LLC Operating Agreement

Version 1.2
9/4/2015

Equitize, LLC was created to provide people a way to invest in Real Estate by enabling them to
purchase shares of equity. Investors benefit from their ownership by: 1) receiving distributions
for their share of rental income, 2) appreciation in property value over time.
*Equitize, LLC also serves as a platform for investors to fund their real estate endeavors by
cooperating with other investors.
Equitize, LLC was founded by Ibrahim Moussaoui on Aug 8, 2014.
Equitize, LLC will be managed by Ibrahim Moussaoui, Founder & CEO.

Equitize, LLC will serve as the parent company for all investment properties. Each individual
investment property will be held under and owned by its own subsidiary individual LLC (Limited
Liability Corporation). Each individual property LLC will have member owners who are the
Investors and Equity Owners in that property. The name on the Title / Deed for each property
will be the name of the propertys LLC not the names of its members.
Equitize, LLC will own and operate all subsidiary individual property LLCs.
Members / Investors / Equity Owners will retain their share of assets, expenses, and incomes
based on the size of their investment and equity share.
The members of each individual property LLC will share incomes and expenses as detailed
throughout this Operating Agreement.
For practicality and efficiency purposes, the first property acquired in this endeavor may be
acquired by and held under Equitize LLC in which case Equitize LLC will be member owned by
the respective investors of the first property. The property may later be transferred to a
subsidiary LLC. The member owners may be removed from Equitize LLC and established again
as member owners into the new subsidiary LLC. This restores Equitize LLC as the parent
company and allows for the possible future sale of Equitize LLC company equity share to
partner owners.
Each subsidiary LLC may adopt governing documents from Equitize LLC and may also be subject
to new governing documents that are drafted at the time.
* The services Equitize LLC provides does not constitute Crowdfunding as described in Title III
of the Jumpstart Our Business Startups Act (JOBS Act).

*Equitize LLC does not sell securities. The Securities Exchange Commission (SEC) has not
approved or endorsed the form of real estate investing described here.

Equitize, LLC represents a network of investors. Individuals seeking to join will make a one-time
contribution to become part of the network.
Individuals become Members of the Equitize Network by completing the membership form on
the Equitize website at: www.equitize.weebly.com. By completing the membership form, the
user agrees with the latest version of this Operating Agreement. The Equitize Network is a
growing group of prospective and current investors that has access to the investment
opportunities Equitize LLC makes available to them. This form of membership does not mean
the individual becomes a member owner of the Equitize LLC company structure. This grants
them the website privilege of accessing available investment opportunities that Equitize
provides, and provides an avenue for investing that would later establish the individual as a
member owner of the respective property LLC company for that particular investment.
Equitize is launching in several phases.
**Membership is currently free and will continue to be free, for a limited time, while Equitize is
expanding its Investor Network, acquiring its initial property, and finalizing its Investment
Model and structure.
Official Launch of Membership (Date will be determined and announced)
-During the first three months, joining the Equitize network is FREE!
-During the next 3 months, new members will pay $25 to join.
-Next 3 months: $50 to join.
-Next 3 months: $100 to join.
After one year new members will still pay $100 to join!
*Membership is paid once per person and grants the member unlimited investments.
A list of member owners and equity owners for Equitize LLC and subsidiary LLCs will be kept in a
separate document: Equity Owners Log.

-Equitize strategically selects properties to pursue based on certain criteria: location, rental
demand, return on investment (ROI*), and potential for renovating and selling.
Properties that are distressed (such as foreclosures and fixer-uppers) are especially attractive
for investment purposes because they can be purchased for less money, renovated, rented, and
then sold for a sizeable profit.
-Any member of the Equitize Network may request a property through the Equitize website.
Equitize will then review and evaluate the property and add it to the Investments page if it is
a viable investment opportunity.
Equitize may identify multiple prospective properties and elect to dedicate raised funds to
either or any of the properties if one is discovered to be unfavorable for any reason or if it is no

longer active on the Real Estate Listing Service. Prospective properties identified and selected
for each investing endeavor will be comparable to each other in type, condition, location, and
price. A prospective investor must agree with the acquisition of any of the prospective
properties; signing this document communicates this approval. This is good practice and
strategy in order to increase the likelihood of property acquisition and minimize postponement
if a property becomes unavailable or is discovered to be unsuitable.
*ROI is an estimation of projected returns and is not intended to be an absolute, minimum, or maximum amount, nor
is it a guarantee for a property's actual yields and distributions to investors. This figure is an approximation obtained
based on 10 months of rental income and includes the deduction of HOA fees, taxes, and management costs. The
other 2 months, for estimation purposes, are roughly allocated towards insurance, maintenance costs, and other
incidentals and unanticipated costs.

