no capital transactions between the Company and the investor.
In order for an investor to withdraw from his/her capital account, he/she must provide the Company with 60 day
prior written notice from the date the applicable Lockup Period expires indicating that he/she intends to withdraw
his/her Capital Contribution. Within 90 days after the applicable Lockup Period expires, the Company shall
distribute the Class B Members Capital Account balance after the allocation of income and loss. If the Class B
Member does not provide his/her 60 day advance written notice to the Company, the Managing Member, in its sole
discretion, may either reinvest the Class B Members investment for another applicable Investment Term, or
distribute the Class B Members Capital Contribution at any time after the 90 day Lockup Period expires.
In regards to the Registered Notes, an investor will have the option to lend funds pursuant to one of three different
lending terms (the Lending Terms) for each Registered Note. Investors will have the option to choose from the
following Lending Terms for the Registered Notes:
(1) Six-Month Lending Term, yielding a 6.75% annual interest, payable monthly
Page 30 of 54

(2) One-Year Lending Term, yielding a 7.25% annual interest, payable monthly; and
(3) Two-Year Lending, yielding a 8.0% annual interest, payable monthly
Each Noteholder may, upon at least a 60 day written notice before the Maturity Date of such Registered Note,
request that the Company extend the Maturity Date of the Registered Note for a period of and on the terms of one of
the available Lending Terms. Upon receipt of such valid notice, the Company will, in its sole discretion, choose to
either grant the extension or pay on the Maturity Date all sums due under the respective Registered Note.
Subscription Procedures
Each person wishing to subscribe for the purchase of Securities will be required to execute a Subscription
Agreement in the form contained in the Subscription Booklet that accompanies this Memorandum. Each investor
will be required to represent in the Subscription Agreement, among other things, that such investor is acquiring the
Securities for such investors own account, or for a fiduciary account for which the purchaser either directly or
indirectly supplies the funds for investment, and not with any intention of making a distribution or resale of such
Securities either in whole or in part. The Company reserves the right, in its sole discretion, to reject the subscription
of any prospective investor.
EACH INVESTOR WHO WISHES TO SUBSCRIBE FOR CLASS B UNITS MUST COMPLETE,
EXECUTE AND RETURN TO THE COMPANY THE FOLLOWING DOCUMENTS (COLLECTIVELY, THE
SUBSCRIPTION DOCUMENTS) CONTAINED IN THE SUBSCRIPTION BOOKLET (AS APPLICABLE):
(1)

A Subscription Agreement;

(2)

Preferred Member Signature Page and Power of Attorney;

(3)

Certification of Nonforeign Status; and

(4)

A check, cash, or other form of payment acceptable by the Company for the full purchase price of
the Class B Units for which the investor subscribes, payable to First Financial Investment Group,
LLC.

EACH INVESTOR WHO WISHES TO ACQUIRE A REGISTERED NOTE MUST COMPLETE,

EXECUTE AND RETURN TO THE COMPANY THE FOLLOWING DOCUMENTS (COLLECTIVELY, THE
SUBSCRIPTION DOCUMENTS) CONTAINED IN THE SUBSCRIPTION BOOKLET (AS APPLICABLE):
(1)

A Subscription Agreement, together with photocopy of passport biographic page (if an individual)
or articles of incorporation or organization and tax identification number (if a company or
corporation);

(2)

Executed signature page of Registered Note;

(3)

Certification of Foreign Status; and

(4)

A check, cash, or other form of payment acceptable by the Company for the full amount lent under
the Registered Note, payable to First Financial Investment Group, LLC.

The failure to fully complete and execute each of the foregoing documents may result in the rejection, or a
delay in the acceptance, of an investors subscription.
Page 31 of 54

Acceptance of Subscriptions
Before the Company will accept a subscription for the Securities offered hereby, it must determine that: (i)
the investor is an accredited investor as defined in Rule 501(a) promulgated by the Securities and Exchange
Commission under the Act; and (ii) meets the suitability standards set forth above under the caption INVESTOR
SUITABILITY STANDARDS. Therefore, each prospective investor will be asked to complete the Subscription
Documents. Not more than 10 business days after the Company receives completed and executed Subscription
Documents from a prospective investor, the Company will notify such investor whether such investors subscription
will be rejected. Amounts paid by a prospective investor whose subscription is rejected will be promptly returned
without interest.
Issuance of Promissory Notes
In the case of a non-U.S. investor, the Company shall issue a Registered Note which shall be a registered
bond under Section 163(f) of the Code. The Registered Note shall be registered as to both principal and stated
interest with the Company and shall be transferable both by surrender and through a book entry system. The
Registered Note shall qualify for the PI Exemption, provided that the Noteholder supplies Company with the
necessary documentation required by this Memorandum and the Subscription Agreement, including but not limited
to an applicable IRS Form W-8 certifying, under penalty of perjury, that, among others, the Noteholder is not a U.S.
person, and that Company approves Noteholders Subscription.

FINANCIAL PROJECTION & ESTIMATED USE OF PROCEEDS

Assumptions
The financial projections are made based on the assumption that the Companys investment strategy will be carried
out as expected and other economic or political changes may occur. General market assumptions include:

The U.S. Dollar continues to recover

The stock market remains a significant uncertainty
Credit is still difficult to obtain
The housing market has shown signals of recovery in recent years
The unsold inventory of new condominiums has been declining
All cash offers command more respect and have the best pricing and terms when acquiring real estate
property
The unemployment rate is falling
There are sufficient like-minded investors
The flipping market maintains a steady pace
To grow First Financial Investment Group to be the lead in private fund lending area
The Company can provide a continual stream of cash flow from management and transaction fees
The Company revisits and fine tunes its growth plan every 90 days to plan and maximize the Companys
potential

According to the Market Analysis section above, the typical return for flipping, especially in Southern California, is
over 10%. Thus, the Company believes it may be able to achieve a return of around 9%. In regards to the average
Page 32 of 54

industry expenses, the Company has made certain assumptions based on the BizMiner industry financial report for
Fund, trusts, and other financial vehicles (NAICS 525):
Funds, trusts, and other financial vehicles Ratio-to -sale
Officers Comp.

