madyson_ex15.htm

Re:
Madyson Equity Group, LP (the "Company")
Draft Offering Statement on Form 1-A
Submitted April 22, 2016
CIK No. 0001672461

We note that you are a real estate limited partnership and that you have not yet identified any properties to acquire with the net proceeds of this offering. As a result, your offering appears to constitute a "blind pool" offering. Accordingly, as applicable, please provide the disclosure required by Industry Guide 5 or tell us why such disclosure is not appropriate. Please refer to Release No. 33-6900 (June 17, 1991), Securities Act Forms Compliance and Disclosure Interpretation 128.06 and Item 7(c) of Part II of Form 1-A. For example purposes only, please provide cover page summary risk factors and prior performance disclosure.

	·	We are an emerging growth company with a limited operating history.

	·	Subscribers will have limited control in our company with limited voting rights. The Managing Limited Partners will manage the day to day operations of the Company.

	·	We may require additional financing, such as bank loans, outside of this offering in order for our operations to be successful.

	·	We have not conducted any revenue-generating activities and as such have not generated any revenue since inception.

	·	Our offering price is arbitrary and does not reflect the book value of our Limited Partnership Interests.

	·	Investments in real estate and real estate related assets are speculative and we will be highly dependent on the performance of the real estate market.

	·	Our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors' report to the financial statements included in the Offering.

	·	The Company does not currently own any assets.

Name and Description of Investment	Fiduciary Role	Total Equity		Profit/(Loss)		IRR

Majestic Drive - Residential Property	Offering Sponsor		338,950		17,950		5.60	%

Alicia Point - Residential Property	Offering Sponsor		121,050		7,050		6.20	%

Denton Grove - Residential Property	Offering Sponsor		169,700		9,700		6.10	%

Julynn Road - Residential Property	Offering Sponsor		348,750		38,750		12.50	%

EPR Properties - REIT Stock	Offering Sponsor		1,120,680		216,540		23.90	%

Realty Income - REIT Stock	Offering Sponsor		1,478,500		394,000		36.30	%

LTC Properties - REIT Stock	Offering Sponsor		421,300		12,217		2.90	%

Gladstone - REIT Stock	Offering Sponsor		455,400		30,511		6.70	%

LPT Properties - REIT Stock	Offering Sponsor		380,000		16,340		4.30	%

W.P. Carey Inc. - REIT Stock	Offering Sponsor		988,975		63,213		6.80	%

Wheeler - REIT Stock	Offering Sponsor		88,500		1,150		1.30	%

The table above represents the offerings that the Company's Manager has been involved in in recent history.

	Part II - Offering Circular

	Offering Circular Cover Page

2.	If you intend on making written offers using your preliminary offering circular prior to qualification of your offering statement, please include the legend required by Rule 254(a) of the Securities Act.

	The Company does not intend on using the offering circular prior to qualification.

3.	We note your disclosure on page 40 of the limitations on the transfer of partnership interests. Please include a statement on your prospectus cover page regarding the limitations on transferability of the securities being registered and cross-reference the disclosure on page 40. Refer to Item 1 of Form S-11.

	The following information has been added:

	The transfer of Interests is limited. A Limited Partner may assign, his, her or its Interests only if only if certain conditions set forth in the Partnership Agreement are satisfied. Please see those conditions on page 39 under "SUMMARY OF PARTNERSHIP AGREEMENT-Withdrawal, Redemption Policy and Other Events of Dissociation."

	Risk Factors, page 7

4.	We note your disclosure on page 14 that you do not believe that you will be deemed an investment company because you do not intend on trading securities. We also note your disclosure on page 4 that you may purchase other real estate investments including equity in other real estate entities and debt related to properties. Please revise to reconcile this inconsistency.

	We have removed this sentence here and throughout.

	Use of Proceeds, page 18

5.	The use of proceeds table indicates that there are no offering expenses associated with the offering; however, footnote 1 indicates that offering expenses will total $60,000. Footnote 1 also states that the General Partner intends to provide for these offering expenses in exchange for General Partner Interests in the company. Please confirm that the General Partner will fund the offering costs and revise the table to identify such costs.