Investors must first commit to investing a set amount. Commitments will be considered active
and valid as long as the property (may include multiple properties) of interest remain listed for
sale. If a prospective investor wishes to retract their commitment, they must notify Equitize
LLC.
There is no inherent limit on commitments. Commitments can be accepted in excess of 100% of
the property asking price. This helps ensure that there are ample investors to finance the
purchase in the event that some investors fail to transfer their funds or the property is
competitively acquired for more than the asking price. This also allows for additional equity to
cover closing costs and repairs and renovations.
Equitize LLC has the discretion and decision of selecting the investors for each investment
property if there are investments in excess of 100% of asking price. Equitize LLC may make
these selections based on any, some, or all of the following criteria: chronological order of
commitments received, commitment dollar amount, geographical region of prospective
investors residence, and investors prior commitment and investment history on other
properties (prospective and purchased) within the Equitize Network.
Once enough investors have committed so that adequate funding of the property or properties
appears promising, Equitize will begin collecting the investments.
Equitize will collect investments from investors during a fixed period of two weeks or until the
full property value (Asking Price/Listing Price) is raised. Investors must be a member of the
Equitize Network. Investors will purchase their desired share of equity; this is calculated by
dividing Dollars Invested by Property Value. Minimum investments are 1% of the property
value. Investments do not have to be made in increments of 1%; (1.5% may be purchased for
example). Equitize may sometimes adjust/set the minimum investment at an amount different
than 1% the minimum will always be stated for each investment property featured on the
Equitize website. The fundraising progress on each property will be displayed on a meter on the
website.

If a prospective investor fails to transfer their funds to Equitize within the two week period,
their investment commitment will be voided, and their prospective share(s) will become
available to other investors.
Unsuccessful Attempts: If the two week investment funds transfer period expires, one of two
scenarios will take place. Either 1) all funds will be returned to investors and the attempt will be
abandoned, or 2) investment gathering will continue and the funds transfer period will be
extended for another two weeks if significant progress was shown during the first period. This
process will continue until either 1) the property is acquired, or 2) the attempt is abandoned.
If the targeted property is sold to another party prior to acquisition, all funds will be returned to
investors and investors will be presented with a comparable property which they will have the
opportunity and option to commit to invest in.
If there is a very large demand for investing in a prospective property, assessed through
commitments and funds transfer, another comparable property may be listed for which
investors who were not selected for the first property may opt to invest in.

Investments made are to be kept secure in the company bank account of Equitize, LLC or in the
account of an individual property LLC until the full value necessary to acquire the property is
collected. Investments are to be deposited directly into this account (cash or check), given to an
official representative of Equitize, LLC who will deposit the investment into the company
account, mailed to Equitize, LLC for deposit into this account, or transferred into the company
account through an electronic banking transaction.
-Equitize will soon be launching an online infrastructure on our website that will allow for user
accounts, investor portfolios, and the ability to securely transfer funds to make investments
online. All transactions need to be backed with cash no credit card charges or loans will be
granted. Ideally, the system will work as follows: When an investor makes an investment
commitment online, their payment is pending. The fundraising progress on the corresponding
property is updated. When 100% of property value is raised, or an amount necessary to acquire
the property, all investor payments are processed simultaneously. If an investor has insufficient
funds, they will be granted a certain amount of time (3 days) to obtain the funds; if the investor
fails to do so, their pending shares of equity will become available to other investors.
Equitize may establish a maximum cap or threshold on the bank account receiving funds that
will prevent the transfer of excess and unnecessary funds.
Supported Electronic Transaction Systems & Services:
PayPal
Google Wallet

-Once Equitize has collected the full asking price, Equitize, LLC will begin to make offers to
purchase the property. Equitize may also begin making offers when the investment progress is
near to 100% of asking price or an amount deemed appropriate for an offer. Equitize will have
great purchasing power because the property purchase will be in cash No Loans, Debt, or
Interest will be associated with any purchase. Equitize will consider the current market value
of a property and will make every effort possible to negotiate the lowest purchase price. If the
purchase price is less than the asking price, the difference will be put towards improvements to
the property such as repairs and renovations. If the difference exceeds the amount necessary
for improvements, funds will be refunded to investors according to the various equity shares.
Some funds may be reserved for future expenses. All investors will still maintain the percentage
equity they purchased.
-Upon purchase of an investment property, the necessary funds will be transferred from the
Equitize account to the seller. Every Investor/Equity Owner will be issued an Equity Certificate
that states their share of ownership in the property they invested in and the expected
approximate rental income they will receive.