8.24%

Advertising

0.28%

Benefits-Pension

0.75%

Again, a $150 subscription fee per Class B Unit or Registered Note will be charged at the initial subscription, which
the Company believes will generally cover its expenses and costs in relation to the offering documents and related
legal services.
Class B Members preferred return will be allocated monthly based on available cash flow. The Managing Member
shall be entitled to any excess profit over the preferred return. The Managing Member may use any such excess
profit over the preferred return in order to cover any operation costs incurred by the Managing Member.
The return forecast is based on the financial projections exclusively.
Estimated Financial Projection of the Company
To come up with the estimated financial projection, the Company assumes an investment schedule of the first year
of operation as outlined below. In addition, each prospective investor should consider the following assumptions
above (although it may not be a full comprehensive list of assumptions), and these assumptions should be read in
conjunction with the market analysis, financial projections, and estimated use of proceeds of the Company. Past
performance is not an indicator of future outcomes, and the Company makes no assurances that it will be able to
achieve its projections or any result.

Investment Schedule

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Invested Percentage

30%

70%

100%

100%

The financial projection of the Company during the first year of operation is described as below:

Page 33 of 54

Return Forecast for Investors

The return forecast is based on the financial projections exclusively. Since the Company assumes an expected return
of 9% from the investment portfolio, the Company believes that the preferred return of 7.25% of a one-year
investment term can be met. The return forecast for an investor (subject to the same assumptions and disclosures
above) with a capital contribution of $200,000 and an investment term of one year is detailed below:

Page 34 of 54

The financial projection and estimated use of proceeds contained in the following tables above represent
estimates of the Company, and are based upon various assumptions, including the assumptions above. Actual
figures cannot be precisely calculated at the present time, and consequently, the figures set forth above do not
purport to be predictions of the actual financials and uses of proceeds of the Company. The Company makes
no assurances that it will be able to achieve its projections or any results stated in this Memorandum.

RISK FACTORS
THE PURCHASE OF SECURITIES INVOLVES CERTAIN RISKS, INCLUDING, BUT NOT LIMITED TO, THE
RISKS SUMMARIZED BELOW. POTENTIAL INVESTORS SHOULD CAREFULLY READ AND
UNDERSTAND THIS OFFERING AND THE RISKS INVOLVED BEFORE SUBSCRIBING.

Page 35 of 54

Risks Related to this Offering

The Offering has not been Negotiated at Arms Length
The Managing Member has generally established the terms of the Offering, which were not negotiated on an arms
length basis. No Class B Member or Noteholder was represented by counsel in connection with the preparation of
the Offering or otherwise participated in the preparation of the Offering. Legal counsel for the Company
represented only the Company in connection with the preparation of the Offering and not any Class B Member,
Noteholder, or prospective investor. As a result, the terms of the Offering may not be advantageous to Class B
Members or Noteholders. Prospective investors should consult with their own legal counsel with respect to the
investment to the Company.
English Language Documents
This Memorandum, the subscription documents and all of the exhibits referenced herein or therein are written in the
English language. The English language version of these documents is the only approved version and shall control
in all respects. Any version of this Memorandum or other related documents in any language other than English is
not authorized and may not be relied upon by any prospective investor.
The Company may be Subject to the Investment Company Act
The Company intends to avoid becoming subject to the Investment Company Act of 1940, as amended (the 1940
Act); however, the Company cannot assure prospective investors that, under certain conditions, changing
circumstances or changes in the law, the Company may not become subject to the 1940 Act in the future as a result
of the determination that the Company is an investment company within the meaning of the 1940 Act which does
not qualify for an exemption as set forth in the 1940 Act or relevant regulations. Becoming subject to the 1940 Act
could have a material adverse effect on the Company. Additionally, the Company could be terminated and
liquidated due to the cost of registration under the 1940 Act, which could cause Class B Members to lose any
expected return or capital contribution.
The Company may be Subject to the Investment Advisers Act of 1940
None of the Company, the Managing Member or its members are registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the Advisers Act), in reliance upon the following definition of
investment adviser set forth in Section 202(a)(11) of the Advisers Act.
The Company believes that it is unlikely that any of the Company, the Managing Member or its members need to
register as an investment adviser under the Advisers Act because the definition of investment adviser likely does
not apply to any of them with respect to the services provided by them in connection with this Offering. If it is
determined that registration is required, then the Company, the Managing Member or its members may be required
to register under the Advisors Act and may be unable or unwilling to do so, which may have a material adverse
effect on the Company and its business.

Fluctuations in Exchange Rates

The functional currency of the Company will be U.S. dollars. An investors capital contribution to the Company,
repayment of the debt evidenced by the Registered Notes, and distributions of available cash, if any, from the
Company will be stated, made or payable in U.S. dollars. An investor or lender whose functional currency is not
U.S. dollars will bear substantial risks associated with fluctuating currency exchange rates, particularly with regard
to distributions that may not occur for several years, if at all.
Page 36 of 54