The General Partner intends to fund the offering costs. We have revised the table per this comment.

	Minimum		25%		50%		75%		100%
Interests Sold		1,000		12,500		25,000		37,500		50,000
Gross Proceeds	$	1,000,000	$	12,500,000	$	25,000,000	$	37,500,000	$	50,000,000
Offering Expenses¹	$	60,000	$	60,000	$	60,000	$	60,000	$	60,000
Selling Commissions & Fees²	$	0	$	0	$	0	$	0	$	0
Net Proceeds	$	940,000	$	12,440,000	$	24,940,000	$	37,440,000	$	49,940,000
Acquisitions³	$	811,000	$	11,580,000	$	23,370,000	$	35,160,000	$	46,960,000
Related Acquisition Costs⁴	$	44,000	$	636,900	$	1,285,350	$	1,933,800	$	2,585,000
Working Capital⁵	$	60,000	$	198,100	$	254,650	$	316,200	$	360,000
Legal and Accounting	$	25,000	$	25,000	$	30,000	$	30,000	$	35,000
Total Use of Proceeds	$	1,000,000	$	12,500,000	$	25,000,000	$	37,500,000	$	50,000,000

	Investment Policies of Company, page 24

6.	Please disclose your anticipated portfolio composition, including the percentage of assets you anticipate will be invested in real estate properties, securities in other real estate entities, and debt related to properties. Please also state the company's policy as to the amount or percentage of assets which will be invested in any specific investment. Refer to Item 13 of Form S-11.

	We have added the following sentence:

	We believe 100% of our portfolio will consist of real estate properties.

	Overview, page 26

	Lagging New Supply, page 34

7.	We note your statement that Cullor Asset Management, believes the combination of improving economic conditions, pent up household formation, and lack of new supply provide an excellent investment opportunity in multi-family housing. Please obtain and file this third party's consent as an exhibit. Refer to Item 17, paragraph 11, of Form 1-A.

	This was typo. It has been revised to read:

	The Manager believes this combination of improving economic conditions, pent up household formation, and lack of new supply provide an excellent investment opportunity in multi-family housing.

	Summary of Partnership Agreement, page 37

8.	It appears that the company will only pay distributions out of operating cash flow or from proceeds of a Capital Transaction. Please confirm or revise to clarify if distributions may be paid from other sources, such as proceeds of the offering and borrowings. Please also include risk factor disclosure, to the extent applicable.

Distributions will only be paid from operating cash flow or from proceeds of a Capital Transaction.

We do not set aside funds in a sinking fund to pay distributions or redeem the Interests, so you must rely on our revenues from operations and other sources of funding for distributions and withdrawal requests. These sources may not be sufficient to meet these obligations.

We do not contribute funds on a regular basis to a separate account, commonly known as a sinking fund, to pay distributions on or redeem the Interests at the end of the applicable non-withdrawal period. Accordingly, you will have to rely on our cash from operations and other sources of liquidity, such as borrowed funds and proceeds from future offerings of securities, for distributions payments and payments upon withdrawal. Our ability to generate revenues from operations in the future is subject to general economic, financial, competitive, legislative, statutory and other factors that are beyond our control. Moreover, we cannot assure you that we will have access to additional sources of liquidity if our cash from operations are not sufficient to fund distributions to you. Our need for such additional sources may come at undesirable times, such as during poor market or credit conditions when the costs of funds are high and/or other terms are not as favorable as they would be during good market or credit conditions. The cost of financing will directly impact our results of operations, and financing on less than favorable terms may hinder our ability to make a profit. Your right to receive distributions on your Interests is junior to the right of our general creditors to receive payments from us. If we do not have sufficient funds to meet our anticipated future operating expenditures and debt repayment obligations as they become due, then you could lose all or part of your investment. We currently do not have any revenues.

Our ability to make distributions to our Limited Partners is subject to fluctuations in our financial performance, operating results and capital improvement requirements.

Currently, our strategy includes paying a preferred return to investors under this Offering that would result in a return of approximately 6% annualized return on investment, of which there is no guarantee. In the event of downturns in our operating results, unanticipated capital improvements to our properties, or other factors, we may be unable to declare or pay distributions to our Limited Partners. The timing and amount of distributions are the sole discretion of our General Partner who will consider, among other factors, our financial performance, any debt service obligations, any debt covenants, our taxable income and capital expenditure requirements. We cannot assure you that we will generate sufficient cash in order to fund distributions.

