PART II AND III

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.

PRELIMINARY OFFERING CIRCULAR DATED [            , 20        ]

Cottonwood Multifamily REIT II, Inc.

Maximum Offering of 5,000,000 Shares of Common Stock

Minimum Offering of 200,000 Shares of Common Stock

Cottonwood Multifamily REIT II, Inc. is a newly organized Maryland corporation that intends to qualify as a real estate investment trust beginning with the taxable year ending December 31, 2016, which may be extended to the taxable year ending December 31, 2017, in our board of director’s discretion. We expect to use substantially all of the net proceeds from this offering to invest primarily in multifamily apartment communities located throughout the United States and multifamily real estate related assets. We have formed Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership to hold our assets (referred to as our “operating partnership”). We are the limited partner and the sole member of the general partner of our operating partnership. Our operating partnership intends to enter into one or more joint ventures with Cottonwood Residential O.P., LP, a Delaware limited partnership. Cottonwood Residential O.P., LP is the operating partnership of Cottonwood Residential, Inc., a Maryland corporation, which is also a real estate investment trust. We intend to acquire all of our assets through joint ventures and will only acquire an asset outside of a joint venture if Cottonwood Residential O.P., LP does not want to participate in such investment. It is anticipated that our operating partnership and Cottonwood Residential O.P., LP will invest through a special purpose entity for each investment.

We are offering up to 5,000,000 shares of common stock in this offering for $10.00 per share. The managing broker-dealer, Orchard Securities, LLC, is not required to sell any specific number or dollar amount of shares. The shares will be offered by our managing broker-dealer on an “all-or-nothing minimum, best-efforts maximum” basis. The minimum permitted purchase is $10,000. We will not sell any shares unless we raise gross offering proceeds of $2,000,000 from persons who are not affiliated with us by [            , 20        ]. Pending satisfaction of this condition, all subscription payments will be placed in a non-interest bearing account held by the escrow agent, UMB Bank, N.A., in trust for our subscribers’ benefit, pending release to us. If we do not raise gross offering proceeds of $2,000,000 by [            , 20        ] we will promptly return all funds in the escrow account, and we will stop offering shares. We expect to offer the 5,000,000 shares in this offering over a one-year period beginning on the date this offering is qualified by the SEC. We may terminate this offering at any time.

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

Our charter contains restrictions on the ownership and transfer of our common stock. See “Description of Shares—Restriction on Ownership of Shares” at page [104]. There is currently no public market for our shares and it is unlikely that one will develop. Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 18 to read about risks you should consider before buying shares of our common stock. These risks include the following:

• We depend on our board of directors and officers to conduct our operations and this offering. Our board of directors and officers are also directors and officers of Cottonwood Residential, Inc. Our directors and officers will be subject to conflicts of interest.

• No public market currently exists for our shares, and we are not required to effectuate a liquidity event until December 31, 2024 (unless sooner dissolved or terminated by our board of directors, otherwise extended or a listing occurs). If you are able to sell your shares, you would likely have to sell them at a substantial discount from their offering price.

• We have no operating history and our only assets consist of Cottonwood Residential O.P., LP’s initial investment of $10,000, which was contributed in exchange for all of the outstanding shares of common stock.

• We are primarily a blind pool because we have only identified one investment to make with proceeds from this offering.

• There are restrictions and limitations on our share repurchasing program.

• We have not established the offering price on an independent basis and it bears no relationship to the value of our assets.

• We will use leverage to acquire multifamily apartment communities which will increase your investment risk.

• Our charter permits us to pay distributions from any source, including offering proceeds or borrowings (which may constitute a return of capital), and our charter does not limit the amount of funds we may use from any source to pay such distributions. If we pay distributions from sources other than our cash flow from operations, we will have less funds available for investment in multifamily apartment communities and multifamily real estate related assets.

• If we raise substantially less than the maximum offering amount, we may not be able to invest in a diverse portfolio of multifamily apartment communities and multifamily real estate related assets and the value of your investment may vary more widely with the performance of certain assets.

• If we fail to qualify as a REIT it could have economic consequences.

The disclosure format we are using is Form S-11.

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.

	Price to Investor	Selling Commissions, Managing Broker- Dealer Fee(1)(2)	Selling Commissions, Managing Broker- Dealer Fee Paid by our Sponsor(1)(2)	Net Proceeds(1)(2)
Per Share	$10.00	$0.90	($0.90)	$10.00
Total Minimum	$2,000,000.00	$180,000.00	($180,000.00)	$2,000,000.00
Total Maximum	$50,000,000.00	$4,500,000.00	($4,500,000.00)	$50,000,000.00

⁽¹⁾  Cottonwood Capital Property Management II, LLC will be responsible for paying the selling commissions, managing broker-dealer fee and organizational and offering expenses. We will not use any of our offering proceeds to pay such expenses. For more details see the executed Three-Party Agreement in Exhibit 6.9. The managing broker-dealer fee includes compensation for acting as the managing broker-dealer and for expenses incurred in connection with marketing our shares and wholesaler compensation. The managing broker-dealer may re-allow some or all of the managing broker-dealer fee to the soliciting dealers.

⁽²⁾  Cottonwood Capital Property Management II, LLC will be responsible for paying organizational and offering expenses. We anticipate that the organization and offering expenses will be approximately $500,000 if the maximum offering amount is sold (approximately 1% of the maximum offering amount), and approximately $80,000 if the minimum offering amount is sold (approximately 4% of the minimum offering amount).

The date of this offering circular is [                    ], 20[        ].

SUITABILITY STANDARDS	1
SUMMARY OF THE OFFERING	3
Cottonwood Multifamily REIT II, Inc	3
Investment Objectives	3
Investment Strategy	3
Investment Committee	4
Properties	4
Investment Policy	5
Our Sponsor	5
Our Board of Directors	6
Capitalization of the Company	6
Our Operating Partnership	6
Capitalization of our Operating Partnership	6
Joint Ventures	6
Capitalization of the Joint Ventures	7
Distributions from the Joint Ventures	7
Our Structure	9
REIT Status	10
Terms of the Offering	10
Summary Risk Factors	10
Compensation to Cottonwood Capital Property Management  II, LLC and Its Affiliates	11
Compensation to Our Managing Broker-Dealer	13
Conflicts of Interest of Directors and Officers	14
Share Repurchase Program	14
Reporting Requirement	15
Liquidity Strategy	15
Investment Company Act Considerations	16
RISK FACTORS	18
Risks Related to Conflicts of Interest	18
Risks Related to an Investment in our Common Stock	20
Risks Related to This Offering and Our Corporate Structure	24
General Risks Related to Investments in Real Estate	33
Risks Related to Multifamily Real Estate Related Assets	37
Risks Associated with Debt Financing	38
Federal Income Tax Risks	41
Retirement Plan Risks	44
PLAN OF DISTRIBUTION	46
General	46
Compensation of Managing Broker-Dealer and Soliciting Dealers	46
Subscription Procedures	47
Suitability Standards	48
Minimum Purchase Requirements	48
ESTIMATED USE OF PROCEEDS	49
MANAGEMENT	51
Board of Directors	51
Investment Committee	51
Committees of the Board of Directors	52
Executive Officers and Directors	52
Compensation of Directors	54
Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents	54
Initial Investment by Cottonwood Residential O.P., LP	55

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Other Affiliates	55
MANAGEMENT COMPENSATION	57
STOCK OWNERSHIP	62
CONFLICTS OF INTEREST	63
Fiduciary Duties Owed by Our Directors and Officer to Our Affiliates	63
Our Affiliates’ Interests in Cottonwood Residential O.P., LP	63
Receipt of Fees and Compensation by Cottonwood Residential O.P., LP and its Affiliates	64
Joint Venture Decisions	65
INVESTMENT OBJECTIVES AND CRITERIA	65
General	65
Investment Strategy	65
Investment Committee	68
Properties	68
Joint Venture	69
Investment Limitations under the Investment Company Act of 1940	71
INDUSTRY OVERVIEW AND MARKET OPPORTUNITY	72
Industry Data	72
Overview	72
Economic and Demographic Landscape	72
Sustained growth in prime renter population	72
Rising rentership rates and increase in household formation	73
Affordability driving demand for apartments	73
Compelling national apartment market fundamentals	73
PLAN OF OPERATION	74
General	74
Liquidity and Capital Resources	74
Results of Operations	75
PRIOR PERFORMANCE SUMMARY	76
Experience and Background of Cottonwood Residential O.P., LP	76
Prior Performance of Cottonwood Residential, Inc., Cottonwood Residential O.P., LP and their Affiliates	78
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS	80
Taxation of Cottonwood Multifamily REIT II	81
Taxation of Shareholders	91
Backup Withholding and Information Reporting	98
Other Tax Considerations	98
ERISA CONSIDERATIONS	99
Prohibited Transactions	99
Plan Asset Considerations	100
Other Prohibited Transactions	101
Annual Valuation	101
DESCRIPTION OF SHARES	103
Common Stock In General	103
Voting Common Stock	103
Preferred Stock	103
Limited Partner Units in our Operating Partnership	103

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Meetings and Special Voting Requirements	104
Restriction on Ownership of Shares	104
Distributions	106
Business Combinations	107
Control Share Acquisitions	107
Share Repurchase Program	108
Registrar and Transfer Agent	110
THE FORM OF JOINT VENTURE AGREEMENT	111
Capital Contributions	111
Management	111
Distributions and Allocations of Profit and Losses	112
Amendments	113
Transfer Restrictions	113
Right of First Refusal	113
Purchase Option Agreement	113
THE OPERATING PARTNERSHIP AGREEMENT	114
General	114
Capital Contributions	114
Operations	114
Joint Venture Member and Manager	114
Distributions and Allocations of Profits and Losses	115
Rights, Obligations and Powers of the General Partner	115
Change in General Partner	115
Amendment of Limited Partnership Agreement	115
THE GENERAL PARTNER’S LIMITED LIABILITY COMPANY AGREEMENT	116
Capital Contributions	116
Management	116
Distributions and Allocations of Profits and Losses	116
SUPPLEMENTAL SALES MATERIAL	117
ELECTRONIC DELIVERY	117
LEGAL MATTERS	117
EXPERTS	118
WHERE YOU CAN FIND MORE INFORMATION	118
FINANCIAL STATEMENTS	F-1

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EXHIBITS

EXHIBIT 1.1	MANAGING BROKER-DEALER AGREEMENT
EXHIBIT 1.2	FORM OF SOLICITING DEALER AGREEMENT
EXHIBIT 2.1	CHARTER
EXHIBIT 2.2	BYLAWS
EXHIBIT 4	FORM OF SUBSCRIPTION AGREEMENT
EXHIBIT 6.1	SHARE REPURCHASE PROGRAM
EXHIBIT 6.2	LIMITED PARTNERSHIP AGREEMENT OF OPERATING PARTNERSHIP
EXHIBIT 6.3	LIMITED LIABILITY COMPANY AGREEMENT OF GENERAL PARTNER OF OPERATING PARTNERSHIP
EXHIBIT 6.4	FORM OF JOINT VENTURE AGREEMENT
EXHIBIT 6.5	ASSET MANAGEMENT AGREEMENT
EXHIBIT 6.6	FORM OF PROPERTY MANAGEMENT AGREEMENT
EXHIBIT 6.7	PURCHASE OPTION AGREEMENT
EXHIBIT 6.8	INVESTMENT POLICY AGREEMENT
EXHIBIT 6.9	THREE-PARTY AGREEMENT
EXHIBIT 8	ESCROW AGREEMENT
EXHIBIT 11	CONSENT OF INDEPENDENT AUDITORS
EXHIBIT 12.1	LEGAL OPINION
EXHIBIT 12.2	TAX OPINION
EXHIBIT 15.1	PRIOR PERFORMANCE TABLES
EXHIBIT 15.2	UNAUDITED BALANCE SHEETS AND INCOME STATEMENTS OF COTTONWOOD RESIDENTIAL, INC.

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SUITABILITY STANDARDS

The shares we are offering through this offering circular are suitable only as a long-term investment for persons of adequate financial means and who have no need for liquidity in this investment. Because there is no public market for our shares, you will have difficulty selling your shares.

In consideration of these factors, we have established suitability standards for investors in this offering. These suitability standards require that a purchaser of shares satisfy one of the following:

(1) You are an accredited investor. An “accredited investor” is:

a. If a natural person, a person that has:

i. an individual net worth, or joint net worth with his or her spouse, that exceeds $1,000,000, excluding the value of the primary residence of such natural person (as described below); or

ii. individual income in excess of $200,000, or joint income with his or her spouse in excess of $300,000, in each of the two most recent years and has a reasonable expectation of reaching the same income level in the current year.

b. If not a natural person, one of the following:

i. a corporation, an organization described in Code Section 501(c)(3), a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring shares, with total assets in excess of $5,000,000;

ii. a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered and whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in a share;

iii. a broker-dealer registered pursuant to Section 15 of the Exchange Act;

iv. an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”);

v. a business development company (as defined in Section 2(a)(48) of the Investment Company Act);

vi. a Small Business Investment Company licensed by the United States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

vii. an employee benefit plan within the meaning of ERISA, if the investment decision is made by a plan fiduciary (as defined in Section 3(21) of ERISA), which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, with investment decisions made solely by persons who are accredited investors;

viii. a private business development company (as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended);

ix. a bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; or

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x. an entity in which all of the equity owners are accredited investors.

c. In addition, the SEC has issued certain no-action letters and interpretations in which it deemed certain trusts to be accredited investors, such as trusts where the trustee is a bank as defined in Section 3(a)(2) of the Securities Act and revocable grantor trusts established by individuals who meet the requirements of clause (1)(a)(i) or (1)(a)(ii) of this section. However, these no-action letters and interpretations are very fact specific and should not be relied upon without close consideration of your unique facts; or

(2) If you are not an accredited investor, the investment in the shares is not more than 10% of the greater of:

a. If you are a natural person:

i. your individual net worth, or joint net worth with your spouse, excluding the value of your primary residence (as described below); or

ii. your individual income, or joint income with your spouse, received in each of the two most recent years and you have a reasonable expectation that an investment in the shares will not exceed 10% of your individual or joint income in the current year.

b. If you are not a natural person,

i. your revenue, as of your most recently completed fiscal year end; or

ii. your net assets, as of your most recently completed fiscal year end.

For purposes of this definition, “net worth” means the excess of total assets at fair market value over total liabilities, except that the value of the principal residence owned by a natural person will be excluded for purposes of determining such natural person’s net worth. In addition, for purposes of this definition, the related amount of indebtedness secured by the primary residence up to the primary residence’s fair market value may also be excluded, except in the event such indebtedness increased in the 60 days preceding the purchase of our common stock and was unrelated to the acquisition of the primary residence, then the amount of the increase must be included as a liability in the net worth calculation. Moreover, indebtedness secured by the primary residence in excess of the fair market value of such residence should be considered a liability and deducted from the natural person’s net worth.

The managing broker-dealer, those selling shares on our behalf, and soliciting dealers and registered investment advisors recommending the purchase of shares in this offering must make every reasonable effort to determine that the purchase of shares in this offering is a suitable and appropriate investment for each shareholder based on information provided by the shareholder regarding the shareholder’s financial situation and investment objectives. See “Plan of Distribution—Suitability Standards” for a detailed discussion of the determinations regarding suitability that we require.

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SUMMARY OF THE OFFERING

Cottonwood Multifamily REIT II, Inc.

We were formed as a Maryland corporation on June 10, 2016, to acquire and own directly or indirectly real estate investments located throughout the United States, primarily in the multifamily sector. Further, we may also participate in mezzanine loans and preferred equity in limited situations.

We will elect to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, beginning with the taxable year ending December 31, 2016, which may be extended by our board of directors until the taxable year ending December 31, 2017.

Our office is located at 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121, and our main telephone number is (801) 278-0700.

Investment Objectives

Our investment objectives are to:

• preserve, protect and return invested capital;

• pay attractive and stable cash distributions to shareholders; and

• realize capital appreciation in the value of our investments over the long term.

Our board of directors may revise our investment policies without the approval of our shareholders.

Investment Strategy

We will use the net proceeds of this offering to invest directly or indirectly in multifamily apartment communities and multifamily real estate related assets located throughout the United States. We will do all of our investing through our operating partnership and anticipate that all or substantially all of our investments will be made through joint ventures with Cottonwood Residential O.P., LP. In the event that Cottonwood Residential O.P., LP declines to participate in an investment that our board of directors has approved, we may acquire or participate in the investment directly. It is anticipated that our operating partnership and Cottonwood Residential O.P., LP will invest through a special purpose entity for each investment.

We anticipate that our investments will be comprised of stabilized Class A multifamily apartment communities. We will seek to acquire and actively manage income-producing properties, with the objective of providing a stable and secure source of income for our shareholders and maximizing potential returns upon disposition of our assets through capital appreciation. We will primarily target properties that are located in major metropolitan areas in the western, southwestern and southeastern regions of the United States that have, in the opinion of the board of directors, attractive investment dynamics for property owners. We intend to target properties that were constructed after 2000; provided, however, we may invest in older properties if our board of directors determines that it is in our best interest. We, or the joint ventures, will engage Cottonwood Capital Property Management II, LLC to manage our multifamily apartment communities and provide other related services.

In addition to investments in multifamily apartment communities, we may make mezzanine loans or make preferred equity investments to or in entities that have been formed for the purpose of acquiring multifamily apartment communities. We anticipate that the mezzanine loans may have no security, may be directly or indirectly secured by the applicable multifamily apartment community or may be structured so that we or one of the joint ventures have the right to foreclose on the ownership interests in the entity to which we are making the mezzanine loan. We anticipate that we will not have significant voting rights with respect to an entity in which we made a preferred equity investment.

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After we have invested substantially all of the offering proceeds from this offering, we expect that investments in the multifamily apartment communities will directly or indirectly comprise 80% or more of the aggregate cost of our portfolio, while multifamily real estate related assets (which consists of mezzanine loans and preferred equity interests) will comprise 20% or less of the aggregate cost of our portfolio. Our board of directors may revise this targeted portfolio allocation from time to time, or at any time, if it determines that a different portfolio composition is in our shareholders’ best interests.

Investment Committee

We intend to establish an investment committee that will analyze and approve any investment to be made by us. The investment committee will have 5 committee members and is currently comprised of Daniel Shaeffer, Chad Christensen, Gregg Christensen, Paul Fredenberg and Enzio Cassinis. The investment committee may request information from third parties in making its recommendations. The investment committee may be expanded or changed by our board of directors without shareholder approval.

Properties

Acquisition

It is anticipated that we will purchase properties, as described above, pursuant to purchase and sale agreements with unaffiliated sellers. We may also enter into contribution agreements whereby a holder of real estate desires to exchange the real estate for limited partner units in our operating partnership. If this occurs, we will amend and restate the partnership agreement of our operating partnership. The acquisition structure for such properties is currently unknown, but it is anticipated to be as described in “Investment Strategy” above. Cottonwood Residential O.P., LP may acquire multifamily apartment communities and warehouse such asset until we have sufficient funds to acquire the multifamily apartment community. In such event, the purchase price will be equal to the price paid by Cottonwood Residential O.P., LP for such multifamily apartment community.

In the event that the acquisition of a multifamily apartment community requires capital in excess of the amount raised by us, Cottonwood Residential O.P., LP will make a loan to us for the amount of such excess needed to acquire such multifamily apartment community. Any such loan will bear interest at a rate equal to 6% per annum. We will use the proceeds from the sale of shares to repay the principal and accrued interest on any such loan made.

We may have the opportunity to acquire investments during the offering period which require equity in excess of the amount raised by us at the time the investment must be purchased. If any such instances occur, Cottonwood Residential O.P., LP may make temporary loans to us for any amounts we are required to contribute to the joint venture in excess of the amount available by us to invest at the time of acquisition. Any loan made by Cottonwood Residential O.P., LP will bear interest at 6% per annum and will be repaid as additional shares are sold by us.

Financing

We intend to finance the purchase of the multifamily apartment communities with proceeds of this offering and loans obtained from third party lenders. We anticipate the use of moderate leverage to enhance total cash flow to our shareholders. We will target an aggregate loan-to-value ratio for multifamily apartment communities we acquire of between 50% and 70%, based on the purchase price of the multifamily apartment community or the fair market value of the multifamily apartment community at the time that the financing is obtained; provided, however, that we may obtain financing that is less than or exceeds such loan-to-value ratio in the discretion of our board of directors if the board of directors deems it to be in our best interest, or the best interest of our shareholders, to obtain such financing. We anticipate that all financing obtained to acquire multifamily apartment communities will be non-recourse to the joint ventures, our operating partnership and us. However, it is likely that at least one of the joint venture partners, which is anticipated to be Cottonwood Residential O.P., LP, but could also include us, will be required to enter into guaranties for the loans that relate to certain non-recourse carve-outs. The terms of any financing to be obtained are not currently known and we have not obtained any financing commitments for any multifamily apartment communities.

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We may obtain a line of credit or other financing that will be secured by one or more of our assets. We intend to use the proceeds from any line of credit or financing to bridge the acquisition of, or acquire, the multifamily apartment communities and multifamily real estate related assets if our board of directors determines that we require such funds to acquire the multifamily apartment communities or multifamily real estate related assets.

Cottonwood Residential O.P., LP may, but is not obligated to, lend us money. All of the terms and conditions of such loan shall be determined by us and Cottonwood Residential O.P., LP; provided however that the interest rate on any such loan shall not exceed the 10-year Treasury rate plus 600 basis points.

Operations

We anticipate holding and managing our investments until December 31, 2024 (unless sooner dissolved and terminated by our board of directors, otherwise extended or a listing occurs), at which time we will commence an orderly sale of our assets. For more details regarding our liquidity strategy see “Summary of the Offering – Liquidity Strategy” below.

Investment Policy

We will rely on Cottonwood Residential O.P., LP to identify suitable investments. Many investment opportunities that are suitable for us may also be suitable for Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. or other programs sponsored by such persons. Our sponsor has previously formed Cottonwood Multifamily REIT I, Inc. which will have a priority for potential investments until at least 85% of the capital raised by Multifamily REIT I, Inc. has been identified for investment. After such time, it is the intent of Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. and us that, until at least 85% of the capital raised in this offering has been identified for investment or invested in multifamily apartment communities and multifamily real estate related assets, all opportunities to invest in multifamily apartment communities that meet our investment criteria and diversification criteria, subject to a few exceptions, will be first presented by Cottonwood Residential O.P., LP to our operating partnership and our operating partnership will have the right to acquire such multifamily apartment community; provided, however, our operating partnership must have enough equity available to make the required equity investment in such multifamily apartment community. Cottonwood Residential O.P., LP may sponsor other real estate funds and real estate investment trusts in the future which have investment objectives similar to ours. If we have already invested (or identified for investment) at least 85% of the capital raised in this offering and we sell one of our assets, we will not have priority for any suitable investment identified by Cottonwood Residential O.P., LP until the competing entity has invested (or identified for investment) at least 85% of its available capital. Cottonwood Residential O.P., LP may, but is not required to, present potential investments in multifamily real estate related assets to our operating partnership. For more details on how our operating partnership and Cottonwood Residential O.P., LP will minimize such conflicts of interest see the executed Investment Policy Agreement in Exhibit 6.8.

Our Sponsor

Our sponsor is Cottonwood Capital Property Management II, LLC which was formed as a Delaware limited liability company on January 25, 2008. Cottonwood Capital Property Management II, LLC is also referred to as the “property manager” and “asset manager.” The property and asset manager has extensive experience in operating multifamily apartment communities. Cottonwood Capital Property Management II, LLC is headquartered in Salt Lake City, Utah.

Cottonwood Capital Property Management II, LLC is wholly owned by Cottonwood Capital Holdings, LLC, a Delaware limited liability company, which is wholly owned by Cottonwood Capital Management, Inc., a Delaware corporation. Cottonwood Capital Management, Inc. is controlled by its board of directors currently consisting of Daniel Shaeffer, Chad Christensen and Gregg Christensen. The sole shareholder of Cottonwood Capital Management, Inc. is Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP is the operating partnership of Cottonwood Residential, Inc. Cottonwood Residential, Inc. is the sole general partner of Cottonwood Residential O.P., LP and makes all decisions on behalf of Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP has ownership interests in 45 multifamily apartment communities, owns structured investments

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in 3 multifamily apartment communities and is currently involved in the development of 4 multifamily apartment communities. Cottonwood Residential O.P., LP, either directly or through an affiliate, currently owns, operates and/or manages 21,529 multifamily apartment units across 18 states.

Cottonwood Residential, Inc. is controlled by its board of directors currently consisting of Daniel Shaeffer, Chad Christensen, Gregg Christensen, David Robertson and Lance Graber.

Our Board of Directors

We operate under the direction of our board of directors, the members of which are accountable to us and our shareholders as fiduciaries. Our board of directors is responsible for the management and control of our affairs. We currently have three members on our board of directors, all of which are currently on the board of directors and are officers of Cottonwood Residential, Inc. As a result, we do not have independent management.

Our board of directors will be classified into three classes. Each class of directors will be elected for successive terms ending at the annual meeting of the shareholders the third year after election and until his or her successor is elected and qualified. The current board members are Daniel Shaeffer, Chad Christensen and Gregg Christensen. The current Chief Executive Officer is Daniel Shaeffer, the current Chairman of the Board and President is Chad Christensen and the current Executive Vice President & General Counsel is Gregg Christensen.

The board of directors will have the right, with input from our investment committee, to make decisions regarding investments by our operating partnership. We do not have an outside advisor, and we do not plan to engage an advisor.

Capitalization of the Company

Our charter authorizes us to issue: (i) 1,000,000,000 shares of common stock, $0.01 par value per share. Our charter also authorizes the issuance of 100,000,000 shares of preferred stock. At this time, we have not issued any preferred stock.

As of the date of this offering circular, we have issued 1,000 shares of our common stock to Cottonwood Residential O.P., LP at a price of $10,000.

Our Operating Partnership

We will utilize an “umbrella partnership real estate investment trust” or “UPREIT” structure in which all our investments, including our interest in the joint ventures, will be owned through our operating partnership. We are the limited partner and the sole member of the general partner of the operating partnership. For each share purchased pursuant to this offering, CW Multifamily REIT II GP, LLC will acquire one common general partner unit of the operating partnership. We believe that using an UPREIT structure provides us with flexibility regarding our future acquisitions. Our operating partnership may accept contributions of property in exchange for limited partnership units in our operating partnership. If this occurs, we will amend and restate the partnership agreement of our operating partnership.

Capitalization of our Operating Partnership

The operating partnership is currently owned entirely by us, either directly or through a wholly owned subsidiary. It is anticipated that we will make capital contributions to the operating partnership as we raise funds pursuant to this offering.

Joint Ventures

Our operating partnership intends to enter into one or more joint ventures with Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP is the operating partnership of Cottonwood Residential, Inc. The joint ventures will be co-managed by our operating partnership and Cottonwood Residential O.P., LP which means that

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we will be dependent on Cottonwood Residential O.P., LP to make decisions with us regarding our investments. We (through our operating partnership) and Cottonwood Residential O.P., LP will have equal management authority with respect to the joint ventures despite unequal capital contributions and distributions. Our board of directors and officers will direct CW Multifamily REIT II GP, LLC, the general partner of our operating partnership, to direct the operating partnership’s decisions on our behalf regarding the management and operation of the joint ventures between us and Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP will own at least a 10% interest in each joint venture, but the ownership may vary on a joint venture by joint venture basis in Cottonwood Residential O.P., LP’s sole discretion. The capital contributions to each joint venture will initially be made approximately 90% by us and 10% by Cottonwood Residential O.P., LP.

It is anticipated that all of our multifamily apartment communities will be acquired through the joint ventures. If Cottonwood Residential O.P., LP acquires a tenant in common interest in a multifamily apartment community acquired by a joint venture, Cottonwood Residential O.P., LP’s obligation to make capital contributions will be reduced by the amount of equity used by Cottonwood Residential O.P., LP to acquire such tenant in common interest. To the extent that the tenant in common interest represents at least a 10% undivided interest in the multifamily apartment community, Cottonwood Residential O.P., LP will not be required to make any capital contributions to the applicable joint venture in exchange for its interest in such joint venture. Cottonwood Residential O.P., LP will be entitled to receive 20% of net income and distributions from the joint venture even if it has not made any capital contributions to the joint venture. This promotional interest is subordinated to our receipt of an 8% preferred return. Multifamily apartment communities may be acquired directly by our operating partnership in the event that Cottonwood Residential O.P., LP does not want to participate in a transaction which our board of directors has approved. See “Investment Objectives and Criteria” below for a description of the approval process for all investments to be made by us.

Capitalization of the Joint Ventures

The joint ventures will be capitalized by our operating partnership and Cottonwood Residential O.P., LP as multifamily apartment communities or multifamily real estate related assets are ready to be acquired or made.

Distributions from the Joint Ventures

Cash from Operations from each joint venture will be distributed as follows:

(1) First, to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their accrued but undistributed 8% preferred return (as defined in the Form of Joint Venture Agreement in Exhibit 6.4), until the partners have been distributed an amount equal to their accrued but undistributed 8% preferred return;

(2) Second, (i) 50% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and (ii) 50% to Cottonwood Residential O.P., LP, until Cottonwood Residential O.P., LP has received an amount pursuant to this clause (ii) equal to 20% of the amount distributed to the partners (our operating partnership and Cottonwood Residential O.P., LP) pursuant to item 1 and this item 2; and

(3) Thereafter, 80% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and 20% to Cottonwood Residential O.P., LP.

Cash from Capital Transactions from each joint venture will be distributed as follows:

(1) First, to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their accrued but undistributed 8% preferred return (as defined in the Form of Joint Venture Agreement in Exhibit 6.4), until the partners have been distributed an amount equal to their accrued but undistributed 8% preferred return;

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(2) Second, 100% to the partners (our operating partnership and Cottonwood Residential O.P., LP) until their capital accounts are reduced to zero;

(3) Third, (i) 50% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and (ii) 50% to Cottonwood Residential O.P., LP, until Cottonwood Residential O.P., LP has received an amount pursuant to clause (ii) of item 2 under Cash from Operations (above) and this clause (ii) equal to 20% of the total amount distributed to the partners (our operating partnership and Cottonwood Residential O.P., LP) pursuant to item 1 above, this item 3 and items 1 and 2 under Cash from Operations; and

(4) Thereafter, 80% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and 20% to Cottonwood Residential O.P., LP.

Taking into consideration the distributions from Cash From Operations and Cash From Distributions, Cottonwood Residential O.P., LP is effectively receiving a promotional interest equal to 20% of the profits of each joint venture which is subordinated to our receipt of an 8% preferred return. The joint venture will make allocations of income and loss so that the allocations are made in a similar manner to the distributions. Losses will not be passed through to our shareholders.

The following is an example of how Cash from Operations from each joint venture will be distributed.

Joint Venture Distribution Example

			— Scenario A: Upside —										— Scenario B: Down Side —
	Total		Members								Total		Members
			Cottonwood Multifamily REIT II  O.P., LP			Cottonwood Residential  O.P., LP			Cottonwood Residential  O.P., LP				Cottonwood Multifamily  REIT II O.P., LP			Cottonwood Residential  O.P., LP			Cottonwood Residential  O.P., LP
Joint Venture Investment		10,000,000		9,000,000			1,000,000			—		10,000,000		9,000,000			1,000,000			—
Ownership %				90	%		10	%						90	%		10	%
Operating Cash Flow (5-Year Hold)		5,000,000										2,500,000
(1) Preferred Return - 8%				3,600,000			400,000			—				2,250,000			250,000			—
(2) 50/50 Till 20%				450,000			50,000			500,000				—			—			—
(3) 80/20 Thereafter				—			—			—				—			—			—
Total OCF Distribution		5,000,000		4,050,000			450,000			500,000		2,500,000		2,250,000			250,000			—
Cash from Capital Transaction		12,000,000										11,000,000
(1) Preferred Return - 8%				—			—			—				1,350,000			150,000			—
(2) Return of Capital				9,000,000			1,000,000			—				8,550,000			950,000			—
(3) 50/50 Till 20%				450,000			50,000			500,000				—			—			—
(4) 80/20 Thereafter				720,000			80,000			200,000				—			—			—
Total Transaction CF Distribution		12,000,000		10,170,000			1,130,000			700,000		11,000,000		9,900,000			1,100,000			—
TOTAL PROCEEDS		17,000,000		14,220,000			1,580,000			1,200,000		13,500,000		12,150,000			1,350,000			—

(1) Assume 5 year hold.

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Our Structure

The chart below shows the relationships among our company and various affiliates.

* Some multifamily apartment communities and multifamily real estate related assets may be purchased by our operating partnership without Cottonwood Residential, Inc.’s and Cottonwood Residential O.P., LP’s participation. We intend to form one or more joint ventures with Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP will have the option to vary its ownership on a joint venture by joint venture basis in its sole discretion, but in no circumstance will its ownership be less than 10%.

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REIT Status

We intend to qualify as a REIT and to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the year ending December 31, 2016, however, the board of directors may extend such date until the taxable year ending December 31, 2017. To qualify for REIT status, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute at least 90% of our REIT taxable income, determined without regard for any deduction for distributions paid and excluding any net capital gain to our shareholders.

The timing and amount of distributions we pay will be determined by our board of directors in its discretion and may vary from time to time. Generally, our policy will be to make distributions from cash flow from operations. However, we expect to have little, if any, cash flow from operations available for distribution until we make substantial investments. Further, because we may receive income from interest or rents or interest at various times during our fiscal year and because we may need cash flow from operations during a particular period to fund capital expenditures and other expenses, we expect that at least during the early stages of our development and from time to time during our operational stage, we will declare distributions in anticipation of cash flow that we expect to receive during a later period, and we expect to pay these distributions in advance of our actual receipt of these funds. In these instances, our board of directors has the authority under our organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements in its sole discretion. We have not established a limit on the amount of proceeds we may use from this offering to fund distributions. If we make distributions from sources other than cash flow from operations, we will have fewer funds available for investments and your overall return on your investment in us may be reduced.

As a REIT, we generally will not be subject to federal income tax on our REIT taxable income that we distribute to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax at regular corporate rates. Even if we qualify as a REIT, we may still be subject to some federal, state and local taxes on a portion of our income or property. In order for us to maintain our qualification as a REIT, it may be necessary for certain services to be provided by a taxable REIT subsidiary. It is not currently anticipated that we will need a taxable REIT subsidiary.

Terms of the Offering

We are offering up to $50,000,000 in shares of our common stock. We are offering shares at an initial price of $10.00 per share. This is a “all-or-nothing minimum, best-efforts maximum” offering, which means that we are required to obtain subscriptions for at least $2,000,000 of common stock before any common stock is sold to investors. After the minimum of $2,000,000 of common stock have been sold, our managing broker-dealer and the soliciting dealers will use their best efforts to sell our shares of common stock, but are not required to sell any specific amount of our shares of common stock. We are limiting our sales in the state of Texas to no more than $10,000,000 in shares of common stock and in the state of Washington to no more than $5,000,000 in shares of common stock.

Our shares will not be listed for trading on any securities exchange or over-the-counter market at the time you purchase the shares. It is unlikely that any public market for the shares will develop. You should expect to hold your shares for an extended period of time.

Summary Risk Factors

An investment in shares of our common stock involves significant risks, including those described below.

• We have no operating history. There is no assurance that we will be able to successfully achieve our investment objectives.

• Because there is no public trading market for our shares and we are not required to effectuate a liquidity event until December 31, 2024 (unless sooner dissolved and terminated by our board of directors, otherwise extended or a listing occurs), it will be difficult for you to sell your shares. If you are able to sell your shares, you will likely sell them at a substantial discount.

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• There are restrictions and limitations on your ability to have all or any portion of your shares of our common stock repurchased under our share repurchase program, and, if you are able to have your shares repurchased, it may be at a price that is less than the price you paid for the shares or the then-current value of the shares.

• The amount of distributions we may make is uncertain. Our distributions may be paid from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements. We have not established a limit on the amount of proceeds from this offering that we may use to fund distributions. Distributions from sources other than our cash flow from operations would reduce the funds available to us for investments in multifamily apartment communities and multifamily real estate related assets, which could reduce your overall return.

• All of our executive officers and directors are also officers and directors of Cottonwood Residential, Inc., the general partner of Cottonwood Residential O.P., LP, which will be our joint venture partner. As a result, they will likely face conflicts of interest.

• We have not established the offering price on an independent basis and it bears no relationship to the value of our assets.

• You will not have the opportunity to evaluate our investments prior to purchasing shares of our common stock.

• Our ability to raise money and achieve our investment objectives depends on the ability of the managing broker-dealer to successfully market our offering. If we raise substantially less than the maximum offering amount, we may not be able to invest in a diverse portfolio of assets and the value of your investment may vary more widely with the performance of certain investments.

• We will pay certain fees and expenses to Cottonwood Residential O.P., LP and its affiliates. These fees were not negotiated at arm’s length and therefore may be higher than fees payable to unaffiliated third parties.

• We may incur substantial debt in certain circumstances. Our use of leverage increases the risk of your investment. Loans we obtain may be collateralized by some or all of our investments, which will put those investments at risk of forfeiture if we are unable to pay our debts. Principal and interest payments on these loans reduce the amount of money that would otherwise be available for other purposes.

• Volatility in the debt markets could affect our ability to obtain financing for investments or other activities related to real estate assets and the diversification or value of our portfolio, potentially reducing cash available for distribution to our shareholders or our ability to make investments.

• If we fail to continue to qualify as a REIT, it would adversely affect our operations and our ability to make distributions to our shareholders because we will be subject to United States federal income tax at regular corporate rates with no ability to deduct distributions made to our shareholders.

Compensation to Cottonwood Capital Property Management II, LLC and Its Affiliates

Cottonwood Capital Property Management II, LLC and its affiliates receive compensation for services related to this offering and for the acquisition, management and disposition of our assets, subject to review and approval of our board of directors.

(1) Managing Broker-Dealer Fee – Cottonwood Capital Property Management II, LLC will pay our managing broker-dealer a managing broker-dealer fee equal to 3% of the gross offering proceeds. Our managing broker-dealer may re-allow 1% of the managing broker-dealer fee, as a wholesale commission, to certain employees of Cottonwood Residential Inc. or Cottonwood Residential O.P., LP.

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(2) Sales commissions – Cottonwood Capital Property Management II, LLC will pay our managing broker-dealer sales commissions equal to 6% of the gross offering proceeds. Our managing broker-dealer may re-allow such sales commissions to certain employees of Cottonwood Residential Inc. or Cottonwood Residential O.P., LP who sell shares of our common stock.

(3) Property Management Fee – Cottonwood Capital Property Management II, LLC will receive a property management fee in an amount up to 3.5% of the annual gross revenues of our multifamily apartment communities it manages.

(4) Construction Management Fee – Cottonwood Capital Property Management II, LLC will receive for its services in supervising any renovation or construction project in excess of $5,000 in or about each property a construction management fee equal to 5% of the cost of the amount that is expended. In the event that Certis Construction, LLC has been hired as the general contractor with respect to any renovation or construction project, Cottonwood Capital Property Management II, LLC will not receive the construction management fee for such renovation or construction project.

(5) Asset Management Fee – Cottonwood Capital Property Management II, LLC will receive an annual asset management fee in an amount equal to 0.75% of the gross book value of our assets (until such time as our board of directors has established a net asset value of our assets, at which point it shall equal 0.75% of the gross asset value determined pursuant to the most recent net asset value). We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter. The asset management fee will be paid by us and not the joint ventures. As a result, it will be paid from our share of income generated by the joint ventures.

(6) Distributions from joint ventures – Cottonwood Residential O.P., LP will be a member of the joint ventures and will receive distributions and allocations of profits in an amount that exceeds its proportional share of capital contributions to the joint venture. For more details, see the Form of Joint Venture Agreement in Exhibit 6.4. The Form of Joint Venture Agreement will be updated for each joint venture to reflect actual contributions made by our operating partnership and Cottonwood Residential O.P., LP.

(7) Reduced Sales Price – If Cottonwood Residential O.P., LP purchases our operating partnership’s interest, the purchase price to be paid by Cottonwood Residential O.P, LP will be reduced by the customary closing costs, fees and commissions in the jurisdiction in which the multifamily apartment communities are located which would be applied if the joint ventures sold such multifamily apartment communities in a third party sale. For more information regarding the reduced sales price see the executed Purchase Option Agreement in Exhibit 6.7.

(8) Construction Services – Certis Construction, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may be hired as the general contractor for construction related to loss events at the multifamily apartment communities. Certis Construction, LLC will enter into contracts for the applicable repair work for the amount of the insurance award related to the applicable loss. Certis Construction, LLC will have the right to retain the excess over the amount actually incurred by Certis Construction, LLC to perform the required repairs and the contracted amount (i.e. the amount of the insurance proceeds).

(9) Resident Indemnification Program – Resident Indemnity Management, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may enter into contracts with the residents at the multifamily apartment communities for limited renter indemnification. The fee to be received by Residential Indemnity Management, LLC will vary, but will generally be equal to $8 per month per participating resident (though this amount may be higher or lower in some instances). These fees will be paid by residents of the multifamily apartment complex and will not be obligations of us or the joint ventures that own the multifamily apartment communities.

(10) Utility Management Fee – Capital Utility Resources, LLC, an affiliate of Cottonwood Capital Property Management II, LLC may be hired by the joint ventures to provide services related to allocation of the

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utility charges at the applicable multifamily apartment community to each of the residents at such multifamily apartment community. The fees charged by Capital Utility Resources, LLC will vary, based on the multifamily apartment community, from $3.00 to $5.00 per month per residential unit at the multifamily apartment community (though this amount may be higher or lower in some instances). Under some circumstances, the joint ventures that own the multifamily apartment communities may charge the residents at the multifamily apartment community for such services and will have the right to retain such amounts.

(11) Internet and Television Services – Ditaro, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may enter into a contract with each of the joint ventures to provide internet and/or TV services for the multifamily apartment communities. The fees charged by Ditaro, LLC will vary based on market factors where the multifamily apartment community is located and will generally be between $10 and $30 per month per residential unit at the multifamily apartment communities (though this amount may be higher or lower in some instances). The joint ventures intend to charge each resident a fee for internet and/or television services which is anticipated to exceed the fee charged by Ditaro, LLC. The joint ventures will be entitled to retain the excess over the amount of the fee charged by Ditaro, LLC and the amount of the fee charged to the residents.

(12) Vendor Verification – Vendor Verify, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may enter into contracts with all third party vendors that propose to provide services with respect to the multifamily apartment communities. Pursuant to these contracts Vendor Verify, LLC will have the right to perform background checks on the third party vendor and will receive a fee equal to approximately $100 to $150 per vendor (though this amount may be higher or lower with respect to a particular vendor). The fees due to Vendor Verify, LLC will be paid by the third party vendors and will not be obligations of us or the joint ventures.

(13) Property Management Corporate Service Fee – Cottonwood Capital Property Management II, LLC will allocate a fee each month to each of the joint ventures which is intended to allocate certain costs incurred by Cottonwood Capital Property Management II, LLC and its affiliated entities with respect to all assets under management by such entities including, without limitation, technical support, postage, legal fees, travel, payroll services, marketing fees, LRO/revenue management and Yardi services. Cottonwood Capital Property Management II, LLC believes that the size of its management platform results in economies of scale with respect to such costs and relative to what these costs would be if charged by a third party to us or the joint ventures. This fee may vary each month and will be dependent on the number of assets managed by Cottonwood Capital Property Management II, LLC and its affiliates and the actual overhead expenses incurred. Cottonwood Capital Property Management II, LLC will have the right to retain any excess over actual costs and the amount of the fee charged.

(14) Insurance Fee – Cottonwood Capital Property Management II, LLC, through its wholly-owned insurance company, will provide insurance for the multifamily apartment communities and will receive a risk management fee equal to 10% of the insurance premium. Cottonwood Capital Property Management II, LLC will also be entitled to retain any excess of the funded aggregate deductible not used to pay claims. Greentree Risk Management, Inc., a licensed insurance broker affiliated with Cottonwood Capital Property Management II, LLC, will receive 20% of the brokerage fee charged with respect to the placement of all insurance policies for the multifamily apartment communities.

See “Management Compensation” for a more detailed explanation of the fees and expenses payable to Cottonwood Capital Property Management II, LLC and its affiliates. Cottonwood Capital Property Management II, LLC is paying the selling commissions and managing broker-dealer fee in exchange for which it shall become our asset manager and the property manager for our multifamily apartment communities. For more details, see the executed Three-Party Agreement in Exhibit 6.9.

Compensation to Our Managing Broker-Dealer

Cottonwood Capital Property Management II, LLC will pay our managing broker-dealer, Orchard Securities, LLC, selling commissions equal to 6% of the purchase price of the shares sold by soliciting dealers, which it will re-allow to the soliciting dealers. Cottonwood Capital Property Management II, LLC will also pay our managing broker-dealer a managing broker-dealer fee equal to 3% of the purchase price of the shares sold by soliciting dealers, which includes compensation for acting as the managing broker-dealer and for expenses incurred in connection with marketing our shares and wholesaler compensation, some of which may be re-allowed to

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soliciting dealers. Since we are not responsible for paying selling commissions, the managing broker-dealer fee or organization and offering expenses, we estimate that we will use 100% of the gross proceeds from this offering, or $10.00 per share, for investments in multifamily apartment communities and multifamily real estate related assets.

Conflicts of Interest of Directors and Officers

We may experience conflicts of interest with Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. or their affiliates in connection with this offering and the management of our business, including the following:

• the members of our board of directors are also members of the board of directors of Cottonwood Residential, Inc., the general partner of Cottonwood Residential O.P., LP, so there will likely be a conflict of interest between their obligations to Cottonwood Residential O.P., LP and their obligations to us and our operating partnership;

• the directors and officers of Cottonwood Residential, Inc. must allocate their time between advising us and managing Cottonwood Residential, Inc.’s and Cottonwood Residential O.P., LP’s businesses and the other real estate projects and business activities in which they may be involved;

• the compensation payable by us to Cottonwood Residential O.P., LP and its affiliates may not be on terms that would result from arm’s-length negotiations between unaffiliated parties, and are payable regardless of the performance of the investments we make; and

• the property management fees, construction management fees and asset management fees payable to our property and asset manager will generally be payable regardless of the quality of services provided to us.

Share Repurchase Program

Our share repurchase program may provide an opportunity for our shareholders to have their shares of our common stock repurchased by us, subject to certain restrictions and limitations. No shares can be repurchased under our share repurchase program until after the first anniversary of the date of purchase of such shares by the applicable investor.

The purchase price for shares repurchased under our share repurchase program will be as follows:

Share Purchase Anniversary	Repurchase Price
Less than 1 year	No Repurchase Allowed
1 year	80% of Estimated Value(1)
2 years	85% of Estimated Value(1)
3 years	90% of Estimated Value(1)
4 years and thereafter	95% of Estimated Value(1)
In the event of a shareholder’s death or complete disability	95% of Estimated Value(1)

(1) For purposes of the share repurchase program, the “estimated value per share” will equal the purchase price until the day we disclose, subsequent to completion of the offering, a new estimated value per share. During this time period, the purchase price per share will be determined by adjusting for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Thereafter, the estimated value per share (which shall be the net asset value of our common stock) shall be determined by our board of directors. We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter. The purchase price per share for shares repurchased pursuant to the share repurchase program will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to our shareholders prior to the repurchase date as a result of the sale of one or more of our assets that constitutes a return of capital distribution as a result of such sales. For more details on how the board of directors will determine the net asset value see “Risk Factors — Risks Related to This Offering and Our Corporate Structure.”

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We are not obligated to repurchase shares of our common stock under the share repurchase program. We presently intend to limit the number of shares to be repurchased in any calendar year to 3% of the weighted average number of shares of our common stock outstanding during the prior calendar year. We will not repurchase shares if our board of directors determines, in its sole discretion, that the repurchase price determined in accordance with the terms of our share repurchase plan exceeds the then current fair market value of the shares to be repurchased. There is no fee in connection with a repurchase of shares of our common stock.

Subject to the 3% limitation outlined above, our board of directors may, in its sole discretion, choose to use any source of funds to repurchase shares of our common stock. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to shareholders or purchases of real estate assets.

Our board of directors may, in its sole discretion, amend, suspend, or terminate the share repurchase program at any time upon 30 days’ notice to our shareholders if it determines that the funds available to fund the share repurchase program are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase program is in the best interest of our shareholders. Therefore, shareholders may not have the opportunity to make a repurchase request prior to any potential termination of our share repurchase program.

Reporting Requirement

We have to comply with a number of reporting requirements. Pursuant to Rule 257 of Regulation A, we are required to file with the SEC the following periodic and current reports:

(1) Annual reports on Form 1-K that cover, among other things, our business operations, our transactions with related persons, descriptions of our management personnel, management’s discussion and analysis of our liquidity, capital resources and results of operations, and audited financial statements;

(2) Semiannual reports on Form 1-SA that consist primarily of financial statements and management’s discussion and analysis;

(3) Current event reports on Form 1-U, which are required when we experience certain types of events, including, but not limited to, fundamental changes, bankruptcy or receivership, or material modifications to the rights of our shareholders; and

(4) Special financial reports on Form 1-K or Form 1-SA.

Liquidity Strategy

In the future, our board of directors will consider alternatives for providing liquidity to our shareholders, each of which is referred to as a “liquidity event,” including the sale of our assets, a sale or merger of our company or a listing of our shares on a national securities exchange. In making the decision regarding which type of liquidity event to pursue, our board of directors will try to determine which available alternative method would result in the greatest value for our shareholders. Our board of directors has determined that the liquidity event will occur no later than December 31, 2024, also known as the termination date (which may be extended for two 1-year extensions in the sole discretion of our board of directors and may be extended for two additional 1-year extensions by a majority vote of the shareholders). Board approval and shareholder approval of such extension must take place at least three months before the scheduled termination date. If our board of directors does not approve an extension we will begin an orderly sale of our assets within a one-year period from the date our board of directors made the decision not to extend. If we do not get shareholder approval to extend the term we will begin an orderly sale of our assets within a one-year period from date of the shareholder vote. If our shareholders approve the second and last 1-year extension,

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we will begin an orderly sale of our assets within a one-year period from the final termination date (December 31, 2028). The precise timing of such sales would take account of the prevailing real estate finance markets and the debt markets generally as well as the federal income tax consequences to our shareholders. It is possible that we may merge with Cottonwood Residential, Inc.

In the event that a listing occurs on or before the termination date, we will continue perpetually unless dissolved pursuant to a vote of our shareholders or any applicable provision of the Maryland General Corporation Law. A listing shall mean the commencement of trading of our common stock on any securities exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended, any over the counter exchange or, as determined in the sole discretion of our board of directors, any similar exchange that offers sufficient trading to offer similar liquidity to our shareholders. A listing shall also be deemed to occur on the effective date of a merger in which the consideration received by our shareholders is securities of another entity that are listed on any securities exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended, any over the counter exchange or, as determined in the sole discretion of our board of directors, any similar exchange that offers sufficient trading to offer similar liquidity to our shareholders. For more details, see Article XI of our Charter in Exhibit 2.1.

After December 31, 2020, Cottonwood Residential O.P., LP will have the option, in its sole discretion, to purchase our operating partnership’s interest in all, but not less than all, of the joint ventures and any direct interests in real property not held in a joint venture at their fair market value, by delivering written notice to our operating partnership of its election to exercise the purchase option. Our operating partnership and Cottonwood Residential O.P., LP will each appoint one third-party appraiser to provide an estimate of the fair market value of the joint ventures’ assets and the direct interests in real property not held in a joint venture as if such assets were sold as of the date of the notice, reduced by the customary closing costs, fees and commissions in the jurisdiction in which the multifamily apartment communities are located which would be applied if the joint ventures sold such multifamily apartment communities in a third party sale. The selected appraisers will provide their determinations of value. If the two appraised values are within 5% of each other, the value of the investments will be the average of the two appraised values. If the two appraised values are not within 5% of each other, the two selected appraisers will mutually agree upon a third appraiser and the third appraiser will provide an appraised value. The value of the joint ventures’ assets will then be equal to the average of the third appraised value and whichever of the prior appraised values is closest to the third appraised value. The price to be paid for our interest in the joint ventures will be determined as if there was a hypothetical sale of all the joint ventures’ assets at the appraised value (subtracting all liabilities) and a distribution is made pursuant to the terms of each joint venture agreement. Upon the determination of the net value of our interest in the joint ventures and our direct interests in real property not held in a joint venture, Cottonwood Residential O.P., LP will have thirty (30) days to elect whether to complete the purchase option and purchase our operating partnership’s interest in the joint ventures and our direct interests in real property not held in a joint venture. If Cottonwood Residential O.P., LP does not elect to proceed with the purchase option, it will not be permitted to send notice and initiate the appraisal process for a period of six (6) months and all costs and expenses related to the purchase option will be borne by Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP will have the right to restructure the purchase of our interest in the joint ventures to maximize its tax consequences. Cottonwood Residential O.P., LP will have the right to assign this purchase option to an affiliate of Cottonwood Residential O.P., LP. This option will expire upon the earliest of: (i) the sale of the last joint venture’s assets, (ii) December 31, 2030 or (iii) a merger of our company into another REIT, real estate company or other entity. For further details see the executed Purchase Option Agreement in Exhibit 6.7.

Investment Company Act Considerations

We believe we will conduct our operations so that neither we, nor our operating partnership or the subsidiaries of our operating partnership (including the joint ventures) are required to register as investment companies under the Investment Company Act of 1940, as amended, or the Investment Company Act. If we, our operating partnership or any of our subsidiaries (including the joint ventures) were obligated to register as investment companies, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

• limitations on capital structure;

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• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that:

• pursuant to Section 3(a)(1)(A), is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or

• pursuant to Section 3(a)(1)(C) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).

We believe that neither we nor our operating partnership will be required to register as an investment company based on the following analysis. With respect to the 40% test, all of the joint ventures through which we and our operating partnership will own our assets will be majority-owned subsidiaries that will not themselves be investment companies and will not be relying on the exceptions from the definition of investment company under Section 3(c)(1) or Section 3(c)(7).

With respect to the primarily engaged test, we and our operating partnership will be holding companies and do not intend to invest or trade in securities ourselves. Rather, through the joint ventures which will be majority-owned subsidiaries of our operating partnership, we and our operating partnership will be primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real estate and real estate-related assets.

If any of the subsidiaries of our operating partnership, including the joint ventures, fail to meet the 40% test, we believe they will usually, if not always, be able to rely on Section 3(c)(5)(C) of the Investment Company Act for an exception from the definition of an investment company. (Otherwise, they should be able to rely on the exceptions for private investment companies pursuant to Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act.) As reflected in no-action letters, the SEC staff’s position on Section 3(c)(5)(C) generally requires that an issuer maintain at least 55% of its assets in “mortgages and other liens on and interests in real estate,” or qualifying assets; at least 80% of its assets in qualifying assets plus real estate-related assets; and no more than 20% of the value of its assets in other than qualifying assets and real estate-related assets, which we refer to as miscellaneous assets. To constitute a qualifying asset under this 55% requirement, a real estate interest must meet various criteria based on no-action letters. We expect that any of the joint ventures relying on Section 3(c)(5)(C) will invest at least 55% of its assets in qualifying assets, and approximately an additional 25% of its assets in other types of real estate-related assets. If any subsidiary relies on Section 3(c)(5)(C), we expect to rely on guidance published by the SEC staff or on our analyses of guidance published with respect to types of assets to determine which assets are qualifying real estate assets and real estate-related assets.

To maintain compliance with the Investment Company Act, our subsidiaries may be unable to sell assets we would otherwise want them to sell and may need to sell assets we would otherwise wish them to retain. In addition, our subsidiaries may have to acquire additional assets that they might not otherwise have acquired or may have to forego opportunities to make investments that we would otherwise want them to make and would be important to our investment strategy. Moreover, the SEC or its staff may issue interpretations with respect to various types of assets that are contrary to our views and current SEC staff interpretations are subject to change, which increases the risk of non-compliance and the risk that we may be forced to make adverse changes to our portfolio.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this offering circular before purchasing our common stock. If any of the following risks were to occur, our business, financial condition or results of operations could be materially and adversely affected. In these circumstances, the value of our common stock may decline, and you could lose some or all of your investment.

This offering circular contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. You should not rely on these forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our actual results, performance and achievements may be materially different from those expressed or implied by these forward-looking statements.

You should carefully review this section for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Risks Related to Conflicts of Interest

Cottonwood Residential O.P., LP, our officers and the real estate, debt finance, legal, management and accounting professionals we retain will face competing demands on their time and this may cause our operations and our shareholders’ investment to suffer.

We rely on Cottonwood Residential O.P., LP, our officers, and the real estate, debt finance, legal, management, and accounting professionals that we retain to provide services to us for the day-to-day operation of our business. Other Cottonwood Residential O.P., LP sponsored real estate programs are advised by Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. and rely on many of the same real estate, debt finance, legal, management, and accounting professionals, as will future Cottonwood Residential O.P., LP sponsored programs. As a result of their interests in other Cottonwood Residential O.P., LP programs and their obligations to other investors, these professionals will likely face conflicts of interest in allocating their time among us and Cottonwood Residential O.P., LP and other Cottonwood Residential O.P., LP sponsored programs, as well as other business activities in which they are involved. During times of intense activity in other programs and ventures, these individuals may devote less time and fewer resources to our business than are necessary or appropriate to manage our business. If these events occur, the returns on our investments, and the value of your investment, may decline.

All of our executive officers, our directors and the key real estate and debt finance professionals we retain face conflicts of interest related to their positions and/or interests in Cottonwood Residential O.P., LP and its affiliates, which could hinder our ability to implement our business strategy and to generate returns to our shareholders.

All of our executive officers, our directors, and the key real estate and debt finance professionals we retain are also executive officers, directors, managers, key professionals, and/or holders of a direct or indirect controlling interest in Cottonwood Residential O.P., LP. As a result, they owe fiduciary or other duties to each of these entities, their members and limited partners, which fiduciary or other duties may from time to time conflict with the fiduciary or other duties that they owe to us and our shareholders. Their loyalties to these other entities and investors could result in action or inaction that is detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. Cottonwood Residential O.P., LP will be our partner in the joint ventures and may have interests that are different than ours. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to our shareholders and to maintain or increase the value of our assets. Because our board of directors and officers are also directors and officers of Cottonwood Residential, Inc., they may make decisions regarding the management of the properties and the property management agreements which are not in the best interests of our shareholders.

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Our operating partnership and Cottonwood Residential O.P., LP have to agree on investment decisions made by the joint ventures even though we anticipate that we will contribute most of the capital used by the joint ventures to acquire multifamily apartment communities and multifamily real estate related assets.

We anticipate that we, through our operating partnership, will contribute most of the capital used by the joint ventures to acquire multifamily apartment communities and multifamily real estate related assets. All decisions regarding the operations of the joint ventures, including the acquisition of investments, the financing of investments or the disposition of investments, will require the approval of both of our operating partnership and Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP may make a decision regarding the operations of the joint ventures that is not in the best interests of our shareholders. For more details on the capital contributions and management of the joint ventures see “The Form of Joint Venture Agreement.” Each joint venture will use the Form of Joint Venture Agreement attached hereto as Exhibit 6.4, but the form is subject to change to account for changes required by a lender and actual contributions made by our operating partnership and Cottonwood Residential O.P., LP.

Conflicts of interest could result in our management acting other than in our shareholders’ best interest.

We or the joint ventures will be a party to property management agreements with Cottonwood Capital Property Management II, LLC (the form of which is attached hereto as Exhibit 6.6). Cottonwood Capital Property Management II, LLC is indirectly owned by Cottonwood Residential O.P., LP. Because our board of directors and officers are also directors and officers of Cottonwood Residential O.P., LP, they may make decisions regarding the management of the properties and the property management agreements which are not in the best interests of our shareholders.

We may compete with affiliates of Cottonwood Residential O.P., LP for opportunities to acquire or sell multifamily apartment communities and multifamily real estate related assets, which may have an adverse impact on our operations. We may also buy or sell multifamily apartment communities and multifamily real estate related assets at the same time as affiliates of Cottonwood Residential O.P., LP. There may be a conflict of interest with respect to the selection of multifamily apartment communities and multifamily real estate related assets to be purchased by us and/or Cottonwood Residential O.P., LP and its affiliates. Cottonwood Residential O.P., LP may own competing properties in the markets in which our multifamily apartment communities are located which may lead to conflicts of interests with respect to the operations and management of our multifamily apartment communities. For more details on how we, Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. will handle potential investment opportunities see “Conflicts of Interest – Allocation of Investment Opportunities.”

The fees we pay to affiliates in connection with the management of our assets and investments were determined without the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

The fees paid to our property and asset manager for services it provides for us were determined without the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties, may be in excess of amounts that we would otherwise pay to third parties for such services and may reduce the amount of cash that would otherwise be available for investments in multifamily apartment communities and multifamily real estate related assets and distributions to our shareholders.

Cottonwood Capital Property Management II, LLC or its affiliates has sponsored other entities and offerings and may sponsor additional entities and offerings in the future.

Cottonwood Capital Property Management II, LLC has sponsored Cottonwood Multifamily REIT I, Inc. which has investment objectives that are similar to us. In addition, it is possible that Cottonwood Capital Property Management II, LLC or its affiliates may form future REITs and entities that may invest in assets that are similar to the multifamily apartment communities and multifamily real estate related assets we intend to acquire. As a result, the conflicts of interest with respect to time, selection of investments and management of our investments may increase if Cottonwood Capital Property Management II, LLC or its affiliates sponsor additional programs.

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We and the joint ventures will enter into long-term contracts with Cottonwood Capital Property Management II, LLC that cannot be terminated unless Cottonwood Capital Property Management II, LLC is fraudulent or grossly negligent.

We intend to enter into long-term contracts with Cottonwood Capital Property Management II, LLC for the asset management of our assets and the joint ventures will enter into long-term property management contracts with Cottonwood Capital Property Management II, LLC with respect to the property management of each of the multifamily apartment communities. Because these contracts cannot be terminated other than in the event of fraud, gross negligence or willful misconduct by Cottonwood Capital Property Management II, LLC, there may be conflicts of interest with respect to the performance of Cottonwood Capital Property Management II, LLC’s of its obligations under those contracts.

Risks Related to an Investment in our Common Stock

Because no public trading market for your shares currently exists, it will be difficult for you to sell your shares and, if you are able to sell your shares, you will likely sell them at a substantial discount to the offering price.

We are not required to effectuate a liquidity event until December 31, 2024 (unless sooner dissolved and terminated by our board of directors, otherwise extended or a listing occurs). In addition, our charter does not require us to list our shares for trading on a securities exchange by a specified date. There is currently no public market for our shares and we currently have no plans to list our shares on a securities exchange. Any subsequent sale must comply with applicable state and federal securities laws. Our charter prohibits the ownership of more than 9.8% of our stock, unless exempted by our board of directors, which may inhibit large investors from desiring to purchase your shares. Moreover, our share repurchase program includes numerous restrictions that limit your ability to sell your shares to us, and our board of directors may amend, suspend, or terminate our share repurchase program upon 30 days’ notice. We describe the restrictions of our share repurchase program in detail under “Description of Shares—Share Repurchase Program.” Therefore, it will be difficult for you to sell your shares promptly or at all. If you are able to sell your shares, you will likely have to sell them at a substantial discount to their offering price. It is also likely that your shares will not be accepted as the primary collateral for a loan. You should purchase our shares only as a long-term investment because of the illiquid nature of the shares.

We will face significant competition for multifamily apartment communities and multifamily real estate related assets, which may limit our ability to acquire suitable investments and achieve our investment objectives or make distributions.

We will be competing to acquire multifamily apartment communities and multifamily real estate related assets with other REITs, real estate limited partnerships, pension funds and their advisors, bank and insurance company investment accounts, and other entities. Many of our competitors have greater financial resources, and a greater ability to borrow funds to acquire properties, than we do. We cannot be sure that the board of directors will be successful in obtaining suitable investments on financially attractive terms or that, if investments are made, our objectives will be achieved.

If we are unable to find suitable investments or if we raise substantial offering proceeds in a short period of time and are unable to invest all of the net offering proceeds promptly, we may not be able to achieve our investment objectives or make distributions.

The more money we raise in this offering, the greater our challenge will be to invest all of the net offering proceeds on attractive terms. If we are unable to promptly find suitable multifamily apartment communities or multifamily real estate related assets, we will hold the proceeds from this offering in an interest-bearing account or invest the proceeds in short-term investments and may, ultimately, liquidate. We could also suffer from delays in locating suitable investments. In addition, pursuant to our investment policy, Cottonwood Multifamily REIT I, Inc. will have a priority over us with respect to potential investments until Cottonwood Multifamily REIT I, Inc. has invested (or identified for investment) at least 85% of its capital. Our reliance on our board of directors and investment committee and the real estate professionals that such persons retain to identify suitable investments for us at times when such persons are simultaneously seeking to identify suitable investments for other affiliated programs could also delay the investment of the proceeds of this offering. Delays we encounter in the selection and acquisition of income-producing multifamily apartment communities or the acquisition or origination of multifamily real estate related assets would likely limit our ability to make distributions to you and reduce your overall returns.

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If capitalization rates increase the value of our assets may decrease and we may not be able to sell our assets at anticipated prices.

The value of real estate is generally based on capitalization rates. Capitalization rates generally trend with interest rates. Consequently, if interest rates go up, so do capitalization rates. Based on historical interest rates, current interest rates are low, as are current capitalization rates. However, if interest rates rise in the future, it is likely that capitalization rates will also rise, and as a result, the value of real estate will decrease. If capitalization rates increase, our assets will likely achieve a lower sales price than anticipated, resulting in reduced returns.

Continued disruptions in the financial markets and uncertain economic conditions could adversely affect market rental rates, multifamily real estate values and our ability to secure debt financing, service future debt obligations or make distributions to our shareholders.

Disruptions in the financial markets and uncertain economic conditions could adversely affect the values of any investments we make. The United States economy experienced a significant downturn beginning in 2008, from which it is still recovering. While there has been a partial recovery in the real estate sector, it is still unclear how stable the real estate markets currently are or will be once the government pulls back from its unprecedented participation in the bond market to keep interest rates low. As a result, there can be no assurance that our assets will achieve anticipated cash flow levels. Turmoil in the capital markets has constrained equity and debt capital available for investment in multifamily apartment communities, resulting in fewer buyers seeking to acquire multifamily apartment communities and possible increases in capitalization rates and lower property values. Further, recent world events evolving out of increased terrorist activities and the political and military responses of the targeted countries have created an air of uncertainty concerning security and the stability of world and United States economies. Historically, successful terrorist attacks have resulted in decreased travel and tourism to the affected areas, increased security measures and disturbances in financial markets. It is impossible to determine the likelihood of any future terrorist attacks on United States targets, the nature of any United States response to such attacks or the social and economic results of such events. Furthermore, uncertain economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our future multifamily real estate portfolio and in the collateral securing any loan investments we may make. These could have the following negative effects, any of which could impair our ability to make distributions to you:

• the values of any investments in multifamily apartment communities could decrease below the amounts we pay for such investments;

• the value of collateral securing any mezzanine, bridge or preferred equity investments could decrease below the outstanding principal amounts of such loans or preferred equity;

• revenues from the properties we acquire could decrease due to lower demand for multifamily rental units or lower rental rates, making it more difficult for us to make distributions or meet our debt service obligations on debt financings; and/or

• revenues from any multifamily apartment communities and other assets underlying any loan or preferred equity investments we make could decrease, making it more difficult for the borrower to meet its payment obligations to us, which could in turn make it more difficult for us to make distributions or meet any future debt service obligations.

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Because our shareholders will not have the opportunity to evaluate any investments we may make with the proceeds from this offering before we make them, we are considered to be primarily a blind pool. We may make investments with which our shareholders do not agree.

We have not identified any investments that we plan to make with the proceeds from this offering. As a result, we are not able to provide you with any information to assist you in evaluating the merits of any other specific assets that we may acquire. We will seek to invest substantially all of the net proceeds from this offering, after the payment of fees and expenses, in the acquisition of or investment in interests in multifamily apartment communities and multifamily real estate related assets. However, because we have not yet identified any properties or other assets to acquire with the proceeds from this offering, our board of directors and investment committee have broad discretion when identifying, evaluating and making such investments. You will have no opportunity to evaluate the transaction terms or other financial or operational data concerning specific investments before we invest in them. Furthermore, our board of directors and investment committee will have broad discretion in implementing policies regarding tenant or mortgagor creditworthiness and you will likewise have no opportunity to evaluate potential tenants, managers or borrowers. As a result, you must rely on our board of directors and our investment committee to identify and evaluate our investment opportunities, and they may not be able to achieve our business objectives, may make unwise decisions or may make investments with which you do not agree. See “Investment Objectives and Criteria, Properties – Acquisition” for a summary of a potential multifamily apartment community acquisition.

If we raise substantially less than the maximum amount in this offering, adverse investment performance, increased expenses, and our fixed operating expenses will have a more significant adverse impact on our ability to achieve our business objectives and to make distributions than if we raise the maximum amount in this offering.

Our common stock is being offered on a “all-or-nothing minimum, best-efforts maximum” basis and no individual, firm or corporation has agreed to purchase any of our common shares in this offering. If we raise substantially less than the maximum amount of funds in this offering, we may make fewer investments than we would if we are able to raise the maximum amount of funds in this offering. In that case, the likelihood that any single asset’s performance would adversely affect our profitability will increase. In addition, we will incur certain fixed operating expenses, such as costs incurred to secure insurance for our directors and officers, regardless of our size. Our failure to raise the maximum amount in this offering would increase our fixed operating expenses as a percentage of gross income, reducing our net income and cash flow and limiting our ability to make distributions to you.

If we fail to diversify our investment portfolio, downturns relating to certain geographic regions, types of assets, industries or business sectors may have a more significant adverse impact on our assets and our ability to make distributions than if we had a diversified investment portfolio.

While we intend to diversify our portfolio of investments in the manner described in this offering circular, we are not required to observe specific diversification criteria. Therefore, our investments in multifamily apartment communities and multifamily real estate related assets may be concentrated in assets that are subject to higher risk of foreclosure or concentrated in a limited number of geographic locations. To the extent that our portfolio is concentrated in limited geographic regions, downturns relating generally to such region may result in defaults on a number of our investments within a short time period, which may reduce our net income and the value of our common stock and accordingly limit our ability to make distributions to you.

We have no operating history and we may not be able to operate our business successfully or generate sufficient revenue to make or sustain distributions to our shareholders.

We were incorporated in the State of Maryland on June 10, 2016 and have no operating history. As of the date of this offering circular, we have not made any investments and our total assets consist of $10,000 of cash. We cannot assure you that we will be able to operate our business successfully or implement our operating policies and strategies described in this offering circular. We can provide no assurance that our performance will replicate the past performance of Cottonwood Residential O.P., LP or Cottonwood Residential, Inc. or any program sponsored by Cottonwood Residential O.P., LP or Cottonwood Residential, Inc. Our investment returns could be substantially

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lower than the returns achieved by Cottonwood Residential O.P., LP. The results of our operations depend on several factors, including the availability of opportunities for the acquisition of target assets, the level and volatility of interest rates, the availability of short and long-term financing, and conditions in the financial markets and economic conditions.

We are dependent upon our board of directors and our access to the real estate experience of Cottonwood Residential O.P., LP and its affiliates.

We have no employees and have no separate facilities and are substantially reliant on our access to Cottonwood Residential O.P., LP and its resources to implement our business strategy. If our relationship with Cottonwood Residential O.P., LP and its real estate professionals is terminated for any reason, it will be difficult for us to implement our business strategy or manage our portfolio unless we engage another party to provide the services to be provided by Cottonwood Residential O.P., LP, its affiliates and employees.

If we make distributions from sources other than our cash flow from operations, we will have less funds available for investment in multifamily apartment communities and multifamily real estate related assets and the overall return to our shareholders may be reduced.

Our charter permits us to make distributions from any source, including offering proceeds or borrowings (which may constitute a return of capital), and our charter does not limit the amount of funds we may use from any source to pay such distributions. If we fund distributions from financings, the net proceeds from this or future offerings or other sources, we will have less funds available for investment in multifamily apartment communities and other multifamily real estate related assets and the number of real estate properties that we invest in and the overall return to our shareholders may be reduced. If we fund distributions from borrowings, our interest expense and other financing costs, as well as the repayment of such borrowings, will reduce our earnings and cash flow from operations available for distribution in future periods. If we fund distributions from the sale of assets or the maturity, payoff or settlement of multifamily real estate related assets, this will affect our ability to generate cash flows from operations in future periods.

We expect to have little, if any, cash flow from operations available for distribution until we make substantial investments. During our offering stage, when we may raise capital in this offering (and possibly future offerings) more quickly than we acquire income-producing assets, and for some period after our offering stage, we may not be able to make distributions solely from our cash flow from operations. Further, because we may receive income from our investments at various times during our fiscal year and because we may need cash flow from operations during a particular period to fund capital expenditures and other expenses, we expect that at least during the early stages of our existence and from time to time during our operational stage, we will declare distributions in anticipation of cash flow that we expect to receive during a later period and we will pay these distributions in advance of our actual receipt of these funds. In these instances, we expect to look to third party borrowings to fund our distributions. We may also fund such distributions from the sale of assets or from the maturity, payoff or settlement of debt investments. To the extent distributions exceed cash flow from operations, a shareholder’s basis in our stock will be reduced and, to the extent distributions exceed a shareholder’s basis, the shareholder may recognize capital gain.

Our rights and the rights of our shareholders to take action against our directors and officers are limited.

Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter eliminates our directors’ and officers’ liability to us and our shareholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment and which is material to the cause of action. Our bylaws require us to indemnify our directors and officers to the maximum extent permitted by Maryland law for liability actually incurred in connection with any proceeding to which they may be made, or threatened to be made, a party, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was either committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property or services, or, in the case of any criminal

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proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. As a result, we and our shareholders may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our directors and officers.

We may change our targeted investments without shareholder consent.

We may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our shareholders, which could result in our making investments that are different from, and possibly riskier than, the investments described in this offering circular. A change in our targeted investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of our common stock and our ability to make distributions to you.

Risks Related to This Offering and Our Corporate Structure

Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our shareholders.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. To help us comply with the REIT ownership requirements of the Internal Revenue Code, our charter prohibits a person from directly or constructively owning more than 9.8% of our outstanding shares, unless exempted by our board of directors. This restriction may have the effect of delaying, deferring, or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.

Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common shareholders or discourage a third party from acquiring us in a manner that could result in a premium price to our shareholders.

Our board of directors may classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of preferred stock with priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Such preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.

Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.

Neither we nor any of our subsidiaries intend to register as investment companies under the Investment Company Act. If we, our operating partnership or any of our subsidiaries (including the joint ventures) were obligated to register as investment companies, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

• limitations on capital structure;

• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

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• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that:

• pursuant to Section 3(a)(1)(A), is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or

• pursuant to Section 3(a)(1)(C) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).

We believe that neither we nor our operating partnership will be required to register as an investment company based on the following analysis. With respect to the 40% test, all of the joint ventures through which we and our operating partnership will own our assets will be majority-owned subsidiaries that will not themselves be investment companies and will not be relying on the exceptions from the definition of investment company under Section 3(c)(1) or Section 3(c)(7).

With respect to the primarily engaged test, we and our operating partnership will be holding companies and do not intend to invest or trade in securities ourselves. Rather, through the joint ventures which will be majority-owned subsidiaries of our operating partnership, we and our operating partnership will be primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real estate and real estate-related assets.

If any of the subsidiaries of our operating partnership, including the joint ventures, fail to meet the 40% test, we believe they will usually, if not always, be able to rely on Section 3(c)(5)(C) of the Investment Company Act for an exception from the definition of an investment company. (Otherwise, they should be able to rely on the exceptions for private investment companies pursuant to Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act.) As reflected in no-action letters, the SEC staff’s position on Section 3(c)(5)(C) generally requires that an issuer maintain at least 55% of its assets in “mortgages and other liens on and interests in real estate,” or qualifying assets; at least 80% of its assets in qualifying assets plus real estate-related assets; and no more than 20% of the value of its assets in other than qualifying assets and real estate-related assets, which we refer to as miscellaneous assets. To constitute a qualifying asset under this 55% requirement, a real estate interest must meet various criteria based on no-action letters. We expect that any of the joint ventures relying on Section 3(c)(5)(C) will invest at least 55% of its assets in qualifying assets, and approximately an additional 25% of its assets in other types of real estate-related assets. If any subsidiary relies on Section 3(c)(5)(C), we expect to rely on guidance published by the SEC staff or on our analyses of guidance published with respect to types of assets to determine which assets are qualifying real estate assets and real estate-related assets.

To maintain compliance with the Investment Company Act, our subsidiaries may be unable to sell assets we would otherwise want them to sell and may need to sell assets we would otherwise wish them to retain. In addition, our subsidiaries may have to acquire additional assets that they might not otherwise have acquired or may have to forego opportunities to make investments that we would otherwise want them to make and would be important to our investment strategy. Moreover, the SEC or its staff may issue interpretations with respect to various types of assets that are contrary to our views and current SEC staff interpretations are subject to change, which increases the risk of non-compliance and the risk that we may be forced to make adverse changes to our portfolio.

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If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business. For more information related to compliance with the Investment Company Act, see “Investment Company Objectives and Criteria – Investment Limitations under the Investment Company Act of 1940.”

Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exception from the definition of an investment company under the Investment Company Act.

If the market value or income potential of our qualifying real estate assets changes as compared to the market value or income potential of our non-qualifying assets, or if the market value or income potential of our assets that are considered “real estate-related assets” under the Investment Company Act or REIT qualification tests changes as compared to the market value or income potential of our assets that are not considered “real estate-related assets” under the Investment Company Act or REIT qualification tests, whether as a result of increased interest rates, prepayment rates or other factors, we may need to modify our investment portfolio in order to maintain our REIT qualification or exception from the definition of an investment company. If the decline in asset values or income occurs quickly, this may be especially difficult, if not impossible, to accomplish. This difficulty may be exacerbated by the illiquid nature of many of the assets that we may own. We may have to make investment decisions that we otherwise would not make absent REIT and Investment Company Act considerations.

Our shareholders will have limited control over changes in our policies and operations, which increases the uncertainty and risks our shareholders face.

Our board of directors determines our major policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the shareholders. Under Maryland General Corporation Law and our charter, our shareholders have a right to vote only on limited matters. Our board of directors’ broad discretion in setting policies and our shareholders’ inability to exert control over those policies increases the uncertainty and risks our shareholders face.

Our shareholders may not be able to sell their shares under our share repurchase program and, if our shareholders are able to sell their shares under the program, they may not be able to recover the amount of their investment in our shares.

Our share repurchase program includes numerous restrictions that limit your ability to sell your shares. You must hold your shares for at least one year in order to participate in the share repurchase program, except for repurchases sought upon a shareholder’s death or complete disability (as defined in the program). We limit the number of shares repurchased pursuant to the share repurchase program in any calendar year to 3% of the weighted average number of shares outstanding during the prior calendar year. We will not repurchase shares if our board of directors determines, in its sole discretion, that the repurchase price determined in accordance with the terms of the share repurchase program exceeds the then current fair market value of the shares to be repurchased. Further, we have no obligation to repurchase shares if the repurchase would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. These limits may prevent us from accommodating all repurchase requests made in any year.

Under our share repurchase program, shares may be repurchased at varying prices depending on (a) the number of years the shares have been held, (b) the estimated value per share and (c) whether the repurchases are sought upon a shareholder’s death or complete disability. Thus, if your shares are repurchased by us pursuant to our repurchase plan, it is possible that you will receive less than the fair market value of the shares at the time of such repurchase.

Our board of directors may amend, suspend or terminate our share repurchase program upon 30 days’ notice to shareholders. See “Description of Shares—Share Repurchase Program” for more information about the program. The restrictions of our share repurchase program will severely limit your ability to sell your shares should you require liquidity and limit your ability to recover the value you invest in our common stock.

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The offering price of our shares was not established in reliance on a valuation of our assets and liabilities; the actual value of your investment may be substantially less than what you pay.

We established the offering price of our shares on an arbitrary basis. The selling price of our shares bears no relationship to our book or asset values or to any other established criteria for valuing shares. We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter. Our net asset value will be determined either (i) by taking into consideration our net investment in the joint ventures and any other multifamily apartment communities or multifamily related assets owned by us or (ii) by third party appraisal or broker opinion of value. The method used in any year will be selected by our board of directors.

We may offer our shares of common stock in future offerings at different prices.

We may offer shares of our common stock in future offerings. The price for the shares in such offerings may be higher or lower than the amount set forth in this offering. As a result, you could be diluted.

Our investors’ interest in us will be diluted if we issue additional shares, which could reduce the overall value of their investment.

Potential investors in this offering will not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 1,100,000,000 shares of capital stock, of which 1,000,000,000 shares are designated as common stock and 100,000,000 shares are designated as preferred stock. We are only issuing 5,000,000 shares of common stock pursuant to this offering. Our board of directors may increase the number of authorized shares of capital stock without shareholder approval. After your purchase in this offering, our board of directors may elect to (i) sell additional shares in this or future offerings; (ii) issue equity interests in private offerings; or (iii) otherwise issue additional shares of our capital stock. To the extent we issue additional equity interests after your purchase in this offering your percentage ownership interest in us would be diluted. In addition, depending upon the terms and pricing of any additional offerings, the use of the proceeds and the value of our real estate investments, you may also experience dilution in the book value and fair value of your shares and in the earnings and distributions per share.

Our shareholders may be more likely to sustain a loss on their investment because Cottonwood Residential O.P., LP does not have a strong economic incentive to avoid losses.

Cottonwood Residential O.P., LP is only required to invest a maximum of 10% of the required equity in each multifamily apartment community and multifamily real estate related asset acquired by the joint ventures. Pursuant to the form of joint venture agreement (the form of which is attached hereto as Exhibit 6.4), Cottonwood Residential O.P., LP will receive a promotional interest equal to 20% of the profits of the joint venture, after an 8% preferred return. In addition, each joint venture will be treated individually so that if any of the joint ventures sustain a loss it will have no impact on the distributions made by the other joint ventures. Cottonwood Residential O.P., LP is not required to disgorge any amounts (pursuant to a clawback) distributed to it by any of the joint ventures. Thus, Cottonwood Residential O.P., LP will receive a 20% promotional interest from one joint venture even if another joint venture sustains a loss. Because Cottonwood Residential O.P., LP is afforded protection from losses sustained by the joint ventures, Cottonwood Residential O.P., LP may have investment objectives that are dissimilar to ours and may be willing to invest in higher risk assets. Cottonwood Residential O.P., LP may not have the same investment objectives as us when identifying potential investment opportunities for us or the joint ventures. As a result, our portfolio may consist of higher risk assets.

Although we will not currently be afforded the protection of the Maryland General Corporation Law relating to deterring or defending hostile takeovers, our board of directors could opt into these provisions of Maryland law in the future, which may discourage others from trying to acquire control of us and may prevent our shareholders from receiving a premium price for their shares in connection with a business combination.

Under Maryland law, “business combinations” between a Maryland corporation and certain interested shareholders or affiliates of interested shareholders are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. These business combinations include a merger,

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consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. Also under Maryland law, control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the corporation, or an employee of the corporation who is also a director of the corporation are excluded from the vote on whether to accord voting rights to the control shares. Should our board of directors opt into these provisions of Maryland law, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. Similarly, provisions of Title 3, Subtitle 8 of the Maryland General Corporation Law could provide similar anti-takeover protection. For more information about the business combination, control share acquisition and Subtitle 8 provisions of Maryland law, see “Description of Shares—Business Combinations” and “Description of Shares—Control Share Acquisitions.”

Our charter includes an anti-takeover provision that may discourage a shareholder from launching a tender offer for our shares.

Our charter provides that any tender offer made by a shareholder, including any “mini-tender” offer, must comply with most provisions of Regulation 14D of the Securities Exchange Act of 1934, as amended. The offering shareholder must provide our company notice of such tender offer at least 10 business days before initiating the tender offer. If the offering shareholder does not comply with these requirements, our company will have the right to redeem that shareholder’s shares and any shares acquired in such tender offer. In addition, the noncomplying shareholder will be responsible for all of our company’s expenses in connection with that shareholder’s noncompliance. This provision of our charter may discourage a shareholder from initiating a tender offer for our shares and prevent you from receiving a premium price for your shares in such a transaction.

Our ability to successfully conduct our offering is dependent, in part, on the ability of the managing broker-dealer to hire and retain key employees and to successfully establish, operate and maintain a network of broker-dealers.

The managing broker-dealer for this offering is Orchard Securities, LLC, a Utah limited liability company, which we refer to as our managing broker-dealer. The success of this offering and our ability to implement our business strategy is dependent upon the ability of the managing broker-dealer to hire and retain key employees and to establish, operating and maintain a network of licensed securities broker-dealer, or selling group members. If our managing broker-dealer is unable to hire qualified employees and build a sufficient network of selling group members, we may not be able to raise adequate proceeds through this offering to implement our investment strategy. If we are unsuccessful in implementing our investment strategy, you could lose all or a part of your investment.

Breaches of our data security could materially harm us, including our business, financial performance and reputation.

We collect and retain certain personal information provided by our residents and employees. Security measures we have implemented to protect the confidentiality of this information and periodically review and improve our security measures may not prevent unauthorized access to this information. Any breach of our data security measures and loss of this information may result in legal liability and costs (including damages and penalties), as well as damage to our reputation, that could materially and adversely affect us, including our business and financial performance.

Certain investors in Cottonwood Residential, Inc. could cause a change in control of Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP.

Cottonwood Residential, Inc. has issued stock and warrants to certain institutional investors which include the right to cause a change in the management and control of Cottonwood Residential, Inc. under certain circumstances. If these institutional investors exercise this right, Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP, the sole member of our joint venture partners, will be controlled by third parties. In such event, it is possible that the goals of Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP will be different than our goals, and there may not be a method to resolve such conflict.

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Cottonwood Residential O.P., LP may acquire a tenant in common interest in a multifamily apartment community acquired by a joint venture.

Cottonwood Residential O.P., LP may acquire a tenant in common interest in a multifamily apartment community acquired by a joint venture. In such case, Cottonwood Residential O.P., LP’s obligation to make capital contributions will be reduced by the amount of equity used by Cottonwood Residential O.P., LP to acquire such tenant in common interest. To the extent that the tenant in common interest represents at least a 10% undivided interest in the multifamily apartment community, Cottonwood Residential O.P., LP will not be required to make any capital contributions to the applicable joint venture in exchange for its interest in such joint venture. Cottonwood Residential O.P., LP will be entitled to receive 20% of net income and distributions from the joint venture even if it has not made any capital contributions to the joint venture. In addition, Cottonwood Residential O.P., LP may sell their tenant in common interest prior to the sale of such multifamily apartment community by the joint venture, but will continue to receive its share of profits and distributions of the joint venture.

Some of the multifamily apartment communities may be owned through tenant in common structures with Cottonwood Residential O.P., LP.

Cottonwood Residential O.P., LP may acquire a tenant in common interest in a multifamily apartment community acquired by a joint venture. The joint venture and Cottonwood Residential O.P., LP will enter into a tenants in common agreement with respect to any such multifamily apartment community. The tenants in common agreement will restrict the right of the tenants in common to take certain actions, including the sale or financing of such multifamily apartment community, without the unanimous consent of the tenants in common. As a result, any multifamily apartment community owned as a tenant in common will have greater restrictions with respect to the operation, financing and disposition of such multifamily apartment community.

Some of the prior programs of Cottonwood Residential O.P., LP and its predecessor entities have not met the anticipated performance levels.

Cottonwood Residential O.P., LP and its predecessor, Cottonwood Capital, LLC have sponsored a number of prior real estate programs. Some of these prior real estate programs have not achieved the leasing and operational thresholds projected by Cottonwood Residential O.P, LP or Cottonwood Capital, LLC. As a result, the returns to investors in some of these prior real estate programs may not have met the expected thresholds. See “Prior Performance Summary.”

Some of the current or potential selling group members have disclosure events under Rule 262 of Regulation A.

This offering is intended to be made in compliance with Regulation A promulgated under the Securities Act. The SEC has recently changed the requirements of Regulation A offerings to include a prohibition on the participation of certain “bad actors.” We will obtain representations from the managing broker-dealer and the selling group members that the applicable party is not a “bad actor” as that term is defined in Rule 262 of Regulation A. In the event that a statutory “bad actor” participates in the offering, we may lose our exemption from registration for the sale of securities. Pursuant to Rule 262(d) of Regulation A, certain events that would otherwise have designated an offering participant as a “bad actor” but which occurred prior to the effective date of Rule 262, are required to be disclosed to all potential investors. In order to comply with the requirements of Rule 262(d) of Regulation A, we are required to inform potential investors of state sanctions on current or potential selling group members.

VFG Securities, Inc., a selling group member in the offering, has notified us and the managing broker-dealer that VFG Securities, Inc. and an affiliate (VFG Advisors, Inc.) entered into a Stipulation for Consent Order Concerning VFG Securities, Inc. and VFG Advisors, Inc. with the Securities Commissioner of the State of Colorado on May 21, 2012 whereby VFG Securities, Inc. consented to the Consent Order Concerning VFG Securities, Inc. and VFG Advisors, Inc. The consent order alleged that VFG Securities, Inc. employed an unlicensed sales representative and permitted such unlicensed sales representative to engage in securities transactions in Colorado in violation of Section 11-51-401, C.R.S. and Commission Rules 3 CCR 51-4.8H and M (IA). The consent order provided, among other requirements, that for a period of 3 years from the date of the consent order, VFG Securities, Inc. is prohibited from soliciting, recruiting or otherwise engaging any new clients in the state of Colorado.