Unregistered Brokers or Agents

The Company may use (or be deemed to have used) finders, agents, brokers, and foreign introducers of capital to
seek potential investors. While the Company intends to conduct the part of the Offering outside the U.S. pursuant to
Regulation S, depending on the locations of and activities conducted by such persons or entities, certain laws may
require that they be registered with the SEC, U.S. state authorities, or foreign authorities as broker-dealers. If the
Company works with individuals or entities that should be registered (or licensed) with the applicable authorities,
including, without limitation, the SEC, but are not, the Company may be liable to return investment monies and for
other fines and penalties. Additionally, the securities exemptions that the Company is relying on to avoid
registration with the SEC may be made unavailable. In either case, the investors may lose all or a portion of their
investment.
No Legal Counsel for Investors or Class B Members
Legal counsel to the Company will not be engaged to protect the interests of prospective investors or Class B
Members and should never be viewed as representing any prospective investors or Class B Members. Prospective
investors and Class B Members should consult with and rely upon their own counsel in connection with an
investment in the Company, including with respect to tax and currency exchange matters.
No Public Market and Subject to Significant Restrictions on Transferability
There is no public market for the Class B Units or the Registered Notes and no such market is expected to develop
in the future. The sale of the Securities is being made without registration under the Securities Act and applicable
state securities laws in reliance upon various exemptions under the Securities Act, which may include the private
offering exemption of Section 4(2) and Regulation D and Regulation S promulgated under the Securities Act and
available exemptions under applicable state securities laws. Such federal and state securities laws (as well as the
terms of the Company Agreement) severely restrict the transferability of the Securities offered hereby. Accordingly,
an investment in the Securities will be highly illiquid. The Class B Units are considered restricted securities under
the Securities Act and applicable state securities laws and cannot be resold or otherwise transferred unless they are
registered under the Securities Act and any applicable state securities laws or are transferred in a transaction exempt
from such registration requirements. Consequently, a holder of the Securities may not be able to liquidate his or her
investment and each investors ability to control the timing of the liquidation of his or her investment in the
Company will be restricted. Investors should be prepared to hold their Interests indefinitely. In addition, an investor
should be able to withstand a total loss of his or her investment in the Company.
The Company May Not be Able to Obtain Additional Financing if Needed
The Company will not have the ability to require investors to contribute additional capital to the Company. If the
Company were to have a cash requirement, the Company would be required to seek additional financing. There is
no assurance that the Company would be able to obtain such additional capital through issuance of Registered
Notes, the sale of additional Class B Units or otherwise. Neither the Managing Member nor its affiliates or any of
the Class B Members is under an obligation to contribute or lend funds to the Company or any venture, except such
Class B Members obligations to make initial Capital Contributions to the Company pursuant to their respective
subscription agreements.
Non-Compliance with Securities Laws; Potential Class B Member Refunds
This Offering is not registered with the SEC and is being made pursuant to certain exemptions from state and federal
registration requirements. Although the Company will receive representations and warranties from investors
seeking to ensure compliance with the requirements necessary for such exemptions from registration and other
matters, if it is later determined that this Offering did not fully comply with U.S. federal or state law, the Company
may be required to refund each Class B Members Capital Contribution. No U.S. federal or state agency has
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reviewed the fairness or merits of this Offering of Securities, nor is it intended that any such review be made. Such
review, even if made, would not constitute an approval of the Securities or this Offering.
Return of Distributions
The principles of law governing the limitation of liability of Class B Members in the Company are governed by the
California and applicable federal laws. Although generally, a Class B Members liability for the obligations will be
limited to the Class B Members investment in the Company, if a distribution to a Class B Member violates
California or other applicable law, the Class B Member may be required to repay that distribution. Further, there is
no limit of liability for a Class B Member to a third party for such Class B Members participation in tortuous
conduct.
Liability for Breach of Subscription Agreement
The subscription agreement in this Offering requires the investors to represent that, among other things, that they
meet certain suitability requirements and understand the risks associated with an investment in the Securities and an
investment in the Company, and that they can afford to lose all of the money they invest in the Company or the
Registered Notes. Anyone who later makes a claim against the Company that is inconsistent with the
representations in the subscription agreement will be in breach of the subscription agreement and will be liable for
any damages the Company, its affiliates and agents suffer as a result of such breach. Accordingly, investors should
take the representations in the subscription agreement seriously and not invest in the Company or Registered Notes
if they are not comfortable with their investmentor will suffer financially or emotionally if they lose their
investment.
Risks Related to the Company and Real Estate
Inability to Meet Performance Estimates
Any performance estimates that the Company may provide (including assumptions about average daily rates,
occupancy rates, revenue projections and construction costs), regarding the Company are estimates only, and are
based on numerous assumptions, including, without limitation, projections for the marketing and sale of residential
units, rental rates, the costs and availability of labor, equipment, materials and insurance, environmental remediation
costs, rates of inflation, market conditions, timing, interest expense, weather conditions, a broad range of site
conditions, and availability of governmental permits and approvals. There can be no assurance that these
assumptions are reasonable or attainable, or that the performance estimates will be achieved. If one or more
assumptions are incorrect, the actual performance and returns on the Class B Members investment may be
significantly lower than estimated or there may be no returns at all, resulting in the Companys default on the
Registered Notes as well, which could result in the loss of all or a part of your investment.
Construction Defect, Product Liability and Warranty Claims
The third party property management companies that we use are subject to construction defect, product liability and
warranty claims, including, but not limited to, moisture intrusion and related claims, arising in the ordinary course of
business. While the third party property management company has indicated it intends to maintain commercial
general liability insurance and to generally seek to require contractors and design professionals to indemnify the
third party property management or the Company for some portion of the liabilities arising from their work, there
can be no assurance that these insurance rights and indemnities will be collectable or adequate to cover any or all
construction defect and warranty claims for which the third party property management may be liable. Contractual
indemnities can be difficult to enforce, certain claims may not be covered by insurance or may exceed applicable
coverage limits, and one or more of the insurance carriers could become insolvent. Additionally, in the event the
third party property management company determines to obtain product liability or construction defect insurance,
the coverage offered by and availability of such insurance for construction defects is limited and costly. There can
be no assurance that coverage will not be further restricted, become more costly or even be available. Furthermore,
Page 38 of 54