11.	With respect to the principals of the General Partners, please revise your disclosure to include the name and principal business of any corporation or other organization in which their occupations and employment were carried on. Refer to Item 21 of Form S-11 and Item 401 of Regulation S-K.

	We made multiple revisions to this section in order to comply with this comment.

13.	Please revise to estimate front-end fees, such as acquisition fees, to be paid during the first fiscal year of operations or advise.

	The Manager does not intend on receiving any acquisition fees or other front end fees.

August 10, 2016

Re:
Madyson Equity Group, LP (the "Company")
Draft Offering Statement on Form 1-A
Submitted April 22, 2016
CIK No. 0001672461

Dear Ms. McManus,

Please see the answer to your comments below.

General

1.
We note your response to comment 1. However, it does not appear that your revised disclosure complies with the requirements of Industry Guide 5. Please provide the disclosure required by Industry Guide 5 or tell us why such disclosure is not appropriate.

We have provided a tax opinion and a more comprehensive with the prior performance table that reads as follows:

Property		Sponsor	Bedrooms/Baths		Square Footage					Profit/Loss		Internal Rate of Return
Real Estate Holdings:
Majestic Drive	Single Family	MCM	3 bed, 2 Bath			3029	$321,920(Purchase) $338,950(Sale)			$	17,950.00		5.60	%
Alicia Point	Town Home	MCM	1 bed, 1 Bath			900	$116,000.00			$	7,050.00		6.20	%
Denton Grove	Town Home	M CM	2 Bed, 2 Bath			1125	$160,000.00			$	9,700.00		6.10	%
Julynn Road	Multi Family	M CM	4 Bed, 4 Bath			3074	$310,000.00			$	38,750.00		12.50	%

Real Estate Investments:			Value:		Profit/(Loss)		Internal Rate of Return
	REIT Stock	EPR Properties	$	1,120,680.00	$	216,540.00		23.90	%
	REIT Stock	Realty Income	$	1,478,500.00	$	394,000.00		36.30	%
	REIT Stock	LTC Properties	$	421,300.00	$	12,217.00		2.90	%
	REIT Stock	Gladstone	$	455,400.00	$	30,511.00		6.70	%
	REIT Stock	LPT Properties	$	380,000.00	$	16,340.00		4.30	%
	REIT Stock	W.P . Carey Inc	$	988,975.00	$	63,212.50		6.80	%
	REIT Stock	Wheeler	$	88,500.00	$	1,150.00		1.30	%

The table above represents the offerings that the Company's Manager has been involved in in recent history.

38730 Sky Canyon Drive, Ste A, Murrieta, CA 92563

Investment History and Background

The philosophy of Madyson Capital Management (MCM) is to purchase income producing Real Estate utilizing a disciplined long term approach. The goal of MCM is to pay solid steady yields to investors i n the form of Dividends while offering an attractive alternative to the volatility of other asset classes for investors.

Started in 2011, Joseph Ryan, CEO/CFO, has been investing in income producing Real Estate with an offering for investors. M r. Ryan and his team at MCM, apply a consistent disciplined approach to their process and have made several refinements along the way.

MCM, looks for sol id value utilizing a set of criteria they have developed internally. Factors include, but are not l limited to, location, purchase price, comparable properties in the area, risk assessment, Tax information, Demand in the area, Cap Rates, Net Operating Income and Financing considerations.

If a property meets the investment committee criteria, it will be considered for offering and acquisition. Mr. Ryan has an extensive and well versed background in Real Estate. He started his career in Real Estate 1985 working in Property Mainte-nance and his daily duties involved many facets including visual ly i inspecting, maintaining, and responding to tenants for upkeep and repair, handling tenant issues and complaints. Mr. Ryan worked alongside licensed contractors, handled most repair and upgrades for properties and developed a strong understanding of the cost and labor involved in being a landlord. This approach allowed him to learn best practices of the day to day operation of Real Estate ownership.