-Improvements to the property will likely be made following the property purchase preferably
before the unit is rented. Improvements will include necessary repairs and potential upgrades
such as installing new flooring (tiles, laminate), lighting fixtures, doors & locks, windows,
heaters, countertops & cabinets, and more! A fresh coat of paint will make the building stand
out. Durable, low cost materials will be selected.
-Equitize will determine the renovation budget, obtain materials, and make arrangements for
the work to be done. Equitize may hire individuals or companies to work on the renovation.
Equity Owners are welcomed and encouraged to help in the renovation if they wish and
possess the necessary expertise compensation may be provided for this.
-Funds may be drawn from rental income to finance renovations.
-If the improvements require additional funds, Equity Owners or other investors may supply the
capital in exchange for equity in the property. All shares of equity will be scaled accordingly to
accommodate the additional investment.
Individuals or companies may be compensated for their work with shares of equity.

All Equity Owners will receive rental income according to the size of their equity shares. All
applicable expenses will be deducted from rental income prior to distributions. Equitize will
distribute rental income on a monthly, quarterly, or yearly basis. The frequency will depend on
the size of equity in order to minimize time and other expenses spent on accounting. Small
equity shares will likely receive distributions on a quarterly or yearly basis. Regardless of the
frequency, all Equity Owners are entitled to and will receive their share of net rental income.
The method of payment will either be: check, direct deposit, or an electronic funds transfer
from the Equitize bank account or through a PayPal or Google Wallet transaction to the Equity
Owner. An Escrow service may also be used to distribute payments.

Equitize will manage local investment properties on behalf of the investors.

10% of monthly rental income will compensate Equitize for management-related services:
Preparing & Listing Units for Rent
Selecting Tenants/Renters
Scheduling repairs & maintenance
Travel to and from properties
For properties that are outside the greater Corvallis area, especially those in other states,
Equitize will identify and select a management company to manage the investment property.
Equitize may also elect to select a management company for any current investment property if
deemed necessary for logistical reasons.
The management companys service fee will be deducted from rental income in addition to the
Equitize Management Service Fee. Both fees will be deducted. However, the Equitize
Management Fee may be slightly reduced in some situations of joint management on a case by
case basis.

-10% Equitize Management Fee will be deducted from monthly rental income.
-Additional Company Management fee will be deducted if applicable.
-Some expenses are paid by renters/tenants; these may include: Electricity & Garbage.
-Other expenses are paid by Equity Owners: Water, Repairs, Taxes & Insurance, Home Owners
Association (HOA) Fees
-Monthly expenses will be subtracted from each Equity Owners share of rental income.
-Taxes & Insurance will be divided by 12 months and subtracted from each share of rental
income each month.
-LLC Registration & Renewal Fees for the holding LLC for each property.
By deducting all expenses automatically each month, investors will never receive a bill!
In the extreme event of large scale expenses for major repairs, Equitize company funds will
finance the repairs and rental income distributions to equity owners will be frozen or minimized
until the repairs have been entirely paid off. A secondary scenario may allow for the availability
for additional shares to be generated and purchased. Equity Owners or other investors may
supply the capital needed in exchange for equity in the property. All property shares will then
be scaled accordingly.

A voting process will influence how decisions are made. Each property has its own network of
Investors/Equity Owners. Any Equity Owner can make a suggestion / proposition for an action
such as renovating or selling a property they have invested in. The proposition will be voted on
by participating Equity Owners during a specified period of voting. Each percentage of equity is
one vote (1% = 1 vote) (100 Total votes). The most popular decision will likely be executed.
The Equitize Website will later have a portal for decision making and voting.

Equitize may refuse to recognize an action proposal if Equitize deems it to be unnecessary,

irrelevant, or not productive. Equitize, LLC reserves the right to override a decision made by
Equity Owners if Equitize deems it to be in the best interest of the investors. Equitize ultimately
makes the final decision but will genuinely consider the consensus.