any product liability or warranty claims made against the third party property management company, whether or not
they are viable, may lead to negative publicity, which could impact the reputation of the Company causing the
Company to suffer potential loses.
New Laws and Governmental Regulation
The Company is subject to numerous local, state, federal and other statutes, ordinances, rules and regulations
concerning zoning and land use, development, tower design, construction and similar matters which impose
restrictive zoning and density requirements, the result of which is to restrict the Company. Although the third party
property management company believes it has or will receive the land use and development entitlements or permits
necessary to remodel, redesign, and resell the purchased property, it may be required to obtain a variety of other
governmental approvals and permits. During the anticipated development and construction of the purchased
property, the Company may be impacted adversely by unforeseen laws and regulations (including, without
limitation, laws and regulations affecting health, safety, and welfare issues when seeking any additional necessary
development entitlements, permits and governmental approvals). If the Company is delayed or adversely impacted,
it may suffer loses and be unable to repay the preferred return to Class B Members or the debts owed to the
Noteholders.
General Real Estate Risks
The Company will be subject to the risks incident to the ownership and operation of real estate, including, but not
limited to, risks associated with the general economic climate, Los Angeles, California real estate conditions,
geographic or market concentration, competition from other space, the ability to manage the real properties,
government regulations and fluctuations in interest rates. The Company will incur the burdens of owning real
property, which include the paying of expenses and taxes, maintaining such property and any improvements thereon,
and possibly ultimately disposing of such property. The Company will be subject to the risks incident to the
ownership and operation of real estate, including, but not limited to, risks associated with the general economic
climate, Los Angeles, California real estate conditions, geographic or market concentration, competition from other
space, the ability to manage the real properties, government regulations and fluctuations in interest rates, the
national, regional and local economic climates, competitive market forces, changes in market values, natural
disasters, including earthquakes, which present a particular risk in the seismic area where the Company is located, as
well as terrorist acts, changes in market rates of interest and competition from other existing competing properties
and new competing properties that may be developed in the future. If any of these risks were to occur, the
Companys ability to pay the Class B members their preferred returns and the Noteholders their amounts due under
the Registered Notes could be adversely affected.
The Company will be Subject to Insurance Risks
Third party property management companies have informed the Company that it intends to obtain and maintain
insurance. Notwithstanding the foregoing, no assurance can be given that sufficient insurance can be obtained,
especially with respect to an event causing a catastrophic loss to a particular asset.
Environmental Risks
Under various federal, state and local environmental laws, ordinances and regulations, the current and previous
owners or operators of real property may be held jointly and severally liable for the cost of removal or remediation
of certain hazardous or toxic substances. Such laws and regulations often impose liability whether or not the owner
or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. Accordingly, the
Company will indirectly assume environmental risks for pre-existing conditions, and in the event of a foreclosure by
the Company of its lien against the property, such environmental risk may become a direct liability of the Company.
Further, the presence, with or without the knowledge of the third party property management company or the
Company, of hazardous or toxic substances at the purchased property, could have an adverse effect on the business,
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financial condition and results of operations of the Company. The presence of hazardous or toxic substances or
failure to remediate such substances properly may also adversely affect the ability to resell the purchased property.
Environmental problems may require design and/or construction plans to significantly change or cause the
completion timing of one or more components of the purchased property to substantially increase. Furthermore,
changes in environmental laws or in the environmental condition may create liabilities and costly compliance
procedures that did not exist at the time of the acquisition of the purchased property.
Americans with Disabilities Act and other Laws and Regulations
Components of the Company will be required to comply with the Americans with Disabilities Act (ADA). The
ADA generally requires that buildings be made accessible to people with disabilities. Additionally, the Company
must be operated in compliance with applicable fire and safety regulations, building codes and other land use
regulations and food licensing or certification requirements as they may be adopted by governmental agencies and
bodies from time to time. Our third party property management companies that we hire may be required to make
substantial expenditures to comply with those requirements.
Skilled Labor
Substantially all of the renovation work will be performed by third-party contractors. Accordingly, the timing and
quality of the renovation depends on the availability and skill of these contractors. There can be no assurance that
skilled contractors will be available at reasonable rates. Certain of the contractors engaged will have employees that
are represented by labor unions or are subject to collective bargaining arrangements. A strike or other work stoppage
involving any of these contractors could also make it difficult to retain contractors for the renovation work. In
addition, union activity could result in higher costs to retain contractors. The inability to contract with skilled
contractors at reasonable costs on a timely basis could have a material adverse effect on the business, prospects,
liquidity, financial condition and results of operations for the Company and impair the Class B Members investment
and repayment of Company debt to Noteholders.
The Company May Not Successfully Compete for Investors
There are numerous other businesses competing with the Company in seeking to raise funds from individuals that
are accredited investors. These competing business may compete by offering better economic terms, a greater
certainty of success, or affiliation with a more well-know or well-established third party property management
company, among other things.
Managing Member has Significant Control
With the exception of certain material decisions, the Managing Member will have sole responsibility for the
management of the Companys business and affairs, including, without limitation, the monitoring and, potentially,
disposition of Class B Members investment, as well as managing and supervising repayment of the amounts due
under the Registered Notes. If the Managing Member fails to manage the Class B Members investment
appropriately or the sums borrowed under the Registered Notes, you may lose your entire investment in the
Company.
Class B Members and Noteholders have no right to enforce obligations of the Managing Member and its
affiliates under agreements with the Company
Any agreements between the Company, on the one hand, and the Managing Member and its affiliates, on the other,
will not grant to the Class B Members, or the Noteholders, separate and apart from the Company, the right to enforce
the obligations of the Managing Member and its affiliates. There is no guarantee that the Company, which is
controlled by the Managing Member, will enforce any agreement between the Company and the Managing Member
or any of its affiliates.
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New Venture
The Company was formed in March 2015, and therefore has no records and/or operating history. The Companys
future prospects must be weighed against the risks and difficulties frequently encountered by companies in the early
stages of a business enterprise. The Company cannot provide any assurances that it will be successful in addressing
these risks or achieving its objectives.
Lack of Operating History
The Company and the Managing Member are newly formed and have not engaged in any business operations prior
to this Offering. There is no operating history or prior earnings upon which investors could evaluate the likely
performance of the Company or the Managing Member.
Need for Additional Capital
The Company will likely need more investor capital in the future in order to execute its investment strategy, and
there is no assurance that it will be able to raise such capital.
Sufficient Liquidity
The Company may not have sufficient liquid assets or capital to distribute each Class B Members their respective
monthly return or on his/her principal when the investor elects to withdraw his/her capital contribution, or to pay the
Noteholders the amounts due under the Registered Notes.
Dependence on Management Personnel
The future success of the Company is largely dependent upon its Managing Member and its management team. The
loss of one or more of these officers and directors through injury, death or termination or resignation of employment,
could result in the investment of significant time and resources for recruiting and replacement. There is no assurance
that the Company could find the right mix of talent and experience to replace its existing team. There is also no
assurance that as the Company grows, the existing team can successfully manage the growth of the Company, or that
Company can attract new talent to the Company as needed.
Reliance on the Managing Member
The Managing Member will control and direct the Company. The Class B Members will not have any input or
control of the Company, and will be completely reliant on the Managing Member for management of the Companys
affairs and all investment decisions made by the Company.
Reliance on third parties
The Company depends on a number of third parties to deliver services required by the Company, and the Company
faces various risks associated therewith including without limitation, construction services, interior design services,
landscaping services, marketing services, and other similar services related to the Companys business plans.
The Companys inability to effectively manage growth could harm the Business and materially and
adversely affect the Companys operating results and financial condition
The Companys strategy envisions growing the Business. The Company plans to expand its acquisition and loan
services nationwide. Any growth in or expansion of the Business is likely to continue to place a strain on the
Companys management and administrative resources, infrastructure and systems. As with other growing
businesses, the Company expects that it will need to further refine and expand its business development capabilities,
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its systems and processes, and its access to financing sources. The Company also will need to hire, train, supervise
and manage new employees, including executive and management level employees. These processes are time
consuming and expensive, will increase management responsibilities, and will divert management attention. The
Company cannot assure investors that it will be able to: (i) expand its services effectively or efficiently or in a timely
manner; (ii) allocate human resources optimally; (iii) meet capital needs; (iv) identify and hire qualified employees
or retain valued employees; or (v) incorporate effectively the components of any business or product line that may
acquire in the Companys effort to achieve growth. The Companys inability or failure to manage its growth and
expansion effectively could harm its business, and materially and adversely affect the Companys operating results
and financial condition.
Repayment of Loans
While the loans made by the Company may be secured by a deed of trust or a financing statement (UCC1)
recorded against the borrowers assets, the lien of the deed of trust or UCC1 may be subordinate to the lien of one or
more acquisition, development, construction or other loans (the Senior Loans). Generally, the primary source of
the funds for the repayment of the loan will be the sale of the homes, or other improvements to be constructed on the
borrowers property or the operations of the borrower. The repayment will be dependent on the ability of the
borrower to timely commence and complete the construction of the homes or other improvements, the market at the
time construction of the homes or other improvements is complete or the borrowers ability to operate its business in
a manner sufficient to generate the cash flow necessary to repay the loan. If the sales proceeds or such cash flow is
not sufficient, the borrower may not be able to obtain funds from other sources which will be sufficient to pay the
amounts payable under the loan when due.
Risk of Default; Destruction
If a borrower defaults on the payments due under a loan from the Company, the rights of the Company to proceed
against the property that is security for such loan will often times be subordinate and subject to the lien of a prior
loan. In the event of default and it becomes necessary to commence an action to enforce a deed of trust or other
security instrument that secures the loan, the Company will be required to fund the Companys legal costs from the
available proceeds. In addition, if all or a portion of any secured property is damaged or destroyed: (i) there may not
be insurance proceeds available to repair or rebuild the proposed project or replace the property; or (ii) even if such
insurance proceeds are available, any senior lender will have a prior claim to such insurance proceeds which may be
used by such senior lender to repay its outstanding loan rather than to rebuild the damaged or destroyed portion of
the proposed project or replace the secured property. There can be no assurance that at the time of a default under
the loan or any damage or destruction to the proposed project or the secured property, that any borrower or if
applicable, any guarantor of the loan, will have sufficient funds to the pay the loan.
No Assurances of Success
There is no assurance that the borrowers will be successful in purchasing, renovating, selling, or making
improvements on properties at the prices anticipated by such borrowers or in generating sufficient cash flow to repay
the loans. All loans and other investments by the Company will be subject to those risks inherent in real estate
development, including unanticipated government actions, economic downturns, higher interest rates, changing
market conditions, construction cost increases, uninsured losses, etc. and to other general market and business risks
with respect to each borrower and such borrowers particular business.
Substantial Competition
The borrowers, businesses, acquisition of properties, and other projects in which the Company invests or acquires
will compete with other residential housing developments and projects, businesses and other developers in the same
general vicinity and market. There can be no assurance that the Company will be able to successfully compete with
such competition.
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New Laws and Governmental Regulation