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Berthel Fisher & Company Financial Services, Inc., a selling group member in the offering, has notified us and the managing broker-dealer that Berthel Fisher & Company Financial Services, Inc. is subject to certain orders from several state securities commissions as follows:

On June 4, 2013, Berthel Fisher & Company Financial Services, Inc. entered into a consent order with the state of South Dakota Division of Securities. The consent order is related to alleged violations of South Dakota statute 47-31B-412(d)(13) regarding the suitability of sales of certain alternative investments to residents of South Dakota. In connection with the consent order, Berthel Fisher & Company Financial Services, Inc. agreed to provide rescission to 12 investors in the aggregate amount of $69,000.

On December 7, 2007, Berthel Fisher & Company Financial Services, Inc. entered in to a consent order with the state of Nebraska Department of Banking & Finance. The consent order is related to alleged violations of Nebraska statute 8-1101(a) regarding a lack of supervision in the payment of transaction based compensation. In connection with the consent order, Berthel Fisher & Company Financial Services, Inc. agreed to pay a fine of $5,000.

On September 21, 2006, Berthel Fisher & Company Financial Services, Inc. entered into a consent order with the state of North Dakota Securities Commissioner. The consent order is related to alleged violations of North Dakota statute 10-04-15 regarding a misrepresentation of an agent in connection with the sale of certain variable annuities to residents of North Dakota, including an allegation that Berthel Fisher & Company Financial Services, Inc. failed to properly supervise such agent. Berthel Fisher & Company Financial Services, Inc. agreed to pay a fine of $8,000. In addition, on July 28, 2004, Berthel Fisher & Company Financial Services, Inc. entered into another consent order with the State of North Dakota Securities Commissioner. This consent order is related to an alleged violation of North Dakota statute 10-04-11 regarding the failure to supervise agents and a violation of North Dakota statute 10-04-15 regarding a failure to properly disclose the outside business activities of a registered representative and a failure to disclose a prior consent order. Berthel Fisher & Company Financial Services, Inc. agreed to pay a fine of $20,000.

In addition to the above, several representatives who are agents of Berthel Fisher & Company Financial Services, Inc. are restricted from the sale of securities pursuant to Regulation A of the Securities Act.

Newbridge Securities Corporation, a selling group member in the offering, has notified us and the managing broker-dealer that Newbridge Securities Corporation is subject to certain orders from several state securities commissions concerning alleged violations regarding the obligation to properly disclose transaction handling fees charged by Newbridge Securities Corporation to its investors. The orders to which Newbridge Securities Corporation is subject are as follows: (i) on November 10, 2011, Newbridge Securities Corporation entered into a consent order with the Connecticut Department of Banking regarding the allegations, and agreed to reimburse each Connecticut customer for the handling fee, and Newbridge Securities Corporation agreed to pay a fine of $10,000 to Connecticut; (ii) on February 1, 2013, Newbridge Securities Corporation entered into a consent order with the New Jersey Bureau of Securities regarding the allegations, and Newbridge Securities Corporation agreed to grant a 10% discount on all fees and/or commission charges to New Jersey residents for 6 months following the date of the consent order, as well as pay a civil penalty of $15,000 to New Jersey; (iii) on February 10, 2013, Newbridge Securities Corporation entered into a stipulation and consent agreement with the State of Florida, Office of Financial Regulation regarding the allegations, and agreed to pay an administrative fine of $40,000 to Florida; and (iv) on April 2, 2013, Newbridge Securities Corporation entered into a consent order with the Arkansas Securities Commissioner regarding the allegations, and agreed to refund and return handling fees in the total amount of $17,377.44 to Arkansas investors.

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Concorde Investment Services, LLC, a selling group member in the offering, has notified us and the managing broker-dealer that it has determined that a registered representative is subject to final orders of certain state securities commissions as follows:

On July 8, 2012, a registered representative currently associated with Concorde Investment Services, LLC (James Crawford, CRD #1327638, details available at http://brokercheck.finra.org/), was subject to a final order of the state securities commission based on a violation of a law or regulation that prohibits fraudulent, manipulative, or deceptive conduct. Without consenting or denying the findings, the registered representative was temporarily suspended for a three-month period ending March 23, 2013 for violating portions of the Virginia Administrative Code. However, the State Corporate Commission has stated that the order should not be construed, and is no way intended, to serve as a basis for any statutory disqualification nor is the effect of the order intended to reach conduct governed by other states, or matters regulated by FINRA or the SEC.

On January 22, 2013, a registered representative currently associated with Concorde Investment Services, LLC (Thomas Fanning, CRD #1107203, details available at http://brokercheck.finra.org/), was temporarily suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for an act or omission to act constituting conduct inconsistent with just and equitable principles of trade until March 21, 2013. Without consenting or denying the findings, the registered representative was temporarily suspended for violating FINRA/NASD Rules 2010, 2110 and 2370 and actions contrary to the former broker dealer’s written procedures.

On November 20, 2007, a registered representative currently associated with Concorde Investment Services, LLC (Frank Dunn, CRD #1075960, details available at http://brokercheck.finra.org/), in order for the registered representative to avoid expending further time and money, entered into a Consent Order with the Oregon Department of Consumer and Business Services, Division of Finance and Corporate Securities. The Consent Order was based on findings, which registered representative neither admitted nor denied, while acting as the sole managing member of a limited liability company, lent himself funds without interest, specific authority or documentation, but subsequently repaid the full amount of the loans. While not engaged in the securities industry or possessing a license at the time, the Consent Order concluded that the registered representative violated ORS § 59.205(2) and placed conditions on the registered representative’s license, business and supervision for a period of 5 years (expired December 5, 2012) and reimbursement of $7,500 for the division’s investigation costs.

Madison Avenue Securities, Inc., a selling group member in the offering, has notified us and the managing broker-dealer that it has determined that one of its registered representatives is subject to final orders of certain state securities commissions as follows: Jeffrey Raymond Dixson (CRD# 4166311), associated with Madison Avenue Securities, Inc., entered into a Stipulation and Consent Order Levying a Fine with State of Washington Office of Insurance Commissioner on December 19, 2007, whereby Jeffrey Raymond Dixson consented to the order. The order stated that Jeffrey Raymond Dixson sold variable annuities to Washington residents that were not approved by the Washington Office of the Insurance Commissioner, and that Jeffrey Raymond Dixson falsely represented that the variable annuity applications were signed in Oregon, a violation of Revised Code of Washington Section 48.30.040. The order provided, among other requirements, that Jeffrey Raymond Dixson pay a fine equal to $6,000, of which $3,000 was suspended pending Jeffrey Raymond Dixson’s completion of multiple conditions in the order, and that Jeffrey Raymond Dixson not engage in making false statements or representations in or relative to applications for insurance.

Madison Avenue Securities, Inc. further determined that another of its registered representatives is subject to final orders of certain state securities commissions as follows: Douglas John McCauley (CRD# 1257811), associated with Madison Avenue Securities, Inc., entered into an Order Imposing Administrative Sanctions and Consent to Same with what was then known as the

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Vermont Department of Banking, Insurance, Securities & Healthcare Administration (now the Department of Financial Regulation) on August 22, 2008, whereby Douglas John McCauley consented to such order. The order stated that Douglas John McCauley engaged in the practices of an Investment Advisor without proper licensure in violation of Vermont Securities Act Section 4213(f) and that Douglas John McCauley made a false statement to the Department of Financial Regulation, a violation of Vermont Securities Act Section 4224a(d). The order provided, among other requirements, that Douglas John McCauley pay a fine equal to $13,000, that he consent to the entry of an order setting forth special supervisory requirements if Douglas John McCauley should ever seek to become registered with the Department of Financial Regulation in any investment-related capacity and barring Douglas John McCauley from association with a registered broker-dealer and investment advisor for a period of 6 months which ended on the date of the order.

Thomas Michael Baer (CRD# 1663820) (“Baer”), associated with Madison, entered into a Consent Order with the Insurance Commissioner of the Commonwealth of Pennsylvania on July 9, 2009 (the “Baer Order”), whereby Baer consented to the Baer Order. The Baer Order stated that Baer sold insurance policies to customers where signatures indicated the sale was made in Ohio when in fact the customers lived, signed and purchased the policies in Pennsylvania. Such acts of Baer were in violation of Purdon’s Pennsylvania Statutes, Section 310.11(7) which prohibits licensees from the use of fraudulent, coercive or dishonest practices or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of doing business in the Commonwealth of Pennsylvania. The Baer Order provided, among other requirements, that Baer pay a civil penalty equal to $10,000, and that Baer cease and desist from engaging in false or fraudulent statements on insurance company applications.

Independent Financial Group, LLC (“IFG”), a selling group member in the offering, has notified the Company and the Managing Broker Dealer that it has determined that a registered representative is subject to final orders of certain state securities commissions as follows:

Ralph Hendry (CRD #2422745) (“Hendry”), associated with IFG, entered into a Settlement Order with the Virginia Division of Securities on September 24, 2008 (the “Hendry Settlement Order”). The Hendry Settlement Order was based on alleged violations of the Virginia Securities Act and the Commission’s Rules and Regulations, which Hendry neither admitted nor denied. The Virginia Division of Securities alleged that, among other alleged violations, Hendry violated (i) Section 13.1-502(2) of the Virginia Securities Act by offering and selling stock in a company that did not legally exist to a client without the associated broker-dealer’s knowledge and (ii) Rule 21 VAC 5-20-280.B.3 by establishing and maintaining an account containing fictitious information in order to execute transactions which would otherwise be unlawful or prohibited. Pursuant to the Hendry Settlement Order, Hendry agreed to pay a penalty equal to $20,000 and investigative costs equal to $1,300.

Thomas Doncaster (CRD #1926394) (“Doncaster”), associated with IFG, entered into a Consent Order with the Washington Department of Financial Institutions – Securities Division (the “WA Division”) on November 10, 2011 (the “Doncaster Consent Order”). The Doncaster Order was based on findings, which Doncaster neither admitted nor denied, that Doncaster offered and sold unsuitable variable annuities to customers, falsified account applications, provided clients with unauthorized financial projections, and engaged in other misleading conduct. The Doncaster Consent Order found, among other things, that Doncaster violated Revised Code of Washington (“RCW”) Section 21.20.010 (the anti-fraud section of the Securities Act of Washington (the “Washington Securities Act”), which was a dishonest or unethical business practice under RCW Section 21.20.110(1)(g) and Washington Administrative Code Section 460-22B-090, because Doncaster made untrue statements of material fact, engaged in manipulative or deceptive practices, and/or omitted to state material facts necessary in order to make the statements made, in light of the circumstances in which they were made, not misleading. Pursuant to the Doncaster Consent Order, Doncaster agreed to cease and desist from violating certain sections of the Washington Securities Act, and he agreed to pay the Securities Division the costs and other expenses in the investigation of the matter equal to $7,000.

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We may add additional selling group members who may be subject to disclosure requirements. In such event, we will supplement this offering with the required disclosures. There may also be additional state sanctions against selling group members in the future of which we will be required to inform potential investors.

General Risks Related to Investments in Real Estate

We will not be diversified with respect to the class of assets that we own.

We will invest, through our operating partnership and the joint ventures, solely in multifamily apartment communities and multifamily real estate related assets. While we intend to invest in a significant number of properties across several geographical locations and markets, we will not invest in a diverse set of asset classes. Further, we have no plans to acquire any assets other than assets consisting of multifamily apartment communities and multifamily real estate related assets. Therefore, each of our investments could be subject to the same or similar rental property related risks and a decline in real estate values in general or a change in economic conditions which affects real property investment and rental markets could have a substantial adverse effect on our financial performance.

There are risks inherent in the acquisition and management of multifamily apartment communities.

There are risks associated with the operation of multifamily apartment communities, including, but not limited to, vacillations in the demand for residential space; risk of loss or damage to the improvements, tenant improvements, or property of tenants; environmental risks and other risks associated with ownership of real estate.

Rental levels at the multifamily apartment communities that we acquire can vary over time and we may not be able to maintain the occupancy rates we anticipate.

We will make our determination regarding the acquisition of multifamily apartment communities that we acquire based, among other things, on the property’s projected rent levels. However, there can be no assurance that a multifamily apartment community will continue to be occupied at the projected rents. If the tenants of the properties do not renew or extend their leases, if tenants default under their leases at the properties, if issues arise with respect to the permissibility of certain uses at the properties, if tenants of the properties terminate their leases, or if the terms of any renewal (including concessions to the tenants) are less favorable than existing lease terms, the operating results of the properties could be substantially affected. As a result, we may not be able to make distributions to the shareholders at the anticipated levels.

It may be difficult for us to attract new tenants to the multifamily apartment communities.

There can be no assurance that we will be able to maintain the occupancy rates at the multifamily apartment communities. The tenants at any multifamily apartment communities may have the right to terminate their leases upon the occurrence of specified events. It is anticipated that the majority of leases at the properties will be for terms of 1 year or less.

Our inability to sell a multifamily apartment community at the time and on the terms we want could limit our ability to pay cash distributions to our shareholders.

Many factors that are beyond our control affect the real estate market and could affect our ability to sell multifamily apartment communities for the price, on the terms or within the time frame that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a multifamily apartment community on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our multifamily apartment communities at a profit. Our inability to sell multifamily apartment communities at the time and on the terms we want could reduce our cash flow and limit our ability to make distributions to our shareholders and could reduce the value of your investment.

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Actions by Cottonwood Residential O.P., LP our joint venture partner, could reduce the returns on joint venture investments and decrease our shareholders’ overall return.

We will acquire substantially all of our assets in the joint ventures with Cottonwood Residential O.P., LP. Making investments with an investment partner presents certain risks including, for example, the following risks:

• that Cottonwood Residential O.P., LP could become insolvent or bankrupt;

• that Cottonwood Residential O.P., LP may refuse or be unable to make capital contributions when due;

• that Cottonwood Residential O.P., LP may at any time have economic or business interests or goals that are or that become inconsistent with our business interests or goals;

• that Cottonwood Residential O.P., LP may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives;

• that we may be liable for the actions of Cottonwood Residential O.P., LP and its activities could adversely affect our ability to qualify as a REIT; or

• that disputes between us and Cottonwood Residential O.P., LP may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our operations.

Any of the above might subject a property to liabilities in excess of those contemplated and thus reduce our returns on that investment and the value of your investment.

We may have no or only limited recourse for any problems later identified for multifamily apartment communities we acquire, which could materially and adversely affect us, including our results of operations.

We anticipate sellers of multifamily apartment communities will sell such properties “as is,” “where is” and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase and sale agreements may contain limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The purchase of multifamily apartment communities with no or limited warranties increases the risk that we may lose some or all of our invested capital in the property, as well as the loss of rental income from that multifamily apartment community, which could materially and adversely affect us.

Costs imposed pursuant to governmental laws and regulations may reduce our net income and the cash available for distributions to our shareholders.

Real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to protection of the environment and human health. We could be subject to liability in the form of fines, penalties or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials and other health and safety-related concerns.

Some of these laws and regulations may impose joint and several liability on the tenants, owners or operators of real property for the costs to investigate or remediate contaminated properties, regardless of fault, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. Activities of our tenants, the condition of properties at the time we buy them, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.

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The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder our ability to sell, rent, or pledge such property as collateral for future borrowings. Any material expenditures, fines, penalties or damages we must pay will reduce our ability to make distributions and may reduce the value of your investment.

Potential liability for environmental matters could adversely affect our financial condition.

Although we intend to subject our multifamily apartment communities to an environmental assessment prior to acquisition, we may not be made aware of all the environmental liabilities associated with a property prior to its purchase. There may be hidden environmental hazards that may not be discovered prior to acquisition. The costs of investigation, remediation or removal of hazardous substances may be substantial. In addition, the presence of hazardous substances on one of our properties, or the failure to properly remediate a contaminated property, could adversely affect our ability to sell or rent the property or to borrow using the property as collateral.

Various federal, state and local environmental laws impose responsibilities on an owner or operator of real estate and subject those persons to potential joint and several liabilities. Typical provisions of those laws include:

• responsibility and liability for the costs of investigation, removal, or remediation of hazardous substances released on or in real property, generally without regard to knowledge of or responsibility for the presence of the contaminants;

• liability for claims by third parties based on damages to natural resources or property, personal injuries, or costs of removal or remediation of hazardous or toxic substances in, on, or migrating from our property;

• responsibility for managing asbestos-containing building materials, and third-party claims for exposure to those materials; and

• environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require expenditures.

Costs associated with complying with the Americans with Disabilities Act and the Fair Housing Amendment Act may decrease cash available for distributions.

Our properties may be subject to the Americans with Disabilities Act of 1990, as amended, or the Disabilities Act and the Fair Housing Amendment Act, as amended, or the Fair Housing Act. Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons and may require owners of multifamily dwellings to make reasonable exceptions in their policies and operations to afford people with disabilities equal housing opportunities. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties, or, in some cases, an award of damages. The Fair Housing Act requires multifamily dwellings first occupied after March 13, 1991 to comply with design and construction requirements related to access and use by disabled persons. Any funds used for Disabilities Act and Fair Housing Act compliance will reduce our net income and the amount of cash available for distributions to you.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on our shareholders’ investment.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution, or environmental matters, that are uninsurable or not economically

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insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, which may increase our cost of obtaining financing. We may not have adequate coverage for such losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of your investment. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to you.

The properties will include certain amenities for the residents at the properties that could increase the potential liabilities at the properties.

In addition to the apartment buildings, the properties will be improved with various amenities, such as swimming pools, exercise rooms, playgrounds, laundry facilities, business centers and/or rentable club houses. Certain claims could arise in the event that a personal injury, death, or injury to property should occur in, on, or around any of these improvements. In addition, certain of the multifamily apartment communities may be located in areas where dangerous wildlife lives which could pose dangers to the residents at the applicable property. There can be no assurance that particular risks pertaining to these improvements that currently may be insured will continue to be insurable on an economical basis or that current levels of coverage will continue to be available. If a loss occurs that is partially or completely uninsured, we may lose all or part of their investment. We may be liable for any uninsured or underinsured personal injury, death or property damage claims. Liability in such cases may be unlimited but shareholders will not be personally liable.

Competition and any increased affordability of single-family residential homes could limit our ability to lease our apartments or maintain or increase rents, which may materially and adversely affect us, including our financial condition, cash flows, results of operations and growth prospects.

The multifamily industry is highly competitive, and we face competition from many sources, including from other multifamily apartment communities both in the immediate vicinity and the geographic market where our properties are and will be located. If so, this would increase the number of apartment units available and may decrease occupancy and unit rental rates. Furthermore, multifamily apartment communities we acquire compete, or will compete, with numerous housing alternatives in attracting residents, including owner occupied single and multifamily homes available to rent or purchase. The number of competitive properties and/or condominiums in a particular area, or any increased affordability of owner occupied single and multifamily homes caused by declining housing prices, mortgage interest rates and government programs to promote home ownership, could adversely affect our ability to retain our residents, lease apartment units and maintain or increase rental rates. These factors could materially and adversely affect us.

Increased construction of similar multifamily apartment communities that compete with our properties in any particular location may materially and adversely affect us, including our results of operations and our cash available for distribution to our shareholders.

We may acquire multifamily apartment communities in locations that experience increases in construction of properties that compete with our properties. This increased competition and construction could make it more difficult for us to find residents to lease units in our multifamily apartment communities and/or force us to lower our rental rates in order to lease units in our properties, which could substantially reduce our revenues and could have a material adverse effect on us. In addition, overbuilding of multifamily apartment communities may occur.

We may be unable to secure funds for future capital improvements, which could adversely impact our ability to make cash distributions to our shareholders.

When residents do not renew their leases or otherwise vacate their apartment unit, in order to attract replacement residents, we may be required to expend funds for capital improvements to the vacated apartment homes. In addition, we may require substantial funds to renovate a multifamily apartment community in order to sell

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it, upgrade it or reposition it in the market. If we have insufficient capital reserves, we will have to obtain financing from other sources. We intend to establish capital reserves in an amount we, in our discretion, believe is necessary. A lender also may require escrow of capital reserves in excess of any established reserves. If these reserves or any reserves otherwise established are designated for other uses or are insufficient to meet our cash needs, we may have to obtain financing from either affiliated or unaffiliated sources to fund our cash requirements. We cannot assure our shareholders that sufficient financing will be available or, if available, will be available on economically feasible terms or on terms acceptable to us. Moreover, certain reserves required by lenders may be designated for specific uses and may not be available for capital purposes such as future capital improvements. Additional borrowing for capital needs and capital improvements will increase our interest expense, and therefore our financial condition and our ability to make cash distributions to our shareholders may be adversely affected.

Our multifamily apartment communities are subject to property taxes that may increase in the future, which could adversely affect our cash flow.

Our multifamily apartment communities are subject to real and personal property taxes that may increase as tax rates change and as the multifamily apartment communities are assessed or reassessed by taxing authorities. As the owner of the multifamily apartment communities, we are ultimately responsible for payment of the taxes to the applicable government authorities. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the real property and the real property may be subject to a tax sale.

Increases in costs to own and maintain our properties may materially and adversely affect us, including our results of operations and cash flows.

We may experience increased costs associated with operating expenses, including capital improvements, routine property maintenance, real estate taxes and utility expenses. Any increases in our expenses to own and maintain our properties would consequently reduce our results of operations and cash flows.

After December 31, 2020, Cottonwood Residential O.P., LP will have the option to purchase our operating partnership’s interest in all, but not less than all, of the joint ventures and any direct interests in real property not held in a joint venture at their fair market value.

Pursuant to the Purchase Option Agreement (attached hereto as Exhibit 6.7), Cottonwood Residential O.P., LP will have the option, after December 31, 2020, to purchase our operating partnership’s interest in all, but not less than all, of the joint ventures and any direct interests in real property not held in a joint venture at their fair market value. This option may limit the market of potential buyers of our multifamily apartment communities or multifamily real estate related assets, as well as the number of potential merger partners. In addition, Cottonwood Residential O.P., LP may decide to exercise its option at a time when the value of our multifamily apartment communities or multifamily real estate related assets are low.

Risks Related to Multifamily Real Estate Related Assets

Our investments in multifamily real estate related assets will be subject to the risks typically associated with real estate.

Our investments in mezzanine, or other real estate loans will generally be directly or indirectly secured by a lien on real property (or the equity interests in an entity that owns real property) that, upon the occurrence of a default on the loan, could result in our taking ownership of the entity that owns the real estate. We will not know whether the values of the multifamily apartment communities ultimately indirectly securing our loans will remain at the levels existing on the dates of origination or acquisition of those loans. If the values of the underlying multifamily apartment communities drop, our risk will increase because of the lower value of the security associated with such loans. In this manner, real estate values could impact the values of our loan investments. Therefore, our multifamily real estate related assets will be subject to the risks typically associated with real estate, which are described above under the heading “General Risks Related to Investments in Real Estate.”

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The mezzanine and bridge loans in which we may invest would involve greater risks of loss than loans secured by a first deed of trust or mortgage on property.

We may invest in mezzanine and bridge loans that take the form of subordinated loans secured by a pledge of the ownership interests of either the entity owning (directly or indirectly) the real property or the entity that owns the interest in the entity owning the real property. These types of investments may involve a higher degree of risk than long-term senior mortgage lending secured by income-producing real property because the investment may become unsecured as a result of foreclosure by the senior lender. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt. As a result, we may not recover some or all of our investment. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the real property and increasing the risk of loss of principal.

We may invest in the preferred equity of other entities, the management of which may adversely affect our business.

We may invest in the preferred equity of other entities. However, we will not control the management, investment decisions, or operations of these companies. Management of those enterprises may decide to change the nature of their assets, or management may otherwise change in a manner that is not satisfactory to us. We will have no ability to affect these management decisions and we may have only limited ability to dispose of our investments.

Risks Associated with Debt Financing

We are likely to obtain mortgage indebtedness and other borrowings, which increases our risk of loss due to potential foreclosure.

We plan to obtain long-term financing that may be secured by our multifamily apartment communities. In some instances, we may acquire multifamily apartment communities by financing a portion of the price of the multifamily apartment communities and mortgaging or pledging some or all of the multifamily apartment communities purchased as security for that debt. We may also incur mortgage debt on multifamily apartment communities that we already own in order to obtain funds to acquire additional multifamily apartment communities, to fund property improvements and other capital expenditures, to make distributions, and for other purposes. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income to our shareholders (computed without regard to the dividends-paid deduction and excluding net capital gain). We, however, can give our shareholders no assurance that we will be able to obtain such borrowings on satisfactory terms.

Incurring mortgage debt increases the risk of loss of a multifamily apartment community since defaults on indebtedness secured by a multifamily apartment community may result in lenders initiating foreclosure actions. In that case, we could lose the multifamily apartment community securing the loan that is in default, reducing the value of our shareholders’ investment. For tax purposes, a foreclosure of any of our multifamily apartment communities would be treated as a sale of the multifamily apartment community for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure even though we would not necessarily receive any cash proceeds. We may give full or partial guaranties to lenders of mortgage debt on behalf of the entities that own our multifamily apartment communities. When we give a guaranty on behalf of an entity that owns one of our multifamily apartment communities, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single multifamily apartment community could affect many multifamily apartment communities.

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Our multifamily apartment communities and multifamily real estate related assets may be cross-collateralized.

We may obtain a line of credit or other debt financing which we may utilize to acquire multifamily apartment communities and multifamily real estate related assets. Thus, our assets may be cross-collateralized. We have not obtained a commitment for the line of credit. Therefore, the amount and terms of the line of credit are uncertain and will be negotiated by our officers. No assurance can be given that future cash flow will be sufficient to make the debt service payments on any loans and to cover all operating expenses. If our revenues are insufficient to pay debt service and operating costs, we may be required to seek additional working capital. There can be no assurance that such additional funds will be available. The degree to which we are leveraged could have an adverse impact on us, including (i) increased vulnerability to adverse general economic and market conditions, (ii) impaired ability to expand and to respond to increased competition, (iii) impaired ability to obtain additional financing for future working capital, capital expenditures, general corporate or other purposes and (iv) requiring that a significant portion of cash provided by operating activities be used for the payment of debt obligations, thereby reducing funds available for operations and future business opportunities.

High mortgage rates or changes in underwriting standards may make it difficult for us to finance or refinance multifamily apartment communities, which could reduce the number of multifamily apartment communities we can acquire, our cash flows from operations and the amount of cash distributions we can make.

If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of multifamily apartment communities. If we place mortgage debt on a multifamily apartment community, we run the risk of being unable to refinance part or all of the multifamily apartment community when the debt becomes due or of being unable to refinance on favorable terms. If interest rates are higher when we refinance multifamily apartment communities, our income could be reduced. We may be unable to refinance or may only be able to partly refinance multifamily apartment communities if underwriting standards, including loan to value ratios and yield requirements, among other requirements, are more strict than when we originally financed the multifamily apartment communities. If any of these events occurs, our cash flow could be reduced and/or we might have to pay down existing mortgages. This, in turn, would reduce cash available for distribution to our shareholders, could cause us to require additional capital and may hinder our ability to raise capital by issuing more shares or by borrowing more money.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our shareholders.

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan agreements we enter into may contain covenants that limit our ability to further mortgage a property or that prohibit us from discontinuing insurance coverage. These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives.

Increases in interest rates could increase the amount of our debt payments and limit our ability to make distributions to our shareholders.

We expect that we will incur debt in the future and increases in interest rates will increase the cost of that debt, which could reduce the cash we have available for distributions. Additionally, if we incur variable-rate debt, increases in interest rates would increase our interest costs, which would reduce our cash flows and our ability to make distributions to our shareholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.

We have broad authority to incur debt and high debt levels could hinder our ability to make distributions and decrease the value of our shareholders’ investment.

Our charter does not limit us from incurring debt. High debt levels would cause us to incur higher interest charges and higher debt service payments and may also be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our shareholders’ investment.

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Interest-only indebtedness may increase our risk of default and ultimately may reduce our funds available for distribution to our shareholders.

We may obtain loans that require interest-only payments for a number of years before we are required to make payments on the principal. During the interest-only period, the amount of each scheduled payment will be less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest- only period, we will be required either to make scheduled payments of amortized principal and interest or to make a lump-sum, or “balloon,” payment at maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan. If the mortgage loan has an adjustable interest rate, the amount of our scheduled payments also may increase at a time of rising interest rates. Increased payments and substantial principal or balloon maturity payments will reduce the funds available for distribution to our shareholders because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.

We are uncertain of our sources for funding our future capital needs. If we do not have sufficient funds from operations to cover our expenses or to fund improvements to our multifamily apartment communities and cannot obtain debt or equity financing on acceptable terms, our ability to cover our expenses or to fund improvements to our multifamily apartment communities may be adversely affected.

The net proceeds of this offering will be used primarily for investments in multifamily apartment communities and multifamily real estate related assets. To date, we have not had sufficient funds from operations to cover all of our expenses. Accordingly, in the event that we develop a need for additional capital in the future for the improvement of our multifamily apartment communities or for any other reason, sources of funding may not be available to us. If we do not have sufficient funds from cash flow generated by our assets or out of net sale proceeds, or cannot obtain debt or equity financing on acceptable terms, our financial condition and ability to make distributions may be adversely affected.

The derivative financial instruments that we may use to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment.

We may use derivative financial instruments, such as interest rate cap or collar agreements and interest rate swap agreements, to hedge exposures to changes in interest rates on loans secured by our assets, but no hedging strategy can protect us completely. These agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and that these arrangements may not be effective in reducing our exposure to interest rate changes. We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT gross income tests.

We may not have sufficient funds to pay interest payments if the interest rates increase significantly.

It is anticipated that loans we obtain may have variable interest rates. In the event that the interest rate on any loan increases significantly, we may not have sufficient funds to pay the required interest payments. In such event, the continued ownership of the applicable multifamily apartment community may be threatened.

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Federal Income Tax Risks

Failure to qualify as a REIT would reduce our net earnings available for investment or distribution.

Our qualification as a REIT will depend upon our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets, and other tests imposed by the Internal Revenue Code. If we fail to qualify as a REIT for any taxable year after electing REIT status, we will be subject to federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to shareholders because of the additional tax liability. In addition, distributions to shareholders would no longer qualify for the dividends-paid deduction and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax. For a discussion of the REIT qualification tests and other considerations relating to our election to be taxed as a REIT, see “Material Federal Income Tax Considerations.”

Even if we qualify as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to our shareholders.

Even if we qualify as a REIT for federal income tax purposes, we may be subject to some federal, state and local taxes on our income or property. For example:

• In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to our shareholders (which is determined without regard to the dividends-paid deduction or net capital gain). To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will generally be subject to federal corporate income tax on the undistributed income.

• We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income, and 100% of our undistributed income from prior years.

• If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

• If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax unless such sale were made by one of our taxable REIT subsidiaries or we qualified for a “safe harbor” under the Internal Revenue Code.

We intend to make distributions to our shareholders to comply with the REIT requirements of the Internal Revenue Code.

The ownership limits that apply to REITs, as prescribed by the Internal Revenue Code and by our charter, may inhibit market activity in shares of our common stock and restrict our business combination opportunities.

In order for us to qualify as a REIT, not more than 50% in value of our outstanding shares of stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) at any time during the last half of each taxable year after the first year for which we elect to qualify as a REIT. Additionally, at least 100 persons must beneficially own our stock during at least 335 days of a taxable year (other than the first taxable year for which we elect to be taxed as a REIT). Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Our charter also provides that, unless exempted by our board of directors, no person may own more than 9.8% by value or number of shares, whichever is more restrictive, of our outstanding shares of common stock, or 9.8% by

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value or number of shares, whichever is more restrictive, of our outstanding capital stock. Our board of directors may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations and undertakings, prospectively or retroactively, waive the ownership limit or establish a different limit on ownership, or excepted holder limit, for a particular shareholder if the shareholder’s ownership in excess of the ownership limit would not result in our being “closely held” under Section 856(h) of the Internal Revenue Code or otherwise failing to qualify as a REIT. These ownership limits could delay or prevent a transaction or a change in control of our company that might involve a premium price for our shares of common stock or otherwise be in the best interest of our shareholders.

REIT distribution requirements could adversely affect our ability to execute our business plan.

To qualify as a REIT, we must distribute to our shareholders each year 90% of our REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gain). From time to time, we may generate taxable income greater than our income for financial reporting purposes, or our taxable income may be greater than our cash flow available for distribution to shareholders (for example, where a borrower defers the payment of interest in cash pursuant to a contractual right or otherwise). If we do not have other funds available in these situations we could be required to borrow funds, sell investments at disadvantageous prices, or find another alternative source of funds to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

To maintain our REIT status, we may be forced to forego otherwise attractive opportunities, which may delay or hinder our ability to meet our investment objectives and reduce our shareholders’ overall return.

To qualify as a REIT, we must satisfy certain tests on an ongoing basis concerning, among other things, the sources of our income, nature of our assets, and the amounts we distribute to our shareholders. We may be required to make distributions to shareholders at times when it would be more advantageous to reinvest cash in our business or when we do not have funds readily available for distribution. Compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits and the value of our shareholders’ investment.

The tax on prohibited transactions will limit our ability to engage in transactions that would be treated as sales for federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of assets, other than foreclosure property, deemed held primarily for sale to customers in the ordinary course of business (subject to a safe harbor under the Internal Revenue Code for certain sales). It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through taxable REIT subsidiaries. However, to the extent that we engage in such activities through taxable REIT subsidiaries, the income associated with such activities may be subject to full corporate income tax.

We may be subject to adverse legislative or regulatory tax changes.

At any time, the federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be amended. We cannot predict when or if any new federal income tax law, regulation or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation, or administrative interpretation.

The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.

We may make mezzanine loans. The Internal Revenue Service has provided a safe harbor in Revenue Procedure 2003-65 for structuring mezzanine loans so that they will be treated by the Internal Revenue Service as a

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real estate asset for purposes of the REIT asset tests, and interest derived from mezzanine loans will be treated as qualifying mortgage interest for purposes of the 75% gross income test, as discussed below. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. We may make mezzanine loans that do not meet all of the requirements of the safe harbor. In the event a mezzanine loan does not meet the safe harbor, the Internal Revenue Service could challenge such loan’s treatment as a real estate asset for purposes of the REIT asset and income tests and, if such a challenge were sustained, we could fail to continue to qualify as a REIT.

Non-United States investors may be subject to FIRPTA on the sale of shares of our common stock if we are unable to qualify as a “domestically controlled qualified investment entity.”

A non-United States person disposing of a United States real property interest, including shares of a United States corporation whose assets consist principally of United States real property interests, is generally subject to a tax, known as FIRPTA, on the gain recognized on the disposition of such interest. Certain “qualified foreign pension funds” and certain “qualified shareholders” are exempt from FIRPTA. FIRPTA does not apply, however, to the disposition of shares in a REIT if the REIT is a “domestically controlled qualified investment entity.” A REIT is a domestically controlled qualified investment entity if, at all times during a specified testing period (the continuous five year period ending on the date of disposition or, if shorter, the entire period of the REIT’s existence), less than 50% in value of its shares is held directly or indirectly by non-United States holders. We cannot assure you that we will qualify as a domestically controlled qualified investment entity. If we were to fail to so qualify, gain realized by a non-United States investor on a sale of our common stock would be subject to FIRPTA unless our common stock was traded on an established securities market and the non-United States investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Internal Revenue Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate, inflation and/or currency risks, including gain from the disposition of certain hedging transactions, will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges (i) interest rate risk on liabilities incurred to carry or acquire real estate or (ii) risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the REIT 75% or 95% gross income tests, and such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute nonqualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur.

If we were considered to actually or constructively pay a “preferential dividend” to certain of our shareholders, our status as a REIT could be adversely affected.

In order to qualify as a REIT, we must distribute annually to our shareholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. In order for distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions must not be “preferential dividends.” A dividend is generally not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in the REIT’s organizational documents. There is no de minimis exception with respect to preferential dividends. Therefore, if the Internal Revenue Service were to take the position that we inadvertently paid a preferential dividend, we may be deemed either to (a) have distributed less than 100% of our REIT taxable income and be subject to tax on the undistributed portion, or (b) have distributed less than 90% of our REIT taxable income and our status as a REIT could be terminated for the year in which such determination is made if we were unable to cure such failure. We can provide no assurance that we will not be treated as inadvertently paying preferential dividends.

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Equity participation in mortgage, bridge and mezzanine loans may result in taxable income and gains from these properties, which could adversely impact our REIT status.

If we participate under a loan in any appreciation of the properties securing the loan or its cash flow and the Internal Revenue Service characterizes this participation as “equity,” we might have to recognize income, gains and other items from the property for federal income tax purposes. This could affect our ability to qualify as a REIT.

Your investment has various federal income tax risks.

Although the provisions of the Internal Revenue Code generally relevant to an investment in shares of our common stock are described in “Material Federal Income Tax Considerations,” we urge you to consult your tax advisor concerning the effects of United States federal, state, local and foreign tax laws to you with regard to an investment in shares of our common stock

Retirement Plan Risks

If the fiduciary of an employee pension benefit plan subject to ERISA (such as profit sharing, Section 401(k) or pension plan) or any other retirement plan or account fails to meet the fiduciary and other standards under ERISA or the Internal Revenue Code as a result of an investment in our common stock, the fiduciary could be subject to criminal and civil penalties.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit sharing, Section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Internal Revenue Code (such as an IRA) that are investing in our shares. Fiduciaries investing the assets of such a plan or account in our common stock should satisfy themselves that:

• the investment is consistent with their fiduciary and other obligations under ERISA and the Internal Revenue Code;

• the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;

• the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Internal Revenue Code;

• the investment in our shares, for which no public market currently exists, is consistent with the liquidity needs of the plan or IRA;

• the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;

• our shareholders will be able to comply with the requirements under ERISA and the Internal Revenue Code to value the assets of the plan or IRA annually; and

• the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

With respect to the annual valuation requirements described above, we will provide an estimated value for our shares annually. We can make no claim whether such estimated value will or will not satisfy the applicable annual valuation requirements under ERISA and the Internal Revenue Code. The Department of Labor or the Internal Revenue Service may determine that a plan fiduciary or an IRA custodian is required to take further steps to determine the value of our common shares. In the absence of an appropriate determination of value, a plan fiduciary or an IRA custodian may be subject to damages, penalties or other sanctions.

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Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Internal Revenue Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to claims for damages or for equitable remedies. In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Internal Revenue Code, the fiduciary or IRA owner who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. In the case of a prohibited transaction involving an IRA owner, the IRA may be disqualified and all of the assets of the IRA may be deemed distributed and subjected to tax. ERISA plan fiduciaries and IRA custodians should consult with counsel before making an investment in our common shares.

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PLAN OF DISTRIBUTION

General

We are offering a minimum of 200,000 shares and a maximum of 50,000,000 shares of our common stock on an “all-or-nothing minimum, best-efforts maximum” basis through Orchard Securities, LLC, our managing broker-dealer. Because this is an “all-or-nothing minimum, best-efforts maximum” offering, Orchard Securities, LLC must use only its best efforts to sell the shares and has no firm commitment or obligation to purchase any of our shares. We are offering up to 50,000,000 shares of common stock in our offering at $10.00 per share. We expect to sell the 50,000,000 shares offered in our offering over a one-year period beginning on the date this offering is qualified by the SEC. We are limiting our sales in the state of Texas to no more than $10,000,000 in shares of common stock and in the state of Washington to no more than $5,000,000 in shares of common stock.

We cannot sell our shares of common stock to you until our offering is qualified by the SEC. If you receive this preliminary offering circular prior to qualification and more than 48 hours before the sale, then delivery of the final offering circular may be satisfied by electronic delivery of the final offering circular or the uniform resource locator, or URL, to where the final offering circular may be accessed on EDGAR or by mailing the final offering circular to you. If you purchase your shares through a soliciting dealer within 90 calendar days after qualification of our offering, the soliciting dealer will deliver to you, no later than two business days following the completion of such sale, a copy of the final offering circular via mail or by providing you with notice with the uniform resource locator, or URL, to where the final offering circular may be accessed on EDGAR.

Compensation of Managing Broker-Dealer and Soliciting Dealers

Except as provided below, Cottonwood Capital Property Management II, LLC will pay the managing broker-dealer selling commissions equal to 6% of the gross offering proceeds. Cottonwood Capital Property Management II, LLC will also pay the managing broker-dealer a managing broker-dealer fee equal to 3% of the gross proceeds as compensation for acting as the managing broker-dealer and for expenses incurred in connection with marketing our shares and wholesaler compensation. Neither we nor Cottonwood Capital Property Management II, LLC will pay referral or similar fees to any accountants, attorneys, or other persons in connection with the distribution of the shares. In no event will the maximum amount of compensation to be paid to FINRA members exceed 9% of the gross offering proceeds in this offering (exclusive of the total non-transaction based compensation paid to certain employees of our sponsor). We will not be responsible for paying any selling commissions or managing broker-dealer fees. The maximum amount of non-transaction based items of compensation to be paid in connection with this offering, including, but not limited to the non-transaction based compensation allocated to dual-employees, will not exceed 1% of the gross offering proceeds.

The managing broker-dealer may authorize certain other broker-dealers who are members of FINRA, who we refer to as soliciting dealers, to sell our shares. In the event of the sale of shares by soliciting dealers, the managing broker-dealer may re-allow all of its selling commissions to the soliciting dealers. In addition, the managing broker-dealer may re-allow a portion of its managing broker-dealer fee to soliciting dealers to be paid to such soliciting dealers as marketing fees and for reimbursement of offering-related expenses. The maximum amount of reimbursements would be based on factors such as the number of shares sold by soliciting dealers, the assistance of such soliciting dealers in marketing the offering, and due diligence expenses incurred.

We have agreed to indemnify the soliciting dealers and the managing broker-dealer against any and all loss, liability, claim, damage and expense whatsoever arising out of or based upon:

(1) Any untrue statement or alleged untrue statement of a material fact contained in the offering statement, (as from time to time amended and supplemented), or in any application or other document filed in any jurisdiction in order to qualify the shares under or exempt the offering of the shares from the registration or qualification requirements of the securities laws thereof unless any of the soliciting dealer or the managing broker-dealer know such statement to be untrue;

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(2) The omission or alleged omission from the offering statement (as from time to time amended and supplemented) of a material fact required to be stated therein or necessary to make the statements therein not misleading unless any of the soliciting dealers or the managing broker-dealer know such statement to be untrue;

(3) Our failure as a result of our acts or omissions to comply with any of the applicable provisions of the Securities Act, Regulation A or the regulations thereunder, or any applicable state laws or regulations;

(4) Any verbal or written representations made by us in connection with this offering in violation of the Securities Act, or any other applicable federal or state securities laws and regulations; or

(5) Our breach of any term, condition, representation, warranty or covenant in the Managing Broker-Dealer Agreement (the executed copy of which is provided in Exhibit 1.1).

Indemnification of the soliciting dealers and the managing broker-dealer will not be allowed to the extent any loss, liability, claim, damage or expense arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the soliciting dealers, the managing broker-dealer or any of their agents, or any omission or alleged omission of a material fact required to be disclosed by the soliciting dealers, the managing broker-dealer or any of their agents.

Subscription Procedures

We will not sell any shares unless we raise a minimum of $2,000,000 by [                    , 20    ] from persons who are not affiliated with us or Cottonwood Residential O.P., LP. Until we have raised this amount, all subscription payments will be placed in a non-interest bearing account held by the escrow agent, UMB Bank, N.A., in trust for subscribers’ benefit, pending release to us. Once we have raised the applicable minimum offering amount and instructed the escrow agent to disburse the funds in the account, funds representing the gross purchase price for the shares will be distributed to us. If we do not raise at least $2,000,000 by [                    , 20    ], we will promptly return all funds in the escrow account, and we will stop offering shares. We will not deduct any fees if we return funds from the escrow account because we are unable to raise the minimum offering amount.

To purchase shares in this offering, you must complete and sign a subscription agreement (in the form attached to this offering circular as Exhibit 4) for a specific number of shares and pay for the shares at the time of your subscription. You should make your check payable to “UMB Bank, N.A., as Escrow Agent for Cottonwood Multifamily REIT II, Inc.” Completed subscription agreements and payments should be sent by your broker-dealer or registered investment advisor, as applicable, to the escrow agent, UMB Bank, N.A., at the address set forth in the subscription agreement. Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription in whole or in part. For any subscription agreement received prior to the date this offering is qualified by the SEC (which we will refer to as the qualification date), we shall have a period of 30 days from the qualification date to accept or reject the subscription agreement. For any subscription agreements received after the qualification date, we shall have a period of 30 days after receipt of the subscription agreement to accept or reject the subscription agreement. If rejected, we will return all funds to the rejected subscribers within ten business days. If accepted, the funds will be transferred into our general account. You will receive a confirmation of your purchase. We will not accept subscription agreements prior to the SEC’s qualification of this offering.

After the qualification date, the soliciting dealers will provide each prospective investor with a copy of the final offering circular and any exhibits and appendices thereto. If a prospective investor receives the preliminary offering circular, then the soliciting dealer will deliver to the investor the final offering circular at least 48 hours before such investor will be permitted to acquire shares of our common stock. If an investor purchases shares of our common stock within 90 calendar days of the qualification date, the soliciting dealer will deliver to the investor, no later than two business days following the completion of such sale, a copy of the final offering circular and all exhibits and appendices thereto either by (i) electronic delivery of the final offering circular or the uniform resource locator to where the final offering circular may be accessed on the SEC’s Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”), or (ii) mailing the final offering circular and all exhibits and appendices thereto to the investor at the address indicated in the subscription agreement.

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Suitability Standards

The soliciting dealers and registered investment advisors recommending the purchase of shares in this offering have the responsibility to make every reasonable effort to determine that your purchase of shares in this offering is a suitable and appropriate investment for you based on information provided by you regarding your financial situation and investment objectives. In making this determination, these persons have the responsibility to ascertain that you:

• meet the minimum income and net worth standards set forth under “Suitability Standards” immediately following the cover page of this offering circular;

• can reasonably benefit from an investment in our shares based on your overall investment objectives and portfolio structure;

• are able to bear the economic risk of the investment based on your overall financial situation;

• are in a financial position appropriate to enable you to realize to a significant extent the benefits described in this offering circular of an investment in our shares; and

• have apparent understanding of:

• the fundamental risks of the investment;

• the risk that you may lose your entire investment;

• the lack of liquidity of our shares;

• the restrictions on transferability of our shares; and

• the tax consequences of your investment.

Relevant information for this purpose will include at least your age, investment objectives, investment experience, income, net worth, financial situation, and other investments as well as any other pertinent factors. The soliciting dealers and registered investment advisors recommending the purchase of shares in this offering must maintain, for a six-year period, records of the information used to determine that an investment in shares is suitable and appropriate for you.

Minimum Purchase Requirements

You must initially invest at least $10,000 in our shares to be eligible to participate in this offering. In order to satisfy this minimum purchase requirement, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $10. You should note that an investment in our shares will not, in itself, create a retirement plan and that, in order to create a retirement plan, you must comply with all applicable provisions of the Internal Revenue Code.

If you have satisfied the applicable minimum purchase requirement, any additional purchase must be in amounts of at least $10.

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ESTIMATED USE OF PROCEEDS

The following table sets forth information about how we intend to use the proceeds raised in this offering assuming that we sell the minimum of 200,000 shares and the maximum of 5,000,000 shares of common stock. Many of the amounts set forth below represent management’s best estimate since they cannot be precisely calculated at this time. Depending primarily upon the number of shares we sell in this offering and assuming a $10.00 purchase price for shares sold in this offering, we estimate that we will use 100% of the gross proceeds from this offering, or $10.00 per share, for investments in multifamily apartment communities and multifamily real estate related assets.

	Minimum Offering						Maximum Offering
	Amount			Percentage of Gross Proceeds			Amount			Percentage of Gross Proceeds
Gross Offering Proceeds(1)	$	2,000,000			100	%	$	50,000,000			100.00	%
Selling Commissions, Managing Broker-Dealer Fee and Organizational and Offering Expenses(2)(3)		260,000			13	%		5,000,000			10	%
Selling Commissions, Managing Broker-Dealer Fee and Organizational and Offering Expenses paid by Sponsor(2)(3)		(260,000	)		(13	%)		(5,000,000	)		(10	%)
Available for Investment(2)(3)		2,000,000			100	%		50,000,000			100.00	%
Total Application(4)(5)	$	2,000,000			100	%	$	50,000,000			100.00	%

(1) In the event that the first acquisition of a multifamily apartment community requires capital in excess of our minimum offering amount of $2,000,000, Cottonwood Residential O.P., LP will make a loan to us for the amount in excess of the minimum offering amount needed to acquire such multifamily apartment community. Any such loan will bear interest at a rate equal to 6% per annum. We will use the proceeds from the sale of shares to repay the principal and accrued interest on any such loan made.

(2) We are not responsible for paying any selling commissions or managing broker-dealer fees to the managing broker-dealer or any organizational or offering expenses. Cottonwood Capital Property Management II, LLC will be responsible for paying the managing broker-dealer selling commissions in an amount up to 6% of the purchase price of the shares sold by soliciting dealers, which the managing broker-dealer will re-allow to the soliciting dealers. In addition, Cottonwood Capital Property Management II, LLC will pay the managing broker-dealer a managing broker-dealer fee equal to 3% of the gross offering proceeds for acting as the managing broker-dealer and for expenses incurred in connection with marketing our shares and wholesaler compensation. The managing broker-dealer may re-allow part of the managing broker-dealer fee to soliciting dealers. Cottonwood Capital Property Management II, LLC will also pay our organizational and offering expenses, including our legal, accounting, printing, mailing and filing fees, charges of our escrow holder and transfer agent. We expect organizational and offering expenses (other than selling commissions and the managing broker-dealer fee) to be approximately 4% of the gross proceeds from the offering if we raise the minimum offering amount and 1% of the gross proceeds from the offering if we raise the maximum offering amount. For more details on Cottonwood Capital Property Management II, LLC’s obligation to pay such expenses see the executed Three-Party Agreement in Exhibit 6.9. Our organizational documents permit us to make distributions from any source, including offering proceeds or borrowings (which may constitute a return of capital), and our organizational documents do not limit the amount of funds we may use from any source to pay such distributions. If we make distributions from sources other than our cash flow from operations, we will have less funds available for investment in multifamily apartment communities or multifamily real estate related assets. If our sponsor does not pay the selling commissions, managing broker-dealer fees and organizational offering expenses, we will not sell the applicable shares of common stock.

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(3) Our sponsor is paying all selling commissions and managing broker-dealer fees and all organizational and offering expenses. In turn, our sponsor and its affiliates will enter into certain contracts with us and will receive certain fees pursuant to those contracts. If our sponsor did not pay the selling commissions and managing broker-dealer fees and organizational and offering expenses, the terms of the contracts between us and our sponsor may have been on terms that are more advantageous to us. The contracts between us and our sponsor (and its affiliates) are fixed until December 31, 2024 (subject to extensions if our initial term is extended). As a result, the percentage amount of the fees paid to our sponsor are fixed and will not increase. Potential investors should consult their investment advisors.

(4) Until required in connection with investment in multifamily apartment communities or multifamily real estate related assets, substantially all of the net proceeds of the offering and, thereafter, our working capital reserves, may be invested in short-term, highly liquid investments, including government obligations, bank certificates of deposit, short-term debt obligations and interest-bearing accounts or other authorized investments as determined by our board of directors. Amounts available for investment from this offering may also include anticipated capital improvement expenditures and leasing costs.

(5) We may also utilize proceeds from a line of credit (if obtained) or other financing to acquire multifamily apartment communities and multifamily real estate related assets.

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MANAGEMENT

Board of Directors

We operate under the direction of our board of directors. The board of directors is responsible for the management and control of our affairs. The current board members are Daniel Shaeffer, Chad Christensen and Gregg Christensen. The current Chief Executive Officer is Daniel Shaeffer, the current Chairman of the Board and President is Chad Christensen and the current Executive Vice President & General Counsel is Gregg Christensen.

Our board of directors will be classified into three classes. Each class of directors will be elected for successive terms ending at the annual meeting of the shareholders the third year after election and until his or her successor is elected and qualified. The presence in person or by proxy of shareholders entitled to cast 50% of all the votes entitled to be cast at any shareholder meeting constitutes a quorum. Currently, all of our outstanding common stock is owned by Cottonwood Residential O.P., LP. With respect to the election of directors, each candidate nominated for election to the board of directors must receive a majority of the votes present, in person or by proxy, in order to be elected. Therefore, if a nominee receives fewer “for” votes than “withhold” votes in an election, then the nominee will not be elected.

Although the number of board members may increase or decrease, a decrease may not have the effect of shortening the term of any incumbent director. Any director may resign at any time or may be removed for fraud, gross negligence or willful misconduct as determined by non-appealable decision of a court of competent jurisdiction, by the shareholders upon the affirmative vote of at least a majority of all the votes entitled to be cast at a meeting called for the purpose of the proposed removal. The notice of the meeting will indicate that the purpose, or one of the purposes, of the meeting is to determine if the director will be removed.

Unless otherwise provided by Maryland law, the board of directors and the shareholders may select nominees for the board of directors and the shareholders will elect the directors. Unless filled by a vote of the shareholders as permitted by the Maryland General Corporation Law, a vacancy that results from the removal of a director will be filled by a vote of a majority of the remaining directors. Any vacancy on the board of directors for any other cause will be filled by a vote of a majority of the remaining directors, even if such majority vote is less than a quorum.

Under Maryland law, our directors must perform their duties in good faith and in a manner each director believes to be in our best interests. Further, our directors must act with such care as a prudent person in a similar position would use under similar circumstances, including exercising reasonable inquiry when taking actions. However, our directors and executive officers are not required to devote all of their time to our business and must devote only such time to our affairs as their duties may require. We do not expect that our directors will be required to devote a substantial portion of their time to us in discharging their duties. All of our directors are also directors of Cottonwood Residential, Inc. As a result, we do not have any independent directors or management and conflicts of interest may arise. For more details, see “Conflicts of Interest.”

In addition to meetings of the various committees of the board of directors, which committees we describe below, we expect our directors to hold at least four regular board meetings each year.

Our general investment and borrowing policies are set forth in this offering circular. Our directors may establish further written policies on investments and borrowings and will monitor our administrative procedures, investment operations and performance to ensure that our executive officers follow these policies and that these policies continue to be in the best interests of our shareholders. Unless modified by our directors, we will follow the policies on investments and borrowings set forth in this offering circular.

Investment Committee

We have established an investment committee that will be charged with identifying and investigating potential investment opportunities for us. The investment committee will analyze and approve any investment to be made by us. The investment committee will have 5 committee members and is currently comprised of Daniel Shaeffer, Chad Christensen, Gregg Christensen, Paul Fredenberg and Enzio Cassinis. The investment committee may request information from third parties in making its recommendations.

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Committees of the Board of Directors

Our board of directors may delegate many of its powers to one or more committees, in addition to the investment committee discussed above.

Executive Officers and Directors

We have provided below certain information about our executive officers and directors.

Name*	Age**	Positions
Daniel Shaeffer	46	Chief Executive Officer, Director and Investment Committee Member
Chad Christensen	43	President, Chairman of the Board, Director and Investment Committee Member
Gregg Christensen	47	Executive Vice President, Secretary, General Counsel, Director and Investment Committee Member
Susan Hallenberg	48	Chief Financial Officer
Paul Fredenberg	40	Investment Committee Member
Enzio Cassinis	39	Investment Committee Member

* The address of each executive officer and director listed is 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121.

** As of June 30, 2016.

Daniel Shaeffer is the Chief Executive Officer, Director and a member of the investment committee. Mr. Shaeffer’s primary responsibilities include overseeing acquisitions, capital markets and strategic planning. He is also involved with our marketing and capital raising activities. Mr. Shaeffer also currently serves as the Chief Executive Officer and a Director of Cottonwood Residential, Inc. Before co-founding Cottonwood Capital Properties, LLC, a predecessor to Cottonwood Residential, Inc., in 2004, Mr. Shaeffer worked as a senior equities analyst with Wasatch Advisors of Salt Lake City. Prior to joining Wasatch Advisors, Mr. Shaeffer was a Vice President of Investment Banking at Morgan Stanley. In that role he focused primarily on public company mergers and acquisitions as well as public capital markets transactions involving equity, debt and hybrid securities. Mr. Shaeffer began his career with Ernst & Young working in the firm’s audit department. Mr. Shaeffer has been involved in real estate development, management, acquisition, disposition and financing for more than 11 years and with the acquisition, origination, management, disposition and financing of real estate-related debt investments for more than 11 years. Mr. Shaeffer holds an International MBA from the University of Chicago Graduate School of Business and a BS in Accounting from Brigham Young University and is a Certified Public Accountant.

Chad Christensen is the President, Chairman of the Board, Director and a member of the investment committee. Mr. Christensen oversees our financial and general operations. Mr. Christensen is also actively involved in our acquisitions, marketing and capital raising activities. Mr. Christensen also currently serves as the President and a Director of Cottonwood Residential, Inc. Before co-founding Cottonwood Capital Properties, LLC, a predecessor to Cottonwood Residential, Inc., in 2004, Mr. Christensen worked with the Stan Johnson Company, a national commercial Real Estate Brokerage firm in Tulsa, Oklahoma. The vision and business plan for Cottonwood Capital Properties, LLC stemmed from Mr. Christensen’s experience working with tenant-in-common sponsors while at the Stan Johnson Company. Early in his career, Mr. Christensen founded Paramo Investment Company, a small investment management company. Mr. Christensen has been involved in real estate development,

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management, acquisition, disposition and financing for more than 13 years and with the acquisition, origination, management, disposition and financing of real estate-related debt investments for more than 13 years. Mr. Christensen holds a MBA from The Wharton School at the University of Pennsylvania with an emphasis in Finance and Real Estate and a BA in English from the University of Utah. Mr. Christensen also holds an active real estate license. Chad Christensen and Gregg Christensen are brothers.

Gregg Christensen is the Executive Vice President, Secretary, General Counsel, Director and a member of the investment committee. Mr. Christensen oversees and coordinates all legal aspects of our company and is also actively involved in our operations, acquisitions, and due diligence activities. Mr. Christensen also currently serves as the Executive Vice President, Secretary, General Counsel and a Director of Cottonwood Residential, Inc. Prior to joining Cottonwood Residential, Inc., Mr. Christensen was a principal, managing director and general counsel of Cherokee & Walker, an investment company focused on real estate investments and private equity investments in real estate related companies. Previously, Mr. Christensen practiced law with Nelson & Senior in Salt Lake City. His areas of practice included real estate and corporate law. He is a member of the Utah State Bar, as well as the Bar of the United States District Court for the District of Utah. Mr. Christensen has been involved in real estate development, management, acquisition, disposition and financing for more than 19 years and with the acquisition, origination, management, disposition and financing of real estate-related debt investments for more than 19 years. Mr. Christensen holds an Honors Bachelor of Arts Degree in English from the University of Utah and a Juris Doctorate Degree from the University of Utah, S.J. Quinney College of Law. Gregg Christensen and Chad Christensen are brothers.

Susan Hallenberg is the Chief Financial Officer. In this role, she oversees all aspects of our financial, accounting, treasury, and risk management functions. Additionally, Ms. Hallenberg handles our investor relations. Ms. Hallenberg also currently serves as the Chief Financial Officer and Treasurer of Cottonwood Residential, Inc. Prior to joining Cottonwood Residential O.P., LP, Ms. Hallenberg served as Acquisitions Officer for Phillips Edison & Company, a real estate investment company. She also served as Vice President for Lend Lease Real Estate Investments, where her responsibilities included financial management of a large mixed-use real estate development project and the underwriting, financing and reporting on multifamily housing development opportunities in the Western United States using tax credit, tax-exempt bond, and conventional financing. She also worked for Aldrich Eastman & Waltch for two years as an Assistant Portfolio Controller. Ms. Hallenberg started her career at Ernst & Young where she worked in the firm’s audit department for four years. Ms. Hallenberg is a Certified Public Accountant and holds a BA in Economics/Accounting from The College of the Holy Cross.

Paul Fredenberg is a member of the investment committee. Paul Fredenberg also currently serves as the Senior Vice President of Acquisitions for Cottonwood Residential, Inc. and focuses exclusively on sourcing and evaluating new multifamily investment opportunities. Mr. Fredenberg joined Cottonwood Capital Properties, LLC, a predecessor to Cottonwood Residential Inc. in 2006 and has been instrumental in building the acquisition team at Cottonwood Residential, Inc. Before joining Cottonwood Residential, Inc., Mr. Fredenberg worked in the Mergers and Acquisitions Investment Banking Group of Wachovia Securities. Prior to his experience in investment banking, Mr. Fredenberg worked at the Arbor Strategy Group, a boutique strategy consulting firm based in Ann Arbor, Michigan specializing in brand development, innovation, and strategic growth. While at the Arbor Strategy Group, Mr. Fredenberg gained experience across several practice areas and industry groups, working closely with senior management at global consumer products companies such as ConAgra, Sara Lee, and Georgia-Pacific to develop and implement sustainable growth strategies for assorted business units and product lines. Mr. Fredenberg holds a Bachelors of Arts in Economics from the University of Michigan, a Masters of Arts in Latin American Studies and International Management from the University of Pennsylvania, and a Masters of Business Administration from The Wharton School at the University of Pennsylvania, with an emphasis in Finance and Public Policy.

Enzio Cassinis is a member of the investment committee. Enzio Cassinis also currently serves as the Senior Vice President, Finance/Associate Counsel for Cottonwood Residential, Inc. Mr. Cassinis joined Cottonwood Residential, Inc. in 2013 and is responsible for capital and venture formation activity. Prior to joining Cottonwood Residential, Inc., Mr. Cassinis was Vice President of Investment Management at Archstone, where he was responsible for managing Archstone’s domestic joint venture and private investment fund platform. While with Archstone, he negotiated transactions in both foreign and domestic markets with transaction volume exceeding several billion dollars in total capitalization. Prior to Archstone, Mr. Cassinis worked as an attorney with Krendl, Krendl, Sachnoff & Way, PC (now Kutak Rock LLP), focusing his practice on corporate law and merger and

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acquisition transactions. Mr. Cassinis earned a Master of Business Administration and Juris Doctorate (Order of St. Ives) from the University of Denver, and a Bachelor of Science in Business Administration from the University of Colorado at Boulder.

Compensation of Directors

Our board of directors has the authority to fix the compensation of all officers that it selects and may pay compensation to directors for services rendered to us in any other capacity. However, we currently do not intend to pay our board members or officers any compensation for serving as members of our board of directors and officers, respectively.

Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its shareholders for money damages, except for liability resulting from:

• actual receipt of an improper benefit or profit in money, property or services; or

• active and deliberate dishonesty established by a final judgment and which is material to the cause of action.

Our charter contains such a provision that eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law. These limitations of liability do not apply to liabilities arising under the federal securities laws and do not generally affect the availability of equitable remedies such as injunctive relief or rescission.

Our charter also authorizes our company, to the maximum extent permitted by Maryland law, to obligate our company to indemnify any present or former director or officer or any individual who, while a director or officer of our company and at the request of our company, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that individual may become subject or which that individual may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding.

Our bylaws obligate us, to the maximum extent permitted by Maryland law, to indemnify any present or former director or officer or any individual who, while a director or officer of our company and at the request of our company, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity, from and against any claim or liability to which that individual may become subject or which that individual may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. Our charter and bylaws also permit our company to indemnify and advance expenses to any individual who served a predecessor of our company in any of the capacities described above and any employee or agent of our company or a predecessor of our company.

Maryland law requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that:

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• the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty;

• the director or officer actually received an improper personal benefit in money, property or services; or

• in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:

• a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

• a written undertaking by him or her on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

Insofar as the foregoing provisions permit indemnification of directors, executive officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Initial Investment by Cottonwood Residential O.P., LP

Cottonwood Residential O.P., LP has invested $10,000 in us through the purchase of 1,000 shares of our common stock at $10.00 per share. As of the date of this offering circular, this constitutes 100% of our issued and outstanding common stock. Cottonwood Residential O.P., LP may not sell any of these shares during the period Cottonwood Capital Property Management II, LLC serves as our sponsor. Although nothing prohibits Cottonwood Residential O.P., LP or its affiliates from acquiring additional shares of our common stock, they currently do not have any options or warrants to acquire any shares.

Other Affiliates

Property and asset manager

To avail ourselves of the experience, sources of information, advice, assistance and certain facilities available to Cottonwood Capital Property Management II, LLC, we have entered into the Asset Management Agreement with Cottonwood Capital Property Management II, LLC (an executed copy of which is attached hereto as Exhibit 6.5). In addition, our operating partnership has agreed to enter into property management agreements (the form of which is attached hereto as Exhibit 6.6) with Cottonwood Capital Property Management II, LLC with respect to all multifamily apartment communities owned by our operating partnership, and our operating partnership and Cottonwood Residential O.P., LP have agreed to cause the joint ventures to enter into property management agreements with respect to the multifamily apartment communities owned by the joint ventures. For more information, see the executed Three-Party Agreement in Exhibit 6.9. The Form of Property Management Agreement attached hereto will be used by the joint ventures and Cottonwood Capital Property Management II, LLC, but the form is subject to any changes required by the lender. These contracts are, or will be, long-term contracts that cannot be terminated other than because of the fraud, gross negligence or willful misconduct of Cottonwood Capital Property Management II, LLC.

The property and asset manager’s office is located at 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121. The property and asset manager was formed on January 25, 2008. Our directors and officers hold key positions at our property and asset manager. For more information about their background and experience, see “Management—Executive Officers and Directors.”

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We will pay Cottonwood Capital Property Management II, LLC an annual asset management fee for providing asset management services in an amount equal to 0.75% of the gross book value of our assets (until such time as our board of directors has established a net asset value of our assets, at which point it shall equal 0.75% of the gross asset value determined pursuant to the most recent net asset value). We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter. The asset management fee will be paid by us and not the joint ventures. As a result, it will be paid from our share of income generated by the joint ventures. For more details, see the executed Asset Management Agreement in Exhibit 6.5.

Our operating partnership or our joint ventures will pay Cottonwood Capital Property Management II, LLC an annual property management fee of up to 3.5% of the monthly gross receipts generated at our properties for services it provides in connection with operating and managing each multifamily apartment community. Cottonwood Capital Property Management II, LLC will also receive for its services in supervising any renovation or construction project in excess of $5,000 in or about each property a construction management fee equal to 5% of the cost of the amount that is expended. In the event that Certis Construction, LLC has been hired as the general contractor with respect to any renovation or construction project, Cottonwood Capital Property Management II, LLC will not receive the construction management fee for such renovation or construction project. Cottonwood Capital Property Management II, LLC and its affiliated entities will also receive additional compensation for other services related to the multifamily apartment communities. If our sponsor does not pay the selling commissions, managing broker-dealer fees and organizational offering expenses, we would not sell any shares of common stock. For more details, see “Management Compensation.”

Our sponsor is paying all selling commissions and managing broker-dealer fees and all organizational and offering expenses. In turn, our sponsor and its affiliates will enter into the contracts described above and will receive the fees described above. If our sponsor did not pay the selling commissions and managing broker-dealer fees and organizational and offering expenses, the terms of the contracts between us and our sponsor may have been on terms that are more advantageous to us. The property management fee and asset management fee have been determined by the Three-Party Agreement between us, our operating partnership and our sponsor, which makes reference to the Asset Management Agreement and Form of Property Management Agreement. These contracts will terminate on December 31, 2024, which may be extended for up to 4 additional 1 year periods as set forth in our charter. Potential investors should consult their investment advisors.

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MANAGEMENT COMPENSATION

Although we have executive officers who will manage our operations, we have no paid employees. Our board of directors will manage our day-to-day affairs and Cottonwood Capital Property Management II, LLC will manage our portfolio of multifamily apartment communities and multifamily real estate related assets, subject to the board of directors’ supervision. The following table summarizes all of the compensation and fees that will be paid to Cottonwood Capital Property Management II, LLC and its affiliates in connection with this offering, including amounts to reimburse their costs in providing services.

Form of Compensation and Recipient	Determination of Amount	Estimated Amount for Minimum Offering/ Maximum Offering
	Organization and Offering Stage
Managing Broker-Dealer Fee	Cottonwood Capital Property Management II, LLC will pay the managing broker-dealer a managing broker-dealer fee equal to 3% of the gross proceeds from this offering. Of this managing broker-dealer fee, Orchard Securities, LLC will pay 1% of the total amount of proceeds from this offering to certain wholesalers that may be employees of Cottonwood Residential Inc. or Cottonwood Residential O.P., LP. We will not be responsible for paying the managing broker-dealer fee.	The total fee paid to Orchard Securities, LLC would be $60,000/ $1,500,000. The total wholesaler fees would be $20,000/$500,000
Sales Commissions	Cottonwood Capital Property Management II, LLC will pay the managing broker-dealer selling commissions equal to 6% of the gross proceeds from this offering. Certain employees of Cottonwood Residential, Inc. or Cottonwood Residential O.P., LP may sell shares of our common stock, in which case Orchard Securities, LLC, will re-allow the selling commissions to those employees. We will not be responsible for paying the sales commissions.	$120,000/$3,000,000
	Operational Stage
Property Management Fees –Affiliated Property Manager	Our operating partnership or the joint ventures will hire Cottonwood Capital Property Management II, LLC to perform property management services. The property management fee payable with respect to each property will be up to 3.5% of the gross revenue of each property managed.	Actual amounts depend upon the gross revenue of the properties therefore cannot be determined at this time.
Construction Management Fees – Affiliated Property Manager	Cottonwood Capital Property Management II, LLC will receive for its services in supervising any renovation or construction project in excess of $5,000 in or about each property a construction management fee equal to 5% of the cost of the amount that is expended. In the event that Certis Construction, LLC has been hired as the general contractor with respect to any renovation or construction project, Cottonwood Capital Property Management II, LLC will not receive the construction management fee for such renovation or construction project.	Actual amounts depend upon the amount expended on a given renovation or construction project therefore cannot be determined at this time.
Asset Management	We will hire Cottonwood Capital Property Management II,	Actual amounts depend

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Form of Compensation and Recipient	Determination of Amount	Estimated Amount for Minimum Offering/ Maximum Offering
Fee – Affiliated Asset Manager	LLC to perform asset management services. Our asset manager shall receive, as compensation for providing asset management services, an annual asset management fee in an amount equal to 0.75% of the gross book value of our assets (until such time as our board of directors has established a net asset value of our assets, at which point it shall equal 0.75% of the gross asset value determined pursuant to the most recent net asset value). The asset management fee will be paid by us and not the joint ventures. As a result, it will be paid from our share of income generated by the joint ventures. We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter.	upon the gross offering proceeds we raise in this offering therefore cannot be determined at this time.
Promotional Interest in Joint Ventures	Our operating partnership and Cottonwood Residential O.P., LP will form a new joint venture for each multifamily apartment community jointly acquired. Cash from operations for each joint venture shall be distributed as follows: (i) to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their accrued but undistributed 8% preferred return (as defined in the Form of Joint Venture Agreement in Exhibit 6.4), until the partners have been distributed an amount equal to their accrued but undistributed 8% preferred return; (ii) (i) 50% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and (ii) 50% to Cottonwood Residential O.P., LP, until Cottonwood Residential O.P., LP has received an amount pursuant to this clause (ii) equal to 20% of the amount distributed to the partners (our operating partnership and Cottonwood Residential O.P., LP) pursuant to item (i) and this item (ii); and (iii) 80% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and 20% to Cottonwood Residential O.P., LP. Cash from capital transactions for each joint venture shall be distributed as follows: (i) to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their accrued but undistributed 8% preferred return (as defined in the Form of Joint Venture Agreement in Exhibit 6.4), until the partners have been distributed an amount equal to their accrued but undistributed 8% preferred return; (ii) 100% to the partners (our operating partnership and Cottonwood Residential O.P., LP) until their capital accounts are reduced to zero; (iii) (a) 50% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and (b) 50% to Cottonwood Residential O.P., LP,	Impracticable to determine at this time.

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Form of Compensation and Recipient	Determination of Amount	Estimated Amount for Minimum Offering/ Maximum Offering
	until Cottonwood Residential O.P., LP has received an amount pursuant to clause (b) of item (ii) under cash from operations (above) and this clause (b) equal to 20% of the total amount distributed to the partners (our operating partnership and Cottonwood Residential O.P., LP) pursuant to item (i) above, this item (iii) and items (i) and (ii) under cash from operations (above); and (iv) 80% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and 20% to Cottonwood Residential O.P., LP. Taking into consideration the distributions from Cash From Operations and Cash From Distributions, Cottonwood Residential O.P., LP is effectively receiving a promotional interest equal to 20% of the profits of each joint venture which is subordinated to our receipt of an 8% preferred return. The joint venture will make allocations of income and loss so that the allocations are made in a similar manner to the distributions. Losses will not be passed through to our shareholders.
Construction Services	Certis Construction, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may be hired as the general contractor for construction related to loss events at the multifamily apartment communities. Certis Construction, LLC will enter into contracts for the applicable repair work for the amount of the insurance award related to the applicable loss. Certis Construction, LLC will have the right to retain the excess over the amount actually incurred by Certis Construction, LLC to perform the required repairs and the contracted amount (i.e. the amount of the insurance proceeds).	Impracticable to determine at this time.
Resident Indemnification Program	Resident Indemnity Management, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may enter into contracts with the residents at the multifamily apartment communities for limited renter indemnification. The fee to be received by Residential Indemnity Management, LLC will vary, but will generally be equal to $8 per month per participating resident (though this amount may be higher or lower in some instances). These fees will be paid by residents of the multifamily apartment complex and will not be obligations of us or the joint ventures that own the multifamily apartment communities.	Impracticable to determine at this time.
Utility Management Fee	Capital Utility Resources, LLC, an affiliate of Cottonwood Capital Property Management II, LLC may be hired by the joint ventures to provide services related to allocation of the utility charges at the applicable multifamily apartment community to each of the residents at such multifamily apartment community. The fees charged by Capital Utility	Impracticable to determine at this time.

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Form of Compensation and Recipient	Determination of Amount	Estimated Amount for Minimum Offering/ Maximum Offering
	Resources, LLC will vary, based on the multifamily apartment community, from $3.00 to $5.00 per month per residential unit at the multifamily apartment community (though this amount may be higher or lower in some instances). Under some circumstances, the joint ventures that own the multifamily apartment communities may charge the residents at the multifamily apartment community for such services and will have the right to retain such amounts.
Internet and Television Services	Ditaro, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may enter into a contract with each of the joint ventures to provide internet and/or TV services for the multifamily apartment communities. The fees charged by Ditaro, LLC will vary based on market factors where the multifamily apartment community is located and will generally be between $10 and $30 per month per residential unit at the multifamily apartment communities (though this amount may be higher or lower in some instances). The joint ventures intend to charge each resident a fee for internet and/or television services which is anticipated to exceed the fee charged by Ditaro, LLC. The joint ventures will be entitled to retain the excess over the amount of the fee charged by Ditaro, LLC and the amount of the fee charged to the residents.	Impracticable to determine at this time.
Vendor Verification	Vendor Verify, LLC, an affiliate of Cottonwood Capital Property Management II, LLC, may enter into contracts with all third party vendors that propose to provide services with respect to the multifamily apartment communities. Pursuant to these contracts Vendor Verify, LLC will have the right to perform background checks on the third party vendor and will receive a fee equal to approximately $100 to $150 per vendor (though this amount may be higher or lower with respect to a particular vendor). The fees due to Vendor Verify, LLC will be paid by the third party vendors and will not be obligations of us or the joint ventures.	Impracticable to determine at this time.
Property Management Corporate Service Fee	Cottonwood Capital Property Management II, LLC will allocate a fee each month to each of the joint ventures which is intended to allocate certain costs incurred by Cottonwood Capital Property Management II, LLC and its affiliated entities with respect to all assets under management by such entities including, without limitation, technical support, postage, legal fees, travel, payroll services, marketing fees, LRO/revenue management and Yardi services. Cottonwood Capital Property Management II, LLC believes that the size of its management platform results in economies of scale with respect to such costs and relative to what these costs would be if charged by a third party to us or the joint ventures. This fee may vary each month and will be	Impracticable to determine at this time.

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Form of Compensation and Recipient	Determination of Amount	Estimated Amount for Minimum Offering/ Maximum Offering
	dependent on the number of assets managed by Cottonwood Capital Property Management II, LLC and its affiliates and the actual overhead expenses incurred. Cottonwood Capital Property Management II, LLC will have the right to retain any excess over actual costs and the amount of the fee charged.
Insurance Fee	Cottonwood Capital Property Management II, LLC, through its wholly-owned insurance company, will provide insurance for the multifamily apartment communities and will receive a risk management fee equal to 10% of the insurance premium. Cottonwood Capital Property Management II, LLC will also be entitled to retain any excess of the funded aggregate deductible not used to pay claims. Greentree Risk Management, Inc., a licensed insurance broker affiliated with Cottonwood Capital Property Management II, LLC, will receive 20% of the brokerage fee charged with respect to the placement of all insurance policies for the multifamily apartment communities.	Impracticable to determine at this time.
	Liquidation Stage
Reduced Sale Price	If Cottonwood Residential O.P., LP purchases our operating partnership’s interest, the purchase price to be paid by Cottonwood Residential O.P, LP will be reduced by the customary closing costs, fees and commissions in the jurisdiction in which the multifamily apartment communities are located which would be applied if the joint ventures sold such multifamily apartment communities in a third party sale. For more information regarding the reduced sales price see the executed Purchase Option Agreement in Exhibit 6.7.	Impracticable to determine at this time.

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STOCK OWNERSHIP

The following table sets forth the beneficial ownership of our common stock as of the date of this offering circular for each person or group that holds more than 5% of our common stock, for each director and executive officer and for our directors and executive officers as a group.

Name of Beneficial Owner (1)	Number of Shares Beneficially Owned		Percent of All Shares
Cottonwood Residential O.P., LP(2)		1,000		100.0	%
Daniel Shaeffer, Chief Executive Officer and Director		0		0.0
Chad Christensen, President, Chairman of the Board and Director		0		0.0
Gregg Christensen, General Counsel, Executive Vice President, Secretary and Director		0		0.0
All directors and executive officers as a group		1,000		100.0	%

⁽¹⁾  The address of each beneficial owner listed is 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121.

⁽²⁾  Cottonwood Residential O.P., LP is managed by its general partner, Cottonwood Residential, Inc. Cottonwood Residential, Inc. is managed by its board of directors, which currently consists of Daniel Shaeffer, Chad Christensen, Gregg Christensen, David Robertson and Lance Graber. The board of directors of Cottonwood Residential, Inc., as the general partner of Cottonwood Residential O.P., LP, will have the voting and investment control of the shares of our common stock held by Cottonwood Residential O.P., LP.

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CONFLICTS OF INTEREST

We are subject to various conflicts of interest arising out of our relationship with Cottonwood Residential O.P., LP, Cottonwood Residential, Inc. and Cottonwood Capital Property Management II, LLC, the property manager for the joint ventures and our asset manager. The members of our board of directors and our officers are also members of the board of directors and/or officers of Cottonwood Residential, Inc. and Cottonwood Capital Property Management II, LLC. We discuss these conflicts below and conclude this section with a discussion of the corporate governance measures we have adopted to ameliorate some of the risks posed by these conflicts.

Fiduciary Duties Owed by Our Directors and Officer to Our Affiliates

All of our executive officers and directors, and the key real estate professionals are also officers, directors, managers, key professionals, and/or holders of a direct or indirect controlling interest in or for:

• Cottonwood Residential O.P., LP, the sole member of our joint venture partners and Cottonwood Residential, Inc., its general partner; and

• Cottonwood Capital Property Management II, LLC, the property and asset manager.

Some of these persons also serve as executive officers and directors, and the key real estate professionals in and for Cottonwood Residential O.P., LP’s other affiliates. As a result, such persons owe fiduciary duties to Cottonwood Residential O.P., LP and/or its affiliates. These fiduciary duties may from time to time conflict with the fiduciary duties that they owe to us.

Our Affiliates’ Interests in Cottonwood Residential O.P., LP

General

All of our executive officers and directors, and other key real estate professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect voting controlling interest (but not a controlling economic interest) in Cottonwood Residential O.P., LP, Cottonwood Residential, Inc. and their affiliates, including the property and asset manager. These individuals have legal and financial obligations with respect to Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. and the shareholders and investors in such entities which are similar to their obligations to us. Thus, there may be conflicts of interest with respect to the officers’ and director’s obligations and duties to Cottonwood Residential O.P., LP and its affiliates and their obligations and duties to us and our affiliates. In the future, these persons may also form other real estate investment vehicles, to which they will have similar obligations. In addition, Cottonwood Residential O.P., LP’s approval to participate in investment opportunities is conditioned on the approval of certain institutional partners of Cottonwood Residential O.P., LP.

Allocation of Investment Opportunities

We will rely on Cottonwood Residential O.P., LP to identify suitable investments. Many investment opportunities that are suitable for us may also be suitable for Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. or other programs sponsored by such persons. Our sponsor has previously formed Cottonwood Multifamily REIT I, Inc. which will have a priority for potential investments until at least 85% of the capital raised by Cottonwood Multifamily REIT I, Inc. has been identified for investment. After such time, it is the intent of Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. and us that, until at least 85% of the capital raised in this offering has been identified for investment or invested in multifamily apartment communities and multifamily real estate related assets, all opportunities to invest in multifamily apartment communities that meet our investment criteria and diversification criteria, subject to a few exceptions, will be first presented by Cottonwood Residential O.P., LP to our operating partnership and our operating partnership will have the right to acquire such multifamily apartment community; provided, however, our operating partnership must have enough equity available to make the required equity investment in such multifamily apartment community. Cottonwood Residential O.P., LP may sponsor other real estate funds and real estate investment trusts in the future which have investment

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objectives similar to ours. If we have already invested (or identified for investment) at least 85% of the capital raised in this offering and we sell one of our assets, we will not have priority for any suitable investment identified by Cottonwood Residential O.P., LP until the competing entity has invested (or identified for investment) at least 85% of its available capital. Cottonwood Residential O.P., LP may, but is not required to, present potential investments in multifamily real estate related assets to our operating partnership. For more details on how our operating partnership and Cottonwood Residential O.P., LP will minimize such conflicts of interest see the executed Investment Policy Agreement in Exhibit 6.8.

Allocation of Our Affiliates’ Time

We rely on our board of directors, and the team of real estate professionals that Cottonwood Residential O.P., LP has assembled for the day-to-day operation of our business. Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. and other investment programs managed and controlled by Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. are also advised by many of the same real estate and management professionals as will future Cottonwood Residential O.P., LP sponsored programs. In addition, Cottonwood Capital Property Management II, LLC has acted as the sponsor to Cottonwood Multifamily REIT I, Inc. As a result of their interests in Cottonwood Residential O.P., LP and other Cottonwood Residential O.P., LP programs, their obligations to other investors and the fact that they engage in and they will continue to engage in other business activities on behalf of themselves and others, these real estate and management professionals will likely face conflicts of interest in allocating their time among us and Cottonwood Residential O.P., LP other Cottonwood Residential O.P., LP sponsored programs and other business activities in which they are involved. Our executive officers and our key real estate and management professionals are not obligated to devote a fixed amount of their time to us.

We believe that our executive officers and the other key professionals have sufficient time to fully discharge their responsibilities to us and to the other businesses in which they are involved. We believe that our affiliates and executive officers will devote the time required to manage our business and expect that the amount of time a particular executive officer or affiliate devotes to us will vary during the course of the year and depend on our business activities at the given time. Because we have not commenced operations, it is difficult to predict specific amounts of time an executive officer or affiliate will devote to us. We expect that our executive officers and affiliates will generally devote more time to programs raising and investing capital than to programs that have completed their offering stages, though from time to time each program will have its unique demands. Because many of the operational aspects of Cottonwood Residential O.P., LP programs are very similar, there are significant efficiencies created by the same team of individuals providing services to multiple programs.

Receipt of Fees and Compensation by Cottonwood Residential O.P., LP and its Affiliates

Cottonwood Residential O.P., LP will receive a promotional interest equal to 20% of the profits of each joint venture in exchange for identifying investment opportunities for our operating partnership.

We intend to engage Cottonwood Capital Property Management II, LLC, which is indirectly owned by Cottonwood Residential O.P., LP, as our asset manager and our property manager for all of our multifamily apartment communities. The asset management agreement and the property management agreements will be long-term contracts that cannot be terminated other than because of the fraud, gross negligence or willful misconduct of Cottonwood Capital Property Management II, LLC. Cottonwood Capital Property Management II, LLC will receive compensation for its services as the property and asset manager of our assets. Among other matters, this compensation arrangement could affect our judgment with respect to:

• the continuation, renewal or enforcement of the property management agreements between us, our subsidiaries and Cottonwood Capital Property Management II, LLC; and

• decisions regarding the disposition of assets that would result in the termination of any property management agreement.

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Joint Venture Decisions

Our operating partnership intends to enter into one or more joint ventures with Cottonwood Residential O.P., LP. The joint venture agreements (the form of which is attached hereto as Exhibit 6.4) require that all major decisions regarding the joint venture be made by both our operating partnership and Cottonwood Residential O.P., LP. Our operating partnership’s interests and the interests of Cottonwood Residential O.P., LP may not be similar. Because the same persons are members of our board of directors and members of the board of directors of Cottonwood Residential, Inc., the general partner of Cottonwood Residential O.P., LP, there will likely be a conflict of interest between their obligations to Cottonwood Residential O.P., LP and their obligations to us and our operating partnership. Our operating partnership and Cottonwood Residential O.P., LP have entered into the Investment Policy Agreement (an executed copy of which is attached hereto as Exhibit 6.8) to help mitigate these conflicts.

In addition, Cottonwood Residential, Inc. has issued stock and warrants to certain institutional investors which include the right to cause a change in the management and control of Cottonwood Residential, Inc. under certain circumstances. If these institutional investors exercise this right, Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP will be controlled by third parties. In such event, it is possible that the goals of Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP will be different than our goals, and there may not be a method to resolve such conflict.

INVESTMENT OBJECTIVES AND CRITERIA

General

Our investment objectives are to:

• preserve, protect and return invested capital;

• pay attractive and stable cash distributions to shareholders; and

• realize capital appreciation in the value of our investments over the long term.

Our board of directors may revise our investment policies, which we describe in more detail below, without the approval of our shareholders.

Investment Strategy

We will use the net proceeds of this offering to invest directly or indirectly in multifamily apartment communities and multifamily real estate related assets located throughout the United States. We will do all of our investing through our operating partnership and anticipate that all or substantially all of our investments will be made through our joint ventures with Cottonwood Residential O.P., LP. In the event that Cottonwood Residential O.P., LP declines to participate in an investment that our board of directors has approved, we may acquire or participate in the investment directly.

We anticipate that our investments will be comprised of stabilized Class A multifamily apartment communities. We will seek to acquire and actively manage income-producing properties, with the objective of providing a stable and secure source of income for our shareholders and maximizing potential returns upon disposition of our assets through capital appreciation. We will primarily target properties that are located in major metropolitan areas in the western, southwestern and southeastern regions of the United States that have, in the opinion of the board of directors, attractive investment dynamics for property owners. We intend to target properties that were constructed after 2000; provided, however, we may invest in older properties if our board of directors determines that it is in our best interest. We, or the joint ventures, will engage Cottonwood Capital Property Management II, LLC to manage our multifamily apartment communities and provide other related services.

In addition to investments in multifamily apartment communities, we may make mezzanine loans or make preferred equity investments to or in entities that have been formed for the purpose of acquiring or developing

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multifamily apartment communities. We anticipate that the mezzanine loans may have no security, may be directly or indirectly secured by the applicable multifamily apartment community or may be structured so that we or the joint ventures have the right to foreclose on the ownership interests in the entity to which we are making the mezzanine loan. We anticipate that we will not have significant voting rights with respect to an entity in which we made a preferred equity investment.

After we have invested substantially all of the offering proceeds from this offering, we expect that investments in the multifamily apartment communities will directly or indirectly comprise 80% or more of the aggregate cost of our portfolio, while multifamily real estate related assets (which consists of mezzanine loans and preferred equity interests) will comprise 20% or less of the aggregate cost of our portfolio. Our board of directors may revise this targeted portfolio allocation from time to time, or at any time, if it determines that a different portfolio composition is in our shareholders’ best interests.

Multifamily Apartment Communities. We will target multifamily apartment communities that meet the following criteria:

• Investment Criteria: A multifamily apartment community with the following general characteristics (which may be altered by our board of directors in its sole discretion):

• be a multifamily apartment community built after 2000 and complete or substantially complete as of the date acquired by one of our joint ventures;

• be located in a primary market or a secondary market (as defined below);

• have an average occupancy of 85% during the 30-day period prior to the date the multifamily apartment community is placed under contract by one of our joint ventures;

• derive at least 75% of its projected stabilized net operating income from rental apartments;

• require no more than a $15,000,000 equity investment; and

• be a single asset and not part of a multiple asset portfolio purchase, joint venture or partnership.

• Diversification Criteria: The multifamily apartment community must not result in an expected permanent capital structure upon placement of debt financing that results in greater than:

• $15,000,000 of our equity capital in our operating partnership being invested in multifamily apartment communities in a single primary market; or

• $10,000,000 of our equity capital in our operating partnership being invested in multifamily apartment communities in a single secondary market.