At any time an Equity Owner may offer their equity share for sale either a portion of it or the
entirety of the shares they own. Equitize, LLC will have the first opportunity to purchase the
share. Other Equity Owners of that same property will have the next opportunity to purchase
the equity shares. Remaining available shares for sale will be listed on the Equitize network
website and can be purchased by any member of the Equitize Network.
Equity Value Determination: Equitize will take multiple factors into consideration when
calculating the current value of equity: current market value of the property, improvements
made to the property that have increased its value, and the rental income the property is
generating. The share of equity to be sold will be listed and sold for the price Equitize
establishes. If applicable, the Equity Owner will earn a margin of profit over their initial
investment/equity purchase. Equitize does NOT take a royalty on this profit.
When shares of equity are sold, appropriate amendments will be made to the list and
description of member owners for the respective property LLCs for which the transactions
applied to. Member owners may be removed or new member owners may be added, or their
respective ownership share may be adjusted accordingly based on the transaction details.
In the event that an Equity Owner attains 100% ownership in a single property, the Equity
Owner may optionally request to become a full property owner, in which case Equitize will
transfer the title/deed of the property to the Equity Owner in exchange for a fee to be decided
at that time.

A property sale may be proposed by equity owners. Investment properties that will be
completely renovated or flipped are likely to be sold after a set amount of time: 2+ years in
order to avoid paying or minimize payment of the Capital Gains Tax. Properties will only be sold
if the market is conducive for a sale if it is not, the property will continue to be rented until
the market improves. The property will be listed with a local real estate office. Upon sale of the
property, the sale price minus broker fees, commissions, and any applicable closing costs will be
distributed accordingly to the Equity Owners who owned the property.

Any investment carries an inherent risk Real Estate too. In the event that property values
depreciate due to economic decline, Equitize will postpone sales of properties and continue
renting the investment properties until the market improves. Equity Owners always maintain
the freedom to list their equity shares for sale at any time. If Equitize is forced for some reason
to sell a property for a lesser price than it was purchased for, all Equity Owners will take losses

and receive their respective share of the sale price. All risks known and unknown, and all
losses predicted and unpredicted will be assumed and taken by all Equity Owners on the
basis of their equity share.
Current investors and potential investors are advised to consult with their legal, financial, and
tax advisers with regard to their investments with Equitize and agree not to hold Equitize
accountable for any risks or losses associated with investing.

All investors and equity owners are expected and required to fill out relevant portions on their
financial reporting forms including information submitted to the Internal Revenue Service (IRS)
for Taxes, Financial Aid, and other financial purposes, that accurately and honestly reflect their
assets and income earnings as a result of investing with Equitize LLC and affiliated subsidiary
property LLCs.

The following documents and records will be kept and are all regarded as governing
documents.
-Members Log & Operating Agreement Log of all Members of the Equitize Network including
Operating Agreement revision history (beginning with version 1.0, 1.1, 1.2, etc) and agreement
version status of current members.
-Equity Owners Log of Equitize LLC and Subsidiary LLCs and their respective Equity Owners.
-Finances document including all property acquisitions, expenses, revenues, profits,
distributions and tax information.
Some of the information contained within these documents may be made public, some may
only be available to Members of the Equitize Network, some may only be available to Equity
Owners, and some may only be available to Equitize LLC company owners. It is the decision,
discretion, and responsibility of Equitize LLC owners and managers determine how to handle
this information and to do so appropriately and responsibly.

*Equitize may revise, modify, or change existing policies outlined in the Operating Agreement.
Equitize may also introduce new additions to the Operating Agreement. Current
Investors/Equity Owners will always be notified of any changes and provided an opportunity to
agree with the updated Operating Agreement.

Equitize, LLC Pledges and Promises to:

Abide by this Operating Agreement.
Use Investor funds solely to purchase properties and pay for relevant expenses.
Distribute Rental Income to all Equity Owners.

Investors who are ready to commit to investing must first read and sign this form.
I, ________________________________________have read, understood, and agreed with all
(print full name)

parts of the Equitize, LLC Operating Agreement. I am committing to transfer the necessary
funds for my investment into the bank account of Equitize, LLC or its appropriate subsidiary
company.

Signature________________________________________ Date________________________

Any suggestions or feedback on how to refine this Operating Agreement will be appreciated.

Equitize, LLC
www.equitize.weebly.com
Equitize@gmail.com
PO Box 965, Philomath, OR 97370