The Companys Business is subject to numerous local, state, federal and other statutes, ordinances, rules and
regulations concerning investment types and similar matters which might affect the Companys flexibility to carry
out the Business. Although the Managing Member believes it has or will be able to conduct the investment
complying with all applicable laws, it may be required to obtain a variety of other approvals and licenses. In
addition, the Company may become subject to unanticipated governmental charges and fees. Accordingly, the
Companys investment may be subject to periodic delays, changes in scheduled cash receivable of the properties
sales due to unexpected government regulations. If the Companys receivables is delayed or adversely impacted, the
Companys distribution of any return or capital contribution may be delayed or the Company may not be able to
repay the investment at all, or its debts under the Registered Notes, as applicable. If that occurs, you may lose your
investment in the Securities.
Distributions and Return of Investment Not Guaranteed
Distributions and the return of investors invested capital contribution or loan by the Company are not guaranteed.
Payment of distributions and loans and the amounts thereof and the return of investors capital contribution or loan
to investors will be dependent upon performance of the investment and the Company. There can be no assurance
that the Company will operate profitably or be able to declare and pay any distributions or return investors capital
contributions or loans.
Restrictions on Transferability; No Market for Units
There currently exists no public market for the Class B Units, and the Company is uncertain when or if such market
might develop. A holder of the Securities will only be able to sell such units pursuant to exemptions from
registration and qualification under applicable Federal and state securities laws. As a result of the foregoing, except
in connection with the Option to Withdraw (as set forth in the Operating Agreement), investors must bear the
economic risk of an investment in the Class B Units offered hereby for a specified period of time and may not be
able to liquidate their investments in the event of an emergency or for any other reason. Furthermore, Noteholders
may not transfer or assign their right or interest in the Registered Notes without the presentation or surrender of the
original Registered Note to the Company.
Arbitrary Determination of Offering Price
The offering price of the Class B Units has been determined arbitrarily. There is no reliable way to establish the
market value of the Class B Units offered hereby, which value is speculative and may be less than the offering price.
Liability of the Members for Return of Distributions
Under applicable law, a member who has received distributions from the Company, representing, in whole or in part,
a return of such members capital contribution (distributions of cash in excess of profits) may be required to repay to
the Company any sum not in excess of the amount of such return of capital plus interest, if the Company is unable to
satisfy its liabilities to creditors who extended credit or whose claim arose before such return of capital.
Reports to the Members
The only information regarding the Business of the Company that will be required to be prepared and made
available to the members will be the reports described in this Memorandum under the caption SUMMARY OF
THE RIGHTS OF THE UNITS
Risks Related to Taxes