Starting in 1989 to today, Mr. Ryan has worked in Real Estate Management for various firms and including his own. Mr. Ryan has managed real estate off and on for the last 27 years in different capacities. In 2011, he started his own Real Estate offering and has a staff of professionals working alongside of him at Madyson.

As an accountant for several years, Mr. Ryan has also seen the potential tax breaks and passive income possibilities real estate ownership can provide. It is for these reasons he believed in starting his offering as a diversification tool and alternative to investors.

38730 Sky Canyon Drive, Ste A, Murrieta, CA 92563

Mr. Ryan also uses his acumen from Real Estate to identify and find value in Real Estate utilizing REIT offerings available to investors. Mr. Ryan looks for solid steady dividend returns, track record of dividends, low share price volatility, and utilizes share price risk mitigation by Dollar Cost Averaging and Investing over time to spread out volatility.

Utilizing this approach, Mr. Ryan and Madyson has maintained solid yields to investors over the last 5 years.

Investment Policies of Company, page 24

2.
We note your response to comment 6 and reissue in part. Please state the company's policy as to the amount or percentage of assets which will be invested in any specific investment. Refer to Item 13(a)(6) of Form S-11.

We added the following sentence:

We do not intend to invest more than 25% of Company assets into any single real estate asset upon full capitalization of the Company.

Executive Compensation, page 44

3.
We note your revised disclosure in response to comment 12. However, your disclosure is still inconsistent. On pages 22, 37, and 38 you disclose a 65% distribution to the limited partners and a 35% distribution to the general partner. Meanwhile, your disclosure on pages 44 and 45 indicates that the distribution to the general partner will be 65%. Please revise or advise.

This should have been 35% and has been revised.

Certain Relationships and Related Party Transactions, page 45

4.
Please tell us why you are not able to provide an estimate of the asset management fee based on the maximum number of shares sold in this offering. Please also clarify whether the asset management fee is an annual fee.

We have updated the Asset Management Fee discussion to read as follows:

38730 Sky Canyon Drive, Ste A, Murrieta, CA 92563

	1/12^th of 1.05% of the total amount the Company invests. The total amount of fees that the General Partner may receive cannot be determined at this time. This could be as little as $8,515 (annually) or as much as $493,080 (annually.) This fee may be paid monthly.

	We also updated the Use of Proceeds table to reflect this fee properly broken out as a separate line item.

Plan of Distribution, page 17

5.
You state that "[t]he Company, subject to Rule 256 of the 33 Act and corresponding state regulations, is permitted to generally solicit investors by using advertising mediums such as print, radio, TV, and the Internet." Please revise to reference Rule 255 and clarify that after qualification, you will offer the securities as permitted by Rule 251(d)(1)(iii).

Please also advise as to which marketing materials will be printed advertisements or sales materials that will be accompanied with or preceded by a final offering circular in accordance with Rule 251(d)(1)(iii). Also note that testing the waters materials under Rule 255 must be filed with the Commission in accordance with Item 17, paragraph 13, of Form 1-A. We may have further comments.

We currently do not have any marketing or advertising materials created or contemplated.

38730 Sky Canyon Drive, Ste A, Murrieta, CA 92563


	We have updated to correctly reference 255.

	We have added the following paragraph:

	We will offer the securities as permitted by Rule 251 (d)(1)(iii) whereby offers may be made after this Offering has been qualified, but any written offers must be accompanied with or preceded by the most recent offering circular filed with the Commission for the Offering.

Exhibit 12

6.
Please revise to state whether purchasers of the securities will have any obligation to make payments to the registrant or its creditors (other than the purchase price for the securities) or contributions to the registrant or its creditors solely by reason of the purchasers' ownership of the securities. See Staff Legal Bulletin No. 19, Section II.B.1.b.

The following paragraph has been added:

The Limited Partners, upon purchase, will have no obligation to make payments to the Company or its creditors (other than the purchase price for the securities) or contributions to the Company or its creditors solely by reason of the purchasers Limited Partner's ownership of the Limited Partnership Interests.

Thank you.

