Kobi Real Estate Fund 1 LLC

FUND TERM SHEET This term sheet does not constitute an offer to purchase securities in the Fund. Such an offer may only be made through the Fund’s Investment Prospectus and will be subject to certain State and Federal regulations. Participation in this Fund entails a significant degree of risk. Investors should be able to lose their entire investment and should only participate with a subscription amount that is congruent with the risk profile of their portfolio.

Kobi Real Estate Fund 1 LLC3625 London Rd.Duluth, MN 55804(715) 892-6325

Summary of the Fund

Fund Name: Kobi Real Estate Fund 1 LLCFund Address: 3625 London Rd.Duluth, MN 55804

Phone Number: (715) 892-6325

Type: Real EstateEntity Type: Limited Liability Company

Fund Manager

Kobi Investments, LLCPrincipal Managers: Neal Jacobi and Jonathan Korb

Investment Focus

Kobi Real Estate Fund 1 LLC (the “Fund” or the “Company” or “KREF1”) was formed for the purpose of acquiring residential real estate (single family, duplex, triplex, and quad-plex) to be held and rented for extended periods. The Fund’s objective is to attain a well-diversified portfolio of real estate assets with the sole intention of providing participating investors with an avenue to diversify their personal portfolio. This portfolio will seek to provide a consistent stream of income, equity appreciation, and a method to hedge against inflation. The Fund will be managed by Kobi Investments, LLC (the “Manager”), a Minnesota based company formed in 2016 that specializes in acquiring single family real estate for rent. The primary individuals involved are two experienced investors with 15 years of investing experience and 8 years of real estate experience.

KREF1 Key Highlights

• Evergreen fund• Long term perspective

• Consistent quarterly dividend income• Considered low risk investments• No Leverage

• No debt and fluctuating interest rates • Consistent income for investors

• Diversified single family rental portfolio • Manager managed portfolio

• No middleman or funds of funds with additional manager fees• Direct communication with managers• Midwest values• Personally involved with every transaction• Substantial knowledge of target area and local economics

• No Acquisition fees• No nickel-and-diming investors with add on fees. Manager only.

• 2% Manager fee per year• 6% Preferred rate (Hurdle rate)• 70/30 split• Working with elite property management company - Heirloom Property

Management• Professional fund administrators - Redwood REA• SEC law Firm – Fryberger Law Firm• Location:

• Largest body of freshwater in the United States (Lake Superior)• Resistant to climate change• Growing area• Healthcare hub• College town – 3 major Universities in area

Acquisition Strategy:• Utilize strong network of realtors and other professionals• Knock on doors• Mail• Signs in target markets• Close monitoring of foreclosure actions• Constant networking in search of opportunities

Acquisition Criteria:• Property type: Single family, Duplex, Triplex• Purchase properties at a discount to replacement cost• Estimated average age of properties: 50 to 100 years old• Deferred maintenance and rehabilitation expected on certain properties• Properties in target market - Twin Ports area of Duluth, Minnesota and

Superior, Wisconsin initially – with the possibility of expanding to other markets given market trends and other factors

• Properties that can benefit from rehabilitation in terms of raising rent and increasing valuation

• Separate utilities to ensure renters responsibility• Location: High walkability score, proximity to schools, hospitals, bus

routes, bike lanes and parks in the immediate area

Planned Fund Operations and Acquisitions:

The Fund’s primary focus is to diversify an investor’s income with consistent dividends through single family real estate investment strategy. Diversified acquisitions of small residential households add diversity to the portfolio and enables the Managers to administer economies of scale business model. This scale allows the Manager to spread out fixed costs associated with single family real estate investing. The Fund will also be able to efficiently invest in markets generally only obtainable with cash, as is the foreclosure and tax forfeiture markets. This ability to invest capital provides tremendous opportunities that are missed or delayed when purchasers require financing. The Manager will deploy the capital, having strict guidelines in place to achieve the projected ROI and meet the desired objectives. Without thoroughly researching every investment, it is common for investors to have preconceived notions regarding single family properties. With the guidance of the experienced management team, investors are cleared from the complexities and time required for individual property ownership.