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Limitations on Losses and Credits from Passive Activities. Losses and deductions from passive trade or business
activities generally may not be used to offset portfolio income, which consists of interest, dividends and royalties,
or active income which consists of salary and income from a business in which there is active participation.
Passive activities include (1) trade or business activities in which the taxpayer does not materially participate which
would include holding Class B Units, and (2) rental activities.
Losses from passive activities that exceed passive activity income are disallowed and can be carried forward and
treated as deductions and credits from passive activities in subsequent taxable years. Disallowed losses from an
activity, except for certain dispositions to related parties, are allowed in full when the taxpayer disposes of his entire
interest in the activity in a taxable transaction. Class B Members share of the Companys income and losses should
be considered passive income and loss.
Allocation of Profits and Losses. In order for the allocations of profits and losses, gains, deductions, and credits
under the Operating Agreement to be recognized for tax purposes, such allocations must possess substantial
economic effect. No assurance can be given that the IRS will not claim that such allocations lack substantial
economic effect. If any such challenge to the allocation of losses to any Class B Member were upheld, the tax
treatment of the investment for such Member could be adversely affected.
Treatment of Cash Distributions from the Company. The Operating Agreement provides certain Preferred
Returns to Class B Members. While cash distributions (including for federal income tax purposes, a Class B
Members share of any reduction in nonrecourse indebtedness) made to a Class B Member, other than those made in
exchange for or in redemption of all or part of his Units, are generally in proportion to the Class B Members
distributive share of Profits or Losses from the Company, cash distributions rarely equal to the Members allocated
Profits or Losses and may cause reduction to the Members adjusted basis in the Company. Such distributions are
generally first applied against and reduce the Members adjusted basis in his Units. To the extent that such
distributions are so applied against and reduce the adjusted basis of the Members Units, they will not give rise to a
realization of income, gain or loss by the Class B Member. Cash distributions in excess of a Members adjusted
basis in his Units will result in the recognition of gain to the extent of such excess. Ordinarily, any such recognized
gain will be treated as gain from the sale or exchange of his Class B Units.
Treatment of Gain or Loss on Disposition of Investor Units. Any gain or loss realized by a Class B Member
upon the sale or exchange of Class B Units will generally be treated as capital gain or loss, provided that such
Member is not deemed to be a dealer in such securities. However, any portion of the gain that is attributable to
unrealized receivables or inventory items (such as the properties held for resale by the Company) of the Company
that have substantially appreciated in value will generally be treated as ordinary income. If the Class B Members
holding period for the Units sold or exchanged is more than one year, the portion of any gain realized that is capital
gain will be treated as long-term capital gain.
Unrelated Business Taxable Income. The Company is expected to generate unrelated business taxable income
("UBTI") from gain on sale of property that is inventory or of property otherwise held primarily for sale to
customers in the ordinary course of business. Tax-exempt entities must consult their own tax counsel regarding the
effect of any unrelated business taxable income. FOR CERTAIN TAX-EXEMPT ENTITIES - SUCH AS
CHARITABLE REMAINDER TRUSTS AND CHARITABLE REMAINDER UNITRUSTS (AS DEFINED IN
SECTION 664 OF THE CODE) THE RECEIPT OF ANY UBTI MAY HAVE EXTREMELY ADVERSE TAX
CONSEQUENCES. FOR EXAMPLE, IF SUCH A TRUST OR UNITRUST RECEIVED ANY UBTI DURING A
TAXABLE YEAR, ALL OF ITS TAXABLE INCOME FROM ALL SOURCES WILL BE TAXABLE.
THEREFORE, CHARITABLE REMAINDER TRUSTS AND CHARITABLE REMAINDER UNITRUSTS MAY
NOT PURCHASE INVESTOR UNITS.
Withholding
The Company is authorized to withhold from distributions and pay over to any federal, state, local or foreign
government any amounts required to be withheld with respect to any Member pursuant to any provisions of federal,
state, local or foreign law. All amounts so withheld shall be treated as advances of amounts distributed to the
Page 44 of 54

Members pursuant to Summary of the Offering Financial in this memorandum, depending upon the source of the
income that gives rise to the withholding obligation. To the extent any amount withheld or required to be withheld
with respect to a Member pursuant to this provision for any year exceeds the amount of cash available and
distributable to such Member for such year, such Member shall repay such excess to the Company within ten (10)
days after such Member receives written notice from the Company of the amount of such excess, including with
respect to tax withholding. Each Class B Member shall cooperate with the Managing Member in supplying needed
information and filling out tax forms and returns in order to enable the Managing Member to file its tax returns and
otherwise comply with all tax laws and rulings. Each Class B Member shall indemnify the Company for all costs,
damages and losses, including attorneys fees, for failure to satisfy its obligations under this provision.
Non-U.S. Members.
If a Noteholder is not a U.S. person within the meaning of the Code, then income and gain attributable to their
interest will generally be treated as, a non-U.S. Noteholder will be subject to 30% withholding tax on certain types
of income, such as dividends (and possibly on some capital gains, if the Noteholder is present in the U.S. for over
183 days in a calendar year and certain other conditions are met), provided that such withholding tax may be
reduced or eliminated under an applicable tax treaty if the Noteholder is entitled to and properly claims the benefits
of such treaty or may be eliminated as described below under Portfolio Interest Income Exemption . Eligibility
for treaty benefits are generally established by completing an appropriate IRS Form W-8 and providing it to the
Managing Member.
If, as described above, a non-U.S. Noteholder is deemed to be engaged in a trade or business conducted in the
United States, the Noteholder will be required to file a tax return with the IRS and possibly with state and local
taxing authorities reporting income allocable to the Noteholder from such business and to pay the tax liabilities with
respect thereto. The Managing Member is required to withhold and pay to the IRS on behalf of the Noteholder
prescribed amounts intended to meet the tax obligation of the Noteholder, with installment payments for such
withholding taxes being due April 15, June 15, September 15, and December 15. When the non-U.S. Noteholder
files his tax return for the year, he will be given credit for the withholding taxes paid in by the Managing Member on
his behalf. A non-U.S. Noteholder should consult his own tax advisors with respect to the taxation of its investment
both in the United States and in his own jurisdiction, including the possibility of receiving a foreign tax credit for
taxes paid in the United States.
Portfolio Interest Income Exemption.
In general, a foreign person or entity which does not conduct a U.S. trade or business is nonetheless subject to a
withholding tax of thirty percent (30%) on the gross amount of certain U.S. source income which is not effectively
connected with a U.S. trade or business. Income subject to such a flat tax rate is of a fixed or determinable annual or
periodic nature, including dividends and certain interest income. Such withholding tax may be reduced or eliminated
by the PI Exemption with respect to certain types of such income under any applicable income tax treaty between
the United States and the foreign members country of residence or under the portfolio interest rules contained in
Section 871 or 881 of the Code, provided that the following terms and conditions are met:
1) Registration Requirements. To qualify for the Portfolio Exemption, pursuant to sections 871(h) and 881(c)
of the Code, the non-U.S. Noteholder must: 1) provide proof of its foreign status; 2) confirm that it is not a
bank extending credit in the course of its ordinary trade or business (except if buying U.S. obligations); 3)
is not related to the issuer, if the non-U.S. Noteholder is a Controlled Foreign Corporation (CFC); and 4)
confirm that it is not a 10-percent shareholder of the Company at the time the interest is received.
2) Debt Obligation. The Portfolio Exemption shall be available on debt obligations in registered form as
defined in sections 163(f), 871(h)(7) and 881(c)(7) of the Code. Generally, an obligation is in registered
form if: (1) the obligation is registered as to both principal and any stated interest with the issuer (or its
agent) and any transfer of the obligation may be effected only by surrender of the old obligation and
reissuance to the new holder; (2) the right to principal and stated interest with respect to the obligation may
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be transferred only through a book entry system maintained by the issuer or its agent; or (3) the obligation
is registered as to both principal and stated interest with the issuer or its agent and can be transferred both
by surrender and reissuance and through a book entry system.
3) The non-U.S. Noteholder may not treat its interest income as passive income, against which passive losses
(such as deductions from unrelated real estate investments) may be offset.
Where the Portfolio Interest Income Exemption is available, and thus to preclude the 30% withholding of IRS tax
obligations by the Managing Member, the non-U.S. Noteholder shall provide the Managing Member with a copy of
the appropriate executed IRS forms and certificates, with appropriate supporting documentation, as determined to be
required by the Managing Member, including, but not limited to, an applicable IRS Form W-8 certifying, under
penalty of perjury, that, among others, the Noteholder is not a U.S. person. Should the non-resident Noteholder
move to and reside in the U.S., such Noteholder shall lose his or her right to the TI Exemption
To this end Registered Notes held by non-U.S. Noteholders will be debt obligations, held by the non-U.S.
Noteholder and owed by the Company.