Exclusivity. Except as set forth herein (including until Cottonwood Multifamily REIT I, Inc., an entity that was formed by our sponsor) and until at least 85% of the capital raised in this offering has been identified for investment or invested in multifamily apartment communities and multifamily real estate related assets, Cottonwood Residential O.P., LP shall be required to bring each multifamily apartment community that meets the investment criteria and diversification criteria (listed above), to our operating partnership if our operating partnership has equity available to make the required equity investment in such multifamily apartment community. Cottonwood Residential O.P., LP may, but shall not be required to, present other potential investments in multifamily real estate related assets to our operating partnership. In addition, Cottonwood Residential O.P., LP may, in its sole discretion, present investment opportunities to our operating partnership that do not meet the investment criteria and diversification criteria. Notwithstanding the foregoing, Cottonwood Residential O.P., LP and its affiliates will freely and without limitation be permitted to pursue investment opportunities in multifamily apartment communities that meet the investment criteria and diversification criteria if:

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• Available Equity Capital: Ninety percent (90%) of the anticipated equity required for the acquisition of the multifamily apartment community exceeds our operating partnership’s equity capital available for investment in such multifamily apartment community;

• Like-Kind Transactions: Cottonwood Residential O.P., LP or its affiliates target the acquisition of the multifamily apartment community for the purpose of identifying all or a portion of the multifamily apartment community as replacement property in connection with a deferred exchange pursuant to Sections 1031 or 1033 of the Internal Revenue Code of 1986, as amended;

• Roll-Up Transactions: Cottonwood Residential O.P., LP or its affiliates are acquiring all or an undivided interest in the multifamily apartment community as part of Cottonwood Residential O.P., LP’s broader investment strategy involving the roll-up of fractional or tenant-in-common interests in multifamily apartment communities in exchange for cash and/or limited partnership interests in Cottonwood Residential O.P., LP; or

• Existing Interests: Cottonwood Residential O.P., LP or its affiliates are acquiring interests in multifamily apartment communities that are held by third parties in existing joint ventures or similar existing investment vehicles of Cottonwood Residential O.P., LP or its affiliates.

Additional Offerings Sponsored by Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP and its affiliates may form additional entities, including, without limitation, additional real estate investment trusts, limited liability companies and limited partnerships (each a “competing entity”), which may have investment objectives that are similar to our operating partnership, so long as:

• Our operating partnership has identified for investment or invested at least 85% of the capital raised pursuant to this offering; and

• This offering has terminated.

Priority. Provided that our operating partnership has equity available to make the required equity investment, our operating partnership shall have the first priority (other than until Cottonwood Multifamily REIT I, Inc. has invested or identified for investment at least 85% of its capital) to invest in multifamily apartment communities until at least 85% of the capital raised pursuant to this offering has been identified for investment or invested in multifamily apartment communities and multifamily real estate related assets. In the event of the sale of any multifamily apartment community or multifamily real estate related asset owned by our operating partnership, Cottonwood Residential O.P., LP shall present potential investment opportunities in multifamily apartment communities to our operating partnership only after any competing entity (as described above) has at least 85% of its available capital invested or identified for investment. In the event that any competing entity has available capital from the sale of any asset, priority will be given to either our operating partnership or the competing entity based on the date of the earlier disposition date.

Investments Generally. Our board of directors may, in its sole discretion, approve for investment in our operating partnership a multifamily apartment community that does not satisfy the investment criteria and diversification criteria (listed above) if the board of directors determines that the multifamily apartment community otherwise satisfies our investment objectives.

Primary Markets. We consider the following metropolitan areas to be primary markets:

• Orlando, Florida

• Atlanta, Georgia

• Dallas, Texas

• Houston, Texas

• Phoenix, Arizona

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• Denver, Colorado

• Salt Lake City, Utah

• Miami, Florida

• Portland, Oregon

Secondary Markets: We consider the following metropolitan areas to be secondary markets:

• Raleigh, North Carolina

• Durham, North Carolina

• Charlotte, North Carolina

• Tampa, Florida

• Nashville, Tennessee

• Austin, Texas

• San Antonio, Texas

Promotional Interest. In exchange for identifying investment opportunities for our operating partnership, Cottonwood Residential O.P., LP will receive a promotional interest equal to 20% of the profits of each joint venture. For more details see the Form of Joint Venture Agreement in Exhibit 6.4.

Investment Committee

We intend to establish an investment committee that will analyze and approve any investment to be made by us. The investment committee will have 5 committee members and is currently comprised of Daniel Shaeffer, Chad Christensen, Gregg Christensen, Paul Fredenberg and Enzio Cassinis. The investment committee may request information from third parties in making its recommendations.

Properties

Acquisition

It is anticipated that we will purchase properties, as described above, pursuant to purchase and sale agreements with unaffiliated sellers. We may also enter into contribution agreements whereby a holder of real estate desires to exchange the real estate for limited partner units in our operating partnership. If this occurs, we will amend and restate the partnership agreement of our operating partnership. The acquisition structure for such properties is currently unknown, but it is anticipated to be as described in “Investment Strategy” above. Cottonwood Residential O.P., LP may acquire multifamily apartment communities and warehouse such asset until we have sufficient funds to acquire the multifamily apartment community. In such event, the purchase price will be equal to the price paid by Cottonwood Residential O.P., LP for such multifamily apartment community.

In the event that the acquisition of a multifamily apartment community requires capital in excess of the amount raised by us, Cottonwood Residential O.P., LP will make a loan to us for the amount of such excess needed to acquire such multifamily apartment community. Any such loan will bear interest at a rate equal to 6% per annum. We will use the proceeds from the sale of shares to repay the principal and accrued interest on any such loan made.

We may have the opportunity to acquire investments during the offering period which require equity in excess of the amount raised by us at the time the investment must be purchased. If any such instances occur, Cottonwood Residential O.P., LP may make temporary loans to us for any amounts we are required to contribute to the joint venture in excess of the amount available by us to invest at the time of acquisition. Any loan made by Cottonwood Residential O.P., LP will bear interest at 6% per annum and will be repaid as additional shares are sold by us.

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Financing

We intend to finance the purchase of the multifamily apartment communities with proceeds of this offering and loans obtained from third party lenders. We anticipate the use of moderate leverage to enhance total cash flow to our shareholders. We will target an aggregate loan-to-value ratio for multifamily apartment communities we acquire of between 50% and 70%, based on the purchase price of the multifamily apartment community or the fair market value of the multifamily apartment community at the time that the financing is obtained; provided, however, that we may obtain financing that is less than or exceeds such loan-to-value ratio in the discretion of our board of directors if the board of directors deems it to be in our best interest, or the best interest of our shareholders, to obtain such financing. We anticipate that all financing obtained to acquire multifamily apartment communities will be non-recourse to the joint ventures, our operating partnership and us. However, it is likely that at least one of the joint venture partners, which is anticipated to be Cottonwood Residential O.P., LP, but could also include us, will be required to enter into guaranties for the loans that relate to certain non-recourse carve-outs. The terms of any financing to be obtained are not currently known and we have not obtained any financing commitments for any multifamily apartment communities.

We may obtain a line of credit or other financing that will be secured by one or more of our assets. We intend to use the proceeds from any line of credit or financing to bridge the acquisition of, or acquire, the multifamily apartment communities and multifamily real estate related assets if our board of directors determines that we require such funds to acquire the multifamily apartment communities or real estate related assets.

Cottonwood Residential O.P., LP may, but is not obligated to, lend us money. All of the terms and conditions of such loan shall be determined by us and Cottonwood Residential O.P., LP; provided however that the interest rate on any such loan shall not exceed the 10-year Treasury rate plus 600 basis points.

Operations

We anticipate holding and managing our investments until December 31, 2024, the termination date (which may be extended by our board of directors for two 1-year extensions and may be extended for two additional 1-year extensions by a majority vote of the shareholders). Board approval and shareholder approval of such extension must take place at least three months before the scheduled termination date. If our board of directors does not approve an extension we will begin an orderly sale of our assets within a one-year period from the date our board of directors made the decision not to extend. If we do not get shareholder approval to extend the term we will begin an orderly sale of our assets within a one-year period from date of the shareholder vote. If our shareholders approve the second and last 1-year extension, we will begin an orderly sale of our assets within a one-year period from the final termination date (December 31, 2028). However, the termination date may be accelerated in the sole discretion of the board of directors. It is possible that we could merge with Cottonwood Residential, Inc.

In the event that a listing occurs on or before the termination date, we will continue perpetually unless we are dissolved pursuant to a vote of our shareholders or any applicable provision of the Maryland General Corporation Law. A listing shall mean the commencement of trading of our common stock on any securities exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended, any over the counter exchange or, as determined in the sole discretion of our board of directors, any similar exchange that offers sufficient trading to offer similar liquidity to our shareholders. A listing shall also be deemed to occur on the effective date of a merger in which the consideration received by our shareholders is securities of another entity that are listed on any securities exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended, any over the counter exchange or, as determined in the sole discretion of our board of directors, any similar exchange that offers sufficient trading to offer similar liquidity to our shareholders. For more details, see Article XI of our Charter in Exhibit 2.1.

Joint Venture

Our operating partnership intends to enter into one or more joint ventures with Cottonwood Residential O.P., LP, which is the operating partnership of Cottonwood Residential, Inc. The joint venture will be co-managed by our operating partnership and Cottonwood Residential O.P., LP which means that we will be dependent on Cottonwood Residential O.P., LP, as the sole member of our joint venture partners, to make decisions with us

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regarding our investments. Cottonwood Residential O.P., LP will own at least a 10% interest in each joint venture, but its ownership may vary on a joint venture by joint venture basis in its sole discretion. The capital contributions to each joint venture will initially be made approximately 90% by us and 10% by Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP may invest more than 10%, but shall never invest less than 10% of the capital required for each joint venture. It is anticipated that all of our multifamily apartment communities will be acquired through the joint ventures. If Cottonwood Residential O.P., LP acquires a tenant in common interest in a multifamily apartment community acquired by a joint venture, Cottonwood Residential O.P., LP’s obligation to make capital contributions will be reduced by the amount of equity used by Cottonwood Residential O.P., LP to acquire such tenant in common interest. To the extent that the tenant in common interest represents at least a 10% undivided interest in the multifamily apartment community, Cottonwood Residential O.P., LP will not be required to make any capital contributions to the applicable joint venture in exchange for its interest in such joint venture. Cottonwood Residential O.P., LP will be entitled to receive 20% of net income and distributions from the joint venture even if it has not made any capital contributions to the joint venture. This promotional interest is subordinated to our receipt of an 8% preferred return. Multifamily apartment communities may be acquired directly by our operating partnership in the event that Cottonwood Residential O.P., LP does not want to participate in a transaction which our board of directors has approved. See “The Form of Joint Venture Agreement” for more details.

In exchange for identifying investment opportunities for our operating partnership, Cottonwood Residential O.P., LP will receive a promotional interest equal to 20% of the profits of each joint venture. For more details see the Form of Joint Venture Agreement in Exhibit 6.4. Each joint venture will use the Form of Joint Venture Agreement as attached hereto, but the form is subject to change to account for changes required by a lender and actual contributions made by our operating partnership and Cottonwood Residential O.P., LP.

After December 31, 2020, Cottonwood Residential O.P., LP will have the option, in its sole discretion, to purchase our operating partnership’s interest in all, but not less than all, of the joint ventures and any direct interests in real property not held in a joint venture at their fair market value, by delivering written notice to our operating partnership of its election to exercise the purchase option. Our operating partnership and Cottonwood Residential O.P., LP will each appoint one third-party appraiser to provide an estimate of the fair market value of the joint ventures’ assets and the direct interests in real property not held in a joint venture as if such assets were sold as of the date of the notice, reduced by the customary closing costs, fees and commissions in the jurisdiction in which the multifamily apartment communities are located which would be applied if the joint ventures sold such multifamily apartment communities in a third party sale. The selected appraisers will provide their determinations of value. If the two appraised values are within 5% of each other, the value of the investments will be the average of the two appraised values. If the two appraised values are not within 5% of each other, the two selected appraisers will mutually agree upon a third appraiser and the third appraiser will provide an appraised value. The value of the joint ventures’ assets will then be equal to the average of the third appraised value and whichever of the prior appraised values is closest to the third appraised value. The price to be paid for our interest in the joint ventures will be determined as if there was a hypothetical sale of all the joint ventures’ assets at the appraised value (subtracting all liabilities) and a distribution is made pursuant to the terms of each joint venture agreement. Upon the determination of the net value of our interest in the joint ventures and our direct interests in real property not held in a joint venture, Cottonwood Residential O.P., LP will have thirty (30) days to elect whether to complete the purchase option and purchase our operating partnership’s interest in the joint ventures and our direct interests in real property not held in a joint venture. If Cottonwood Residential O.P., LP does not elect to proceed with the purchase option, it will not be permitted to send notice and initiate the appraisal process for a period of six (6) months and all costs and expenses related to the purchase option will be borne by Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP will have the right to restructure the purchase of our interest in the joint ventures to maximize its tax consequences. Cottonwood Residential O.P., LP will have the right to assign this purchase option to an affiliate of Cottonwood Residential O.P., LP. This option will expire upon the earliest of: (i) the sale of the last joint venture’s assets, (ii) December 31, 2030 or (iii) a merger of our company into another REIT, real estate company or other entity. For further details see the executed Purchase Option Agreement in Exhibit 6.7.

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Investment Limitations under the Investment Company Act of 1940

We intend to conduct our operations so that neither we nor any of our subsidiaries, including the joint ventures, will be required to register as an investment company under the Investment Company Act. Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that:

• pursuant to Section 3(a)(1)(A), is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or

• pursuant to Section 3(a)(1)(C) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).

We believe that neither we nor our operating partnership will be required to register as an investment company based on the following analysis. With respect to the 40% test, all of the joint ventures through which we and our operating partnership will own our assets will be majority-owned subsidiaries that will not themselves be investment companies and will not be relying on the exceptions from the definition of investment company under Section 3(c)(1) or Section 3(c)(7).

With respect to the primarily engaged test, we and our operating partnership will be holding companies and do not intend to invest or trade in securities ourselves. Rather, through the joint ventures which will be majority-owned subsidiaries of our operating partnership, we and our operating partnership will be primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real estate and real estate-related assets.

If any of the subsidiaries of our operating partnership, including the joint ventures, fail to meet the 40% test, we believe they will usually, if not always, be able to rely on Section 3(c)(5)(C) of the Investment Company Act for an exception from the definition of an investment company. (Otherwise, they should be able to rely on the exceptions for private investment companies pursuant to Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act.) As reflected in no-action letters, the SEC staff’s position on Section 3(c)(5)(C) generally requires that an issuer maintain at least 55% of its assets in “mortgages and other liens on and interests in real estate,” or qualifying assets; at least 80% of its assets in qualifying assets plus real estate-related assets; and no more than 20% of the value of its assets in other than qualifying assets and real estate-related assets, which we refer to as miscellaneous assets. To constitute a qualifying asset under this 55% requirement, a real estate interest must meet various criteria based on no-action letters. We expect that any of the joint ventures relying on Section 3(c)(5)(C) will invest at least 55% of its assets in qualifying assets, and approximately an additional 25% of its assets in other types of real estate-related assets. If any subsidiary relies on Section 3(c)(5)(C), we expect to rely on guidance published by the SEC staff or on our analyses of guidance published with respect to types of assets to determine which assets are qualifying real estate assets and real estate-related assets.

To maintain compliance with the Investment Company Act, our subsidiaries may be unable to sell assets we would otherwise want them to sell and may need to sell assets we would otherwise wish them to retain. In addition, our subsidiaries may have to acquire additional assets that they might not otherwise have acquired or may have to forego opportunities to make investments that we would otherwise want them to make and would be important to our investment strategy. Moreover, the SEC or its staff may issue interpretations with respect to various types of assets that are contrary to our views and current SEC staff interpretations are subject to change, which increases the risk of non-compliance and the risk that we may be forced to make adverse changes to our portfolio.

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INDUSTRY OVERVIEW AND MARKET OPPORTUNITY

Industry Data

Overview

We believe that current market dynamics and underlying fundamentals suggest the positive trends in United States multifamily housing will continue. Steady job growth, broadly increasing rentership rates, increasing household formation and aligned demographics provide the backdrop for strong renter demand. We believe that other factors impacting the prime United States renter demographic such as delayed major life decisions, increased levels of student debt and tight credit standards in the single-family home mortgage market support the value proposition for owning multifamily apartment communities.

Economic and Demographic Landscape

We believe that job growth across an increasingly diverse group of sectors and regions of the United States has contributed to a notable economic expansion across the country. According to U.S. Bureau of Labor Statistics (the “BLS”) data, during the most recent recession, 8.7 million jobs were lost. Though progress erasing the jobs deficit was initially slow, the economy has now recovered all of the jobs lost between the start of the recession in December 2007 and early 2010, and continued to add jobs since.

Source: U.S. Bureau of Labor Statistics

We believe that favorable demographic trends under way will result in an increased demand for apartment housing. The echo-boom generation (generally those born between 1982 and 1994) continues to enter the labor force, obtain their own housing for the first time and are members of the 20 to 34 year-old age group, the predominant renter age range.

Source: U.S. Bureau of Labor Statistics

According to BLS data, by November 2015, nonfarm payroll employment was 3.3% (approximately 4.6 million jobs) higher than it was at the start of the recession, with 2.6 million jobs added to the United States economy since December 2014. Further supporting the economic recovery, BLS data shows the United States unemployment rate has fallen from a cyclical high of 10.0% in October 2009 to 5.0% as of November 2015.

Sustained growth in prime renter population

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According to United States Census Bureau data, individuals under the age of 35 have the highest rentership rate with nearly 64% renting rather than owning their homes. Moreover, while this age group has a higher propensity to rent, United States Census Bureau data shows that the rentership rates for nearly all age groups have increased from 2013 to 2014.

Rising rentership rates and increase in household formation

Source: U.S. Census Bureau

According to United States Census Bureau data, the United States rentership rate has steadily increased from historically low rates in the mid-2000’s. Since hitting a low of 31% in 2004, the rentership rate has increased to 36% as of the third quarter of 2015.

Source: U.S. Census Bureau

We believe the recession most notably impacted household formation in the prime renter demographic. As households doubled-up due to economic constraints and job loss, the United States Census Bureau data shows the national household formation rate for households under the age of 35 declined by an annual average rate of 0.8% from 2008 through 2010. However, this data also shows that from 2011 through 2014, the annual average rate of household formation in the same age group increased by over 160 basis points to 0.9% as younger households decoupled and job growth accelerated.

Affordability driving demand for apartments.

We believe that many households choose to rent given maintenance costs and other burdens associated with homeownership. In addition, the ability to vary location and the lease terms associated with renting provides flexibility that appeals to many households, particularly those in younger groups who prioritize mobility.

Compelling national apartment market fundamentals.

According to the National Council of Real Estate Investment Fiduciaries (NCREIF) research, over the past approximately 38 years, the multifamily sector has generated superior returns compared to other major core real estate sectors.

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PLAN OF OPERATION

General

We are a newly organized Maryland corporation that intends to qualify as a REIT beginning no later than the taxable year ending December 31, 2016, which may be extended by our board of directors until the taxable year ending December 31, 2017. We expect to use substantially all of the net proceeds from this offering to invest, primarily through joint ventures with Cottonwood Residential O.P., LP, in multifamily apartment communities that are located in major metropolitan areas in the western, southwestern and southeastern regions of the United States which have been built after 2000. Provided, however, we may invest in older properties if our board of directors determines that it is in our best interest. We may also invest in multifamily real estate related assets, which consist of mezzanine loans and preferred equity. We do not intend to do large portfolio investments.

Although this is our current target portfolio, we may make adjustments to our target portfolio based on real estate market conditions and investment opportunities. We will not forego what we believe to be a good investment because it does not precisely fit our expected portfolio composition. Thus, to the extent that our investment committee presents us with attractive investment opportunities that allow us to meet the REIT requirements under the Internal Revenue Code, our portfolio composition may vary from what we initially expect. Other than as described below, as of the date of this offering circular we have not commenced operations.

We have established an investment committee which will make recommendations on all investments to our board of directors. All proposed investments must be approved by at least a majority of our board of directors.

Our properties will be managed by Cottonwood Capital Property Management II, LLC, which is indirectly owned by Cottonwood Residential O.P., LP.

We intend to make an election to be taxed as a REIT under the Internal Revenue Code as discussed herein. If we qualify as a REIT for federal income tax purposes, we generally will not be subject to federal income tax to the extent we distribute qualifying dividends to our shareholders. If we fail to qualify as a REIT in any taxable year after electing REIT status, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and cash available for distribution. However, we believe that we will be organized and will operate in a manner that will enable us to qualify for treatment as a REIT for federal income tax purposes beginning no later than the taxable year ending December 31, 2016 (or December 31, 2017 as described herein), and we intend to continue to operate so as to remain qualified as a REIT for federal income tax purposes thereafter.

We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter. We will present our financial statements and operating partnership income, expenses and depreciation on a consolidated basis with our operating partnership, which will not file a federal income tax return. All items of income, gain, deduction (including depreciation), loss and credit will flow through the operating partnership to us. These tax items will not generally flow through us to our shareholders. Rather, our net income and net capital gain will effectively flow through us to our shareholders as and when we make distributions.

Liquidity and Capital Resources

We are dependent upon the net proceeds from this offering to conduct our proposed operations. We will obtain the capital required to purchase multifamily apartment communities and make investments in multifamily real estate related assets and conduct our operations from the proceeds of this offering, from secured or unsecured financings from banks and other lenders, and from any undistributed funds from our operations. As of the date of this offering circular, we have not made any investments, and our total assets consist of $10,000 of cash. For information regarding the anticipated use of proceeds from this offering, see “Estimated Use of Proceeds.”

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We will not sell any shares in this offering unless we raise a minimum of $2,000,000 in gross offering proceeds from persons who are not affiliated with us or Cottonwood Residential O.P., LP. If we are unable to raise substantially more funds in the offering than the minimum offering amount, we will make fewer investments resulting in less diversification in terms of the type, number, and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. Further, we will have certain fixed operating expenses regardless of whether we are able to raise substantial funds in this offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions. We do not expect to establish a permanent reserve from our offering proceeds for maintenance and repairs of real properties. However, to the extent that we have insufficient funds for such purposes, we may establish reserves from gross offering proceeds, out of cash flow from operations, or from net cash proceeds from the sale of properties.

We currently have no outstanding debt. We may leverage individual assets up to 50% to 70% of the cost of such assets. We may leverage a particular asset in an amount that is greater or lesser than the foregoing, in the board of directors’ sole discretion. However, we expect the debt financing for our entire portfolio to be no more than 70% of the cost of our tangible assets (before deducting depreciation or other non-cash reserves). Our charter does not limit us from incurring debt.

We intend to make an election to be taxed as a REIT under the Internal Revenue. To maintain our qualification as a REIT, we will be required to make aggregate annual distributions to our shareholders of at least 90% of our REIT taxable income (computed without regard to the dividends-paid deduction and excluding net capital gain). Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant. Provided we have sufficient available cash flow, we intend to authorize and declare distributions based on daily record dates and make distributions on a monthly basis. We have not established a minimum distribution level.

Results of Operations

We were formed on June 10, 2016 and, as of the date of this offering circular, we have not commenced operations. We expect to use substantially all of the net proceeds from this offering to invest in, either directly or through the joint ventures, and manage a portfolio of multifamily apartment communities and multifamily real estate related assets, including the acquisition of multifamily apartment communities and investments in real estate-related assets such as mezzanine and bridge loans and preferred equity investments. We will not commence any significant operations until we have raised the minimum offering amount of $2,000,000 from persons who are not affiliated with us or Cottonwood Residential O.P., LP.

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PRIOR PERFORMANCE SUMMARY

We are a newly formed corporation and will not commence operations until we raise the minimum offering amount of $2,000,000. As a result, we do not have any prior performance or experience. In addition, the joint ventures will be newly formed Delaware limited liability companies, so they will also have no experience acquiring, operating, constructing or managing real estate.

The information presented in this section represents the historical experience of real estate programs, which we refer to as “prior real estate programs,” sponsored by Cottonwood Residential Inc., Cottonwood Residential O.P., LP and their affiliates. The following summary is qualified in its entirety by reference to the Prior Performance Tables, which may be found in Exhibit 15.2 of this offering circular. Investors in our shares should not assume that they will experience returns, if any, comparable to those experienced by investors in the prior real estate programs. Investors who purchase our shares will not thereby acquire any ownership interest in any of the entities to which the following information relates.

Experience and Background of Cottonwood Residential O.P., LP

Our sponsor, Cottonwood Capital Property Management II, LLC, was formed as a Delaware limited liability company on January 25, 2008. It is wholly owned by Cottonwood Capital Holdings, LLC, which is wholly owned by Cottonwood Capital Management, Inc. The sole shareholder of Cottonwood Capital Management, Inc. is Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP is managed by its general partner, Cottonwood Residential, Inc. Cottonwood Residential, Inc. was formed on September 24, 2009.

Cottonwood Residential, Inc. does all of its investing through Cottonwood Residential O.P., LP, its operating partnership. Since Cottonwood Residential O.P., LP’s formation in 2009, Cottonwood Residential O.P., LP, has grown into an industry-leading, fully integrated, national multifamily platform. As of March 31, 2016, Cottonwood Residential O.P., LP provides property and asset management services to a $1.85 billion platform of multifamily assets representing approximately 21,529 multifamily apartment units across 18 states. The size and scale of Cottonwood Residential, Inc.’s platform was recognized in the National Multifamily Housing Counsel’s 2014 list of the top 51 apartment managers in the United States, where Cottonwood Residential, Inc. was ranked 42^nd.

Cottonwood Residential O.P., LP also has a significant investment platform, holding ownership interests in 50 multifamily apartment communities and other related assets, representing 15,304 units and over $1 billion in total gross asset value. Since the formation of Cottonwood Residential, Inc.’s and Cottonwood Residential O.P., LP’s investment platform in 2009, Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP have secured capital commitments through contributions by direct property owners, broker-dealer networks and institutional investors totaling over $475 million.

Cottonwood Residential O.P., LP secured a $125 million commitment in 2011 and an additional $23.75 million commitment in 2014 from affiliates of FrontRange Capital Partners and Equity Resource Investments to capitalize on attractive multifamily investment opportunities within its managed platform. In addition, in 2015, Cottonwood Residential, Inc. secured an additional $52.5 million debt commitment and $52.5 million equity commitment from Equity Resource Investments. Cottonwood Residential, Inc. was restructured at the time of the first commitment to provide institutional-quality board representation and governance, and internalized management.

In connection with Cottonwood Residential, Inc.’s and Cottonwood Residential O.P., LP’s internalization in 2011, the founding principals retained an ownership stake in Cottonwood Residential O.P., LP. In addition, the founding principals indirectly own a majority of the voting stock of Cottonwood Residential, Inc. The aligned ownership structure with other investors provides a demonstrable interest in the success of the broader enterprise.

Recognizing the value of aligned interests, Cottonwood Residential O.P., LP will originate all potential investments and co-invest alongside us; provided, however, Cottonwood Residential O.P., LP’s approval to participate in each joint venture is conditioned on the approval of certain institutional partners of Cottonwood Residential O.P., LP. The co-investment amounts will vary, but will represent at least 10% of the total investments of each joint venture between us and Cottonwood Residential O.P., LP.

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Cottonwood Residential, Inc. has issued stock and warrants to certain institutional investors which include the right to cause a change in the management and control of Cottonwood Residential, Inc. under certain circumstances. If these institutional investors exercise this right, Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP will be controlled by third parties. In such event, it is possible that the goals of Cottonwood Residential, Inc. and Cottonwood Residential O.P., LP will be different than our goals, and there may not be a method to resolve such conflict.

Competitive Strengths of Cottonwood Residential O.P., LP

Proven management and strong institutional backing.

Cottonwood Residential O.P., LP, is managed by its general partner, Cottonwood Residential, Inc. Cottonwood Residential, Inc.’s senior management team has significant experience in managing multifamily investments and offering alternatives and long-term solutions to investors in varying investment structures. Average executive management tenure with Cottonwood Residential, Inc. exceeds 8 years, with the three highest ranking officers having been with Cottonwood Residential, Inc. since its formation. The senior leadership team has an average of 16+ years of industry experience, providing Cottonwood Residential, Inc. with deep expertise and relationships in the market. In addition, Cottonwood Residential, Inc.’s board of directors includes two former senior executives of one of the largest publicly traded apartment REITs in the United States, with each director having over two decades of industry experience.

Fully-integrated multifamily platform.

Cottonwood Residential O.P., LP’s expertise is derived from its complimentary operating segments across a geographically diverse footprint. Cottonwood Residential O.P., LP’s sponsorship provides:

Track record of performance

• Cottonwood Residential O.P., LP owns interests exceeding $1 billion multifamily assets, with total assets under management exceeding $1.85 billion.

• Cottonwood Residential O.P., LP has grown its net operating income under management by approximately 5.5x since 2009.

• Cottonwood Residential O.P., LP and Cottonwood Residential, Inc. have raised over $475 million in capital over the last 6 years for deployment in high quality multifamily investment opportunities.

• Cottonwood Residential O.P., LP has sourced debt capital in excess of $400 million since 2011.

Scale benefits and operating leverage

• Established operating platform with approximately 21,500 units under management and over 580 employees (approximately 110 corporate associates and approximately 470 on-site professionals) that will benefit us

• Best-in-class practices with respect to cost control and property and asset management

• Active lease management to minimize volatility in occupancy and increase rental collections

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Substantial expertise in our core strategy

• Multifamily acquisition and ownership – Generate recurring income and long-term capital growth from stable assets in strong locations

• Structured investments – High return capital infusions where Cottonwood Residential O.P., LP’s unique expertise as an owner and operator of multifamily properties provide enhanced risk-adjusted return prospects

Active portfolio management

• Dedicated asset management and construction management teams to optimize portfolio performance and identify asset repositioning opportunities

• Diligent approach to capital deployment and structured investment opportunities and strict enforcement of return hurdles

Prior Performance of Cottonwood Residential, Inc., Cottonwood Residential O.P., LP and their Affiliates

Cottonwood Residential O.P., LP has become the manager of 11 limited liability companies which were formed to accept the contribution of tenant in common interests in multifamily apartment communities formerly owned by tenant in common owners or which were converted from Delaware statutory trusts. These limited liability companies accepted the contribution of undivided interests in real estate in exchange for limited liability company interests. Approximately 83 investors participated in these limited liability companies. All of the limited liability companies acquired multifamily apartment communities, of which 8 were located in the southeastern United States, 2 were located in the southwestern United States and 1 was located in the northwestern United States. All of the properties were previously owned. None of the properties have been sold. See Exhibit 15.1, Table III, Annual Operating Results of Prior Real Estate Programs for information regarding the last five programs sponsored by Cottonwood Residential O.P., LP. The following table sets forth information regarding these 10 limited liability companies and 1 tenant in common.

Name of Program	Type of Program	Launch Year	Program Status
Pavilions	Limited Liability Company	2011	Operating
Lily Flagg	Limited Liability Company	2011	Operating
Waterford Creek	Limited Liability Company	2012	Operating
Appling Lakes	Limited Liability Company	2012	Operating
Midtown Crossing	Limited Liability Company	2013	Operating
Brook Highland Place	Limited Liability Company	2013	Operating
Toscana	Limited Liability Company	2015	Operating
Scott Mountain	Limited Liability Company	2015	Operating
Courtney Oaks	Limited Liability Company	2015	Operating
Sanctuary	Limited Liability Company	2015	Operating
Summer Park	Tenant in Common	2015	Operating

Cottonwood Capital, LLC, which became a subsidiary of Cottonwood Residential O.P., LP in 2011, was formed in 2005 for the purpose of offering tenant in common interests in multifamily residential apartment communities. Cottonwood Capital, LLC or its affiliates sponsored 17 tenant in common programs. These prior tenant in common programs raised more than $157 million from over 419 investors. Purchasers who participated in more than one prior tenant in common program were counted as an investor for each such program. The tenant in common programs purchased 17 properties for an aggregate purchase price of more than $412 million, of which 4 were located in the southeastern United States, 9 were located in the southwestern United States, 1 was located in the northwestern United States and 3 were located in the western United States. All of the properties were previously owned. All of the properties were multifamily residential properties. Of these 17 programs, 6 have been sold. See Exhibit 15.1, Table IV Operating Results of Prior Real Estate Programs Which Have Completed Operations, for information regarding the tenant in common programs that have been sold. The following table sets forth information regarding the 17 tenant in common programs.

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Name of Program	Type of Program	Launch Year	Program Status
Northwest Corners	Tenant in Common	2005	Closed
Scott Mountain	Tenant in Common	2005	Closed
Tramore Village	Tenant in Common	2005	Closed
Camelot	Tenant in Common	2006	Operating
Valencia Park	Tenant in Common	2006	Closed
Fox Point	Tenant in Common	2006	Operating
Greenbrier	Tenant in Common	2006	Operating
Water Song	Tenant in Common	2007	Closed
Cottonwood Apartments	Tenant in Common	2007	Operating
West Town	Tenant in Common	2007	Operating
Gables Apartments	Tenant in Common	2007	Operating
Arbors at Windsor Lake	Tenant in Common	2008	Operating
Regatta	Tenant in Common	2008	Operating
Oak Ridge	Tenant in Common	2008	Operating
Copperfield	Tenant in Common	2008	Closed
Blue Swan	Tenant in Common	2008	Closed
Arbor Crossing	Tenant in Common	2009	Operating

Prior Programs with Adverse Results

The following is a summary of the prior real estate programs of Cottonwood Capital, LLC and its affiliates as of December 31, 2015 that have experienced adverse results. For more detailed information regarding some of these prior programs please see Exhibit 15.1, Table IV Operating Results of Prior Real Estate Programs Which Have Completed Operations.

Copperfield, a multifamily apartment community located in San Antonio, Texas, was acquired in September, 2008 and sold by the tenant in common owners in September, 2015. When distributions are included, investors experienced an average annualized rate of return on the investor’s initial equity invest of -0.98%.

Tramore Village, a multifamily apartment community located in Austell, Georgia, was acquired in December, 2005 and sold by the tenant in common owners in June, 2015. When distributions are included, investors experienced an average annualized rate of return on the investor’s initial equity investment of -0.63%.

Valencia Park, a multifamily apartment community located in Norcross, Georgia, was acquired in March, 2006 and sold by the tenant in common owners in March, 2015. When distributions are included, investors experienced an average annualized rate of return on the investor’s initial equity investment of -9.96%.

In addition, the prior real estate programs listed above were acquired from 2005 to 2009. In 2008, the United States economy experienced a significant recession. Real estate values in the United States were severely impacted. As a result of the recession, all of the prior real estate programs, at one or more times, failed to meet the projected distribution initially made by Cottonwood Capital, LLC and its affiliates with respect to such investment. Please see Exhibit 15.1, Table III Annual Operating Results of Prior Programs and Table IV Operating Results of Prior Real Estate Programs Which Have Completed Operations for more detailed information regarding the performance of some of the prior real estate programs. All prior programs for which anticipated liquidation dates were set forth in the original offering and for which such dates have passed, were liquidated on or before the anticipated liquidation date.

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MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the material United States federal income tax consequences of an investment in our common stock. The law firm of DLA Piper LLP (US) has acted as our tax counsel and reviewed this summary. For purposes of this section under the heading “Material Federal Income Tax Considerations,” references to “Cottonwood Multifamily REIT II,” “we,” “our,” and “us” mean only Cottonwood Multifamily REIT II, Inc. and not its subsidiaries or other lower-tier entities, except as otherwise indicated. This summary is based upon the Internal Revenue Code, the regulations promulgated by the United States Treasury Department, rulings and other administrative pronouncements issued by the Internal Revenue Service, and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the Internal Revenue Service would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. We have not sought and do not currently expect to seek an advance ruling from the Internal Revenue Service regarding any matter discussed in this offering circular. The summary is also based upon the assumption that we will operate Cottonwood Multifamily REIT II and its subsidiaries and affiliated entities in accordance with their applicable organizational documents. This summary is for general information only and does not purport to discuss all aspects of United States federal income taxation that may be important to a particular investor in light of its investment or tax circumstances or to investors subject to special tax rules, such as:

• financial institutions;

• insurance companies;

• broker-dealers;

• regulated investment companies;

• partnerships and trusts;

• persons who hold our stock on behalf of other persons as nominees;

• persons who receive our stock through the exercise of employee stock options (if we ever have employees) or otherwise as compensation;

• persons holding our stock as part of a “straddle,” “hedge,” “conversion transaction,” “constructive ownership transaction,” “synthetic security,” or other integrated investment;

• “S” corporations;

and, except to the extent discussed below:

• tax-exempt organizations; and

• foreign investors.

This summary assumes that investors will hold their common stock as a capital asset, which generally means as property held for investment.

The federal income tax treatment of holders of our common stock depends in some instances on determinations of fact and interpretations of complex provisions of United States federal income tax law for which no clear precedent or authority may be available. In addition, the tax consequences to any particular shareholder of holding our common stock will depend on the shareholder’s particular tax circumstances. You are urged to consult your tax advisor regarding the federal, state, local, and foreign income and other tax consequences to you in light of your particular investment or tax circumstances of acquiring, holding, exchanging, or otherwise disposing of our common stock.

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Taxation of Cottonwood Multifamily REIT II

We intend to elect to be taxed as a REIT beginning with the taxable year ending December 31, 2016, which may be extended by our board of directors until the taxable year ending December 31, 2017. We believe that we have been organized and expect to operate in such a manner as to qualify for taxation as a REIT.

Prior to the commencement of this offering, the law firm of DLA Piper LLP (US), acting as our tax counsel in connection with this offering, will render an opinion that our organization and current and proposed method of operation should enable us to be taxed as a REIT pursuant to Sections 856 through 860 of the Internal Revenue Code, commencing with our taxable year ending December 31, 2016, which may be delayed by our board of directors until the taxable year ending December 31, 2017. It must be emphasized that the opinion of DLA Piper LLP (US) will be based on various assumptions relating to our organization and operation and will be conditioned upon fact-based representations and covenants made by our management regarding our organization, assets, and income, and the past, present, and future conduct of our business operations. While we intend to operate so that we will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given by DLA Piper LLP (US) or by us that we will qualify as a REIT for any particular year. The opinion will be expressed as of the date issued and will not cover subsequent periods. Counsel will have no obligation to advise us or our shareholders of any subsequent change in the matters stated, represented or assumed, or of any subsequent change in the applicable law. You should be aware that opinions of counsel are not binding on the Internal Revenue Service, and no assurance can be given that the Internal Revenue Service will not challenge the conclusions set forth in such opinions.

Qualification and taxation as a REIT depends on our ability to meet on a continuing basis, through actual operating results, distribution levels, and diversity of stock and asset ownership, various qualification requirements imposed upon REITs by the Internal Revenue Code, the compliance with which will not be reviewed by DLA Piper LLP (US). Our ability to qualify as a REIT also requires that we satisfy certain asset tests, some of which depend upon the fair market values of assets that we own directly or indirectly. Such values may not be susceptible to a precise determination. Accordingly, no assurance can be given that the actual results of our operations for any taxable year will satisfy such requirements for qualification and taxation as a REIT.

Taxation of REITs in General

As indicated above, our qualification and taxation as a REIT depends upon our ability to meet, on a continuing basis, various qualification requirements imposed upon REITs by the Internal Revenue Code. The material qualification requirements are summarized below under “Material Federal Income Tax Considerations—Taxation of Cottonwood Multifamily REIT II—Requirements for Qualification—General.” While we intend to operate so that we qualify as a REIT, no assurance can be given that the Internal Revenue Service will not challenge our qualification, or that we will be able to operate in accordance with the REIT requirements in the future. See “Material Federal Income Tax Considerations—Taxation of Cottonwood Multifamily REIT II—Failure to Qualify.”

Provided that we qualify as a REIT, we will generally be entitled to a deduction for dividends that we pay to our shareholders and therefore will not be subject to federal corporate income tax on our taxable income that is currently distributed to our shareholders. This treatment substantially eliminates the “double taxation” at the corporate and shareholder levels that generally results from an investment in a corporation. In general, the income that we generate is taxed only at the shareholder level upon distribution to our shareholders.

Distributions to United States shareholders that are designated as capital gain distributions normally will be treated as long-term capital gains to the extent they do not exceed our actual net capital gain for the taxable year without regard to the period for which the United States shareholder has held his shares of common stock. A corporate United States shareholder might be required to treat up to 20% of some capital gain distributions as ordinary income. Long-term capital gains are generally taxable at maximum federal rates of 20% in the case of shareholders who are individuals and 35% in the case of shareholders that are corporations. Capital gains attributable to the sale of depreciable real property held for more than 12 months are subject to a 25% maximum federal income tax rate for taxpayers who are individuals, to the extent of previously claimed depreciation deductions.

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Any net operating losses and other tax attributes generally do not pass through to our shareholders, subject to special rules for certain items such as the capital gains that we recognize. See “—Taxation of Shareholders.”

If we qualify as a REIT, we will nonetheless be subject to federal tax in the following circumstances:

• We will be taxed at regular corporate rates on any undistributed taxable income, including undistributed net capital gains.

• We may be subject to the “alternative minimum tax” on our items of tax preference, including any deductions of net operating losses.

• If we have net income from prohibited transactions, which are, in general, sales or other dispositions of inventory or property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax. See “—Prohibited Transactions” and “—Foreclosure Property” below.

• If we elect to treat property that we acquire with a foreclosure of a mortgage loan or certain leasehold terminations as “foreclosure property,” we may thereby avoid the 100% tax on gain from resale of that property (if the sale would otherwise constitute a prohibited transaction), but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate (currently 35%).

• If we should fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below, but nonetheless maintain our qualification as a REIT because we satisfy other requirements, we will be subject to a 100% tax on an amount based on the magnitude of the failure, as adjusted to reflect the profit margin associated with our gross income.

• If we should violate the asset tests (other than certain de minimis violations) or other requirements applicable to REITs, as described below, and yet maintain our qualification as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subject to an excise tax. In that case, the amount of the excise tax will be at least $50,000 per failure, and, in the case of certain asset test failures, will be determined as the amount of net income generated by the assets in question multiplied by the highest corporate tax rate (currently 35%) if that amount exceeds $50,000 per failure.

• If we should fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year; (b) 95% of our REIT capital gain net income for such year; and (c) any undistributed taxable income from prior periods, we would be subject to a nondeductible 4% excise tax on the excess of the required distribution over the sum of (i) the amounts that we actually distributed and (ii) the amounts we retained and upon which we paid income tax at the corporate level.

• We may be required to pay monetary penalties to the Internal Revenue Service in certain circumstances, including if we fail to meet record keeping requirements intended to monitor our compliance with rules relating to the composition of a REIT’s shareholders, as described below in “—Requirements for Qualification—General.”

• If we acquire appreciated assets from a corporation that is not a REIT (i.e., a corporation taxable under subchapter C of the Internal Revenue Code) in a transaction in which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of the subchapter C corporation, we may be subject to tax on such appreciation at the highest corporate income tax rate then applicable if we subsequently recognize gain on a disposition of any such assets during the five-year period following their acquisition from the subchapter C corporation (provided, under recently promulgated regulations the five-year period is increased to a ten-year period in certain conversion transactions).

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• The earnings of our subsidiaries are subject to federal corporate income tax to the extent that such subsidiaries are subchapter C corporations. We will also be subject to this rule with regard to assets acquired by us before the effective date of our REIT election that have appreciated.

In addition, we and our subsidiaries may be subject to a variety of taxes, including payroll taxes and state and local and foreign income, property and other taxes on our assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated.

Requirements for Qualification—General

The Internal Revenue Code defines a REIT as a corporation, trust or association:

(1) that is managed by one or more trustees or directors;

(2) the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;

(3) that would be taxable as a domestic corporation but for its election to be subject to tax as a REIT;

(4) that is neither a financial institution nor an insurance company subject to specific provisions of the Internal Revenue Code;

(5) the beneficial ownership of which is held by 100 or more persons for at least 335 days of each taxable year of 12 months or during a proportionate part of a taxable year of less than 12 months;

(6) in which, during the last half of each taxable year, not more than 50% in value of the outstanding stock is owned, directly or indirectly, by five or fewer “individuals” (as defined in the Internal Revenue Code to include specified tax-exempt entities); and

(7) which meets other tests described below, including with respect to the nature of its income and assets.

The Internal Revenue Code provides that conditions (1) through (4) must be met during the entire taxable year, and that condition (5) must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year. Conditions (5) and (6) need not be met during a corporation’s initial tax year as a REIT. (In our case, we intend to elect to be taxed as a REIT for our taxable year ending December 31, 2016, which may be extended by our board of directors until December 31, 2017) Our charter provides restrictions regarding the ownership and transfer of our shares, which are intended to assist us in satisfying the share ownership requirements described in conditions (5) and (6) above.

We believe that we will issue in this offering common stock with sufficient diversity of ownership to satisfy conditions (5) and (6). In addition, our charter restricts the ownership and transfer of our stock so that we should continue to satisfy these requirements. The provisions of our charter restricting the ownership and transfer of our common stock are described in “Description of Shares—Restriction on Ownership of Shares.”

To monitor compliance with the share ownership requirements, we generally are required to maintain records regarding the actual ownership of our shares. To do so, we must demand written statements each year from the record holders of significant percentages of our stock pursuant to which the record holders must disclose the actual owners of the shares (i.e., the persons required to include our distributions in their gross income). We must maintain a list of those persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if we fail to comply with these record-keeping requirements. If you fail or refuse to comply with the demands, you will be required by Treasury Regulations to submit a statement with your tax return disclosing your actual ownership of our shares and other information.

In addition, a REIT may not have any undistributed C corporation earnings and profits at the end of any taxable year. Upon our election to be taxable as a REIT, any earnings and profits that we have accumulated while

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we were taxable as a C corporation would have to be distributed no later than the end of the first year for which we elect REIT status. If we fail to do so, we would not qualify to be taxed as a REIT for that year and a number of years thereafter, unless we are able to rely on certain relief provisions.

The Internal Revenue Code provides relief from violations of the REIT gross income requirements, as described below under “Income Tests,” in cases where a violation is due to reasonable cause and not to willful neglect, and other requirements are met, including the payment of a penalty tax that is based upon the magnitude of the violation. In addition, certain provisions of the Internal Revenue Code extend similar relief in the case of certain violations of the REIT asset requirements (see “Asset Tests” below) and other REIT requirements, again provided that the violation is due to reasonable cause and not willful neglect, and other conditions are met, including the payment of a penalty tax. If we fail to satisfy any of the various REIT requirements, there can be no assurance that these relief provisions would be available to enable us to maintain our qualification as a REIT, and, if such relief provisions are available, the amount of any resultant penalty tax could be substantial.

Effect of Subsidiary Entities including the Joint Ventures

Ownership of Partnership Interests. If we are a partner in an entity that is treated as a partnership for federal income tax purposes, including the joint ventures, Treasury Regulations provide that we are deemed to own our proportionate share of the partnership’s assets, and to earn our proportionate share of the partnership’s income, for purposes of the asset and gross income tests applicable to REITs. Our proportionate share of a partnership’s assets and income is based on our capital interest in the partnership (except that for purposes of the 10% value test, our proportionate share of the partnership’s assets is based on our proportionate interest in the equity and certain debt securities issued by the partnership). In addition, the assets and gross income of the partnership are deemed to retain the same character in our hands. Thus, our proportionate share of the assets and items of income of any of our subsidiary partnerships will be treated as our assets and items of income for purposes of applying the REIT requirements. For any period of time that we own 100% of our operating partnership, all of the operating partnership’s assets and income will be deemed to be ours for federal income tax purposes.

The recently enacted Bipartisan Budget Act of 2015 changes the rules applicable to U.S. federal income tax audits of partnerships. Under the new rules (which are generally effective for taxable years beginning after December 31, 2017), among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction, or credit of a partnership (and any partner’s distributive share thereof) is determined, and taxes, interest, or penalties attributable thereto are assessed and collected, at the partnership level. Although it is uncertain how these new rules will be implemented, it is possible that they could result in partnerships in which we directly or indirect invest, including the operating partnership, being required to pay additional taxes, interest and penalties as a result of an audit adjustment, and we, as a direct or indirect partner of these partnerships, could be required to bear the economic burden of those taxes, interest, and penalties even though we, as a REIT, may not otherwise have been required to pay additional corporate-level taxes as a result of the related audit adjustment. The changes created by these new rules are sweeping and in many respects dependent on the promulgation of future regulations or other guidance by the Treasury. Investors are urged to consult their tax advisors with respect to these changes and their potential impact on their investment in our stock.

Disregarded Subsidiaries. If we own a corporate subsidiary that is a qualified REIT subsidiary, that subsidiary is generally disregarded for federal income tax purposes, and all of the subsidiary’s assets, liabilities and items of income, deduction and credit are treated as our assets, liabilities and items of income, deduction and credit, including for purposes of the gross income and asset tests applicable to REITs. A qualified REIT subsidiary is any corporation, other than a taxable REIT subsidiary, that is directly or indirectly wholly owned by a REIT. Other entities that are wholly owned by us, including single member limited liability companies that have not elected to be taxed as corporations for federal income tax purposes, are also generally disregarded as separate entities for federal income tax purposes, including for purposes of the REIT income and asset tests. Disregarded subsidiaries, along with any partnerships in which we hold an equity interest, are sometimes referred to herein as “pass-through subsidiaries.”

In the event that a disregarded subsidiary of ours ceases to be wholly owned—for example, if any equity interest in the subsidiary is acquired by a person other than us or another disregarded subsidiary of ours—the subsidiary’s separate existence would no longer be disregarded for federal income tax purposes. Instead, the

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subsidiary would have multiple owners and would be treated as either a partnership or a taxable corporation. Such an event could, depending on the circumstances, adversely affect our ability to satisfy the various asset and gross income requirements applicable to REITs, including the requirement that REITs generally may not own, directly or indirectly, more than 10% of the securities of another corporation. See “Asset Tests” and “Income Tests.”

Taxable REIT Subsidiaries. In the future we may jointly elect with any of our subsidiary corporations, whether or not wholly owned, to treat such subsidiary corporations as taxable REIT subsidiaries, or TRSs. A REIT is permitted to own up to 100% of the stock of one or more TRSs. A domestic TRS is a fully taxable corporation that may earn income that would not be qualifying income if earned directly by the parent REIT. The subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation with respect to which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. We generally may not own more than 10% of the securities of a taxable corporation, as measured by voting power or value, unless we and such corporation elect to treat such corporation as a TRS. Overall, no more than 25% (20% for taxable years beginning after December 31, 2017) of the value of a REIT’s assets may consist of stock or securities of one or more TRSs.

The separate existence of a TRS or other taxable corporation is not ignored for federal income tax purposes. Accordingly, a TRS or other taxable corporation generally would be subject to corporate income tax on its earnings, which may reduce the cash flow that we and our subsidiaries generate in the aggregate, and may reduce our ability to make distributions to our shareholders.

We are not treated as holding the assets of a TRS or other taxable subsidiary corporation or as receiving any income that the subsidiary earns. Rather, the stock issued by a taxable subsidiary to us is an asset in our hands, and we treat the distributions paid to us from such taxable subsidiary, if any, as income. This treatment can affect our income and asset test calculations, as described below. Because we do not include the assets and income of TRSs or other taxable subsidiary corporations in determining our compliance with the REIT requirements, we may use such entities to undertake indirectly activities that the REIT rules might otherwise preclude us from doing directly or through pass-through subsidiaries. For example, we may use TRSs or other taxable subsidiary corporations to conduct activities that give rise to certain categories of income such as management fees or activities that would be treated in our hands as prohibited transactions.

Certain restrictions imposed on TRSs are intended to ensure that such entities will be subject to appropriate levels of United States federal income taxation. First, a TRS with a debt-equity ratio in excess of 1.5 to 1 may not deduct interest payments made in any year to an affiliated REIT to the extent that such payments exceed, generally, 50% of the TRS’ adjusted taxable income for that year (although the TRS may carry forward to, and deduct in, a succeeding year the disallowed interest amount if the 50% test is satisfied in that year). In addition, if amounts are paid to a REIT or deducted by a TRS due to transactions between the REIT and a TRS that exceed the amount that would be paid to or deducted by a party in an arm’s-length transaction, the REIT generally will be subject to an excise tax equal to 100% of such excess. Under the Protecting Americans from Tax Hikes Act of 2015, the 100% tax will also apply to “redetermined services income,” i.e. non-arm’s-length income of a REIT’s TRS attributable to services provided to, or on behalf of, the REIT (other than services provided to REIT tenants, which are potentially taxed as redetermined rents). We intend to scrutinize all of our transactions with any of our subsidiaries that are treated as a TRS in an effort to ensure that we do not become subject to this excise tax; however, we cannot assure you that we will be successful in avoiding this excise tax.

Income Tests

In order to qualify as a REIT, we must satisfy two gross income requirements on an annual basis.

• First, at least 75% of our gross income for each taxable year, excluding gross income from sales of inventory or dealer property in “prohibited transactions,” generally must be derived from investments relating to real property or mortgages on real property or on interest in real property, including interest income derived from mortgage loans secured by real property, “rents from real property,” distributions received from other REITs and gains from the sale of real estate assets (other than a non-qualified publicly offered REIT debt instrument), as well as specified income from temporary investments.

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• Second, at least 95% of our gross income in each taxable year, excluding gross income from prohibited transactions and certain hedging transactions, must be derived from some combination of such income from investments in real property (i.e., income that qualifies under the 75% income test described above), as well as other distributions, interest, and gain from the sale or disposition of stock or securities, which need not have any relation to real property.

Interest income constitutes qualifying mortgage interest for purposes of the 75% income test (as described above) to the extent that the obligation upon which such interest is paid is secured by a mortgage on real property. If we receive interest income with respect to a mortgage loan that is secured by both real property and personal property, and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property on the date that we acquired or originated the mortgage loan, the interest income will be apportioned between the real property and the personal property, and our income from the arrangement will qualify for purposes of the 75% income test only to the extent that the interest is allocable to the real property. However, for purposes of the 75% income test, if the fair market value of such personal property does not exceed 15% of the total fair market value of all such property, such personal property is treated as real property. Even if a loan is not secured by real property, or is undersecured, the income that it generates may nonetheless qualify for purposes of the 95% income test.

To the extent that we derive income from the rental of real property (discussed below) where all or a portion of the amount of rental income payable is contingent, such income generally will qualify for purposes of the gross income tests only if it is based upon the gross receipts or sales and not on the net income or profits of the lessee. This limitation does not apply, however, where the lessee leases substantially all of its interest in the property to tenants or subtenants to the extent that the rental income derived by the lessee would qualify as rents from real property had we earned the income directly.

We and our subsidiaries may invest in mezzanine loans, which are loans secured by equity interests in an entity that directly or indirectly owns real property, rather than by a direct mortgage of the real property. The Internal Revenue Service has issued Revenue Procedure 2003-65, which provides a safe harbor applicable to mezzanine loans. Under the Revenue Procedure, if a mezzanine loan meets each of the requirements contained in the Revenue Procedure, (1) the mezzanine loan will be treated by the Internal Revenue Service as a real estate asset for purposes of the asset tests described below and (2) interest derived from the mezzanine loan will be treated as qualifying mortgage interest for purposes of the 75% income test. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. We intend to structure any investments in mezzanine loans in a manner that generally complies with the various requirements applicable to our qualification as a REIT. However, the extent that any of our mezzanine loans do not meet all of the requirements for reliance on the safe harbor set forth in the Revenue Procedure, there can be no assurance that the Internal Revenue Service will not challenge the tax treatment of these loans.

Rents received by us will qualify as “rents from real property” in satisfying the gross income requirements described above only if several conditions are met.

• If rent is partly attributable to personal property leased in connection with a lease of real property, the portion of the rent that is attributable to the personal property will not qualify as “rents from real property” unless it constitutes 15% or less of the total rent received under the lease.

• The amount of rent must not be based in whole or in part on the income or profits of any person. Amounts received as rent, however, generally will not be excluded from rents from real property solely by reason of being based on fixed percentages of gross receipts or sales.

• We generally must not operate or manage the property or furnish or render services to the tenants of such property, other than through an “independent contractor” from which we derive no revenue. We are permitted, however, to perform services that are “usually or customarily rendered” in connection with the rental of space for occupancy only and which are not otherwise considered rendered to the occupant of the property. In addition, we may directly or indirectly provide noncustomary services to tenants of our properties without disqualifying all of the rent from the property if the payments for

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such services do not exceed 1% of the total gross income from the properties. For purposes of this test, we are deemed to have received income from such non-customary services in an amount at least 150% of the direct cost of providing the services. Moreover, we are generally permitted to provide services to tenants or others through a TRS without disqualifying the rental income received from tenants for purposes of the income tests.

• We must not directly or constructively hold a 10% or greater interest, as measured by vote or value, in the lessee’s equity.

We may directly or indirectly receive distributions from TRSs or other corporations that are not REITs or qualified REIT subsidiaries. These distributions generally are treated as dividend income to the extent of the earnings and profits of the distributing corporation. Such distributions will generally constitute qualifying income for purposes of the 95% gross income test, but not for purposes of the 75% gross income test. Any distributions that we receive from a REIT, however, will be qualifying income for purposes of both the 95% and 75% income tests.

We may receive various fees in connection with our operations relating to the origination or purchase of whole loans secured by first mortgages and other loans secured by real property. The fees will generally be qualifying income for purposes of both the 75% and 95% gross income tests if they are received in consideration for entering into an agreement to make a loan secured by real property and the fees are not determined by income and profits. Other fees generally are not qualifying income for purposes of either gross income test and will not be favorably counted for purposes of either gross income test. Any fees earned by any TRS will not be included for purposes of the gross income tests. We and our subsidiaries may enter into hedging transactions with respect to one or more of our assets or liabilities. Hedging transactions could take a variety of forms, including interest rate swap agreements, interest rate cap agreements, options, futures contracts, forward rate agreements or similar financial instruments. Except to the extent provided by Treasury Regulations, any income from a hedging transaction we entered into (1) in the normal course of our business primarily to manage risk of interest rate, inflation and/or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets, which is clearly identified as specified in Treasury Regulations before the closing of the day on which it was acquired, originated or entered into, including gain from the sale or disposition of such a transaction, (2) primarily to manage risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% income tests, and (3) to manage risk with respect to the extinguishment of certain indebtedness or the disposition of certain property relating to prior hedging transactions described in (1) or (2) above, each of which is clearly identified as such before the closing of the day on which it was acquired, originated or entered to, will not constitute gross income for purposes of the 75% or 95% gross income tests.

If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may still qualify as a REIT for such year if we are entitled to relief under applicable provisions of the Internal Revenue Code. These relief provisions will be generally available if (1) our failure to meet these tests was due to reasonable cause and not due to willful neglect and (2) following our identification of the failure to meet the 75% or 95% gross income test for any taxable year, we file a schedule with the Internal Revenue Service setting forth each item of our gross income for purposes of the 75% or 95% gross income test for such taxable year in accordance with Treasury Regulations yet to be issued. It is not possible to state whether we would be entitled to the benefit of these relief provisions in all circumstances. If these relief provisions are inapplicable to a particular set of circumstances, we will not qualify as a REIT. As discussed above under “Taxation of REITs in General,” even where these relief provisions apply, the Internal Revenue Code imposes a tax based upon the amount by which we fail to satisfy the particular gross income test.

Asset Tests

At the close of each calendar quarter, we must also satisfy four tests relating to the nature of our assets.

• First, at least 75% of the value of our total assets must be represented by some combination of “real estate assets,” cash, cash items, United States government securities and, under some circumstances, stock or debt instruments purchased with new capital. For this purpose, real estate assets include interests in real property, such as land, buildings, leasehold interests in real property, stock of other

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corporations that qualify as REITs and some kinds of mortgage-backed securities and mortgage loans. Under the Protecting Americans from Tax Hikes Act of 2015, to the extent that rent attributable to personal property is treated as rents from real property under the Internal Revenue Code, such personal property will be treated as a “real estate asset” for purposes of the 75% asset test. Further, a debt obligation secured by a mortgage on both real and personal property will be treated as a real estate asset for purposes of the 75% asset test, if the fair market value of the personal property does not exceed 15% of the fair market value of all property securing the debt. Assets that do not qualify for purposes of the 75% test are subject to the additional asset tests described below.

• Second, no more than 25% of our total assets may be represented by securities other than those in the 75% asset class; provided that not more than 25% of the value of our assets may consist of debt instruments issued by publicly offered REITs.

• Third, of the investments included in the 25% asset class, the value of any one issuer’s securities that we own may not exceed 5% of the value of our total assets. Additionally, we may not own more than 10% of any one issuer’s outstanding securities, as measured by either voting power or value. The 5% and 10% asset tests do not apply to securities of TRSs and qualified REIT subsidiaries and the 10% asset test does not apply to “straight debt” having specified characteristics and to certain other securities described below. Solely for purposes of the 10% asset test, the determination of our interest in the assets of a partnership or limited liability company in which we own an interest will be based on our proportionate interest in any securities issued by the partnership or limited liability company, excluding for this purpose certain securities described in the Internal Revenue Code.

• Fourth, the aggregate value of all securities of taxable REIT subsidiaries that we hold may not exceed 25% of the value of our total assets (20% for taxable years beginning after December 31, 2017).

Notwithstanding the general rule, as noted above, that for purposes of the REIT income and asset tests we are treated as owning our proportionate share of the underlying assets of a subsidiary partnership, if we hold indebtedness issued by a partnership, the indebtedness will be subject to, and may cause a violation of, the asset tests unless the indebtedness is a qualifying mortgage asset or other conditions are met. Similarly, although stock of another REIT is a qualifying asset for purposes of the REIT asset tests, any non-mortgage debt that is issued by another REIT may not so qualify (such debt, however, will not be treated as “securities” for purposes of the 10% asset test, as explained below).

Certain relief provisions are available to REITs to satisfy the asset requirements or to maintain REIT qualification notwithstanding certain violations of the asset and other requirements. One such provision allows a REIT which fails one or more of the asset requirements to nevertheless maintain its REIT qualification if (1) the REIT provides the Internal Revenue Service with a description of each asset causing the failure; (2) the failure is due to reasonable cause and not willful neglect; (3) the REIT pays a tax equal to the greater of (a) $50,000 per failure and (b) the product of the net income generated by the assets that caused the failure multiplied by the highest applicable corporate tax rate (currently 35%); and (4) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which it identifies the failure, or otherwise satisfies the relevant asset tests within that time frame.

In the case of de minimis violations of the 10% and 5% asset tests, a REIT may maintain its qualification despite a violation of such requirements if (1) the value of the assets causing the violation does not exceed the lesser of 1% of the REIT’s total assets and $10,000,000, and (2) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which it identifies the failure, or the relevant tests are otherwise satisfied within that time frame.

Certain securities will not cause a violation of the 10% asset test described above. Such securities include instruments that constitute “straight debt,” which includes, among other things, securities having certain contingency features. A security does not qualify as “straight debt” where a REIT (or a controlled TRS of the REIT) owns other securities of the same issuer which do not qualify as straight debt, unless the value of those other securities constitute, in the aggregate, 1% or less of the total value of that issuer’s outstanding securities. In addition to straight debt, the Internal Revenue Code provides that certain other securities will not violate the 10% asset test.

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Such securities include (1) any loan made to an individual or an estate; (2) certain rental agreements pursuant to which one or more payments are to be made in subsequent years (other than agreements between a REIT and certain persons related to the REIT under attribution rules); (3) any obligation to pay rents from real property; (4) securities issued by governmental entities that are not dependent in whole or in part on the profits of (or payments made by) a non-governmental entity; (5) any security (including debt securities) issued by another REIT; and (6) any debt instrument issued by a partnership if the partnership’s income is of a nature that it would satisfy the 75% gross income test described above under “Income Tests.” In applying the 10% asset test, a debt security issued by a partnership is not taken into account to the extent, if any, of the REIT’s proportionate interest in the equity and certain debt securities issued by that partnership.

Independent appraisals may not be obtained to support our conclusions as to the value of our total assets or the value of any particular security or securities. Moreover, values of some assets may not be susceptible to a precise determination, and values are subject to change in the future. Furthermore, the proper classification of an instrument as debt or equity for federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT asset requirements. Accordingly, there can be no assurance that the Internal Revenue Service will not contend that our interests in our subsidiaries or in the securities of other issuers will not cause a violation of the REIT asset tests.

If we should fail to satisfy the asset tests at the end of a calendar quarter, such a failure would not cause us to lose our REIT qualification if we (1) satisfied the asset tests at the close of the preceding calendar quarter and (2) the discrepancy between the value of our assets and the asset requirements was not wholly or partly caused by an acquisition of non-qualifying assets, but instead arose from changes in the market value of our assets. If the condition described in (2) were not satisfied, we still could avoid disqualification by eliminating any discrepancy within 30 days after the close of the calendar quarter in which it arose or by making use of relief provisions described below.

Annual Distribution Requirements

In order to qualify as a REIT, we are required to make distributions, other than capital gain distributions, to our shareholders in an amount at least equal to:

(a) the sum of

(1) 90% of our “REIT taxable income,” computed without regard to our net capital gains and the dividends-paid deduction, and

(2) 90% of our net income, if any, (after tax) from foreclosure property (as described below), minus

(b) the sum of certain specified items of non-cash income.

We generally must make these distributions in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for the year and if paid with or before the first regular distribution payment after such declaration. In order for distributions to be counted for this purpose, and to provide a tax deduction for us, the distributions must not be “preferential dividends.” A distribution is not a preferential dividend if the distribution is (1) pro rata among all outstanding shares of stock within a particular class and (2) in accordance with the preferences among different classes of stock as set forth in our organizational documents.

To the extent that we distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax at ordinary corporate tax rates on the retained portion. We may elect to retain, rather than distribute, our net long-term capital gains and pay tax on such gains. In this case, we could elect for our shareholders to include their proportionate shares of such undistributed long-term capital gains in income, and to receive a corresponding credit for their share of the tax that we paid. Our shareholders would then increase their adjusted basis of their stock by the difference between (a) the amounts of capital gain distributions that we designated and that they include in their taxable income minus (b) the tax that we paid on their behalf with respect to that income.

To the extent that we have available net operating losses carried forward from prior tax years, such losses may reduce the amount of distributions that we must make in order to comply with the REIT distribution

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requirements. Such losses, however, will generally not affect the character, in the hands of our shareholders, of any distributions that are actually made as ordinary dividends or capital gains. See “Material Federal Income Tax Considerations—Taxation of Shareholders—Taxation of Taxable Domestic Shareholders—Distributions.”

If we should fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year; (b) 95% of our REIT capital gain net income for such year; and (c) any undistributed taxable income from prior periods, we would be subject to a non-deductible 4% excise tax on the excess of such required distribution over the sum of (x) the amounts actually distributed plus (y) the amounts of income we retained and on which we have paid corporate income tax.

We may be able to rectify a failure to meet the distribution requirements for a year by paying “deficiency dividends” to shareholders in a later year, which may be included in our deduction for distributions paid for the earlier year. In this case, we may be able to avoid losing REIT qualification or being taxed on amounts distributed as deficiency dividends. We will be required to pay interest and a penalty based on the amount of any deduction taken for deficiency dividends.

Failure to Qualify

If we fail to satisfy one or more requirements for REIT qualification other than the gross income or asset tests, we could avoid disqualification if our failure is due to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. Relief provisions are available for failures of the gross income tests and asset tests, as described above in “Income Tests” and “Asset Tests.”

If we fail to qualify for taxation as a REIT in any taxable year, and the relief provisions described above do not apply, we would be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We cannot deduct distributions to shareholders in any year in which we are not a REIT, nor would we be required to make distributions in such a year. In this situation, to the extent of current and accumulated earnings and profits, distributions to domestic shareholders that are individuals, trusts and estates will generally be taxable at capital gains rates. In addition, subject to the limitations of the Internal Revenue Code, corporate distributees may be eligible for the dividends received deduction. Unless we are entitled to relief under specific statutory provisions, we would also be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year during which we lost qualification. It is not possible to state whether, in all circumstances, we would be entitled to this statutory relief.

Prohibited Transactions

Net income that we derive from a prohibited transaction is subject to a 100% tax. The term prohibited transaction generally includes a sale or other disposition of property (other than foreclosure property, as discussed below) that is held primarily for sale to customers in the ordinary course of a trade or business. We intend to conduct our operations so that no asset that we own (or are treated as owning) will be treated as, or as having been, held for sale to customers, and that a sale of any such asset will not be treated as having been in the ordinary course of our business. Whether property is held “primarily for sale to customers in the ordinary course of a trade or business” depends on the particular facts and circumstances. No assurance can be given that any property that we sell will not be treated as property held for sale to customers, or that we can comply with certain safe-harbor provisions of the Internal Revenue Code that would prevent such treatment. The 100% tax does not apply to gains from the sale of property that is held through a TRS or other taxable corporation, although such income will potentially be subject to tax in the hands of the corporation at regular corporate rates, nor does the 100% tax apply to sales that qualify for a safe harbor as described in Section 857(b)(6) of the Internal Revenue Code.

Foreclosure Property

Foreclosure property is real property and any personal property incident to such real property (1) that we acquire as the result of having bid on the property at foreclosure, or having otherwise reduced the property to ownership or possession by agreement or process of law, after a default (or upon imminent default) on a lease of the property or a mortgage loan held by us and secured by the property; (2) for which we acquired the related loan or

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lease at a time when default was not imminent or anticipated; and (3) with respect to which we made a proper election to treat the property as foreclosure property. We generally will be subject to tax at the maximum corporate rate (currently 35%) on any net income from foreclosure property, including any gain from the disposition of the foreclosure property, other than income that would otherwise be qualifying income for purposes of the 75% gross income test. Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 100% tax on gains from prohibited transactions described above, even if the property would otherwise constitute inventory or dealer property. To the extent that we receive any income from foreclosure property that does not qualify for purposes of the 75% gross income test, we intend to make an election to treat the related property as foreclosure property.

Taxation of Shareholders

Taxation of Taxable Domestic Shareholders

Distributions. So long as we qualify as a REIT, the distributions that we make to our taxable domestic shareholders out of current or accumulated earnings and profits that we do not designate as capital gain distributions will generally be taken into account by shareholders as ordinary income and will not be eligible for the dividends received deduction for corporations. With limited exceptions, our distributions are not eligible for taxation at the preferential income tax rates (i.e., the 20% maximum federal rate) for qualified distributions received by domestic shareholders that are individuals, trusts and estates from taxable C corporations. Such shareholders, however, are taxed at the preferential rates on distributions designated by and received from REITs to the extent that the distributions are attributable to:

• income retained by the REIT in the prior taxable year on which the REIT was subject to corporate level income tax (less the amount of tax);

• distributions received by the REIT from TRSs or other taxable C corporations; or

• income in the prior taxable year from the sales of “built-in gain” property acquired by the REIT from C corporations in carryover basis transactions (less the amount of corporate tax on such income).

Distributions that we designate as capital gain dividends will generally be taxed to our shareholders as long-term capital gains, to the extent that such distributions do not exceed our actual net capital gain for the taxable year, without regard to the period for which the shareholder that receives such distribution has held its stock. We may elect to retain and pay taxes on some or all of our net long-term capital gains, in which case provisions of the Internal Revenue Code will treat our shareholders as having received, solely for tax purposes, our undistributed capital gains, and the shareholders will receive a corresponding credit for taxes that we paid on such undistributed capital gains. See “Taxation of Cottonwood Multifamily REIT II—Annual Distribution Requirements.” Corporate shareholders may be required to treat up to 20% of some capital gain distributions as ordinary income. Long-term capital gains are generally taxable at maximum federal rates of 20% in the case of shareholders that are individuals, trusts and estates, and 35% in the case of shareholders that are corporations. Capital gains dividends attributable to the sale of depreciable real property held for more than 12 months are subject to a 25% U.S. federal income tax rate for taxable domestic shareholders who are individuals, trusts or estates, to the extent of certain previously claimed depreciation deductions.

For purposes of determining the portion of distributions on separate classes of securities that will be treated as dividends for United States federal income tax purposes, current and accumulated earnings and profits will be allocated to distributions resulting from priority rights of preferred stock before being allocated to other distributions.

Distributions in excess of our current and accumulated earnings and profits will generally represent a return of capital and will not be taxable to a shareholder to the extent that the amount of such distributions do not exceed the adjusted basis of the shareholder’s shares in respect of which the distributions were made. Rather, the distribution will reduce the adjusted basis of the shareholder’s shares. To the extent that such distributions exceed the adjusted basis of a shareholder’s shares, the shareholder generally must include such distributions in income as long-term capital gain, or short-term capital gain if the shares have been held for one year or less. In addition, any

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distribution that we declare in October, November or December of any year and that is payable to a shareholder of record on a specified date in any such month will be treated as both paid by us and received by the shareholder on December 31 of such year, provided that we actually pay the distribution before the end of January of the following calendar year.

To the extent that we have available net operating losses and capital losses carried forward from prior tax years, such losses may reduce the amount of distributions that we must make in order to comply with the REIT distribution requirements. See “Taxation of Cottonwood Multifamily REIT II—Annual Distribution Requirements.” Such losses, however, are not passed through to shareholders and do not offset income of shareholders from other sources, nor would such losses affect the character of any distributions that we make, which are generally subject to tax in the hands of shareholders to the extent that we have current or accumulated earnings and profits.

Dispositions of Our Stock. In general, a taxable domestic shareholder who is not a dealer in securities must treat any gain or loss realized upon a taxable disposition of our stock as long-term capital gain or loss if the taxable domestic shareholder has held our stock for more than one year. Otherwise, the taxable domestic shareholder must treat any such gain or loss as short-term capital gain or loss. However, a taxable domestic shareholder must treat any loss upon a sale or exchange of our stock held by such shareholder for six months or less as a long-term capital loss to the extent of capital gain dividends and any other actual or deemed distributions from us that such shareholder treats as long-term capital gain. All or a portion of any loss that a taxable domestic shareholder realizes upon a taxable disposition of our stock may be disallowed if the United States shareholder repurchases our stock within 30 days before or after the disposition.

Capital Gains and Losses. The tax rate differential between capital gain and ordinary income for non-corporate taxpayers may be significant. A taxpayer generally must hold a capital asset for more than one year for gain or loss derived from its sale or exchange to be treated as long-term capital gain or loss. The highest marginal individual income tax rate is currently 39.6%. The maximum tax rate on long-term capital gains applicable to non-corporate taxpayers is 20% for sales and exchanges of capital assets held for more than one year. The maximum tax rate on long-term capital gain from the sale or exchange of “section 1250 property,” or depreciable real property, is 25% to the extent that such gain, known as “unrecaptured section 1250 gains,” would have been treated as ordinary income on depreciation recapture if the property were “section 1245 property.” With respect to the distributions that we designate as capital gain dividends and any retained capital gain that we are deemed to distribute, we generally may designate whether such a distribution is taxable to our non-corporate shareholders as long term capital gains or unrecaptured section 1250 gains. The Internal Revenue Service has the authority to prescribe, but has not yet prescribed, regulations that would apply a capital gain tax rate of 25% (which is generally higher than the long-term capital gain tax rates for non-corporate taxpayers) to a portion of capital gain realized by a non-corporate shareholder on the sale of REIT stock that would correspond to the REIT’s “unrecaptured Section 1250 gain.” In addition, the characterization of income as capital gain or ordinary income may affect the deductibility of capital losses. A non-corporate taxpayer may deduct capital losses not offset by capital gains against its ordinary income only up to a maximum annual amount of $3,000. A non-corporate taxpayer may carry forward unused capital losses indefinitely. A corporate taxpayer must pay tax on its net capital gain at ordinary corporate rates (currently up to 35%). A corporate taxpayer may deduct capital losses only to the extent of capital gains, with unused losses being carried back three years and forward five years.

If a taxable domestic shareholder recognizes a loss upon a subsequent disposition of our stock in an amount that exceeds a prescribed threshold, it is possible that the provisions of certain Treasury Regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss generating transactions to the IRS. While these regulations are directed towards “tax shelters,” they were written quite broadly, and apply to transactions that would not typically be considered tax shelters. Significant penalties apply for failure to comply with these requirements. You should consult your tax advisors concerning any possible disclosure obligation with respect to the receipt or disposition of our stock, or transactions that might be undertaken directly or indirectly by us. Moreover, you should be aware that we and other participants in transactions involving us might be subject to disclosure or other requirements pursuant to these regulations.

Passive Activity Losses and Investment Interest Limitations. Distributions that we make and gain arising from the sale or exchange by a domestic shareholder of our stock will not be treated as passive activity income. As a result, shareholders will not be able to apply any “passive losses” against income or gain relating to our stock. To the extent that distributions we make do not constitute a return of capital, they will be treated as investment income for purposes of computing the investment interest limitation.

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Medicare Tax. A United States person that is an individual is subject to a 3.8% tax on the lesser of (i) the United States person’s “net investment income” for the relevant taxable year and (ii) the excess of the United States person’s modified gross income for the taxable year over a certain threshold (which currently is between $125,000 and $250,000, depending on the individual’s circumstances). Estates and trusts that do not fall into a special class of trusts that is exempt from such tax are subject to the same 3.8% tax on the lesser of their undistributed net investment income and the excess of their adjusted gross income over a certain threshold. Net investment income generally includes dividends on our stock and gain from the sale of our stock. If you are a U.S. person that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of this tax to your income and gains in respect of your investment in our stock.

Taxation of Foreign Shareholders

The following is a summary of certain United States federal income and estate tax consequences of the ownership and disposition of our stock applicable to non-United States holders. A non-United States holder is any person other than:

• a citizen or resident of the United States;

• a corporation (or entity treated as a corporation for United States federal income tax purposes) created or organized in the United States or under the laws of the United States, or of any state thereof, or the District of Columbia;

• an estate, the income of which is includable in gross income for United States federal income tax purposes regardless of its source; or

• a trust if a United States court is able to exercise primary supervision over the administration of such trust and one or more United States fiduciaries have the authority to control all substantial decisions of the trust.

If a partnership, including for this purpose any entity that is treated as a partnership for United States federal income tax purposes, holds our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. An investor that is a partnership and the partners in such partnership should consult their tax advisors about the United States federal income tax consequences of the acquisition, ownership and disposition of our common stock.

The following discussion is based on current law, and is for general information only. It addresses only selected, and not all, aspects of United States federal income and estate taxation. In addition, certain “qualified shareholders” and “qualified foreign pension plans” may be subject to certain statutory exemptions as discussed herein. Such shareholders are urged to consult their own tax advisors concerning the availability of such exemptions.

Ordinary Dividends. The portion of distributions received by non-United States holders (1) that is payable out of our earnings and profits; (2) which is not attributable to our capital gains; and (3) which is not effectively connected with a United States trade or business of the non-United States holder, will be subject to United States withholding tax at the rate of 30%, unless reduced or eliminated by treaty. As required by Internal Revenue Service guidance, we intend to notify our shareholders if a portion of a distribution paid by us is attributable to excess inclusion income.

In general, non-United States holders will not be considered to be engaged in a United States trade or business solely as a result of their ownership of our stock. In cases where the dividend income from a non-United States holder’s investment in our stock is, or is treated as, effectively connected with the non-United States holder’s conduct of a United States trade or business, the non-United States holder generally will be subject to United States

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federal income tax at graduated rates, in the same manner as domestic shareholders are taxed with respect to such distributions. Such income must generally be reported on a United States income tax return filed by or on behalf of the non-United States holder. The income may also be subject to the 30% branch profits tax in the case of a non-United States holder that is a corporation.

Non-Dividend Distributions. Unless our stock constitutes a USRPI, distributions that we make that are not out of our earnings and profits will generally not be subject to United States income tax. If we cannot determine at the time a distribution is made whether or not the distribution will exceed current and accumulated earnings and profits, the distribution will be subject to withholding at the rate applicable to ordinary dividends. The non-United States holder may seek a refund from the Internal Revenue Service of any amounts withheld if it is subsequently determined that the distribution was, in fact, in excess of our current and accumulated earnings and profits. If our stock constitutes a USRPI, as described below, distributions that we make in excess of the sum of (a) the shareholder’s proportionate share of our earnings and profits, plus (b) the shareholder’s basis in its stock, will be taxed under FIRPTA at the rate of tax, including any applicable capital gains rates, that would apply to a domestic shareholder of the same type (e.g., an individual or a corporation, as the case may be), and the collection of the tax will be enforced by a refundable withholding at a rate of 15% of the amount by which the distribution exceeds the shareholder’s share of our earnings and profits.

Capital Gain Distributions. Under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, a distribution that we make to a non-United States holder, to the extent attributable to gains from dispositions of United States Real Property Interests, or USRPIs, that we held directly or through pass-through subsidiaries, or USRPI capital gains, will, except as described below, be considered effectively connected with a United States trade or business of the non-United States holder and will be subject to United States income tax at the rates applicable to United States individuals or corporations, without regard to whether we designate the distribution as a capital gain distribution. See above under “—Taxation of Foreign Shareholders—Ordinary Dividends,” for a discussion of the consequences of income that is effectively connected with a United States trade or business. In addition, we will be required to withhold tax equal to 35% of the amount of distributions to the extent the distributions constitute USRPI capital gains. Distributions subject to FIRPTA may also be subject to a 30% branch profits tax in the hands of a non-United States holder that is a corporation. A distribution is not a USRPI capital gain if we held an interest in the underlying asset solely as a creditor. Capital gain distributions received by a non-United States holder that are attributable to dispositions of our assets other than USRPIs are not subject to United States federal income or withholding tax, unless (1) the gain is effectively connected with the non-United States holder’s United States trade or business, in which case the non-United States holder would be subject to the same treatment as United States holders with respect to such gain or (2) the non- United States holder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the non-United States holder will incur a 30% tax on his or her capital gains.

A capital gain distribution that would otherwise have been treated as a USRPI capital gain will not be so treated or be subject to FIRPTA, and generally will not be treated as income that is effectively connected with a United States trade or business, and instead will be treated in the same manner as an ordinary dividend (see “—Taxation of Foreign Shareholders—Ordinary Dividends”), if (1) the capital gain distribution is received with respect to a class of stock that is regularly traded on an established securities market located in the United States and (2) the recipient non-United States holder does not own more than 10% of that class of stock at any time during the year ending on the date on which the capital gain distribution is received. At the time you purchase shares in this offering, our shares will not be publicly traded and we can give you no assurance that our shares will ever be publicly traded on an established securities market. Therefore, these rules will not apply to our capital gain distributions.

Qualified Shareholders. Subject to the exception discussed below, any distribution on or after December 18, 2015 to a “qualified shareholder” who holds stock of a REIT directly or indirectly (through one or more partnerships) will not be subject to United States tax as income effectively connected with a United States trade or business and thus will not be subject to special withholding rules under FIRPTA. While a “qualified shareholder” will not be subject to FIRPTA withholding on REIT distributions, certain investors of a “qualified shareholder” (i.e., non- United States persons who hold interests in the “qualified shareholder” (other than interests solely as a creditor), and hold more than 10% of the stock of the REIT in which the “qualified shareholder” holds stock (whether or not by reason of the investor’s ownership in the “qualified shareholder”) may be subject to FIRPTA withholding.

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A “qualified shareholder” is a foreign person that (i) either is eligible for the benefits of a comprehensive income tax treaty which includes an exchange of information program and whose principal class of interests is listed and regularly traded on one or more recognized stock exchanges (as defined in such comprehensive income tax treaty), or is a foreign partnership that is created or organized under foreign law as a limited partnership in a jurisdiction that has an agreement for the exchange of information with respect to taxes with the United States and has a class of limited partnership units representing greater than 50% of the value of all the partnership units that is regularly traded on the NYSE or NASDAQ markets, (ii) is a qualified collective investment vehicle (defined below), and (iii) maintains records on the identity of each person who, at any time during the foreign person’s taxable year, is the direct owner of 5% or more of the class of interests or units (as applicable) described in (i), above.

A qualified collective investment vehicle is a foreign person that (i) would be eligible for a reduced rate of withholding with respect to ordinary dividends under the comprehensive income tax treaty described above, even if such entity holds more than 10% of the stock of such REIT, (ii) is publicly traded (as defined in Section 7704(b) of the Internal Revenue Code, is treated as a partnership under the Internal Revenue Code, is a withholding foreign partnership for purposes of United States withholding taxes, and would be treated as a United States real property holding company if it were a domestic corporation, or (iii) is designated as such by the Secretary of the Treasury and is either (a) fiscally transparent within the meaning of Section 894 of the Internal Revenue Code, or (b) required to include dividends in its gross income, but is entitled to a deduction for distributions to its investors.

Qualified Foreign Pension Funds. Any distribution on or after December 18, 2015 to a “qualified foreign pension fund” or an entity all of the interests of which are held by a “qualified foreign pension fund” who holds REIT stock directly or indirectly (through one or more partnerships) will generally not be subject to United States tax as income effectively connected with a United States trade or business and thus will not be subject to the withholding rules under FIRPTA.

A qualified foreign pension fund is any trust, corporation, or other organization or arrangement (i) which is created or organized under the law of a country other than the United States, (ii) which is established to provide retirement or pension benefits to participants or beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered, (iii) which does not have a single participant or beneficiary with a right to more than 5% of its assets or income, (iv) which is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in the country in which it is established or operates and (v) with respect to which, under the laws of the country in which it is established or operates, (A) contributions to such organization or arrangement that would otherwise be subject to tax under such laws are deductible or excluded from the gross income of such entity or taxed at a reduced rate, or (B) taxation of any investment income of such organization or arrangement is deferred or such income is taxed at a reduced rate.

Dispositions of Our Stock. Unless our stock constitutes a USRPI, our distributions that are not distributions out of our earnings and profits will generally not be subject to United States income tax. If it cannot be determined at the time at which a distribution is made whether the distribution will exceed current and accumulated earnings and profits, the distribution will be subject to withholding at the rate applicable to distributions. However, the non-United States holder may seek a refund from the Internal Revenue Service of any amounts withheld if it is subsequently determined that the distribution was, in fact, in excess of our current and accumulated earnings and profits. If our stock constitutes a USRPI, as described above, our distributions in excess of the sum of our earnings and profits plus the stockholder’s basis in shares of our common stock will be taxed FIRPTA at the rate of tax, including any applicable capital gains rates, that would apply to a domestic stockholder of the same type (e.g., an individual or a corporation, as the case may be), and the collection of the tax will be enforced by a refundable withholding at a rate of 15% of the amount by which the distribution exceeds the stockholder’s share of our earnings and profits.

Non-United States holders could incur tax under FIRPTA with respect to gain realized upon a disposition of our shares if we are a United States real property holding corporation during a specified testing period. If at least 50% of a REIT’s assets are USRPIs during the testing period, then the REIT will be a United States real property

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holding corporation. We believe that we are, and will continue to be, a United States real property holding corporation based on our investment strategy. However, even if we are a United States real property holding corporation, a non-United States stockholder generally would not incur tax under FIRPTA on gain from the sale of our common stock if we are a “domestically controlled qualified investment entity.” However, even if we are a domestically controlled qualified investment entity, upon disposition of our stock, a non-United States stockholder may be treated as having gain from the sale or exchange of a USRPI if the non-United States holder (i) disposes of our common stock within a 30-day period preceding the ex-dividend date of a distribution, any portion of which distribution would, but for the disposition, have been treated as gain from the sale or exchange of a USRPI and (ii) acquires, or enters into a contract or option to acquire, other shares of our common stock within 30 days after such ex-dividend date.

A “domestically controlled qualified investment entity” includes a REIT in which, at all times during a specified testing period, less than 50% in value of its shares are held directly or indirectly by non-United States stockholders. We cannot assure you that this test will be met.

If the applicable class of our stock is regularly traded on an established securities market, an additional exception to the tax under FIRPTA will be available with respect to such stock, even if we do not qualify as a domestically controlled qualified investment entity at the time the non-United States stockholder sells such stock. Under that exception, the gain from such a sale by such a non-United States stockholder will not be subject to tax under FIRPTA if (1) the applicable class of our stock is treated as being regularly traded under applicable Treasury Regulations on an established securities market and (2) the non-United States stockholder owned, actually or constructively, 10% or less of that class of stock at all times during a specified testing period. We believe that our common stock to be issued in this offering will not be regularly traded on an established securities market.

On or after December 18, 2015, a sale of our common stock by:

• a “qualified shareholder” or

• a “qualified foreign pension fund”

that holds such stock directly or indirectly (through one or more partnerships) will not be subject to U.S. federal income taxation under FIRPTA. While a “qualified shareholder” will not be subject to FIRPTA withholding upon sale of our shares, certain investors of a “qualified shareholder” (i.e., non-United States persons who hold interests in the “qualified shareholder” (other than interests solely as a creditor), and hold, directly or indirectly, more than 10% of our stock (whether or not by reason of the investor’s ownership in the “qualified shareholder”)) may be subject to FIRPTA withholding.

If the gain on the sale of shares of our common stock were taxed under FIRPTA, a non-United States stockholder would be taxed on that gain in the same manner as United States stockholders, subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. If we are not a domestically controlled qualified investment entity at the time our common stock is sold and the non-United States stockholder does not qualify for the exemptions described in the preceding paragraph, under FIRPTA the purchaser of shares of common stock also may be required to withhold 15% of the purchase price and remit this amount to the IRS on behalf of the selling non-United States stockholder.

Gain from the sale of our stock that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-United States holder in two cases: (i) if the non-United States holder’s investment in our stock is effectively connected with a United States trade or business conducted by such non-United States holder, the non-United States holder will be subject to the same treatment as a United States stockholder with respect to such gain, or (ii) if the non-United States holder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and certain other conditions are satisfied, the nonresident alien individual will be subject to a 30% tax on the individual’s capital gain.