Sincerely,

/j/

Jillian Sidoti

Securities Counsel for the Company

38730 Sky Canyon Drive, Ste A, Murrieta, CA 92563

	Withdrawal, Redemption Policy and Other Events of Dissociation, page 40

9.	You state that a Limited Partner may request for withdrawal and may receive a 100% return of capital provided the Limited Partner has been a Limited Partner for at least 12 months and the Limited Partner provides a withdrawal request at least 90 days prior to such withdrawal. On page 8 you state that redemption is subject to a penalty up until the third year of ownership. Please revise to ensure consistency.

	The line on page 8 referring to a penalty has been struck.

	Security Ownership of Certain Beneficial Owners and Management, page 42

10.	Please revise the "limited partnership interests" column of your beneficial ownership table to correctly refer to general partnership interests. Please also revise to disclose the natural person(s) with voting and/or investment control of the shares held by Madyson Capital Management LLC.

	This is has been revised.

	Director, Executive Officers, Promoters and Control Persons, page 42

	Executive Compensation, page 44

12.	We note your disclosure that the General Partner will receive 75% of distributions available after the Limited Partners have received their Preferred Return. We also note your disclosure on page 45 that the General Partner will receive a 65% distribution after the Limited Partners have received their Preferred Return. Last, we note the discussion on page 37, indicating that after paying the preferred return to Limited Partners the Partnership will distribute 65% to the Limited Partners in proportion to their Percentage Interests, and 35% to the General Partner. Please revise for consistency.

	This was a typo and has been corrected to read:

	The General Partner shall receive reimbursement for expenses incurred on behalf of the Company. The General Partner will also receive 65% of distributions available after the Limited Partners have received their Preferred Return, annualized and paid quarterly.

	Certain Relationships and Related Party Transactions, page 45

1.	We note your response to comment 1. However, it does not appear that your revised disclosure complies with the requirements of Industry Guide 5. Please provide the disclosure required by Industry Guide 5 or tell us why such disclosure is not appropriate.

	We have provided a tax opinion and a more comprehensive with the prior performance table that reads as follows:

2.	We note your response to comment 6 and reissue in part. Please state the company's policy as to the amount or percentage of assets which will be invested in any specific investment. Refer to Item 13(a)(6) of Form S-11.

	We added the following sentence:

	We do not intend to invest more than 25% of Company assets into any single real estate asset upon full capitalization of the Company.

3.	We note your revised disclosure in response to comment 12. However, your disclosure is still inconsistent. On pages 22, 37, and 38 you disclose a 65% distribution to the limited partners and a 35% distribution to the general partner. Meanwhile, your disclosure on pages 44 and 45 indicates that the distribution to the general partner will be 65%. Please revise or advise.

	This should have been 35% and has been revised.

4.	Please tell us why you are not able to provide an estimate of the asset management fee based on the maximum number of shares sold in this offering. Please also clarify whether the asset management fee is an annual fee.

	We have updated the Asset Management Fee discussion to read as follows:

5.	You state that "[t]he Company, subject to Rule 256 of the 33 Act and corresponding state regulations, is permitted to generally solicit investors by using advertising mediums such as print, radio, TV, and the Internet." Please revise to reference Rule 255 and clarify that after qualification, you will offer the securities as permitted by Rule 251(d)(1)(iii).

	Please also advise as to which marketing materials will be printed advertisements or sales materials that will be accompanied with or preceded by a final offering circular in accordance with Rule 251(d)(1)(iii). Also note that testing the waters materials under Rule 255 must be filed with the Commission in accordance with Item 17, paragraph 13, of Form 1-A. We may have further comments.

	We currently do not have any marketing or advertising materials created or contemplated.

6.	Please revise to state whether purchasers of the securities will have any obligation to make payments to the registrant or its creditors (other than the purchase price for the securities) or contributions to the registrant or its creditors solely by reason of the purchasers' ownership of the securities. See Staff Legal Bulletin No. 19, Section II.B.1.b.

	The following paragraph has been added:

	The Limited Partners, upon purchase, will have no obligation to make payments to the Company or its creditors (other than the purchase price for the securities) or contributions to the Company or its creditors solely by reason of the purchasers Limited Partner's ownership of the Limited Partnership Interests.