COMPENSATION AND FEES

Any available cash received by the Company will be distributed to meet all Noteholders interest and
principal payments first, followed by Class B Members preferred return requirements. No management fee will be
charged. Only a $150 subscription fee per Class B Unit and Registered Note will be charged at the initial
subscription which will generally cover expenses and costs regarding the offering documents and related legal
services. However, the Managing Member shall be entitled to any excess profit over the preferred return and
repayment of Registered Notes. The Managing Member may use any such excess profit in order to cover any
operation costs incurred by the Managing Member.
In terms of loans made by the Company, the Managing Member will receive a fee to be negotiated with,
and payable by, each borrower in connection with each loan made by the Company. The Managing Member will be
reimbursed by the Company for certain costs and expenses paid by the Managing Member on behalf of the
Company in relation to such loans. Also, certain affiliates, such as real estate brokers, will receive a real estate
broker fee in connection with certain loans made by the Company that will be paid by each borrower, and will be in
an amount to be negotiated with such borrower.
CONFLICTS OF INTEREST
The Company is subject to various conflicts of interest arising from its relationships with the Managing
Member and its affiliates. These conflicts include, but are not limited to, the following:
Compensation. The Managing Members fees and its affiliates fees, including the fee to be paid to the
borrowers, were, or will be, determined by the Managing Member, without independent representation of the
interests of the Class B Members and Noteholders, and may not have been determined on the basis of arms-length
negotiations. While the Company believes that the compensation arrangements are reasonable and provide
incentives for the profitable operation of the Company that will benefit all Members, the interests of the Managing
Member, and its affiliates, on the one hand, and the Class B Members on the other, may not always coincide with
respect to the amount, or the terms and conditions, of such compensation arrangements.
Other Activities of the Managing Member. The Managing Member may engage for its own account, or
for the account of others, including other entities which the Managing Member may form, in other business
ventures, related to similar businesses, competitive or otherwise, and neither the Company nor any Class B Member
Page 46 of 54

or Noteholder shall be entitled to any interest therein. The Operating Agreement expressly provides that the
Managing Member will not be obligated to present to the Company any particular investment opportunity that
comes to its attention, even if such opportunity is of a character that might be suitable for investment by the
Company. Furthermore, the Managing Member will not have any duty to account to the Company for profits
derived from any of the foregoing activities.
Lack of Separate Representation. The Company and the Managing Member are represented by the same
counsel. The attorneys who perform services for the Company and the Managing Member may also perform
services for certain affiliates of the Managing Member. Legal counsel for the Company does not purport to act
independently on behalf of the investors, and does not represent the interests of the Class B Members or Noteholders
in connection with this Offering. It is anticipated that the representation of the Company and the Managing Member
by the same counsel will continue in the future. If a dispute arises between the Company and the Managing Member,
the Managing Member will cause the Company to retain separate counsel for such matters as and when appropriate.
Each investor must rely upon such investors legal counsel for advice in connection with an investment in the
Securities.
Resolution of Conflicts of Interest. The Managing Member has not developed, and does not expect to
develop, any formal process for resolving conflicts of interest. However, the Managing Member is subject to a
fiduciary duty to exercise good faith and integrity in handling the affairs of the Company, which duty will govern its
actions in all such matters. While the foregoing conflicts of interest could materially and adversely affect the Class B
Members and the Company, the Managing Member, in its sole judgment and discretion, will attempt to mitigate
such potential adversity by the exercise of its business judgment in an attempt to fulfill its fiduciary obligations.
There can be no assurance that any such attempt will prevent the adverse consequences that may result from the
numerous conflicts of interest.
Conflicting Interests among Members. The Class B Members may include persons or entities organized
in various jurisdictions who may have conflicting investment, tax and other interests with respect to their investment
in the Company. The conflicting interests of individual Class B Members may relate to or arise from, among other
things, the nature of investments, the structuring of the acquisition of investments, and the timing of the disposition
of investments. Such structuring of investments may result in different after tax returns being realized by different
Class B Members. As a consequence, conflicts of interest may arise in connection with decisions to be made by the
Managing Member, including, without limitation, with respect to the nature or structuring of investments that may
be more beneficial for one Class B Member than for another Class B Member, especially with respect to a Class B
Members individual tax situation.

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SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR

SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY
DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED,
INTENDED OR PLANNED.