Estate Tax. If our stock is owned or treated as owned by an individual who is not a citizen or resident (as specially defined for United States federal estate tax purposes) of the United States at the time of such individual’s

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death, the stock will be includable in the individual’s gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise, and may therefore be subject to United States federal estate tax.

FATCA Withholding on Certain Foreign Accounts and Entities. The Foreign Account Tax Compliance Act, or FATCA, provisions of the Internal Revenue Code, enacted in 2010, together with administrative guidance and certain intergovernmental agreements entered into thereunder, impose a 30% withholding tax on certain types of payments (including dividends on our stock) made to “foreign financial institutions” and certain other non-United States entities unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner. If the payee is a foreign financial institution that is not subject to special treatment under certain intergovernmental agreements, it must enter into an agreement with the United States Treasury requiring, among other things, that it undertakes to identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information about such accounts and withhold 30% on payments to account holders whose actions prevent them from complying with these reporting and other requirements. Investors in jurisdictions that have entered into intergovernmental agreements may, in lieu of the foregoing requirements, be required to report such information to their home jurisdictions. Withholding under FATCA will apply after December 31, 2018 with respect to the gross proceeds from a disposition of property that can produce United States source interest or dividends and began after June 30, 2014 with respect to the other withholdable payments (including dividends on our stock). Prospective investors should consult their tax advisors regarding this legislation.

Taxation of Tax-Exempt Shareholders

Tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts, generally are exempt from federal income taxation. However, they may be subject to taxation on their unrelated business taxable income, or UBTI. While some investments in real estate may generate UBTI, the Internal Revenue Service has ruled that dividend distributions from a REIT to a tax-exempt entity do not constitute UBTI. Based on that ruling, and provided that (1) a tax-exempt shareholder has not held our stock as “debt financed property” within the meaning of the Internal Revenue Code (i.e., where the acquisition or holding of the property is financed through a borrowing by the tax-exempt shareholder) and (2) our stock is not otherwise used in an unrelated trade or business, distributions that we make and income from the sale of our stock generally should not give rise to UBTI to a tax-exempt shareholder.

To the extent, however, that we are (or a part of us, or a disregarded subsidiary of ours is) deemed to be a TMP, or if we hold residual interests in a REMIC, a portion of the distributions paid to a tax-exempt shareholder that is allocable to excess inclusion income may be treated as UBTI. We anticipate that our investments may generate excess inclusion income. As required by Internal Revenue Service guidance, we intend to notify our shareholders if a portion of a distribution paid by us is attributable to excess inclusion income.

Tax-exempt shareholders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans exempt from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17), and (c)(20) of the Internal Revenue Code are subject to different UBTI rules, which generally require such shareholders to characterize distributions that we make as UBTI.

In certain circumstances, a pension trust that owns more than 10% of our stock could be required to treat a percentage of its distributions as UBTI, if we are a “pension-held REIT.” We will not be a pension-held REIT unless either (1) one pension trust owns more than 25% of the value of our stock or (2) a group of pension trusts, each individually holding more than 10% of the value of our stock, collectively owns more than 50% of our stock. Certain restrictions on ownership and transfer of our stock should generally prevent a tax-exempt entity from owning more than 10% of the value of our stock and should generally prevent us from becoming a pension-held REIT.

Tax-exempt shareholders are urged to consult their tax advisors regarding the federal, state, local and foreign income and other tax consequences of owning our stock.

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Backup Withholding and Information Reporting

We will report to our domestic shareholders and the Internal Revenue Service the amount of dividends paid during each calendar year and the amount of any tax withheld. Under the backup withholding rules, a domestic shareholder may be subject to backup withholding with respect to dividends paid unless the holder is a corporation or comes within other exempt categories and, when required, demonstrates this fact or provides a taxpayer identification number or social security number, certifies as to no loss of exemption from backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A domestic shareholder that does not provide his or her correct taxpayer identification number or social security number may also be subject to penalties imposed by the Internal Revenue Service. Backup withholding is not an additional tax. In addition, we may be required to withhold a portion of a capital gain distribution to any domestic shareholder who fails to certify its non-foreign status.

We must report annually to the Internal Revenue Service and to each non-United States shareholder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-United States shareholder resides under the provisions of an applicable income tax treaty. A non-United States shareholder may be subject to backup withholding unless applicable certification requirements are met.

Payment of the proceeds of a sale of our common stock within the United States is subject to both backup withholding and information reporting unless the beneficial owner certifies under penalties of perjury that it is a non-United States shareholder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person) or the holder otherwise establishes an exemption. Payment of the proceeds of a sale of our common stock conducted through certain United States related financial intermediaries is subject to information reporting (but not backup withholding) unless the financial intermediary has documentary evidence in its records that the beneficial owner is a non-United States shareholder and specified conditions are met or an exemption is otherwise established. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against such holder’s United States federal income tax liability provided the required information is furnished to the Internal Revenue Service.

Other Tax Considerations

Legislative or Other Actions Affecting REITs

The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the United States Treasury Department. Changes to the federal tax laws and interpretations thereof could adversely affect an investment in our stock.

State, Local and Foreign Taxes

We and our subsidiaries and shareholders may be subject to state, local, or foreign taxation in various jurisdictions including those in which we or they transact business, own property or reside. We may own real property assets located in numerous jurisdictions, and may be required to file tax returns in some or all of those jurisdictions. Our state, local, or foreign tax treatment and that of our shareholders may not conform to the federal income tax treatment discussed above. We may own foreign real estate assets and pay foreign property taxes, and dispositions of foreign property or operations involving, or investments in, foreign real estate assets may give rise to foreign income or other tax liability in amounts that could be substantial. Any foreign taxes that we incur do not pass through to shareholders as a credit against their United States federal income tax liability. Prospective investors should consult their tax advisors regarding the application and effect of state, local, and foreign income and other tax laws on an investment in our stock.

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ERISA CONSIDERATIONS

The following is a summary of some considerations associated with an investment in our shares by a qualified employee pension benefit plan or an individual retirement account (IRA). This summary is based on provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, each as amended through the date of this offering circular, and the relevant regulations, opinions and other authority issued by the Department of Labor and the IRS. We cannot assure you that there will not be adverse tax or labor decisions or legislative, regulatory or administrative changes that would significantly modify the statements expressed herein. Any such changes may apply to transactions entered into prior to the date of their enactment.

Each fiduciary of an employee pension benefit plan subject to ERISA (such as a profit sharing, Section 401(k) or pension plan) or any other retirement plan or account subject to Section 4975 of the Internal Revenue Code, such as an IRA, seeking to invest plan assets in our shares must, taking into account the facts and circumstances of each such plan or IRA (Benefit Plan), consider, among other matters:

• whether the investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code;

• whether, under the facts and circumstances pertaining to the Benefit Plan in question, the fiduciary’s responsibility to the plan has been satisfied;

• whether the investment will produce an unacceptable amount of UBTI to the Benefit Plan (see “Material Federal Income Tax Considerations – Taxation of Shareholders – Taxation of Tax-Exempt Shareholders”) and

• the need to value the assets of the Benefit Plan annually.

Under ERISA, a plan fiduciary’s responsibilities include the following duties:

• to act solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing benefits to them, as well as defraying reasonable expenses of plan administration;

• to invest plan assets prudently;

• to diversify the investments of the plan, unless it is clearly prudent not to do so;

• to ensure sufficient liquidity for the plan;

• to ensure that plan investments are made in accordance with plan documents and

• to consider whether an investment would constitute or give rise to a prohibited transaction under ERISA or the Internal Revenue Code.

ERISA also requires that, with certain exceptions, the assets of an employee benefit plan are held in trust and that the trustee, or a duly authorized named fiduciary or investment manager, have exclusive authority and discretion to manage and control the assets of the plan.

Prohibited Transactions

Generally, both ERISA and the Internal Revenue Code prohibit Benefit Plans from engaging in certain transactions involving plan assets with specified parties, such as sales or exchanges or leasing of property, loans or other extensions of credit, furnishing goods or services, or transfers to, or use of, plan assets. The specified parties are referred to as “parties-in-interest” under ERISA and as “disqualified persons” under the Internal Revenue Code. These definitions generally include both parties owning threshold percentage interests in an investment entity and “persons providing services” to the Benefit Plan, as well as employer sponsors of the Benefit Plan, fiduciaries and

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other individuals or entities affiliated with the foregoing. For this purpose, a person generally is a fiduciary with respect to a Benefit Plan if, among other things, the person has discretionary authority or control with respect to plan assets or provides investment advice for a fee with respect to plan assets. Under Department of Labor regulations, a person will be deemed to be providing investment advice if that person renders advice as to the advisability of investing in our shares, and that person regularly provides investment advice to the Benefit Plan pursuant to a mutual agreement or understanding that such advice will serve as the primary basis for investment decisions, and that the advice will be individualized for the Benefit Plan based on its particular needs. Thus, if we are deemed to hold plan assets, its management could be characterized as fiduciaries with respect to such assets, and each would be deemed to be a party-in-interest under ERISA and a disqualified person under the Internal Revenue Code with respect to investing Benefit Plans. Whether or not we are deemed to hold plan assets, if we or our affiliates are affiliated with a Benefit Plan Investor, we might be a disqualified person or party-in-interest with respect to such Benefit Plan Investor, resulting in a prohibited transaction merely upon investment by such Benefit Plan in our shares.

Plan Asset Considerations

In order to determine whether an investment in our shares by a Benefit Plan creates or gives rise to the potential for either prohibited transactions or a commingling of assets as referred to above, a fiduciary must consider whether an investment in our shares will cause our assets to be treated as assets of the investing Benefit Plan. Neither ERISA nor the Internal Revenue Code defines the term “plan assets;” however, regulations promulgated by the Department of Labor provide guidelines as to whether, and under what circumstances, the underlying assets of an entity will be deemed to constitute assets of a Benefit Plan when the plan invests in that entity (Plan Assets Regulation). Under the Plan Assets Regulation, the assets of an entity in which a Benefit Plan makes an equity investment will generally be deemed to be assets of the Benefit Plan, unless one of the exceptions to this general rule applies.

In the event that our underlying assets were treated as the assets of investing Benefit Plans, our management would be treated as fiduciaries with respect to each Benefit Plan shareholder. Further, if our assets are deemed to be “plan assets,” an investment by an IRA in our shares might be deemed to result in an impermissible commingling of IRA assets with other property.

If our management or our affiliates were treated as fiduciaries with respect to Benefit Plan shareholders, the prohibited transaction restrictions of ERISA and the Internal Revenue Code would apply to any transaction involving our assets. These restrictions could, for example, require that we avoid transactions with persons that are affiliated with or related to us or our affiliates or require that we restructure our activities in order to obtain an administrative exemption from the prohibited transaction restrictions. Alternatively, we might have to provide Benefit Plan shareholders with the opportunity to sell their shares to us, or we might dissolve.

If a prohibited transaction were to occur, the Internal Revenue Code imposes an excise tax equal to 15% of the amount involved and authorizes the Internal Revenue Service to impose an additional 100% excise tax if the prohibited transaction is not “corrected” in a timely manner. These taxes would be imposed on any disqualified person who participates in the prohibited transaction. In addition, our board of directors, and possibly other fiduciaries of Benefit Plan shareholders subject to ERISA who permitted the prohibited transaction to occur or who otherwise breached their fiduciary responsibilities (or a non-fiduciary participating in a prohibited transaction), could be required to restore to the Benefit Plan any profits they realized as a result of the transaction or breach and make good to the Benefit Plan any losses incurred by the Benefit Plan as a result of the transaction or breach. With respect to an IRA that invests in our shares, the occurrence of a prohibited transaction involving the individual who established the IRA, or his or her beneficiary, would cause the IRA to lose its tax-exempt status under Section 408(e)(2) of the Internal Revenue Code.

The Plan Assets Regulation provides that the underlying assets of an entity such as a REIT will be treated as assets of a Benefit Plan Investing therein unless the entity satisfies one of the exceptions to the general rule. We believe that we will satisfy one or more of the exceptions described below.

Exception for Insignificant Participation by Benefit Plan Investors. The Plan Assets Regulation provides that the assets of an entity will not be deemed to be the assets of a Benefit Plan if equity participation in the entity by

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employee benefit plans, including Benefit Plans, is not significant. The Plan Assets Regulation provides that equity participation in an entity by Benefit Plan Investors is “significant” if at any time 25% or more of the value of any class of equity interest is held by Benefit Plan Investors. The term “Benefit Plan Investor” is defined for this purpose under ERISA Section 3(42) and includes any employee benefit plan subject to Part 4 of Subtitle B of Title I of ERISA, any plan subject to Section 4975 of the Code (including IRAs), and any entity whose underlying assets include plan assets by reasons of a plan’s investment in such entity. In calculating the value of a class of equity interests, the value of any equity interests held by us and our affiliates must be excluded. It is not clear whether we will qualify for this exception.

Exception for Operating Companies. The Plan Assets Regulation provides an exception with respect to securities issued by an operating company, which includes a “real estate operating company” or a “venture capital operating company.” Generally, we will be deemed to be a real estate operating company if during the relevant valuation periods at least 50% of our assets are invested in real estate that is managed or developed and with respect to which we have the right to substantially participate directly in management or development activities. To constitute a venture capital operating company, 50% or more of our assets must be invested in “venture capital investments” during the relevant valuation periods. A venture capital investment is an investment in an operating company, including a “real estate operating company,” as to which the investing entity has or obtains direct management rights. If an entity satisfies this 50% assets requirement on the date it first makes a long-term investment (the “initial valuation date”), it will be considered a real estate operating company or a venture capital operating company, as the case may be, for the entire period beginning on the initial valuation date and ending on the last day of the first annual valuation period, provided that it actually exercises its management rights during such entire period. An “annual valuation period” is a pre-established annual period of not more than 90 days, and the first annual valuation period must begin no later than the anniversary of the initial valuation date. For subsequent periods, the entity must satisfy the 50% of assets test at some time during each annual valuation period and must exercise its management rights during the following 12 months. We believe that we will qualify for the real estate operating company exception or the venture capital operating company exception; however, we have not obtained an opinion of counsel regarding such qualification.

Other Prohibited Transactions

Regardless of whether the shares qualify for an exception under the Plan Assets Regulation, a prohibited transaction could occur if we, any selected broker-dealer or any affiliates is a fiduciary (within the meaning of Section 3(21) of ERISA) with respect to any Benefit Plan purchasing our shares. Accordingly, unless an administrative or statutory exemption applies, shares should not be purchased by a Benefit Plan with respect to which any of the above persons is a fiduciary. A person is a fiduciary with respect to a Benefit Plan under Section 3(21) of ERISA if, among other things, the person has discretionary authority or control with respect to the Benefit Plan or “plan assets” or provides investment advice for a fee with respect to “plan assets.”

Annual Valuation

Typically, a fiduciary of an employee benefit plan subject to ERISA is required to determine annually the fair market value of each asset of the plan as of the end of the plan’s fiscal year and to file a report with the Internal Revenue Service reflecting such value. When no fair market value of a particular asset is available, the fiduciary is generally required to make a good faith determination of that asset’s “fair market value” assuming an orderly liquidation at the time the determination is made. In addition, a trustee or custodian of an IRA typically must provide the Internal Revenue Service with a statement of the value of the IRA each year. In discharging its obligation to value assets of a plan, a fiduciary subject to ERISA must act consistently with the relevant provisions of the plan and the general fiduciary standards of ERISA

Unless and until our shares are listed on a national securities exchange, we do not expect that a public market for our shares will develop, and there may not be an independent basis to determine the fair market value of our shares. To date, neither the Internal Revenue Service nor the Department of Labor has promulgated regulations specifying how a plan fiduciary should determine the fair market value of shares when the fair market value of such shares is not determined in the marketplace.

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The foregoing requirements of ERISA and the Internal Revenue Code are complex and subject to change. Plan fiduciaries and the beneficial owners of IRAs are urged to consult with their own advisors regarding an investment in our shares.

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DESCRIPTION OF SHARES

Our charter authorizes us to issue: (i) 1,000,000,000 shares of common stock, $0.01 par value per share and (ii) 100,000,000 shares of preferred stock. At this time, we have not issued any preferred stock.

As of the date of this offering circular, we have issued 1,000 shares of common stock to Cottonwood Residential O.P., LP.

Common Stock In General

Holders of our common stock will be entitled to receive such distributions as declared from time to time by our board of directors out of legally available funds, subject to any preferential rights of any preferred stock that we issue in the future. In any liquidation, each outstanding share of common stock entitles its holder to share (based on the percentage of shares held) in the assets that remain after we pay our liabilities and any preferential distributions owed to preferred shareholders. Holders of shares of our common stock will not have preemptive rights, which means that you will not have an automatic option to purchase any new shares that we issue, nor will holders of our shares of common stock have any preference, conversion, exchange, sinking fund, redemption, or appraisal rights. Our common stock will be non-assessable by us upon our receipt of the consideration for which our board of directors authorized its issuance.

Our board of directors has authorized the issuance of shares of our common stock without certificates. We will not issue shares in certificated form. Information regarding restrictions on the transferability of our shares that, under Maryland law, would otherwise have been required to appear on our share certificates will instead be furnished to shareholders upon request and without charge.

We maintain a stock ledger that contains the name and address of each shareholder and the number of shares that the shareholder holds. With respect to uncertificated stock, we will continue to treat the shareholder registered on our stock ledger as the owner of the shares until the new owner delivers a properly executed form to us, which form we will provide to any registered holder upon request.

Voting Common Stock

Subject to the restrictions our charter places on transfer and ownership of shares and except as may otherwise be specified in the charter, the holders of our common stock are entitled to one vote per share on all matters submitted to a shareholder vote, including election of our directors. Therefore, the holders of a majority of our outstanding shares of common stock can elect the entire board of directors. Except as set forth in our charter, including any articles supplementary with respect to any series of preferred stock we may issue in the future, the holders of our common stock will possess exclusive voting power. Our charter does not provide for cumulative voting in the election of its directors.

Preferred Stock

Our charter authorizes our board of directors to designate and issue one or more classes or series of preferred stock without approval of our common shareholders. Our board of directors may determine the relative rights, preferences and privileges of each class or series of preferred stock so issued, which may be more beneficial than the rights, preferences, and privileges attributable to our common stock. The issuance of preferred stock could have the effect of delaying or preventing a change in control. Our board of directors has no present plans to issue preferred stock but may do so at any time in the future without shareholder approval.

Limited Partner Units in our Operating Partnership

We may also enter into contribution agreements whereby a holder of real estate desires to exchange the real estate for limited partner units in our operating partnership. If this occurs, we will amend and restate the partnership agreement of our operating partnership.

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Meetings and Special Voting Requirements

An annual meeting of our shareholders will be held each year, on a date and at the time and place set by the board of directors.

Special meetings of shareholders may be called by our chairman of the board of directors, chief executive officer, president or the board of directors. In addition, a special meeting of the shareholders must be called to act on any matter that may properly be considered at a meeting of shareholders upon the written request of shareholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting and the satisfaction by such shareholders of certain procedural requirements set forth in the Bylaws.

The presence in person or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at any shareholder meeting constitutes a quorum. The affirmative vote of a plurality of all votes cast is sufficient to elect a director. Unless otherwise provided by the Maryland General Corporation Law or our charter, the affirmative vote of a majority of all votes cast is sufficient to approve any other matter which properly comes before the meeting.

Under the Maryland General Corporation Law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless declared advisable by its board of directors and approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Except for amendments of our charter relating to the restrictions on transfer and ownership of shares and the vote required to amend certain provisions of the charter and except for those amendments permitted to be made without shareholder approval under Maryland law or by specific provision in the charter, any amendment to our charter will be valid only if it is declared advisable by the board of directors and approved by the affirmative vote of holders of shares entitled to cast a majority of all votes entitled to be cast on the matter.

Restriction on Ownership of Shares

Ownership Limit

To maintain our REIT qualification, not more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals (including certain entities treated as individuals under the Internal Revenue Code) during the last half of each taxable year. In addition, at least 100 persons who are independent of us and each other must beneficially own our outstanding shares for at least 335 days per 12-month taxable year or during a proportionate part of a shorter taxable year. Each of the requirements specified in the two preceding sentences will not apply to any period prior to the second year for which we elect to be taxable as a REIT. We may prohibit certain acquisitions and transfers of shares so as to ensure our continued qualification as a REIT under the Internal Revenue Code. However, we cannot assure you that this prohibition will be effective.

To help ensure that we meet these tests, our charter prohibits any person or group of persons from acquiring, directly or indirectly, beneficial ownership of more than 9.8% of our aggregate outstanding shares unless exempted by our board of directors. Our board of directors may waive this ownership limit with respect to a particular person if the board of directors receives evidence that ownership in excess of the limit will not jeopardize our REIT status. For purposes of this provision, we treat corporations, partnerships and other entities as single persons.

Any attempted transfer of our shares that, if effective, would result in a violation of our ownership limit or would result in our shares being owned by fewer than 100 persons will be null and void and will cause the number of shares causing the violation to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries. The prohibited transferee will not acquire any rights in the shares. The automatic transfer will be deemed to be effective as of the close of business on the business day prior to the date of the attempted transfer. We will designate a trustee of the trust that will not be affiliated with us or the prohibited transferee. We will also name one or more charitable organizations as a beneficiary of the share trust.

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Shares held in trust will remain issued and outstanding shares and will be entitled to the same rights and privileges as all other shares of the same class or series. The prohibited transferee will not benefit economically from any of the shares held in trust, will not have any rights to dividends or distributions, and will not have the right to vote or any other rights attributable to the shares held in the trust. The trustee will receive all dividends and distributions on the shares held in trust and will hold such dividends or distributions in trust for the benefit of the charitable beneficiary. The trustee may vote any shares held in trust.

Within 20 days of receiving notice from us that any of our shares have been transferred to the trust for the charitable beneficiary, the trustee will sell those shares to a person designated by the trustee whose ownership of the shares will not violate the above restrictions. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited transferee and to the charitable beneficiary as follows. The prohibited transferee will receive the lesser of (i) the price paid by the prohibited transferee for the shares or, if the prohibited transferee did not give value for the shares in connection with the event causing the shares to be held in the trust (e.g., a gift, devise or other similar transaction), the market price (as defined in our charter) of the shares on the day of the event causing the shares to be held in the trust and (ii) the price received by the trustee from the sale or other disposition of the shares. Any net sale proceeds in excess of the amount payable to the prohibited transferee will be paid immediately to the charitable beneficiary. If, prior to our discovery that shares have been transferred to the trust, the shares are sold by the prohibited transferee, then (i) the shares will be deemed to have been sold on behalf of the trust and (ii) to the extent that the prohibited transferee received an amount for the shares that exceeds the amount he was entitled to receive, the excess will be paid to the trustee upon demand.

In addition, shares held in the trust for the charitable beneficiary will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in the transfer to the trust (or, in the case of a devise or gift, the market price at the time of the devise or gift) and (ii) the market price on the date we, or our designee, accept the offer. We will have the right to accept the offer until the trustee has sold the shares. Upon a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited transferee.

Any person who acquires or attempts to acquire shares in violation of the foregoing restrictions or who would have owned the shares that were transferred to any such trust must give us immediate written notice of such event, and any person who proposes or attempts to acquire or receive shares in violation of the foregoing restrictions must give us at least 15 days’ written notice prior to such transaction. In both cases, such persons will provide to us such other information as we may request in order to determine the effect, if any, of such transfer on our status as a REIT.

The foregoing restrictions will continue to apply until our board of directors determines it is no longer in our best interest to continue to qualify as a REIT. The ownership limit does not apply to any underwriter in an offering of our shares or to a person or persons exempted from the ownership limit by our board of directors based upon appropriate assurances that our qualification as a REIT would not be jeopardized.

Within 30 days after the end of each taxable year, every owner of 5% or more of our outstanding capital stock will be asked to deliver to us a statement setting forth the number of shares owned directly or indirectly by such person and a description of how such person holds the shares. Each such owner will also provide us with such additional information as we may request in order to determine the effect, if any, of his or her beneficial ownership on our status as a REIT and to ensure compliance with our ownership limit.

These restrictions could delay, defer or prevent a transaction or change in control of us that might involve a premium price for our shares of common stock or otherwise be in the best interests of our shareholders.

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Suitability Standards and Minimum Purchase Requirements

Purchasers of our common stock are required to meet standards regarding (i) net worth or income and (ii) minimum purchase amounts. Purchasers must either (i) be an accredited investor or (ii) if you are not an accredited investor, the investment in the shares is not more than 10% of the greater of: (a) if you are a natural person: (1) your individual net worth, or joint net worth with your spouse, excluding the value of your primary residence; or (2) your individual income, or joint income with your spouse, received in each of the two most recent years and you have a reasonable expectation that an investment in the shares will not exceed 10% of your individual or joint income in the current year or (b) if you are not a natural person, (1) your revenue, as of your most recently completed fiscal year end; or (2) your net assets, as of your most recently completed fiscal year end.

All subsequent sales must comply with applicable state and federal securities laws.

Distributions

We expect to authorize and declare distributions based on daily record dates, and we expect to make distributions on a monthly basis. The rate will be determined by the board of directors based on our financial condition and such other factors as our board of directors deems relevant. The board of directors has not pre-established a percentage range of return for distributions to shareholders. We have not established a minimum distribution level, and our charter does not require that we make distributions to our shareholders.

Generally, our policy will be to make distributions from cash flow from operations. However, we expect to have little, if any, cash flow from operations available for distribution until we make substantial investments. During our offering stage, when we may raise capital in this offering more quickly than we acquire income-producing assets, and for some period after our offering stage, we may not be able to make distributions solely from our cash flow from operations. Further, because we may receive income from interest or rents at various times during our fiscal year and because we may need cash flow from operations during a particular period to fund capital expenditures and other expenses, we expect that at least during the early stages of our development and from time to time during our operational stage, we will declare distributions in anticipation of cash flow that we expect to receive during a later period and we will pay these distributions in advance of our actual receipt of these funds. In these instances, we expect to look to third party borrowings to fund our distributions. We may also fund such distributions from the sale of assets or from the maturity, payoff or settlement of debt investments. Our charter permits us to make distributions from any source, including offering proceeds or borrowings (which may constitute a return of capital), and our charter does not limit the amount of funds we may use from any source to pay such distributions. If we make distributions from sources other than our cash flow from operations, we will have less funds available for investment in properties and other assets.

To maintain our qualification as a REIT, we must make aggregate annual distributions to our shareholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If we meet the REIT qualification requirements, we generally will not be subject to federal income tax on the income that we distribute to our shareholders each year. See “Material Federal Income Tax Considerations—Taxation of Cottonwood Multifamily REIT II—Annual Distribution Requirements.” Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant.

Distributions that you receive will be taxed as ordinary income to the extent they are from current or accumulated earnings and profits. To the extent any portion of your distribution is not from current or accumulated earnings and profits, it will not be subject to tax immediately; it will be considered a return of capital for tax purposes and will reduce the tax basis of your investment (and potentially result in taxable gain upon your sale of the stock). Distributions that constitute a return of capital, in effect, defer a portion of your tax until your investment is sold or we are liquidated, at which time you will be taxed at capital gains rates. However, because each investor’s tax considerations are different, we suggest that you consult with your tax advisor.

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Business Combinations

Under the Maryland General Corporation Law, business combinations between a Maryland corporation and an interested shareholder or the interested shareholder’s affiliate are prohibited for five years after the most recent date on which the shareholder becomes an interested shareholder. For this purpose, the term “business combination” includes mergers, consolidations, share exchanges, asset transfers, and issuances or reclassifications of equity securities. An “interested shareholder” is defined for this purpose as: (i) any person who beneficially owns 10% or more of the voting power of the corporation’s shares or (ii) an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting shares of the corporation. A person is not an interested shareholder under the statute if the board of directors approved in advance the transaction by which he otherwise would have become an interested shareholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.

After the five-year prohibition, any business combination between the corporation and an interested shareholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (i) 80% of the votes entitled to be cast by holders of outstanding voting shares of the corporation and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of the corporation other than shares held by the interested shareholder or its affiliate with whom the business combination is to be effected, or held by an affiliate or associate of the interested shareholder.

These super-majority vote requirements do not apply if the corporation’s common shareholders receive a minimum price, as defined under the Maryland General Corporation Law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested shareholder for its shares.

None of these provisions of the Maryland General Corporation Law will apply, however, to business combinations that are approved or exempted by the board of directors of the corporation prior to the time that the interested shareholder becomes an interested shareholder. We have opted out of these provisions by resolution of our board of directors. However, our board of directors may, by resolution, opt in to the business combination statute in the future.

Control Share Acquisitions

The Maryland General Corporation Law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the corporation, or an employee of the corporation who is also a director of the corporation are excluded from the vote on whether to accord voting rights to the control shares. “Control shares” are voting shares that, if aggregated with all other shares owned by the acquirer or with respect to which the acquirer has the right to vote or to direct the voting of, other than solely by virtue of revocable proxy, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power:

• one-tenth or more but less than one-third;

• one-third or more but less than a majority; or

• a majority or more of all voting power.

Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval. Except as otherwise specified in the statute, a “control share acquisition” means the acquisition of control shares.

Once a person who has made or proposes to make a control share acquisition has undertaken to pay expenses and has satisfied other required conditions, the person may compel the board of directors to call a special meeting of shareholders to be held within 50 days of the demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any shareholders meeting.

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If voting rights are not approved for the control shares at the meeting or if the acquiring person does not deliver an “acquiring person statement” for the control shares as required by the statute, the corporation may redeem any or all of the control shares for their fair value, except for control shares for which voting rights have previously been approved. Fair value is to be determined for this purpose without regard to the absence of voting rights for the control shares, and is to be determined as of the date of the last control share acquisition or of any meeting of shareholders at which the voting rights for control shares are considered and not approved.

If voting rights for control shares are approved at a shareholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of these appraisal rights may not be less than the highest price per share paid in the control share acquisition. Some of the limitations and restrictions otherwise applicable to the exercise of dissenters’ rights do not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or to acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our stock. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

Share Repurchase Program

Our board of directors has adopted a share repurchase program that may enable you to sell your shares of common stock to us in limited circumstances. In its sole discretion, our board of directors could choose to terminate the program or to amend its provisions without shareholder approval.

Upon the request of a shareholder, repurchases will be made in the discretion of our board of directors and at the following repurchase price:

(i) Beginning on the first anniversary of the date such shareholder acquired the shares in question (referred to as the “acquisition date”) and prior to the second anniversary of the acquisition date, the purchase price for the repurchased shares will be equal to 80% of the estimated value (as defined below) of the shares;

(ii) Beginning on the second year anniversary of the acquisition date and prior to the third anniversary of the acquisition date, the purchase price for the repurchased shares will be equal to 85% of the estimated value of the shares;

(iii) Beginning on the third year anniversary of the acquisition date and prior to the fourth anniversary of the acquisition date, the purchase price for the repurchased shares will be equal to 90% of the estimated value of the shares; and

(iv) Beginning on the fourth year anniversary of the acquisition date and every year thereafter, the purchase price for the repurchased shares will be equal to 95% of the estimated value of the shares.

For purposes of the share repurchase program, the estimated value per share will equal the purchase price until the day we disclose, subsequent to completion of the offering, a new estimated value per share. During this time period, the purchase price per share will be determined by adjusting for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Thereafter, the estimated value per share (which shall be the net asset value of our common stock) shall be determined by our board of directors. We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter. The purchase price per share for shares

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repurchased pursuant to the share repurchase program will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to our shareholders prior to the repurchase date as a result of the sale of one or more of our assets that constitutes a return of capital distribution as a result of such sales. For more details on how the board of directors will determine the net asset value see “Risk Factors — Risks Related to This Offering and Our Corporate Structure.”

There are several limitations on our ability to repurchase shares under the program:

• Unless the shares are being repurchased in connection with a shareholder’s death or complete disability, we may not repurchase shares unless the shareholder has held the shares for at least one year.

• During any calendar year, we may repurchase no more than 3% of the weighted average number of shares of our common stock outstanding during the prior calendar year.

• We have no obligation to repurchase shares if the repurchase would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

• We will not repurchase shares if our board of directors determines, in its sole discretion, that the repurchase price determined in accordance with the terms of the share repurchase program exceeds the then current fair market value of the shares to be repurchased.

Unless otherwise approved by our board of directors in its sole discretion, we will repurchase shares on the last business day of each quarter; provided, however we will not repurchase shares on the same day we make a divided payment. We or our transfer agent must receive your written request for repurchase at least 15 business days before the repurchase date in order for us to repurchase your shares on the repurchase date. If we could not repurchase all shares presented for repurchase in any quarter, we would attempt to honor repurchase requests on a pro rata basis. We will deviate from pro rata purchases in two minor ways: (i) if a pro rata repurchase would result in you owning less than half of the minimum purchase amount described below under “Plan of Distribution—Minimum Purchase Requirements,” then we will repurchase all of your shares and (ii) if a pro rata repurchase would result in you owning more than half but less than all of the minimum purchase amount, then we will not repurchase any shares that would reduce your holdings below the minimum purchase amount.

We will treat a repurchase request that would cause a shareholder to own fewer than 100 shares of common stock as a request to repurchase all of his or her shares of common stock, and we will vary from pro rata treatment of repurchases as necessary to avoid having shareholders holding fewer than 100 shares of common stock or in other special situations determined by our board of directors.

If we did not completely satisfy a shareholder’s repurchase request on a repurchase date because we or our transfer agent did not receive the request in time or because of the restrictions on the number of shares we could repurchase under the program, we would treat the unsatisfied portion of the repurchase request as a request for repurchase at the next repurchase date funds are available for repurchase unless the shareholder withdrew his or her request before the next date for repurchases. Any shareholder could withdraw a repurchase request upon written notice to us if such notice were received by us at least 15 business days before the date for repurchases.

In several respects we would treat repurchases sought upon a shareholder’s death or complete disability differently from other repurchases:

• there is no one-year holding requirement; and

• the purchase price for the repurchased shares will be equal to 95% of the estimated value of the shares (as described above).

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Our board of directors, in its sole discretion, will determine in good faith whether a shareholder becomes completely disabled based on the definition of “disabled” under the federal Social Security Act. The federal Social Security Act generally defines disabled or disability as the inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment(s) that either (i) can be expected to result in death or (ii) has lasted or that we can expect to last for a continuous period of not less than 12 months. Our board of directors may rely on a determination made by the Social Security Administration’s office in the shareholder’s state in making its determination that the shareholder’s medical condition is considered a disability under the Social Security Act.

Repurchase upon complete disability will only be available to shareholders who become completely disabled after the purchase of their shares. If the shares are purchased by joint owners, the repurchase upon complete disability or death will be available when either joint owner first becomes completely disabled or dies.

Neither we nor the board of directors will have any liability to any shareholder for any damages resulting from or related to the shareholder’s presentment of the shareholder’s shares. Further, shareholders will have complete responsibility for payment of all taxes, assessments and other applicable obligations and third party costs resulting from or relating to our repurchase of shares.

Our board of directors may amend, suspend, or terminate the share repurchase program upon 30 days’ notice. We may provide notice by including such information in a separate mailing to the shareholders. During this offering, we would also include this information in an offering circular supplement as required under federal securities laws.

Our share repurchase program provides shareholders only a limited ability to redeem shares for cash until a secondary market develops for our shares, at which time the program would terminate. No such market presently exists, and we cannot assure you that any market for your shares will ever develop.

Qualifying shareholders who desire to redeem their shares would have to give written notice to us by completing a repurchase request form and returning it to us at Cottonwood Multifamily REIT II, Inc., c/o DST Systems, Inc. (contact information immediately below).

Registrar and Transfer Agent

We have engaged a third party to serve as the registrar and transfer agent for our common stock. The name and address of our transfer agent is as follows:

DST Systems, Inc.

1055 Broadway, 7th Floor

Kansas City, Missouri 64105

Attn: Group Vice President-Full Service

Fax: (816) 435-3455

To ensure that any account changes or updates are made promptly and accurately, all changes and updates should be directed to the transfer agent, including any change to a shareholder’s address, ownership type, or distribution mailing address, as well as shareholder repurchase requests under our share repurchase program.

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THE FORM OF JOINT VENTURE AGREEMENT

Our operating partnership and Cottonwood Residential O.P., LP intend to form a new joint venture for each multifamily apartment community or multifamily real estate related asset acquired. Our operating partnership will be no more than a 90% owner and a manager of each joint venture. Cottonwood Residential O.P., LP, a Delaware limited partnership will be at least a 10% owner and the other manager of each joint venture. Cottonwood Residential O.P., LP will have the option to vary its ownership on a joint venture by joint venture basis in its sole discretion, but in no circumstance will its ownership be less than 10%. We anticipate that substantially all of our investments will be made through the joint venture(s).

Our operating partnership and Cottonwood Residential O.P., LP will use the Form of Joint Venture Agreement attached hereto as Exhibit 6.4 for each joint venture, but the form is subject to change to account for changes required by a lender and actual contributions made by our operating partnership and Cottonwood Residential O.P., LP.

Capital Contributions

Together with Cottonwood Residential O.P., LP, our operating partnership will make capital contributions to the joint venture as the joint venture requires capital to make investments or for general corporate purposes. Our operating partnership will contribute up to 90% of the capital contributions agreed to by the members and Cottonwood Residential O.P., LP will contribute at least 10% of the capital contributions agreed to by the members. This allocation will change if Cottonwood Residential O.P., LP increases its ownership in a joint venture. Our joint ventures may invest through special purpose entities.

If Cottonwood Residential O.P., LP acquires a tenant in common interest in a multifamily apartment community acquired by a joint venture, Cottonwood Residential O.P., LP’s obligation to make capital contributions will be reduced by the amount of equity used by Cottonwood Residential O.P., LP to acquire such tenant in common interest. To the extent that the tenant in common interest represents at least a 10% undivided interest in the multifamily apartment community, Cottonwood Residential O.P., LP will not be required to make any capital contributions to the applicable joint venture in exchange for its interest in such joint venture. Cottonwood Residential O.P., LP will be entitled to receive 20% of net income and distributions from the joint venture even if it has not made any capital contributions to the joint venture. This promotional interest is subordinated to our receipt of an 8% preferred return.

Management

Each joint venture will be co-managed by our operating partnership and Cottonwood Residential O.P., LP. We (through our operating partnership) and Cottonwood Residential O.P., LP will have equal management authority with respect to the joint ventures despite unequal capital contributions and distributions. Our board of directors and officers will direct CW Multifamily REIT II GP, LLC, the general partner of our operating partnership, to direct the operating partnership’s decisions on our behalf regarding the management and operation of the joint ventures between us and Cottonwood Residential O.P., LP.

Our sponsor has previously formed Cottonwood Multifamily REIT I, Inc. which will have a priority for potential investments until at least 85% of the capital raised by Multifamily REIT I, Inc. has been identified for investment. After such time and until at least 85% of the capital raised in this offering has been identified for investment or invested in multifamily apartment communities and multifamily real estate related assets and provided that our operating partnership has equity available to make the required equity investment, all opportunities to invest in multifamily apartment communities that meet our investment criteria and diversification criteria, subject to a few exceptions, will be first presented by Cottonwood Residential O.P., LP to our operating partnership and our operating partnership will have the right to acquire such multifamily apartment community. Cottonwood Residential O.P., LP may sponsor other real estate funds and real estate investment trusts in the future which have investment objectives similar to ours. If we have already invested (or identified for investment) at least 85% of the capital raised in this offering and we sell one of our assets, we will not have priority for any suitable investment identified by Cottonwood Residential O.P., LP until the competing entity has invested (or identified for investment) at least 85% of its available capital. For more details, see the executed Investment Policy Agreement in Exhibit 6.8.

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Cottonwood Residential O.P., LP may, but is not required to, present potential investments in multifamily real estate related assets to our operating partnership. If Cottonwood Residential O.P., LP determines that it does not want to participate in a particular investment, our operating partnership may acquire the asset directly without the participation of Cottonwood Residential O.P., LP. Similarly, if our operating partnership does not want to participate in an investment opportunity presented by Cottonwood Residential O.P., LP, Cottonwood Residential O.P., LP may pursue that opportunity independently of the joint venture after our operating partnership has declined to participate.

In exchange for identifying investment opportunities for our operating partnership, Cottonwood Residential O.P., LP will receive a promotional interest equal to 20% of the profits of each joint venture after the payment of a preferred return and catch-up allocation.

Distributions and Allocations of Profit and Losses

Cash from Operations from each joint venture will be distributed as follows:

(1) First, to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their accrued but undistributed 8% preferred return (as defined in the Form of Joint Venture Agreement in Exhibit 6.4), until the partners have been distributed an amount equal to their accrued but undistributed 8% preferred return;

(2) Second, (i) 50% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and (ii) 50% to Cottonwood Residential O.P., LP, until Cottonwood Residential O.P., LP has received an amount pursuant to this clause (ii) equal to 20% of the amount distributed to the partners (our operating partnership and Cottonwood Residential O.P., LP) pursuant to item 1 and this item 2; and

(3) Thereafter, 80% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and 20% to Cottonwood Residential O.P., LP.

Cash from Capital Transactions from each joint venture will be distributed as follows:

(1) First, to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their accrued but undistributed 8% preferred return (as defined in the Form of Joint Venture Agreement in Exhibit 6.4), until the partners have been distributed an amount equal to their accrued but undistributed 8% preferred return;

(2) Second, 100% to the partners (our operating partnership and Cottonwood Residential O.P., LP) until their capital accounts are reduced to zero;

(3) Third, (i) 50% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and (ii) 50% to Cottonwood Residential O.P., LP, until Cottonwood Residential O.P., LP has received an amount pursuant to clause (ii) of item 2 under Cash from Operations (above) and this clause (ii) equal to 20% of the total amount distributed to the partners (our operating partnership and Cottonwood Residential O.P., LP) pursuant to item 1 above, this item 3 and items 1 and 2 under Cash from Operations; and

(4) Thereafter, 80% to the partners (our operating partnership and Cottonwood Residential O.P., LP) in proportion to their respective interest in the joint venture and 20% to Cottonwood Residential O.P., LP.

Taking into consideration the distributions from Cash From Operations and Cash From Distributions, Cottonwood Residential O.P., LP is effectively receiving a promotional interest equal to 20% of the profits of each joint venture which is subordinated to our receipt of an 8% preferred return. The joint venture will make allocations of income and loss so that the allocations are made in a similar manner to the distributions. Losses will not be passed through to our shareholders.

112

Amendments

The joint venture agreement cannot be amended without the approval of both us and Cottonwood Residential O.P., LP.

Transfer Restrictions

Our operating partnership and Cottonwood Residential O.P., LP may not resign or withdraw as a member, without the consent of the other member. In addition, no member may directly or indirectly sell, assign, hypothecate, encumber or otherwise transfer all or any part of its membership interest in the joint venture without the consent of the other member.

Right of First Refusal

If our operating partnership or Cottonwood Residential O.P., LP desires to transfer all or a portion of its membership interest in a joint venture, the non-transferring member shall have the option to purchase the transferring member’s membership interest on the same terms the transferring member intends to sell its interest to a third-party.

Purchase Option Agreement

Pursuant to the Purchase Option Agreement (an executed copy of which is attached hereto as Exhibit 6.7), after December 31, 2020, Cottonwood Residential O.P., LP will have the option, in its sole discretion, to purchase our operating partnership’s interest in all, but not less than all, of the joint ventures and any direct interests in real property not held in a joint venture at their fair market value, by delivering written notice to our operating partnership of its election to exercise the purchase option. Our operating partnership and Cottonwood Residential O.P., LP will each appoint one third-party appraiser to provide an estimate of the fair market value of the joint ventures’ assets and the direct interests in real property not held in a joint venture as if such assets were sold as of the date of the notice, reduced by the customary closing costs, fees and commissions in the jurisdiction in which the multifamily apartment communities are located which would be applied if the joint ventures sold such multifamily apartment communities in a third party sale. The selected appraisers will provide their determinations of value. If the two appraised values are within 5% of each other, the value of the investments will be the average of the two appraised values. If the two appraised values are not within 5% of each other, the two selected appraisers will mutually agree upon a third appraiser and the third appraiser will provide an appraised value. The value of the joint ventures’ assets will then be equal to the average of the third appraised value and whichever of the prior appraised values is closest to the third appraised value. The price to be paid for our interest in the joint ventures will be determined as if there was a hypothetical sale of all the joint ventures’ assets at the appraised value (subtracting all liabilities) and a distribution is made pursuant to the terms of each joint venture agreement. Upon the determination of the net value of our interest in the joint ventures and our direct interests in real property not held in a joint venture, Cottonwood Residential O.P., LP will have thirty (30) days to elect whether to complete the purchase option and purchase our operating partnership’s interest in the joint ventures and our direct interests in real property not held in a joint venture. If Cottonwood Residential O.P., LP does not elect to proceed with the purchase option, it will not be permitted to send notice and initiate the appraisal process for a period of six (6) months and all costs and expenses related to the purchase option will be borne by Cottonwood Residential O.P., LP. Cottonwood Residential O.P., LP will have the right to restructure the purchase of our interest in the joint ventures to maximize its tax consequences. Cottonwood Residential O.P., LP will have the right to assign this purchase option to an affiliate of Cottonwood Residential O.P., LP. This option will expire upon the earliest of: (i) the sale of the last joint venture’s assets, (ii) December 31, 2030 or (iii) a merger of our company into another REIT, real estate company or other entity. For further details see the executed Purchase Option Agreement in Exhibit 6.7.

113

THE OPERATING PARTNERSHIP AGREEMENT

General

Cottonwood Multifamily REIT II O.P., LP which we refer to as the operating partnership, is a newly formed Delaware limited partnership. We expect to own substantially all of our assets and conduct our operations through the operating partnership. We are the limited partner and the sole member of the general partner of our operating partnership. The general partner of our operating partnership is CW Multifamily REIT II GP, LLC, a Delaware limited liability company. As the sole member of the general partner, we have the exclusive power to manage and conduct the business of the operating partnership.

As we accept subscriptions for shares in this offering, we will transfer substantially all of the net proceeds of the offering to our operating partnership as a capital contribution in exchange for units of limited partnership interest; however, we will be deemed to have made capital contributions in the amount of the gross offering proceeds received from investors.

As a result of this structure, we are considered an UPREIT, or an umbrella partnership real estate investment trust. For purposes of satisfying the asset and income tests for qualification as a REIT, the REIT’s proportionate share of the assets and income of the operating partnership will be deemed to be assets and income of the REIT.

If we ever decide to acquire properties in exchange for units of limited partnership interest in the operating partnership, we expect to amend and restate the partnership agreement of our operating partnership to provide substantially as set forth below.

Capital Contributions

We have contributed $100 to the partnership in exchange for limited partnership units, and we have caused CW Multifamily REIT II GP, LLC to contribute $9,900 to the partnership in exchange for general partnership units. We and CW Multifamily REIT II GP, LLC will make additional contributions to the capital of our operating partnership at such times and in such amounts as agreed to by the partners. All future additional capital contributions shall be made in proportion to the partners’ units. We plan to contribute the proceeds of this offering to the operating partnership as an additional capital contribution. We anticipated that we will be the only limited partner of the operating partnership. However, if we offer preferred shares in the future, the operating partnership will also issue preferred general partnership interests. In addition, if we accept contributions of property in our operating partnership, our percentage ownership interest in the operating partnership will be adjusted to reflect the relative ownership percentages of the property contributors and us. If the operating partnership would require additional funds at any time in excess of capital contributions made by us or from borrowings, we could borrow funds from a financial institution or other lender and lend such funds to the operating partnership on the same terms and conditions as are applicable to our borrowing of such funds.

Operations

We would expect the partnership agreement of our operating partnership to provide that, so long as we remain qualified as a REIT, the operating partnership would be operated in a manner that would enable us to satisfy the requirements for being classified as a REIT for tax purposes.

Joint Venture Member and Manager

The operating partnership will be no more than a 90% member of the joint ventures and will act as the co-manager of the joint ventures with Cottonwood Residential O.P., LP.

114

Distributions and Allocations of Profits and Losses

Cottonwood Multifamily REIT II O.P., LP will be considered a disregarded entity for federal income tax purposes. We are the sole owner of Cottonwood Multifamily REIT II O.P., LP and all allocations and distributions will be made to us.

Rights, Obligations and Powers of the General Partner

Under the partnership agreement of our operating partnership, the general partner has all power and authority as a general partner is able to have under the Delaware Revised Uniform Limited Partnership Act, as amended. We are the sole member of CW Multifamily REIT II GP, LLC, the general partner of our operating partnership. As the sole member of the general partner, we have complete and exclusive discretion to manage and control the operating partnership’s business, through CW Multifamily REIT II GP, LLC, and to make all decisions affecting its assets.

We expect that the operating partnership would continue to pay all of the administrative and operating costs and expenses it incurs in acquiring or originating and operating and managing our investments. Other than the organizational and offering expenses paid by Cottonwood Capital Property Management II, LLC, we expect the operating partnership would also pay all of our administrative costs and expenses and such expenses would be treated as expenses of the operating partnership. Such expenses would include:

• all expenses relating to our continuity of existence;

• all expenses associated with the preparation and filing of our periodic reports under federal, state, or local laws or regulations; and

• all of our other operating or administrative costs incurred in the ordinary course of business.

Other than the organizational and offering expenses paid by Cottonwood Capital Property Management II, LLC, the only costs and expenses we could incur that the operating partnership would not reimburse would be costs and expenses relating to assets we may own outside of the operating partnership. We would pay the expenses relating to such assets directly.

Change in General Partner

As the sole member of CW Multifamily REIT II GP, LLC, we may cause the general partner to withdraw as the general partner of the operating partnership or transfer its general partnership interest in the operating partnership (which would also require our approval as the limited partner).

Amendment of Limited Partnership Agreement

The partnership agreement of our operating partnership may be amended with the consent of the partners. It is anticipated that the partnership agreement of our operating partnership will be amended and restated if additional limited partners are admitted.

115

THE GENERAL PARTNER’S LIMITED LIABILITY COMPANY AGREEMENT

CW Multifamily REIT II GP, LLC, which we refer to as the general partner, is a newly formed Delaware limited liability company. We are currently the sole member of the general partner. As the sole member, we have the exclusive power to manage and conduct the business of the general partner.

Capital Contributions

We have made an initial capital contribution of $100 to CW Multifamily REIT II GP, LLC in exchange for our sole membership interest.

Management

The business and affairs of CW Multifamily REIT II GP, LLC will be managed by us, as the sole member. We will have full and complete authority, power and discretion to manage and control the business, affairs and assets of CW Multifamily REIT II GP, LLC, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of CW Multifamily REIT II GP, LLC’s business. We will have all authority, rights and powers conferred by law and those required or appropriate to the management of CW Multifamily REIT II GP, LLC’s business.

Distributions and Allocations of Profits and Losses

Cash from operations with respect to each calendar year will be distributed to us.

116

SUPPLEMENTAL SALES MATERIAL

In addition to this offering circular, we may utilize additional sales materials in connection with the offering of the shares, although only when accompanied by or preceded by the delivery of this offering circular. The supplemental sales material will not contain all of the information material to an investment decision and should only be reviewed after reading this offering circular. These supplemental sales materials may include:

• investor sales promotion brochures;

• cover letters transmitting the offering circular;

• brochures containing a summary description of the offering;

• fact sheets describing the general nature of Cottonwood Multifamily REIT II, Inc. and our investment objectives;

• asset flyers describing our recent acquisitions;

• broker updates;

• online investor presentations;

• web site material;

• electronic media presentations; and

• client seminars and seminar advertisements and invitations.

All of the foregoing material will be prepared by us, our managing broker-dealer, or their affiliates with the exception of the third-party article reprints. In certain jurisdictions, some or all of such sales material may not be available. In addition, the sales material may contain certain quotes from various publications without obtaining the consent of the author or the publication for use of the quoted material in the sales material.

We are offering shares only by means of this offering circular. Although the information contained in our supplemental sales materials will not conflict with any of the information contained in this offering circular, the supplemental materials do not purport to be complete and should not be considered a part of or as incorporated by reference in this offering circular or the offering statement of which this offering circular is a part.

ELECTRONIC DELIVERY

Subject to availability, you may consent to the electronic delivery of documents, including the offering circular, supplements to the offering circular, annual and quarterly reports, and other shareholder communication and reports. Such consent may be given in the subscription agreement, the form of which is attached hereto as Exhibit 1.2. In connection with this offering, the managing broker-dealer and other soliciting dealers may distribute offering circulars by electronic means, such as e-mail.

LEGAL MATTERS

The validity of the shares of our common stock being offered hereby will be passed upon for us by DLA Piper LLP (US), San Diego, California. DLA Piper LLP (US) has also reviewed the statements relating to certain federal income tax matters that are likely to be material to United States holders of our common stock under the caption “Material Federal Income Tax Considerations” and will opine upon our qualification as a REIT for federal income tax purposes.

117

EXPERTS

The consolidated balance sheet of Cottonwood Multifamily REIT II, Inc. at June 16, 2016 appearing in this offering circular has been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and is included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed an offering statement on Form 1-A with the SEC with respect to the shares of our common stock to be issued in this offering. This offering circular is a part of that offering statement and, as permitted by SEC rules, does not include all of the information you can find in the offering statement or the exhibits to the offering statement. For additional information relating to us, we refer you to the offering statement and the exhibits to the offering statement. Statements contained in this offering circular as to the contents of any contract or document are necessarily summaries of such contract or document and in each instance, if we have filed the contract or document as an exhibit to the offering statement, we refer you to the copy of the contract or document filed as an exhibit to the offering statement.

After commencement of this offering, we will file annual, semiannual and current event reports with the SEC. We intend to furnish our shareholders with annual reports containing consolidated financial statements certified by an independent public accounting firm. The offering statement is, and any of these future filings with the SEC will be, available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may read and copy any filed document at the SEC’s public reference room in Washington, D.C. at 100 F. Street, N.E., Room 1580, Washington, D.C. Please call the SEC at (800) SEC-0330 for further information about the public reference room.

118

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

COTTONWOOD MULTIFAMILY REIT II, INC.

June  16, 2016

Contents

Report of Independent Auditors	F-2
Consolidated Balance Sheet	F-4
Notes to Consolidated Balance Sheet	F-5

F-1

Report of Independent Auditors

The Board of Directors and Stockholders

Cottonwood Multifamily REIT II, Inc.

We have audited the accompanying consolidated balance sheet of Cottonwood Multifamily REIT II, Inc., as of June 16, 2016 and the related notes (the financial statement).

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of this financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

F-2

Opinion

In our opinion the balance sheet referred to above presents fairly, in all material respects, the consolidated financial position of Cottonwood Multifamily REIT II, Inc. at June 16, 2016, in conformity with U.S. generally accepted accounting principles.

\s\ Ernst & Young LLP

Salt Lake City, Utah

June 30, 2016

F-3

Cottonwood Multifamily REIT II, Inc.

Consolidated Balance Sheet

June 16, 2016

Assets
Cash	$	10,000
Total assets	$	10,000
Liabilities and stockholders’ equity
Liabilities
Total liabilities	$	—
Commitments and contingencies
Stockholder’s Equity
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued and outstanding		—
Common stock, $0.01 par value; 1,000,000,000 shares authorized, 1,000 shares issued and outstanding		10
Additional paid in capital		9,990
Total stockholders’ equity		10,000
Total liabilities and stockholders’ equity	$	10,000

See accompanying notes.

F-4

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet

June 16, 2016

Note 1 - Organization and Business

Cottonwood Multifamily REIT II, Inc. (the “Company”) was formed on June 10, 2016 as a Maryland corporation that intends to qualify as a real estate investment trust (“REIT”) beginning with the taxable year ending December 31, 2016, which may be extended to the taxable year ending December 31, 2017. Substantially all of the Company’s business is expected to be conducted through Cottonwood Multifamily REIT II O.P., LP (the “Operating Partnership”), a Delaware limited partnership. The Company is a limited partner and the sole member of the general partner of the Operating Partnership. As of June 16, 2016, the Company has not begun operations.

The Company intends to file an offering statement on Form 1-A with the Securities and Exchange Commission (“SEC”) with respect to an offering of up to $50 million in common shares, for an initial price of $10.00 per share. The Company will not sell any shares of common stock unless $2,000,000 in gross proceeds are raised from unaffiliated persons by the one year anniversary of the date the offering is qualified by the SEC. Subscription payments will be held in escrow until this condition is satisfied.

On June 16, 2016, the Company issued 1,000 shares of its common stock to Cottonwood Residential O.P, LP (“CROP”) at a purchase price of $10.00 per share. As of June 16, 2016, the 1,000 shares of common stock owned by CROP were the only issued and outstanding shares of the Company.

The purpose of the Company is to invest in multifamily apartment communities and real estate related assets located throughout the United States.

Note 2 - Summary of Significant Accounting Policies

The Company intends to invest through joint ventures with CROP, an affiliated entity, and will only invest in assets outside of a joint venture with CROP should CROP choose not to participate.

F-5

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 2 - Summary of Significant Accounting Policies (continued)

Principles of Consolidation and Basis of Presentation

The consolidated balance sheet includes the accounts of the Company, CW Multifamily REIT II GP, LLC, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

The accompanying consolidated balance sheet has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board Accounting Standards Codification.

Use of Estimates

The preparation of the consolidated balance sheet in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated balance sheet and accompanying notes. Actual results could materially differ from those estimates.

Cash

Cash consists of amounts the Company has on deposit with a major commercial financial institution. There were no restrictions on the use of the Company’s cash as of June 16, 2016.

The Company will recognize interest income on its cash and cash equivalents as it is earned and will record such amounts as other interest income.

Share Repurchase Program

The Company has a share repurchase program enabling stockholders to sell to the Company up to 3% of the weighted average number of shares of common stock outstanding during the prior calendar year at the sole discretion and option of the board of directors. The board of directors may amend, suspend, or terminate the repurchase plan at any time in its sole discretion, upon 30 days’ written notice to the shareholders, if it believes that such action is in the best interest of the shareholders.

F-6

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 2 - Summary of Significant Accounting Policies (continued)

The repurchase price is subject to the following discounts, depending upon when the shares are repurchased:

Share Purchase Anniversary	Repurchase Price (as percentage of estimated value)1
Less than 1 year		No repurchase allowed
1 year		80%
2 years		85%
3 years		90%
4 years and thereafter		95%
In the event of a shareholder’s death or complete disability		95%

¹  Estimated value will equal the purchase price until a new Net Asset Value (“NAV”) is determined and disclosed by the board of directors, which will be no later than 150 days following the second anniversary of breaking escrow, and quarterly thereafter.

The purchase price will further be reduced by amounts distributed to shareholders as a result of the sale of one or more of assets constituting a return of capital. The purchase price prior to determining the NAV will take into consideration any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock.

Organization and Offering Costs

Organization costs include all expenses incurred in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. Offering costs include all expenses incurred in connection with the offering, including managing broker-dealer fees and selling commissions. All organization and offering costs will be paid by Cottonwood Capital Property Management II, LLC (“CCPM II”), an affiliate of CROP. The Company will not incur any liability for or reimburse CCPM II for any of these organizational and offering costs. Offering costs incurred by CCPM II in connection with this offering through the date of this report are approximately $270,000. Organizational costs incurred by CCPM II were not significant.

F-7

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 2 - Summary of Significant Accounting Policies (continued)

Income Taxes

The Company intends to qualify as a real estate investment trust beginning with the taxable year ending December 31, 2016, which may be extended to the taxable year ending December 31, 2017.

To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its taxable income to its stockholders. As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its taxable income that is currently distributed to stockholders.

If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company intends to organize and operate in such a manner as to qualify for treatment as a REIT.

Note 3 – Stockholders’ Equity

The Company’s charter authorizes the issuance of up to 1,000,000,000 shares of common stock at $0.01 par value per share and 100,000,000 shares of preferred stock at $0.01 par value per share.

Voting Common Stock

Holders of the Company’s common stock are entitled to receive dividends when authorized by the Company’s board of directors, subject to any preferential rights of outstanding preferred stock. Holders of common stock are also entitled to one vote per share on all matters submitted to a shareholder vote, including election of directors to the board, subject to certain restrictions. As of June 16, 2016, 1,000 shares of common stock were issued and outstanding to CROP.

Preferred Stock

The board of directors is authorized, without approval of common shareholders, to provide for the issuance of preferred stock, in one or more classes or series, with such rights, preferences and privileges as the board of directors approves. As of June 16, 2016, no preferred stock was issued and outstanding.

F-8

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 3 – Stockholders’ Equity (continued)

Distributions

Distributions are determined by the board of directors based on the Company’s financial condition and other relevant factors. Should cash flows from operations not cover distributions during the early stages of real estate investment or during the operational stage the Company may look to third party borrowings to fund distributions. It may also use funds from the sale of assets or from the maturity, payoff or settlement of debt investments for distributions not covered by operating cash.

Note 4 – Joint Venture Distributions

Cash from operations of the Company’s individual joint ventures after payment of asset and property management fees is expected to be distributed to provide a preferred return of up to 8% on invested capital in the joint venture. Profits will then be allocated 50% to the Operating Partnership and CROP (in proportion to their respective interests in the joint venture) and 50% to CROP until CROP has received an amount equal to 20% of all distributions. Profits after the above distributions will be allocated 80% to the Operating Partnership and CROP (in proportion to their respective interests in the joint venture) and 20% to CROP.

Note 5 – Related-Party Transactions

Promotional Interest

The Company’s directors and officers hold key positions at both CROP and CCPM II. They are not compensated by the Company but are responsible for the management and affairs of the Company. As outlined above, CROP is expected to receive a 20% catch up and a 20% promotional interest after an 8% preferred return on invested capital.

Asset Management Fee

CCPM II will provide asset management services for the Company subject to the board of directors’ supervision. As compensation for those services, CCPM II is expected to receive an annual fee of 0.75% of gross assets, defined initially as the gross book value of the Company’s assets and subsequently as gross asset value once NAV is established.

F-9

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 5 – Related-Party Transactions (continued)

Property Management Fee

CCPM II will generally provide property management services for the Company’s real estate assets and receive a fee up to 3.5% of gross revenues of each property managed for these services. CCPM II will also be reimbursed for expenses incurred in behalf of its management duties in accordance with the property management agreement.

Construction Management Fee

CCPM II may receive for its services in supervising any renovation or construction project in excess of $5,000 in or about each property a construction management fee equal to 5% of the cost of the amount that is expended.

Utility Management Fee

An affiliate of CCPM II may be hired by each of the joint ventures to provide services related to allocation of the utility charges to residents at the applicable multifamily apartment community. The fees charged will vary based on local law. Under some circumstances, the joint ventures may charge the residents at the multifamily apartment community for such services and will have the right to retain such amounts.

Internet and Television Services

An affiliate of CCPM II may enter into a contract with each of the joint ventures to provide internet and TV services for the multifamily apartment communities. The fees charged will vary based on market factors where the multifamily apartment community is located. The joint ventures intend to charge each resident a fee for internet and television services which is anticipated to exceed the fee charged the affiliate. The joint ventures will be entitled to retain the excess between the amount of the fee charged the affiliate and the amount of the fee charged to the residents.

Property Management Corporate Service Fee

CCPM II, LLC may allocate a flat fee each month to each of the joint ventures which is intended to fairly allocate the overhead costs incurred by CCPM II and its affiliated entities with respect to the management of all assets. This fee will vary each month and be dependent on the number of assets managed and the actual overhead expenses incurred. CCPM II will have the right to retain any excess between actual costs and the amount of the fee charged.

F-10

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 5 – Related-Party Transactions (continued)

Insurance Fee

CCPM II through its wholly-owned insurance company, may provide insurance for the multifamily apartment communities. It will receive a risk management fee equal to 10% of the insurance premium and be entitled to retain in excess of the funded aggregate deductible not used to pay claims. A licensed insurance broker affiliated with CCPM II will receive 20% of the brokerage fee charged with respect to the placement of all insurance policies for the multifamily apartment communities.

Reimbursement of Operating Expenses

Operating expenses advanced or paid by CROP will be reimbursed by the applicable joint venture. These expenses include the costs of leasing, acquiring, owning, developing, constructing, improving, operating, and disposing of real estate.

Reduced Sales Price

If CROP purchases the Operating Partnership’s interest in the joint ventures and its direct interest in real property, the purchase price will be reduced by the customary closing costs, fees and commissions in the jurisdiction in which the multifamily apartment communities are located which would be applied if the joint ventures sold such multifamily apartment communities in a third party sale.

CROP’s Purchase Option

After December 31, 2019, CROP has the option in its sole discretion to purchase all, but not less than all, of the Operating Partnership’s interest in the joint ventures and its direct interests in real property at the appraised fair market value. This purchase option will terminate upon the earliest of the sale of the last joint venture’s assets, December 31, 2029 or a merger of the Company into another REIT, real estate company or other entity.

Note 6 – Commitments and Contingencies

Economic Dependency

Under various agreements, the Company has engaged or will engage CCPM II to provide certain services that are essential to the Company, including asset management services and other administrative responsibilities for the Company including accounting services and investor

F-11

Cottonwood Multifamily REIT II, Inc.

Notes to Consolidated Balance Sheet (continued)

Note 6 – Commitments and Contingencies (continued)

relations. As a result of these relationships, the Company is dependent upon CCPM II. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

Liquidity Strategy

The Company’s board of directors will try to determine which liquidity strategy would result in the greatest value for shareholders. A liquidity event will occur no later than December 31, 2024 which may be extended for two one-year periods in the sole discretion of the board of directors and an additional two one-year periods by a majority vote of the shareholders. If no extension is approved an orderly sale of the Company’s assets will begin within a one-year period from the decision not to extend. If all extensions are approved the final termination date would be December 31, 2028 The precise timing of sales would take account of the prevailing real estate finance markets and the debt markets generally as well as the federal income tax consequences to shareholders.

In the event that a listing occurs on or before the termination date, the Company will continue perpetually unless dissolved pursuant to a vote of the shareholders or any applicable provision of the Maryland General Corporation Law. A listing shall mean the commencement of trading of the Company’s common stock on any securities exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended, any over the counter exchange or, as determined in the sole discretion of the board of directors, any similar exchange that offers sufficient trading to offer similar liquidity to the shareholders. A listing shall also be deemed to occur on the effective date of a merger in which the consideration received by the shareholders is securities of another entity that are listed on any securities exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended, any over the counter exchange or, as determined in the sole discretion of our board of directors, any similar exchange that offers sufficient trading to offer similar liquidity to the shareholders.

Note 7 – Subsequent events

The Company has evaluated subsequent events up until the date the consolidated balance sheet is issued for recognition or disclosure and has determined there are none to be reported or disclosed in the consolidated financial statements.

F-12

Until the end of the one-year period beginning on the date this offering is qualified by the SEC, all soliciting dealers that effect transactions in these securities may be required to deliver to prospective investors a preliminary offering circular and a final offering circular or notice of where the final offering circular may be accessed on EDGAR.

COTTONWOOD MULTIFAMILY REIT II, INC.

Maximum Offering of

5,000,000 Shares

of Common Stock

Minimum Offering of

200,000 shares

of Common Stock

OFFERING STATEMENT

ORCHARD SECURITIES LLC

[                    , 20        ]

SIGNATURES

Cottonwood Multifamily REIT II, Inc. has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Salt Lake City, Utah on July 1, 2016.

COTTONWOOD MULTIFAMILY REIT II, INC.
By:	/s/ Daniel Shaeffer
	Daniel Shaeffer, Chief Executive Officer

We, the undersigned officers and directors of Cottonwood Multifamily REIT II, Inc., hereby severally constitute Daniel Shaeffer our true and lawful attorney with full power to him to sign for us and in our names in the capacities indicated below, the offering statement filed herewith and any and all amendments to said offering statement and generally to do all such things in our names and in our capacities as officers and directors to enable Cottonwood Multifamily REIT II, Inc. to comply with the provisions of the Securities Act of 1933, Regulation A promulgated thereunder and all requirements of the SEC, hereby ratifying and confirming our signature as they may be signed by our said attorney to said registration statement and any and all amendments thereto.

This offering statement has been signed by the following persons in the capacities and on the dates indicated

Name	Title	Date
/s/ Daniel Shaeffer Daniel Shaeffer	Chief Executive Officer and Director (Principal Executive Officer)	July 1, 2016
/s/ Chad Christensen Chad Christensen	President, Chairman of the Board and Director	July 1, 2016
/s/ Gregg Christensen Gregg Christensen	Executive Vice President, Secretary, General Counsel and Director	July 1, 2016
/s/ Susan Hallenberg Susan Hallenberg	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	July 1, 2016

INDEX OF EXHIBITS

EXHIBIT 1.1	MANAGING BROKER-DEALER AGREEMENT
EXHIBIT 1.2	FORM OF SOLICITING DEALER AGREEMENT
EXHIBIT 2.1	CHARTER
EXHIBIT 2.2	BYLAWS
EXHIBIT 4	FORM OF SUBSCRIPTION AGREEMENT
EXHIBIT 6.1	SHARE REPURCHASE PROGRAM
EXHIBIT 6.2	LIMITED PARTNERSHIP AGREEMENT OF OPERATING PARTNERSHIP
EXHIBIT 6.3	LIMITED LIABILITY COMPANY AGREEMENT OF GENERAL PARTNER OF OPERATING PARTNERSHIP
EXHIBIT 6.4	FORM OF JOINT VENTURE AGREEMENT
EXHIBIT 6.5	ASSET MANAGEMENT AGREEMENT
EXHIBIT 6.6	FORM OF PROPERTY MANAGEMENT AGREEMENT
EXHIBIT 6.7	PURCHASE OPTION AGREEMENT
EXHIBIT 6.8	INVESTMENT POLICY AGREEMENT
EXHIBIT 6.9	THREE-PARTY AGREEMENT
EXHIBIT 8	ESCROW AGREEMENT
EXHIBIT 11	CONSENT OF INDEPENDENT AUDITORS
EXHIBIT 12.1	LEGAL OPINION
EXHIBIT 12.2	TAX OPINION
EXHIBIT 15.1	PRIOR PERFORMANCE TABLES
EXHIBIT 15.2	UNAUDITED BALANCE SHEETS AND INCOME STATEMENTS OF COTTONWOOD RESIDENTIAL, INC.

EX1A-1 UNDR AGMT

Exhibit 1.1

COTTONWOOD MULTIFAMILY REIT II, INC.

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

[                         ], 20[    ]

Orchard Securities, LLC

401 South 850 East, Suite C1

Lehi, Utah 84043

Re:     Managing Broker-Dealer Agreement

Ladies and Gentlemen:

This letter confirms and comprises the agreement (this “Agreement”) between Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Company”), Cottonwood Capital Property Management II, LLC, a Delaware limited liability company (“Cottonwood Management”) and Orchard Securities, LLC (the “Managing Broker-Dealer”), regarding the offering and sale (the “Offering”) by the Company of up to $50,000,000 in Common Stock (the “Shares”) pursuant to the Cottonwood Multifamily REIT II, Inc. Offering Statement dated [                         ], 20[    ] (the “Offering Statement”).

1.        Appointment of the Managing Broker-Dealer.

1.1        On the basis of the representations, warranties and covenants herein contained, but subject to the terms and conditions herein set forth, the Managing Broker-Dealer is hereby appointed and agrees to sell the Shares on an “all-or-nothing minimum, best-efforts maximum” basis through an offering qualified by the Securities and Exchange Commission (the “SEC”) and exempt from registration pursuant to (i) Regulation A (“Regulation A”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and (ii) applicable state blue sky exemptions. The Managing Broker-Dealer is authorized to enlist other members of the Financial Industry Regulatory Authority, Inc. (“FINRA”) acceptable to the Company (the “Selling Group Members”) to sell the Shares.

1.2        It is understood that no sale of the Shares shall be regarded as effective unless and until accepted by the Company. The Company reserves the right in its sole discretion to accept or reject any subscription for the Shares (the “Subscription Agreement”) in whole or in part. For any Subscription Agreement received prior to the date the Offering Statement is qualified by the SEC (the “Qualification Date”), the Company shall have a period of 30 days from the Qualification Date to accept or reject the Subscription Agreement. For any Subscription Agreements received after the Qualification Date, the Company shall have a period of 30 days after receipt of the Subscription Agreement to accept or reject the Subscription Agreement. Any proposed subscription for the Shares not accepted within such 30 day period shall be deemed rejected. The Shares will be offered during a period commencing on the date of the Offering Statement and continuing until the earliest of: (i) the sale of $50,000,000 of Shares, (ii) the day before the one year anniversary of the Qualification Date or (iii) a determination by the board of directors to terminate the Offering (the “Offering Termination Date”). If subscriptions for at least $2,000,000 in Shares (the “Minimum Offering Amount”) have not been received and accepted by the Company by [                         ], 20[__], none of the Shares will be sold and all funds tendered for the purchase of the Shares will be refunded in full to cash subscribers without deductions or charges.

1.3        Subject to the performance by the Company of all the obligations to be performed hereunder, and to the completeness and accuracy of all the representations and warranties

contained herein, the Managing Broker-Dealer hereby accepts such agency and agrees on the terms and conditions herein set forth to use its best efforts during the Offering period to find qualified subscribers (the “Subscribers”) for the Shares.

1.4        The Managing Broker-Dealer further understands and agrees that the compensation to the Managing Broker-Dealer for the sale of the Shares described herein is conditioned upon the sale of the Minimum Offering Amount by the Company by [                         ], 20[    ] and that the failure to sell the Minimum Offering Amount by the above dates shall relieve the Company and any other party of any obligation to pay the Managing Broker-Dealer for any services rendered by the Managing Broker-Dealer in connection with the sale of the Shares under this Agreement or otherwise.

1.5        The Shares will be offered at a price of $10.00 per Share. Cottonwood Management will pay all amounts due to the Managing Broker-Dealer pursuant to Sections 6 and 7 of this Agreement and will be obligated to pay all organization and offering expenses of the Company. As a result, no Subscriber will be permitted to acquire Shares at a price that is less than $10.00 per Share.

2.        Representations and Warranties of the Company.   The Company hereby represents and warrants to the Managing Broker-Dealer that:

2.1        The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Maryland, has all requisite power and authority to enter into this Agreement and has all requisite power and authority to conduct its business as described in the Offering Statement.

2.2        No defaults exist in the due performance or observance of any material obligation, term, covenant or condition of any agreement or instrument to which the Company is a party or by which it is bound.

2.3        Subject to Section 3.3, the Offering Statement does not include nor will it include, through the Offering Termination Date, any untrue statement of a material fact nor does it or will it omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

2.4        No consent, approval, authorization or other order of any governmental authority is required in connection with the execution or delivery by the Company of this Agreement or the issuance and sale by the Company of the Shares, except such as may be required under the Securities Act, FINRA or applicable state securities laws.

2.5        At the time of the issuance of the Shares, the Shares will have been duly authorized and validly issued, and upon payment therefor, will be fully paid and nonassessable and will conform to the description thereof contained in the Offering Statement.

2.6        The Company hereby represents and warrants to the Managing Broker-Dealer and each of the Selling Group Members as of the date of this Agreement (the “Effective Date”) that neither the Company nor any of its executive officers, directors, general partners, managing members, or officers involved in the Offering or persons who own 20% or more of the Company:

2.6.1        Has been convicted, within 10 years of the Effective Date of any felony or misdemeanor that was:

(a)        In connection with the purchase or sale of any security;

(b)        Involving or making of any false filing with the Securities and Exchange Commission (the “SEC”); or

(c)        Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

2.6.2        Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Effective Date, that restrains or enjoins such person from engaging or continuing in any conduct or practice:

(a)        In connection with the purchase or sale of any security;

(b)        Involving the making of any false filing with the SEC; or

(c)        Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

2.6.3        Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions), a state authority that supervises or examines banks, savings associations or credit unions, a state insurance commission (or an agency or officer of a state performing like functions), an appropriate federal banking agency, the U.S. Commodity Futures Trading Commission or the National Credit Union Administration that:

(a)        As of the Effective Date, bars the person from:

(i)          Association with an entity regulated by such commission, authority, agency or officer;

(ii)         Engaging in the business of securities, insurance or banking; or

(iii)        Engaging in savings association or credit union activities.

(b)        Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct entered within 10 years before the Effective Date.

2.6.4        Is subject to an order of the SEC pursuant to sections 15(b) or 15B(c) of the Securities Exchange Act of 1934 (the “Exchange Act”) or section 203(e) or (f) of the Investment Advisers Act of 1940 (the “Investment Advisers Act”) that, as of the Effective Date:

(a)        Suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment advisor;

(b)        Places limitations on the activities, functions or operations of such person; or

(c)        Bars such person from being associated with any entity or from participating in the offering of any penny stock.

2.6.5        Is subject to any order of the SEC entered within 5 years before the Effective Date that, as of the date hereof, orders the person to cease and desist from committing or causing a violation or future violation of:

(a)        Any scienter-based anti-fraud provisions of the federal securities laws including, without limitation, section 17(a)(1) of the Securities Act, section 10(b) of the Exchange Act and 17 CFR 240.10b-5, section 15(c)(1) of the Exchange Act and section 206(1) of the Investment Advisers Act, or any other rule or regulation thereunder; or

(b)        Section 5 of the Securities Act.

2.6.6        Is suspended or expelled from membership in, or suspended or barred from association with, a member of a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.

2.6.7        Has filed (as a registrant or issuer), or was or was named as an underwriter in, any registration statement or offering statement filed with the SEC that, within 5 years before the Effective Date, was the subject of a refusal order, stop order or order suspending the Regulation A exemption or, is, on the Effective Date, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued.

2.6.8        Is subject to a United States Postal Service false representation order entered within 5 years before the Effective Date, or is, at the Effective Date, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.

The representations and warranties made in this Section 2 are and shall be continuing representations and warranties throughout the term of the Offering. In the event that any of these representations or warranties become untrue, the Company will immediately notify the Managing Broker-Dealer in writing of the fact which makes the representation or warranty untrue.

3.        Covenants of the Company.   The Company agrees that:

  3.1        The Company will deliver to the Managing Broker-Dealer such numbers of copies of the Offering Statement, with all appendices thereto, as the Managing Broker-Dealer may reasonably request for the purposes contemplated by federal and applicable state securities laws. The Company also will deliver to the Managing Broker-Dealer such number of copies of any printed sales literature or other materials as the Managing Broker-Dealer may reasonably request in connection with the Offering. In the event that the Company provides any copies of the Offering Statement to any party, the Company shall promptly provide to the Managing Broker-Dealer the number identifying the copy of the Offering Statement provided to such party.

  3.2        The Company will comply with all requirements imposed upon it by the rules and regulations of the SEC, and by all applicable state securities laws and regulations, to permit the continuance of offers and sales of the Shares, in accordance with the provisions of this Agreement and in the Offering Statement, and will amend or supplement the Offering Statement (including filing such amendment or supplement with the SEC) in order to make the Offering Statement comply with the requirements of federal and applicable state securities laws and regulations.

  3.3        If at any time any event occurs as a result of which the Offering Statement would include an untrue statement of a material fact or, in view of the circumstances under which it was made, omit to state any material fact necessary to make the statements therein not misleading, the Company will notify the Managing Broker-Dealer thereof, effect the preparation of an amended or supplemental Offering Statement which will correct such statement or omission, and deliver to the Managing Broker-Dealer as many copies of such amended or supplemental Offering Statement as the Managing Broker-Dealer may reasonably request.

  3.4        The Company will apply the net proceeds from the Offering received by it in the manner set forth in the Offering Statement.

  3.5        Subject to the Managing Broker-Dealer’s actions and the actions of others in connection with the Offering, the Company will comply with all requirements imposed upon it by Regulation A and the rules thereunder, and applicable state securities laws, including timely filing an Offering Statement with the state securities regulators when required. Upon request, the Company will furnish to the Managing Broker-Dealer a copy of such papers filed by the Company in connection with any SEC qualification and/or state law blue sky filing.

  3.6        The Company will furnish the holders of the Shares (“Shareholders”) with the reports described in the Offering Statement under “Reports,” and will deliver to the Managing Broker-Dealer a copy of each such report at the time that such reports are furnished to the Shareholders, and such other information concerning the Company, as may reasonably be requested.

  3.7        The Company will: (i) file every amendment and supplement to the Offering Statement that may be required by the SEC and (ii) if at any time the SEC shall issue any stop order suspending the qualification of the Offering Statement, it will promptly notify the Managing Broker-Dealer.

  3.8        The Company will disclose a per share estimated value of the Shares and related information in accordance with the applicable requirements of FINRA Rule 2310(b)(5). The Company will provide a copy of the forgoing information to the Managing Broker-Dealer simultaneously with the distribution of such information to the Shareholders.

4.        Duties and Obligations of the Managing Broker-Dealer.

  4.1        The Managing Broker-Dealer will serve in an “all-or-nothing minimum, best-efforts maximum” capacity in the offering, sale and distribution of the Shares. The Managing Broker-Dealer may offer the Shares as an agent, but all sales shall be made by the Company, acting through the Managing Broker-Dealer as an agent, and not by the Managing Broker-Dealer as a principal. The Managing Broker-Dealer shall have no authority to appoint any person or other entity as an agent or sub-agent of the Managing Broker-Dealer or the Company, except to appoint Selling Group Members acceptable to the Company in its sole discretion. It is acknowledged that the Company may enter into selling agreements with non-commissioned registered investment advisors and, to the extent reasonably practicable, the Managing Broker-Dealer shall assist the Company and the registered investment advisors in completing any sales through the registered investment advisor.

  4.2        The Managing Broker-Dealer shall not execute any transaction in which a Subscriber invests in the Shares in a discretionary account without prior written approval of the transaction by the Subscriber.

4.3        The Managing Broker-Dealer will comply in all respects with the subscription procedures and plan of distribution set forth in the Offering Statement.

4.4        In the event the Managing Broker-Dealer receives any customer funds for the Shares, the Managing Broker-Dealer will transmit such customer funds, not later than noon of the next business day following receipt of such funds for the Shares to UMB Bank, N.A., or such other escrow bank as determined by the Company (the “Escrow Bank”), pursuant to that certain Escrow Agreement among the Company, the Managing Broker-Dealer and the Escrow Bank; provided, however, upon receipt of the Minimum Offering Amount, the Company and the Managing Broker-Dealer may redirect the Subscribers to transmit such funds for the Shares directly to the Company.

4.5        The Managing Broker-Dealer shall complete all steps necessary to permit the Managing Broker-Dealer to perform its obligations under this Agreement pursuant to exemptions available under applicable federal law and applicable state laws. The Managing Broker-Dealer shall conduct all of its solicitation and sales efforts in conformity with Regulation A, and exemptions available under applicable state law.

4.6        The Managing Broker-Dealer shall notify the Company of Subscription Agreements it receives within one business day of receipt so that the Company may make any required federal or state law filings.

4.7        The Managing Broker-Dealer will furnish to the Company upon request a complete list of all persons who have been offered the Shares (including the corresponding number of the Offering Statement delivered to such persons) and such persons’ places of residence.

4.8        The Managing Broker-Dealer will immediately bring to the attention of the Company any circumstance or fact which causes the Managing Broker-Dealer to believe the Offering Statement, or any other literature distributed pursuant to the Offering, or any information supplied by prospective Subscribers in their subscription materials, may be inaccurate or misleading.

4.9        The Managing Broker-Dealer will terminate the Offering upon request of the Company at any time.

4.10       The Managing Broker-Dealer shall enter into a Soliciting Dealer Agreement in the form attached hereto as Exhibit A with each Selling Group Member, and shall not modify, amend or supplement the terms of the Soliciting Dealer Agreement without the prior written consent of the Company and the Managing Broker-Dealer

4.11        After the Offering Statement has been filed with the SEC but prior to the Qualification Date, the Managing Broker-Dealer is required to provide, or require the Selling Group Member to provide, each prospective Investor with a copy of the Preliminary Offering Circular and any exhibits and appendices thereto (which are contained in the Offering Statement). After the Qualification Date, the Managing Broker-Dealer is required to provide, or require the Selling Group Member to provide, each prospective Investor with a copy of the final Offering Circular and any exhibits and appendices thereto. If a prospective Investor receives the Preliminary Offering Circular, then you will be required to deliver to the Investor the final Offering Circular at least 48 hours before such Investor will be permitted to acquire Shares. If an Investor purchases Shares within 90 calendar days of the Qualification Date, you will deliver to the Investor, no later than two business days following the completion of such sale, a copy of the final Offering Circular and all exhibits and appendices thereto either by (i) electronic delivery of the final Offering Circular or the uniform resource locator (the “URL”) to where the final Offering Circular may be accessed on the SEC’s Electronic Data Gathering, Analysis and Retrieval

System (“EDGAR”), or (ii) mailing the final Offering Circular and all exhibits and appendices thereto to the Investor at the address indicated in the Subscription Agreement.

5.        Representations and Warranties of the Managing Broker-Dealer.   The Managing Broker-Dealer represents and warrants to the Company that:

  5.1         The Managing Broker-Dealer is a duly organized Utah limited liability company.

  5.2         This Agreement, when executed by the Managing Broker-Dealer, will have been duly authorized and will be a valid and binding agreement of the Managing Broker-Dealer, enforceable in accordance with its terms.

  5.3         The consummation of the transactions contemplated herein and those contemplated by the Offering Statement will not result in a breach or violation of any order, rule or regulation directed to the Managing Broker-Dealer by any court or any federal or state regulatory body or administrative agency having jurisdiction over the Managing Broker-Dealer or its affiliates.

  5.4         The Managing Broker-Dealer is, and during the term of this Agreement will be, duly registered as a broker-dealer pursuant to the provisions of the Exchange Act, a member in good standing of FINRA, and a broker or dealer duly registered as such in any state where offers are made by the Managing Broker-Dealer. The Managing Broker-Dealer will comply with all applicable laws, regulations and requirements of the Securities Act, the Exchange Act, applicable state law and FINRA. The Managing Broker-Dealer has all required licenses and permits.

  5.5         The Managing Broker-Dealer has reasonable grounds to believe, based on information made available to it by the Company, that all material facts are adequately and accurately disclosed in the Offering Statement and provide an adequate basis for evaluating an investment in the Shares.

  5.6         This Agreement, or any supplement or amendment hereto, may be filed by the Company with the SEC, if such should be required, and may be filed with, and may be subject to the approval of, any applicable federal and applicable state securities regulatory agencies, if required.

  5.7         No agreement will be made by the Managing Broker-Dealer with any person permitting the resale, repurchase or distribution of the Shares purchased by such person.

  5.8         The Managing Broker-Dealer’s acceptance of this Agreement constitutes a representation to the Company that the Managing Broker-Dealer has established and implemented anti-money-laundering compliance programs, in accordance with FINRA Rule 3310 and Section 352 of the Money Laundering Abatement Act and Section 326 of the Patriot Act of 2001, which are reasonably expected to detect and cause reporting of suspicious transactions in connection with the sale of the Shares.

  5.9         In the event the Managing Broker-Dealer becomes a Selling Group Member, the Managing Broker-Dealer shall comply with all requirements of the Selling Group Members as set forth in the Soliciting Dealer Agreement.

  5.10       The Managing Broker-Dealer hereby represents and warrants as of the Effective Date to the Company that none of the Managing Broker-Dealer nor any of its executive officers, directors, general partners, managing members, or officers involved in the Offering or persons who own 20% or more of the Managing Broker-Dealer:

5.10.1    Has been convicted, within 10 years of the Effective Date of any felony or misdemeanor that was:

    (a)        In connection with the purchase or sale of any security;

    (b)        Involving or making of any false filing with the SEC; or

    (c)        Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

5.10.2    Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Effective Date, that restrains or enjoins such person from engaging or continuing in any conduct or practice:

    (a)        In connection with the purchase or sale of any security;

    (b)        Involving the making of any false filing with the SEC; or

    (c)        Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

5.10.3    Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions), a state authority that supervises or examines banks, savings associations or credit unions, a state insurance commission (or an agency or officer of a state performing like functions), an appropriate federal banking agency, the U.S. Commodity Futures Trading Commission or the National Credit Union Administration that:

    (a)        As of the Effective Date, bars the person from:

     (i)          Association with an entity regulated by such commission, authority, agency or officer;

     (ii)         Engaging in the business of securities, insurance or banking; or

     (iii)        Engaging in savings association or credit union activities.

    (b)        Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct entered within 10 years before the Effective Date.

5.10.4    Is subject to an order of the SEC pursuant to sections 15(b) or 15B(c) of the Exchange Act or section 203(e) or (f) of the Investment Advisers Act that, as of the Effective Date:

    (a)        Suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment advisor;

    (b)        Places limitations on the activities, functions or operations of such person; or

   (c)        Bars such person from being associated with any entity or from participating in the offering of any penny stock.

  5.10.5    Is subject to any order of the SEC entered within 5 years before the Effective Date, as of the date hereof, that orders the person to cease and desist from committing or causing a violation or future violation of:

   (a)        Any scienter-based anti-fraud provisions of the federal securities laws including, without limitation, section 17(a)(1) of the Securities Act, section 10(b) of the Exchange Act and 17 CFR 240.10b-5, section 15(c)(1) of the Exchange Act and section 206(1) of the Investment Advisers Act, or any other rule or regulation thereunder; or

   (b)        Section 5 of the Securities Act.

  5.10.6    Is suspended or expelled from membership in, or suspended or barred from association with, a member of a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade;

  5.10.7    Has filed (as a registrant or issuer), or was or was named as an underwriter in, any registration statement or Regulation A offering statement filed with the SEC that, within 5 years of the Effective Date, was the subject of a refusal order, stop order or order suspending the Regulation A exemption or, is, on the Effective Date, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued.