The Manager has identified opportunities and markets that, in the opinion of the Manager, will provide for compelling growth in real estate values. By actively seeking lucrative opportunities that are generally out of range for large institutional investors, the Manager will invest in markets ranging in population from 50,000-250,000. Most of these markets are too small to deploy large amounts of capital without shocking the system or creating rapid price appreciations. This Private Placement Memorandum outlines the Fund’s proprietary strategies for executing these opportunities and pertinent details regarding investments in the Fund’s securities.

Using Kobi Investments, LLC standards and credentials the Fund will seek lucrative opportunities to acquire, revive, maximize value, and rent out single family residential properties.

Examples of Target KREF1 Properties

(Current Kobi investment holdings):

Sample Property #1

421 N 15th Ave E., Duluth, MN 55805

IRR = 17.94%Annualized total return on investment = 24.22%Cash-on-cash returns = 10.95%

Purchase price = $95,000 Current market value = $135,000Months vacant due to repairs = 2 months Current rent = $1,350Closing costs = $2,123Repairs = $9,55519 windows, 2 exterior doors, repaired water leak in foundation, paint interi-or, replaced hot water heater. Cash income per year = $11,680

Purchased April 5, 2017Taxes = $2,080Insurance = $851Years held = 2 years

Sample Property #2

426 N 13th Ave E., Duluth, MN 55805

IRR= 12.9%Annualized total return on investment = 19.35%Cash-on-cash returns = 10.1%

Purchase price = $118,500Current market value = $149,000Months vacant due to repairs= 0 months Current rent = $1,450Closing costs= $2,250Repairs = $5,010City sewer drain, repaired soffits, replaced hot water heater, replaced bathtub drains.

Cash income per year = $12,704

Purchased: January 23rd 2017Taxes = $2,258 Insurance = $850 Years held = 2 years

Offering Terms

Limited Liability Company UnitsKobi Real Estate Fund 1 LLC Unit Price $1.00 Maximum Offering: $10,000,000.00 Minimum Offering: $500,000.00

Minimum Subscription Amount

Per Investor: $20,000.00

Fund Management Fees and Compensation

The Manager will receive an annual fee equal to two percent (2%) of the invested, unreturned capital contributions. The fee will be paid to the Manager in monthly payments equal to 0.166666667% of the invested, unreturned capital contributions at 12:01 am on the last day of the prior month.

Participation: thirty percent (30%) of net distributable profit from operations subject to payment of Preferred Return and Member distributions per the Operating Agreement.

Fund Performance

Kobi Real Estate Fund 1 LLC is a new Fund with no operating history or historical performance data.

Offering Termination Date

The Fund’s proposed offering will terminate on the earliest of: (a) the date the Fund, in its discretion, elects to terminate, or (b) the date upon which all Limited Partnership Units have been sold, or (c) August 1, 2020, or such date as may be extended from time to time by the Company, but not later than 180 days thereafter.

The Fund Manager has provided all of the information stated herein. The Fund makes no express or implied representation or warranty as to the completeness of this information or, in the case of projections, estimates,

future plans, or forward looking assumptions or statements, as to their attainability or the accuracy and completeness of the assumptions from which they are derived, and it is expected that each prospective investor will pursue his, her, or its own independent investigation. It must be recognized that estimates of the Fund’s performance are necessarily subject to a high degree of uncertainty and may vary materially from actual results.

This Term Sheet has been prepared solely for the information of the person to whom it has been delivered by or on behalf of the Fund. Distribution of this Term Sheet to any person other than the prospective investor to whom this Term Sheet is delivered by the Fund and those persons retained to advise them with respect thereto is unauthorized. Any reproduction of this Term Sheet, in whole or in part, or the divulgence of any of the contents without the prior written consent of the Fund is strictly prohibited.

How to Subscribe

Interested investors may request delivery of the Fund’s investment prospectus using the contact information below:

Kobi Real Estate Fund 1 LLC3625 London Rd.Duluth, MN 55804(715) 892-6325invest@kref1.com