[THIS PORTION IS LEFT INTENTIONALLY BLANK]

Page 48 of 54

SUMMARY OF THE RIGHTS OF THE CLASS B UNITS

THE FOLLOWING IS A SUMMARY OF THE RIGHTS, PREFERENCES AND PRIVILEGES OF THE CLASS B
UNITS. SUCH SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF
THE COMPANYS OPERATING AGREEMENT (THE OPERATING AGREEMENT ), A COPY OF WHICH IS
ATTACHED TO THIS MEMORANDUM AS EXHIBIT A. IT IS RECOMMENDED THAT EACH
PROSPECTIVE INVESTOR READ THE OPERATING AGREEMENT IN FULL. CAPITALIZED TERMS NOT
OTHERWISE DEFINED IN THIS MEMORANDUM SHALL HAVE THE MEANING GIVEN TO THEM IN THE
OPERATING AGREEMENT.
Nature of the Company
The Company is a limited liability company formed under the laws of the State of California in March 2015. The
Operating Agreement authorizes the issuance and sale of up to 300 Class B Units for $200,000 per Unit. Each Class
B Unit shall represent 0.33% Class B Membership Interest in the Company. The maximum number of Class B
Members of the Company will be one hundred (100).
Responsibilities of the Company
The Managing Member shall be sole Class A Member of the Company, and has the exclusive management and
control of all aspects of the Business of the Company. In the course of its management, the Managing Member may,
in the Managing Members absolute discretion, acquire property in order to renovate and resell the property for a
profit, make loans, both secured and unsecured, consumer and commercial loans, including loans secured by real
estate, receivables and other assets of the borrowers, modify, amend, extend or accelerate such loans, foreclose on
any property that secures any loan, purchase other real estate or property and execute all documents, instruments and
agreements, and take all actions deemed advisable or necessary by the Managing Member with respect to the
Company.
In addition, the Managing Member may employ such persons, including, under certain circumstances, affiliates of
the Managing Member, as the Managing Member deems necessary for the efficient operation of the Company.
Liabilities of Members/Nonassessability of Units
A members capital contributed to the Company is subject to the risks of the Companys Business. Except as
specifically provided in the Operating Agreement, a member is not permitted to take any part in the management or
control of the Business, does not have any voting rights in the Company, and may not be assessed for additional
capital contributions. Assuming that the Company is operated in accordance with the terms of the Operating
Agreement, a member will not be liable for the liabilities of the Company in excess of such members capital
contribution and share of undistributed profits. Notwithstanding the foregoing, a member will be liable for any
distributions made to such member if, after such distributions, the remaining assets of the Company are not
sufficient to pay the Companys then outstanding liabilities, exclusive of liabilities of the members on account of the
members contributions, and liabilities for which recourse is limited to specific Company assets. The Operating
Agreement provides that the members shall not be bound by, or be personally liable for, the expenses, liabilities, or
obligations of the Company.

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Exclusive Managing Member Discretion; Voting Rights of Preferred Members

As stated above, the Company will be operated and managed by the Managing Member. The Class B Members will
have no right to vote on any matters except as otherwise required by law.
Indemnification of the Managing Member
The Operating Agreement provides that the Company shall indemnify the Managing Member and its directors,
officers, agents and employees against liabilities arising out of their activities on behalf of the Company, unless such
liabilities are caused by fraud, gross negligence, breach of fiduciary duty or gross misconduct.
Distributions and Option to Withdraw
The investor will receive monthly preferred return payments depending on the preferred return rate the investor
chose. If the Company does not make a timely payment to the investor and is in default, all unpaid interest shall
compound at the applicable maturity date when the investor is capable of withdrawing his/her capital contribution.
Each Class B Member shall have the option to request a withdrawal of all their capital contribution, along with all
undistributed return payable at certain points of time. Investors who have been with the Company for longer than 6
months are also permitted to request an extension of their investment of an additional 6 months or any other
Investment Term available. If the investor elects to extend his/her investment for an additional 6 months, there will
be no capital transactions between the Company and the investor.
In order for an investor to withdraw from his/her capital account, the investor must give 60 days prior written notice
before the applicable Lockup Period expires. After the Company receives the investors prior written notice, the
investor shall receive his/her principal (capital account balance) within 90 days after the date of the applicable
Lockup Period expires.
The Managing Members Independent Activities
The Operating Agreement provides that the Managing Member (as well as any Member) and any of its affiliates
may engage in or possess any interest in other business ventures of every nature and description, whether such
ventures are competitive with the Company or otherwise. Thus, the Managing Member or any of its affiliates may
engage independently in any other business. (See RISK FACTORS.)
Books and Records
At all times during the term of the Company, the Company will keep true and accurate books of account of all the
financial activities of the Company. These books of account will be kept open for inspection by the members or their
representatives at any time during normal business hours following reasonable notice given to the Company. The
Managing Member may make such elections for Federal and state income tax purposes as the Managing Member
deems appropriate, and the fiscal year of the Company will be the calendar year unless changed by the Managing
Member with the consent of the Commissioner of the Internal Revenue Service.
Reports
The Company will use commercially reasonable efforts to prepare and mail to each of the Members, within 45 days
after the end of each fiscal year, an unaudited financial statement of the Company setting forth the assets, liabilities
and capital of the Company as of the end of such fiscal year, the net profit or net loss of the Company for such fiscal
year, a statement of the cash flows of the Company for such fiscal year, and such Members closing Capital Account
as of the end of such fiscal year for the preparation of the Federal Income tax returns of the investors; provided,
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however, that such financial statement need not be prepared in accordance with generally accepted accounting
procedures (GAAP). Members will be provided with the opportunity to audit the books and records of the
Company in accordance with the terms of the Operating Agreement.

Appointment of the Managing Member as Attorney-in-Fact

Under the Operating Agreement, each member irrevocably constitutes and appoints the Managing Member as such
members true and lawful attorney-in-fact, with full power and authority in such members name, place and stead to
make, execute acknowledge and file the certificates and other instruments described therein. This power of attorney
does not grant the authority to amend or modify the Operating Agreement except as otherwise permitted therein.
(See Preferred Member Signature Page and Power of Attorney contained in Subscription Booklet that
accompanies this Memorandum.)
ADDITIONAL INFORMATION
Reference materials described in this Memorandum are available for inspection at the office of the
Company during normal business hours. It is the intention of the Company that all potential investors be given full
access to such information for their consideration in determining whether to purchase the Securities being offered.
Prospective investors should contact the Company, for access to information regarding the matters set forth or other
information concerning the Company. Representatives of the Company will also answer all inquiries from potential
investors concerning the Company and any matters relating to its proposed operations or present activities. The
Company will afford potential investors and their representatives the opportunity to obtain any additional
information reasonably necessary to verify the accuracy or the source of any representations or information
contained in this Memorandum.

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EXHIBIT A
FIRST FINANCIAL INVESTMENT GROUP OPERATING AGREEMENT

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EXHIBIT B
FORM OF REGISTERED NOTE

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EXHIBIT C
SUBSCRIPTION DOCUMENTATION
FIRST FINANCIAL INVESTMENT GROUP, LLC
SUBSCRIPTION AGREEMENT

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