  5.10.8    Is subject to a United States Postal Service false representation order entered within 5 years before the Effective Date, or is, on the Effective Date, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.

The representations and warranties made in this Section 5 are and shall be continuing representations and warranties throughout the term of the Offering. In the event that any of these representations or warranties become untrue, the Managing Broker-Dealer will immediately notify the Company in writing of the fact which makes the representation or warranty untrue.

6.        Compensation.   Subject to Section 9, as compensation for services rendered by the Managing Broker-Dealer under this Agreement, the Managing Broker-Dealer will be entitled to receive from Cottonwood Management, as appropriate:

  6.1      A selling commission up to 6.0% of the purchase price of the Shares sold by the Managing Broker-Dealer (the “Total Sales”), which it will re-allow to the Selling Group Members; provided, however, that this amount will be reduced to the extent a lower commission rate is negotiated with a Selling Group Member and the commission rate will be the lower agreed upon rate.

  6.2      A placement fee equal to 0.75% of the Total Sales.

  6.3      A wholesaler fee in an amount up to 1.0% of the Total Sales, which will be re-allowed, in whole or in part, to certain wholesalers, some of which are internal to the Company and its Affiliates.

  6.4        The Managing Broker-Dealer may also sell the Shares as part of the Selling Group, thereby becoming entitled to selling commissions.

Notwithstanding the above, if a sale of Shares has been made by a registered investment advisor, the Managing Broker Dealer will only be entitled to receive the placement fee set forth in Section 6.2 and shall not be entitled to receive the fees described in Section 6.1, 6.3 and 6.4.

In addition, notwithstanding the foregoing provisions of this Section 6, the Company reserves the right, in its sole discretion, to refuse to accept any or all Subscription Agreements tendered by the Managing Broker-Dealer and/or to terminate the Offering of the Shares at any time before the Offering Termination Date.

7.        Expense Allowances. Subject to Section 9, in addition to the compensation described in Section 6, Cottonwood Management will pay the Managing Broker-Dealer for sales of the Shares, 1.25% of the Total Sales as a non-accountable marketing and due diligence allowance which the Managing Broker-Dealer may re-allow, in whole or in part, to the Selling Group Members. Cottonwood Management will also pay the Managing Broker-Dealer 1.25% of the purchase price of the Shares sold to any registered investment advisors as a non-accountable marketing and due diligence allowance.

8.        Offering.   The Offering of the Shares shall be at the offering price and upon the terms and conditions set forth in the Offering Statement (including any supplemental Offering Statements) and the exhibits and appendices thereto.

9.        Conditions to Payment of Commissions, Allowances and Expense Reimbursements.

  9.1        No selling commissions, allowances or expense reimbursements or other compensation will be payable with respect to any Subscription Agreements that are rejected by the Company, or if the Company terminates the Offering for any reason whatsoever. No selling commissions, allowances, expense reimbursements or other compensation will be payable to the Managing Broker-Dealer with respect to any sale of the Shares by the Managing Broker-Dealer unless and until such time as the Company has received the total proceeds of any such sale.

  9.2        Except as provided in Section 17, all other expenses incurred by the Managing Broker-Dealer in the performance of the Managing Broker-Dealer’s obligations hereunder, including, but not limited to, expenses related to the Offering of the Shares and any attorneys’ fees, shall be at the Managing Broker-Dealer’s sole cost and expense, and the foregoing shall apply notwithstanding the fact that the Offering is not consummated for any reason.

10.      Indemnification by the Company.

  10.1      Subject to the conditions set forth below, the Company, with respect to the Offering, agrees to indemnify and hold harmless Cottonwood Management, the Managing Broker-Dealer and the Selling Group Members and their respective owners, managers, members, partners, directors, officers, employees, agents, attorneys and accountants (the “MBDSD Parties”) against any and all loss, liability, claim, damage and expense whatsoever (“Loss”) arising out of or based upon:

    10.1.1    Any untrue statement or alleged untrue statement of a material fact contained in the Offering Statement, (as from time to time amended and supplemented), or in any application or other document filed in any jurisdiction in order to qualify the Shares under or exempt the Offering of the Shares from the registration or qualification requirements of the securities laws thereof unless any of the MBDSD Parties know such statement to be untrue;

10.1.2    The omission or alleged omission from the Offering Statement (as from time to time amended and supplemented) of a material fact required to be stated therein or necessary to make the statements therein not misleading unless any of the MBDSD Parties know such statement to be untrue;

10.1.3    The failure of the Company as a result of its acts or omissions to comply with any of the applicable provisions of the Securities Act, Regulation A or the regulations thereunder, or any applicable state laws or regulations;

10.1.4    Any verbal or written representations made in connection with the Offering by the Company in violation of the Securities Act, or any other applicable federal or state securities laws and regulations; or

10.1.5    The breach by the Company of any term, condition, representation, warranty or covenant in this Agreement.

10.2      If any action is brought against any of the MBDSD Parties in respect of which indemnity may be sought hereunder, the Managing Broker-Dealer or the Selling Group Members, as the case may be, shall promptly notify the Company in writing of the institution of such action, and the Company shall assume the defense of such action; provided, however, that the failure to notify the Company shall not affect the provisions in this Section 10 except to the extent such failure to notify the Company has a material and adverse effect on the defense of such claims. The affected MBDSD Parties shall have the right to employ counsel in any such case. The fees and expenses of such counsel shall be at the Company’s expense and authorized in writing by the Company.

10.3      The Company agrees to promptly notify the Managing Broker-Dealer of the commencement of any litigation or proceedings against the Company or any of its respective managers, members, partners, officers, employees, agents, attorneys and accountants in connection with the Offering.

10.4      The indemnity provided to the Managing Broker-Dealer pursuant to this Section 10 shall not apply to the extent that any Loss arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the Managing Broker-Dealer or any agent of the Managing Broker-Dealer, or any omission or alleged omission of a material fact required to be disclosed by the Managing Broker-Dealer or any agent of the Managing Broker-Dealer.

10.5      The indemnity provided to the Selling Group Member pursuant to this Section 10 shall not apply to the extent that any Loss arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the Selling Group Member or any agent of the Selling Group Member, or any omission or alleged omission of a material fact required to be disclosed by the Selling Group Member or any agent of the Selling Group Member.

11.      Indemnification by the Managing Broker-Dealer.

11.1      Subject to the conditions set forth below, the Managing Broker-Dealer agrees to indemnify and hold harmless the Company, Cottonwood Management and the Selling Group Members and their respective owners, managers, members, partners, directors, officers, employees, agents, attorneys and accountants (the “CSGM Parties”), against any and all Loss arising out of or based upon:

 11.1.1    Any verbal or written representations in connection with the Offering made by the Managing Broker-Dealer in violation of the Securities Act, or any other applicable federal or state securities laws and regulations;

 11.1.2    Any misrepresentation contained in any sales or other materials provided by the Managing Broker-Dealer to the Selling Group Members;

 11.1.3    The Managing Broker-Dealer’s failure to comply with any of the applicable provisions of the Securities Act, the Exchange Act, Regulation A, the applicable requirements and rules of FINRA, or any applicable state laws or regulations; or

 11.1.4    The breach by the Managing Broker-Dealer of any term, condition, representation, warranty, or covenant of this Agreement.

 11.2      If any action is brought against the CSGM Parties in respect of which indemnity may be sought hereunder, the Company or the Selling Group Members shall promptly notify the Managing Broker-Dealer in writing of the institution of such action, and the Managing Broker-Dealer shall assume the defense of such action; provided, however, that the failure to notify the Managing Broker-Dealer shall not affect the provisions in this Section 11 except to the extent such failure to notify the Managing Broker-Dealer has a material and adverse effect on the defense of such claims. The affected CSGM Parties shall have the right to employ counsel in any such case. The reasonable fees and expenses of such counsel shall be at the Managing Broker-Dealer’s expense and authorized in writing by the Managing Broker-Dealer, provided that the Managing Broker-Dealer will not be obligated to pay for legal fees and expenses for more than one law firm in connection with the defense of similar claims arising out of the same alleged acts or omissions.

 11.3      The Managing Broker-Dealer agrees to promptly notify the Company of the commencement of any litigation or proceedings against the Managing Broker-Dealer or any of its managers, members, partners, officers, employees, agents, attorneys and accountants in connection with the Offering.

 11.4      The indemnity provided to the Company and Cottonwood Management pursuant to this Section 11 shall not apply to the extent that any Loss arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the Company or Cottonwood Management or any agent of the Company (other than the Managing Broker-Dealer), or any omission or alleged omission of a material fact required to be disclosed by the Company or Cottonwood Management or any agent of the Company or Cottonwood Management (other than the Managing Broker-Dealer).

 11.5      The indemnity provided to the Selling Group Member pursuant to this Section 11 shall not apply to the extent that any Loss arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the Selling Group Member or any agent of the Selling Group Member, or any omission or alleged omission of a material fact required to be disclosed by the Selling Group Member or any agent of the Selling Group Member.

12.      Indemnification by the Selling Group Member.

  12.1      Subject to the conditions set forth below, each Selling Group Member agrees to indemnify and hold harmless the Company, Cottonwood Management and the Managing Broker-Dealer and their respective owners, managers, members, partners, directors, officers, employees, agents, attorneys and accountants (the “CMBD Parties”), against any and all Loss arising out of or based upon:

12.1.1    Any verbal or written representations in connection with the Offering made by such Selling Group Member, its employees or affiliates in violation of the Securities Act, or any other applicable federal or state securities laws and regulations;

12.1.2    Any use of sales materials or use of unauthorized verbal representations by such Selling Group Member, its employees or affiliates concerning the Offering in violation of the Soliciting Dealer Agreement or otherwise;

12.1.3    Such Selling Group Member’s failure to comply with any of the applicable provisions of the Securities Act, the Exchange Act, Regulation A, the applicable requirements and rules of FINRA, or any applicable state laws or regulations;

12.1.4    The breach by such Selling Group Member of any term, condition, representation, warranty, or covenant of the Soliciting Dealer Agreement; or

12.1.5    The failure by any Subscriber of a Share to comply with the Investor Suitability Requirements set forth in the section captioned “Suitability Standards” in the Offering Statement.

12.2      If any action is brought against the CMBD Parties in respect of which indemnity may be sought hereunder, the Company or the Managing Broker-Dealer shall promptly notify the applicable Selling Group Member in writing of the institution of such action, and the Selling Group Member shall assume the defense of such action; provided, however, that the failure to notify the Selling Group Member shall not affect the provisions in this Section 12 except to the extent such failure to notify the Selling Group Member has a material and adverse effect on the defense of such claims. The affected CMBD Parties shall have the right to employ counsel in any such case. The reasonable fees and expenses of such counsel shall be at such Selling Group Member’s expense and authorized in writing by such Selling Group Member, provided that such Selling Group Member will not be obligated to pay for legal fees and expenses for more than one law firm in connection with the defense of similar claims arising out of the same alleged acts or omissions.

12.3      The Selling Group Member agrees to promptly notify the Company and the Managing Broker-Dealer of the commencement of any litigation or proceedings against the Selling Group Member or any of the Selling Group Member’s officers, directors, partners, affiliates or agents in connection with the Offering.

12.4      The indemnity provided to the Managing Broker-Dealer pursuant to this Section 12 shall not apply to the extent that any Loss arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the Managing Broker-Dealer or any agent of the Managing Broker-Dealer, or any omission or alleged omission of a material fact required to be disclosed by the Managing Broker-Dealer or any agent of the Managing Broker-Dealer.

12.5      The indemnity provided to the Company pursuant to this Section 12 shall not apply to the extent that any Loss arises out of or is based upon any untrue statement or alleged untrue statement of material fact made by the Company or any agent of the Company (other than the Managing Broker-Dealer), or any omission or alleged omission of a material fact required to be disclosed by the Company or any agent of the Company (other than the Managing Broker-Dealer).

13.      Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided pursuant to Sections 10, 11 and 12 is for any reason held to be unavailable from the Company, the Managing Broker-Dealer or the Selling Group Members, as the case

may be, the Company, the Managing Broker-Dealer and the Selling Group Members shall contribute to the aggregate Loss, liabilities, claims, damages and expenses (including any amount paid in settlement of any action, suit, or proceeding or any claims asserted) in such amounts as a court of competent jurisdiction may determine (or in the case of settlement, in such amounts as may be agreed upon by the parties) in such proportion to reflect the relative fault of the Company, the Managing Broker-Dealer and the Selling Group Members and their respective owners, managers, members, trustees, partners, directors, officers, employees, agents, attorneys and accountants in connection with the events described in Sections 10, 11 and 12, as the case may be, which resulted in such Loss, liabilities, claims, damages or expenses, as well as any other equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Managing Broker-Dealer and the Selling Group Members and their respective owners, managers, members, trustees, partners, directors, officers, employees, agents, attorneys and accountants and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such omission or statement. The parties and any person who controls the Managing Broker-Dealer shall also have rights to contribution under this Section 13.

14.      Compliance.   All actions, direct or indirect, by the Managing Broker-Dealer and its agents, members, employees and affiliates, shall conform to (i) requirements applicable to broker-dealers under federal and applicable state securities laws, rules and regulations, and (ii) applicable requirements and rules of FINRA.

15.      Privacy Act.   To protect Customer Information (as defined below) and to comply as may be necessary with the requirements of the Gramm-Leach-Bliley Act, the relevant state and federal regulations pursuant thereto and state privacy laws, the parties wish to include the confidentiality and non-disclosure obligations set forth herein.

15.1      Customer Information.     “Customer Information” means any information contained on a customer’s application or other form and all nonpublic personal information about a customer that a party receives from the other party. Customer Information shall include, but not be limited to, name, address, telephone number, social security number, health information and personal financial information (which may include consumer account number).

15.2      Usage and Nondisclosure.     The parties understand and acknowledge that they may be financial institutions subject to applicable federal and state customer and consumer privacy laws and regulations, including Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801, et seq.) and regulations promulgated thereunder (collectively, the “Privacy Laws”), and any Customer Information that one party receives from the other party is received with limitations on its use and disclosure. The parties agree that they are prohibited from using the Customer Information received from the other party other than (i) as required by law, regulation or rule or (ii) to carry out the purposes for which one party discloses Customer Information to the other party pursuant to the Agreement, as permitted under the use in the ordinary course of business exception to the Privacy Laws.

15.3      Safeguarding Customer Information.     The parties shall establish and maintain safeguards against the unauthorized access, destruction, loss, or alteration of Customer Information in their control which are no less rigorous than those maintained by a party for its own information of a similar nature. In the event of any improper disclosure of any Customer Information, the party responsible for the disclosure will immediately notify the other party.

15.4      Survivability.     The provisions of this Section 15 shall survive the termination of this Agreement.

16.        Representations and Agreements to Survive Sale and Payment.   Except as the context otherwise requires, all representations, warranties and agreements contained in this Agreement shall be deemed to be representations, warranties and agreements at and as of the Offering Termination Date, and such representations, warranties and agreements by the Managing Broker-Dealer or the Company, including the indemnity agreements contained in Sections 10, 11 and 12 and the contribution agreements contained in Section 13 shall remain operative and in full force and effect regardless of any investigation made by the Managing Broker-Dealer, the Company and/or any controlling person, and shall survive the sale of, and payment for, the Shares.

17.        Costs of Offering.   Except for the compensation payable to the Managing Broker-Dealer described in Section 6 and the allowances and reimbursements described in Section 7, which are the sole obligations of Cottonwood Management, the Managing Broker-Dealer will pay all of its own costs and expenses, including, but not limited to, all expenses necessary for the Managing Broker-Dealer to remain in compliance with any applicable federal, state or FINRA laws, rules or regulations in order to participate in the Offering as a broker-dealer, and the fees and costs of the Managing Broker-Dealer’s counsel. Cottonwood Management agrees to pay all other expenses incident to the performance of its obligations hereunder, including all expenses of the Company incident to filings with federal and state regulatory authorities and to the exemption of the Shares under federal and state securities laws, including fees and disbursements of the Company’s counsel, and all costs of reproduction and distribution of the Offering Statement and any amendment or supplement thereto.

18.        Termination.   This Agreement is terminable by any party for any reason whatsoever or for no reason at any time upon written notice to the other parties. Such termination shall not affect the indemnification agreements set forth in Sections 10, 11 and 12 or the contribution agreements set forth in Section 13.

19.        Governing Law.   This Agreement shall be governed by, subject to and construed in accordance with, the laws of the State of Utah without regard to conflict of law provisions.

20.        Dispute Resolution.   Any controversy arising out of or related to this Agreement or the breach thereof shall be settled by arbitration in Salt Lake County, Utah, in accordance with the rules of The American Arbitration Association, and judgment entered upon the award rendered may be enforced by appropriate judicial action. The arbitration panel shall consist of one member, which shall be a person agreed to by each party to the dispute within 30 days following notice by one party that he desires that a matter be arbitrated. If the parties are unable within such 30 day period to agree upon an arbitrator, then the panel shall be one arbitrator selected by the Salt Lake County office of The American Arbitration Association, which arbitrator shall be experienced in the area of real estate and limited liability companies and who shall be knowledgeable with respect to the subject matter area of the dispute. The losing party shall bear any fees and expenses of the arbitrator, other tribunal fees and expenses, reasonable attorney’s fees of both parties, any costs of producing witnesses and any other reasonable costs or expenses incurred by him or the prevailing party or such costs shall be allocated by the arbitrator. The arbitration panel shall render a decision within 30 days following the close of presentation by the parties of their cases and any rebuttal. The parties shall agree within 30 days following selection of the arbitrator to any prehearing procedures or further procedures necessary for the arbitration to proceed, including interrogatories or other discovery; provided, in any event each party shall be entitled to discovery. Any action not resolved pursuant to the foregoing shall be brought only in a court of competent jurisdiction located in Salt Lake County, Utah.

21.        Severability.   If any portion of this Agreement shall be held invalid or inoperative, then so far as is reasonable and possible (i) the remainder of this Agreement shall be considered valid and operative and (ii) effect shall be given to the intent manifested by the portion held invalid or inoperative.

22.        Counterparts.   This Agreement may be executed in 2 or more counterparts, each of which shall be deemed to be an original, and together which shall constitute one and the same instrument.

23.        Modification or Amendment.   This Agreement may not be modified or amended except by written agreement executed by the parties hereto.

24.        Notices.   All communications hereunder, except as herein otherwise specifically provided, shall be in writing and, if sent to the Managing Broker-Dealer, shall be mailed or delivered to Orchard Securities, LLC, 401 South 850 East, Suite C1, Lehi, Utah 84043, if sent to the Company shall be mailed or delivered to Cottonwood Multifamily REIT II, Inc., 6340 South 3000 East, Suite 500, Salt Lake City, UT 84121, if sent to Cottonwood Management shall be mailed or delivered to Cottonwood Capital Property Management II, LLC, 6340 South 3000 East, Suite 500, Salt Lake City, UT 84121. The notice shall be deemed to be received on the date of its actual receipt by the party entitled thereto.

25.        Parties.   This Agreement shall be binding upon and inure solely to the benefit of the parties hereto, the persons referred to in Sections 10, 11, 12 and 13, their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under, in respect of, or by virtue of, this Agreement or any provision herein contained.

26.        Delay.   Neither the failure nor any delay on the part of any party to this Agreement to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall a waiver of any right, remedy, power, or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power, or privilege with respect to any subsequent occurrence.

27.        Recovery of Costs.   If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding (and any additional proceeding for the enforcement of a judgment) in addition to any other relief to which it or they may be entitled.

28.        Entire Agreement.   This Agreement contains the entire understanding between the parties hereto and supersedes any prior understandings or written or oral agreements between them respecting the subject matter hereof.

29.        Confirmation.   The Company agrees to confirm all orders for purchase of Shares that are accepted by the Company and provide such confirmation to the Managing Broker-Dealer and the Selling Group Members. To the extent practicable and permitted by law, all such confirmations may be provided electronically.

30.        Due Diligence.   The Company will authorize a collection of information regarding the Offering (the “Due Diligence Information”), which collection the Company may amend and supplement from time to time, to be delivered by the Managing Broker-Dealer to the Selling Group Members (or their agents performing due diligence) in connection with their due diligence review of the Offering. In the event a Selling Group Member (or its agent performing due diligence) requests access to additional information or otherwise wishes to conduct additional due diligence regarding the Offering, the Company and the Managing Broker-Dealer will reasonably cooperate with such Selling Group Member to accommodate such request. All Due Diligence Information received by the Managing Broker-Dealer and/or the Selling Group Members in connection with their due diligence review of the Offering are

confidential and shall be maintained as confidential and not disclosed by the Managing Broker-Dealer or the Selling Group Members except to the extent such information is disclosed in the Offering Statement.

If the foregoing correctly sets forth the understanding between the Managing Broker-Dealer, the Company and Cottonwood Management, please so indicate in the space provided below for that purpose, and return one of the signed copies of this letter agreement to the Company whereupon this letter agreement shall constitute a binding agreement among us.

Very truly yours,
COTTONWOOD MULTIFAMILY REIT II, INC., a Maryland corporation
By:
	Chad Christensen, President

AGREED AND ACCEPTED:

ORCHARD SECURITIES, LLC, a Utah limited liability company

By:  

Its:

Commission checks to be sent to:

Name:	Orchard Securities, LLC
Address:	401 South 850 East, Suite C1 Lehi, Utah 84043

COTTONWOOD CAPITAL PROPERTY MANAGEMENT II, LLC, a Delaware limited liability company
By:
	Gregg Christensen, Executive Vice President

EXHIBIT A

SOLICITING DEALER AGREEMENT

EX1A-1 UNDR AGMT

Exhibit 1.2

ORCHARD SECURITIES, LLC

401 SOUTH 850 EAST, SUITE C1

LEHI, UTAH 84043

SOLICITING DEALER AGREEMENT

for Shares in

Cottonwood Multifamily REIT II, Inc.

                    , 20        

Ladies and Gentlemen:

The undersigned, Orchard Securities, LLC, a Utah limited liability company (the “Managing Broker-Dealer”), has entered into an agreement (the “MBD Agreement”) with Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Company”) for the sale (the “Offering”) of up to $50,000,000 share of common stock (the “Shares”) in the Company, pursuant to which the Managing Broker-Dealer has agreed to use its best efforts to form and manage, as the Managing Broker-Dealer, a group of securities dealers (the “Selling Group Members”) for the purpose of soliciting offers for the purchase of the Shares. The MBD Agreement is attached as Exhibit A. The terms of the Offering are set forth in the Cottonwood Multifamily REIT II, Inc. Offering Statement dated [                         ], 20[    ] (the “Offering Statement”). The date the Offering Statement is qualified by the Securities and Exchange Commission (the “SEC”) shall be referred to herein as the “Qualification Date.” The Shares will be offered during a period commencing on the date of the Offering Statement, and continuing until the earliest of: (i) the sale of $50,000,000 of Shares, (ii) the one year anniversary of the Qualification Date or (iii) a determination by the board of directors to terminate the Offering (the “Offering Termination Date”); provided, however, that the Company in its sole discretion may terminate the Offering at any time. If subscriptions for at least 200,000 Shares ($2,000,000, the “Minimum Offering Amount”) have not been received and accepted by the Company before [                         ], 20[    ] none of the Shares will be sold and all funds tendered for the purchase of Shares will be refunded in full to each subscriber without deductions or charges. Terms used but not otherwise defined in this Soliciting Dealer Agreement (this “Agreement”) have the same meanings as set forth in the MBD Agreement. The Shares will be offered at a price of $10.00 per Share. No subscriber will be permitted to acquire Shares at a price that is less than $10.00 per Share.

You are invited to become a Selling Group Member and by your confirmation hereof you agree to act in such capacity and to use your best efforts, in accordance with the following terms and conditions, to find qualified investors (the “Investors”) for the Shares. By your acceptance of this Agreement, you will become one of the Selling Group Members and will be entitled to and subject to the indemnification and contribution provisions contained in the MBD Agreement, including the provisions of the MBD Agreement wherein the Selling Group Members severally agree to indemnify and hold harmless the Company and the Managing Broker-Dealer for certain actions.

1.        Selling Group Member Representations.

1.1        You hereby confirm that you (i) are a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”), (ii) are qualified and duly registered to act as a broker-dealer within all states in which you will sell the Shares, (iii) are a broker-dealer duly registered with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iv) will maintain all such registrations and qualifications in good standing for the duration of your involvement in

the Offering. You agree to immediately notify the Managing Broker-Dealer if you cease to be a member of FINRA in good standing.

1.2        You hereby agree to solicit, as an independent contractor, and not as the Managing Broker-Dealer’s agent, or as an agent of the Company or its affiliates, persons acceptable to the Company to purchase the Shares pursuant to the Instructions to Investors and Subscription Agreement (the “Subscription Agreement”) in the form attached to the Offering Statement and in accordance with the terms of the Offering Statement and to diligently make inquiries as required by this Agreement, the Offering Statement or applicable law with respect to prospective Investors in order to ascertain whether a purchase of the Shares is suitable for the Investor. In accordance with the instructions set forth in the Subscription Agreement, all the Subscription Agreements and all funds received by you with respect to any Subscription Agreement shall be transmitted to the Managing Broker-Dealer. To the extent received by the Managing Broker-Dealer, the Managing Broker-Dealer will be responsible for the transmittal of such funds for the purchase of Shares with UMB Bank, N.A. (the “Escrow Bank”). The funds shall be maintained in accordance with SEC Rule 15c2-4. No Subscription Agreement shall be effective unless and until accepted by the Company, it being understood that the Company may accept or reject any Investor in its sole discretion and that the Company may terminate the Offering at any time for any reason.

1.3        You understand that the offering of Shares is made on an “all-or-nothing minimum, best-efforts maximum” basis, as described in the Offering Statement. You further understand and agree that your compensation under this Agreement for the sale of Shares is conditioned upon the sale of at least $2,000,000 in Shares before [                         ], 20[    ], and the Company’s acceptance of sales by you, and that the failure to sell at least $2,000,000 in Shares or the failure to accept a purchase for Shares shall relieve the Managing Broker-Dealer or any other party of any obligation to pay you for any services rendered by you in connection with the sale of Shares under this Agreement or otherwise.

1.4        You agree that before participating in the Offering, you will have reasonable grounds to believe, based on information made available to you by the Managing Broker-Dealer and/or the Company through the Offering Statement, that all material facts are adequately and accurately disclosed in the Offering Statement and provide a basis for evaluating the Company and the Shares.

1.5        You agree not to execute any transaction in which an Investor invests in the Shares in a discretionary account without prior written approval of the transaction by the Investor and the Managing Broker-Dealer.

1.6        You agree to comply in all respects with the purchase procedures and plan of distribution set forth in the Offering Statement. Further, you agree that although you may receive due diligence regarding the Offering from the Company in electronic form, you will not distribute to any prospective Investor or any other person any such due diligence material.

1.7        All subscriptions solicited by you will be strictly subject to confirmation by the Managing Broker-Dealer and acceptance thereof by the Company. The Managing Broker-Dealer and the Company reserve the right in their absolute discretion to reject any such subscription and to accept or reject subscriptions in the order of their receipt by the Company, as appropriate or otherwise. Neither you nor any other person is authorized to, and neither you nor any of your employees, agents or representatives shall give any information or make any representation other than those contained in the Offering Statement or in any supplemental sales literature furnished by the Managing Broker-Dealer or the Company for use in making solicitations in connection with the offer and sale of the Shares.

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1.8        Upon authorization by the Managing Broker-Dealer, you may offer the Shares at the Offering price set forth in the Offering Statement, subject to the terms and conditions thereof.

1.9        The Company or the Managing Broker-Dealer will provide you with such number of copies of the Offering Statement as you may reasonably request. You will be solely responsible for correctly placing orders of such materials, and will reimburse the Managing Broker-Dealer for any costs incurred in connection with unreasonable or mistaken orders. The Managing Broker-Dealer also understands that the Company may provide you with certain supplemental sales material to be used by you in connection with the solicitation of purchases of the Shares. If you elect to use such supplemental sales material, you agree that such material shall not be used in connection with the solicitation or purchase of the Shares unless accompanied or preceded by the Offering Statement, as then currently in effect, and as it may be amended or supplemented in the future.

1.10        The Managing Broker-Dealer shall have full authority to take such action as it may deem advisable with respect to all matters pertaining to the Offering. The Managing Broker-Dealer shall be under no liability to you except for lack of good faith and for obligations expressly assumed by it in this Agreement. Nothing contained in this Section is intended to operate as, and the provisions of this Section shall not constitute a waiver by you, of compliance with any provision of the Securities Act, the Exchange Act, other applicable federal law, applicable state law or of the rules and regulations thereunder.

1.11        You agree that you will not offer the Shares for sale to any Investor who has not confirmed to you, in writing, that such Investor meets the Investor Suitability Requirements set forth in the section captioned “Suitability Standards” in the Offering Statement. Nothing contained in this Section 1.11 shall be construed to relieve you of your suitability obligations under FINRA Rule 2111.

1.12        For the sale of Shares, you will instruct all Investors to make their checks payable to “UMB Bank, N.A., as Escrow Bank for Cottonwood Multifamily REIT II, Inc.” If you receive a check that does not conform with the foregoing instructions you shall return such check directly to such subscriber not later than the end of the next business day following its receipt.

1.13        You will limit the offering of the Shares to persons whom you have reasonable grounds to believe, and in fact believe, meet the financial suitability and other Investor requirements set forth in the Offering Statement.

1.14        After the Offering Statement has been filed with the SEC but prior to the Qualification Date, you are required to provide each prospective Investor with a copy of the Preliminary Offering Circular and any exhibits and appendices thereto (which are contained in the Offering Statement). After the Qualification Date, you are required to provide each prospective Investor with a copy of the final Offering Circular and any exhibits and appendices thereto. If a prospective Investor receives the Preliminary Offering Circular, then you will be required to deliver to the Investor the final Offering Circular at least 48 hours before such Investor will be permitted to acquire Shares. If an Investor purchases Shares within 90 calendar days of the Qualification Date, you will deliver to the Investor, no later than two business days following the completion of such sale, a copy of the final Offering Circular and all exhibits and appendices thereto either by (i) electronic delivery of the final Offering Circular or the uniform resource locator (the “URL”) to where the final Offering Circular may be accessed on the SEC’s Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”), or (ii) mailing the final Offering Circular and all exhibits and appendices thereto to the Investor at the address indicated in the Subscription Agreement.

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1.15        During the course of the Offering, you will advise each prospective Investor at the time of the initial offering to him or her that the Company and/or its agents and consultants will, during the course of the Offering and prior to any sale, accord said Investor and his or her purchaser representative, if any, the opportunity to ask questions of and to receive answers from the Company and/or its agents and consultants concerning the terms and conditions of the Offering and to obtain any additional information, which information is possessed by the Company or may be obtained by it without unreasonable effort or expense and which is necessary to verify the accuracy of the information contained in the Offering Statement.

1.16        You will immediately bring to the attention of the Company and the Managing Broker-Dealer any circumstance or fact which causes you to believe the Offering Statement, or any other literature distributed pursuant to the Offering, or any information supplied to prospective Investors in their purchase materials, may be inaccurate or misleading.

1.17        You agree that in recommending to an Investor the purchase or sale of the Shares, you shall have reasonable grounds to believe, on the basis of information obtained from the prospective Investor concerning his or her investment objectives, other investments, financial situation and needs, and any other information known by you, that:

1.17.1    The prospective Investor meets the Investor Suitability Requirements set forth in the Offering Statement and the acquisition of Shares is otherwise a suitable investment for such Investor as may be required by all applicable laws, rules and regulations;

1.17.2    The prospective Investor is or will be in a financial position appropriate to enable him or her to realize to a significant extent the benefits described in the Offering Statement;

1.17.3    The prospective Investor has a fair market net worth sufficient to sustain the risks inherent in an investment in the Shares, including, but not limited to, the total loss of the investment, lack of liquidity and other risks described in the Offering Statement; and

1.17.4    An investment in the Shares is otherwise suitable for the prospective Investor.

1.18        You agree to keep records in compliance with the requirements imposed by (i) federal and state securities laws and the rules and regulations thereunder and (ii) the applicable rules of FINRA. You agree to retain in your records and make available to the Managing Broker-Dealer and to the Company, for a period of at least 6 years following the Offering Termination Date, information establishing that (i) each person who purchases the Shares pursuant to a Subscription Agreement solicited by you is within the permitted class of Investors under the requirements of the jurisdiction in which such Investor is a resident, (ii) each person met the suitability requirements set forth in the Offering Statement and the Subscription Agreement and (iii) each person is suitable for such investment and the basis on which such suitability determination was made. You also agree to make your records regarding suitability available to representatives of the SEC and FINRA and applicable state securities administrators upon the Managing Broker-Dealer’s request.

1.19        You agree that upon request by the Managing Broker-Dealer, you will furnish a complete list of all persons who have been offered the Shares (including the corresponding number of the Offering Statement delivered to such persons) and such persons’ place of residence.

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1.20      You agree that before executing a purchase transaction in the Shares, you will inform the prospective Investor and his or her purchaser representative, if any, of all pertinent facts relating to the liquidity and marketability of the Shares, as appropriate, during the term of the investment.

1.21      You hereby undertake and agree to comply with all obligations applicable to you as set forth in FINRA rules, including, but not limited to, any new suitability and filing requirements.

1.22      You agree not to rely upon the efforts of the Managing Broker-Dealer in (i) performing due diligence related to the Company (including its members, managers, officers, directors, employees, and Affiliates), the Shares, or the suitability thereof for any Investors and (ii) determining whether the Company has adequately and accurately disclosed all material facts upon which to provide a basis for evaluating the Company to the extent required by federal law, state law and/or FINRA. You further agree that you are solely responsible for performing adequate due diligence, and you agree to perform adequate due diligence as required by federal law, state law, and/or FINRA.

1.23      You will refrain from making any representations to any prospective Investor other than those contained in the Offering Statement, and will not allow any other written materials to be used to describe the potential investment to prospective Investors other than the Offering Statement or factual summaries and sales brochures of the Offering prepared by the Company and distributed by the Managing Broker-Dealer.

1.24      You will refrain from distributing any material to prospective Investors that is marked “Financial Advisor Use Only” or “Broker-Dealer Use Only,” or any other due diligence material related to the Offering received by you.

1.25      The Selling Group Member hereby represents and warrants as of the date of this Agreement (the “Effective Date”) to the Managing Broker-Dealer and to the Company that neither the Selling Group Member nor any of its executive officers, directors, general partners, managing members, or officers involved in the offering or persons who own 20% or more of the Selling Group Member or any person receiving a commission from the Selling Group Member with respect to the Offering:

  1.25.1    Has been convicted, within 10 years of the Effective Date of any felony or misdemeanor that was:

     (a)        In connection with the purchase or sale of any security;

     (b)        Involving or making of any false filing with the SEC; or

     (c)        Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

  1.25.2    Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Effective Date, that restrains or enjoins such person from engaging or continuing in any conduct or practice:

     (a)        In connection with the purchase or sale of any security;

     (b)        Involving the making of any false filing with the SEC; or

     (c)        Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

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1.25.3    Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions), a state authority that supervises or examines banks, savings associations or credit unions, a state insurance commission (or an agency or officer of a state performing like functions), an appropriate federal banking agency, the U.S. Commodity Futures Trading Commission or the National Credit Union Administration that:

   (a)        As of the Effective Date, bars the person from:

     (i)          Association with an entity regulated by such commission, authority, agency or officer;

     (ii)         Engaging in the business of securities, insurance or banking; or

     (iii)        Engaging in savings association or credit union activities.

   (b)        Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct entered within 10 years before the Effective Date.

1.25.4    Is subject to an order of the SEC pursuant to sections 15(b) or 15B(c) of the Exchange Act or section 203(e) or (f) of the Investment Advisers Act of 1940 (the “Investment Advisers Act”) that, as of the Effective Date:

   (a)        Suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment advisor;

   (b)        Places limitations on the activities, functions or operations of such person; or

   (c)        Bars such person from being associated with any entity or from participating in the offering of any penny stock.

1.25.5    Is subject to any order of the SEC entered within 5 years before the Effective Date, as of the date hereof, that orders the person to cease and desist from committing or causing a violation or future violation of:

   (a)        Any scienter-based anti-fraud provisions of the federal securities laws including, without limitation, section 17(a)(1) of the Securities Act, section 10(b) of the Exchange Act and 17 CFR 240.10b-5, section 15(c)(1) of the Exchange Act and section 206(1) of the Investment Advisers Act, or any other rule or regulation thereunder; or

   (b)        Section 5 of the Securities Act.

1.25.6    Is suspended or expelled from membership in, or suspended or barred from association with, a member of a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade;

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  1.25.7    Has filed (as a registrant or issuer), or was or was named as an underwriter in, any registration statement or Regulation A offering statement filed with the SEC that, within 5 years of the Effective Date, was the subject of a refusal order, stop order or order suspending the Regulation A exemption or, is, as of the Effective Date, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued.

  1.25.8    Is subject to a United States Postal Service false representation order entered within 5 years before the Effective Date, or is, at the Effective Date, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.

The representations and warranties made in this Section 1 are and shall be continuing representations and warranties throughout the term of the Offering. In the event that any of these representations or warranties becomes untrue, the Selling Group Member will immediately notify the Managing Broker-Dealer in writing of the fact which makes the representation or warranty untrue.

1.26      You acknowledge that this Offering is being made in reliance on Regulation A promulgated under the Securities Act and that the Company is relying on a certification from you that a potential Investor meets with the suitability requirements set forth in the Offering Statement.

1.27      You will provide the Managing Broker-Dealer with such information relating to the offer and sale of the Shares by you as the Managing Broker-Dealer may from time to time reasonably request.

2.        Compensation.     Subject to certain conditions, and in consideration of your services hereunder, the Managing Broker-Dealer will pay you sales commissions and marketing allowances as follows:

2.1      You will receive a selling commission in an amount up to 6.0% of the purchase price of the Shares sold by you; provided, however, that this amount will be reduced to the extent the Managing Broker-Dealer negotiates a lower commission rate with you, in which event the commission rate will be the lower agreed upon rate (the above being referred to as the “Commissions”).

2.2      You may receive a non-accountable marketing and due diligence allowance of up to 1.25% of the purchase price of the Shares sold by you (the “Allowances”).

2.3      Payment of the Commissions and the Allowances shall be subject to the following conditions:

(a)        No Commissions or Allowances will be payable with respect to any Subscription Agreements that are rejected by the Company or the Managing Broker-Dealer, or if the Company terminates the Offering for any reason whatsoever.

(b)        No Commissions or Allowances will be payable unless and until release to the Company of funds from the Escrow Bank with which there is to be deposited the Minimum Offering Amount of $2,000,000.

(c)        No Commissions or Allowances will be payable to you with respect to any sale of the Shares by you unless and until such time as the Company has received the total proceeds of any such sale from the Escrow Bank and the Managing Broker-Dealer has received the aggregate amount of sales commission to which it is entitled.

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2.4        All other expenses incurred by you in the performance of your obligations hereunder, including, but not limited to, expenses related to the Offering and any attorneys’ fees, shall be at your sole cost and expense, and the foregoing shall apply notwithstanding the fact that the Offering is not consummated for any reason.

2.5        Once Commissions or Allowances become payable, they will be paid on the first and fifteenth of each month. You agree that, in the event any Commissions or Allowances have been paid to the Managing Broker-Dealer pursuant to the terms of the Managing Broker-Dealer Agreement, you will look solely to the Managing Broker-Dealer for payment of any Commissions or Allowances.

2.6        In the event that a purchase is revoked or rescinded, the Selling Group Member will be obligated to return to the Managing Broker-Dealer any Commissions or Allowances previously paid to the Selling Group Member in connection with such purchase.

3.        Solicitation.

3.1        In soliciting persons to acquire the Shares, you agree to comply with any applicable requirements of the Securities Act, the Exchange Act, applicable state securities laws, the published rules and regulations thereunder and FINRA rules and, in particular, you agree that you will not give any information or make any representations other than those contained in the Offering Statement and in any supplemental sales literature furnished to you by the Managing Broker-Dealer or the Company for use in making such solicitations.

3.2        You will conduct all solicitation and sales efforts in conformity with Regulation A promulgated under the Securities Act, and exemptions available under applicable state law and conduct reasonable investigation to ensure that all prospective Investors are not (i) listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, Department of the Treasury (“OFAC”) pursuant to Executive Order No. 133224, 66 Fed. Reg. 49079 (September 25, 2001) and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable enabling legislation or other Executive Orders in respect thereof (such lists are collectively referred to as “Lists”) or (ii) owned or controlled by, nor act for or on behalf of, any person or entity on the Lists.

3.3        You agree to promptly provide to the Managing Broker-Dealer copies of any written or otherwise documented complaints from customers received by you relating in any way to the Offering (including, but not limited to, the manner in which the Shares are offered by you).

4.        Offer and Sale Activities.   It is understood that under no circumstances will you engage in any activities hereunder in any state other than those for which permission has been granted by the Managing Broker-Dealer to you, as evidenced by written acknowledgement by the Managing Broker-Dealer that such state has been cleared for offer and sale activity. It is further understood that you shall notify the Company of Subscription Agreements you receive within 2 business days of receipt so that the Company may make any required federal or state law filings.

5.        Relationship of Parties.   Nothing contained herein shall be construed or interpreted to constitute the Selling Group Member as an employee, agent or representative of, or in association with or in partnership with, the Managing Broker-Dealer or the Company. The Managing Broker-Dealer shall be under no liability to make any payment to you except out of the funds received pursuant to the terms of the Managing Broker-Dealer Agreement as hereinabove provided, and the Managing Broker-Dealer shall not be under any liability for, or in respect of the value or validity of the Subscription Agreement, the Shares or the performance by anyone of any agreement on its part, or for, or in respect of any matter

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connected with this Agreement, except for lack of good faith by the Managing Broker-Dealer, and for obligations expressly assumed by the Managing Broker-Dealer in this Agreement.

6.        Indemnification and Contribution.   You hereby agree and acknowledge that you shall be entitled to the rights, and be subject to the obligations and liabilities, of the indemnification and contribution provisions contained in the MBD Agreement, including without limitation, the provisions by which the Selling Group Members shall severally agree to indemnify and hold harmless the Company and the Managing Broker-Dealer and their respective owners, managers, members, trustees, partners, directors, officers, employees, agents, attorneys and accountants.

7.        Privacy Act.   To protect Customer Information (as defined below) and to comply as may be necessary with the requirements of the Gramm-Leach-Bliley Act, the relevant state and federal regulations pursuant thereto and state privacy laws, the parties wish to include the confidentiality and non-disclosure obligations set forth herein.

7.1        Customer Information.     “Customer Information” means any information contained on a customer’s application or other form and all nonpublic personal information about a customer that a party receives from the other party. Customer Information shall include, but not be limited to, name, address, telephone number, social security number, health information and personal financial information (which may include consumer account number).

7.2        Usage and Nondisclosure.     The parties understand and acknowledge that they may be financial institutions subject to applicable federal and state customer and consumer privacy laws and regulations, including Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801, et seq.) and regulations promulgated thereunder (collectively, the “Privacy Laws”), and any Customer Information that one party receives from the other party is received with limitations on its use and disclosure. The parties agree that they are prohibited from using the Customer Information received from the other party other than (i) as required by law, regulation or rule, or (ii) to carry out the purposes for which one party discloses Customer Information to the other party pursuant to this Agreement, as permitted under the use in the ordinary course of business exception to the Privacy Laws.

7.3        Safeguarding Customer Information.     The parties shall establish and maintain safeguards against the unauthorized access, destruction, loss, or alteration of Customer Information in their control which are no less rigorous than those maintained by a party for its own information of a similar nature. In the event of any improper disclosure of any Customer Information, the party responsible for the disclosure will immediately notify the other party.

7.4        Survivability.   The provisions of Section 6 and this Section 7 shall survive the termination of this Agreement.

8.        Survival of Representations and Warranties.   Except as the context otherwise requires, all representations, warranties and agreements contained in this Agreement and in the applicable provisions of the MBD Agreement shall be deemed to be representations, warranties and agreements at and through the Offering Termination Date, and such representations, warranties and agreements by the Managing Broker-Dealer or the Selling Group Members, including the indemnity agreements contained in Sections 10, 11 and 12, the contribution agreements contained in Section 13 and the representations and warranties contained in Section 2.6 of the MBD Agreement shall remain operative and in full force and effect regardless of any investigation made by the Managing Broker-Dealer, the Selling Group Members and/or any controlling person, and shall survive the sale of, and payment for, the Shares and the termination of this Agreement.

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9.        Termination.   The Selling Group Member will suspend or terminate the Offering upon request of the Company or the Managing Broker-Dealer at any time and will resume the Offering upon the subsequent request of the Company or the Managing Broker-Dealer. This Agreement may be terminated by the Managing Broker-Dealer or a Selling Group Member at any time upon 5 days’ written notice to the other party. If this Agreement is terminated the Selling Group Member is still obligated to fulfill its delivery requirements pursuant to Section 1.14.

10.        Managing Broker-Dealer Obligations.

  10.1        Notifications.   The Managing Broker-Dealer shall provide prompt written notice to the Selling Group Members of any material changes to the Offering Statement that in its judgment could materially and adversely affect a Selling Group Member with respect to this Offering.

  10.2        Records.   The Managing Broker-Dealer shall retain in its records and make available to the Selling Group Members, for a period of at least 6 years following the Offering Termination Date, any communications and information with respect to a prospective Investor that has otherwise not been provided to a Selling Group Member.

  10.3        FINRA Rule 5110.   The Managing Broker-Dealer has submitted to FINRA (or will submit no later than one business day after filing with or submitting to the SEC or any state securities commission or other regulatory authority) a copy of the documents to be filed pursuant to FINRA Rule 5110(b)(5) and the information specified in FINRA Rule 5110(b)(6); provided, however, any documents that are filed with the SEC through the SEC’s EDGAR System that are referenced in FINRA’s electronic filing system shall be treated as filed with FINRA (the “FINRA Filing”). No sales of Shares shall commence unless such documents and information have been filed with and reviewed by FINRA and FINRA has provided an opinion that it has no objections to the proposed underwriting and other terms and arrangements.

  10.4        Confirmation.   The Managing Broker-Dealer hereby acknowledges that it has assumed the duty to confirm on behalf of the Selling Group Members all orders for purchases of Shares accepted by the Company. Such confirmations will comply with the rules of the SEC and FINRA and will comply with the applicable laws of such other jurisdictions to the extent that the Managing Broker-Dealer is advised of such laws in writing by the Selling Group Member.

11.        Governing Law.   This Agreement shall be governed by, subject to and construed in accordance with the laws of the State of Utah without regard to conflict of law provisions.

12.        Dispute Resolution.   Any controversy arising out of or related to this Agreement or the breach thereof shall be settled by arbitration in Salt Lake County, Utah, in accordance with the rules of The American Arbitration Association, and judgment entered upon the award rendered may be enforced by appropriate judicial action. The arbitration panel shall consist of one member, which shall be a person agreed to by each party to the dispute within 30 days following notice by one party that he desires that a matter be arbitrated. If the parties are unable within such 30 day period to agree upon an arbitrator, then the panel shall be one arbitrator selected by the Salt Lake County office of The American Arbitration Association, which arbitrator shall be experienced in the area of real estate and limited liability companies and who shall be knowledgeable with respect to the subject matter area of the dispute. The losing party shall bear any fees and expenses of the arbitrator, other tribunal fees and expenses, reasonable attorney’s fees of both parties, any costs of producing witnesses and any other reasonable costs or expenses incurred by him or the prevailing party or such costs shall be allocated by the arbitrator. The arbitration panel shall render a decision within 30 days following the close of presentation by the parties of their cases and any rebuttal. The parties shall agree within 30 days following selection of the arbitrator to any prehearing

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procedures or further procedures necessary for the arbitration to proceed, including interrogatories or other discovery; provided, in any event each party shall be entitled to discovery. Any action not resolved pursuant to the foregoing shall be brought only in a court of competent jurisdiction located in Salt Lake County, Utah.

13.        Severability.   If any portion of this Agreement shall be held invalid or inoperative, then so far as is reasonable and possible (i) the remainder of this Agreement shall be considered valid and operative and (ii) effect shall be given to the intent manifested by the portion held invalid or inoperative.

14.        Counterparts.   This Agreement may be executed in 2 or more counterparts, each of which shall be deemed to be an original, and together which shall constitute one and the same instrument.

15.        Modification or Amendment.   This Agreement may not be modified or amended except by written agreement executed by the parties hereto.

16.        Notices.   All communications hereunder, except as herein otherwise specifically provided, shall be in writing and, (i) if sent to the Managing Broker-Dealer, shall be mailed or delivered to Orchard Securities, LLC, 401 South 850 East, Suite C1, Lehi, Utah 84043, (ii) if sent to the Company, shall be mailed or delivered to Cottonwood Multifamily REIT II, Inc., 6340 South 3000 East, Suite 500, Salt Lake City, Utah, 84121, or (iii) if sent to you, shall be mailed or delivered to you at your address set forth below. The notice shall be deemed to be received on the date of its actual receipt by the party entitled thereto.

17.        Parties.   This Agreement shall be binding upon and inure solely to the benefit of the parties hereto, the persons referred to in Sections 10, 11, 12 and 13 of the MBD Agreement, their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under, in respect of, or by virtue of, this Agreement or any provision herein contained.

18.        Delay.   Neither the failure nor any delay on the part of any party to this Agreement to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any subsequent occurrence.

19.        Recovery of Costs.   If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding (and any additional proceeding for the enforcement of a judgment) in addition to any other relief to which it or they may be entitled.

20.        Entire Agreement.   This Agreement, along with the applicable provisions of the MBD Agreement, constitute the entire understanding between the parties hereto and supersede any prior understandings or written or oral agreements between them respecting the subject matter hereof.

21.        Anti-Money Laundering Compliance Programs.   Each Selling Group Member’s acceptance of this Agreement constitutes a representation to the Managing Broker-Dealer that the Selling Group Member has established and implemented an anti-money laundering (“AML”) compliance program (“AML Program”), in accordance with FINRA Rule 3310 and Section 352 of the Money Laundering Abatement Act, the Bank Secrecy Act, as amended, and Section 326 of the Patriot Act of 2001, which are reasonably expected to detect and cause reporting of suspicious transactions in

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connection with the sale of Shares. In addition, the Selling Group Member represents that it has established and implemented a program (“OFAC Program”) for compliance with OFAC and will continue to maintain its OFAC Program during the term of this Agreement. Upon request by the Managing Broker-Dealer at any time, the Selling Group Member hereby agrees to (i) furnish a copy of its AML Program and OFAC Program to the Managing Broker-Dealer for review and (ii) furnish a copy of the findings and any remedial actions taken in connection with the Selling Group Member’s most recent independent testing of its AML Program and/or its OFAC Program.

The parties acknowledge that for the purposes of the FINRA rules the Investors who purchase Shares through the Selling Group Member are “Customers” of the Selling Group Member and not the Managing Broker-Dealer. Nonetheless, to the extent that the Managing Broker-Dealer deems it prudent, the Selling Group Member shall cooperate with the Managing Broker-Dealer’s auditing and monitoring of the Selling Group Member’s AML Program and its OFAC Program by providing, upon request, information, records, data and exception reports, related to the Company’s investors introduced to, and serviced by, the Selling Group Member (the “Customers”). Such documentation could include, among other things: (i) copies of Selling Group Member’s AML Program and its OFAC Program; (ii) documents maintained pursuant to the Selling Group Member’s AML Program and its OFAC Program related to the Customers; (iii) any suspicious activity reports filed related to the Customers; (iv) audits and any exception reports related to the Selling Group Member’s AML activities; and (v) any other files maintained related to the Customers. In the event that such documents reflect, in the opinion of the Managing Broker-Dealer, a potential violation of the Managing Broker-Dealer’s obligations in respect of its AML or OFAC requirements, the Selling Group Member will permit the Managing Broker-Dealer to further inspect relevant books and records related to the Customers (with respect to the Offering) and/or the Selling Group Member’s compliance with AML or OFAC requirements. Notwithstanding the foregoing, the Selling Group Member shall not be required to provide to the Managing Broker-Dealer any documentation that, in the Selling Group Member’s reasonable judgment, would cause the Selling Group Member to lose the benefit of attorney-client privilege or other privilege which it may be entitled to assert relating to the discoverability of documents in any civil or criminal proceedings. The Selling Group Member hereby represents that it is currently in compliance with all AML rules and all OFAC requirements, specifically including, but not limited to, the Customer Identification Program requirements under Section 326 of the USA PATRIOT Act. The Selling Group Member hereby agrees, upon request by the Managing Broker-Dealer to (i) provide an annual certification to the Managing Broker-Dealer that, as of the date of such certification (A) its AML Program and its OFAC Program are consistent with the AML Rules and OFAC requirements, (B) it has continued to implement its AML Program and its OFAC Program and (C) it is currently in compliance with all AML Rules and OFAC requirements, specifically including, but not limited to, the Customer Identification Program requirements under Section 326 of the USA PATRIOT Act and (ii) perform and carry out, on behalf of both the Managing Broker-Dealer and the Company, the Customer Identification Program requirements in accordance with Section 326 of the USA PATRIOT Act and applicable SEC and Treasury Department Rules thereunder.

22.        Due Diligence.   Pursuant to the MBD Agreement, the Company will authorize a collection of information regarding the Offering (the “Due Diligence Information”), which collection the Company may amend and supplement from time to time, to be delivered by the Managing Broker-Dealer to the Selling Group Member (or their agents performing due diligence) in connection with its due diligence review of the Offering. In the event the Selling Group Member (or its agent performing due diligence) requests access to additional information or otherwise wishes to conduct additional due diligence regarding the Offering, the Company, the Company’s sponsor or the sponsor’s affiliates and the Managing Broker-Dealer will reasonably cooperate with the Selling Group Member to accommodate such request. All Due Diligence Information received by the Selling Group Member in connection with its due diligence review of the Offering is confidential and shall be maintained as confidential and not disclosed

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by the Selling Group Member, except to the extent such information is disclosed in the Offering Statement.

23.      Managing Broker-Dealer Representations.     The Managing Broker-Dealer hereby represents and warrants as of the Effective Date to the Selling Group Member that neither the Managing Broker-Dealer nor any of its executive officers, directors, general partners, managing members, or officers involved in the offering or persons who own 20% or more of the Managing Broker-Dealer:

23.1      Has been convicted, within 10 years of the Effective Date of any felony or misdemeanor that was:

23.1.1    In connection with the purchase or sale of any security;

23.1.2    Involving or making of any false filing with the SEC; or

23.1.3    Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

23.2      Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Effective Date, that restrains or enjoins such person from engaging or continuing in any conduct or practice:

23.2.1    In connection with the purchase or sale of any security;

23.2.2    Involving the making of any false filing with the SEC; or

23.2.3    Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities.

23.3      Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions), a state authority that supervises or examines banks, savings associations or credit unions, a state insurance commission (or an agency or officer of a state performing like functions), an appropriate federal banking agency, the U.S. Commodity Futures Trading Commission or the National Credit Union Administration that:

23.3.1    As of the Effective Date, bars the person from:

       (a)        Association with an entity regulated by such commission, authority, agency or officer;

       (b)        Engaging in the business of securities, insurance or banking; or

       (c)        Engaging in savings association or credit union activities.

23.3.2    Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct entered within 10 years before the Effective Date.

23.4      Is subject to an order of the SEC pursuant to sections 15(b) or 15B(c) of the Exchange Act or section 203(e) or (f) of the Investment Advisers Act that, as of the Effective Date:

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  23.4.1    Suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment advisor;

  23.4.2    Places limitations on the activities, functions or operations of such person; or

  23.4.3    Bars such person from being associated with any entity or from participating in the offering of any penny stock.

23.5      Is subject to any order of the SEC entered within 5 years before the Effective Date that, as of the Effective Date, orders the person to cease and desist from committing or causing a violation or future violation of:

  23.5.1    Any scienter-based anti-fraud provisions of the federal securities laws including, without limitation, section 17(a)(1) of the Securities Act, section 10(b) of the Exchange Act and 17 CFR 240.10b-5, section 15(c)(1) of the Exchange Act and section 206(1) of the Investment Advisers Act, or any other rule or regulation thereunder; or

  23.5.2    Section 5 of the Securities Act.

23.6      Is suspended or expelled from membership in, or suspended or barred from association with, a member of a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.

23.7      Has filed (as a registrant or issuer), or was or was named as an underwriter in, any registration statement or offering statement filed with the SEC that, within 5 years of the Effective Date, was the subject of a refusal order, stop order or order suspending the Regulation A exemption or, is, as of the Effective Date, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued.

23.8      Is subject to a United States Postal Service false representation order entered within 5 years before the Effective Date, or is, as of the Effective Date, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.

The representations and warranties made in this Section 23 are and shall be continuing representations and warranties throughout the term of the Offering. In the event that any of these representations or warranties becomes untrue, the Managing Broker-Dealer will immediately notify the Selling Group Member in writing of the fact which makes the representation or warranty untrue.

24.      Electronic Delivery of Information; Electronic Processing of Subscriptions.   Pursuant to the MBD Agreement, the Company has agreed to confirm all orders for the purchase of Shares accepted by the Company. In addition, the Company, the Managing Broker-Dealer and/or third parties engaged by the Company or the Managing Broker-Dealer may, from time to time, provide to the Selling Group Member copies of investor letters, annual reports and other communications provided to the Company investors. The Selling Group Member agrees that, to the extent practicable and permitted by law, all confirmations, statements, communications and other information provided to or from the Company, the Managing Broker-Dealer, the Selling Group Member and/or their agents or customers may be provided electronically, as a preference but not as a requirement.

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With respect to Shares held through custodial accounts, the Selling Group Member agrees and acknowledges that to the extent practicable and permitted by law, all confirmations, statements, communications and other information provided from the Company, the Managing Broker-Dealer and/or their agents to Company investors may be provided solely to the custodian that is the registered owner of the Shares, rather than to the beneficial owners of the Shares. In such case it shall be the responsibility of the custodian to distribute the information to the beneficial owners of Shares.

The Selling Group Member agrees and acknowledges that the Managing Broker-Dealer may, as a preference but not as a requirement, use an electronic platform to process subscriptions, including but not limited to the Depository Trust Company (DTC) model. If an electronic platform is used, the Selling Group Member agrees to cooperate with the processing of subscriptions through such an electronic platform if reasonably practical.

25.        Third Party Beneficiaries.   The Company and its affiliates, successors and assigns shall be express third party beneficiaries of Section 1 of this Agreement.

26.        Successors and Assigns.   No party shall assign this Agreement or any right, interest or benefit under this Agreement without the prior written consent of the other party. This Agreement shall be binding upon the Managing Broker-Dealer and Selling Group Member and their respective successors and permitted assigns.

Please confirm this Agreement to solicit persons to acquire the Shares on the foregoing terms and conditions by signing and returning the form enclosed herewith.

Very truly yours,

ORCHARD SECURITIES, LLC, a

Utah limited liability company

By:

Its:

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Orchard Securities, LLC

401 South 850 East, Suite C1

Lehi, Utah 84043

Re:        Offering of Shares in Cottonwood Multifamily REIT II, Inc.

Ladies and Gentlemen:

The undersigned confirms its agreement to act as a Selling Group Member as referred to in the foregoing Soliciting Dealer Agreement, subject to the terms and conditions of such Agreement. The undersigned confirms that it is a member in good standing of the Financial Industry Regulatory Authority, Inc., and is qualified under federal law and the laws of the states in which sales are to be made by the undersigned to act as a Selling Group Member.

Dated:	, 20
			(Print Name of Firm)
		By:
			(Authorized Representative)
		Address:

 Taxpayer Identification Number:                                                                                  

 Registered as broker-dealer in the following states:

¨ All States

¨ AL

¨ AK

¨ AZ

¨ AR

¨ CA

¨ CO

¨ CT

¨ DE

¨ DC

¨ FL

¨ GA

¨ HI

¨ ID

¨ IL

¨ IN

¨ IA

¨ KS

¨ KY

¨ LA

¨ ME

¨ MD

¨ MA

¨ MI

¨ MN

¨ MS

¨ MO

¨ MT

¨ NE

¨ NV

¨ NH

¨ NJ

¨ NM

¨ NY

¨ NC

¨ ND

¨ OH

¨ OK

¨ OR

¨ PA

¨ RI

¨ SC

¨ SD

¨ TN

¨ TX

¨ UT

¨ VT

¨ VA

¨ WA

¨ WV

¨ WI

¨ WY

¨ PR

EXHIBIT A

MBD AGREEMENT

EX1A-2A CHARTER

Exhibit 2.1

COTTONWOOD MULTIFAMILY REIT II, INC.

ARTICLES OF AMENDMENT AND RESTATEMENT

FIRST:         Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Corporation”), desires to amend and restate its charter as currently in effect and as hereinafter amended.

SECOND:         The following provisions are all the provisions of the charter of the Corporation (the “Charter”) currently in effect and as hereinafter amended:

ARTICLE I

INCORPORATOR

Lauren K. Ackermann, whose address is 4141 Parklake Avenue, Suite 300, Raleigh, North Carolina, 27612, being at least 18 years of age, formed the Corporation under the general laws of the State of Maryland on June 10, 2016.

ARTICLE II

NAME

The name of the Corporation is:

Cottonwood Multifamily REIT II, Inc.

ARTICLE III

PURPOSE

The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, engaging in business as a real estate investment trust under the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”)) for which corporations may be organized under the general laws of the State of

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Maryland as now or hereafter in force. For purposes of the Charter, “REIT” means a real estate investment trust under Sections 856 through 860 of the Code.

ARTICLE IV

PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

The address of the principal office of the Corporation in the State of Maryland is 7 St. Paul Street, Suite 820, Baltimore, Maryland, 21202. The name of the resident agent of the Corporation in the State of Maryland is CSC-Lawyers Incorporating Service Company, whose post office address is 7 St. Paul Street, Suite 820, Baltimore, Maryland, 21202. The resident agent is a Maryland corporation.

ARTICLE V

PROVISIONS FOR DEFINING, LIMITING

AND REGULATING CERTAIN POWERS OF THE

CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

Section 5.1     Number of Directors. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors of the Corporation (the “Board of Directors”) and, except as otherwise expressly provided for by law, the Charter or the bylaws of the Corporation (the “Bylaws”), all of the powers of the Corporation shall be vested in the Board of Directors. The number of directors of the Corporation is three, which number may be increased or decreased in accordance with the Bylaws, but shall never be less than the minimum number required by the Maryland General Corporation Law (the “MGCL”).

During any period when the holders of one or more classes or series of Preferred Stock shall have the right, voting separately or together with holders of one or more other classes or series of Preferred Stock, to elect additional directors as provided for or fixed pursuant to the provisions of Article VI, then upon commencement and for the duration of the period during which

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such right continues: (a) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions and (b) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to such director’s earlier death, disqualification, resignation or removal. Except as otherwise provided for or fixed pursuant to the provisions of Article VI, whenever the holders of any such classes or series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors shall automatically terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.

At the time of the approval of these articles of amendment and restatement, the Corporation has three directors, and the names and classes of the directors currently in office are:

Gregg Christensen	Class I
Chad Christensen	Class II
Daniel Shaeffer	Class III

The Board of Directors may fill any vacancy, whether resulting from an increase in the number of directors or otherwise, on the Board of Directors in the manner provided in the Bylaws. The Corporation elects, at such time as it becomes eligible under Section 3-802 of the MGCL to make the election provided for under Section 3-804(c) of the MGCL, that, except as may be provided by the Board of Directors in setting the terms of any class or series of stock and except for any rights of stockholders to fill a vacancy created by the removal of a director as may be required by statute, any and all vacancies on the Board of Directors may be filled only by the affirmative

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vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred and until a successor is elected and qualified.

Section 5.2     Classes of Directors. The Board of Directors shall be classified into three classes, equal or approximately equal in number. Each such class of directors shall be elected for successive terms ending at the annual meeting of the stockholders the third year after election and until his or her successor is elected and qualified. In the event of an increase or decrease in the number of directors, and the number of directors is not divisible evenly by three, the remaining directors by majority vote shall determine the number of directors to be in each class of directors, with each class to be approximately equal in number, to be effective after expiration of the remaining terms of any class which have a reduction in number due to a decrease in the number of directors.

Class I directors shall hold office until the first annual meeting of stockholders and until their successors shall be elected and have qualified and thereafter shall be for three years and until their successors shall be elected and have qualified, Class II directors shall hold office until the second annual meeting of stockholders and until their successors shall be elected and have qualified and thereafter shall be for three years and until their successors shall be elected and have qualified, and Class III directors shall hold office until the third annual meeting of stockholders and until their successors shall be elected and have qualified and thereafter shall be for three years and until their successors shall be elected and have qualified, in all cases subject to a director’s earlier death, resignation or removal

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Section 5.3        Authorization by Board of Stock Issuance. The Board of Directors, without the approval of the stockholders of the Corporation, may authorize the issuance from time to time of shares of stock of the Corporation of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of its stock of any class or series, whether now or hereafter authorized, for such consideration, if any, as the Board of Directors may deem advisable, subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws.

Section 5.4        Preemptive or Appraisal Rights. Except as may be provided by the Board of Directors in setting the terms of classified or reclassified shares of stock pursuant to Section 6.4 or as may otherwise be provided by a contract approved by the Board of Directors, no holder of shares of stock of the Corporation shall, as such holder, have any preemptive right to purchase or subscribe for any additional shares of stock of the Corporation or any other security of the Corporation that it may issue or sell. Holders of shares of stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute (except as provided by Section 3-708 of the MGCL, if and to the extent that the Maryland Control Share Acquisition Act is applicable) unless the Board of Directors, upon the affirmative vote of a majority of the Board of Directors, shall determine that such rights apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.

Section 5.5        Indemnification. The Corporation shall have the power, to the maximum extent permitted by Maryland law in effect from time to time, to obligate itself to indemnify, and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (a) any individual who is a present or former director or officer of the Corporation or (b) any individual

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who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his or her service in such capacity. The Corporation shall have the power, with the approval of the Board of Directors, to provide such indemnification and advancement of expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation.

Section 5.6        Determinations by Board. In addition to, and without limitation of, the general grant of power and authority to the Board of Directors under Section 5.1, the determination as to any of the following matters, made by the Board of Directors or by an officer of the Corporation pursuant to the direction of the Board of Directors consistent with the Charter, shall be final and conclusive and shall be binding upon the Corporation and every holder of shares of its stock: (a) the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of its stock or the payment of other distributions on its stock; (b) the amount of paid-in surplus, net assets, other surplus, annual or other cash flow, funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; (c) the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); (d) any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to

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dividends or other distributions, qualifications or terms and conditions of redemption of any class or series of stock of the Corporation; (e) the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation or of any shares of stock of the Corporation; (f) the number of shares of stock of any class or series of the Corporation; (g) any matter relating to the acquisition, holding or disposition of any assets by the Corporation; or (h) any other matter relating to the business and affairs of the Corporation or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board of Directors.

Section 5.7        REIT Qualification. If the Corporation elects to qualify for U.S. federal income tax treatment as a REIT, the Board of Directors shall use its reasonable best efforts to take such actions as are necessary or appropriate to preserve the qualification of the Corporation as a REIT; however, if the Board of Directors determines that it is no longer in the best interests of the Corporation to continue to be qualified as a REIT, the Board of Directors may revoke or otherwise terminate the Corporation’s REIT election pursuant to Section 856(g) of the Code. The Board of Directors also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in the Charter is no longer required for REIT qualification.

Section 5.8        Removal of Directors. Subject to the rights of holders of one or more classes or series of Preferred Stock to elect or remove one or more directors, any director, or the entire Board of Directors, may be removed from office at any time at an annual or special meeting of the stockholders by the affirmative vote of at least a majority of the votes entitled to be cast generally in the election of directors in the event of the director’s or Board of Director’s fraud, willful misconduct or gross negligence, as determined by a non-appealable final judgement of a court of competent jurisdiction. For avoidance of doubt, if the number of directors of the

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Corporation is decreased as of the end of the then current term of one or more directors, then any such directors who are not reelected for subsequent terms shall cease to be directors of the Corporation as of the end of the current term; provided that if the total number of directors elected for a subsequent term is less than the total number of directorships up for election, then the terms of the directors who were not reelected will continue until their successors are elected; provided further that the number of directors who were not reelected whose terms will continue as set forth above may not exceed the difference obtained by subtracting the total number of directors elected for a subsequent term from the total number of directorships up for election, and if the number of directors who were not reelected exceeds such difference, then only the terms of such directors who were nominated by the Board of Directors for reelection will continue.

Section 5.9        Tender Offers. If any stockholder of the Corporation makes a tender offer, including, without limitation, a “mini-tender” offer, such stockholder must comply with all of the provisions set forth in Regulation 14D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, disclosure and notice requirements, which would be applicable if the tender offer was for more than 5% of the outstanding securities of the Corporation, provided, however, that such documents are not required to be filed with the Securities and Exchange Commission. In addition, any such stockholder must provide notice to the Corporation at least 10 Business Days prior to initiating any such tender offer. The term “Business Day” shall have the meaning set forth in Section 7.1. If any stockholder initiates a tender offer without complying with the provisions set forth above (a “Non-Compliant Tender Offer”), the Corporation, in its sole discretion, shall have the right to redeem such non-compliant stockholder’s shares of Capital Stock and any shares of Capital Stock acquired in such tender offer (collectively, the “Tendered Shares”) at the lesser of (i) with respect to Common Stock, the price then being paid

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per share of Common Stock purchased in the Corporation’s latest offering of Common Stock at full purchase price (not discounted for commission reductions nor for reductions in sale price permitted pursuant to the distribution reinvestment plan), (ii) the fair market value of the shares as determined by an independent valuation obtained by the Corporation or (iii) the lowest tender offer price offered in such Non-Compliant Tender Offer. The term “Capital Stock” shall have the meaning set forth in Section 7.1. The Corporation may purchase such Tendered Shares upon delivery of the purchase price to the stockholder initiating such Non-Compliant Tender Offer, and, upon such delivery, the Corporation may instruct any transfer agent to transfer such purchased shares to the Corporation. In addition, any stockholder who makes a Non-Compliant Tender Offer shall be responsible for all expenses incurred by the Corporation in connection with the enforcement of the provisions of this Section 5.9, including, without limitation, expenses incurred in connection with the review of all documents related to such tender offer and expenses incurred in connection with any purchase of Tendered Shares by the Corporation. The Corporation maintains the right to offset any such expenses against the dollar amount to be paid by the Corporation for the purchase of Tendered Shares pursuant to this Section 5.9. In addition to the remedies provided herein, the Corporation may seek injunctive relief, including, without limitation, a temporary or permanent restraining order, in connection with any Non-Compliant Tender Offer.

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ARTICLE VI

STOCK

Section 6.1        Authorized Shares. The Corporation has authority to issue 1,100,000,000 shares of stock, consisting of 1,000,000,000 shares of common stock, $.01 par value per share (“Common Stock”), and 100,000,000 shares of preferred stock, $.01 par value per share (“Preferred Stock”). The aggregate par value of all authorized shares of stock having par value is $11,000,000. If shares of one class of stock are classified or reclassified into shares of another class of stock pursuant to Sections 6.2, 6.3 or 6.4 of this Article VI, the number of authorized shares of the former class shall be automatically decreased and the number of shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of stock of all classes that the Corporation has authority to issue shall not be more than the total number of shares of stock set forth in the first sentence of this paragraph. The Board of Directors, with the approval of a majority of the entire Board of Directors and without any action by the stockholders of the Corporation, may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Corporation has authority to issue.

Section 6.2        Common Stock. Subject to the provisions of Article VII and except as may otherwise be specified in the Charter, each share of Common Stock shall entitle the holder thereof to one vote. The Board of Directors may reclassify any unissued shares of Common Stock from time to time into one or more classes or series of stock.

Section 6.3        Preferred Stock. The Board of Directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, into one or more classes or series of stock.

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Section 6.4        Classified or Reclassified Shares. Prior to issuance of classified or reclassified shares of any class or series, the Board of Directors by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of stock of the Corporation; (b) specify the number of shares to be included in the class or series; (c) set or change, subject to the provisions of Article VII and subject to the express terms of any class or series of stock of the Corporation outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Corporation to file articles supplementary with the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”).

Section 6.5        Majority Vote Sufficient. Except as specifically provided in Article VIII, notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of shares entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board of Directors and taken or approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter.

Section 6.6        Stockholders’ Consent in Lieu of Meeting. Any action required or permitted to be taken at any meeting of the stockholders may be taken without a meeting if a unanimous consent that sets forth the action is given in writing or by electronic transmission by each stockholder entitled to vote on the matter and filed with the minutes of proceedings of the stockholders.

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Section 6.7        Voting Rights of Any Class or Series. The holders of stock of any class or series shall have exclusive voting rights on any proposed amendment to the Charter that would alter only the contract rights, as expressly set forth in the Charter, of that class or series, unless the terms of such class or series as set forth in the Charter shall expressly provide otherwise.

Section 6.8        Charter and Bylaws. The rights of all stockholders and the terms of all stock are subject to the provisions of the Charter and the Bylaws.

ARTICLE VII

RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

Section 7.1        Definitions. The following terms shall have the following meanings:

Aggregate Stock Ownership Limit. The term “Aggregate Stock Ownership Limit” shall mean 9.8% in value of the aggregate of the outstanding shares of Capital Stock. The value of the outstanding shares of Capital Stock shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

Beneficial Ownership. The term “Beneficial Ownership” shall mean ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns,” “Beneficially Owning” and “Beneficially Owned” shall have the correlative meanings.

Business Day. The term “Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

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Capital Stock. The term “Capital Stock” shall mean all classes or series of stock of the Corporation, including, without limitation, Common Stock and Preferred Stock.

Charitable Beneficiary. The term “Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined pursuant to Section 7.3.6, provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

Common Stock Ownership Limit. The term “Common Stock Ownership Limit” shall mean 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of Common Stock of the Corporation. The number and value of outstanding shares of Common Stock of the Corporation shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

Constructive Ownership.    The term “Constructive Ownership” shall mean ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns,” “Constructively Owning” and “Constructively Owned” shall have the correlative meanings.

Excepted Holder. The term “Excepted Holder” shall mean a stockholder of the Corporation for whom an Excepted Holder Limit is created by this Charter or by the Board of Directors pursuant to Section 7.2.7.

Excepted Holder Limit.    The term “Excepted Holder Limit” shall mean the percentage limit established by this Charter or the Board of Directors pursuant to Section 7.2.7

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provided that the affected Excepted Holder agrees to comply with the requirements, if any, established by the Board of Directors pursuant to Section 7.2.7, and subject to adjustment pursuant to Section 7.2.8.

Initial Date. The term “Initial Date” shall mean the earlier of the date upon which shares of Common Stock are first issued in an Offering or the first date for which the Corporation elects to qualify as a REIT under the Code.

Market Price. The term “Market Price” on any date shall mean, with respect to any class or series of outstanding shares of Capital Stock, the Closing Price for such Capital Stock on such date. The “Closing Price” on any date shall mean the last sale price for such Capital Stock, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Capital Stock, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which such Capital Stock is listed or admitted to trading or, if such Capital Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by FINRA’s OTC Bulletin Board service or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if such Capital Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Capital Stock selected by the Board of Directors or, in the event that no trading price is available for such Capital Stock, the fair market value of the Capital Stock, as determined in good faith by the Board of Directors.

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Offering. The term “Offering” shall mean any offering and sale of shares of Capital Stock.

Person. The term “Person” shall mean an individual, corporation, association, business trust, estate, trust, partnership, limited liability company or other legal entity.

Prohibited Owner. The term “Prohibited Owner” shall mean, with respect to any purported Transfer, any Person who but for the provisions of Section 7.2.1 would Beneficially Own or Constructively Own shares of Capital Stock and, if appropriate in the context, shall also mean any Person who would have been the record owner of the shares that the Prohibited Owner would have so owned.

Restriction Termination Date. The term “Restriction Termination Date” shall mean the first day on which the Corporation determines pursuant to Section 5.7 that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Capital Stock set forth herein is no longer required in order for the Corporation to qualify as a REIT.

Transfer. The term “Transfer” shall mean any issuance, sale, transfer, gift, assignment, devise or other disposition as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership of Capital Stock, or the right to vote or receive distributions on Capital Stock, or any agreement to take any such actions or cause any such events, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Capital Stock or any interest in Capital Stock or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial Ownership or Constructive

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Ownership of Capital Stock; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings.

Trust. The term “Trust” shall mean any trust provided for in Section 7.3.1.

Trustee. The term “Trustee” shall mean the Person unaffiliated with the Corporation and a Prohibited Owner that is appointed by the Corporation to serve as trustee of the Trust.

Section 7.2         Capital Stock.

  Section 7.2.1        Ownership Limitations. During the period commencing on the Initial Date and prior to the Restriction Termination Date:

(a)        Basic Restrictions.

(i)      (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Common Stock in excess of the Common Stock Ownership Limit and (3) no Excepted Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Excepted Holder Limit for such Excepted Holder.

(ii)      No Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial Ownership or Constructive Ownership of Capital Stock would result in the Corporation (1) being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or (2) otherwise failing to qualify as a REIT (including, but

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not limited to, Beneficial Ownership or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code); provided, however, that Section 7.2.1(a)(ii)(1) shall not apply to any period prior to the second year for which the Corporation has elected to be taxable as a REIT.

(iii)      Notwithstanding any other provisions contained herein, any Transfer of shares of Capital Stock (whether or not such Transfer is the result of a transaction entered into through the facilities of any national securities exchange or automated inter-dealer quotation system) that, if effective, would result in the Capital Stock being Beneficially Owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio, and the intended transferee shall acquire no rights in such shares of Capital Stock; provided, however, that (1) this Section 7.2.1(a)(iii) shall not apply to a Transfer of shares of Capital Stock occurring in the Corporation’s first taxable year for which a REIT election is made and (2) the Board of Directors may waive this Section 7.2.1(a)(iii) if, in the opinion of the Board of Directors, such Transfer would not adversely affect the Corporation’s ability to qualify as a REIT.

(b)        Transfer in Trust. If any Transfer of shares of Capital Stock (whether or not such Transfer is the result of a transaction entered into through the facilities of any national securities exchange or automated inter-dealer quotation system) occurs that, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock in violation of Section 7.2.1(a)(i) or Section 7.2.1(a)(ii),

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(i)      then that number of shares of Capital Stock the Beneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 7.2.1(a)(i) or Section 7.2.1(a)(ii) (rounded to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Section 7.3, effective as of the close of business on the Business Day prior to the date of such Transfer and such Person shall acquire no rights in such shares; provided, however,

(ii)     if the transfer to the Trust described in clause (i) of this sentence would not be effective for any reason to prevent the violation of Section 7.2.1(a)(i) or Section 7.2.1(a)(ii), then the Transfer of that number of shares of Capital Stock that otherwise would cause any Person to violate Section 7.2.1(a)(i) or Section 7.2.1(a)(ii) shall be void ab initio and the intended transferee shall acquire no rights in such shares of Capital Stock.

Section 7.2.2        Remedies for Breach. If the Board of Directors shall at any time determine in good faith that a Transfer or other event has taken place that results in a violation of Section 7.2.1(a) or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of Section 7.2.1(a) (whether or not such violation is intended), the Board of Directors or a committee thereof shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Corporation to redeem shares, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer or other event; provided, however, that any Transfers or attempted Transfers or other events in violation of Section 7.2.1(a) shall automatically result in the transfer to the Trust described above and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board of Directors.

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Section 7.2.3    Notice of Restricted Transfer. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of shares of Capital Stock that will or may violate Section 7.2.1(a) or any Person who would have owned shares of Capital Stock that resulted in a transfer to the Trust pursuant to the provisions of Section 7.2.1(b) shall immediately give written notice to the Corporation of such event or, in the case of such a proposed or attempted transaction, give at least 15 days prior written notice and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation’s status as a REIT.

Section 7.2.4    Owners Required To Provide Information. During the period commencing on the Initial Date and prior to the Restriction Termination Date:

(a)        every owner of 5% or more (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding shares of Capital Stock, within 30 days after the end of each taxable year, shall give written notice to the Corporation stating the name and address of such owner, the number of shares of Capital Stock and other shares of the Capital Stock Beneficially Owned and a description of the manner in which such shares are held. Each such owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation’s status as a REIT and to ensure compliance with the Aggregate Stock Ownership Limit.

(b)        each Person who is a Beneficial Owner or Constructive Owner of Capital Stock and each Person (including the stockholder of record) who is holding Capital Stock for a Beneficial Owner or Constructive Owner shall provide to the Corporation such

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information as the Corporation may request, in good faith, in order to determine the Corporation’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance.

Section 7.2.5        Remedies Not Limited.  Subject to Section 5.7, nothing contained in this Section 7.2 shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders in preserving the Corporation’s status as a REIT.

Section 7.2.6  Ambiguity. In the case of an ambiguity in the application of any of the provisions of this Section 7.2, Section 7.3 or any definition contained in Section 7.1, the Board of Directors shall have the power to determine the application of the provisions of this Section 7.2 or Section 7.3 with respect to any situation based on the facts known to it. In the event Section 7.2 or Section 7.3 requires an action by the Board of Directors and this Charter fails to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Sections 7.1, 7.2 or 7.3.

Section 7.2.7  Exceptions.

(a)        Subject to Section 7.2.1(a)(ii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit, as the case may be, and may establish or increase an Excepted Holder Limit for such Person. The Board of Directors may determine to establish or increase an Excepted Holder Limit for such Person only if:

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(i)          the Board of Directors obtains such representations and undertakings from such Person as are reasonably necessary to ascertain that such Person’s Beneficial Ownership or Constructive Ownership of such shares of Capital Stock will not result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise failing to qualify as a REIT;

(ii)         such Person does not and represents that it will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned or controlled by the Corporation) that would cause the Corporation to own, actually or Constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board of Directors obtains such representations and undertakings from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Corporation (or an entity owned or controlled by the Corporation) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the Board of Directors, rent from such tenant would not adversely affect the Corporation’s ability to qualify as a REIT shall not be treated as a tenant of the Corporation); and

(iii)        such Person agrees that any violation or attempted violation of such representations or undertakings (or other action that is contrary to the restrictions contained in Sections 7.2.1 through 7.2.6) will result in such shares of Capital Stock being automatically transferred to a Trust in accordance with Section 7.2.1(b) and Section 7.3.

(b)        Prior to granting any exception pursuant to Section 7.2.7(a), the Board of Directors may require a ruling from the Internal Revenue Service or an opinion of counsel, in either case, in form and substance satisfactory to the Board of Directors in its sole

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discretion, as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of Directors may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.

(c)      Subject to Section 7.2.1(a)(ii), an underwriter that participates in a public offering or a private placement of Capital Stock (or securities convertible into or exchangeable for Capital Stock) may Beneficially Own or Constructively Own shares of Capital Stock (or securities convertible into or exchangeable for Capital Stock) in excess of the Aggregate Stock Ownership Limit, the Common Stock Ownership Limit or both such limits, but only to the extent necessary to facilitate such public offering or private placement.

(d)      The Board of Directors may only reduce the Excepted Holder Limit for an Excepted Holder: (i) with the written consent of such Excepted Holder at any time or (ii) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Common Stock Ownership Limit.

(e)      Notwithstanding the foregoing, until December 31, 2016, “Excepted Holder” shall include Cottonwood Residential O.P., LP (and/or any Person who is a Beneficial Owner of shares as a result of the Beneficial Ownership of shares of Capital Stock by Cottonwood Residential O.P., LP and/or any Person if any of the shares of Capital Stock owned by such Person would be aggregated with the shares of Capital Stock owned by Cottonwood

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Residential O.P., LP for purposes of determining the Beneficial Ownership of Capital Stock), with an Excepted Holder Limit of 100%.

(f)      Increase or Decrease in Aggregate Stock Ownership Limit and Common Stock Ownership Limit. Subject to Section 7.2.1(a)(ii), the Board of Directors may from time to time increase the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit for one or more Persons and decrease the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit for all other Persons; provided, however, that the decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit will not be effective for any Person whose percentage ownership in shares of Capital Stock is in excess of such decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit until such time as such Person’s percentage of shares of Capital Stock equals or falls below the decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit, but any further acquisition of shares of Capital Stock in excess of such percentage ownership of shares of Capital Stock will be in violation of the Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit and, provided further, that the new Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49.9% in value of the outstanding shares of Capital Stock.

Section 7.2.8  Legend. Should the Corporation issue stock certificates, each certificate for shares of Capital Stock shall bear substantially the following legend:

The shares represented by this certificate are subject to restrictions on Beneficial Ownership, Constructive Ownership and Transfer for the purpose of the Corporation’s maintenance of its status as a Real Estate Investment Trust (a

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“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Corporation’s charter: (a) no Person may Beneficially Own or Constructively Own shares of the Corporation’s Common Stock in excess of 9.8% (in value or number of shares) of the outstanding shares of Common Stock of the Corporation unless such Person is an Excepted Holder (in which case the Excepted Holder Limit for such Excepted Holder shall be applicable); (b) no Person may Beneficially Own or Constructively Own shares of Capital Stock of the Corporation in excess of 9.8% of the value of the total outstanding shares of Capital Stock of the Corporation, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit for such Excepted Holder shall be applicable); (c) no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; and (d) no Person may Transfer shares of Capital Stock if such Transfer would result in the Capital Stock of the Corporation being owned by fewer than 100 Persons. Any Person who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own shares of Capital Stock that causes or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately notify the Corporation or, in the case of a proposed or attempted transaction, give at least 15 days prior written notice and provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation’s status as a REIT. If any of the

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restrictions on Transfer or ownership are violated, the shares of Capital Stock represented hereby will be automatically transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem shares of Capital Stock upon the terms and conditions specified by the Board of Directors in its sole discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio.

All capitalized terms in this legend have the meanings defined in the charter of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on Transfer and ownership, will be furnished to each holder of Capital Stock of the Corporation on request and without charge.

Instead of the foregoing legend, the certificate may state that the Corporation will furnish a full statement about certain restrictions on transferability to a stockholder on request and without charge. Such statement shall also be sent on request and without charge to stockholders who are issued shares without a certificate.

Section 7.3      Transfer of Capital Stock in Trust.

Section 7.3.1    Ownership in Trust. Upon any purported Transfer or other event described in Section 7.2.1(b) that would result in a transfer of shares of Capital Stock to a Trust, such shares of Capital Stock shall be deemed to have been transferred to the Trustee as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Trust pursuant to Section

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7.2.1(b). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 7.3.6.

Section 7.3.2    Status of Shares Held by the Trustee. Shares of Capital Stock held by the Trustee shall be issued and outstanding shares of Capital Stock of the Corporation. The Prohibited Owner shall have no rights in the shares held by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any shares held in trust by the Trustee and shall have no rights to dividends or other distributions attributable to the shares held in the Trust.

Section 7.3.3    Distributions and Voting Rights. The Trustee shall have all voting rights and rights to distributions with respect to shares of Capital Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any distribution paid prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee shall be paid by the recipient of such distribution to the Trustee upon demand, and any distribution authorized but unpaid shall be paid when due to the Trustee. Any distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares held in the Trust, and, subject to Maryland law, effective as of the date that the shares of Capital Stock have been transferred to the Trustee, the Trustee shall have the authority with respect to the shares held in the Trust (at the Trustee’s sole discretion) (a) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee and (b) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible

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corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VII, until the Corporation has received notification that shares of Capital Stock have been transferred into a Trust, the Corporation shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

Section 7.3.4    Sale of Shares by Trustee.  Within 20 days of receiving notice from the Corporation that shares of Capital Stock have been transferred to the Trust, the Trustee of the Trust shall sell the shares held in the Trust to a Person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in Section 7.2.1(a). Upon such sale, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 7.3.4. The Prohibited Owner shall receive the lesser of (a) the price paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not give value for the shares in connection with the event causing the shares to be held in the Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the Trust or (b) the price per share received by the Trustee from the sale or other disposition of the shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of distributions that has been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article VII and by the amount of any costs incurred by the Corporation in connection with the transfer. Any net sale proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the

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discovery by the Corporation that shares of Capital Stock have been transferred to the Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 7.3.4, such excess shall be paid to the Trustee upon demand.

Section 7.3.5  Purchase Right in Stock Transferred to the Trustee. Shares of Capital Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (a) the price per share in the transaction that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) or (b) the Market Price on the date the Corporation, or its designee, accepts such offer, both as reduced by the amount of any costs incurred by the Corporation in connection with the transfer. The Corporation shall have the right to accept such offer until the Trustee has sold the shares held in the Trust pursuant to Section 7.3.4. Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner. The Corporation may reduce the amount payable to the Prohibited Owner by the amount of distributions that has been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article VII. The Corporation may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary.

Section 7.3.6  Designation of Charitable Beneficiaries. By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (a) the shares of Capital Stock held in the Trust would not violate the restrictions set forth in Section 7.2.1(a) in the hands of such

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Charitable Beneficiary and (b) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

Section 7.4      Settlement. Nothing in this Article VII shall preclude the settlement of any transaction entered into through the facilities of any national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction is so permitted shall not negate the effect of any other provision of this Article VII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VII.

Section 7.5      Enforcement. The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VII.

Section 7.6      Non-Waiver. No delay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing.

ARTICLE VIII

AMENDMENTS

The Corporation reserves the right from time to time to make any amendment to the Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any shares of outstanding stock. All rights and powers conferred by the Charter on stockholders, directors and officers are granted subject to this reservation. Except for amendments to Article VII or the next sentence of the Charter and except for those amendments permitted to be made without stockholder approval under Maryland

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law or by specific provision in the Charter, any amendment to the Charter shall be valid only if declared advisable by the Board of Directors and approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter.

ARTICLE IX

LIMITATION OF LIABILITY

To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no present or former director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Article IX, nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Article IX, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act that occurred prior to such amendment, repeal or adoption.

ARTICLE X

CORPORATE OPPORTUNITIES

Section 10.1    Renouncement of Corporate Opportunities. To the fullest extent permitted by applicable law, except for business opportunities offered expressly to a director of the Corporation expressly in his or her capacity as a director, the Board of Directors shall have the power to cause the Corporation, on behalf of itself and its subsidiaries, to renounce any interest or expectancy of the Corporation or its subsidiaries in, or in being offered an opportunity to participate in, specified business opportunities or classes or categories of business opportunities that are presented to one or more of the Corporation’s directors even if the opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so and no such person shall have any duty to communicate or offer such business opportunity to the Corporation and, to the fullest extent

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permitted by applicable law, shall not be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty or standard of conduct, as a director or officer or otherwise, by reason of the fact that such person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries.

Section 10.2    Amendment. Neither the amendment nor repeal of this Article X, nor the adoption of any provision of this Charter or the Bylaws, nor, to the fullest extent permitted by Maryland law, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto (or in accordance herewith) existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).

Section 10.3    Severability. If any provision or provisions of this Article X shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (a) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article X (including, without limitation, each portion of any section of this Article X containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Article X (including, without limitation, each such portion of any paragraph of this Article X containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

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Section 10.4    No Limitation of Protections or Defenses. This Article X shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director of the Corporation under the Charter, the Bylaws or applicable law.

Section 10.5    Notice. Any person or entity purchasing or otherwise acquiring any interest in any securities of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article X.

ARTICLE XI

ERISA VCOC COMPLIANCE

For purposes of ERISA venture capital operating company (“VCOC”) compliance, the Corporation hereby establishes the period October 3 through December 31 of each year as its “annual valuation period” as defined in subsection (d)(5)(ii) of the United States Department of Labor Plan Asset Regulation, 29 CFR §2510.3-101.

ARTICLE XII

TERM OF THE CORPORATION

The term of the Corporation shall commence on the date the original Articles of Incorporation were filed with the Maryland Department of Assessments and Taxation and shall terminate on December 31, 2024 (the “Termination Date”) unless the Corporation is sooner dissolved and terminated by the Board of Directors or otherwise extended as provided hereinafter. The Board of Directors may extend the Termination Date for two 1-year terms in its sole discretion. If the Board of Directors choose to extend the Termination Date for both 1-year terms, then at the end of the second extension, the stockholders will have the option to extend the Termination Date, by a majority vote of the stockholders, for two additional 1-year terms. Such Board of Director

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approval and stockholder approval of such extensions must take place at least three months before the scheduled Termination Date. If the Board of Director or stockholders do not approve an extension, the Corporation will begin an orderly sale of its assets within a one-year period from the date the Board of Directors or stockholders made the decision not to extend.

Notwithstanding, the above, in the event that a Listing occurs on or before the Termination Date, the Corporation shall continue perpetually unless dissolved pursuant to a vote of the Shareholders or any applicable provision of the MGCL.

For purposes of this Article, “Listing” shall mean the commencement of trading of the Common Stock on any securities exchange registered as a national securities exchange under Section 6 of the Exchange Act, any over the counter exchange or, as determined in the sole discretion of the Board of Directors, any similar exchange that offers sufficient trading to offer similar liquidity to the stockholders. A Listing shall also be deemed to occur on the effective date of a merger in which the consideration received by the Common stockholders is securities of another entity that are listed on any securities exchange registered as a national securities exchange under Section 6 of the Exchange Act, any over the counter exchange or, as determined in the sole discretion of the Board of Directors, any similar exchange that offers sufficient trading to offer similar liquidity to the stockholders.

ARTICLE XIII

FEES

Section 13.1    Fees.    The Board of Directors may enter into contracts with Cottonwood Residential, Inc., a Maryland corporation or its subsidiaries (individually, a “CRI Entity”) to provide services to the Corporation. In the event a contract is entered into between the Corporation

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and a CRI Entity with respect to the items in Sections 13.2 through 13.5 the fees shall not exceed the amounts set forth below without the majority vote of the stockholders.

Section 13.2    Property Management Fee.    Any property management fee (excluding ancillary services) shall not exceed 3.5% of the annual gross revenues of the property managed.

Section 13.3    Construction Management Fee.    Any construction management fee received for services in supervising any renovation or construction project in excess of $5,000 in or about each property shall not exceed 5% of the cost of the amount that is expended. In the event a CRI Entity is hired as the general contractor with respect to any renovation or construction project, no separate construction management fee will be paid to a CRI Entity.

Section 13.4    Asset Management Fee.    Any asset management fee shall not exceed 0.75% of the gross book value of the Corporation’s assets (until such time as the Board of Directors has established a net asset value of the Corporation’s assets, at which point the asset management fee shall not exceed 0.75% of the gross asset value determined pursuant to the most recent net asset value).

Section 13.5    Construction Services. Any fee paid for services as the general contractor for construction related to loss events at a property shall not exceed the amount of the insurance award related to the applicable loss. Such CRI Entity will have the right to retain the excess over the amount actually incurred by the CRI Entity to perform the required repairs and the contracted amount (i.e. the amount of the insurance proceeds).

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ARTICLE XIV

ASSETS UNDER COMMON CONTROL

If the Corporation ( or a subsidiary thereof) acquires any asset from an Affiliated Entity, the purchase price for such asset shall be based on a third party appraisal or, in the case of an asset that was purchased with the intention of transferring the asset to the Corporation (or a subsidiary thereof), at cost. Any loans between the Corporation and an Affiliated Entity shall be at market rates. For purposes of this Article XIV, an Affiliated Entity shall mean (i) any person directly or indirectly controlling, controlled by or under common control with another person, (ii) any officer, director or partner of such other person and (iii) if such other person is an officer, director or partner, any company for which such person acts in any capacity. The term “person” shall include any natural person, corporation, partnership, trust, unincorporated association or other legal entity.

THIRD:          The amendment to and restatement of the charter as hereinabove set forth have been duly advised by the Board of Directors and approved by the stockholders of the Corporation as required by law.

FOURTH:      The current address of the principal office of the Corporation is as set forth in Article IV of the foregoing amendment and restatement of the charter.

FIFTH:           The name and address of the Corporation’s current resident agent are as set forth in Article IV of the foregoing amendment and restatement of the charter.

SIXTH:           The number of directors of the Corporation and the names of those currently in office are as set forth in Article V of the foregoing amendment and restatement of the charter.

SEVENTH:     The total number of shares of stock that the Corporation had authority to issue immediately prior to the foregoing amendment and restatement of the charter was

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1,000,000,000 shares, $.01 par value per share, all of one class. The aggregate par value of all shares of stock having par value was $10,000,000.

EIGHTH:         The total number of shares of stock that the Corporation has authority to issue pursuant to the foregoing amendment and restatement of the charter is 1,100,000,000, consisting of 1,000,000,000 shares of Common Stock, $.01 par value per share, and 100,000,000 shares of Preferred Stock, $.01 par value per share. The aggregate par value of all authorized shares of stock having par value is $11,000,000.

NINTH:          The undersigned acknowledges these Second Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Corporation has caused these Second Articles of Amendment and Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this 27th day of June, 2016.

ATTEST:	COTTONWOOD MULTIFAMILY REIT II, INC.
/s/ Gregg Christensen	By:	/s/ Chad Christensen
Name: Gregg Christensen, Secretary		Chad Christensen, President

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EX1A-2B BYLAWS

Exhibit 2.2

COTTONWOOD MULTIFAMILY REIT II, INC.

BYLAWS

ARTICLE I

OFFICES

Section 1.1     PRINCIPAL OFFICE.   The principal office of Cottonwood Multifamily REIT II, Inc. (the “Corporation”) in the State of Maryland shall be located at such place as the board of directors of the Corporation (the “Board of Directors”) may designate.

Section 1.2     ADDITIONAL OFFICES.   The Corporation may have additional offices, including a principal executive office, and places of business at such other places, within and without the State of Maryland, as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 2.1     PLACE.   All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set in accordance with these bylaws (the “Bylaws”) and stated in the notice of the meeting.

Section 2.2     ANNUAL MEETING.   An annual meeting of stockholders for the election of directors and the transaction of any other business that may properly come before such meeting shall be held on the date and at the time and place set by the Board of Directors. Failure to hold an annual meeting does not invalidate the Corporation’s existence or affect any otherwise valid act of the Corporation.

Section 2.3     SPECIAL MEETINGS.

    2.3.1   General. Each of the chairman of the board, the chief executive officer, the president, and the Board of Directors may call a special meeting of the stockholders. Except as provided in Section 2.3.2(d), a special meeting of stockholders shall be held on the date and at the time and place set by the person or persons who called the meeting. Subject to, and as set forth in, Section 2.3.2, a special meeting of stockholders shall also be called by the secretary of the Corporation to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders who are entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting.

    2.3.2   Stockholder-Requested Special Meeting.

    (a)       Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary (the “Record Date

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Request Notice”) by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the “Request Record Date”). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be acted on at it, shall be signed by one or more stockholders of record as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), shall bear the date of signature of each such stockholder (or such agent) and shall set forth all information relating to each such stockholder, each individual whom the stockholder proposes to nominate for election as a director and each matter proposed to be acted on at the meeting that would be required to be disclosed in connection with the solicitation of proxies for the election of directors (or the election of each such individual, if applicable) in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such a solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”). Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the tenth day after the first date on which a Record Date Request Notice is received by the secretary. The Record Date Request Notice shall be subject to the requirements of Section 2.11.1(b), (c) and (d).

    (b)       In order for any stockholder to request a special meeting to act on any matter that may properly be considered at a meeting of stockholders, one or more written requests for a special meeting (collectively, the “Special Meeting Request”) signed by stockholders of record (or their agents duly authorized in a writing accompanying the request) as of the Request Record Date entitled to cast not less than a majority of all of the votes entitled to be cast on such matter at such meeting (the “Special Meeting Percentage”) shall be delivered to the secretary. In addition, the Special Meeting Request shall (A) set forth the purpose of the meeting and the matters proposed to be acted on at it (which shall be limited to those lawful matters set forth in the Record Date Request Notice received by the secretary), (B) bear the date of signature of each such stockholder (or such agent) signing the Special Meeting Request, (C) set forth (i) the name and address, as they appear in the Corporation’s books, of each stockholder signing such request (or on whose behalf the Special Meeting Request is signed), (ii) the class, series and number of all shares of stock of the Corporation which are owned (beneficially or of record) by each such stockholder and (iii) the nominee holder for, and number of, shares of stock of the Corporation owned beneficially but not of record by each such stockholder, (D) be sent to the secretary by registered mail, return receipt requested and (E) be received by the secretary within 60 days after the Request Record Date. Any requesting stockholder (or agent duly authorized in a writing accompanying the revocation of the Special Meeting Request) may revoke his, her or its request for a special meeting at any time by written revocation delivered to the secretary.

    (c)       The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of the meeting (including the Corporation’s proxy materials). The secretary shall not be required to call a

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special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by paragraph (b) of this Section 2.3.2, the secretary receives payment of such reasonably estimated cost prior to the preparation and mailing or delivery of such notice of the meeting.

    (d)       Any special meeting called by the secretary upon the request of stockholders (a “Stockholder-Requested Meeting”) shall be held at such place, date and time as may be designated by the Board of Directors; provided, however, that the date of any Stockholder-Requested Meeting shall be not more than 90 days after the record date for such meeting (the “Meeting Record Date”); and provided, further, that if the Board of Directors fails to designate, within ten days after the date that a valid Special Meeting Request is actually received by the secretary (the “Delivery Date”), a date and time for a Stockholder-Requested Meeting, then such meeting shall be held at 2:00 p.m., local time in the location of the Corporation’s principal executive office (“Local Time”) on the 90th day after the Meeting Record Date or, if such 90th day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder-Requested Meeting within ten days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for any Stockholder-Requested Meeting, the Board of Directors may consider such factors as it deems relevant, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting or special meeting. In the case of any Stockholder-Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within 30 days after the Delivery Date, then the close of business on the 30th day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder-Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of paragraph (c) of this Section 2.3.2.

    (e)       If written revocations of the Special Meeting Request have been delivered to the secretary by requesting stockholders and the result is that stockholders of record (or their agents duly authorized in writing), as of the Record Request Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting on the matter to the secretary: (i) if the notice of meeting has not already been delivered, the secretary shall refrain from delivering the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for a special meeting on the matter, or (ii) if the notice of meeting has been delivered and if the secretary first sends to all requesting stockholders who have not revoked requests for a special meeting on the matter written notice of any revocation of a request for the special meeting and written notice of the Corporation’s intention to revoke the notice of the meeting or for the chairman of the meeting to adjourn the meeting without action on the matter, then (A) the secretary may revoke the notice of the meeting at any time before ten days before the commencement of the meeting or (B) the chairman of the meeting may call the meeting to order and adjourn the meeting without acting on the matter. Any request for a special meeting received after a revocation by the secretary of a notice of a meeting shall be considered a request for a new special meeting.

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    (f)       The chairman of the board, chief executive officer, president or Board of Directors may appoint regionally or nationally recognized independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported Special Meeting Request shall be deemed to have been delivered to the secretary until the earlier of (i) five Business Days after receipt by the secretary of such purported request and (ii) such date as the independent inspectors certify to the Corporation that the valid requests received by the secretary represent, as of the Request Record Date, stockholders of record entitled to cast not less than the Special Meeting Percentage. Nothing contained in this Section 2.3.2(f) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

    (g)       For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in New York City are authorized or obligated by law or executive order to close.

Section 2.4     NOTICE. Not less than ten nor more than 90 days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, by mail, by presenting it to such stockholder personally, by leaving it at the stockholder’s residence or usual place of business or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the Corporation, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Corporation may give a single notice to all stockholders who share an address, which single notice shall be effective as to any stockholder at such address, unless such stockholder objects to receiving such single notice or revokes a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

    Subject to Section 2.11.1 of this Article II, any business of the Corporation may be transacted at any annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in such notice. The Corporation may postpone or cancel a meeting of stockholders by making a public announcement (as defined in Section 2.11.3(c)) of such postponement or cancellation prior to the meeting. Notice of the date, time and place to which the meeting is postponed shall

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be given not less than ten days prior to such date and otherwise in the manner set forth in this section.

Section 2.5     ORGANIZATION AND CONDUCT. Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman of the board or, in the case of a vacancy in the office or absence of the chairman of the board, by one of the following officers present at the meeting in the following order: the vice chairman of the board, if there is one, the chief executive officer, the president, the vice presidents in their order of rank and seniority, the secretary or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary or, in the secretary’s absence, an assistant secretary or, in the absence of both the secretary and assistant secretaries, an individual appointed by the Board of Directors or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. In the event that the secretary presides at a meeting of stockholders, an assistant secretary or, in the absence of all assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to stockholders of record of the Corporation, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to stockholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments; (e) determining when and for how long the polls should be opened and when the polls should be closed; (f) maintaining order and security at the meeting; (g) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (h) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum is present, to a later date and time and at a place announced at the meeting, subject to applicable notice requirements, if any; and (i) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 2.6     QUORUM. At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute, the charter of the Corporation (the “Charter”) or these Bylaws for the vote necessary for the approval of any matter. If, however, such quorum is not established at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

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The stockholders present at a meeting that has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough stockholders to leave fewer than would be required to establish a quorum

Section 2.7     VOTING. A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect a director. Each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted, without any right to cumulative voting. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any other matter that may properly come before the meeting, unless more than a majority of the votes cast is required by statute, the Charter or these Bylaws. Unless otherwise provided in the Charter or the Bylaws or expressly required by the Maryland General Corporation Law (“MGCL”), each outstanding share of stock of the Corporation, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.

Section 2.8     PROXIES. A stockholder may cast the votes that the stockholder is entitled to cast either in person or by proxy executed by the stockholder or by the stockholder’s duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Corporation before or at the meeting. No proxy shall be valid after eleven months from its date, unless otherwise provided in the proxy.

Section 2.9     VOTING OF STOCK BY CERTAIN HOLDERS.   Stock of the Corporation registered in the name of a corporation, partnership, trust, limited liability company or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner, a trustee, managing member or other duly authorized officer or agent thereof, as the case may be, or a proxy appointed by any of the foregoing individuals. The Corporation may request such documentation as it deems necessary to establish the authority of any such individual to vote such stock. Any director or other fiduciary may vote stock registered in his or her name in such capacity, either in person or by proxy.

Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholder who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt by the Corporation of such certification, the person specified in the certification shall be

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regarded as, for the purposes set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.

Section 2.10     INSPECTORS. The Board of Directors or the chairman of the meeting may appoint, before or at the meeting, one or more inspectors for the meeting and any successor thereto. The inspectors, if any, shall (i) determine the number of shares of stock represented at the meeting, in person or by proxy, and the validity and effect of proxies, (ii) receive and tabulate all votes, ballots or consents, (iii) report such tabulation to the chairman of the meeting, (iv) hear and determine all challenges and questions arising in connection with the right to vote, and (v) do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

Section 2.11     NOMINATIONS AND PROPOSALS BY STOCKHOLDERS.

      2.11.1   Annual Meetings of Stockholders.

        (a)       Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may only be made at an annual meeting of stockholders (i) by or at the direction of the Board of Directors, (ii) by any stockholder of the Corporation who was a stockholder of record both at the time of giving of notice by the stockholder as provided for in this Section 2.11.1 and at the time of the annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 2.11.1 or (iii) to the extent required by other applicable law by the persons and subject to the applicable requirements provided for therein.

        (b)       For any nomination or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (ii) of Section 2.11.1(a), the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and, in the case of such other business, must otherwise be a proper matter for action by the stockholders. For the first annual meeting, a stockholder’s notice shall be timely if it sets forth all information required under this Section 2.11 and is delivered to the secretary at the principal executive office of the Corporation not later than the close of business on the tenth day after public announcement of the date of such meeting is first made. For all subsequent annual meetings, a stockholder’s notice shall be timely if it sets forth all information required under this Section 2.11 and is delivered to the secretary at the principal executive office of the Corporation not earlier than the 150th day nor later than 5:00 p.m., Local Time, on the 120th day prior to the first anniversary of the date of the proxy statement (as defined in Section 2.11.3(c)) for the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Local Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such

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meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder’s notice as described above.

        (c)       Such stockholder’s notice shall set forth:

          (1)     as to each individual whom the stockholder proposes to nominate for election or reelection as a director (each, a “Proposed Nominee”), all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act;

          (2)     as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the stockholder’ s reasons for proposing such business at the meeting and any material interest in such business of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom;

          (3)     as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person,

          (A)     the class, series and number of all shares of stock or other securities of the Corporation (collectively, the “Company Securities”), if any, which are owned (beneficially or of record) by such stockholder, Proposed Nominee or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person,

          (B)     the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person,

          (C)     whether and the extent to which such stockholder, Proposed Nominee or Stockholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (i) manage risk or benefit of changes in the price of Company Securities for such stockholder, Proposed Nominee or Stockholder Associated Person or (ii) to increase or decrease the voting power of such stockholder, Proposed Nominee or Stockholder Associated Person in the Corporation disproportionately to such person’s economic interest in the Company Securities, and

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          (D)     any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such stockholder, Proposed Nominee or Stockholder Associated Person, individually or in the aggregate, in the Corporation, other than an interest arising from the ownership of Company Securities where such stockholder, Proposed Nominee or Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all holders of the same class or series;

          (4)     as to the stockholder giving the notice, any Stockholder Associated Person with an interest or ownership referred to in 2.11.1(c)(2) and (3) and any Proposed Nominee,

          (A)     the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and the current name and business address, if different, of each such Stockholder Associated Person and any Proposed Nominee and

          (B)     the investment strategy or objective, if any, of such stockholder and each such Stockholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such stockholder and each such Stockholder Associated Person; and

          (5)   to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting any Proposed Nominee or the proposal of other business on the date of such stockholder’s notice.

        (d)       Such stockholder’s notice shall, with respect to any Proposed Nominee, be accompanied by a certificate executed by the Proposed Nominee (i) certifying that such Proposed Nominee (a) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation in connection with service or action as a director that has not been disclosed to the Corporation and (b) will serve as a director of the Corporation if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Corporation, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder, or would be required pursuant to the rules of any national securities exchange on which any securities of the Corporation are listed or over-the-counter market on which any securities of the Corporation are traded).

        (e)       Notwithstanding anything in Section 2.11.1 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the notice for the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.11.1 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal

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executive office of the Corporation not later than 5:00 p.m., Local Time, on the tenth day following the day on which such public announcement to stockholders is first made by the Corporation.

        (f)       For purposes of this Section 2.11, “Stockholder Associated Person” of any stockholder shall mean (i) any person acting in concert with such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder (other than a stockholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such stockholder or such Stockholder Associated Person.

        2.11.2 Special Meetings of Stockholders. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which one or more directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) by a stockholder that has requested that a special meeting be called for the election of one or more directors in compliance with Section 2.3.2, but only with respect to an individual identified as a proposed nominee in the Record Date Request Notice submitted with respect to such special meeting.

        2.11.3 General.

        (a)       If information submitted pursuant to this Section 2.11 by any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 2.11. Any such stockholder shall notify the Corporation of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information. Upon written request by the secretary of the Corporation or the Board of Directors, any such stockholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 2.11, and (B) a written update of any information submitted by the stockholder pursuant to this Section 2.11 as of an earlier date. If a stockholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 2.11.

        (b)       Only such individuals who are nominated in accordance with this Section 2.11 shall be eligible for election by stockholders as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section 2.11. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 2.11.

        (c)       For purposes of this Section 2.11, “public announcement” shall mean disclosure (A) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (B) in a

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document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Exchange Act.

        (d)       Notwithstanding the foregoing provisions of this Section 2.11, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.11. Nothing in this Section 2.11 shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, nor the right of the Corporation to omit a proposal from, the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section 2.11 shall require disclosure of revocable proxies received by the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A under Section 14(a) of the Exchange Act.

Section 2.12   CONTROL SHARE ACQUISITION ACT. Notwithstanding any other provision of the Charter or these Bylaws, Title 3, Subtitle 7 of the MGCL, or any successor statute, shall not apply to any and all acquisitions by any person of shares of stock of the Corporation.

Section 2.13   VOTING BY BALLOT. Voting on any question or in any election may be viva voce unless the chairman of the meeting shall order or any stockholder shall demand that voting be by ballot or otherwise.

ARTICLE III

DIRECTORS

Section 3.1     GENERAL POWERS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section 3.2     NUMBER AND TENURE. The number of directors of the Corporation shall initially be three; provided, however, that the number thereof shall never be less than the minimum number required by the MGCL nor, except as set forth below and in the Charter, more than 15; provided, further, that the tenure of office of a director shall not be affected by any decrease in the number of directors and, following the removal of a director, the Board of Directors may reduce the number of directors to eliminate the directorship previously held by such director. During any period when the holders of one or more classes or series of preferred stock of the Corporation shall have the right, voting separately or together with holders of one or more other classes or series of preferred stock of the Corporation, to elect additional directors as provided for or fixed pursuant to the Charter, then upon commencement and for the duration of the period during which such right continues: (a) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions and (b) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to such director’s earlier death, disqualification, resignation or removal. Except as otherwise

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provided for or fixed pursuant to the Charter, whenever the holders of any such classes or series of preferred stock of the Corporation having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors shall automatically terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.

Section 3.3     ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Directors may be held immediately after and at the same place as the annual meeting of stockholders, with no notice other than this provision of the Bylaws being necessary. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Maryland, for the holding of regular meetings of the Board of Directors without other notice than such resolution.

Section 3.4     SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the chairman of the board, the chief executive officer, the president or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Maryland, for the holding of special meetings of the Board of Directors without other notice than such resolution.

Section 3.5     NOTICE. Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, electronic mail, facsimile transmission, courier or United States mail, with postage thereon prepaid, to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 72 hours prior to the meeting. Notice by United States mail shall be given at least seven days prior to the meeting and shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be given at least three days prior to the meeting and shall be deemed to be given when deposited with or delivered to a courier properly addressed. Telephone notice shall be deemed to be given when the director is personally given such notice in a telephone call to which he or she is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Corporation by the director. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.

Section 3.6     QUORUM. A majority of the directors shall constitute a quorum for transaction of business at any meeting of the Board of Directors; provided, however, that, if less than a majority of such directors is present at such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice; provided, further, that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other

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percentage of a particular group of directors is required for action, a quorum must also include a majority or, if greater, the other percentage of such group.

The directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough directors to leave fewer than required to establish a quorum.

Section 3.7      VOTING. The action of a majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a lesser or greater proportion is required for such action by applicable law, the Charter or these Bylaws. If enough directors have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws.

Section 3.8      CHAIRMAN OF THE BOARD OF DIRECTORS. The Board of Directors shall designate a chairman of the board. The chairman of the board shall be a director and may, but need not be, an officer of the Corporation. If a chairman has not otherwise been designated, the president of the Corporation shall be the chairman of the board. The chairman of the board shall preside, when present, at all meetings of the Board of Directors. The chairman of the board shall have such other powers and shall perform such other duties as may be assigned to him or her by these Bylaws or the Board of Directors. 

Section 3.9      VICE CHAIRMAN OF THE BOARD OF DIRECTORS. The Board of Directors may designate a vice chairman of the board. The vice chairman of the board shall be a director and may, but need not be, an officer of the Corporation. In the absence of the chairman of the board, the vice chairman of the board shall preside over the meetings of the Board of Directors and of the stockholders at which he or she shall be present. The vice chairman of the board shall have such other powers and shall perform such other duties as may be assigned to him or her by these Bylaws or the Board of Directors. 

Section 3.10     CONDUCT OF MEETINGS. All meetings of the Board of Directors shall be called to order and presided over by the chairman of the board, or, in the absence of the chairman, the vice chairman of the board, if any, or in the absence of both the chairman and vice chairman of the board, by a member of the Board of Directors selected by the members present. An individual designated by the presiding officer of the meeting or, in the absence of such appointment or appointed individual, the secretary of the Corporation or, in his or her absence, an assistant secretary of the corporation shall act as secretary at all meetings of the Board of Directors.

Section 3.11     TELEPHONE MEETINGS. Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

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Section 3.12     CONSENT BY DIRECTORS WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each director and is filed with the minutes of proceedings of the Board of Directors.

Section 3.13     RESIGNATIONS. Any director of the Corporation may resign from the Board of Directors or any committee thereof at any time by delivering his or her resignation to the Board of Directors, the chairman of the board or the secretary. Such resignation shall take effect at the time specified therein, which may be on or after the time of receipt of the resignation, or if no time be specified, at the time of the receipt of such resignation by the Board of Directors, the chairman of the board or the secretary. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

Section 3.14     VACANCIES. If for any reason any or all of the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder. Except as may be provided for or fixed pursuant to the Charter with respect to directors that the holders of one or more classes or series of preferred stock of the Corporation shall have the right to elect, and except for any rights of stockholders to fill a vacancy created by the removal of a director as may be required by statute, any and all vacancies on the Board of Directors resulting from any cause, including, without limitation (i) the death, retirement, resignation or removal of a director or (ii) an increase in the number of directors on the Board of Directors pursuant to these Bylaws may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any such director elected to fill such a vacancy shall serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies.

Section 3.15     COMPENSATION. Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation for any service or activity they performed or engaged in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with any other service or activity they perform or engage in as directors; and nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.

Section 3.16     RELIANCE. Each director and officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Corporation or any subsidiary thereof whom the director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the director or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a director, by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.

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Section 3.17     RATIFICATION. The Board of Directors or the stockholders may ratify and make binding on the Corporation any action or inaction by the Corporation or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the matter. Moreover, any action or inaction questioned in any stockholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a director, officer or stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting, or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the stockholders and, if so ratified, shall have the same force and effect as if the questioned action or inaction had been originally duly authorized, and such ratification shall be binding upon the Corporation and its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

Section 3.18     OUTSIDE ACTIVITIES. A director who is not also an officer of the Corporation shall have no responsibility to devote his or her full time to the affairs of the Corporation. Any director or officer of the Corporation, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to or in addition to or in competition with those of or relating to the Corporation.

Section 3.19     EMERGENCY PROVISIONS. Notwithstanding any other provision in the Charter or these Bylaws, this Section 3.19 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors under Article III of these Bylaws cannot readily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Board of Directors, (a) a meeting of the Board of Directors or a committee thereof may be called by any director or officer by any means feasible under the circumstances; (b) notice of any meeting of the Board of Directors during such an Emergency may be given less than 24 hours prior to the meeting to as many directors and by such means as may be feasible at the time, including publication, television or radio; and (c) the number of directors necessary to constitute a quorum shall be one-third of the entire Board of Directors.

ARTICLE IV

COMMITTEES

Section 4.1     NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may appoint from among its members one or more committees, composed of one or more directors, which committees shall serve at the pleasure of the Board of Directors.

Section 4.2     POWERS. The Board of Directors may delegate to committees appointed under Section 4.1 any of the powers of the Board of Directors, except as prohibited by law, the Charter or these Bylaws.

Section 4.3     MEETINGS. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of

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the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board of Directors shall otherwise provide.

Section 4.4     TELEPHONE MEETINGS. Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 4.5     CONSENT BY COMMITTEES WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each member of the committee and such consent is filed with the minutes of proceedings of such committee.

Section 4.6     VACANCIES. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

ARTICLE V

OFFICERS

Section 5.1     GENERAL PROVISIONS. The officers of the Corporation shall include a president, a secretary and a chief financial officer and may include a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, one or more assistant secretaries, one or more assistant treasurers and such other officers with such titles, powers and duties as are determined from time to time. The officers of the Corporation shall be elected or appointed by the Board of Directors or the president, except that the chief executive officer (if any) or president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or other officers. Each officer shall hold office until his or her death, resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent. In the event of the absence or disability of any officer, the Board of Directors or the chief executive officer may designate another officer to act temporarily in the place of such absent or disabled officer.

Section 5.2     REMOVAL AND RESIGNATION. Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if, in their judgment, the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the board, the chief executive officer, the president or the secretary.

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Any resignation shall take effect immediately upon its receipt, if the time when it shall become effective is not specified in the resignation, or at such later time specified therein. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation or such officer.

Section 5.3     VACANCIES. A vacancy in any office may be filled by the Board of Directors or the president for the balance of the term.

Section 5.4     CHIEF EXECUTIVE OFFICER. The Board of Directors may designate a chief executive officer. The chief executive officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. The chief executive officer may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time. If the Corporation has not designated a chief executive officer, the president shall be authorized to take all actions of the chief executive officer.

Section 5.5     CHIEF OPERATING OFFICER. The Board of Directors or chief executive officer may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as determined by the Board of Directors or the chief executive officer.

Section 5.6     CHIEF FINANCIAL OFFICER. The Board of Directors or chief executive officer may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as determined by the Board of Directors or the chief executive officer.

Section 5.7     PRESIDENT. In the absence of a chief executive officer, the president shall in general supervise and control all of the business and affairs of the Corporation. In the absence of a designation of a chief operating officer by the Board of Directors, the president shall be the chief operating officer. The president may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors or the chief executive officer from time to time.

Section 5.8     VICE PRESIDENTS. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by

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the chief executive officer, the president or the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president, senior vice president or vice president for particular areas of responsibility.

Section 5.9      SECRETARY. The secretary shall (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records; (d) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) have general charge of the stock transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Directors.

Section 5.10     TREASURER. The treasurer shall have the custody of the funds and securities of the Corporation, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors or the chief executive officer and in general perform such other duties as from time to time may be assigned to the treasurer by the chief executive officer, the president or the Board of Directors. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.

The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the chief executive officer, the president and the Board of Directors, whenever such parties may so require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.

Section 5.11     ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries and assistant treasurers (a) shall have the power to perform all the duties of the secretary and the treasurer, respectively, in such respective officer’s absence and (b) shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the chief executive officer, the president or the Board of Directors.

Section 5.12     COMPENSATION. The salaries and other compensation of the officers shall be fixed from time to time by or under the authority of the Board of Directors and no officer shall be prevented from receiving such salary or other compensation by reason of the fact that he or she is also a director.

ARTICLE VI

CONTRACTS, CHECKS AND DEPOSITS

Section 6.1     CONTRACTS. The Board of Directors may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the

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Corporation if authorized or ratified, generally or specifically, by action of the Board of Directors and executed by an authorized person.

Section 6.2     CHECKS AND DRAFTS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.

Section 6.3     DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited or invested from time to time to the credit of the Corporation as the Board of Directors, the chief executive officer, the president, the chief financial officer or any other officer designated by the Board of Directors may determine.

ARTICLE VII

STOCK

Section 7.1     CERTIFICATES. Except as may be otherwise provided by the Board of Directors, stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them. In the event that the Corporation issues shares of stock represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized officer, shall contain the statements and information required by the MGCL and shall be signed by the officers of the Corporation in the manner permitted by the MGCL. In the event that the Corporation issues shares of stock without certificates, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates. There shall be no differences in the rights and obligations of stockholders based on whether or not their shares are represented by certificates.

Section 7.2     TRANSFERS. All transfers of shares of stock shall be made on the books of the Corporation, by the holder of the shares of stock, in person or by his or her attorney, in such manner as the Board of Directors or any officer of the Corporation may prescribe and, if such shares of stock are certificated, upon surrender of certificates duly endorsed. The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Directors that such shares of stock shall no longer be represented by certificates. Upon the transfer of uncertificated shares of stock, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares of stock a written statement of the information required by the MGCL to be included on stock certificates.

The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share of stock or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland.

Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

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Section 7.3     REPLACEMENT CERTIFICATE. Any officer of the Corporation may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares of stock have ceased to be certificated, no new certificate shall be issued unless requested in writing by such stockholder and the Board of Directors has determined that such certificates may be issued. Unless otherwise determined by an officer of the Corporation, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Corporation a bond in such sums as it may direct as indemnity against any claim that may be made against the Corporation.

Section 7.4     FIXING OF RECORD DATE. The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

When a record date for the determination of stockholders entitled to notice of and to vote at any meeting of stockholders has been set as provided in this Section 7.4, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned or postponed to a date more than 120 days after the record date originally fixed for the meeting, in which case a new record date for such meeting may be determined as set forth herein.

Section 7.5     STOCK LEDGER. The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate stock ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.

Section 7.6     FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors may authorize the Corporation to issue fractional stock or scrip, all on such terms and under such conditions as it may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may issue units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board of Directors may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.

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ARTICLE VIII

ACCOUNTING YEAR

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

Section 9.1     AUTHORIZATION. Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors and declared by the Corporation, subject to the provisions of applicable law and the Charter. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of applicable law and the Charter.

Section 9.2     CONTINGENCIES. Before payment of any dividends or other distributions, there may be set aside (but there is no duty to set aside) out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine, and the Board of Directors may modify or abolish any such reserve.

ARTICLE X

INDEMNIFICATION AND ADVANCE OF EXPENSES

Section 10.1     INDEMNIFICATION TO THE EXTENT PERMITTED BY LAW.

      10.1.1 The Corporation shall, to the maximum extent permitted by Maryland law as in effect from time to time, indemnify, and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (a) any individual who is a present or former director or officer of the Corporation or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his or her service in such capacity. The Corporation shall have the power, with the approval of the Board of Directors, to provide such indemnification and advancement of expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation.

      10.1.2 For purposes of this Article X, each individual entitled to indemnification and advancement of expenses as set forth in Section 10.1.1, each individual the

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Corporation may, with the approval of the Board of Directors, provide with indemnification and advancement of expenses is referred to as an “Indemnitee.”

    10.1.3 Neither the amendment nor repeal of this Article X, nor the adoption or amendment of any other provision of the Charter or these Bylaws inconsistent with this Article X, shall eliminate or reduce the protection afforded by this Article X with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

Section 10.2   INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any Indemnitee against any liability, whether or not the Corporation would have the power to indemnify him or her against such liability.

Section 10.3  NON-EXCLUSIVE RIGHT TO INDEMNIFY; HEIRS AND PERSONAL REPRESENTATIVES. The indemnification and payment or reimbursement of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way the rights to which any person seeking indemnification or reimbursement of expenses may become entitled to under any bylaw, regulation, insurance agreement or otherwise. The rights to indemnification set forth in this Article X are in addition to all rights to which any Indemnitee may be entitled as a matter of law, and shall inure to the benefit of the heirs and personal representatives of each Indemnitee.

Section 10.4   NO LIMITATION. In addition to any indemnification permitted by these Bylaws, the Board of Directors shall, in its sole discretion, have the power to grant such indemnification as it deems in the interest of the Corporation to the full extent permitted by law. This Article X shall not limit the Corporation’s power to indemnify against liabilities not arising from a person’s serving the Corporation as a director, officer, employee or agent.

ARTICLE XI

WAIVER OF NOTICE

Whenever any notice of any meeting is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice of such meeting, unless specifically required by statute. The attendance of any person at any such meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

ARTICLE XII

AMENDMENT OF BYLAWS

The Board of Directors shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.

22

ARTICLE XIII

MISCELLANEOUS

Section 13.1   SEVERABILITY. If any provision of these Bylaws shall be held invalid or unenforceable in any respect, such holding shall apply only to the extent of any such invalidity or unenforceability and shall not in any manner affect, impair or render invalid or unenforceable any other provision of these Bylaws in any jurisdiction.

Section 13.2   VOTING STOCK IN OTHER COMPANIES. Stock of other corporations or associations, registered in the name of the Corporation, may be voted by the chief executive officer, the president, a vice president, or a proxy appointed by any of them. The Board of Directors, however, may by resolution appoint some other person to vote such shares, in which case such person shall be entitled to vote such shares upon the production of a certified copy of such resolution.

Section 13.3   EXECUTION OF DOCUMENTS. A person who holds more than one office in the Corporation may not act in more than one capacity to execute, acknowledge, or verify an instrument required by law to be executed, acknowledged, or verified by more than one officer.

ARTICLE XIV

EXCLUSIVE FORUM FOR CERTAIN LITIGATION

Unless the Corporation consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for:

(a)       any derivative action or proceeding brought on behalf of the Corporation;

(b)       any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Corporation to the Corporation or to the stockholders of the Corporation;

(c)       any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision of the MGCL, the charter of the Corporation or these Bylaws;

(d)       any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation that is governed by the internal affairs doctrine; or

(e)       any other action asserting a claim of any nature brought by or on behalf of any stockholder, in such stockholder’s capacity as such, of the Corporation (which, for purposes of this Article XIV, shall mean any stockholder of record or any beneficial owners of stock of the Corporation either on his, her or its own behalf or on behalf of any series or class of shares of

23

stock of the Corporation or any group of stockholders of the Corporation) against the Corporation or any director or officer or other employee of the Corporation.

As the Corporation would be irreparably harmed by any action filed in violation of this Article XIV and could not be adequately compensated by monetary damages alone, the Corporation shall be entitled to specific performance of this Article XIV and to temporary, preliminary and permanent injunctive relief to specifically enforce the terms of this Article XIV and to prevent any breaches thereof.

24

EX1A-4 SUBS AGMT

Exhibit 4

Cottonwood Multifamily REIT II, Inc. SUBSCRIPTION AGREEMENT & INVESTOR INSTRUCTIONS
If you need assistance in completing this Subscription Agreement please call (844) 422-2584. Please send all paperwork and subscription payments to:
UMB Bank, N.A., as escrow agent for Cottonwood Multifamily REIT II, Inc. 1010 Grand Blvd., 4th Floor Kansas City, MO 64106 Wires may be sent to: FFC: Investor Name ABA#: 101000695 DDA#: 9872190610
1. INVESTMENT INFORMATION
Amount of Subscription: $
Investment Type: Initial Investment (Minimum Subscription: $10,000)
Additional Investment (No Minimum Subscription Amount)
Non-Qualified Tenants in Common(1) Partnership(4)
Joint Tenants with Right of Survivorship(1) C Corporation(4)
Individual(2) S Corporation(4)
Trust(3) Limited Liability Company(4)
Community Property(1) Other:
Uniform Gift to Minors Act: State of Uniform Transfer to Minors Act: State of
Qualified Traditional (Individual) IRA(5) Pension or Profit Sharing Plan(3)
Simple IRA(5) KEOGH Plan(3)
SEP IRA(5) Other: ROTH IRA(5)
Beneficial as Beneficiary for:
Custodian Information (to be completed by Custodian)
Name of Custodian:
Street Address:
City, State, Zip: Phone No.:
Custodian Tax ID No.:
Custodian Account No.:
(1) All parties must sign this Subscription Agreement
(2) In community property states, if the investor is married, then his or her spouse must sign and submit the Consent of Spouse attached hereto as Attachment B
(3) Please attach a trustee certification or pages of the trust/plan document which lists the names of the trust/plan and trustees authorized to sign on behalf of the trust/plan
(4) Please attach evidence of authority to sign on behalf of the entity
(5) Please submit this subscription agreement to the custodian of record prior to submitting to DST Systems
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Cottonwood Multifamily REIT II, Inc.

2. INVESTOR INFORMATION

Section A: For Individuals, Community Property, Joint Tenants, Tenants is Common, and IRA accounts*
Name(s):
Mailing Address: E-mail Address:
Phone: Home: (            ) Mobile: (_____)
Social Security Number: Date of Birth:______________________________________
Joint Owner Social Security Number: Joint Owner Date of Birth:
Section B: For Trust, Partnership, LLC, and Corporation accounts*
Name of Trust or Entity:
Tax-ID of Trust or Entity: Date of Formation:
Name of Trustee(s) or Authorized Person(s):
Social Security Number(s): Date of Birth(s):
Mailing Address: E-mail Address:
Phone: Home: (            ) Mobile: (_____)

* [One Form W-9 attached hereto as Attachment A must be completed per account]

Please check one of the following options for delivery of investor information:
By checking this box, the Company will send certain investor communications to you in electronic form to the e-mail address provided in this section. Investor communications that may be delivered electronically include account statements, tax forms, annual reports, proxy statements and other communications. By electing electronic delivery, you: (i) agree that you have the appropriate hardware and software to receive e-mail notifications and view PDF documents; (ii) understand that you may incur certain costs associated with downloading and printing investor documents; and (iii) understand that electronic delivery also involves risks related to system or network outages that could impair your timely receipt of or access to your documents. The Company may choose to send one or more items to you in paper form despite your consent to electronic delivery. You may also request a paper copy of any particular investor document. Your consent will be effective until you revoke it in writing to the Company.
By checking this box, the Company will send all investor communications to you in paper form.
3. DISTRIBUTIONS (indicate to whom distributions should be sent)
I hereby authorize the Company or its agent (DST Systems) to initiate entries into the account listed below or to send funds directly to the financial institution/individual(s) listed below. This authorization will remain in effect until you notify the Company or DST Systems in writing to cancel it with time to afford a reasonable opportunity to act on it. This authorization relates solely to this investment. Please select one of the options below:
I choose to have my distributions to be directly deposited into my bank account. [Attach voided check and complete information below]
I choose to have checks sent to the person(s) or financial institution listed below. [Distributions for custodial accounts will be sent to the Custodian of record]
I choose to have checks sent to
the individual(s) listed in Section 2.
Bank, Brokerage Firm or Person:
Mailing Address:
Account Type: Account Number: ABA Routing Number:
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Cottonwood Multifamily REIT II, Inc.
4. INVESTOR SUITABILITY REQUIREMENTS
Please check one of the following:
I AM AN ACCREDITED INVESTOR (check one of the following):
If a natural person, I hereby represent and warrant that (i) I have an individual net worth, or joint net worth with my spouse (exclusive of the value of my primary residence) of more than $1,000,000 (for purposes of determining net worth, exclude the value of your primary residence as well as the amount of indebtedness secured by your primary residence, up to the fair market value. Any amount in excess of the fair market value of your primary residence must be included as a liability. In the event the indebtedness on your primary residence was increased in the 60 days preceding the completion of this Subscription Agreement, the amount of the increase must be included as a liability in the net worth calculation.); or (ii) I have individual income in excess of $200,000, or joint income with my spouse in excess of $300,000, in each of the two most recent years and I have a reasonable expectation of reaching the same income level in the current year.
If other than a natural person, such entity represents and warrants that such entity is (i) a corporation, an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring shares, with total assets in excess of $5,000,000; or (ii) a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring shares and whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in shares; or (iii) a broker-dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or (iv) an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”); or (v) a business development company (as defined in section 2(a)(48) of the Investment Company Act); or (vi) a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; or (vii) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment decision is made by a plan fiduciary (as defined in section 3(21) of ERISA), which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons who are Accredited Investors; or (viii) a private business development company (as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended); or (ix) a bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; or (x) an entity in which all of the equity owners are Accredited Investors; or (xi) a grantor revocable trust where the grantors meet the qualifications under “Natural Persons” above.
I AM NOT AN ACCREDITED INVESTOR (check one of the following):
If a natural person, I hereby represent and warrant that the investment in shares is not more than 10% of the greater of (i) my individual net worth, or joint net worth with my spouse, excluding the value of my primary residence (for purposes of determining net worth, exclude the value of your primary residence as well as the amount of indebtedness secured by your primary residence, up to the fair market value. Any amount in excess of the fair market value of your primary residence must be included as a liability. In the event the indebtedness on your primary residence was increased in the 60 days preceding the completion of this Subscription Agreement, the amount of the increase must be included as a liability in the net worth calculation.); or (ii) my individual income, or joint income with my spouse, in each of the two most recent years and I have a reasonable expectation that an investment in shares will not exceed 10% of my individual or joint income in the current year. If other than a natural person, such entity represents and warrants that the investment in shares is not more than 10% of the greater of (i) such entity’s revenue, as of the most recently completed fiscal year; or (ii) such entity’s net assets, as of the most recently completed fiscal year.
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Cottonwood Multifamily REIT II, Inc.
5. INVESTOR SIGNATURES
THE UNDERSIGNED INVESTOR HEREBY ACKNOWLEDGES AND REPRESENTS THAT IT HAS RECEIVED THE FINAL OFFERING CIRCULAR, AS SUPPLEMENTED, AND ANY EXHIBITS AND APPENDICES THERETO.
THE UNDERSIGNED INVESTOR HEREBY CERTIFIES THAT ALL OF THE INFORMATION, REPRESENTATIONS, WARRANTIES AND CERTIFICATIONS SET FORTH HEREIN ARE TRUE AND CORRECT IN ALL RESPECTS. THE UNDERSIGNED INVESTOR HAS THE AUTHORITY TO ENTER INTO THIS SUBSCRIPTION AGREEMENT ON BEHALF OF THE PERSON(S) OR ENTITY REGISTERED IN SECTION 2 ABOVE.
Executed this day of ___________________, _______________.
X X
Signature (Investor, or Authorized Signatory)
Joint Owner Signature (Investor, or Authorized Signatory)
Printed Name
Printed Name
Title (if applicable)
Title (if applicable)

* CUSTODIAL APPROVAL:

By executing this Subscription Agreement, Custodian certifies to Cottonwood Multifamily REIT II, Inc. (the “Company”) that the shares purchased pursuant to this Subscription Agreement are held for the benefit of the investor named in Section 2 of this Subscription Agreement (the “Beneficial Owner”); Custodian agrees to notify the Company promptly, but in any event within 30 days, of any changes in the name of the Beneficial Owner or the number of shares held by the Custodian for the benefit of the Beneficial Owner; Custodian confirms that the Company is entitled to rely on these representations for purposes of determining the shareholders entitled to notice of or to vote at each annual or special meeting of shareholders of the Company until delivery by the Custodian to the Company of a written statement revoking such representations (provided, however, that any such revocation delivered after the record date or the closing of the stock transfer books of the Company in respect of any annual or special meeting of the shareholders, but on or prior to the date of such annual or special meeting of shareholders, shall not be effective until after the holding of such annual or special meeting of shareholders of the Company), then each Beneficial Owner (and not the Custodian) will be deemed the holder of record for the shares of common stock entitled to notice of or to vote at each annual or special meeting of shareholders.
X             
Signature (Custodian’s Authorized Signatory)
Printed Name
6. COMPANY APPROVAL (to be completed by the Company upon acceptance of this Subscription Agreement)
The Company hereby accepts this Subscription Agreement.
Dated:             , 20            
Cottonwood Multifamily REIT II, Inc., a Maryland corporation By:            Printed Name:            Title:            

* Custodian stamp or Medallion Signature Guarantee required on custodied accounts.

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Cottonwood Multifamily REIT II, Inc.
7. BROKER-DEALER OR REGISTERED INVESTMENT ADVISOR—REPRESENTATIONS & WARRANTIES
The investor’s registered representative (the “Registered Representative”) of a participating broker-dealer (“Broker-Dealer”) or an authorized representative of the investor’s Registered Investment Advisor (“Registered Investment Advisor”) must sign below to complete the order.
If sold by a Registered Representative, the Registered Representative and the Broker-Dealer hereby represent and warrant that (i) he or she and the Broker-Dealer are duly licensed and may lawfully sell shares of common stock in the state designated as the investor’s legal residence and (ii) the Registered Representative and the Broker-Dealer are aware of and have reviewed Rule 262 of Regulation A of the Securities Act of 1933 and neither the Registered Representative nor the Broker-Dealer is subject to statutory disqualification under such Rule 262. If sold by a Registered Investment Advisor, the Registered Investment Advisor represents that it is either registered under the Investment Advisers Act of 1940 or exempt from registration.
Investor suitability requirements have been established by the Company and are in the Offering Circular under “Who May Invest.” Before recommending the purchase of shares, we have reasonable grounds to believe, on the basis of information supplied by the subscriber concerning his or her investment objectives, other investments, financial situation and needs, and other pertinent information that: (i) the subscriber is an “accredited investor” as defined in Section 501(a) of Regulation D of the Securities Act or, if the investor is not an “accredited investor” the investment in shares will not exceed 10% of the investors net income or net assets; (ii) the subscriber meets the investor suitability requirements established by the Company; (iii) the subscriber has a net worth and income sufficient to sustain the risks inherent in the shares, including loss of investment and lack of liquidity; and (iv) the shares are otherwise a suitable investment for the subscriber. We will maintain in our files documents disclosing the basis upon which the suitability of this subscriber was determined as well as documents establishing a pre-existing relationship with the subscriber. We verify that the above subscription either does not involve a discretionary account or, if so, that the subscriber’s prior written approval was obtained relating to the liquidity and marketability of the shares during the term of the investment.
Name of Investor:
Broker-Dealer Firm Name:
Registered Representative:
(Please Print)
Registered Representative’s BRANCH ADDRESS:
Operations E-mail address:
Rep E-mail address:
Branch Phone Number: (            )
The representations and warranties above are and shall be continuing representations and warranties throughout the term of the Offering. In the event that any of these representations or warranties become untrue, the Registered Representative and Broker-Dealer or the Registered
Investment Advisor will immediately notify the Company in writing of the fact which makes the representation or warranty untrue.
X
X
Signature of Registered Representative or Registered
Broker-Dealer Principal Approval Signature
Investment Advisor
Date
Date
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Cottonwood Multifamily REIT II, Inc.                         ATTACHMENT A                 FORM W-9

(Rev. December 2014)         Department of the Treasury         Internal Revenue Service         Request for Taxpayer
Identification Number and Certification         Give Form to the requester. Do not send to the IRS.         Print or type
See Specific Instructions on page 2.
1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
2 Business name/disregarded entity name, if different from above
3 Check appropriate box for federal tax classification; check only one of the following seven boxes:
Individual/sole proprietor or C Corporation S Corporation Partnership Trust/estate single-member LLC
Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership)u
Note. For a single-member LLC that is disregarded, do not check LLC; check the appropriate box in the line above for the tax classification of the single-member owner.
Other (see instructions)u
4 Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3):
Exempt payee code (if any) Exemption from FATCA reporting
code (if any)
(Applies to accounts maintained outside the U.S.)
5 Address (number, street, and apt. or suite no.)
6 City, state, and ZIP code
7 List account number(s) here (optional)
Requester’s name and address (optional)
Part I Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3.
Note. If the account is in more than one name, see the instructions for line 1 and the chart on page 4 for guidelines on whose number to enter.
Social security number or
Employer identification number
Part II Certification
Under penalties of perjury, I certify that:

1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and

2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and

3. I am a U.S. citizen or other U.S. person (defined below); and

4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct.

Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3.
Sign Here Signature of         U.S. person  u
Date  u
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. Information about developments affecting Form W-9 (such as legislation enacted after we release it) is at www.irs.gov/fw9.
Purpose of Form
An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following:
• Form 1099-INT (interest earned or paid)
• Form 1099-DIV (dividends, including those from stocks or mutual funds)
• Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
• Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
• Form 1099-S (proceeds from real estate transactions)
• Form 1099-K (merchant card and third party network transactions)
• Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
• Form 1099-C (canceled debt)
• Form 1099-A (acquisition or abandonment of secured property)
Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding? on page 2.
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting? on page 2 for further information.
Cat. No. 10231X         Form W-9 (Rev. 12-2014)             6 of 7

Cottonwood Multifamily REIT II, Inc.
ATTACHMENT B
CONSENT OF SPOUSE
(For purchasers in community property states, which are currently
Alaska, Arizona, California, Idaho, Louisiana, Nevada,
New Mexico, Texas, Washington and Wisconsin)

I,                                                                                          , spouse of                                                                                          
  (Print Name of Spouse)                                                                     (Print Name of Investor)
have read and hereby approve of the Instructions to Investors and Subscription Agreement of Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Company”), for Common Stock of the Company (the “Subscription Agreement”), which my spouse has signed. I hereby appoint my spouse as my attorney-in-fact with respect to the exercise of any rights related to a purchase of any such shares and agree to be bound by the provisions of the Subscription Agreement, the Offering Statement of common stock of the Company, dated [                                    ], 20[                ] and all Exhibits and supplements thereto, and any other documents related to the purchase of any such shares (collectively, the “Purchase Documents”) insofar as I may have any rights in said Purchase Documents or any property or interest subject thereto under the community property laws of the State of                              or similar laws relating to marital property in effect in the state of our residence as of the date of signing of the Subscription Agreement and/or the Purchase Documents.
Dated:
                                                         , 20                
Signature of Spouse
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EX1A-6 MAT CTRCT

Exhibit 6.1

SHARE REPURCHASE PROGRAM

OF

COTTONWOOD MULTIFAMILY REIT II, INC.

This Share Repurchase Program (our “Program”), effective as of [                             ], 2016, is intended to provide limited interim liquidity for our shareholders until a bona fide secondary market develops for our shares of common stock (the “Shares”). No such market presently exists, and we can provide no assurance that any market for the Shares will ever develop.

Prior to the time that a bona fide secondary market for our Shares has developed, shareholders who meet the applicable requirements, as described herein, may receive the benefit of limited liquidity by presenting for repurchase all or a portion of their Shares to us at any time in accordance with the procedures outlined herein. At that time, we may, subject to the conditions and the Repurchase Limitation described below, repurchase for cash such Shares. The terms on which we repurchase Shares may differ between repurchases upon the death or “complete disability” (as defined herein) of the shareholder (collectively referred to herein as “Exceptional Repurchases”) and all other repurchases (referred to herein as “Ordinary Repurchases”).

Ordinary Repurchases

In the case of Ordinary Repurchases, upon the request of a shareholder, repurchases will be made in the discretion of our Board of Directors and at the following repurchase price:

(i) Beginning on the first anniversary of the date such shareholder acquired the shares in question (the “Acquisition Date”) and prior to the second anniversary of the Acquisition Date, the purchase price for the repurchased shares will be equal to 80% of the Estimated Value (as defined below) of the Shares;

(ii) Beginning on the second year anniversary of the Acquisition Date and prior to the third anniversary of the Acquisition Date, the purchase price for the repurchased shares will be equal to 85% of the Estimated Value of the Shares;

(iii) Beginning on the third year anniversary of the Acquisition Date and prior to the fourth anniversary of the Acquisition Date, the purchase price for the repurchased shares will be equal to 90% of the Estimated Value of the Shares; and

(iv) Beginning on the fourth year anniversary of the Acquisition Date and every year thereafter, the purchase price for the repurchased shares will be equal to 95% of the Estimated Value of the Shares.

For purposes of the Share Repurchase Program, the Estimated Value per Share will be equal to the price per Share the original purchaser or purchasers of Shares paid to us for all of his or her Shares (the “Original Share Price”) until the day we disclose a new Estimated Value per Share, which shall be subsequent to completion of the offering and sale by the Company of up to 5,000,000 Shares pursuant to the Cottonwood Multifamily REIT II, Inc. Offering Circular dated [                             ], 2016, as supplemented or amended (the “Offering”). Thereafter, the Estimated Value per Share (which shall be the net asset value of our common stock) shall be determined by our Board of Directors. We plan to determine the net asset value of our common stock no later than 150 days following the second anniversary of breaking escrow. The net asset value will be determined by adjusting for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the Shares. The purchase price per Share for Shares repurchased pursuant to the Program will be further reduced by

1

the aggregate amount of net proceeds per Share, if any, distributed to our shareholders prior to the Repurchase Date (as defined below) as a result of the sale of one or more of our assets that constitutes a return of capital distribution as a result of such sales.

Exceptional Repurchases

In addition, and subject to the conditions and limitations described below, we may repurchase Shares upon the death of a shareholder who is a natural person, including Shares held by the shareholder through a revocable grantor trust, or an IRA or other retirement or profit-sharing plan, after receiving written notice from the estate of the shareholder, the recipient of the Shares through bequest or inheritance, or, in the case of a revocable grantor trust, the trustee of the trust, having the sole ability to request repurchase on behalf of the trust. If spouses are joint registered holders of Shares, the request to repurchase the Shares may be made if either of the registered holders dies.

Furthermore, and subject to the conditions and limitations described below, we may repurchase Shares held by a shareholder who is a natural person with a complete disability, including Shares held by the shareholder through a revocable grantor trust, or an IRA or other retirement or profit-sharing plan, after receiving written notice from the shareholder, provided that the condition causing the qualifying disability was not pre-existing on the date that the shareholder became a shareholder. If spouses are joint registered holders of Shares, the request to repurchase the Shares may be made if either of the registered holders becomes completely disabled.

Our Board of Directors, in its sole discretion, will determine in good faith whether a shareholder becomes completely disabled based on the definition of “disabled” under the federal Social Security Act. The federal Social Security Act generally defines disabled or disability as the inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment(s) that either (i) can be expected to result in death or (ii) has lasted or that we can expect to last for a continuous period of not less than 12 months. Our Board of Directors may rely on a determination made by the Social Security Administration’s office in the shareholder’s state in making its determination that the shareholder’s medical condition is considered a disability under the Social Security Act.

In the case of Exceptional Repurchases, the purchase price per Share for the repurchased Shares will be equal to 95% of the Estimated Value per Share (as defined above).

General Terms for Repurchase

Our Program is generally available only for shareholders who have held their Shares for at least one year and who acquired their Shares directly from us or the transferees mentioned below, and is not intended to provide liquidity to any shareholder who acquired his or her Shares by purchase from another shareholder. In connection with a request for repurchase, the shareholder or his or her estate, heir or beneficiary will be required to certify to us that the shareholder either (1) acquired the Shares requested to be repurchased directly from us or (2) acquired the Shares from the original subscriber by way of a bona fide gift not for value to, or for the benefit of, a member of the subscriber’s immediate or extended family (including the subscriber’s spouse, parents, siblings, children or grandchildren and including relatives by marriage) or through a transfer to a custodian, trustee or other fiduciary for the account of the subscriber or members of the subscriber’s immediate or extended family in connection with an estate planning transaction, including by bequest or inheritance upon death or operation of law.

We will not repurchase Shares if the Board of Directors determines, in its sole discretion, that the repurchase price determined in accordance with the terms of this Program exceeds the then current fair market value of the Shares to be repurchased.

2

We will not repurchase Shares that are subject to liens or other encumbrances until the shareholder presents evidence that the liens or encumbrances have been removed. If any Shares subject to a lien are inadvertently repurchased or we shall otherwise be required to pay to any other party all or any amount in respect of the value of repurchased Shares, then the recipient of amounts in respect of repurchase shall repay to us the amount paid for such repurchase up to the amount we are required to pay to such other party.

Notwithstanding the repurchase prices established above, our Board of Directors may determine, whether pursuant to formulae or processes approved by our Board of Directors or otherwise set by our Board of Directors, the repurchase price of the Shares, which may differ between Ordinary Repurchases and Exceptional Repurchases; provided, however, that we must provide at least 30 days’ notice to shareholders before applying the new price that is set pursuant to this sentence to either Ordinary Repurchases or Exceptional Repurchases.

Unless otherwise approved by the Board of Directors in their sole discretion, we will repurchase Shares on the last business day of each quarter (the “Repurchase Date”); provided, however, we will not repurchase shares on the same day we make a dividend payment. We will not repurchase, during any twelve-month period, more than 3% of the weighted average number of Shares outstanding during the prior calendar year (the “Repurchase Limitation”), although our Board of Directors reserves the right to increase or decrease the Repurchase Limitation from time to time. The Repurchase Limitation applies to all repurchases, whether Ordinary or Exceptional Repurchases.

Subject to the Repurchase Limitation outlined above, our Board of Directors may, in its sole discretion, choose to use any source of funds to repurchase Shares. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to shareholders or purchases of real estate assets.

Our Board of Directors reserves the right, in its sole discretion, at any time and from time to time to (1) waive the one-year holding requirement in the event of other exigent circumstances such as bankruptcy or a mandatory distribution requirement under a shareholder’s IRA, (2) reject any request for repurchase, (3) change the purchase price for repurchases, (4) limit the funds to be used for repurchases hereunder or otherwise change the Repurchase Limitation or (5) amend, suspend (in whole or in part) or terminate the Program upon 30 days’ written notice to the shareholders. We may provide notice by including such information in a separate mailing to the shareholders. During the Offering, we would also include this information in an Offering Circular supplement as required under federal securities laws.

We have no obligation to repurchase Shares if the repurchase would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

If we suspend our Program (in whole or in part), except as otherwise provided by our Board of Directors, until the suspension is lifted, we will not accept any requests for repurchase in respect of Shares to which such suspension applies in subsequent periods and any such requests and all pending requests that are subject to the suspension will not be honored or retained, but will be returned to the requestor. If a request for an Exceptional Repurchase is made, we will waive the one-year holding requirement (a) upon the request of the estate, heir or beneficiary of a deceased shareholder or (b) upon the complete disability of a shareholder, provided that the condition causing such disability was not preexisting on the date that such person became a shareholder.

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We or DST Systems, Inc. (our “Transfer Agent”) must receive your written request for repurchase at least fifteen business days before the Repurchase Date in order for us to repurchase your Shares on the Repurchase Date. If we cannot repurchase all Shares presented for repurchase in any quarter, we will attempt to honor repurchase requests on a pro rata basis. We will deviate from pro rata purchases in two minor ways: (i) if a pro rata repurchase would result in you owning less than half of the minimum purchase amount described in the Offering Circular, then we will repurchase all of your Shares and (ii) if a pro rata repurchase would result in you owning more than half but less than all of the minimum purchase amount, then we will not repurchase any Shares that would reduce your holdings below the minimum purchase amount.

A request for repurchase may be withdrawn in whole or in part by a shareholder in writing if received at least 15 business days before the Repurchase Date. If we did not completely satisfy a shareholder’s repurchase request on an Repurchase Date because we or our Transfer Agent did not receive the request in time or because of the restrictions on the number of Shares we could repurchase under the Program, we would treat the unsatisfied portion of the repurchase request as a request for repurchase at the next Repurchase Date funds are available for repurchase unless the shareholder withdrew his or her request at least 15 business days before the next date for repurchases.

Further, if we do not repurchase all Shares presented for repurchase during any period in which we are repurchasing Shares, then all Shares will generally be repurchased on a pro rata basis during the relevant period. With respect to any pro rata treatment, requests for Exceptional Repurchases will be considered first, as a group, with any remaining available funds allocated pro rata among requests for Ordinary Repurchases. Generally, no outstanding requests for Ordinary Repurchases will be satisfied until all outstanding requests for Exceptional Repurchases are satisfied in full. We will treat a repurchase request that would cause a shareholder to own fewer than 100 Shares as a request to repurchase all of his or her Shares, and we will vary from pro rata treatment of repurchases as necessary to avoid having shareholders holding fewer than 100 Shares or in other special situations determined by our Board of Directors. Any portion of a repurchase request that is not honored will be automatically treated as a request for repurchase during the next period in which requests will be considered, unless the shareholder seeking repurchase affirmatively asks us to withdraw that portion of the request. Unless otherwise determined by our Board of Directors, we will not retain any repurchase requests that are withdrawn.

In general, and unless otherwise approved by the Board of Directors in its sole discretion, a shareholder or his or her estate, heir or beneficiary may present to us fewer than all of the Shares then owned for repurchase, except that the minimum number of Shares that must be presented for repurchase must be at least 25% of the holder’s Shares. If, however, repurchase is being requested on behalf of a deceased shareholder, by a shareholder with a complete disability or by a shareholder due to other exigent circumstances, such as bankruptcy or a mandatory distribution requirement under such shareholder’s IRA, a minimum of 10% of the shareholder’s Shares may be presented for repurchase; provided, however, that, unless otherwise approved by the Board of Directors in its sole discretion, any future repurchase request by the shareholder must present for repurchase at least 25% of the shareholder’s remaining Shares.

A shareholder who wishes to have Shares repurchased must mail or deliver to us a written request on a form provided by us and executed by the shareholder, its trustee or authorized agent. An estate, heir or beneficiary that wishes to have Shares repurchased following the death of a shareholder must mail or deliver to us a written request on a form provided by us, including evidence acceptable to our Board of Directors of the death of the shareholder, and executed by the executor or executrix of the estate, the heir or beneficiary, or their trustee or authorized agent. A shareholder requesting the repurchase of his or her Shares due to a complete disability must mail or deliver to us or our Transfer Agent a written request on a form provided by us, including the evidence and documentation described above, or evidence acceptable to our Board of Directors of the shareholder’s complete disability. If the Shares are to be repurchased under the conditions outlined herein, we will forward the documents necessary to affect the repurchase, including any signature guaranty we may require.

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We will repurchase shares on the Repurchase Date. Commencing on the Repurchase Date, any Shares accepted for repurchase will no longer be deemed outstanding and will no longer be eligible to receive distributions. Our Board of Directors will consider only properly completed repurchase requests that we or our Transfer Agent receive at least 15 business days before the Repurchase Date. Payment for the Shares so approved for repurchase, assuming that we have not exceeded the Repurchase Limitation and that all necessary conditions have been satisfied, will generally be processed no later than the Repurchase Date. There is no fee in connection with a repurchase of Shares.

Neither we nor the board of directors will have any liability to any shareholder for any damages resulting from or related to the shareholder’s presentment of the shareholder’s Shares. Further, shareholders will have complete responsibility for payment of all taxes, assessments and other applicable obligations and third party costs resulting from or relating to our repurchase of Shares.

Neither any member of our Board of Directors nor any of their affiliates will receive any fee on the repurchase of Shares by us pursuant to our Program. The Shares we purchase under our Program will be cancelled, and will have the status of authorized but unissued Shares. We will not reissue repurchased Shares unless they are first registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and under appropriate state securities laws or otherwise issued in compliance with an exemption from registration under these laws.

The foregoing provisions regarding our Program in no way limit our ability to repurchase Shares or other of our securities by any other legally available means for any reason that our Board of Directors, in its sole discretion, deems to be in our best interest.

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EX1A-6 MAT CTRCT

Exhibit 6.2

AGREEMENT OF LIMITED PARTNERSHIP

OF

COTTONWOOD MULTIFAMILY REIT II O.P., LP

This Agreement of Limited Partnership (“Agreement”) is effective as of June 10, 2016 by and between CW Multifamily REIT II GP, LLC, a Delaware limited liability company as the general partner (the “General Partner”), and Cottonwood Multifamily REIT II, Inc., a Maryland corporation, as the limited partner (the “Limited Partner”), for the purpose of forming a limited partnership (the “Partnership”) in accordance with the provisions of the Delaware Revised Uniform Limited Partnership Act (6 Del. § 17-101 et seq.)(the “Act”).

1. Formation, Filings and Annual Valuation Period

1.1         Certificate of Limited Partnership. The General Partner shall complete, execute and file a Certificate of Limited Partnership.

1.2         Other Filings. The General Partner shall prepare, execute, acknowledge, verify, file, record and publish all certificates, statements and documents (and amendments thereto) required by applicable law or necessary to protect the Partnership or to preserve the limited liability of the Limited Partner.

1.3         Annual Valuation Period. For the purpose of ERISA real estate operating company (“REOC”) compliance, the Partnership hereby establishes the period October 3 through December 31 of each year as its “annual valuation period” as defined in subsection (d)(5)(ii) of the United States Department of Labor Plan Asset Regulation, 29 CFR §2510.3-101.

2. Name, Office, Agent for Service of Process and Purpose.

2.1         Name of the Partnership. The name of the Partnership shall be “Cottonwood Multifamily REIT II O.P., LP.”

2.2         Principal Executive Office. The street address of the Partnership’s principal executive office is 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121.

2.3         Agent for Service of Process. The agent for service of process on the Partnership in Delaware shall be Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

2.4         Purpose. The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act; provided, however, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to qualify as a real estate investment trust (“REIT”), and in a manner such that the General Partner will not be subject to any taxes under Section 857 or 4981 of the Code, unless the General Partner otherwise ceases to qualify as a REIT, (ii) to enter into any partnership, joint venture or other similar arrangement to engage in any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing and (iii) to do anything necessary or incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its sole and absolute discretion to qualify or cease qualifying as a REIT, the Partners acknowledge that the General Partner intends to qualify as a REIT for federal income tax purposes and upon such qualification, the avoidance of income and excise taxes on the General Partner inures to the benefit of all the Partners

and not solely to the General Partner. Notwithstanding the foregoing, the Limited Partner agrees that the General Partner may terminate its status as a REIT under the Code at any time to the full extent permitted under its Articles of Incorporation, as amended. The General Partner shall also be empowered to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Code.

3. Capital Contributions and Financing.

3.1         Contribution by the General Partner. Within five (5) days of signing this Agreement, the General Partner shall contribute to the capital of the Partnership cash in the amount of $9,900 in exchange for 990 General Partnership Units.

3.2          Contribution by the Limited Partner. Within five (5) days of signing this Agreement, the Limited Partner shall contribute to the capital of the Partnership cash in the amount of $100 in exchange for 10 Limited Partnership Units.

3.3         Additional Capital Contributions by the Partner. The General Partner shall make all additional contributions to the capital of the Partnership at such times and in such amounts as determined by the General Partner in its sole discretion. Except as expressly set forth herein, the Partners shall not be required to make any additional capital contributions and no capital contribution of any Partner shall bear interest or otherwise entitle the contributing Partner to a preferred return or compensation for the use of the contributed capital.

4. Management. The General Partner shall be the manager of the activities of the Partnership and shall have all power and authority as a general partner is able to have under the Act.

5. Distributions and Tax Allocations.

5.1         Distributions. After all creditors have been paid in full, any cash available for distribution to the Partners shall be distributed to the Partners as follows:

5.1.1     Distributions of cash derived from the Partnership shall be distributed to the Partners in proportion to their Units.

5.2         Tax Allocations. For each taxable year of the Partnership (and for each portion of each taxable year treated separately under Internal Revenue Code § 706):

5.2.1     Taxable income and loss of the Partnership shall be allocated to the Partners in proportion to their Units.

5.2.2     Before any allocation under Section 5.2.1 or Section 5.2.2, (i) items of Partnership income and gain (including gross income), deduction, and loss shall be allocated in compliance with the “minimum gain chargeback” and then the “qualified income offset” provisions of the regulations under Internal Revenue Code 704(b), and (ii) subject to the prior application of clause (i) for any taxable year or period, then to offset as quickly as possible any allocation pursuant to clause (i).

5.2.3     “Taxable income” and “taxable loss” shall mean the taxable income or taxable loss of the Partnership as determined for federal income tax purposes under Internal Revenue Code § 702(a)(8), modified by (i) including in the calculation thereof all items required to be separately stated under Internal Revenue Code § 702(a)(1)-(7) or otherwise required to be separately stated (including without limitation income exempt from tax and items treated as nondeductible expenditures not properly

chargeable to capital account), and (ii) excluding, notwithstanding clause i) of this sentence, any item of income, gain, deduction, loss or credit specially allocated under this Agreement other than as part of a special allocation of taxable-income or taxable loss generally. In the event that property of the Partnership properly is reflected on its books in accordance with Treasury Regulations Section 1.704-1(b) at a value other than adjusted tax basis of such property for federal income tax purposes, then (i) “book” income, gain, deduction and loss with respect to such property, as determined in accordance with such Regulations, shall be allocated in the manner taxable income and taxable loss are allocated under this Agreement, and (ii) taxable income and taxable loss shall be allocated in the manner required by Section 704(c) of the Internal Revenue Code or the principles thereof as set forth in applicable Treasury Regulations.

6. Books, Records and Reports.

6.1         In General. The General Partner shall be responsible for maintaining or causing to be maintained the books and records of the Partnership and making reports to partners in accordance with generally accepted accounting principles, prudent business practice and the Act.

6.2         Tax Accounting. Capital accounts shall be maintained for each Partner in accordance with regulations under Section 704(b) of the Internal Revenue Code, and taxable income and taxable loss shall be determined in accordance with such regulations.

7.         Outside Interests. Any Partner, and any affiliate thereof, may engage or possess an interest in any other business venture of any nature and description, whether such ventures are competitive with the partnership or otherwise, independently or with others, including, but not limited to, the acquisition, ownership, syndication, financing, leasing, management, brokerage, operation, maintenance, construction and development of properties similar to the Property or Project, which may be located in the same market area or vicinity of the Property or Project. No Partner shall have any interest in any other such business by reason of an interest of the Partnership.

8. Transfer of Partner’s Interest.

8.1         Partners. The Partners may not sell, exchange, assign, convey, pledge, encumber, hypothecate or otherwise transfer all or any portion of their interest in the Partnership without the consent of all Partners.

8.2         Withdrawal. Except as otherwise provided in this Agreement or as agreed to by the General Partner, neither the General Partner nor the Limited Partner may withdraw from the Partnership.

9. Term of the Partnership and Dissolution.

9.1         Term. The Partnership shall commence on the effective date of this Agreement and shall continue until December 31, 2099, unless earlier terminated in accordance with this Agreement.

9.2         Termination. The Partnership will dissolve upon the earliest to occur of the following:

9.2.1     The resignation, withdrawal, removal, termination or dissolution of, or insolvency of the General Partner, unless either (i) at the time there is at least one remaining General Partner who elects to and does continue the business of the Partnership or (ii) within 90 days after such event the Limited Partner elects a successor General Partner and elects to continue the business of the Partnership;

9.2.2     A vote by the General Partner to terminate or dissolve the Partnership;

9.2.3     The expiration of the term of the Partnership; or

9.2.4     Entry of a decree of judicial dissolution under Section 17-802 of the Act.

9.3          Liquidation of Assets. Upon a dissolution of the Partnership for any reason and, if required and within the period prescribed after any “liquidation” of the Partnership under regulations pursuant to Section 704(b) of the Internal Revenue Code, the General Partner shall take full account of the Partnership assets and liabilities, shall liquidate the assets as promptly as is consistent with obtaining the fair market value thereof, and shall apply and distribute the proceeds therefrom in the following order:

9.3.1     To the payment of creditors of the Partnership, including Partners who are creditors to the extent permitted by law, but excluding secured creditors whose obligations will be assumed or otherwise transferred on the liquidation of Partnership assets; and

9.3.2     Thereafter, to the Partners in proportion to their Units.

9.4         Liquidation. Notwithstanding the foregoing, in the case of a “liquidation” of the Partnership arising solely by reason of the application of Section 708(b)(1)(B) of the Internal Revenue Code upon the sale or exchange of an interest in Partnership capital or profits, no actual distribution of Property shall be required. However, capital accounts of the Partners shall be adjusted and the provisions of this Agreement applied as though the Property of the Partnership had been distributed in liquidation in accordance with this Agreement and recontributed by the Partners; and the Partnership shall continue thereafter for the remaining balance of the original term of the Partnership in accordance with the provisions of this Agreement.

9.5         Deficit Capital Accounts. No Partner shall be required to restore any deficit in its Capital Account.

10. Miscellaneous.

10.1      Successors and Assigns. This Agreement shall be binding upon and, to the extent provided in this Agreement, shall be for the benefit of the successors and assigns of the respective Partners.

10.2      Entire Agreement. This Agreement contains the entire agreement between the Partners with respect to the transactions contemplated herein and supersedes all prior or contemporaneous written or oral agreements to the contrary.

10.3      Severability. In the event any provision of this Agreement is declared by a court of competent jurisdiction to be void, voidable or unenforceable, such provision shall be deemed severed from the remainder of this Agreement and the balance of this Agreement shall remain in full force and effect.

10.4      Notices. All notices under this Agreement shall be in writing and shall be given to the Partner entitled thereto, by personal delivery or by United States mail, posted to the address for such person specified in this Agreement or at such other address as such person may specify by notice given in accordance with this provision. Notice shall be effective upon receipt in the case of personal delivery or upon deposit in any official United States mail depository in the case of notice by mail properly given in accordance with this provision.

10.5       Governing Law. This Agreement shall be governed by and construed in accordance with the local laws of the State of Delaware.

10.6       Captions. Paragraph titles or captions contained in this Agreement in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions hereof.

10.7       Gender, Number and Person. Whenever required by the context hereof, each gender and number shall include each other gender and number; and the word “person” shall include an individual, trust, estate, corporation, partnership, joint venture, firm or other form of entity, organization or association.

10.8       Consents and Waivers. No consent or waiver, express or implied, by any Partner required or permitted by this Agreement, or to or of any breach or default by another Partner in the performance by such other Partner of its obligations hereunder, shall be deemed or construed to be valid unless in writing, or to be a consent or waiver to or of any other breach or default in the performance of such other party of the same or any other obligations of such Partner hereunder. Failure on the part of any Partner to complain of any act of any of the other Partners or to declare any of the other Partners in default, irrespective of how long such failure continues, shall not constitute a waiver by such Partner of its rights hereunder.

10.9       Attorneys’ Fees. In the event of any litigation, arbitration, or other action to enforce or interpret this Agreement, the prevailing party (as determined by the tribunal) shall be entitled to recovery such party’s reasonable attorneys’ fees and costs.

10.10     Amendments. This Agreement may be amended with the consent of the Partners.

[Signatures on Following Page]

IN WITNESS WHEREOF, the undersigned have executed this Agreement of Limited Partnership effective as of the date first above written.

GENERAL PARTNER:
CW MULTIFAMILY REIT II GP, LLC, a Delaware limited liability company
By:	Cottonwood Multifamily REIT II, Inc., a Maryland corporation, its sole member

By:	/s/ Daniel Shaeffer
	Daniel Shaeffer, Chief Executive Officer

Address of the General Partner:

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

LIMITED PARTNER:
COTTONWOOD MULTIFAMILY REIT II, INC., a Maryland corporation
By:	/s/ Daniel Shaeffer
	Daniel Shaeffer, Chief Executive Officer

Address of Limited Partner:

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

EX1A-6 MAT CTRCT

Exhibit 6.3

LIMITED LIABILITY COMPANY AGREEMENT

OF

CW MULTIFAMILY REIT II GP, LLC

LIMITED LIABILITY COMPANY AGREEMENT

OF

CW MULTIFAMILY REIT II GP, LLC

This Limited Liability Company Agreement, effective the 10th day of June, 2016, is entered into by Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Member”), as the Member, pursuant to the Act on the following terms and conditions.

1.                       Organization.

1.1        Formation.   On June 10, 2016, a Certificate of Formation was filed in the office of the Secretary of State of Delaware in accordance with and pursuant to the Act.

1.2        Name and Place of Business.   The name of the Company shall be CW Multifamily REIT II GP, LLC and its principal place of business shall be 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121. The Member may change such name, change such place of business or establish additional places of business of the Company as the Member may determine to be necessary or desirable.

1.3        Business and Purpose of the Company.   The purpose of the Company is to transact any and all lawful business for which a limited liability company may be organized under the laws of the State of Delaware.

1.4        Term.   The term of the Company shall commence on the effective date of this Agreement and shall terminate on December 31, 2099 unless the Company is sooner dissolved and terminated as provided in this Agreement.

1.5        Required Filings.   The Member, or its authorized representative, shall execute, acknowledge, file, record and/or publish such certificates and documents, as may be required by this Agreement or by law in connection with the formation and operation of the Company.

1.6        Registered Office and Registered Agent.   The Company’s initial registered office and initial registered agent shall be as provided in the Certificate of Formation. The registered office and registered agent may be changed from time to time by the Member by filing the address of the new registered office and/or the name of the new registered agent pursuant to the Act.

2.        Definitions.   Definitions for this Agreement are set forth on Exhibit A and are incorporated herein.

3.        Capitalization and Financing.   The Member shall make an initial capital contribution of $100. The Member may, but shall have no obligation to, make additional capital contributions.

4.        Allocation of Net Income and Net Loss.   For each fiscal year, the Net Income and Net Loss of the Company shall be allocated to the Member.

5.        Distributions.   Cash from Operations with respect to each calendar year shall be distributed to the Member.

6.        Company Expenses.   The Company shall pay directly, or reimburse the Member, as the case may be, for all of the costs and expenses of the Company’s operations.

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7.        Authority, and Responsibilities of the Member.

7.1        Management.   The business and affairs of the Company shall be managed by its Member. The Member shall have full and complete authority, power and discretion to manage and control the business, affairs and assets of the Company, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of the Company’s business.

7.2        Member Authority.   The Member shall have all authority, rights and powers conferred by law and those required or appropriate to the management of the Company’s business.

7.3        Tax Matters Member.   The Member is hereby appointed to act as the “tax matters partner” or the “partnership representative.”

7.4        Indemnification of Member.   The Member, its shareholders, members, partners, Affiliates, officers, directors, employees, agents and assigns, shall not be liable for, and shall be indemnified and held harmless (to the extent of the Company’s assets) from, any loss or damage incurred by them, the Company or the Member in connection with the business of the Company, including costs and reasonable attorneys’ fees and any amounts expended in the settlement of any claims of loss or damage resulting from any act or omission performed or omitted.

7.5        No Personal Liability for Return of Capital.   The Member shall not be personally liable or responsible for the return or repayment of all or any portion of the Capital Contribution of any Member or any loan made to the Company, it being expressly understood that any such return of capital or repayment of any loan shall be made solely from the assets (which shall not include any right of contribution from any Member) of the Company.

7.6        Authority as to Third Persons.

7.6.1     No third party dealing with the Company shall be required to investigate the authority of the Member. No purchaser of any property or interest owned by the Company shall be required to determine the right to sell or the authority of the Member to sign and deliver any instrument of transfer on behalf of the Company, or to see to the application or distribution of revenues or proceeds paid or credited in connection therewith.

7.6.2     The Member shall have full authority to execute on behalf of the Company any and all agreements, contracts, conveyances, deeds, mortgages and other instruments, and the execution thereof by the Member executing on behalf of the Company shall be the only execution necessary to bind the Company thereto.

7.7        Officers of the Company.

7.7.1     The Member may appoint officers at any time. The officers of the Company, if deemed necessary by the Member, may include a chief executive officer, president, vice president, secretary, and chief financial officer. The officers shall serve at the pleasure of the Member. Any individual may hold any number of offices. The Member’s officers may serve as officers of the Company. The officers shall exercise such powers and perform such duties as determined and authorized by the Member.

7.7.2     Any officer may be removed, either with or without cause, by the Member at any time. Any officer may resign at any time by giving written notice to the Member. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless

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otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.

8.        Assignment of the Member’s Interest.   The Member may sell, assign, hypothecate, encumber or otherwise transfer all or any part of its interest in the Company.

9.        Records, Audits and Reports.   The Company shall maintain at its principal office the Company’s records and accounts of all operations and expenditures of the Company including the following:

9.1        A current list in alphabetical order of the full name and last known business or resident address of the Member, together with the Capital Contribution and the share in profits and losses of the Member;

9.2        A copy of the Certificate of Formation and all amendments thereto, together with any powers of attorney pursuant to which the Certificate of Formation or any amendments thereto were executed;

9.3        Copies of the Company’s Federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years;

9.4        Copies of this Agreement and any amendments thereto together with any powers of attorney pursuant to which any written accounting or any amendments thereto were executed;

9.5        Copies of any financial statements of the Company, if any, for the six most recent years; and

9.6        The Company’s books and records as they relate to the internal affairs of the Company for at least the current and past four fiscal years.

10.       Termination of the Company.

10.1      Termination of Company.   The Company shall be dissolved, shall terminate and its assets shall be disposed of, and its affairs wound up upon the earliest to occur of the following:

10.1.1     Upon the happening of any event of dissolution specified in the Certificate of Formation;

10.1.2     A determination by the Member to terminate the Company; or

10.1.3     The expiration of the term of the Company.

10.2      Certificate of Cancellation.   As soon as possible following the occurrence of any of the events specified in Section 10.1, the Member shall execute a Certificate of Cancellation in such form as shall be prescribed by the Delaware Secretary of State and file the Certificate as required by the Act.

10.3      Liquidation of Assets.   Upon a dissolution and termination of the Company, the Member shall take full account of the Company assets and liabilities, shall liquidate the assets as promptly as is consistent with obtaining the fair market value thereof, and shall apply and distribute the proceeds therefrom in the following order:

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10.3.1     To the payment of creditors of the Company, including the Member, but excluding secured creditors whose obligations will be assumed or otherwise transferred on the liquidation of Company assets;

10.3.2     To the setting up of any reserves as required by law for any contingent liabilities or obligations of the Company; provided, however, that said reserves shall be deposited with a bank or trust company in escrow at interest for the purpose of disbursing such reserves for the payment of any of the aforementioned contingencies and, at the expiration of a reasonable period, for the purpose of distributing the balance remaining in accordance with remaining provisions of this Section 10.3; and

10.3.3     Any remaining amount to the Member.

11.        Relationship of This Agreement to the Act. Many of the terms of this Agreement are intended to alter or extend provisions of the Act as they may apply to the Company or the Member. Any failure of this Agreement to mention or specify the relationship of such terms to provisions of the Act that may affect the scope or application of such terms shall not be construed to mean that any of such terms is not intended to be an operating agreement provision authorized or permitted by the Act or which in whole or in part alters, extends or supplants provisions of the Act as may be allowed thereby.

12.        Miscellaneous.

12.1      Successors and Assigns.   The terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Member.

12.2      Severability.   In the event any sentence or Section of this Agreement is declared by a court of competent jurisdiction to be void, such sentence or Section shall be deemed severed from the remainder of this Agreement and the balance of this Agreement shall remain in full force and effect.

12.3      Notices.   All notices under this Agreement shall be in writing and shall be given to the Member by personal service or by mail, posted to the address maintained by the Company for such person or at such other address as he may specify in writing.

12.4      Member’s Address.   The name and address of the Member is as follows:

Cottonwood Multifamily REIT II, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

12.5      Governing Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

12.6      Captions.   Section titles or captions contained in this Agreement are inserted only as a matter of convenience and reference. Such titles and captions in no way define, limit, extend or describe the scope of this Agreement nor the intent of any provisions hereof.

12.7      Gender.   Whenever required by the context hereof, the singular shall include the plural, and vice versa, the masculine gender shall include the feminine and neuter genders, and vice versa.

12.8      Descriptions.   All descriptions referred to in this Agreement are expressly incorporated herein by reference as if set forth in full, whether or not attached hereto.

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12.9        Venue.   Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located only in Salt Lake City, Utah.

12.10      Integrated and Binding Agreement.   This Agreement contains the entire understanding and agreement of the Member.

IN WITNESS WHEREOF, the undersigned have set their hands to this Agreement as of the date first set forth in the preamble.

MEMBER:
COTTONWOOD MULTIFAMILY REIT II, INC., a Maryland corporation
By:	/s/ Daniel Shaeffer
	Daniel Shaeffer, Chief Executive Officer

5

Exhibit A

Definitions

“Act” shall mean the Delaware Limited Liability Company Act, as the same may be amended from time to time.

“Affiliate” shall mean (i) any person directly or indirectly controlling, controlled by or under common control with another person; (ii) a person owning or controlling 10% or more of the outstanding voting securities of such other person; (iii) any officer, director or partner of such other person; and (iv) if such other person is an officer, director or partner, any company for which such person acts in any capacity. The term “person” shall include any natural person, corporation, partnership, trust, unincorporated association or other legal entity.

“Agreement” shall mean this Limited Liability Company Agreement, as amended from time to time.

“Capital Contribution” shall mean the gross amount invested in the Company by a Member.

“Cash From Operations” shall mean the net cash realized by the Company from all sources, including, but not limited to, cash from the operations of the Company after payment of all cash expenditures of the Company (including, but not limited to, all operating expenses).

“Certificate of Formation” shall mean the Certificate of Formation of the Company as filed with the Secretary of State of Delaware as the same may be amended or restated from time to time.

“Company” shall refer to CW Multifamily REIT II GP, LLC, a Delaware limited liability company.

“Member” shall refer to Cottonwood Multifamily REIT II, Inc., a Maryland corporation.

“Net Income” or “Net Loss” shall mean, respectively, for each taxable year of the Company the taxable income and taxable loss of the Company as determined for federal income tax purposes.

“Property” shall refer to any or all of such real and tangible or intangible personal property or properties as may be acquired by the Company.

EX1A-6 MAT CTRCT

Exhibit 6.4

FORM OF JOINT VENTURE AGREEMENT

LIMITED LIABILITY COMPANY AGREEMENT

OF

[                                                 ], LLC

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR BY THE SECURITIES REGULATORY AUTHORITY OF ANY STATE, NOR HAS ANY COMMISSION OR AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF ANY DISCLOSURE MADE IN CONNECTION THEREWITH. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SECURITIES OFFERED HEREBY MAY NOT BE RESOLD WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTION THEREFROM. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH IN THIS AGREEMENT.

TABLE OF CONTENTS

			Page
1.	Organization			1
	1.1	Formation		1
	1.2	Name and Place of Business		1
	1.3	Business and Purpose of the Company		1
	1.4	Term		1
	1.5	Required Filings		1
	1.6	Registered Office and Registered Agent		1
	1.7	Competitive Transactions		1
2.	Definitions			1
3.	Capitalization and Financing			2
	3.1	Capital Contributions		2
	3.2	Additional Capital Contributions		2
	3.3	Failure to Make Additional Capital Contribution		2
	3.4	Enforcement of Obligation		2
	3.5	Liabilities of Members		2
	3.6	Company Loans		2
4.	Allocation of Tax Items			2
	4.1	Allocation of Net Income and Net Loss		2
	4.2	Special Allocations		3
	4.3	Curative Allocations		4
	4.4	Contributed Property		4
	4.5	Recapture Income		5
	4.6	Allocation of Company Items		5
	4.7	Assignment		5
	4.8	Power of Cottonwood Residential to Vary Allocations		5
	4.9	Consent of Members		5
	4.10	Withholding Obligations		5
5.	Distributions			6
	5.1	Cash From Operations		6
	5.2	Cash From Capital Transactions		6
	5.3	Restrictions		6
6.	Compensation to the Members and their Affiliates			6
	6.1	Agreements with Affiliates		6
	6.2	Company Expenses		7
7.	Authority and Responsibilities of the Members			7
	7.1	Management		7
	7.2	Members’ Authority		7
	7.3	Major Decisions		9
	7.4	Administration of the Company		10
	7.5	Tax Matters Partner		10
	7.6	Indemnification of the Member and the Officers		10
	7.7	No Personal Liability for Return of Capital		10
	7.8	Authority as to Third Persons		10
	7.9	Insurance		11
	7.10	Officers		11
	7.11	Approved Budget		11

(i)

8.	Rights, Authority and Voting of the Members		11
	8.1	Members As Agents	11
	8.2	Voting by the Members	11
	8.3	Member Vote	12
	8.4	Meetings of the Members	12
	8.5	Rights of Members	13
	8.6	Restrictions on the Owners	13
	8.7	Return of Capital	14
	8.8	Indemnification of Members
9.	Member Transfers		14
	9.1	Resignation or Withdrawal of A Member	14
	9.2	Permitted Assignments	14
	9.3	Substituted Members	14
	9.4	Loss of Rights	14
	9.5	Consent of Members	14
	9.6	Transfer in Violation Not Recognized	14
	9.7	Rights of Economic Interest Owner	15
	9.8	Right to Inspect Books	15
	9.9	Assignment of 50% or More of Interests	15
	9.10	Transfer Subject to Law	15
	9.11	Right of First Refusal	15
	9.12	Repurchase Rights	15
	9.13	Specific Performance	16
10.	Books, Records, Accounting and Reports		16
	10.1	Records	16
	10.2	Delivery to Members and Inspection	16
	10.3	Rights of Members	17
	10.4	Reports	17
	10.5	Tax Information	17
11.	Termination and Dissolution of the Company		17
	11.1	Termination of the Company	17
	11.2	Certificate of Cancellation	17
	11.3	Liquidation of Assets	17
	11.4	Distributions Upon Dissolution	17
	11.5	Liquidation of Member’s Interest	17
12.	Amendment of Agreement		18
13.	Relationship of this Agreement to the Act		18
14.	Trade Secrets
	14.1	Restriction on Disclosure
	14.2	Use Restriction
	14.3	Nonremoval
	14.4	Prohibition on Unfair Competition
14.	Representations of Each Member		18
	14.1	No View to Resell	18
	14.2	Status	18
	14.3	Due Authorization	18
	14.4	Other Agreements	18
15.	Miscellaneous		18

(ii)

15.1	Counterparts	18
15.2	Successors and Assigns	18
15.3	Severability	18
15.4	Notices	18
15.5	Members’ Address	19
15.6	Governing Law	19
15.7	Captions	19
15.8	Gender	19
15.9	Time	19
15.10	Additional Documents	19
15.11	Descriptions	19
15.12	Dispute Resolution	19
15.13	Attorneys’ Fees	19
15.14	Venue	19
15.15	Partition	19
15.16	Integrated and Binding Agreement	19
15.17	Title to Company Property	19

EXHIBITS:

EXHIBIT A:        Definitions

EXHIBIT B:        Members

(iii)

LIMITED LIABILITY COMPANY AGREEMENT

OF

[                                               ], LLC

            This Limited Liability Company Agreement (the “Agreement”) of [                                             ], LLC, effective as of [                                             ], 20[    ] is entered into by and between Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership (“Multifamily REIT”) as a Member, and [                                    ], LLC, a Delaware limited liability company [special purpose entity of Cottonwood Residential O.P., LP, a Delaware limited partnership] (“Cottonwood Residential”) as a Member, pursuant to the Act on the following terms and conditions.

1.          Organization.

1.1        Formation. On [                    ], 20[    ], a Certificate of Formation was filed in the office of the Secretary of State of the state of Delaware in accordance with and pursuant to the Act.

1.2        Name and Place of Business.   The name of the Company shall be [                                    ], LLC, and its principal place of business shall be 6340 South 3000 East, Suite 500, Salt Lake City, Utah 84121. The Members may change such name, change such place of business or establish additional places of business of the Company.

1.3        Business and Purpose of the Company.   The purpose of the Company is to (i) acquire, directly or indirectly, entire or undivided interests in multifamily apartment communities, and to manage, lease, finance, refinance, operate and dispose of multifamily apartment communities, (ii) make investments, directly or indirectly, in multifamily real estate related assets (including, but not limited to, mezzanine, bridge or other real estate loans or preferred equity investments) and (iii) engage in such other activities relating to or incidental as are necessary to accomplish such purposes.

1.4        Term.   The term of the Company shall commence on the effective date of this Agreement and shall terminate on December 31, 2099, unless the Company is sooner dissolved and terminated as provided in this Agreement.

1.5        Required Filings.   Cottonwood Residential shall execute, acknowledge, file, record, amend and/or publish such certificates and documents as may be required by this Agreement or by law in connection with the formation and operation of the Company.

1.6        Registered Office and Registered Agent.   The Company’s initial registered office and initial registered agent shall be as provided in the Certificate of Formation. The registered office and registered agent may be changed from time to time by Cottonwood Residential by filing the address of the new registered office and/or the name of the new registered agent pursuant to the Act.

1.7        Competitive Transactions.   Except as set forth in the Investment Policy Agreement, any Owner or any Affiliate thereof, or any shareholder, officer, director, employee, partner, member, manager or any Person owning an interest therein, may engage in or possess an interest in any other business or venture of any nature or description, whether or not competitive with the Company, including, but not limited to, the acquisition, syndication, ownership, financing, leasing, operation, maintenance, management, brokerage, construction and development of property similar to the Project and no Owner or any Affiliate, or other Person shall have any interest in such other business or venture by reason of their interest in the Company.

2.          Definitions.   Definitions for this Agreement are set forth on Exhibit A and are incorporated herein.

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3.          Capitalization and Financing.

3.1          Capital Contributions.

3.1.1      Multifamily REIT Capital Contribution.   Multifamily REIT shall contribute [90]% of the Capital Contributions agreed to by the Members and its Capital Account shall be credited with such amount and Multifamily REIT shall receive its Membership Interest in exchange.

3.1.2      Cottonwood Residential Capital Contribution.   Cottonwood Residential shall contribute [10]% of the Capital Contributions agreed to by the Members and its Capital Account shall be credited with such amount and Cottonwood Residential shall receive its Membership Interest in exchange.

3.2          Additional Capital Contributions.   If the Members determine that the Company requires cash in addition to the Capital Contributions set forth in Section 3.1 in order to carry out the purposes of this Agreement or to carry on the business of the Company, no more than 30 days after such determination, the Members shall contribute the additional Capital Contributions required. The Members may also make additional Capital Contributions at such times and in such amounts as set forth in an Approved Budget. All future additional Capital Contributions shall be made pro rata by the Members according to their respective Percentage Interests.

3.3          Failure to Make Additional Capital Contribution.   In the event a Member or Members (the “Delinquent Member”) fails to make all or any portion of its capital contribution as set forth in Section 3.2 (the “Required Additional Capital Contribution”) by the specified contribution date for the Required Additional Capital Contribution, the non-defaulting Member (the “Non-Delinquent Member”) may elect one of the following:

3.3.1      Loan.   The Non-Delinquent Member may fund the amount of the Required Additional Capital Contribution not made by the Delinquent Member, such amount together with the amount funded by the Non-Delinquent Member shall be treated as a loan to the Company by the Non-Delinquent Member. Any such loan shall bear interest at a fixed rate equal to 15%. Any principal and interest on any such loan shall be repaid prior to any Distributions to the Members pursuant to Section 5.1; or

3.3.2      Return of Additional Capital Contribution.   The Non-Delinquent Member may elect to have its Required Additional Capital Contribution returned to it by the Company.

3.4          Enforcement of Obligation.   Only the Company or a Member and no third party creditor (either in its own right or as a successor-in-interest of the Company, and including a trustee, receiver or other representative of the Company or an Owner), shall be entitled to enforce the requirements to make additional Capital Contributions. The Members intend and agree that the obligation of a Member to make Capital Contributions constitutes an agreement to make financial accommodations to and for the benefit of the other Member and the Company.

3.5          Liabilities of Members.   Except as specifically provided in this Agreement, the Members shall not be required to make any additional contributions to the Company and no Member shall be liable for the debts, liabilities, contracts, or any other obligations of the Company, by reason of being a Member of the Company, nor shall the Members be required to lend any funds to the Company or to repay or to contribute to the Company or any Member, or any creditor of the Company any portion or all of any deficit balance in a Member’s Capital Account.

3.6          Company Loans.   Any Member or an Affiliate (at the request of the Members) may, but will have no obligation to, make loans to the Company. All of the terms and conditions of such loan shall be approved by the Members.

4.          Allocation of Tax Items.

4.1          Allocation of Net Income and Net Loss.   For each fiscal year, the Net Income and Net Loss of the Company shall be allocated as follows:

2

4.1.1       Net Income.   After giving effect to the special allocations set forth in Sections 4.2 and 4.3, Net Income for any fiscal year shall be allocated as follows:

(a)        First, between the Members in proportion to and to the extent of Net Loss allocated to the Members pursuant to Section 4.1.2(d) until the aggregate Net Income allocated to the Members pursuant to this Section 4.1.1(a) for such fiscal year and all previous fiscal years is equal to the aggregate Net Loss allocated to the Members pursuant to Section 4.1.2(d) for all previous fiscal years;

(b)        Second, to the Members in proportion to their accrued but unallocated 8% Preferred Return, until the Members have been allocated an amount equal to their accrued but undistributed 8% Preferred Return;

(c)        Third, (i) 50% to the Members in proportion to their Percentage Interests and (ii) 50% to Cottonwood Residential, until Cottonwood Residential has been allocated an amount pursuant to clause (ii) equal to 20% of the amount allocated to the Members and Cottonwood Residential pursuant to Sections 4.1.1(b) and this Section 4.1.1(c); and

(d)        Thereafter, 80% to the Members in proportion to their Percentage Interests and 20% to Cottonwood Residential.

4.1.2        Net Loss.   After giving effect to the special allocations set forth in Sections 4.2 and 4.3, Net Loss for any fiscal year shall be allocated as follows:

(a)        First, between the Members in proportion to and to the extent of Net Income allocated to the Members pursuant to Section 4.1.1(d) until the aggregate Net Loss allocated pursuant to this Section 4.1.2(a) for such fiscal year and all previous fiscal years equals the aggregate Net Income allocated to the Members pursuant to Section 4.1.1(d) for all previous fiscal years;

(b)        Second, to Cottonwood Residential to the extent of Net Income allocated to Cottonwood Residential pursuant to Section 4.1.1(c) until the aggregate Net Loss allocated pursuant to this Section 4.1.2(b) for such fiscal year and all previous fiscal years equals the aggregate Net Income allocated to Cottonwood Residential pursuant to Section 4.1.1(c) for all previous fiscal years;

(c)        Third, between the Members in proportion to and to the extent of Net Income allocated to the Members pursuant to Section 4.1.1(b) until the aggregate Net Loss allocated pursuant to this Section 4.1.2(c) for such fiscal year and all previous fiscal years equals the aggregate Net Income allocated to the Members pursuant to Section 4.1.1(b) for all previous fiscal years; and

(d)        Thereafter, to the Members in proportion to their Percentage Interests.

4.2          Special Allocations.

4.2.1      Qualified Income Offset.   Except as provided in Section 4.2.3, in the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit created by such adjustment, allocation or distribution as quickly as possible.

4.2.2      Gross Income Allocation.   Net Loss shall not be allocated to any Member to the extent such allocation would cause such Member to have an Adjusted Capital Account Deficit at the end of a fiscal year. In the event any Member has an Adjusted Capital Account Deficit at the end of any fiscal year, each such Member shall be specially allocated items of Company gross income and gain in the amount of such Adjusted Capital Account Deficit as quickly as possible.

3

4.2.3      Minimum Gain Chargeback.   Notwithstanding any other provision of this Section 4, if there is a net decrease in Company Minimum Gain during any Company fiscal year, each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 4.2.3 is intended to comply with the partnership minimum gain chargeback requirement in the Treasury Regulations and shall be interpreted consistently therewith. This provision shall not apply to the extent the Member’s share of net decrease in Company Minimum Gain is caused by a guaranty, refinancing, or other change in the debt instrument causing it to become partially or wholly recourse debt or Member Nonrecourse Debt, and such Member bears the economic risk of loss (within the meaning of Treasury Regulations Section 1.752-2) for the newly guaranteed, refinanced or otherwise changed debt or to the extent the Member contributes cash to the capital of the Company that is used to repay the Nonrecourse Debt, and the Member’s share of the net decrease in Company Minimum Gain results from the repayment.

4.2.4      Member Minimum Gain Chargeback.   Notwithstanding any other provision of this Section 4, except Section 4.2.3, if there is a net decrease in Member Minimum Gain, any Member with a share of that Member Minimum Gain (as determined under Treasury Regulations Section 704-2(i)(5)) as of the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Member Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section shall not apply to the extent the net decrease in Member Minimum Gain arises because the liability ceases to be Member Nonrecourse Debt due to conversion, refinancing or other change in a debt instrument that causes it to become partially or wholly a Nonrecourse Debt. This Section is intended to comply with the partner minimum gain chargeback requirements in the Treasury Regulations and shall be interpreted consistently therewith and applied with the restrictions attributable thereto.

4.2.5      Nonrecourse Deductions.   Nonrecourse Deductions for any fiscal year or other period shall be allocated to the Members in proportion to their Percentage Interests and each Member’s share of excess Nonrecourse Debt shall be in the same proportion.

4.2.6      Member Nonrecourse Deductions.   Member Nonrecourse Deductions for any fiscal year shall be allocated to the Member who bears the economic risk of loss as set forth in Treasury Regulations Section 1.752-2 with respect to the Member Nonrecourse Debt. If more than one Member bears the economic risk of loss for a Member Nonrecourse Debt, any Member Nonrecourse Deductions attributable to that Member Nonrecourse Debt shall be allocated among the Members according to the ratio in which they bear the economic risk of loss.

4.2.7      Code Section 754 Adjustments.   To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.

4.3          Curative Allocations.   Notwithstanding any other provision of this Agreement, the Regulatory Allocations shall be taken into account in allocating items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred.

4.4          Contributed Property.   Notwithstanding any other provision of this Agreement, Cottonwood Residential shall cause depreciation and/or cost recovery deductions and gain or loss attributable to Property contributed by a Member or revalued by the Company to be allocated among the Members for income tax purposes in accordance with Code Section 704(c) and the Treasury Regulations promulgated thereunder. The Members shall be entitled to select the appropriate method to account for the variation between the basis of a Member’s interest in a contributed Property and the fair market value of the interest at the time it is contributed to the Company.

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4.5          Recapture Income.   The portion of each Member’s distributive share of Net Income that is characterized as ordinary income pursuant to Code Sections 1245 or 1250 shall be proportionate to the amount of Net Income or Net Loss which included the corresponding depreciation deductions that were allocated to such Member as compared with the amount of depreciation deductions allocated to all Members.

4.6          Allocation of Company Items.   Except as otherwise provided herein, whenever a proportionate part of Net Income or Net Loss is allocated to a Member, every item of income, gain, loss or deduction entering into the computation of such Net Income or Net Loss, and every item of credit or tax preference related to such allocation and applicable to the period during which such Net Income or Net Loss was realized shall be allocated to the Member in the same proportion. For purposes of this Section 4 and Section 5, an Economic Interest Owner shall be treated as a Member.

4.7          Assignment.   Unless otherwise agreed to by the Members, in the event of the assignment of an Interest pursuant to the terms of this Agreement (or a change in a Member’s Percentage Interest), the Net Income and Net Loss arising from other than a sale or refinancing of Property shall be allocated as between the Owner and such Owner’s assignee based upon the number of months of their respective ownership during the year in which the assignment occurs, without regard to the results of the Company’s operations during the period before or after such assignment. Distributions shall be made to the Owner or the assignee, whichever is the owner of the Interest, as of the date of the Distribution. An assignee who receives an Interest during the first 15 days of a month will receive any allocations relative to such month. An assignee who acquires an Interest on or after the sixteenth day of a month will be treated as acquiring the Interest on the first day of the following month. Net Income and Net Loss from a sale or exchange of Property will be allocated between the Owner and its assignee (or to reflect such change in Percentage Interest) as of the date of any such transaction.

4.8          Power to Vary Allocations.   It is the intent of the Members that each Member’s share of Net Income and Net Loss be determined and allocated in accordance with Code Section 704(b) and the provisions of this Agreement shall be so interpreted. Therefore, if the Company is advised by the Company’s legal counsel that the allocations provided in this Section 4 are unlikely to be respected for federal income tax purposes, Cottonwood Residential, with the approval of Multifamily REIT, shall amend the allocation provisions of this Agreement to the minimum extent necessary to comply with Code Section 704(b) and effect the plan of allocations and Distributions provided for in this Agreement.

4.9          Consent of Members.   The allocation methods of Net Income and Net Loss are hereby expressly consented to by each Member as a condition of becoming a Member.

4.10        Withholding Obligations.

4.10.1      If the Company is required (as determined in good faith by Cottonwood Residential) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member.

4.10.2      If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of Cottonwood Residential, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the

5

gain is allocated shall pay the Company prior to the due date of Tax Payment an amount of cash equal to such Tax Payment.

4.10.3      Cottonwood Residential shall be entitled to hold back any Distribution to any Member to the extent Cottonwood Residential believes in good faith that a Tax Payment will be required with respect to such Member in the future and Cottonwood Residential believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

5.          Distributions.

5.1          Cash From Operations.   Except as otherwise provided in Section 13, Cash From Operations with respect to each calendar year shall be distributed as follows:

5.1.1      First, to the Members in proportion to their accrued but undistributed 8% Preferred Return, until the Members have been distributed an amount equal to their accrued but undistributed 8% Preferred Return;

5.1.2      Second, (i) 50% to the Members in proportion to their Percentage Interests and (ii) 50% to Cottonwood Residential, until Cottonwood Residential has received an amount pursuant to clause (ii) equal to 20% of the amount distributed to the Members and Cottonwood Residential pursuant to Sections 5.1.1 and this 5.1.2; and

5.1.3      Thereafter, 80% to the Members in proportion to their Percentage Interests and 20% to Cottonwood Residential.

5.2          Cash From Capital Transactions.   Except as otherwise provided in Section 13, Cash From Capital Transactions with respect to each calendar year shall be distributed as follows:

5.2.1    First, to the Members in proportion to their accrued but undistributed 8% Preferred Return, until the Members have been distributed an amount equal to their accrued but undistributed 8% Preferred Return;

5.2.2      Second, 100% to the Members in proportion to their Net Capital Contributions until their Net Capital Contributions are reduced to zero;

5.2.3      Third, (i) 50% to the Members in proportion to their Percentage Interests and (ii) 50% to Cottonwood Residential, until Cottonwood Residential has received an amount pursuant to clause (ii) of Section 5.1.2 and clause (ii) of this Section 5.2.3 equal to 20% of the total amount distributed to the Members and Cottonwood Residential pursuant to Sections 5.1.1, 5.1.2, 5.2.1 and this 5.2.3; and

5.2.4       Thereafter, 80% to the Members in proportion to their Percentage Interests and 20% to Cottonwood Residential.

5.3          Restrictions.   The Company intends to make periodic Distributions of substantially all cash determined by the Members to be distributable, subject to the following: (i) Distributions may be restricted or suspended for periods when the Members determine that it is in the best interest of the Company; and (ii) all Distributions are subject to the payment, and the maintenance of reasonable reserves for payment of Company obligations.

6.          Compensation to the Members and their Affiliates.

6.1          Compensation.   All compensation to be received by the Members, or their Affiliates from the Company or any subsidiary thereof shall be approved by both Members.

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6.1.1      The Company will enter into a property management agreement with the Property Manager. Pursuant to such agreement the Company will pay the Property Manager an annual Property Management Fee of up to 3.5% of the monthly gross receipts generated at the Project for services it provides in connection with operating and managing the Project.

6.1.2      The Company will enter into certain agreements with Affiliates of Cottonwood Residential for the operation of the Project. Such Affiliates will receive fees for services rendered in the operation of the Project. These agreements will be made on similar terms as the agreements for the Project similarly situated and shall be approved by the Members.

6.2          Company Expenses.

6.2.1      Operating Expenses.   Subject to the limitations set forth in Section 6.2.2, the Company shall pay directly, or reimburse the Members, as the case may be, for all of the costs and expenses of the Company’s operations, including, without limitation, the following costs and expenses: (a) all Organization Expenses advanced or otherwise paid by the Members; (b) all costs of personnel employed by the Company and directly involved in the Company’s business, if any; (c) all compensation due to the Members or their Affiliates; (d) all costs of borrowed money, taxes and assessments on Property and other taxes applicable to the Company; (e) legal, accounting, audit, brokerage and other fees; (f) fees and expenses paid to independent contractors, mortgage brokers, real estate brokers and other agents; (g) costs of leasing, acquiring, owning, developing, constructing, improving, operating, and disposing of Property; (h) expenses incurred in connection with the development, construction, alteration, maintenance, repair, remodeling, refurbishment, leasing and operation of Property; (i) all expenses incurred in connection with the maintenance of Company books and records, the preparation and dissemination of reports, tax returns or other information to the Members and the making of Distributions to the Members; (j) expenses incurred in preparing and filing reports or other information with appropriate regulatory agencies; (k) expenses of insurance as required in connection with the business of the Company; (l) costs incurred in connection with any litigation in which the Company may become involved, or any examination, investigation, or other proceedings conducted by any regulatory agency, including legal and accounting fees; (m) the actual costs of goods and materials used by or for the Company; (n) the costs of services that could be performed directly for the Company by independent parties such as legal, accounting, secretarial or clerical, reporting, transfer agent, data processing and duplicating services but which are in fact performed by the Members or their Affiliates, but not in excess of the amounts which the Company would otherwise be required to pay to independent parties for comparable services in the same geographic locale; (o) expenses of Company administration, accounting, documentation and reporting; (p) expenses of revising, amending, modifying or terminating this Agreement; and (q) all other costs and expenses incurred in connection with the Company’s business, including travel to and from the Project that may be acquired by the Company.

6.2.2      Overhead of Members.   No Member nor any Affiliate shall be reimbursed for such Member’s or Affiliate’s overhead expenses incurred in connection with the business of the Company, including, but not limited to rent, depreciation, utilities, capital equipment and other administrative items.

7.          Authority and Responsibilities of the Members.

7.1          Management.   Subject to the terms of this Agreement, the business and affairs of the Company shall be managed by the Members.

7.2          Members’ Authority.   Except as otherwise set forth in this Agreement, the Members shall have all authority, rights and powers conferred by law (subject to Section 7.3) and those required or appropriate to the management of the Company’s business, which, by way of illustration but not by way of limitation, shall include the right, authority and power to cause the Company to:

7.2.1      Enter into any limited liability company agreement, partnership agreement, other operating agreement or any joint venture directly or for any subsidiary;

7.2.2      Take all actions as the manager, general partner, or member of any subsidiary;

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7.2.3      Acquire, hold, develop, lease, rent, operate, sell, exchange, subdivide and otherwise dispose of Property;

7.2.4      Place record title to, or the right to use, the Property in the name or names of a nominee or nominees for any purpose convenient or beneficial to the Company;

7.2.5      Borrow money, and, if security is required therefor, to pledge or mortgage or subject Property and the Project to any security device, to obtain replacements of any mortgage or other security device and to prepay, in whole or in part, refinance, increase, modify, consolidate, or extend any mortgage or other security device. All of the foregoing shall be on such terms and in such amounts as the Members deem to be in the best interest of the Company;

7.2.6      Provide guarantees with respect to any loan or preferred equity obtained by the Company;

7.2.7      Enter into such contracts and agreements as the Members determine to be reasonably necessary or appropriate in connection with the Company’s business and purpose (including contracts with Affiliates of the Members) and any contract of insurance that the Members deem necessary or appropriate for the protection of the Company, including errors and omissions insurance, for the conservation of Company assets, or for any purpose convenient or beneficial to the Company;

7.2.8      Employ Persons in the operation and management of the business of the Company;

7.2.9      Prepare or cause to be prepared reports, statements, and other relevant information for distribution to the Members;

7.2.10      Open accounts and deposit and maintain funds in the name of the Company in banks, savings and loan associations, “money market” mutual funds and in such other entities or instruments as the Members may deem in their discretion to be necessary or desirable;

7.2.11      Cause the Company to make or revoke any of the elections referred to in the Code;

7.2.12      Select as the Company’s accounting year a calendar or fiscal year as may be approved by the Internal Revenue Service (the Company initially intends to adopt the calendar year);

7.2.13      Determine the appropriate accounting method or methods to be used by the Company;

7.2.14      Require in any Company contract that the Members shall not have any personal liability, but that the Person contracting with the Company is to look solely to the Company and its assets for satisfaction;

7.2.15      Lease personal property for use by the Company;

7.2.16      Establish reserves from income in such amounts as the Members may deem appropriate;

7.2.17      Represent the Company and the Members as “tax matters partner” or the “partnership representative” within the meaning of the Code in discussions with the Internal Revenue Service regarding the tax treatment of items of Company income, loss, deduction or credit, or any other matter reflected in the Company’s returns, and, if deemed in the best interest of the Members, to agree to final Company administrative adjustments or file a petition for a readjustment of the Company items in question with the applicable court and take any action permitted to the “tax matters partner” or “partnership representative” pursuant to applicable law or regulation;

7.2.18      Initiate legal actions, settle legal actions and defend legal actions on behalf of the Company;

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7.2.19      Merge or combine the Company or “roll-up” the Company into a partnership, limited liability company or other entity;

7.2.20      Appoint officers of the Company as set forth in Section 7.10;

7.2.21      Perform any and all other acts which the Members are obligated to perform hereunder or which the Company is obligated to perform as the sole member of any subsidiary of the Company;

7.2.22      Admit additional Members as set forth herein;

7.2.23      Redeem or repurchase Membership Interests on behalf of the Company;

7.2.24      Execute, acknowledge and deliver any and all instruments to effectuate the foregoing and take all such actions in connection therewith as the Member deem necessary or appropriate. Any and all documents or instruments may be executed on behalf of and in the name of the Company by the Member or any officer of the Company designated by the Member.

7.3          Major Decisions.   The Company may not take the following actions without the consent of both Members (each a “Major Decision”):

7.3.1      Use or permit any other Person to use Company funds or assets in any manner except for the exclusive benefit of the Company;

7.3.2      Alter the primary purpose of the Company;

7.3.3      Receive from the Company a rebate or give-up or participate in any reciprocal business arrangements which would enable it or any Affiliate to do so;

7.3.4      Enter into any limited liability company agreement, partnership agreement, other operating agreement or joint venture directly or for any subsidiary;

7.3.5      Sell or transfer all or substantially all of the assets of the Company or any Project.

7.3.6      Decisions regarding the acquisition, management, financing, leasing, operation or disposition of any Project;

7.3.7      Borrowing or lending of any sum of money by the Company, the extension of credit or becoming a surety, guarantor, endorser or accommodation maker;

7.3.8      The acquisition of any real estate;

7.3.9      The merger, combination or “roll up” of the Company with another entity;

7.3.10      Do any act in contravention of this Agreement;

7.3.11      Do any act that would make it impossible to carry on the ordinary business of the Company;

7.3.12      Obtain insurance on behalf of the Company or any of its principals;

7.3.13      Approve of a proposed budget as an Approved Budget;

7.3.14      Require any additional capital contributions by the Members except as set forth in an Approved Budget;

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7.3.15      Selecting or varying accounting methods, filing of federal or state income tax returns or other income tax filings and making other decisions with respect to treatment of items for accounting, financial reporting, or federal or state income tax purposes, or other matters in connection therewith;

7.3.16      Approve any proposed settlement with the Internal Revenue Service or other taxing authority regarding any Company matter;

7.3.17      Distribute any Company assets in-kind;

7.3.18      Confess any judgment against the Company;

7.3.19      Increase any expense not listed in an Approved Budget that exceeds $50,000;

7.3.20      Modify the terms of any subsidiary partnership or operating agreement; and

7.3.21      Dissolution and winding up of the Company as set forth in Section 13.1.2.

7.4          Administration of the Company.   Cottonwood Residential shall have the responsibility of providing administrative and executive support, advice, consultation, analysis and supervision with respect to the functions of the Company on a commercially reasonable basis. Cottonwood Residential will be required to provide the Company with strategic advice regarding the acquisition, financing, management, improvement, leasing and disposition of the Project and to provide the Company with access to all employees and other resources of Cottonwood Residential that is necessary and reasonable to execute the foregoing.

7.5          Tax Matters Partner.   The Members hereby appoint Cottonwood Residential to act as the “tax matters partner” or the “partnership representative.”

7.6          Indemnification of the Member and the Officers.   The Members and their shareholders, Affiliates, officers, directors, partners, manager, members, employees, agents and assigns and any officers of the Company, shall not be liable for, and shall be indemnified and held harmless (to the extent of the Company’s assets) from, any loss or damage incurred by them, the Company or the other Members in connection with the business of the Company, including costs and reasonable attorneys’ fees and any amounts expended in the settlement of any claims of loss or damage resulting from any act or omission performed or omitted in good faith, which shall not constitute fraud, gross negligence or willful misconduct, breach of fiduciary duty or breach of this Agreement, pursuant to the authority granted to promote the interests of the Company. Moreover, neither the Members nor any officer of the Company shall be liable to the Company or the other Member because any taxing authorities disallow or adjust any deductions or credits in the Company’s income tax returns. Notwithstanding the above, no indemnification or defense shall be required in the event that such indemnification or default is as a result of the indemnified parties’ fraud, gross negligence or willful misconduct or breach of fiduciary duty or a claim relating thereto until such claim has been resolved by a final determination.

7.7          No Personal Liability for Return of Capital.   No Member shall be personally liable or responsible for the return or repayment of all or any portion of the Capital Contribution of any Member or any loan made by any Member to the Company, it being expressly understood that any such return of capital or repayment of any loan shall be made solely from the assets (which shall not include any right of contribution from any Member) of the Company.

7.8          Authority as to Third Persons.

7.8.1      No third party dealing with the Company shall be required to investigate the authority of the Members or the officers of the Company or secure the approval or confirmation by any Member of any act of the officers in connection with the Company’s business. No purchaser of any Property owned by the Company shall be required to determine the right to sell or the authority of the Members to sign and deliver any instrument of transfer on behalf of the Company, or to see to the application or distribution of revenues or proceeds paid or credited in connection therewith.

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7.8.2      The Members or any officer designated by the Members, shall have full authority to execute on behalf of the Company, in its own capacity or in its capacity as the general partner or manager of any subsidiary, any and all agreements, contracts, conveyances, deeds, mortgages and other instruments, and the execution thereof by the Members or any officer designated by the Members, executing on behalf of the Company, in its own capacity or in its capacity as the general partner or manager of any subsidiary, shall be the only execution necessary to bind the Company thereto. When executed by such officer, no signature of any Member shall be required.

7.9          Insurance.   The Company shall maintain insurance in the amounts determined by the Members.

7.10        Officers.

7.10.1      Appointment of Officers.   The Members may appoint officers of the Company at any time. The officers of the Company, if appointed by the Members, may include a president, chief executive officer, any number of vice presidents, a secretary and a chief financial officer. The officers shall serve at the pleasure of the Members. Any individual may hold any number of offices. The officers shall exercise such powers and perform such duties as determined and authorized by the Members when applicable.

7.10.2      Removal, Resignation and Filling of Vacancy of Officers.   Subject to the rights, if any, of an officer under a contract of employment, any officer may be removed, either with or without cause, by the Members. Any officer may resign at any time by giving written notice to the Members. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in this Agreement for regular appointments to that office.

7.10.3      Salaries of Officers.   No officer shall receive a salary for acting as an officer of the Company.

7.10.4      Signing Authority.   Subject to any restrictions imposed by the Members, and in accordance with the terms of this Agreement, the chief executive officer, the president, a vice president or the chief financial officer, acting alone, are authorized to sign and endorse checks, drafts, and other evidences of indebtedness made payable to the order of the Company or obligating the Company to pay money. The chief executive officer, the president, a vice president and the chief financial officer shall be authorized to sign contracts and obligations on behalf of the Company.

7.11          Approved Budget.   For each calendar year, not later than December 15 of the preceding year, the Property Manager shall prepare a preliminary budget for the Company which shall delineate: (a) for the Company the projected operating revenues, operating expenses, working capital, and capital expenditures, anticipated to be incurred or generated by the Company and the subsidiaries for the next following calendar year and (b) any other anticipated Company or subsidiary revenues and expenditures for such period. Each such preliminary budget shall be in such format and contain such information as determined by the Members. After approval by the Members of any such budget, the same shall constitute the “Approved Budget” for the purpose of this Agreement.

8.          Rights, Authority and Voting of the Members.

8.1          Members As Agents.   Pursuant to Section 7, the management of the Company is vested in the Members.

8.2          Voting by the Members.   Except as otherwise set forth in this Agreement, each Member shall be entitled to cast one vote. Except as otherwise specifically provided in this Agreement, Members (but not Economic Interest Owners) shall have the right to vote upon the following matters:

8.2.1       Dissolution and winding up of the Company as set forth in Section 13.1.2;

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8.2.2       Amendment of this Agreement unless otherwise provided herein; or

8.2.3       Any merger or combination of the Company or roll-up of the Company.

8.3          Member Vote.   Matters upon which the Members may vote shall require the consent of both Members to pass and become effective.

8.4          Meetings of the Members.   Any Member may at any time call for a meeting of the Members, or for a vote without a meeting, on matters on which the Members are entitled to vote.

8.4.1      Notice.   Written notice of each meeting shall be given to each Member entitled to vote, either personally or by mail or other means of written communication, charges prepaid, addressed to such Member at its address appearing on the books of the Company or given by it to the Company for the purpose of notice or, if no such address appears or is given, at the principal executive office of the Company. All such notices shall be sent not less than 10, nor more than 60, days before such meeting. The notice shall specify the place, date and hour of the meeting and the general nature of business to be transacted, and no other business shall be transacted at the meeting.

8.4.2      Adjourned Meeting and Notice Thereof.   When a Members’ meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the subsequent meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if after the adjournment a new record date is fixed for the subsequent meeting, a notice of the subsequent meeting shall be given to each Member of record entitled to vote at the meeting.

8.4.3      Quorum.   The presence in person or by proxy by both Members shall constitute a quorum for the transaction of business.

8.4.4      Consent of Absentees.   The transactions of any meeting of Members, however called and noticed and wherever held, are as valid as though they occurred at a meeting duly held after regular call and notice, if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting or an approval of the minutes thereof. All waivers, consents and approvals shall be filed with the Company records or made a part of the minutes of the meeting.

8.4.5      Action Without Meeting.   Except as otherwise provided in this Agreement, any action which may be taken at any meeting of the Members may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by the Members. In the event the Members are requested to consent on a matter without a meeting, each Member shall be given not less than 1, nor more than 5, days’ notice. In the event the Members request a meeting for the purpose of discussing or voting on the matter, the notice of a meeting shall be given in the same manner as required by Section 8.4.1 and no action shall be taken until the meeting is held. Unless delayed as a result of the preceding sentence, any action taken without a meeting will be effective immediately after the Members have signed the consent.

8.4.6       Record Dates.   For purposes of determining the Members entitled to notice of any meeting or to vote or entitled to receive any Distributions or to exercise any rights in respect of any other lawful matter, the Member or Members if the meeting is being called at its or their request may fix in advance a record date, which is not more than 60 nor less than 10 days prior to the date of the meeting nor more than 60 days prior to any other action. If no record date is fixed:

(a)        The record date for determining Members entitled to notice of or to vote at a meeting of Members shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held;

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(b)        The record date for determining Members entitled to give consent to Company action in writing without a meeting shall be the day on which the first written consent is given;

(c)        The record date for determining Members for any other purpose shall be at the close of business on the day on which the Members adopt the resolution relating thereto, or the 60th day prior to the date of such other action, whichever is later; and

(d)        A determination of Members of record entitled to notice of or to vote at a meeting of Members shall apply to any adjournment of the meeting unless the Members who requested the meeting fix a new record date for the adjourned meeting, but such Members, shall fix a new record date if the meeting is adjourned for more than 45 days from the date set for the original meeting.

8.4.7      Proxies.   Every person entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the Company. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy continues in full force and effect until revoked as specified or unless it states that it is irrevocable. A proxy which states that it is irrevocable is irrevocable for the period specified therein.

8.4.8      Chairman of Meeting.   The Members shall designate a secretary for such meeting, who shall take and keep or cause to be taken and kept minutes of the proceedings thereof.

8.4.9      Record Date and Closing Company Books.   When a record date is fixed, only Members of record on that date are entitled to notice of and to vote at the meeting or to receive a Distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any Membership Interests on the books of the Company after the record date.

8.4.10      Meetings.   Notwithstanding anything to the contrary herein, the Members shall meet at least once per calendar year to review the status of the Company. The Members may call meetings more frequently to discuss the foregoing as any Member deems to be necessary or desirable.

8.5          Rights of Members.   No Owner shall have the right or power to: (i) withdraw or reduce its Capital Contribution, except as a result of the dissolution and termination of the Company or as otherwise provided in this Agreement or by law; (ii) bring an action for partition against the Company; or (iii) demand or receive property other than cash in return of its Capital Contribution. Except as provided in this Agreement, no Owner shall have priority over any other Owner either as to the return of Capital Contributions or as to allocations of the Net Income, Net Loss or Distributions of the Company. Other than upon the termination and dissolution of the Company as provided by this Agreement, there has been no time agreed upon when the contribution of each Owner is to be returned.

8.6          Restrictions on the Owners.   No Owner shall:

8.6.1      Disclose to any non-Owner, other than their lawyers, accountants or consultants, and/or commercially exploit any of the Company’s business practices, trade secrets or any other information not generally known to the business community, including the identity of suppliers utilized by the Company;

8.6.2      Do any other act or deed with the intention of harming the business operations of the Company;

8.6.3      Do any act contrary to this Agreement; or

8.6.4      Do any act which would make it impossible to carry on the intended purposes or ordinary business of the Company.

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8.7          Return of Capital. In accordance with the Act, an Owner may, under certain circumstances, be required to return to the Company, for the benefit of the Company’s creditors, amounts previously distributed to the Owner. If any court of competent jurisdiction holds that any Owner is obligated to make any such payment, such obligation shall be the obligation of such Owner and not of the Company or any other Owner.

9.          Member Transfers.

9.1          Resignation or Withdrawal of A Member.   Subject to this Section 11, a Member shall not resign or withdraw as a Member, without the consent of the other Member.

9.2          Permitted Assignments. No Member may directly or indirectly sell, assign, hypothecate, encumber or otherwise transfer all or any part of its Interest without the consent of the other Member.

9.2.1      Any assignment or transfer of a Member’s Interest provided for by this Agreement can be an assignment or transfer of all of its Interest or any portion or part of its Interest.

9.2.2      Any transfer of all or a part of any Member’s Interest may be made only pursuant to the terms and conditions contained in this Section 9.

9.2.3      Any such assignment shall be by a written instrument of assignment, the terms of which are not in contravention of any of the provisions of this Agreement, and which has been duly executed by the assignor of such Member’s Interest and accepted by the other Member.

9.2.4      All costs of the transfer, including reasonable attorneys’ fees (if any), shall be borne by the transferring Member.

9.3          Substituted Members.   No assignee shall have the right to become a Substituted Member unless the other Member shall consent thereto and all of the following conditions are satisfied:

9.3.1      A duly executed and acknowledged written instrument of assignment shall have been filed with the Company, which instrument shall specify the Interest being assigned and set forth the intention of the assignor that the assignee succeed to the assignor’s interest as a Substituted Member in his place;

9.3.2      The assignor and assignee shall have executed, acknowledged and delivered such other instruments as the other Member may deem necessary or desirable to effect such substitution, which shall include the written acceptance and adoption by the assignee of the Membership Interest of the provisions of this Agreement;

9.3.3      The other Member shall have consented to admit the proposed assignee as a Substituted Member as set forth in this Section 9.3; and

9.3.4      The assignee shall have delivered to the other Member a signed acknowledgement of receipt of a copy of this Agreement.

9.4          Loss of Rights.   A Member shall cease to have the power to exercise any rights with respect to that portion of the assigning Member’s Membership Interest that is assigned to a Substituted Member. In the event that the Member has assigned all of the Member’s Membership Interest when the assignee becomes a Substituted Member, the assigning Member shall cease to be a Member and shall cease to have the power to exercise any rights of a Member.

9.5          Consent of Members.   By executing or adopting this Agreement, each Member hereby consents to the admission of a Substituted Member, and to any Economic Interest Owner becoming a Substituted Member upon the consent of the Members in compliance with this Agreement.

9.6          Transfer in Violation Not Recognized.   Any assignment, sale, transfer, exchange or other disposition in contravention of the provisions of this Section 9 shall be void and ineffectual and shall not bind or be

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recognized by the Company. Upon the transfer of a Member’s Membership Interest in violation of this Agreement, the Membership Interest of a Member shall be converted to an Economic Interest.

9.7          Rights of Economic Interest Owner.   An Economic Interest Owner shall be entitled to receive Distributions from the Company attributable to the Interest acquired by reason of such assignment from and after the effective date of the assignment; provided, however, that notwithstanding anything herein to the contrary, the Company shall be entitled to treat the assignor of such Interest as the absolute owner thereof in all respects, and shall incur no liability for allocations of Net Income and Net Loss or Distributions, or for the transmittal of reports or other information until the written instrument of assignment has been received by the Company and recorded on its books. The effective date of such assignment shall be the date on which all of the requirements of this Section have been complied with, subject to Section 4.7.

9.8          Right to Inspect Books.   Economic Interest Owners shall have no right to inspect the Company’s books or records, to vote on Company matters, or to exercise any other right or privilege as Members, until they are admitted to the Company as Substituted Members except as required by the Act.

9.9          Assignment of 50% or More of Interests.   Without the consent of the Members, no assignment of any Interest may be made if the Interest to be assigned, when added to the total percentage of all other Interests assigned within the 13 immediately preceding months, would, in the opinion of counsel for the Company, result in the termination of the Company under the Code.

9.10        Transfer Subject to Law.   No assignment, sale, transfer, exchange or other disposition of any Membership Interest may be made except in compliance with the applicable governmental laws and regulations, including state and federal securities laws.

9.11        Right of First Refusal.   This Section 9.11 is applicable whenever any Member desires to sell, assign, or otherwise transfer any part or all of its Membership Interest:

9.11.1      If any Owner desires to transfer all or a portion of their Interest, such Owner shall give the other Member written notice of such proposed transfer (the “Transfer Notice”) and offer to sell such Interest to the other Member. The price of the Interest shall be the price at which such Interest is intended to be transferred by the Owner to a third party in a bona fide transaction. The Transfer Notice shall set forth the intended terms, conditions, price and the name and address of such third party.

9.11.2      The other Member shall have the option for a period of 10 business days from the date of receipt of such written offer (the “Offer Period”) to accept such offer, and 2 months from the date of the receipt of such written offer to purchase the Interest (the “Option Period”) on the terms and conditions set forth therein.

9.11.3      If the offer has not been accepted in writing prior to the expiration of the Offer Period, or, if so accepted in writing, the closing of the purchase of the Interest by the other Member delivering such written acceptance has not occurred within the Option Period, the transferring Owner shall have the right for a period of 180 days following the end of the Offer Period (where no acceptance has been delivered by the other Member) or the Option Period (where acceptance of the offer has been delivered but the applicable Interest has not been purchased on or prior to the expiration of the Option Period), as applicable, to dispose of all (but not less than all) of such Interest in accordance with the terms set forth in the Transfer Notice.

9.12          Repurchase Rights.   In the event a Member assigns all or a portion of its Interest without approval of the other Member, the Company may, at its option exercised written 60 days following receipt of notice of the Member, purchase from such Member and the Member shall transfer to the Company for the consideration of $100, all of the Member’s remaining rights in the Company other than its Economic Interest. Each Member acknowledges and agrees that the right of the Company to purchase such remaining rights and interest from a Member who transfers an Interest in violation of this Section 9 is not unreasonable under the circumstances existing as of the date hereof. No such purchase by the Company of the remaining rights and interest of the Member shall operate to make a Member’s assignee a Substituted Member. Upon exercise of the Company’s right to purchase the remaining

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rights, the Company shall have the right to purchase from the assignee the Economic Interest purchased from the Member at the same price and terms paid by the assignee.

9.13          Specific Performance.   It is agreed that the rights granted to the parties in this Section 9 are of a special and unique kind and character and if there is a breach by any Member of any material provision in this Section, the other Members would not have adequate remedy at law. It is expressly agreed, therefore, that the provisions in this Section and the rights of the Members thereunder may be enforced by an action for specific performance and such other equitable relief as is provided for under the laws of the State of Delaware, and that any such action may only be brought in a court of competent jurisdiction in the State of Utah.

10.        Books, Records, Accounting and Reports.

10.1          Records.   The Company shall maintain at its principal office the Company’s records and accounts of all operations and expenditures of the Company including the following:

10.1.1      A current list of the name and last known business, residence or mailing address of each Owner;

10.1.2      A copy of the Certificate of Formation and all amendments thereto, together with any powers of attorney pursuant to which the Certificate of Formation or any amendments thereto were executed;

10.1.3      Copies of the Company’s federal, state, and local income tax or information returns and reports, if any, for the six most recent fiscal years;

10.1.4      Copies of this Agreement and any amendments thereto together with any powers of attorney pursuant to which any written accounting or any amendments thereto were executed;

10.1.5      Copies of any financial statements of the Company, if any, for the six most recent years; and

10.1.6      The Company’s books and records as they relate to the internal affairs of the Company for at least the current and past four fiscal years.

10.2          Delivery to Members and Inspection.   Each Member, or its representative designated in writing, has the right, upon reasonable written request for the purposes related to the interest of that person as a Member, which purposes shall be set forth in the written request, to receive from the Company:

10.2.1      True and full information regarding the status of the business and financial condition of the Company;

10.2.2      Promptly after becoming available, a copy of the Company’s federal, state and local income tax returns for each year;

10.2.3      A current list of the name and last known business, residence or mailing address of each Owner;

10.2.4      A copy of this Agreement and the Certificate of Formation and all amendments thereto, together with executed copies of any written powers of attorney pursuant to which this Agreement and the Certificate of Formation and all amendments thereto have been executed;

10.2.5      True and full information regarding the amount of cash and a description and statement of the agreed value of any property or services contributed by each Owner and which each Owner has agreed to contribute in the future, and the date on which each became an Owner; and

10.2.6      Any and all other information a Member may require.

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10.3          Rights of Members.   The Members have the right to inspect and copy during normal business hours any of the Company’s records.

10.4          Reports.   Cottonwood Residential will cause the Company, at the Company’s expense, to prepare quarterly and annual reports on the operations of the Company containing a year-end balance sheet and income statement. Copies of such statements shall be distributed to each Member within 30 days after the close of each quarter or 90 days after the close of each year, as applicable.

10.5          Tax Information.   Cottonwood Residential, at the Company’s expense, shall cause the income tax returns for the Company to be prepared and timely filed with the appropriate authorities. The Company shall send to each Member within 75 days after the end of each taxable year such information as is necessary to complete federal and state income tax or information returns, and a copy of the Company’s federal, state, and local income tax or information returns for that year; provided, however, that this time may be extended by the Members.

11.          Termination and Dissolution of the Company.

11.1        Termination of the Company.   The Company shall be dissolved, shall terminate and its assets shall be disposed of, and its affairs wound up upon the earliest to occur of the following:

11.1.1      Upon the happening of any event of dissolution specified in the Certificate of Formation;

11.1.2      A determination by the Members to terminate the Company;

11.1.3      Upon the entry of a decree of judicial dissolution; or

11.1.4      The expiration of the term of the Company.

11.2          Certificate of Cancellation.   As soon as possible following the occurrence of any of the events specified in Section 13.1, the Members shall execute a Certificate of Cancellation in such form as shall be required by the Act.

11.3          Liquidation of Assets. Upon a dissolution and termination of the Company, the Members or Person designated by the Members shall take full account of the Company assets and liabilities, shall liquidate the assets as promptly as is consistent with obtaining the fair market value thereof, and shall apply and distribute the proceeds therefrom in the following order:

11.3.1      To the payment of creditors of the Company, including Members who are creditors to the extent permitted by law, but excluding secured creditors whose obligations will be assumed or otherwise transferred on the liquidation of Company assets;

11.3.2      To the setting up of any reserves as required by law for any liabilities or obligations of the Company; provided, however, that said reserves shall be deposited with a bank or trust company in escrow at interest for the purpose of disbursing such reserves for the payment of any of the aforementioned contingencies and, at the expiration of a reasonable period, for the purpose of distributing the balance remaining in accordance with the remaining provisions of this Section 11.3; and

11.3.3      To the Owners as set forth in Section 5.2.

11.4         Distributions Upon Dissolution.   Each Member shall look solely to the assets of the Company for all Distributions of its Capital Contributions, and shall have no recourse therefor (upon dissolution or otherwise) against any Member. No Member shall be required to restore any deficit in the Member’s Capital Account.

11.5        Liquidation of Member’s Interest.   If there is a Liquidation of a Member’s interest in the Company, any liquidating Distribution pursuant to such Liquidation shall be made only to the extent of the positive Capital Account balance, if any, of such Member for the taxable year during which such Liquidation occurs after

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proper adjustments for allocations and Distributions for such taxable year up to the time of Liquidation. Such Distributions shall be made by the end of the taxable year of the Company during which such Liquidation occurs, or if later, within 90 days after such Liquidation.

12.          Amendment of Agreement.   This Agreement may not be amended without the consent of the Members evidenced by execution of the applicable amendment.

13.          Relationship of this Agreement to the Act.   Many of the terms of this Agreement are intended to alter or extend provisions of the Act as they may apply to the Company or the Members. Any failure of this Agreement to mention or specify the relationship of such terms to provisions of the Act that may affect the scope or application of such terms shall not be construed to mean that any of such terms is not intended to be a limited liability company agreement provision authorized or permitted by the Act or which in whole or in part alters, extends or supplants provisions of the Act as may be allowed thereby.

14.          Representations of Each Member.   Each Member represents as follows:

14.1          No View to Resell.   The Member is acquiring the Membership Interest for investment purposes only and not with a view to resell or distribute to any other person.

14.2          Status. The Member, if an entity, is duly formed and organized, validly existing and in good standing under the laws of the state of its formation and has the power under its formation documents and has the power and authority to execute, deliver and perform this Agreement, which upon execution and delivery will be a valid and binding obligation enforceable in accordance with its terms (subject only to the application of bankruptcy, insolvency or other similar laws regarding the rights of creditors generally and the exercise of judicial discretion in equity).

14.3          Due Authorization.   The execution, delivery and performance of this Agreement by such Member are duly authorized and do not require the consent or approval of any person that has not been obtained, and, if such Member is an entity, are not in contravention of or in conflict with any term or provision of such Member’s organizational documents.

14.4          Other Agreements.   The execution, delivery and performance of this Agreement will not breach or constitute a default under any agreement, indenture, undertaking or other instrument to which the Member or any Affiliate is a party or by which any of such persons or any of their respective properties may be bound or affected, which breach or default would have a materially adverse effect on the financial condition, properties or operations of this Company, and other than as contemplated by this Agreement, such execution, delivery and performance will not result in the creation or imposition of (or the obligation to create or impose) any lien or encumbrance on any of the Company’s property.

15.          Miscellaneous.

15.1          Counterparts.   This Agreement may be executed in several counterparts, and all so executed shall constitute one Agreement, binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the original or the same counterpart.

15.2          Successors and Assigns.   The terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective Members.

15.3          Severability.   In the event any sentence or Section of this Agreement is declared by a court of competent jurisdiction to be void, such sentence or Section shall be deemed severed from the remainder of this Agreement and the balance of this Agreement shall remain in full force and effect.

15.4          Notices.   All notices under this Agreement shall be in writing and shall be given to the Members or Economic Interest Owners entitled thereto, by personal service or by mail or by Federal Express, posted to the address maintained by the Company for such person or at such other address as he may specify in writing.

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15.5          Members’ Address.   The name and address of the Members are as set forth on Exhibit B.

15.6          Governing Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

15.7          Captions.   Section titles or captions contained in this Agreement are inserted only as a matter of convenience and reference. Such titles and captions in no way define, limit, extend or describe the scope of this Agreement nor the intent of any provisions hereof.

15.8          Gender.   Whenever required by the context hereof, the singular shall include the plural, and vice versa, the masculine gender shall include the feminine and neuter genders, and vice versa.

15.9          Time.   Time is of the essence with respect to this Agreement.

15.10          Additional Documents.   Each Member, upon the request of the Company, shall perform any further acts and execute and deliver any documents which may be reasonably necessary to carry out the provisions of this Agreement.

15.11          Descriptions.   All descriptions referred to in this Agreement are expressly incorporated herein by reference as if set forth in full, whether or not attached hereto.

15.12          Dispute Resolution.   In the event of a dispute under this Agreement, the Members shall first be subject to non-binding mediation at a mutually convenient location in the Salt Lake City, Utah. Such mediation shall be in accordance with the American Arbitration Association’s Mediation Rules (the “Mediation Rules”). The parties agree to use their good faith efforts to hold their first meeting with any mediator within 15 days after the notice from one party to the other invoking the mediation under this Section 15.12. The parties agree that the mediation proceedings shall be confidential as provided in the Mediation Rules. If the dispute has not been resolved as provided in this Section 15.12 within 90 days of written notice by one party to the other of such party’s election to submit the controversy to mediation, then neither party shall be obligated to proceed further with such mediation. Each of the parties to the mediation shall pay their portion of the mediator’s fees for any mediation under this Section 15.12; each of the parties shall otherwise each pay their own costs and attorneys’ fees incurred in relation to such mediation.

15.13          Attorneys’ Fees.   In the event that litigation is commenced to enforce any of the provisions of this Agreement, to recover damages for breach of any of the provisions of this Agreement, or to obtain declaratory relief in connection with any of the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs, whether or not such action proceeds to judgment. The prevailing party shall be determined by either the officiating judge in the matter or by the presiding judge in the District Court of Utah.

15.14          Venue.   Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located in Salt Lake City, Utah.

15.15          Partition.   The Members agree that the assets of the Company are not and will not be suitable for partition. Accordingly, each of the Members hereby irrevocably waives any and all rights that he may have, or may obtain, to maintain any action for partition of any of the assets of the Company.

15.16          Integrated and Binding Agreement.   This Agreement and the Investment Policy Agreement contain the entire understanding and agreement among the Members with respect to the subject matter hereof, and there are no other agreements, understandings, representations or warranties among the Members other than those set forth herein. This Agreement may be amended only as provided in this Agreement.

15.17          Title to Company Property.   All Property owned by the Company shall be owned by the Company as an entity and, insofar as permitted by applicable law, no Member shall have any ownership interest in any Company Property in its individual name or right, and each Member’s Membership Interest shall be personal property for all purposes.

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IN WITNESS WHEREOF, this Agreement is effective as of the date first set forth in the preamble.

MEMBER:
Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership
By:	CW Multifamily REIT II GP, LLC, a Delaware limited liability company, its general partner
	By:	Cottonwood Multifamily REIT II, Inc., a Maryland corporation, its sole member
		By:
			Gregg Christensen, Executive Vice President

MEMBER:
[                                                 ], LLC, a Delaware limited liability company
By:	Cottonwood Residential O.P., LP, a Delaware limited partnership, its sole member
	By:	Cottonwood Residential, Inc., a Maryland corporation, its general partner
		By:
			Gregg Christensen, Executive Vice President

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EXHIBIT A

DEFINITIONS

“8% Preferred Return” shall mean an amount equal to an 8% cumulative but not compounded annual return on a Member’s Net Capital Contribution.

“Act” shall mean the Delaware Limited Liability Company Act, as the same may be amended from time to time.

“Adjusted Capital Account Deficit” shall mean, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

(i)        Credit to such Capital Account any amounts which the Member is obligated to restore and the Member’s share of Member Minimum Gain and Company Minimum Gain and;

(ii)        Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).

“Affiliate” shall mean (i) any Person directly or indirectly controlling, controlled by or under common control with another Person; (ii) a Person owning or controlling 10% or more of the outstanding voting securities of such other Person; (iii) any officer, director or partner of such other Person; and (iv) if such other Person is an officer, director or partner, any company for which such Person acts in any capacity.

“Agreement” shall mean this Limited Liability Company Agreement, as amended from time to time.

“Approved Budget” shall have the meaning set forth in Section 7.11.

“Book Gain” shall mean the excess, if any, of the fair market value of the Property over its adjusted basis for federal income tax purposes at the time a valuation of the Property is required under this Agreement or Treasury Regulations Section 1.704-1(b) for purposes of making adjustments to the Capital Accounts.

“Book Loss” shall mean the excess, if any, of the adjusted basis of Property for federal income tax purposes over its fair market value at the time a valuation of the Property is required under this Agreement or Treasury Regulations Section 1.704-1(b) for purposes of making adjustments to the Capital Accounts.

“Book Value” shall mean the adjusted basis of Property for federal income tax purposes increased or decreased by Book Gain, Book Loss, Built-In Gain and Built-In Loss as reduced by depreciation, amortization or other cost recovery deductions, or otherwise, based on such Book Value.

“Built-In Gain (or Loss)” shall mean the amount, if any, by which the agreed value of contributed Property exceeds (or is less than) the adjusted basis of Property contributed to the Company by a Member immediately after its contribution by the Member to the capital of the Company.

“Capital Account” with respect to any Member (or such Member’s assignee) shall mean such Member’s initial Capital Contribution adjusted as follows:

(i)          A Member’s Capital Account shall be increased by:

(a)        such Member’s share of Net Income;

(b)        any item of income or gain specially allocated to a Member and not included in Net Income or Net Loss;

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(c)        any additional cash Capital Contribution made by such Member to the Company; and

(d)        the fair market value of any additional Capital Contribution consisting of property contributed by such Member to the capital of the Company reduced by any liabilities assumed by the Company in connection with such contribution or to which the Property is subject.

(ii)          A Member’s Capital Account shall be reduced by:

(a)        such Member’s share of Net Loss;

(b)        any loss or deduction specially allocated to a Member and not included in Net Income or Net Loss;

(c)        any cash Distribution made to such Member; and

(d)        the fair market value, as agreed to by the Members, of any Property (reduced by any liabilities assumed by the Member in connection with the Distribution or to which the distributed Property is subject) distributed to such Member; provided that, upon liquidation and winding up of the Company, unsold Property will be valued for Distribution at its fair market value and the Capital Account of each Member before such Distribution shall be adjusted to reflect the allocation of gain or loss that would have been realized had the Company then sold the Property for its fair market value. Such fair market value shall not be less than the amount of any nonrecourse indebtedness that is secured by the Property.

Property other than money may not be contributed to the Company except as specifically provided in this Agreement. Property of the Company may not be revalued for purposes of calculating Capital Accounts unless the Members agree upon the fair market value of the Property and the Company complies with the requirements of Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and (g); provided, however, for purposes of calculating Book Gain or Book Loss (but not for purposes of adjusting Capital Accounts to reflect the contribution and distribution of such Property), the fair market value of Property shall be deemed to be no less than the outstanding balance of any nonrecourse indebtedness secured by such Property.

The Capital Account of a Substituted Member shall include the Capital Account of his transferor. Notwithstanding anything to the contrary in this Agreement, the Capital Accounts shall be maintained in accordance with Treasury Regulations Section 1.704-1(b). For purposes of this Agreement, any references to the Treasury Regulations shall include corresponding subsequent provisions.

“Capital Contribution” shall mean the gross amount of cash actually contributed by a Member to the capital of the Company pursuant to Section 3 and the agreed upon fair market value of a contributing Member’s equity in any property actually contributed pursuant to Section 3 (including any indebtedness assumed by a Member). In the plural, “Capital Contributions” shall mean the aggregate amount contributed by all of the Members in the Company.

“Cash From Operations” shall mean the net cash realized by the Company from all sources other than Cash From Capital Transactions, including, but not limited to, cash from the operations of the Company after payment of all cash expenditures of the Company (including, but not limited to, all operating expenses, all payments of principal and interest on indebtedness, expenses for repairs and maintenance, capital improvements and replacements, and such reserves and retentions as the Members reasonably determine to be necessary and desirable in connection with the Company’s operations in connection with its existing assets and any anticipated acquisitions).

“Cash From Capital Transactions” shall (i) mean the net cash realized by the Company from the sale, financing, or other disposition of Property after payment of all cash expenditures of the Company, including, but not limited to, all disposition expenses including all fees payable to Affiliates, all payments of principal and interest on indebtedness, expenses for repairs and maintenance, capital improvements and replacements and such reserves and retentions as the Members reasonably determine to be necessary and desirable in connection with Company

A-2

operations with its then existing assets and any anticipated acquisitions and (ii) any Capital Contributions that are determined by the Members to be distributed.

“Certificate of Formation” shall mean the Certificate of Formation of the Company as filed with the Secretary of State of Delaware as the same may be amended or restated from time to time.

“Code” shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequently enacted federal revenue laws.

“Company” shall mean [                                                     ], LLC.

“Company Minimum Gain” shall have the same meaning as “partnership minimum gain” as set forth in Treasury Regulations Section 1.704-2(d).

“Delinquent Member” shall have the meaning set forth in Section 3.3.

“Distribution” shall refer to any money or other property transferred without consideration to Owners with respect to their Interests in the Company, but shall not include payments pursuant to Section 6.

“Economic Interest” shall mean an interest in the Net Income, Net Loss and Distributions of the Company but shall not include any right to vote or to participate in the management of the Company.

“Economic Interest Owner” shall mean the owner of an Economic Interest who is not a Member.

“Interest” shall mean a Membership Interest or an Economic Interest.

“Investment Policy Agreement” shall mean that certain Investment Agreement dated                                  , 20     between the Members.

“Liquidation” shall mean in respect to the Company the earlier of the date upon which the Company is terminated under Code Section 708(b)(1) or the date upon which the Company ceases to be a going concern (even though it may exist for purposes of winding up its affairs, paying its debts and distributing any remaining balance to its Members), and in respect to a Member where the Company is not in Liquidation means the date upon which occurs the termination of the Member’s entire interest in the Company by means of a distribution or the making of the last of a series of Distributions (whether or not made in more than one year) to the Member by the Company.

“Major Decision” shall have the meaning set forth in Section 7.3.

“Mediation Rules” shall have the meaning set forth in Section 15.12.

“Member” shall refer to any Person who is admitted to the Company as a Member or a Substituted Member and who has not ceased to be a Member.

“Member Minimum Gain” shall mean “partner nonrecourse debt minimum gain” as determined under Treasury Regulations Section 1.704-2(i)(3).

“Member Nonrecourse Debt” shall mean “partner nonrecourse debt” as set forth in Treasury Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deductions” shall mean “partner nonrecourse deductions,” and the amount thereof shall be, as set forth in Treasury Regulations Section 1.704-2(i).

“Membership Interest” shall mean a Member’s entire interest in the Company including such Member’s Economic Interest and such voting and other rights and privileges that the Member may enjoy by being a Member.

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“Net Capital Contribution” of any Member shall be equal to the excess, if any, of (a) the aggregate Capital Contributions of such Member over (b) the aggregate Distributions to such Member pursuant to Section 5.2.2.

“Net Income” or “Net Loss” shall mean, respectively, for each taxable year of the Company the taxable income and taxable loss (exclusive of Built-In Gain or Loss) of the Company as determined for federal income tax purposes in accordance with Code Section 703(a) (including all items of income, gain, loss, or deduction required to be separately stated pursuant to Code Section 703(a)(1)) (other than any specific item of income, gain (exclusive of Built-In Gain), loss (exclusive of Built-In Loss), deduction or credit subject to special allocation under this Agreement), with the following modifications:

(a)        The amount determined above shall be increased by any income exempt from federal income tax;

(b)        The amount determined above shall be reduced by any expenditures described in Code Section 705(a)(2)(B) or expenditures treated as such pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i);

(c)        Depreciation, amortization and other cost recovery deductions shall be computed based on Book Value instead of on the amount determined in computing taxable income or loss. Any item of deduction, amortization or cost recovery specially allocated to a Member and not included in Net Income or Net Loss shall be determined for Capital Account purposes in a similar manner; and

(d)        For purposes of this Agreement, Book Gain and Book Loss attributable to a revaluation of Property attributable to unrealized gain or loss in such Property shall be treated as Net Income and Net Loss.

“Non-Delinquent Member” shall have the meaning set forth in Section 3.3.

“Nonrecourse Debt” shall have the meaning set forth in Treasury Regulations Section 1.704-2(b)(3).

“Nonrecourse Deductions” shall have the meaning, and the amount thereof shall be, as set forth in Treasury Regulations Section 1.704-2(c).

“Organization Expenses” shall mean all of the out-of-pocket expenses incurred in connection with the organization and formation of the Company such as filing fees and costs and other costs and fees of the Members and their advisors.

“Owner” shall mean a Member or the holder of an Economic Interest.

“Percentage Interest” shall mean the percentage interest of a Member, as set forth opposite the name of such Member under the column “Percentage Interest” on Exhibit B.

“Person” shall mean a natural person, corporation, limited partnership, general partnership, joint stock company, joint venture, association, company, trust, bank trust company, land trust, business trust, statutory trust or other organization, whether or not a legal entity, and a government or agency or political subdivision thereof.

“Prime Rate” shall mean the reference rate announced from time-to-time by the Wall Street Journal, and changes in the Prime Rate shall be deemed to occur on the date that changes in such rate are announced.

“Project” shall mean that certain [                    ] located in [                        ] commonly known as [                                                         ].

“Property” shall refer to any or all of such real and tangible or intangible personal property or properties as may be acquired by the Company, including the Project.

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“Property Management Fee” shall have the meaning set forth in Section 6.1.1.

“Property Manager” shall mean Cottonwood Capital Management II, LLC, a Delaware limited liability company.

“Regulatory Allocations” shall mean the allocations set forth in Sections 4.2.1 through 4.2.7.

“Required Additional Capital Contribution” shall have the meaning set forth in Section 3.3.

“Substituted Member” shall mean any Person admitted as a substituted Member pursuant to this Agreement.

“Tax Payment” shall have the meaning set forth in Section 4.10.1.

“Transfer Notice” shall have the meaning set forth in Section 9.11.1.

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EXHIBIT B

ROSTER OF MEMBERS

Name and Address	Percentage Interest
Cottonwood Multifamily REIT II O.P., LP 6340 South 3000 East, Suite 500 Salt Lake City, Utah 84121		[90]%
[                                         ], LLC 6340 South 3000 East, Suite 500 Salt Lake City, Utah 84121		[10]%

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EX1A-6 MAT CTRCT

Exhibit 6.5

ASSET MANAGEMENT AGREEMENT

This Asset Management Agreement (“Agreement”), dated as of [                ], 20[    ], is entered into by and between Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Company”) and Cottonwood Capital Property Management II, LLC, a Delaware limited liability company (the “Asset Manager”).

W I T N E S S E T H

WHEREAS, the Company desires to avail itself of the experience, sources of information, advice, assistance and certain facilities available to the Asset Manager and to have the Asset Manager undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of the Board; and

WHEREAS, the Asset Manager is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions set forth hereinafter.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

1.      Definitions. Defined terms shall have the meaning set forth below.

“Affiliate or Affiliated” shall mean as to any individual, corporation, partnership, limited liability company, trust or other association (i) any person or entity directly or indirectly, through one or more intermediaries controlling, controlled by, or under common control with another person or entity; (ii) any person or entity, directly or indirectly owning or controlling 10% or more of the outstanding voting securities of another person or entity; (iii) any officer, director, partner, member, or trustee of such person or entity; (iv) any person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other person; and (v) if such other person or entity is an officer, director, partner, member, or trustee of a person or entity, the person or entity for which such person or entity acts in any such capacity. For purpose of this Agreement, the term “person” shall include any natural persons, partnership, corporation, trust, limited liability company, association or other entity.

“Agreement” shall mean this Asset Management Agreement between the Company and the Asset Manager, as amended from time to time.

“Articles of Incorporation” shall mean the charter of the Company, as amended or restated from time to time.

“Asset Management Fee” shall have the meaning set forth in Section 7.

“Asset Manager” shall mean Cottonwood Capital Property Management II, LLC, a Delaware limited liability company.

“Board” shall mean the Board of Directors of the Company.

“Bylaws” shall mean the bylaws of the Company, as amended from time to time.

“Company” shall mean Cottonwood Multifamily REIT II, Inc., a Maryland corporation.

“Director” shall mean a member of the Board.

“GAAP” shall mean generally accepted accounting principles.

“Gross Assets” shall mean (i) the gross book value of the assets of the Company until such time as the Board has established a net asset value of the Company’s assets and (ii) after the Board has established a net asset value of the Company’s assets, the gross asset value of the assets of the Company based on such net asset value determination. The Gross Assets of the Company will be determined on a quarterly basis. For avoidance of doubt, under (i) or (ii), gross book value or gross asset value (as applicable) shall be determined based on the Company’s pro rata ownership interest in the underlying real estate and other assets and liabilities, without regard to GAAP consolidation or equity method accounting principles.

“Gross Offering Proceeds” shall mean the offering proceeds received by the Company through the Offering.

“Investment” means any investment by the Company in Multifamily Apartment Communities and Multifamily Real Estate Related Assets.

“Joint Venture” means a Delaware limited liability company formed by the Operating Partnership and Cottonwood Residential O.P., LP, as the members, to acquire Multifamily Apartment Communities and Multifamily Real Estate Related Assets.

“Multifamily Apartment Communities” means investments by the Company in multifamily apartment communities, either through the Operating Partnership or through a Joint Venture.

“Multifamily Real Estate Related Assets” means any investments by the Company in (i) mezzanine loans or (ii) preferred equity interests, either through the Operating Partnership or through a Joint Venture.

“Offering” shall mean the offering of Shares of the Company pursuant to the Offering Statement.

“Offering Statement” shall mean the Offering Statement on Form 1-A as filed with the SEC for qualification.

“Offering Termination Date” shall mean the date on which the earliest of the following occurs: (i) the sale of $50,000,000 of Shares, (ii) the one year anniversary of the date the SEC qualified the Offering Statement or (iii) a determination by the Board to terminate the Offering.

“Operating Partnership” shall mean Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership.

“REIT” shall mean a “real estate investment trust” under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequently enacted Federal revenue laws.

“SEC” shall mean the Securities and Exchange Commission.

“Shareholders” shall mean the registered holders of the Shares.

“Shares” shall mean shares of common stock of the Company.

“Termination Date” shall mean the date of termination of this Agreement.

2.      Appointment. The Company hereby appoints the Asset Manager to serve as its asset manager on the terms and conditions set forth in this Agreement, and the Asset Manager hereby accepts such appointment.

3.    Duties of the Asset Manager. The Asset Manager is responsible for advising the Company with respect to managing, operating, directing and supervising the operations and administration of the Company and its assets, including any assets owned by subsidiaries of the Company. The Asset Manager shall have no obligation to take any action that would require the Asset Manager to register as an investment advisor pursuant to the Investment Advisers Act of 1940. Subject to the limitations set forth in this Agreement, including Section 4, and the continuing and exclusive authority of the Board over the management of the Company, the Asset Manager shall perform the following duties:

3.1        serve as the Company’s asset manager and, when reasonably requested, provide the Board with reports in connection with the Company’s assets and investment policies;

3.2        provide, either directly or through access to the Asset Manager’s employees and contractors, the daily management of the Company and perform and supervise the various administrative functions reasonably necessary for the management of the Company;

3.3        select, and, on behalf of the Company, engage and conduct business with such persons as the Asset Manager deems necessary to the proper performance of its obligations as set forth in this Agreement, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, developers, construction companies, property owners, property managers, mortgagors, and any and all agents for any of the foregoing, including Affiliates of the Asset Manager, and persons acting in any other capacity deemed by the Asset Manager necessary or desirable for the performance of any of the foregoing services, including but not limited to entering into contracts in the name of the Company with any of the foregoing;

3.4        perform such due diligence and underwriting duties as reasonably required by the Board in order for the Board to make a reasonable business judgement as to the acquisition or disposition of an Investment;

3.5        monitor and evaluate the performance of the Company’s Investments, oversee the performance of the property managers for the Investments and coordinate and manage relationships between the Company and any Joint Venture partners;

3.6        provide ongoing services with respect to the management of the Company’s investments including with respect to recommendations regarding capital improvements at a Multifamily Apartment Community, payment and contestation of property and other taxes assessed at a Multifamily Apartment Community and evaluation and recommendations regarding any insurance policies obtained by the Company or a Joint Venture (or any subsidiary thereof);

3.7        negotiate on behalf of the Company with banks or lenders for loans to be made to the Company, or obtain loans for the Company, and negotiate on behalf of the Company with investment banking firms and broker-dealers; and provided, further, that any fees and costs payable to third parties incurred by the Asset Manager in connection with the foregoing shall be the responsibility of the Company;

3.8        from time to time, or at any time reasonably requested by the Board, make reports to the Board of its performance of services to the Company, as applicable, under this Agreement;

3.9        provide the Company with all necessary cash management services; and

3.10        do all things necessary to assure its ability to render the services described in this Agreement.

4.    Authority of Asset Manager.

4.1        Pursuant to the terms of this Agreement (including the restrictions included in this Section 4), and subject to the continuing and exclusive authority of the Board, the Board hereby delegates to the Asset Manager the authority to perform the services described in Section 3. The Asset Manager shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Asset Manager as it may deem appropriate. Any authority delegated by the Asset Manager to any other Person shall be subject to the limitations on the rights and powers of the Asset Manager specifically set forth in this Agreement.

4.2        Notwithstanding the foregoing, the Asset Manager may not take any action on behalf of the Company without the prior approval of the Board or duly authorized committees thereof if the Articles of Incorporation or Maryland General Corporation Law require the prior approval of the Board. The acquisition or disposition of any Investment, including any financing of such Investment, will require the prior approval of the Board, any particular Directors specified by the Board or any committee of the Board, as the case may be.

5.    Records; Access. The Asset Manager shall maintain appropriate records of all its activities hereunder and make such records available for inspection by the Board and by counsel, auditors and authorized agents of the Company, at anytime or from time to time during normal business hours. The Asset Manager shall at all reasonable times have access to the books and records of the Company.

6.    Limitations on Activities. Notwithstanding any other provision in this Agreement, the Asset Manager shall refrain from taking any action which, in its sole judgment made in good faith, would (i) adversely affect the status of the Company as a REIT after the Company qualifies for and has elected REIT status, (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or (iii) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, the Shares, or otherwise not be permitted by the Articles of Incorporation or Bylaws of the Company. In the event that an action would violate (i) through (iii) of the preceding sentence but such action has been ordered by the Board, the Asset Manager shall notify the Board of the Asset Manager’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event the Asset Manager shall have no liability for acting in accordance with the specific instructions of the Board so given. Notwithstanding the foregoing, the Asset Manager, its members, managers, officers, employees and stockholders, members of the board and officers of the Asset Manager’s Affiliates shall not be liable to the Company, the Board, or Shareholders of the Company for any act or omission by the Asset Manager, its officers or employees, or stockholders, board or officers of the Asset Manager’s Affiliates except as provided in Section 15 and Section 16 of this Agreement.

7.    Asset Management Fee. The Company shall pay the Asset Manager as compensation for the services described in Section 3 an Asset Management Fee in an amount equal to 0.75% per annum of the Gross Assets of the Company. The Gross Assets will be determined as of the last day of the prior month. The Asset Management Fee shall be payable monthly on the last day of such month, or the first business day following the last day of such month.

8.    Other Services. Should the Board request that the Asset Manager or any member, manager, officer or employee thereof render services for the Company other than as set forth in Section 3, such services shall be separately compensated at such rates and in such amounts as are agreed by the Asset Manager and the Board, and shall not be deemed to be services pursuant to the terms of this Agreement.

9.    Other Activities of the Asset Manager. Nothing herein contained shall prevent the Asset Manager from engaging in other activities, including, without limitation, the rendering of advice to other persons (including other REITs) and the management of other programs advised, sponsored or organized by the Asset Manager or its Affiliates; nor shall this Agreement limit or restrict the right of any member, manager, officer, or employee of the Asset Manager or its Affiliates to engage in any other business or to render services of any kind to any other person. The Asset Manager may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein.

10.    Relationship of Asset Manager and Company. The Company and the Asset Manager do not intend to form a joint venture, partnership or similar relationship. Instead, the parties intend that Asset Manager shall act solely in the capacity of an independent contractor for the Company. Nothing in this Agreement shall cause the Asset Manager and the Company to be joint venturers or partners of each other, and neither shall have the power to bind or obligate the other party by virtue of this Agreement, except as expressly provided in this Agreement.

11.    Term; Termination of Agreement. Subject to Section 12, this Agreement shall continue until December 31, 2023, which may be automatically extended for up to 4 additional 1 year periods if the term of the Company is extended as set forth in the Articles of Restatement of the Company (the “Liquidation Date”); provided, however, if the Company has listed its shares on a national exchange, over the counter exchange or the substantial equivalent thereof (as such terms are defined in the Articles of Restatement of the Company) or if the Company is involved in a merger with another entity, the Property Management Agreement shall continue until the Liquidation Date (the “Termination Date”). Notwithstanding the foregoing, the Company and the Asset Manager may extend the term of this Agreement beyond the Termination Date upon the mutual consent of the Company and the Asset Manager.

12.    Termination for Cause. This Agreement may be terminated for cause by the Company in the event fraud, willful misconduct or gross negligence of the Asset Manager, as determined by a final, non-appealable judgement of a court of competent jurisdiction. This Agreement may be terminated for cause by the Asset Manager in the event that the Company becomes subject to regulation under the Investment Company Act.

13.    Assignment to an Affiliate. This Agreement may be assigned by the Asset Manager to an Affiliate with the approval of the Board. The Asset Manager may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board. This Agreement shall not be assigned by the Company without the consent of the Asset Manager, except in the case of an assignment by the Company to a corporation or other organization which is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company are bound by this Agreement.

14.    Payments to And Duties of Asset Manager Upon Termination.

14.1        After the Termination Date (unless this Agreement is extended as set forth in Section 12), the Asset Manager shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination all earned but unpaid fees payable to the Asset Manager prior to termination of this Agreement.

14.2        The Asset Manager shall promptly upon termination, but in no event earlier than 30 days following termination:

14.2.1    pay over to the Company all money collected and held for the account of the Company pursuant to this Agreement, after deducting any accrued compensation to which it is then entitled;

14.2.2    deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board;

14.2.3    deliver to the Board all assets, including Investments, and documents of the Company then in the custody of the Asset Manager; and

14.2.4    cooperate with the Company to provide an orderly management transition.

15.    Indemnification by the Company. The Company shall indemnify and hold harmless the Asset Manager and its Affiliates, including their respective officers, directors, partners, members, managers and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, subject to any limitations imposed by any law. Notwithstanding the foregoing, the Asset Manager shall not be entitled to indemnification or be held harmless pursuant to this Section 15 for any activity which the Asset Manager shall be required to indemnify or hold harmless the Company pursuant to Section 16. Any indemnification of the Asset Manager may be made only out of the net assets of the Company.

16.    Indemnification by Asset Manager. The Asset Manager shall indemnify and hold harmless the Company from contract or other liability, claims, damages, taxes or losses and related expenses including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the Asset Manager’s fraud, willful misconduct or gross negligence, but the Asset Manager shall not be held responsible for any action of the Board, or an action taken by the Asset Manager on the request of the Board, in following or declining to follow any advice or recommendation given by the Asset Manager.

17.        Miscellaneous.

17.1        Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice is accepted by the party to whom it is given, and shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein:

To the Company:

Cottonwood Multifamily REIT II, Inc.

Attn: Gregg Christensen

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

To the Asset Manager:

Cottonwood Capital Property Management II, LLC

Attn: Gregg Christensen

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section 17.1.

17.2        Modification. This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assignees.

17.3        Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

17.4        Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Utah.

17.5        Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

17.6        Indulgences, Not Waivers. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

17.7        Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

17.8        Titles Not to Affect Interpretation. The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

17.9        Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

COMPANY:	ASSET MANAGER:
COTTONWOOD MULTIFAMILY REIT II, INC., a Maryland corporation	COTTONWOOD CAPITAL PROPERTY MANAGEMENT II, LLC, a Delaware limited liability company

By:		By:	Cottonwood Capital Holdings, LLC, a Delaware limited liability company, its sole member
	Gregg Christensen, Executive Vice President

        By:   Cottonwood Capital Management, Inc., a Maryland corporation, its sole member

By:
	Gregg Christensen, Executive Vice President

EX1A-6 MAT CTRCT

Exhibit 6.6

FORM OF

PROPERTY MANAGEMENT AGREEMENT

This PROPERTY MANAGEMENT AGREEMENT (the “Agreement”) is effective as of [                ], 20[        ] (the “Effective Date”) by and between [                ], LLC a Delaware limited liability company (the “Property Owner”) the owner of [                    ] which consists of [                ] units located at [                                ] and as more particularly described in Exhibit “A” attached hereto and incorporated herein (the “Project”) and Cottonwood Capital Property Management II, LLC, a Delaware limited liability company (the “Property Manager”).

The Property Owner desires to engage the Property Manager to supervise, manage, lease, operate, and maintain the Project.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.      Commencement and Termination Dates.

1.1        Commencement and Termination. The Property Manager’s duties and responsibilities under this Agreement shall begin on the Effective Date.

1.2        Termination. This Agreement shall terminate on the earlier of: (i) the sale of the Project or (ii) December 31, 2024, which may be automatically extended for up to 4 additional 1 year periods if the term of Cottonwood Multifamily REIT II, Inc. a Maryland corporation (the “Company”) is extended as set forth in the Articles of Restatement of the Company (the “Liquidation Date”); provided, however, if the Company has listed its shares on a national exchange, over the counter exchange or the substantial equivalent thereof (as such terms are defined in the Articles of Restatement of the Company) or if the Company is involved in a merger with another entity, the Property Management Agreement shall continue until the Liquidation Date, (iii) a termination as provided in Section 10. Notwithstanding the above, the Property Owner and the Property Manager may elect to extend this Agreement beyond the term set forth above by mutual written agreement.

2.      Property Manager’s Responsibilities.

2.1        Status of the Property Manager. The Property Owner and the Property Manager do not intend to form a joint venture, partnership or similar relationship. Instead, the parties intend that the Property Manager shall act solely in the capacity of an independent contractor for the Property Owner. Nothing in this Agreement shall cause the Property Manager and the Property Owner to be joint venturers or partners of each other, and neither shall have the power to bind or obligate the other party by virtue of this Agreement, except as expressly provided in this Agreement. Nothing in this Agreement shall deprive or otherwise affect the right of the parties to this Agreement to own, invest in, manage or operate, or to conduct business activities that compete with the business of the Project.

2.2        Management.

2.2.1    Generally. The Property Manager shall manage, operate and maintain the Project in a commercially reasonable manner for the tenants thereof, subject to (a) applicable governmental requirements and (b) the terms and provisions of this Agreement. At the expense of the Property Owner, the Property Manager shall keep the Project clean and in good repair, and shall order and supervise the completion of such repairs as may be required, provided that the Property Owner, in a

manner reasonably satisfactory to the Property Manager, makes available to the Property Manager sufficient sums to pay the costs thereof.

2.2.2    Responsibility Relating to Loans. In addition to the foregoing, the Property Manager shall have responsibility for interfacing and communicating with the owner and holder of any deed of trust or mortgage upon the Project and its successors and assigns (a “Lender”) and shall: (i) perform all services customarily provided by a property manager, with respect to interfacing with the Lender in connection with the loan secured by such deed of trust or mortgage (“Loan”) and all other documents executed in connection therewith (the “Loan Documents”), including, without limitation, designating changes in address, receiving any and all notices, including, without limitation, default notices on behalf of the Property Owner, requesting and receiving any amounts out of any reserve accounts or escrow accounts maintained by Lender, or its successors and assigns, on account of repairs, capital improvements, tenant improvements, leasing commissions, real estate taxes and assessments and insurance proceeds or otherwise; and (ii) with the consent of the Property Owner, request waivers of provisions under the Loan Documents and negotiate conditions to any such requested waivers that might be granted by the Lender and its successors and assigns, depositing rents or other revenues in any lockbox account maintained under such Loan Documents, receiving into an operating account to be maintained by the Property Manager for the benefit of the Property Owner all disbursements made out of any such lockbox to the Property Owner as the borrower thereunder for the payment of operating expenses of the Project, or otherwise to be made to or to the account of the Property Owner as such borrower, requesting and receiving any amounts out of any reserve accounts or escrow accounts maintained by such Lender on account of repairs, capital improvements, tenant improvements, leasing commissions, real estate taxes and assessments and insurance proceeds or otherwise.

2.3    Employees/Independent Contractors of Property Manager. The Property Manager shall employ, directly or through third party contractors (e.g. employee leasing company) employees and/or independent contractors to enable the Property Manager to manage, operate and maintain the Project. All matters pertaining to the supervision of such employees and independent contractors shall be the responsibility of the Property Manager. All salaries, benefits and positions of employees who perform work in connection with the Project shall be consistent with the Budget (as defined in Section 2.5).

2.4    Compliance with Laws, Mortgages and Other Matters.

2.4.1    The Property Manager shall comply with all applicable local, state and federal laws (collectively “Laws”). The Property Manager may implement such procedures with respect to the Project as the Property Manager may deem advisable for the efficient and economic management and operation thereof. The Property Manager shall pay from the Operating Account (defined in Section 6.1) expenses incurred to remedy violations of Laws. However, the Property Manager shall not be obligated to remedy any violations of Law if sufficient funds are not available in the Operating Account or if the Property Owner does not provide sufficient additional funds to do so.

2.4.2    The Property Manager shall furnish to the Property Owner, promptly after receipt, any notice of violation of any material Laws issued by any governmental entity or any notice of termination or cancellation of any insurance policy.

2.4.3    The Property Manager shall use commercially reasonable efforts to comply with the Loan Documents. The Property Manager shall furnish to the Property Owner, promptly after receipt, any notices of default received from a Lender. The Property Owner shall furnish to the Property Manager, promptly after receipt, any notices of default received from a Lender.

2.5    Budgets.

2.5.1    The Property Manager shall prepare and submit to the Property Owner annually an annual capital and operating budget (“Budget”) for the promotion, operation, leasing, repair, maintenance and improvement of the Project for each calendar year. The Budget for the initial calendar year, preapproved by the Property Owner, is attached hereto as Exhibit “B” and incorporated herein by this reference. The Property Manager shall deliver the Budget for each subsequent calendar year on or prior to December 1^st of the calendar year before the budget year, or as soon as possible thereafter. The Property Owner shall have thirty (30) days after delivery of the Budget to approve or disapprove of the Budget. The Property Owner agrees to use its best efforts to approve the Budget. If the Property Owner does not disapprove of the Budget (which disapproval shall be in writing to the Property Manager), or any item therein, within such thirty (30) day specified response period described above, the Property Owner shall have been deemed to have approved the Budget. In the event the approval is not obtained, the Property Owner shall negotiate in good faith with the Property Manager for fifteen (15) days to resolve the issue. If the parties are unable to reach an agreement, the issue shall be resolved by arbitration as set forth in Section 13.5 with the Property Owner on the one hand, and the Property Manager on the other hand; the costs of the arbitration shall be paid by the Project. The Property Manager may proceed under the terms of the proposed Budget for items that are not objected to and may take any action with respect to Permitted Expenditures (as defined in Section 2.5.2 below). In the event that the items that are objected to are operational expenditures, as opposed to capital expenditures, the Property Manager shall be entitled to operate the Project using the prior year’s Budget for such items plus five percent (5%) until approval is obtained. The Property Manager may at any time submit a revised Budget to the Property Owner for its approval, which will be governed by the terms of this Section 2.5.1 and shall continue to operate the Project under the previously approved Budget until the revised Budget is approved. The Property Manager shall provide the Property Owner with such information regarding the Budget as may be, from time to time, reasonably requested by the Property Owner.

2.5.2    The Property Manager shall charge all expenses to the proper account as specified in the Budget, provided that the Property Manager may reallocate savings from one line item to other line items for the benefit of the Property Owner. The Property Manager shall submit (subject to the same procedures as set forth in Section 2.5.1) a revised Budget to the Property Owner before making any expenditure not within the Budget unless the expenditure is (a) less than $25,000, or (b) is, in the Property Manager’s reasonable judgment, required to avoid personal injury, significant property damage, a default under any loan encumbering the Project, a violation of applicable Law or the suspension of a service (collectively, “Permitted Expenditures”).

2.5.3    During each calendar year, in the regular monthly reports sent to the Property Owner, the Property Manager shall inform the Property Owner of any material increases in costs and expenses not foreseen and not included in the Budget within a reasonable time after the Property Manager learns of such changes.

2.5.4    Any controversy arising out of or related to any dispute regarding the Budget as set forth in Section 2.5.1 shall be settled by binding arbitration as provided in Section 13.5.

2.6    Leasing.

2.6.1    The Property Owner hereby approves all Leases, as defined in Section 2.6.2 presently in effect on the date hereof and the Property Manager’s standard lease form, a copy of which is attached hereto and incorporated herein as Exhibit C.

2.6.2    The Property Manager shall use commercially reasonable efforts to obtain tenants for all leasable space in the Project and to renew leases and rental agreements (collectively, “Leases”) as provided herein. The Property Manager shall have the authority to negotiate and execute new and renewal Leases on behalf of the Property Owner. In connection with its leasing efforts, the Property Manager may advertise the Project for lease.

2.6.3    The Property Manager shall not, without the prior written approval of the Property Owner, give free rental or discounts or rental concessions to any employees, officers or shareholders of the Property Manager or anyone related to such employees, officers or shareholders unless such discounts or concessions are disclosed in the Budget or are in lieu of salaries or other benefits to which they would be contractually entitled. The Property Manager shall not lease any space in the Project to itself or to any of its affiliates or subsidiaries.

2.6.4    The Property Manager shall reasonably investigate all prospective tenants, and shall not rent to persons not meeting credit standards reasonable for the market. The Property Manager may, in its discretion, obtain a credit check for all prospective tenants through LexisNexis or a similar service. The Property Manager shall retain such information for the duration of the tenancy, and shall make it available to the Property Owner upon reasonable notice, subject to compliance with any confidentiality restrictions required by any credit check company and any applicable Laws. The Property Manager does not guarantee the accuracy of any such information or the financial condition of any tenant.

2.6.5    The Property Manager and the Property Owner agree that there shall be no intentional discrimination against or segregation of any person or group of persons on account of age, race, color, religion, creed, handicap, sex or national origin in the leasing of the Project, nor shall the Property Manager knowingly permit any such practice or practices of discrimination or segregation with respect to the selection, location, number or occupancy of tenants.

2.6.6    The Property Manager is hereby authorized to execute any and all subordination and non-disturbance agreements, tenant estoppel certificates and tenant notices with respect to the Project, and any and all property tax declaration forms with respect to the acquisition of the Project.

2.7    Collection of Rents and Other Income. Unless otherwise required by any Loan Documents affecting the Project, the Property Manager shall bill all tenants and shall use its commercially reasonable efforts to collect all rent and other charges due and payable from any tenant or from others for services provided in connection with the Project. The Property Manager shall deposit all monies so collected in the Operating Account as defined in Section 6.1.

2.8    Repairs and Maintenance. The Property Manager shall maintain the buildings, appurtenances and common areas of the Project other than areas that are the responsibility of the tenants, including, without limitation, all repairs, cleaning, painting, decorations and alterations, for example electrical, plumbing, carpentry, masonry, elevators and such other routine repairs as are necessary or reasonably appropriate in the course of maintenance of the Project (subject to the limitations of this Agreement). The Property Manager shall pay actual and reasonable expenses for materials and labor for such purposes from the Operating Account.

2.9    Capital Expenditures. The Property Manager, on behalf of the Property Owner, may make any capital expenditure within any Budget approved by the Property Owner without any further consent, provided that the Property Manager follows the bidding procedures prescribed below. All other capital expenditures (other than Permitted Expenditures) shall be subject to submittal of a revised Budget to the Property Owner. Unless the Property Owner specifically waives such requirements,

or approves a particular contract, the Property Manager shall award any contract for a capital improvement exceeding $50,000 in cost on the basis of competitive bidding, solicited from a minimum of two (2) written bids. The Property Manager shall accept the bid of the lowest bidder determined by the Property Manager to be responsible, qualified and capable of completing such improvements on a reasonable schedule.

2.10    Service Contracts, Supplies and Equipment.

2.10.1    The Property Manager, on behalf of the Property Owner, may enter into or renew any contract for cleaning, maintaining, repairing or servicing the Project or any of the constituent parts of the Project (including but not limited to contracts for utilities, security or other protection, extermination, landscaping, architectural or engineering services) without the further consent of the Property Owner. Each service contract shall (a) be in the name of the Property Owner or the Property Manager as agent of the Property Owner, (b) be assignable to a successor owner of the Project, and (c) be for a term not to exceed one year unless the circumstances require otherwise in the sole discretion of the Property Manager.

2.10.2    If this Agreement terminates pursuant to Section 10, the Property Manager shall assign to the Property Owner or the nominee of the Property Owner all of the Property Manager’s interest in the service agreements pertaining to the Project or otherwise terminate such service agreements as directed by the Property Owner to the extent the Property Manager and/or Property Owner has the authority to terminate such service agreements.

2.10.3    At the expense of the Property Owner, the Property Manager shall purchase, provide, and pay for any needed janitorial and maintenance supplies, tools and equipment, restroom and toilet supplies, light bulbs, paints, and similar supplies necessary to operate and maintain the Project. Any interest in such supplies and equipment shall be the property of the Property Owner. All such supplies, tools, and equipment generally shall be delivered to and stored at the Project and shall be used only in connection with the management, operation, and maintenance of the Project.

2.10.4    The Property Manager shall use reasonable efforts to purchase all goods, supplies or services at the lowest cost reasonably available from reputable sources.

2.11    Taxes and Mortgages. The Property Manager, unless otherwise requested, shall obtain and verify bills for real estate and personal property taxes, general and special real property assessments and other like charges (collectively “Taxes”) which are, or may become, liens against the Project and appeal such Taxes as the Property Manager may decide, in its reasonable judgment, to be prudent. The Property Manager shall report any such Taxes that materially exceed the amounts contemplated by the Budget to the Property Owner prior to the Property Manager’s payment thereof. The Property Manager, if requested by the Property Owner, will prepare an application for correction of the assessed valuation (in cooperation with the Property Owner) to be filed with the appropriate governmental agency. The Property Manager shall pay, within the time required to obtain discounts, from funds provided by the Property Owner or from the Operating Account, all utilities, Taxes and payments due under each lease, mortgage, deed of trust or other security instrument, if any, affecting the Project. To the extent contemplated by the Budget (as may be revised from time to time), the Property Manager may make any such payments and pay customary rates to tax professionals for related tax services without the additional approval of the Property Owner.

2.12    Miscellaneous Duties. The Property Manager shall (a) maintain at the Property Manager’s office address as set forth in Section 12.1 or at the Project, and readily accessible to the Property Owner, orderly files containing rent records, insurance policies, Leases and subleases,

correspondence, receipted bills and vouchers, bank statements, canceled checks, deposit slips, debit and credit memos, and all other documents and papers pertaining to the Project or the operation thereof; (b) provide information about the Project necessary for the preparation and filing by the Property Owner of its income or other tax returns required by any governmental authority, including annual statements,; (c) consider and record tenant service requests in systematic fashion showing the action taken with respect to each; (d) supervise the moving in and out of tenants and, if permitted under the Leases and known to the Property Manager, subtenants; arrange, to the extent possible, the dates thereof to minimize disturbance to the operation of the Project and inconvenience to other tenants; and render an inspection report, an assessment for damages and a recommendation on the disposition of any deposit held as security for the performance by the tenant under its lease with respect to each premises vacated; (e) check all bills received for the services, work and supplies ordered in connection with maintaining and operating the Project and, except as otherwise provided in this Agreement, pay such bills when due and payable; and (f) not knowingly permit the use of the Project for any purpose that might void any policy of insurance held by the Property Owner or that might render any loss thereunder uncollectible. All such records are the property of the Property Owner and will be made available to the Property Owner upon request.

3.      Insurance.

3.1    Insurance.

3.1.1    The Property Manager, at the Property Owner’s expense, will, to the extent available at commercially reasonable rates, obtain and keep in force (or require the tenants under the Leases to obtain and keep in force) adequate insurance against physical damage (such as fire with extended coverage endorsement, boiler and machinery) and against liability for loss, damage or injury to property or persons that might arise out of the occupancy, management, operation or maintenance of the Project, as contemplated by the Budget and any Loan Documents affecting the Project. Such insurance shall be obtained for the Property Owner and shall include the Property Owner as a named insured. The Property Manager shall not be required to obtain terrorism, earthquake or flood insurance unless required by the Loan Documents or otherwise expressly directed to do so by a specific written notice from the Property Owner, but may do so in the Property Manager’s reasonable discretion. The Property Manager shall be a named insured on all property damage insurance and an additional insured on all liability insurance maintained with respect to the Project. In the event the Property Manager receives insurance proceeds for the Project, the Property Manager will take any required actions as set forth in any Loan Documents affecting the Project. In the event that the Property Manager receives insurance proceeds that are not governed by the terms of any Loan Documents affecting the Project, the Property Manager will either (i) use such proceeds to replace, repair or refurbish the Project or (ii) distribute such proceeds to the Property Owner, as directed by the Property Owner. Any insurance proceeds distributed to the Property Owner will be distributed subject to any fees owed to the Property Manager pursuant to this Agreement. The foregoing notwithstanding, in all events the Property Manager will obtain on behalf of the Property Owner, at the Property Owner’s expense, all applicable insurance coverage as may be required by the terms of any Loan Documents.

3.1.2    The Property Owner acknowledges that the Property Manager is not a licensed insurance agent or insurance expert. Accordingly, the Property Manager shall be entitled to rely on the advice of a reputable insurance broker or consultant regarding the proper insurance for the Project.

3.1.3    Subject to the provisions of any Loan Documents, the Property Manager shall investigate and submit, as soon as reasonably practicable, any required reports to the insurance carrier as to all accidents, claims for damage relating to the ownership, operation and maintenance of the Project, any damage to or destruction of the Project and the estimated costs of repair thereof. Subject to the provisions of any Loan Documents, the Property Manager shall settle all claims, including the

execution of proofs of loss, the adjustment of losses, signing and collection of receipts and collection of money.

3.2    Contractor’s and Subcontractor’s Insurance. The Property Manager shall require all contractors and subcontractors entering upon the Project to perform services to have insurance coverage at the contractor’s or subcontractor’s expense, in the following minimum amounts or such other amounts as may be required under the terms of any Loan Documents: (a) worker’s compensation – statutory amount; (b) employer’s liability (if required) - $500,000; and (c) comprehensive general liability insurance, including comprehensive auto liability insurance covering the use of all owned, non-owned and hired automobiles, with bodily injury and property damage limits of $750,000 per occurrence. The Property Manager may waive such requirements in its reasonable discretion. The Property Manager shall obtain and keep on file a certificate of insurance which shows that each contractor and subcontractor is so insured.

3.3    Property Manager’s Insurance. The Property Manager shall maintain, at its own expense, errors and omissions insurance, director and officers insurance and employment practices insurance with a minimum of $1,000,000 in coverage. The Property Manager shall also maintain an employee crime policy with a minimum of $50,000 in coverage.

3.4    Waiver of Subrogation. To the extent available at commercially reasonable rates, all property damage insurance policies required hereunder shall contain language whereby the insurance carrier thereunder waives any right of subrogation it may have with respect to the Property Owner or the Property Manager.

4.      Financial Reporting and Record Keeping.

4.1    Books of Accounts. The Property Manager shall maintain adequate and separate books and records for the Project with the entries supported by sufficient documentation to ascertain their accuracy with respect to the Project. The Property Owner agrees to provide to the Property Manager any financial or other information reasonably requested by the Property Manager to carry out its services hereunder. The Property Manager shall maintain such books and records at the Property Manager’s office as set forth in Section 12.1 or at the subcontractor to the Property Manager or at the Project. The Property Manager shall assert such control over accounting and financial transactions as is reasonably necessary to protect the Property Owner’s assets from theft, error or fraudulent activity by the Property Manager’s employees. The Property Manager shall bear the losses arising from the fraud or gross negligence of the Property Manager or any of its employees or agents, including, without limitation, the following: (a) theft of assets by the Property Manager’s employees, principals, or officers or those individuals associated or affiliated with the Property Manager; (b) overpayment or duplicate payment of invoices arising from either fraud or gross negligence, unless credit is subsequently received by the Property Owner within ten (10) days of such overpayment or duplicate payment; (c) overpayment of labor costs arising from either fraud or gross negligence, unless credit is subsequently received by the Property Owner within ten (10) days of such overpayment; (d) overpayment resulting from payment from suppliers to the Property Manager’s employees or agents arising from the purchase of goods or services for the Project; and (e) unauthorized use of facilities by the Property Manager or the Property Manager’s employees or agents.

4.2    Financial Reports. On or about the 20th day following the end of each calendar month, the Property Manager shall furnish to the Property Owner a report of all significant transactions occurring during such prior month. These reports shall include a cash flow statement, a current rent roll and a Property Manager update on the status of the Project. The Property Manager also shall deliver to the Property Owner within sixty (60) days following (i) the end of each calendar year and (ii) the termination of this Agreement, a report showing, in summary form, all collections, delinquencies,

uncollectible items, vacancies and other matters pertaining to the management, operation, and maintenance of the Project during the prior year or such applicable portion thereof. The annual report shall also contain a statement of income and expenses, a balance sheet for the Project and such other financial information deemed applicable in the Property Manager’s reasonable discretion. The statement of income and expenses, the balance sheet, and all other financial statements and reports shall be prepared on an accrual basis and in compliance with all reporting requirements relating to the operations of the Project and required under any Loan Documents. If requested by the Property Owner, the Property Manager shall provide financial statements prepared on an accrual basis according, to the extent possible, to generally accepted accounting principles. The Property Manager shall also provide to any lender under any Loan Documents copies of all applicable reports required thereunder that relate to the Project.

4.3    Supporting Documentation. At the expense of the Property Owner, the Property Manager shall maintain and make available at the Property Manager’s office, as set forth in Section 12.1, or at the office of the subcontractor to the Property Manager, at the Project or at a designated office in the region of the Project, copies of the following, if available: (a) all bank statements, bank deposit slips, bank debit and credit memos, canceled checks, and bank reconciliations; (b) detailed cash receipts and disbursement records; (c) trial balance for receivables and payables and billed and unbilled revenue items; (d) rent roll of tenants; (e) paid invoices (or copies thereof); (f) summaries of adjusting journal entries as part of the annual accounting process; (g) supporting documentation for payroll, payroll taxes and employee benefits; (h) appropriate details of accrued expenses and property records; and (i) market study of competition (annually).

4.4    Tax Information. The Property Manager shall provide the Property Owner with sufficient information so that the Property Owner can prepare its income tax returns on the cash method of accounting or, if requested, with appropriate adjustment to convert the information to an accrual basis.

5.      Right to Audit. The Property Owner and its representatives, including the lender under the Loan Documents, may examine all books, records and files maintained for the Property Owner by the Property Manager. Any such party may perform any audit or investigations relating to the Property Manager’s activities at any office of the Property Manager if such audit or investigation relates to the Property Manager’s activities for the Property Owner. Should the Property Owner discover defects in internal controls or errors in record keeping, the Property Manager shall undertake with all appropriate diligence to correct such discrepancies either upon discovery or within a reasonable period of time. The Property Manager shall inform the Property Owner in writing of the action taken to correct any audit discrepancies. Any audit or investigation performed by the Property Owner will be conducted at the Property Owner’s sole expense.

6.      Bank Accounts.

6.1    Operating Account. To the extent funds are not required to be placed in a lockbox pursuant to any Loan Documents affecting the Project, the Property Manager shall deposit all rents and other funds collected from the operation of the Project in a reputable bank or financial institution in a special trust or depository account or accounts for the Project maintained by the Property Manager for the benefit of the Property Owner. The Property Manager shall maintain books and records of the funds deposited in the accounts and withdrawals therefrom (such accounts together with any interest earned thereon, shall collectively be referred to herein as the “Operating Account”). The Property Manager shall maintain, with funds from the Property Owner, the Operating Account so that an amount at least as great as the budgeted expenses for such month is in such Operating Account as of the first of each month. The Property Manager shall pay from the Operating Account, on behalf of the Property Owner, the operating expenses of the Project and any other payments relating to the Project as required by this Agreement. If more than one account is necessary to operate the Project, each account shall have a

unique name, except to the extent any Lender requires sub-accounts within any account. All rents and other funds collected in the Operating Account after payment of all operating expenses, debt service and such amounts as may be reasonably determined by the Property Manager to be retained for reserves or improvements, shall, unless otherwise provided by any Loan Documents, be paid to the Property Owner.

6.2    Security Deposit Account. The Property Manager shall open, on behalf of the Property Owner, a separate account at a reputable bank or other financial institution for the purpose of segregating security deposits. The Property Manager shall maintain such account in accordance with applicable law and/or the applicable Loan Documents. The Property Manager shall use the account only to maintain security deposits on behalf of the Property Owner. The Property Manager shall require the bank or financial institution to hold the funds in trust for the Property Owner. The Property Manager shall maintain detailed records of all security deposits deposited, and allow the Property Owner or its designees access to such records. Subject to any contrary terms of any Loan Documents, the Property Manager may return such deposits to any tenant in the ordinary course of business in accordance with the terms of the applicable lease and applicable Law.

6.3    Access to Account. As authorized by signature cards, representatives of the Property Manager shall have access to and may draw upon all funds in the accounts described in Sections 6.1 and 6.2 without the approval of the Property Owner. Additionally, representatives of the Property Manager shall have access to and may draw upon any funds escrowed or held in reserve for capital expenditures without the approval of the Property Owner, provided that the requirements of Section 2.9 and any additional Lender requirements with respect to such amounts are satisfied. The Property Owner may not withdraw funds from such accounts without the Property Manager’s prior written consent, except following the Property Manager’s default after expiration of any applicable notice and cure periods or the termination of this Agreement.

7.      Payment of Expenses.

7.1    Costs Eligible for Payment from Operating Account. The Property Manager shall pay all expenses of the operation, maintenance and repair of the Project contemplated by the Budget directly from the Operating Account or shall be reimbursed by the Property Owner, subject to the conditions set forth in Section 2.5, including the following to the extent applicable: (a) costs of the gross salary and wages or proportional shares thereof, payroll taxes, payroll processing fees, worker’s compensation insurance, employee education, training and certification and all other benefits of employees (for example, on-site personnel) required to manage, operate and maintain the Project properly, adequately, safely and economically, subject to this Agreement, provided that the Property Manager shall not pay such employees in advance; (b) cost to comply with the terms of any Loan Documents and/or to correct the violation of any governmental requirement relating to the leasing, use, repair and maintenance of the Project, or relating to the Laws, if such cost is not the result of the Property Manager’s gross negligence fraud or willful misconduct; (c) actual and reasonable cost of making all repairs, decorations and alterations if such cost is not the result of the Property Manager’s gross negligence or willful misconduct; (d) cost incurred by the Property Manager in connection with all service agreements; (e) cost of collection of delinquent rents collected by a collection agency or attorney; (f) legal support fees and reasonable legal fees of attorneys for the costs of services otherwise provided herein; (g) cost of capital expenditures subject to the restrictions in Section 2.9 and in this Section; (h) cost of printed checks for each account required for the Project and the Property Owner; (i) cost of utilities and costs associated with utility billing; (j) cost of advertising, marketing and resident surveys; (k) cost of printed forms and supplies required for use at the Project; (l) management compensation set forth in Section 9; (m) the cost of tenant improvements to the Project subject to the restrictions in Section 2.9 and this Section 7.1; (n) all hiring, relocation and termination costs for any employees whose salaries and benefits are paid by the Property Owner; (n) brokers’ commissions; (o) debt service; (p) the cost of

utilities, services, contractors and insurance; (q) reimbursement of the Property Manager’s out-of-pocket costs and expenses to the extent not prohibited by Section 8; (r) general accounting and reporting services within the reasonable scope of the Property Manager’s responsibility to the Property Owner; (s) cost of forms, papers, ledgers, postage and other supplies and equipment (including computer equipment) used in the Property Manager’s office at any location;(t) computer/information technology (IT) support and the cost of electronic data processing equipment, including personal computers located at the Property Manager’s office at the Project for preparation of reports, information and returns to be prepared by the Property Manager under the terms of this Agreement; (u) cost of electronic data processing provided by computer service companies for preparation of reports, information and returns to be prepared by the Property Manager under the terms of this Agreement, including but not limited to any costs associated with Yardi or similar property management software; (v) travel and entertainment expenses intended to advance the interests of the Project; and (w) cost of routine travel by the Property Manager’s employees or agents to and from Project. In the alternative, the Property Manager may charge a monthly flat fee for the above services, which flat fee is subject to the approval of the Property Owner. All other amounts not directly related to the Project or the Property Owner shall be payable solely by the Property Manager, and shall not be paid out of the Operating Account or reimbursed by the Property Owner.

7.2    Operating Account Deficiency. If there are not sufficient funds in the Operating Account (or any reserve account held by the Lender) to make any required payment, the Property Manager shall notify the Property Owner, if possible, at least ten (10) days prior to any such delinquency so that the Property Owner has an opportunity to deposit sufficient funds into the Operating Account (or, if applicable, any reserve account held by the Lender) to allow for payment prior to the imposition of any penalty or late charge. In no event shall the Property Manager be required to expend any of its own funds for the operation or maintenance of the Project; however, should it do so, the Property Manager shall be entitled to reimbursement from the Property Owner within thirty (30) days after such advance.

7.3    Interest on Funds Advanced or Loaned by the Property Manager. Subject to the approval of the Property Owner, the Property Manager may (but shall not be obligated to) loan funds to the Property Owner in the future, with simple interest thereon at the rate of fifteen percent (15%) per annum (or, if lower, the highest rate permitted by Law). Such loan, if any, shall be full recourse to the Property Owner and must be repaid within thirty (30) days of funding.

8.      Property Manager’s Costs Not To Be Reimbursed.

8.1    Non-Reimbursable Costs. Costs attributable to losses arising from the gross negligence or fraud on the part of the Property Manager, the Property Manager’s agents or employees shall be at the sole cost and expense of the Property Manager and shall not be reimbursed by the Property Owner.

8.2    Litigation. The Property Manager will be responsible for and hold the Property Owner harmless from, all fees, costs, expenses, and damages relating to criminal activity involving employees, disputes with employees for worker’s compensation (to the extent not covered by insurance), discrimination or wrongful termination, including legal fees and other expenses, where it is determined by final judicial determination that such loss, cost or expense was the fault of the Property Manager.

9.      Compensation. The Property Manager and its Affiliates will receive the compensation set forth on Schedule 1.

10.      Termination.

10.1    Termination by Property Owner. The Property Owner shall have the right to terminate this Agreement only upon the following events: (i) because of the gross negligence, willful misconduct or fraud of the Property Manager, (ii) the bankruptcy, insolvency or inability of the Property Manager to meet its obligation as the same come due or (iii) as directed by a Lender pursuant to the terms of any applicable Loan Documents.

10.2    Termination by the Property Manager. The Property Manager shall have the right to terminate this Agreement upon thirty (30) days prior written notice from the Property Manager to the Property Owner indicating its’ termination of the Agreement.

10.3    Termination on Sale.     This Agreement shall automatically terminate upon the sale of the entire Project.

10.4    Final Accounting.     Within forty-five (45) days after termination of this Agreement for any reason, the Property Manager shall deliver to the Property Owner the following: (a) a final accounting, setting forth the balance of income and expenses on the Project as of the date of termination; (b) transfer to any account indicated by the Property Owner any balance or monies of the Property Owner or tenant security deposits held by the Property Manager with respect to the Project (or transfer the accounts in which such sums are held as instructed by the Property Owner); and (c) deliver to a subsequent property manager or other agent indicated by the Property Owner all materials and supplies, keys, books and records, contracts, leases, receipts for deposits, unpaid bills and other papers or documents which pertain to the Project. For a period of forty-five (45) days after such expiration or cancellation for any reason other than the Property Owner’s default, the Property Manager shall be available, through its senior executives familiar with the Project, to consult with and advise the Property Owner or any person or entity succeeding to the Property Owner as owner of the Project or such other person or persons selected by the Property Owner regarding the operation and maintenance of the Project. In addition, the Property Manager shall cooperate with the Property Owner in notifying all tenants of the Project of the expiration and termination of this Agreement, and shall use reasonable efforts to cooperate with the Property Owner to accomplish an orderly transfer of the operation and management of the Project to a party designated by the Property Owner. The Property Manager shall receive its monthly Property Management Fee for such services. The Property Manager shall, at its cost and expense, promptly remove all signs wherever located indicating that it is the Property Manager and replace and repair any damage resulting therefrom. Termination of this Agreement shall not release either party from liability for failure to perform any of the duties or obligations as expressed herein and required to be performed by such party for the period prior to the termination.

10.5    Debts and Obligations of the Property Owner. In the performance of its duties hereunder, the Property Manager and its affiliates, shall act on behalf of the Property Owner solely in their capacity as the Property Owner’s agent. All debts and obligations to third parties incurred by the Property Manager or its affiliates, in relation to the Project, shall be the debts and obligations of the Property Owner, and neither the Property Manager, nor its affiliates, shall be liable for, and shall be indemnified by, the Property Owner for any such debts, liabilities or obligations. The Property Manager and its affiliates shall have no obligation or responsibility to make payments with their own funds on any indebtedness incurred on behalf of the Property Owner or the Project, whether secured by the Project, or any portion thereof. Furthermore, this Agreement shall not be terminated by the Property Owner until all existing debts, liabilities and obligations arising out of any loan or the payment for goods or services on behalf of the Project are paid in full or assumed by a successor property manager; any guarantees entered into or made by the Property Manager, its affiliates, principles or officers on behalf of the Project are extinguished; and all fees owed to the Property Manager and its affiliates have been paid in full.

11.      Conflicts. The Property Manager shall not deal with or engage, or purchase goods or services from, any subsidiary or affiliated company of the Property Manager in connection with the management of the Project for amounts above market rates.

12.      Notices. All notices, demands, consents, approvals, reports and other communications to the Property Owner as provided for in this Agreement shall be in writing and shall be given to the Property Owner as set forth below, or at such other address as they may specify hereafter in writing. All notices, demands, consents, approvals, reports, and other communications to the Property Manager provided for in this Agreement shall be in writing and shall be given to the Property Manager at the address set forth below or at such other address as it may specify hereafter in writing:

To the Property Manager at:

Cottonwood Capital Property Management II, LLC

c/o Cottonwood Residential, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Attention: General Counsel

To the Property Owner:

[                     ], LLC

c/o Cottonwood Multifamily REIT II, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Attention: General Counsel

Any notice or other communication that is not emailed may be delivered by a recognized overnight delivery service providing a receipt, facsimile transmission or mailed by United States registered or certified mail, return receipt requested, postage prepaid if deposited in a United States Post Office or depository for the receipt of mail regularly maintained by the post office. Notices sent by overnight courier shall be deemed given one (1) business day after mailing; notices sent by registered or certified mail shall be deemed given two (2) business days after mailing; and notices sent by facsimile transmission shall be deemed given as of the date sent (if sent prior to 5:00 p.m. MT and if receipt has been acknowledged by the operator of the receiving machine). Notices sent via e-mail shall be deemed given as of the date sent (if sent prior to 5:00 p.m. MT and if the Property Manager does not receive a “bounce back” notice that the e-mail transmission was not completed).

13.    Miscellaneous.

13.1    Assignment. The Property Manager may not assign this Agreement without the prior written consent of the Property Owner, which consent may be withheld in the Property Owner’s sole and absolute discretion, except with respect to an assignment to an affiliate, including, but not limited to a wholly-owned subsidiary, which shall be permissible under this Agreement.

13.2    Gender. Each gender shall include each other gender. The singular shall include the plural and vice-versa.

13.3    Amendments. Each amendment, addition or deletion to this Agreement shall not be effective unless approved by the parties in writing, except as otherwise provided herein.

13.4    Attorneys’ Fees. In any action or proceeding between the Property Manager and the Property Owner arising from or relating to this Agreement or the enforcement or interpretation hereof, the party prevailing in such action or proceeding shall be entitled to recover from the other party all of its reasonable attorneys’ fees and other costs and expenses of the action or proceeding.

13.5 Binding Arbitration. Any controversy between the parties hereto arising out of or related to this Agreement or the breach thereof shall be settled by arbitration in Salt Lake City, Utah, in accordance with the rules of The American Arbitration Association, and judgment entered upon the award rendered may be enforced by appropriate judicial action. The arbitration panel shall consist of one member, which shall be the mediator if mediation has occurred or shall be a person agreed to by each party to the dispute within thirty (30) days following notice by one party that he or she desires that a matter be arbitrated. If there was no mediation and the parties are unable within such thirty (30) day period to agree upon an arbitrator, then the panel shall be one arbitrator selected by the Denver, Colorado office of The American Arbitration Association, which arbitrator shall be experienced in the area of real estate and limited liability companies and who shall be knowledgeable with respect to the subject matter area of the dispute. The losing party shall bear any fees and expenses of the arbitrator, other tribunal fees and expenses, reasonable attorneys’ fees of both parties, any costs of producing witnesses and any other reasonable costs or expenses incurred by the losing party or the prevailing party or such costs shall be allocated by the arbitrator. The arbitration panel shall render a decision within thirty (30) days following the close of presentation by the parties of their cases and any rebuttal. The parties shall agree within thirty (30) days following selection of the arbitrator to any prehearing procedures or further procedures necessary for the arbitration to proceed, including interrogatories or other discovery; provided, in any event each party shall be entitled to discovery in accordance with applicable Utah law.

13.6    Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Utah without regard to any choice of law rules. Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located in Salt Lake City, Utah.

13.7    Headings. All headings are only for convenience and ease of reference and are irrelevant to the construction or interpretation of any provision of this Agreement.

13.8    Representations. The Property Manager represents and warrants that it is or shall become fully qualified and licensed, to the extent required by applicable Law, to manage and lease real estate and perform all obligations assumed by the Property Manager hereunder. The Property Manager shall use reasonable efforts to comply with all such laws now or hereafter in effect. If at any time it is determined that the Property Manager does not have all applicable licenses or qualifications, the Property Manager shall be given a reasonable opportunity to cure such deficiency by obtaining any required licenses or permits.

13.9    Indemnification by Property Manager. The Property Manager shall indemnify, defend and hold the Property Owner and its shareholders, officers, directors, members, partners and employees harmless from any and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses, including reasonable attorneys’ fees and court costs, sustained or incurred by or asserted against the Property Owner where it is determined by final judicial determination that such loss, cost or expense was the result of the acts of the Property Manager which arise out of the gross negligence, willful misconduct or fraud of the Property Manager, its agents or employees or the Property Manager’s material breach of this Agreement. If any person or entity makes a claim or institutes a suit against the Property Owner on a matter for which the Property Owner claims the benefit of the foregoing indemnification, then (a) the Property Owner shall give the Property Manager prompt notice thereof in writing; (b) the Property Manager may defend such claim or action by counsel of its own choosing

provided such counsel is reasonably satisfactory to the Property Owner; and (c) neither the Property Owner nor the Property Manager shall settle any claim without the other’s written consent.

13.10    Indemnification by the Property Owner. The Property Owner shall indemnify, defend and hold the Property Manager and its shareholders, members, partners, officers, directors, managers and employees harmless from any and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses, including reasonable attorneys’ fees and court costs, sustained or incurred by or asserted against the Property Manager by reason of the operation, management, and maintenance of the Project and the performance by the Property Manager of the Property Manager’s obligations under this Agreement, except those which arise from the Property Manager’s gross negligence, willful misconduct or fraud. If any person or entity makes a claim or institutes a suit against the Property Manager on matters for which the Property Manager claims the benefit of the foregoing indemnification, then (a) the Property Manager shall give the Property Owner prompt notice thereof in writing; (b) the Property Owner may defend such claim or action by counsel of its own choosing provided such counsel is reasonably satisfactory to the Property Manager; (c) neither the Property Manager nor the Property Owner shall settle any claim without the other’s written consent; and (d) this subsection shall not be so construed as to release the Property Owner or the Property Manager from any liability to the other for a breach of any of the covenants agreed to be performed under the terms of this Agreement.

13.11    Complete Agreement. This Agreement shall supersede and take the place of any and all previous agreements entered into between the parties with respect to the Project.

13.12 Severability. If any provisions of this Agreement or application to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement, where the application of such provisions or circumstances other than those as to which it is determined to be invalid or unenforceable shall not be affected thereby, and each provision hereof shall be valid and shall be enforced to the fullest extent permitted by law.

13.13    No Waiver. The failure by any party to insist upon the strict performance of, or to seek remedy of, any one of the terms or conditions of this Agreement or to exercise any right, remedy, or election set forth herein or permitted by law shall not constitute or be construed as a waiver or relinquishment for the future of such term, condition, right, remedy or election, but such item shall continue and remain in full force and effect. All rights or remedies of the parties specified in this Agreement and all other rights or remedies that they may have at law, in equity or otherwise shall be distinct, separate and cumulative rights or remedies, and no one of them, whether exercised or not, shall be deemed to be in exclusion of any other right or remedy of the parties.

13.14    Binding Effect. This Agreement shall be binding and inure to the benefit of the parties and their respective successors and assigns.

13.15    Counterparts. This Agreement may be executed in several counterparts, which when executed shall constitute one Agreement, binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the original or the same counterpart.

13.16    Waiver of Right to Jury Trial. THE PROPERTY OWNER AND THE PROPERTY MANAGER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTIONS BROUGHT BY OR AGAINST THE PROPERTY OWNER OR THE PROPERTY MANAGER IN CONNECTION WITH THIS AGREEMENT.

IN WITNESS WHEREOF the parties hereby execute this Agreement to be effective as of the date set forth above.

PROPERTY MANAGER:

Cottonwood Capital Property Management II, LLC, a Delaware limited liability company

By:   Cottonwood Capital Holdings, LLC, a Delaware limited liability company, its sole member

By:   Cottonwood Capital Management, Inc., a Delaware corporation, its sole member

By:

Name:

Title:

PROPERTY OWNER:

[                ] LLC, a Delaware limited liability company

By:

Name:

Title:

SCHEDULE 1

FEES TO PROPERTY MANAGER & AFFILIATES

The Property Manager and its Affiliates will receive the following compensation:

●        Property Management Fee.   The Property Manager, or an affiliate, shall receive, for its services in managing the day-to-day operations of the Project in accordance with the terms of this Agreement, an annual property management fee (the “Property Management Fee”) equal to 3.5% of the Gross Revenues (as defined below) and prorated for any partial year, payable in monthly installments, which Property Management Fee shall be in addition to any out-of-pocket and on-site personnel costs that are reimbursable pursuant to Section 7. “Gross Revenues” shall be all gross billings from the operations of the Project including rental receipts, late fees, application fees, pet fees, damages, lease buy-out payments, and reimbursements by tenants for common area expenses, operating expenses and Taxes and similar pass-through obligations paid by tenants, but excluding (i) security deposits received from tenants and interest accrued thereon for the benefit of the tenant until such deposits or interest are included in the taxable income of the Property Owner; (ii) advance rents (but not lease buy-out payments) until the month in which payments are to apply as rental income; (iii) reimbursements by tenants for work done for that particular tenant, (iv) proceeds from the sale or other disposition of all or any part of the Project, (v) insurance proceeds received by the Property Owner as a result of any insured loss (except proceeds from rent insurance or the excess of insurance proceeds for repairs over the actual costs of such repairs), (vi) condemnation proceeds not attributable to rent, (vii) capital contributions made by the Property Owner; (viii) proceeds from capital, financing and any other transactions not in the ordinary course of the operation of the Project, (ix) income derived from interest on investments or otherwise, (x) abatement of Taxes, awards arising out of takings by eminent domain, discounts and dividends on insurance policies, and (xi) rental concessions not paid by third parties. The Property Management Fee shall be payable monthly from the Operating Account or from other funds timely provided by the Property Owner. Upon termination of this Agreement, the parties will prorate the Property Management Fee on a daily basis to the effective date of such cancellation or termination. Upon a sale of the Project, the Property Manager shall receive additional compensation equal to the previous month’s Property Management Fee as compensation for work to be performed in connection with the sale or completion of managing matters relating to each tenant. The Property Management Fee will be paid monthly in arrears.

●        Construction Management Fee.   The Property Manager, or an affiliate, shall receive for its services in supervising any renovation or construction project in excess of $5,000 in or about the Project a construction management fee (the “Construction Management Fee”) equal to 5% of the cost of the amount (including related professional services and any supervisory onsite personnel) that is expended. The Construction Management Fee is generally not payable for routine maintenance expenditures. The Construction Management Fee will be paid within 30 days of the incurrence of the applicable Construction Management Fee. If Certis Construction, LLC is acting as the general contractor for any renovation or construction project, the Property Manager will not be paid the Construction Management Fee for such renovation or construction project.

EXHIBIT A

LEGAL DESCRIPTION

EXHIBIT B

BUDGET

EXHIBIT C

FORM LEASE

EX1A-6 MAT CTRCT

Exhibit 6.7

PURCHASE OPTION AGREEMENT

This Purchase Option Agreement (“Agreement”) is made as of [                    ,     ] (“Effective Date”) by and between Cottonwood Residential O.P., L.P., a Delaware limited partnership (“CROP”) and Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership (“CW Multifamily OP II”). In this Agreement, CROP and Multifamily REIT are individual referred to as a “Party” and collectively referred to as the “Parties.”

RECITALS

A.    The Parties plan to enter into one or more joint ventures, which are anticipated to formed as Delaware limited liability companies (each a “Joint Venture” and collectively, the “Joint Ventures”).

B.    CW Multifamily OP II desires to grant a purchase option to CROP with respect to the purchase of CW Multifamily OP II’s interest in the Joint Ventures.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.    Purchase Option by CROP. CROP shall have the option, but not the obligation, to purchase CW Multifamily OP II’s interest in the Joint Ventures and any direct interests in real property owned by CW Multifamily OP II not held in a Joint Venture (the “Interest”), as set forth in this Section 1 at any time after December 31, 2020 and until the termination of this Agreement. In order to exercise this option, CROP shall provide written notice of its election to exercise this option to CW Multifamily OP II. The purchase price of the Interest shall be equal to the Fair Market Value of the Interest (as defined in Section 2 of this Agreement). The Parties shall begin negotiation of the Fair Market Value of the Interest within 15 days after the date of the written notice from CROP and shall follow the procedures set forth in Section 2. After the determination of the Fair Market Value of the Interest, CROP shall have 30 days to elect whether to complete the purchase option and purchase the Interest. If CROP elects to complete such purchase option, the purchase price shall be paid by CROP within 60 days after the determination of the Fair Market Value of the Interest and the transfer of the interest shall occur on such date. If CROP does not elect to proceed with the purchase option, CROP will not be permitted to send notice and initiate the purchase option process for a period of 6 months and all costs and expenses related to the purchase option will be borne by CROP.

2.        Fair Market Value.

2.1.        “Fair Market Value of the Interest” shall mean the fair market value of CW Multifamily OP II’s interest in the Joint Ventures as determined in accordance with the procedures set forth below. The Fair Market Value of the Interest shall be determined as of the date notice is sent by CROP of its intent to exercise the applicable purchase option. Within 15 days after the date of the written notice from CROP, the Parties shall each appoint one certified MAI real estate appraiser who shall have been active full-time over the previous 5 years in the appraisal of comparable properties and real estate related assets. The two third-party appraisers shall provide an estimate of the fair market value of the Joint Ventures’ assets as if such assets were sold as of the date of the notice at such value. This value will be reduced by the customary closing costs, fees and commissions in the jurisdiction in which such assets are located that would be applied if the Joint Venture sold such assets. The selected appraisers will provide their determinations of value within 30 days after appointment. If the two appraised values are within 5% of each other, the value of the Joint Ventures’ assets will be the average of the two appraised values. If the two appraised values are not within 5% of each other, the two selected appraisers will, within 15 days after their determinations of value, mutually agree upon a third appraiser meeting the foregoing qualifications and the third appraiser will provide an appraised value. The third appraiser shall provide his/her determination of value within 30 days after appointment. The value of the Joint Ventures’

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assets will then be equal to the average of the third appraised value and whichever of the prior appraised values is closest to the third appraised value. The Fair Market Value of the Interest will be determined as if there was a hypothetical sale of all the Joint Ventures’ assets at the appraised value (subtracting all liabilities) and a distribution is made pursuant to the terms of each Joint Venture agreement.

2.2.    If either Party fails to appoint an appraiser within the time period specified above, the arbitrator appointed by one of them shall reach a decision which shall be binding upon the Parties. The cost of the appraisers shall be paid by CROP. The decision of the appraisers shall be binding upon the Parties and may be submitted by either Party to any court of competent jurisdiction to enforce this Agreement. The Party submitting the decision shall submit to the court a form of judgment incorporating the decision of the appraisers, and such judgment, when signed by a judge of the superior court, shall become final for all purposes and shall be entered by the clerk of the court on the judgment roll of the court. The closing of the purchase of the Interest shall occur in a location mutually agreed to by the parties, or if no location is agreed to, at the offices of CROP. Closing costs and prorations shall be allocated, as is standard practice where the investments are located.

3.    Termination. This Agreement shall terminate upon the earliest of: (i) the sale of the last Joint Venture’s assets, (ii) December 31, 2030 or (iii) a merger of Cottonwood Multifamily REIT II, Inc., a Maryland corporation, into another REIT, real estate company or other entity.

4.    Assignment. CROP shall have the absolute right to assign its rights and obligations under this Agreement to an affiliate of CROP.

5.    Notices. Any notice to be given or other document or payment to be delivered by any Party to any other Party hereunder shall be addressed to the Party for whom intended, as follows:

To CROP at:

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Attn: Gregg Christensen

To CW Multifamily OP II at:

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Attn: Gregg Christensen

6.    Binding Effect. All provisions of this Agreement shall inure to the benefit of the Parties and be binding upon the successors-in-interest, assigns and legal representatives of the Parties hereto.

7.    Headings. All section headings in this Agreement are for convenience and ease of reference and are irrelevant to the construction or interpretation of any provision of this Agreement.

8.    Entire Agreement. This Agreement constitutes the entire written agreement between the Parties and supersedes all prior agreements, oral or written, with respect to the subject matter hereof.

9.    Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Utah without regard to any choice of law rules.

10.    Amendment. Each amendment, addition or deletion to this Agreement shall not be effective unless approved by the Parties in writing.

11.    Venue. Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located in Salt Lake City, Utah.

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12.    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original (including copies sent to a Party by telecopy or facsimile transmission) as against the Party signing such counterpart, but which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed, effective as of the date first written above.

CROP:
COTTONWOOD RESIDENTIAL O.P., LP, a Delaware limited partnership
By:	Cottonwood Residential, Inc., a Maryland corporation, its general partner

By:
	Gregg Christensen, Executive Vice President

COTTONWOOD MULTIFAMILY REIT II O.P., LP, a Delaware limited partnership
By:	CW Multifamily REIT II GP, LLC, a Delaware limited liability company, its general partner

By:   Cottonwood Multifamily REIT II, Inc., a Maryland corporation, its sole member

By:
	Gregg Christensen, Executive Vice President

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EX1A-6 MAT CTRCT

Exhibit 6.8

INVESTMENT POLICY AGREEMENT

This Investment Policy Agreement (the “Agreement”), effective as of                     ,          20        , is entered into by and between Cottonwood Residential O.P., LP, a Delaware limited partnership (“CROP”) and Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership (“CW Multifamily OP II”). CROP and CW Multifamily OP II are individually referred to as a “Party” and collectively referred to as the “Parties.”

WHEREAS, the Parties intend to enter into one or more joint ventures (individually, a “Joint Venture” and collectively, the “Joint Ventures”) to acquire multifamily apartment communities (the “Projects”) and multifamily real estate related assets (the “Real Estate Related Assets”).

WHEREAS, the Parties desire to minimize the conflicts of interest that may arise in connection with the acquisition and management of the Projects and the Real Estate Related Assets.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties hereby agree as follows:

1. Competing Transactions.

1.1. Investment by CW Multifamily OP II. Except as set forth below and after Cottonwood Multifamily REIT I, Inc., an entity sponsored by a subsidiary of CROP, has invested or identified for investment at least 85% of its capital, CROP shall be required to bring each Project that meets the Investment Criteria and Diversification Criteria, to CW Multifamily OP II if CW Multifamily OP II has equity available to make the required equity investment in such Project. CROP may, but shall not be required to, present other potential investments in Real Estate Related Assets to CW Multifamily OP II. In addition, CROP may, in its sole discretion, present investment opportunities to CW Multifamily OP II that do not meet the Investment Criteria and Diversification Criteria. Notwithstanding the foregoing, CROP and its Affiliates will freely and without limitation be permitted to pursue investment opportunities in Projects that meet the Investment Criteria and Diversification Criteria if:

1.1.1. Ninety percent (90%) of the anticipated equity required for the acquisition of the Project exceeds CW Multifamily OP II’s equity capital available for investment in such Project;

1.1.2. CROP or its Affiliates target the acquisition of the Project for the purpose of identifying all or a portion of the Project as replacement property in connection with a deferred exchange pursuant to Sections 1031 or 1033 of the Internal Revenue Code of 1986, as amended;

1.1.3. CROP or its Affiliates are acquiring all or an undivided interest in the Project as part of CROP’s broader investment strategy involving the roll-up of fractional or tenant-in-common interests in multifamily residential real estate in exchange for cash and/or limited partnership interests in CROP; or

1.1.4. CROP or its Affiliates are acquiring interests in Projects that are held by third parties in existing joint ventures or similar existing investment vehicles of CROP or its Affiliates.

1.2. Additional Entities Sponsored by CROP. CROP and its Affiliates may form additional entities, including, without limitation, additional real estate investment trusts, limited liability companies and limited partnerships or conduct subsequent offerings with respect to existing or additional entities, which may have investment objectives that are similar to CW Multifamily OP II (including, Cottonwood Multifamily REIT I, Inc., each a “Competing Entity”), so long as:

1.2.1. CW Multifamily OP II has identified for investment or invested at least 85% of the capital raised pursuant to that certain Offering Circular of common stock in Cottonwood Multifamily REIT II, Inc., dated                              , 20         (the “Offering”); and

1.2.2. The Offering has terminated.

1.3. Priority. Subject to Section 1.1, CW Multifamily OP II shall have the first priority (after Cottonwood Multifamily REIT I, Inc. has at least 85% of its capital invested) to invest in Projects until at least 85% of the capital raised pursuant to the Offering has been identified for investment or invested in Projects and Real Estate Related Assets. In the event CW Multifamily OP II has already invested at least 85% of the capital raised pursuant to the Offering and sells one of its Projects or Real Estate Related Assets, CROP shall present potential investment opportunities in Projects to CW Multifamily OP II only after any Competing Entity has at least 85% of its available capital invested or identified for investment. In the event that any Competing Entity has available capital from the sale of any asset, priority will be given to either CW Multifamily OP II or the Competing Entity based on the date of the earlier disposition date.

2. Definitions.

2.1. “Affiliates” shall mean (i) any Person directly or indirectly controlling, controlled by or under common control with another Person; (ii) a Person owning or controlling 10% or more of the outstanding voting securities of such other Person; (iii) any officer, director or partner of such other Person; and (iv) if such other Person is an officer, director or partner, any company for which such Person acts in any capacity.

2.2. “Diversification Criteria” means that the multifamily apartment community must not result in an expected permanent capital structure upon placement of debt financing that results in greater than: (i) $15,000,000 of CW Multifamily OP II’s equity capital being invested in multifamily apartment communities in a single Primary Market; or (ii) $10,000,000 of CW Multifamily OP II’s equity capital being invested in multifamily apartment communities in a single Secondary Market.

2.3. “Investment Criteria” means that a multifamily apartment community must: (i) be a multifamily apartment community built after 2000 and complete or substantially complete as of the date acquired by a Joint Venture; (ii) be located in a Primary Market or a Secondary Market; (iii) have an average occupancy of 85% during the 30-day period prior to the date the multifamily apartment community is placed under contract by a Joint Venture; (iv) derive at least 75% of its projected stabilized net operating income from rental apartments; (v) require no more than a $15,000,000 equity investment; and (vi) be a single asset and not part of a multiple asset portfolio purchase, joint venture (either with respect to a single asset or multiple assets) or partnership.

2.4. “Offering” shall have the meaning set forth in Section 1.3.1.

2.5. “Person” shall mean a natural person, corporation, limited partnership, general partnership, joint stock company, joint venture, association, company, trust, bank trust company, land trust, business trust, statutory trust or other organization, whether or not a legal entity, and a government or agency or political subdivision thereof.

2.6. “Primary Market” shall mean the following metropolitan areas: (i) Orlando, Florida; (ii) Atlanta, Georgia; (iii) Dallas, Texas; (iv) Houston, Texas; (v) Phoenix, Arizona; (vi) Denver, Colorado; (vii) Salt Lake City, Utah, (vii) Miami, Florida and (ix) Portland, Oregon.

2.7. “Secondary Market” shall mean the following metropolitan areas: (i) Raleigh, North Carolina; (ii) Durham, North Carolina; (iii) Charlotte, North Carolina; (iv) Tampa, Florida; (v) Nashville, Tennessee; (vi) Austin, Texas and (vii) San Antonia, Texas.

3. Miscellaneous.

3.1. Counterparts. This Agreement may be executed in several counterparts, which may be delivered by facsimile or electronic mail, and all so executed shall constitute one Agreement, binding on all of the Parties hereto, notwithstanding that all of the Parties are not signatory to the original or the same counterpart.

3.2. Further Acts and Documents. Each of the Parties hereto hereby covenants and agrees to execute and deliver such further instruments, documents and other agreements and to do such further acts and things as may be necessary to carry out the purposes of this Agreement.

3.3. Notices. All notices under this Agreement shall be in writing and shall be given to the Party entitled thereto, by personal service or by mail, posted to the address set forth below for such person or at such other address as such Party may specify in writing.

3.4. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Utah.

3.5. Venue. Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located in Salt Lake City, Utah.

3.6. Successors and Assigns. The terms and provisions of this Agreement shall be bind upon and shall inure to the benefit of the successors and assigns of the respective Parties.

IN WITNESS WHEREOF, this Agreement is effective as of the date first set forth above.

CROP:
Cottonwood Residential O.P., LP, a Delaware limited partnership
By:	Cottonwood Residential, Inc., a Maryland corporation, its general partner
	By:
		Gregg Christensen, Executive Vice President
CW MULTIFAMILY OP II:
Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership
By:	CW Multifamily REIT II GP, LLC, a Delaware limited liability company, its general partner
	By:	Cottonwood Multifamily REIT II, Inc., a Maryland corporation, its sole member
		By:
			Gregg Christensen, Executive Vice President

EX1A-6 MAT CTRCT

Exhibit 6.9

THREE-PARTY AGREEMENT

This Agreement (the “Agreement”), effective as of [                    , __] (the “Effective Date”), is entered into by and among Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “REIT”), Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership (the “Operating Partnership”) and Cottonwood Capital Property Management II, LLC, a Delaware limited liability company (“Cottonwood Management”). The REIT, the Operating Partnership and Cottonwood Management are individually referred to as a “Party” and collectively referred to as the “Parties.”

WHEREAS, the Operating Partnership is the operating partnership of the REIT. The Operating Partnership intends to form one or more joint ventures (the “Joint Ventures”) with Cottonwood Residential O.P., LP, a Delaware limited partnership or a subsidiary thereof (“CROP”) for the purpose of acquiring, managing, leasing, operating, financing and disposing of multifamily apartment communities (the “Projects”) and multifamily apartment related assets.

WHEREAS, the REIT intends to offer shares of common stock of the REIT (the “Shares”) pursuant to the Offering Statement on Form 1-A filed with the Securities and Exchange Commission (the “SEC”) for qualification (the “Offering”).

WHEREAS, Cottonwood Management has agreed to be obligated to pay all the selling commissions and managing broker-dealer fees (the “Selling Expenses”) and the organizational and offering expenses (the “Organization and Offering Expenses”) related to the Offering.

WHEREAS, in connection with the transactions described herein, the REIT has agreed that it shall enter into an Asset Management Agreement with Cottonwood Management in order to avail itself of the experience, sources of information, advice, assistance and certain facilities available to Cottonwood Management.

WHEREAS, the Operating Partnership has agreed to enter into property management agreements (the “Property Management Agreements”) with Cottonwood Management with respect to all Projects owned by the Operating Partnership (or a subsidiary thereof). In addition, the Operating Partnership and CROP have agreed that they will cause the Joint Ventures (or subsidiaries thereof formed for the purpose of acquiring Projects) to enter into property management agreements (the “Property Management Agreements”) with Cottonwood Management with respect to the Projects owned by the Joint Ventures (or subsidiaries thereof).

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties hereby agree as follows:

1.       Payment of Expenses.

1.1.         Organization and Offering Expenses.   Until the termination of the Offering, which shall occur on the earliest of: (i) the sale of $50,000,000 of Shares, (ii) the one year anniversary of the date the SEC qualifies the Offering Statement or (iii) a determination by the REIT’s board of directors to terminate the Offering (the “Offering Termination Date”), Cottonwood Management shall pay the Organization and Offering Expenses as its direct obligation.

1.2.         Commissions.     Cottonwood Management shall enter into the Managing Broker-Dealer Agreement with the REIT and Orchard Securities, LLC (the “Managing Broker-Dealer Agreement”), pursuant to which Cottonwood Management will be obligated to pay the Selling Expenses

due pursuant to the Managing Broker-Dealer Agreement. The REIT shall be responsible for all obligations assigned to it in the Managing Broker-Dealer Agreement.

2.      Asset Management Agreement.   The REIT and Cottonwood Management will enter into an Asset Management Agreement, the form of which is attached hereto to as Exhibit A. The Asset Management Agreement may not be terminated until the Termination Date, other than because of the fraud, willful misconduct or gross negligence of Cottonwood Management, as determined by a final, non-appealable judgement of a court of competent jurisdiction.

3.       Property Management Agreements.

3.1.        Obligation to Enter into Property Management Agreements.     Until the Termination Date, the Operating Partnership (or a subsidiary thereof formed to own the applicable Project) shall enter into a Property Management Agreement with Cottonwood Management with respect to the property management of every Project owned directly or indirectly by the Operating Partnership. In addition, until the Termination Date, the Operation Partnership and CROP shall cause the Joint Ventures (or a subsidiary of a Joint Venture formed to own the applicable Project) to enter into a Property Management Agreement with Cottonwood Management with respect to the property management of every Project owned directly or indirectly by a Joint Venture. If Cottonwood Management declines to enter into a Property Management Agreement with respect to any Project, the Operating Agreement or the Joint Venture, as applicable, the Operating Partnership or the Joint Venture shall be permitted to enter into a property management agreement with a different property manager.

3.2.        Fees.     Each Property Management Agreement shall provide that Cottonwood Management shall receive the fees set forth in the form Property Management Agreement attached hereto as Exhibit B. In addition, affiliates of CROP shall receive the fees set forth on Schedule 1.

3.3.        Duration.     Each Property Management Agreement enter into pursuant to Section 3.1 shall not terminate until the earlier of (i) the sale of the applicable Project or (ii) the Termination Date. Notwithstanding the above, a Property Management Agreement may be terminated prior to the Termination Date (i) because of the fraud, willful misconduct or gross negligence of Cottonwood Management, as determined by a final, non-appealable judgement of a court of competent jurisdiction or (ii) by the holder of any loan secured by the applicable Project pursuant to the terms of the applicable loan documents.

4.      Termination Date.     For purposes of this Agreement, “Termination Date” shall mean the December 31, 2024, which may be extended for up to 4 additional 1 year periods as set forth in the Articles of Restatement of the REIT (the “Liquidation Date”); provided, however, if the REIT has listed its shares on a national exchange, over the counter exchange or the substantial equivalent thereof (as such terms are defined in the Articles of Restatement of the REIT) or if the REIT is involved in a merger with another entity, the Property Management Agreement shall continue until the Liquidation Date.

5.      Miscellaneous.

5.1.        Counterparts.     This Agreement may be executed in several counterparts, which may be delivered by facsimile or electronic mail, and all so executed shall constitute one Agreement, binding on all of the Parties hereto, notwithstanding that all of the Parties are not signatory to the original or the same counterpart.

5.2.        Further Acts and Documents. Each of the Parties hereto hereby covenants and agrees to execute and deliver such further instruments, documents and other agreements and to do such further acts and things as may be necessary to carry out the purposes of this Agreement.

5.3.        Notices. All notices under this Agreement shall be in writing and shall be given to the Party entitled thereto, by personal service or by mail, posted to the address set forth below for such person or at such other address as such Party may specify in writing.

To REIT:

Cottonwood Multifamily REIT II, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, UT 84121

Attn: Gregg Christensen

To the Operating Partnership:

Cottonwood Multifamily REIT II O.P., LP

6340 South 3000 East, Suite 500

Salt Lake City, UT 84121

Attn: Gregg Christensen

To Cottonwood Management:

Cottonwood Capital Property Management II, LLC

6340 South 3000 East, Suite 500

Salt Lake City, UT 84121

Attn: Gregg Christensen

5.4.        Governing Law.     This Agreement shall be governed by and construed in accordance with the laws of the state of Utah.

5.5.        Venue. Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located in Salt Lake City, Utah.

5.6.        Successors and Assigns. The terms and provisions of this Agreement shall be bind upon and shall inure to the benefit of the successors and assigns of the respective Parties.

IN WITNESS WHEREOF, this Agreement is effective as of the date first set forth above.

REIT:
Cottonwood Multifamily REIT II, Inc., a Maryland corporation
By:
	Gregg Christensen, Exec. Vice President
OPERATING PARTNERSHIP:
Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership
By:	CW Multifamily REIT II GP, LLC, a Delaware limited liability company, its general partner

By:   Cottonwood Multifamily REIT II, Inc., a Maryland corporation, its sole member

By:
	Gregg Christensen, Exec. Vice President

COTTONWOOD MANAGEMENT:
COTTONWOOD CAPITAL PROPERTY MANAGEMENT II, LLC, a Delaware limited liability company
By:	Cottonwood Capital Holdings, LLC, a Delaware limited liability company, its sole member

By:   Cottonwood Capital Management, Inc., a Maryland corporation, its sole member

By:
	Gregg Christensen, Executive Vice President

IN WITNESS WHEREOF, this Agreement is effective as of the date first set forth above.

CROP, with respect to its obligations described in Section 3 of this Agreement:
Cottonwood Residential O.P., LP, a Delaware limited partnership
By:	Cottonwood Residential, Inc., a Delaware corporation, its General Partner

By:
	Gregg Christensen, Exec. Vice President

SCHEDULE 1

FEES TO AFFILIATES OF CROP

(1)       Construction Services – Certis Construction, LLC, an affiliate of CROP, may be hired as the general contractor for construction related to loss events at the Projects. Certis Construction, LLC will enter into contracts for the applicable repair work for the amount of the insurance award related to the applicable loss. Certis Construction, LLC will have the right to retain the excess over the amount actually incurred by Certis Construction, LLC to perform the required repairs and the contracted amount (i.e. the amount of the insurance proceeds).

(2)       Resident Indemnity Program – Resident Indemnity Management, LLC, an affiliate of CROP, may enter into contracts with the residents at the Projects for limited renter indemnification. The fee to be received by Residential Indemnity Management, LLC will vary, but will generally be equal to $8 per month per participating resident (though this amount may be higher or lower in some instances). These fees will be paid by residents of the Projects and will not be obligations of the Joint Ventures.

(3)       Utility Management Services – Capital Utility Resources, LLC, an affiliate of CROP, may be hired by the Joint Ventures to provide services related to allocation of the utility charges at the applicable Project to each of the residents at such Project. The fees charged by Capital Utility Resources, LLC will vary, based on the Project, from $3.00 to $5.00 per month per residential unit at the Projects (though this amount may be higher or lower in some instances). Under some circumstances, the Joint Ventures may charge the residents at the Projects for such services and will have the right to retain such amounts.

(4)       Internet and Television Services – Ditaro, LLC, an affiliate of CROP, may enter into a contract with each of the Joint Ventures to provide internet and/or TV services for the Projects. The fees charged by Ditaro, LLC will vary based on market factors where the Project is located and will generally be between $10 and $30 per month per residential unit at the Project (though this amount may be higher or lower in some instances). The Joint Ventures intend to charge each resident a fee for internet and/or television services which is anticipated to exceed the fee charged by Ditaro, LLC. The Joint Ventures will be entitled to retain the excess over the amount of the fee charged by Ditaro, LLC and the amount of the fee charged to the residents.

(5)       Vendor Verification – Vendor Verify, LLC, an affiliate of CROP, may enter into contracts with all third party vendors that propose to provide services with respect to the Projects. Pursuant to these contracts Vendor Verify, LLC will have the right to perform background checks on the third party vendor and will receive a fee equal to approximately $100 to $150 per vendor (though this amount may be higher or lower with respect to a particular vendor). The fees due to Vendor Verify, LLC will be paid by the third party vendors and will not be obligations of the Joint Ventures.

(6)       Property Management Corporate Service Fee – Cottonwood Management will allocate a fee each month to each of the Joint Ventures which is intended to allocate certain costs incurred by Cottonwood Management and its affiliated entities with respect to all assets under management by such entities including, without limitation, technical support, postage, legal fees, travel, payroll services, marketing fees, LRO/revenue management and Yardi services. Cottonwood Management believes that the size of its management platform results in economies of scale with respect to such costs and relative to what these costs would be if charged by a third party to the Joint Ventures. This fee may vary each month and will be dependent on the number of assets managed by Cottonwood Management and its affiliates and the actual overhead expenses incurred. Cottonwood Management will have the right to retain any excess over actual costs and the amount of the fee charged.

(7)       Insurance Fee – Cottonwood Management, through its wholly-owned insurance company, will provide insurance for the Projects and will receive a risk management fee equal to 10% of the insurance premium. Cottonwood Management will also be entitled to retain any excess of the funded aggregate deductible not used to pay claims. Greentree Risk Management, Inc., a licensed insurance broker affiliated with Cottonwood Management, will receive 20% of the brokerage fee charged with respect to the placement of all insurance policies for the Projects.

EXHIBIT A

ASSET MANAGEMENT AGREEMENT

EXHIBIT B

FORM PROPERTY MANAGEMENT AGREEMENT

EX1A-8 ESCW AGMT

Exhibit 8

ESCROW AGREEMENT

(Subscription Proceeds)

This ESCROW AGREEMENT (“Agreement”) is dated as of [                    ,         ], by and between Cottonwood Multifamily REIT II, Inc., a Maryland corporation (“Issuer”), UMB BANK, N.A. as escrow agent (“Escrow Agent”) and Orchard Securities, LLC, a Utah limited liability company (the “Managing Broker-Dealer”).

R E C I T A L S:

A. The Issuer intends to offer and sell (“Offering”) up to 5,000,000 shares of common stock in Issuer (“Shares”). The offering will remain open until the one year anniversary of the date the offering is qualified by the Securities and Exchange Commission (the “Termination Date”). The minimum offering amount of 200,000 shares (the “Minimum Offering Amount”) is being offered on an “all-or-nothing minimum” basis. Until the Minimum Offering Amount has been accepted by the Issuer, subscribers to the Offering shall deposit the funds for their respective subscriptions in the Subscription Proceeds Escrow (as defined below).

B. The terms of the Offering are set forth in that certain Cottonwood Multifamily REIT II, Inc. Offering Statement dated [                    ,         ], as may be supplemented or amended from time to time (the “Offering Statement”).

C. The Shares will be sold pursuant to the Subscription Agreement (the “Subscription Agreement”), the form of which is attached to the Offering Statement, which will be (i) executed by investors and, (ii) if deemed appropriate by Issuer’s management, accepted by the Issuer, along with the full amount of an investors subscription payable by check or wire transfer in immediately available funds in U.S. dollars.

D.In accordance with and subject to the terms and conditions of this Agreement, the Escrow Agent has agreed to accept and hold all subscription proceeds received directly or indirectly from investors pursuant to all Subscription Agreements that are received by Issuer from time to time prior to the Termination Date.

NOW, THEREFORE, the parties hereto agree as follows:

1. Appointment of Escrow Agent. The Issuer hereby appoints Escrow Agent, and Escrow Agent accepts such appointment, to act as Escrow Agent in accordance with this Agreement. All monies deposited in the Escrow Account are hereinafter referred to as the (“Escrowed Funds”). Upon receipt of the subscription proceeds, the duties and obligations of each of the parties to this Agreement will commence.

2. Subscription Proceeds to be Placed in Escrow.

(a) There is hereby created and ordered to be established in the custody of the Escrow Agent a special subscription proceeds escrow (“Subscription Proceeds Escrow”). The Subscription Proceeds Escrow account will be a segregated account and will be held in trust for each investor’s benefit pending (i) release to the Issuer for investment or (ii) return to the investor in accordance with the terms hereof.

(b) All subscription proceeds received by the Managing Broker-Dealer shall be delivered to the Escrow Agent (clearly identified as such to the Escrow Agent) as promptly as practicable, but in no event later than the end of the next business day. Each deposit of subscription proceeds with the Escrow Agent shall be accompanied by a copy of the executed Subscription Agreement with respect to each investor for whom subscription proceeds are being deposited. All subscription proceeds received by the Escrow Agent shall be deposited into the Subscription Proceeds Escrow.

(c) The subscription proceeds held in the Subscription Proceeds Escrow shall remain un-invested.

(d) The Escrowed Funds shall be held by the Escrow Agent in the Subscription Proceeds Escrow until distributed as provided in this Agreement.

(e) Based solely upon the information set forth in the Subscription Agreements delivered to Escrow Agent, the Escrow Agent shall keep and maintain a record of (i) the subscription proceeds deposited by or on behalf of each investor into the Subscription Proceeds Escrow from time to time and (ii) the total amounts of subscription proceeds held in the Subscription Proceeds Escrow for each investor until the distributions under paragraph 4 below are made. The registration books maintained by the Escrow Agent shall be the official record of the total amounts of subscription proceeds held in the Subscription Proceeds Escrow and each investor’s share of such amounts.

(f) By the fifteenth day of each month during the term hereof, or upon request by the Issuer, the Escrow Agent shall provide to the Issuer a report that details the deposits and disbursements from the Subscription Proceeds Escrow during the preceding calendar month. Upon request and payment of the costs associated therewith, the Escrow Agent shall provide to a requesting investor a report that details the deposits and disbursements from the Subscription Proceeds Escrow that relate to the requesting investor.

3. Identity of investors, Ownership of Proceeds. The Issuer or Managing Broker-Dealer shall furnish to the Escrow Agent, with each delivery of subscription proceeds as provided in paragraph 2, above, a copy of each Subscription Agreement (which shall set forth, among other things, the name and address of the investor and the amount subscribed) tendered by the investors and accepted by Issuer. The Escrow Agent shall not be required to accept any subscription proceeds that are not accompanied by said Subscription Agreement. Until released to the Issuer pursuant to the terms hereof, all subscription proceeds shall be and remain the property of the respective investors and shall not be subject to any liens or charges by the Issuer or against the Issuer, or to judgments or creditors’ claims against the Issuer.

4. Disbursements from the Subscription Proceeds Escrow. Escrowed Funds in the Subscription Proceeds Escrow will be held and disbursed in accordance with the following:

(a) The Issuer will accept or reject subscriptions within thirty (30) days after the Issuer receives them. If an investor’s Subscription Agreement is rejected, the Issuer will notify the Escrow Agent in writing and such investor’s funds will be returned directly to the investor within ten business days after the receipt by the Escrow Agent of the written notice of such rejection and the necessary documentation of the Escrow Agent.

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(b) If an investor’s subscription is accepted, the Issuer will notify the Escrow Agent in writing and the amount delivered with such subscription will continue to be held in the Subscription Proceeds Escrow until the earlier to occur of the following: (i) the Escrow Agent receives written notice that the Issuer has received and accepted subscriptions for the Minimum Offering Amount or (ii) the Termination Date.

(c) Each investor’s escrowed funds remaining in the Subscription Proceeds Escrow at the Termination Date will be returned directly to the investor within ten days after the Termination Date. No further deposits to the Subscription Proceeds Escrow will be accepted after the Termination Date.

(d) If subscriptions for the Minimum Offering Amount have been accepted by the Issuer on or before the Termination Date, Issuer shall notify the Escrow Agent of such fact in writing on the form set forth on Exhibit C hereto and the escrowed funds in the Subscription Proceeds Escrow will be disbursed to the Issuer within one business day of the Escrow Agent’s receipt of such notification.

5. Term. This Agreement shall terminate upon the disbursement of all of the subscription proceeds and the final performance of all of the Escrow Agent’s other duties hereunder.

6. Duties and Responsibilities of Escrow Agent.

(a) Escrow Agent, by signing this Agreement, agrees to accept, hold and dispose of the subscription proceeds in accordance with the terms hereof. The duties and responsibilities of Escrow Agent shall be limited to those expressly set forth in this Agreement, and no implied covenants or duties shall be read into this Agreement against the Escrow Agent, and the Escrow Agent shall not be subject to, nor obligated to comply with or to recognize, any other agreement between, or any direction or instruction of, any or all of the other parties thereto even though reference thereto may be made herein; provided, however, with the written consent of Escrow Agent, this Agreement may be amended at any time or times by an instrument in writing signed by the Issuer, the Managing Broker-Dealer and the Escrow Agent.

(b) Escrow Agent is authorized, in its sole discretion, to disregard any and all notices or instructions given by any person, firm or corporation, except such notices and instructions as are herein specifically provided for and orders or process of any court duly entered. If any property subject hereto is at any time attached, garnished or levied upon under any court order or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, writ, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any of such events, Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel of its own choosing is binding upon it; and if Escrow Agent complies in good faith with any such order, writ, judgment or decree it shall not be liable to any of the parties hereto or to any other person,

3

firm or corporation by reason of such compliance, even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. Escrow Agent shall notify Issuer and Managing Broker-Dealer in the event Escrow Agent takes any action pursuant to this Section 6(b).

(c) Escrow Agent shall not be liable for any act taken or omitted hereunder if taken or omitted by Escrow Agent in good faith and in the exercise of its own reasonable judgment, and Escrow Agent shall not be liable under this Agreement except for its negligence, or willful misconduct. Escrow Agent also shall be fully protected in relying upon any written notice (including specifically those provided for in paragraphs 4(a), 4(b) and 4(d), demand, certificate, waiver, opinion of counsel or other document which it in good faith reasonably believes to be genuine or what it purports to be.

(d) Escrow Agent acts hereunder as a depository only and shall not be responsible for the sufficiency or accuracy or the form, execution, validity or genuineness of this Agreement (except as to its own execution hereof and obligations hereunder, if this Agreement is otherwise valid) or of documents or securities now or hereafter deposited hereunder or of any endorsement thereon, or for lack of endorsement thereon, or for any description therein, or for the adequacy of the subscription proceeds for their intended purposes, nor shall it be responsible or liable in any respect on the account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any such document, security or endorsement under this Agreement.

(e) Escrow Agent may consult with legal counsel (which may be counsel to the Issuer) in the event of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder, and, to the extent it acts in good faith without gross negligence or willful misconduct it shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel.

(f) The Issuer agrees to indemnify and save Escrow Agent harmless from all losses, costs, liabilities, actual damages (which shall not include consequential, special or punitive damages), fees and expenses (including, but not limited to, reasonable attorney’s fees and expenses) suffered or incurred by Escrow Agent arising from the performance of its obligations under this Agreement (“Acts”), except such Acts as arise from or attributable to the negligent, willful misconduct or fraudulent acts or omissions of Escrow Agent. Notwithstanding the above, the Escrow Agent will have no right to withhold subscriber’s funds deposited in the Subscription Escrow Account to pay Issuer obligations under this Section 6(f).

(g) In the event of any disagreement between the parties hereto (or any other persons) resulting in adverse claims and demands being made in connection with or for any portion of the subscription proceeds, Escrow Agent shall be entitled to refuse to comply with any demand or claim, as long as such disagreement shall continue, and in so refusing to make any delivery or other disposition of any portion of the subscription proceeds, Escrow Agent shall not be or become liable to any party hereto or to any other person for its refusal to comply with such conflicting or adverse demands, and Escrow Agent shall be entitled to refuse and refrain to act until:

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(i) The rights of the adverse claimants shall have been fully and finally adjudicated in a court assuming and having jurisdiction in respect of the portion of the persons and the portion of the subscription proceeds involved; or

(ii) All differences shall have been resolved by agreement and Escrow Agent shall have been notified of such agreement in a writing signed by all the interested parties.

(h) Escrow Agent may resign at any time from its obligations under this Agreement by providing written notice to the Issuer. Such resignation shall be effective not less than thirty (30) days after such written notice has been delivered. Escrow Agent shall have no responsibility for the appointment of a successor escrow agent. Upon the effective date of such resignation or removal all cash and other payments and all other property then held by the Escrow Agent hereunder shall be delivered by it to such successor Escrow Agent as may be designated in writing by the Issuer, whereupon the Escrow Agent’s obligations hereunder shall cease and terminate.

(i) In the event of resignation of Escrow Agent, a successor escrow agent shall be appointed as soon as practicable by the Issuer. Should such successor not be appointed within thirty (30) days after Escrow Agent shall have delivered notice of its resignation, the resigning Escrow Agent shall be entitled to petition a court of proper jurisdiction to appoint a successor.

7. Miscellaneous.

(a) Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof. No amendments or modifications to this Agreement shall be binding unless made in writing and signed by the Issuer, the Managing Broker-Dealer and the Escrow Agent.

(b) Notices. Any notices to be given hereunder by any party to any other party shall be in writing and shall be made either by personal delivery, certified, or registered mail (postage prepaid and return receipt requested) or private overnight courier service. Each notice shall be effective only upon receipt, and shall be addressed as follows:

To the Issuer:

Cottonwood Multifamily REIT II, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, UT 84121

To Escrow Agent:

UMB Bank, N.A.

Attention: Lara L Stevens

Corporate Trust & Escrow Services Department

1010 Grand Boulevard, 4^th Floor

Kansas City, MO 64106

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To the Managing Broker-Dealer:

Orchard Securities, LLC

401 South 850 East, Suite C1

Lehi, Utah 84043

Any party may change its address for notice by giving notice in accordance with the terms of this paragraph 7.

(c) Fees. All Escrow Agent’s fees and charges hereunder shall be as set forth in Exhibit “A” hereto and shall be promptly paid, along with the reasonable expenses of Escrow Agent (including, without limitation, reasonable attorney’s fees and expenses), by the Issuer; provided, however, that Escrow Agent is not entitled to withhold or deduct any unpaid fees and expenses prior to the final disbursement of the subscription proceeds under paragraph 4. The fees and charges agreed to be paid are intended as full compensation for Escrow Agent’s services as contemplated by this Agreement; provided, however, in the event that it should become necessary for the Escrow Agent to perform extraordinary services, the Escrow Agent shall be entitled to reasonable additional fees for such extraordinary services and reimbursement for reasonable extraordinary costs so long as such services, fees and costs are approved by Issuer in writing prior to the incurrence thereof.

(d) Waiver. The waiver by any party hereto of a breach of any term or provision of this Agreement shall not operate or be construed as a waiver of (a) a subsequent breach of the same provision by any party or (b) the breach of any other term or provision of this Agreement.

(e) Binding Effect. This Agreement shall extend to and be binding upon and inure to the benefit of the parties hereto, their respective heirs, representatives, successors and assigns. This Agreement may not be assigned.

(f) No Third Party Beneficiaries. Except for the investors, this Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement.

(g) Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added as a part of this Agreement a legal, valid, and enforceable provision, such as is approved by Issuer and Escrow Agent, as similar in terms to such illegal, invalid or unenforceable provision.

(h) Headings. The headings in this Agreement are solely for convenience of reference and shall be given no effect in construction or interpretation of this Agreement.

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(i) Counterparts: Governing Law. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah without regard to its rules of conflicts of laws.

(j) Cooperation. No party shall unreasonably withhold or delay its consent, approval or signature when required to fulfill the purposes of this Agreement.

(k) Patriot Act Compliance. The Issuer and the Managing Broker-Dealer agree to provide the Escrow Agent completed Forms W-9 (or Forms W-8, in the case of non-U.S. Persons) and other forms and documents that the Escrow Agent may reasonably request at the time of execution of this Agreement, and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time. Concurrent with the execution of this Agreement, the Issuer and the Managing Broker-Dealer shall each deliver to the Escrow Agent an authorized signers form in the form of Exhibit B or Exhibit B-1 to this Agreement, as applicable.

8. Multiple Counterparts; Electronic Transaction. This Agreement may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original, and such counterparts shall constitute but one and the same instrument. In addition, the transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

ISSUER:
Cottonwood Multifamily REIT II, Inc., a Maryland corporation
By:
	Gregg Christensen, Executive Vice President
MANAGING BROKER-DEALER:
Orchard Securities, LLC, a Utah limited liability company
By:
Name:
Title:

7

ESCROW AGENT:

UMB BANK, N.A., solely as Escrow Agent

By:

Name:

Title:

8

EXHIBIT “A”

Escrow Agent’s Fee Schedule

Acceptance Fee	$2,500
Review documents and establish account
Annual Fees
Escrow Agent	$3,000
Transaction Fees
Daily BAI File Transmission to DST	$2.50 per Bus Day
Wire Ripping Transmission to DST	$10 per Bus Day
Outgoing Wire Transfers	$35 each
Subscription Processing	$25 each
Overnight Delivery/Mailings	$16.50 each
Online Account Access (UMB Direct)	$60 per Month
IRS Tax Reporting	$50 per 1099

Acceptance fee and first year Annual Fees will be payable at the initiation of the escrow. Thereafter, the Annual Fees will be billed annually in advance and Transactional Fees will be billed quarterly in arrears. Other fees and expenses will be billed as incurred.

Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate.

All expenses related to the administration of the Escrow Agreement such as, but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.

Exhibit B

Escrow Account Signing Authority

Authorized Representatives of the Issuer

The undersigned certifies that he/she is an authorized representative of the Issuers with respect to any instruction or other action to be taken in connection with the Escrow Agreement and UMB Bank, N.A. shall be entitled to rely on such list until a new list is furnished to UMB Bank, N.A.

Signature:
Print:	Gregg Christensen
Title:	Executive Vice President
Phone:	801-278-0700
Fax:	801-278-0756
Email:	gchristensen@cottonwoodres.com

Signature:
Print:	Susan Hallenberg
Title:	Chief Financial Officer
Phone:	801-278-0700
Fax:	801-278-0756
Email:	shallenberg@cottonwoodres.com

The undersigned further certifies that he or she is duly authorized to sign this Escrow Account Signing Authority.

Signature:	**
Name:	Gregg Christensen
Its:	Executive Vice President and Secretary
Date:

**To be signed by corporate secretary/assistant secretary. When the secretary is among those authorized above, the president must sign in the additional signature space provided below. For entities other than corporations, an authorized signatory not signing above should sign this Escrow Account Signing Authority.

(Additional signature, if required)

Signature:
Name:	Chad Christensen
Its:	President
Date:

Exhibit B-1

Escrow Account Signing Authority

Authorized Representatives of the Managing Broker-Dealer

The undersigned certifies that he/she is an authorized representative of the Managing Broker-Dealer with respect to any instruction or other action to be taken in connection with the Escrow Agreement and UMB Bank, N.A. shall be entitled to rely on such list until a new list is furnished to UMB Bank, N.A.

Signature:                                                  

Print:

Title:

Phone:

Fax:

Email:

Signature:                                                  

Print:

Title:

Phone:

Fax:

Email:

The undersigned further certifies that he or she is duly authorized to sign this Escrow Account Signing Authority.

Signature:                                                  **

Name:

Its:

Date:

**To be signed by corporate secretary/assistant secretary. When the secretary is among those authorized above, the president must sign in the additional signature space provided below. For entities other than corporations, an authorized signatory not signing above should sign this Escrow Account Signing Authority.

(Additional signature, if required)

Signature:                                                  

Name:

Its:

Date:

Exhibit C

[                             , 20        ]

UMB Bank, N.A.

1010 Grand Blvd., 4th Floor

Attention: Lara Stevens

Corporate Trust & Escrow Services

Mail Stop: 1020409

Kansas City, Missouri 64106

Facsimile: (816) 860-3029

CLOSING LETTER

Ladies and Gentlemen:

We refer you to that certain agreement dated as of [                    ,         ], among Cottonwood Multifamily REIT II, Inc., a Maryland corporation (“Company”), Orchard Securities, LLC, a Utah limited liability company (“Orchard”) and UMB Bank, National Association (“UMB”) (the “Agreement”), a photocopy of which is attached hereto. Capitalized terms used but not defined in this letter shall have the meanings given them in the Agreement.

We hereby notify you, in accordance with the terms and provisions of Section 4(d) of the Agreement, that both the Company and Orchard, that the Minimum Offering Amount has been raised and the Escrowed Funds should be released to the Company.

Very truly yours,

COMPANY:

Cottonwood Multifamily REIT II, Inc., a Maryland

corporation

By:

Name:

Title:

Acknowledged and agreed by,

Orchard Securities, LLC,

a Utah limited liability company

By:

Name:

Title:

EX1A-11 CONSENT

EXHIBIT 11

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated June 30, 2016, in the amended Regulation A Offering Statement (Form 1-A) of Cottonwood Multifamily REIT II, Inc.

/s/ Ernst & Young LLP

Salt Lake City, UT

June 30, 2016

EX1A-12 OPN CNSL

Exhibit 12.1

DLA Piper LLP (US) 4365 Executive Drive, Suite 1100 San Diego, California 92121-2133 www.dlapiper.com   T    858.677.1400 F    858.677.1401

July 1, 2016

Cottonwood Multifamily REIT II, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Re: Offering Statement on Form 1-A

Ladies and Gentlemen:

We have served as special counsel to Cottonwood Multifamily REIT II, Inc., a Maryland corporation (the “Company”) in connection with the preparation and filing of an Offering Statement on Form 1-A (the “Offering Statement”) under Regulation A of the Securities Act of 1933, as amended, with the Securities and Exchange Commission (the “Commission”). Pursuant to the Offering Statement, the Company is offering for sale up to 5,000,000 shares of common stock, par value $0.01 per share, of the Company (the “Shares”). This opinion (the “Opinion”) is being provided at your request in connection with the filing of the Offering Statement.

In rendering this opinion we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Documents”):

1. The Offering Statement;

2. The Company’s Articles of Amendment and Restatement, as amended, filed with the Maryland State Department of Assessments and Taxation, as certified by the Maryland State Department of Assessments and Taxation on June 28, 2016 (the “Charter”);

3. The Amended and Restated Bylaws of the Company;

4. Resolutions adopted by Written Consent of the Board of Directors of the Company, dated as of July 1, 2015 and relating to the issuance and sale of the Shares (the “Resolutions”);

5. A Good Standing Certificate of the Company issued by the Maryland State Department of Assessments and Taxation on June 28, 2016;

6. A certificate executed by Gregg Christensen, Executive Vice President, Secretary and General Counsel of the Company, dated as of July 1, 2016; and

7. Such other documents and matters as we have deemed necessary or appropriate to express the opinions set forth below, subject to the assumptions, limitations and qualifications stated herein.

In expressing the opinions set forth below, we have assumed the following:

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page Two

1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.

2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.

3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding.

4. All Documents submitted to us as originals are authentic. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All statements and information contained in the Documents are true and complete. There has been no oral or written modification or amendment to the Documents, or waiver of any provision of the Documents, by action or omission of the parties or otherwise.

5. The final versions of all Documents reviewed by us in draft form will conform to such drafts in all respects material to the opinions expressed herein.

6. None of the Shares will be issued or transferred in violation of Article VII of the Charter or any other restriction or limitation on transfer and ownership of shares of stock of the Company contained in the Charter.

7. Upon issuance of any of the Shares, the total number of Shares issued and outstanding will not exceed the total number of Shares that the Company is then authorized to issue under the Charter. Notwithstanding the foregoing, the Company has authorized the issuance of shares in excess of the number of Shares to be sold pursuant to the Offering Statement.

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:

1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the Maryland State Department of Assessments and Taxation.

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page Three

2. The Shares have been duly authorized and, upon delivery of the Shares in the manner contemplated by the Resolutions, the Charter and the Offering Statement, will be validly issued, fully paid and nonassessable.

The opinions set forth herein are subject to additional assumptions, qualifications and limitations as follows:

(a) We have made no investigation of, and we express no opinion as to, the laws of any jurisdiction other than the laws of the State of Maryland. To the extent that any documents referred to herein are governed by the laws of a jurisdiction other than the State of Maryland, we have assumed that the laws of such jurisdiction are the same as the laws of the State of Maryland.

(b) This Opinion concerns only the effect of the laws (exclusive of the principles of conflict of laws) of the State of Maryland as currently in effect. We assume no obligation to supplement this Opinion if any applicable laws change after the date hereof or if any facts or circumstances come to our attention after the date hereof that might change this Opinion.

(c) We express no opinion as to compliance with the securities (or “blue sky”) laws or the real estate syndication laws of the State of Maryland.

(d) This Opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated.

The Opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

We hereby consent to the filing of this Opinion with the Commission as Exhibit 12 to the Offering Statement and to the reference to our firm and to our Opinion in the Offering Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Act or the rules and regulations of the Commission thereunder or Item 509 of Regulation S-K. This opinion may not be relied on by any other person or in any other connection without our prior written approval.

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page Four

Sincerely,

/s/ DLA Piper LLP (US)

DLA Piper LLP (US)

EX1A-12 OPN CNSL

Exhibit 12.2

July 1, 2016

Cottonwood Multifamily REIT II, Inc.

6340 South 3000 East, Suite 500

Salt Lake City, Utah 84121

Re: Cottonwood Multifamily REIT II, Inc.

Ladies and Gentlemen:

This opinion is furnished in connection with the offering of shares of common stock (“Shares”) in Cottonwood Multifamily REIT II, Inc., a Maryland corporation (“Company”), which will be made pursuant to the Cottonwood Multifamily REIT II, Inc., Offering Circular (“Offering Circular”). We have acted as counsel to the Company in connection with the preparation of the Offering Circular and related documents.

Notwithstanding anything herein to the contrary, this opinion does not apply to the individual tax consequences of any taxpayer, and each taxpayer should consult with his or her own independent tax advisor with respect to the consequences of a purchase of Shares.

1. Factual Examination.

1.1 Offering Circular and Related Documents. In the preparation of this opinion, we have examined the following documents, copies of which have been provided to you:

1.1.1 the Offering Circular;

1.1.2 the Charter of the Company, as filed with the State Department of Assessments and Taxation of Maryland;

1.1.3 the Bylaws of the Company;

1.1.4 the Limited Liability Company Agreement of CW Multifamily REIT II GP, LLC, a Delaware limited liability company (“General Partner”);

1.1.5 the Limited Partnership Agreement of Cottonwood Multifamily REIT II O.P., LP, a Delaware limited partnership, as amended (“Operating Partnership”); and

1.1.6 a Certificate of the officers of the Company relating to, among other things, the actual and proposed operations of the Company and the entities in which it holds a direct or indirect interest (the “Certificate”).

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page 2

1.2 Basis of Opinion; Assumptions. For purposes of this opinion:

1.2.1 We have (a) examined the documents referred to above and (b) discussed the matters set forth herein with you. Our opinion is based upon (i) our review of the organizational documents of the Company, the General Partner and the Operating Partnership described above, (ii) the Certificate, (iii) the statements and factual assumptions set forth in the Offering Circular and (iv) relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable Treasury Regulations promulgated under the Code, and current administrative rulings of the Internal Revenue Service (“IRS”) and judicial decisions.

1.2.2 We have assumed (a) the genuineness of all signatures, (b) the authenticity of all documents submitted to us as originals, (c) the conformity to authentic originals of all documents submitted to us as copies, (d) (i) that the documents reviewed and relied upon by us in preparing this opinion were duly authorized, executed and delivered by and on behalf of the parties thereto, (ii) that such documents are legal, valid and binding obligations of the parties, and (iii) that all of the obligations imposed by any such documents on the parties thereto have been, and will be, performed or satisfied in accordance with their terms in all respects material to the opinions expressed herein and (e) that there are no other documents, or any oral agreements or circumstances, that will or do in any way alter or vary the provisions of the documents referred to above.

1.2.3 We have assumed that the offering of shares of common stock in the Company (the “Offering”) will be made as provided in the Offering Circular, including the assumption that all purchasers of the Shares will (a) meet the Investor Suitability Requirements set out in the Offering Circular, (b) complete and execute the Subscription Agreement and (c) pay the subscription price.

1.2.4 We have assumed that (a) the Company will have at least 100 shareholders no later than (i) January 30, 2017, if the Company’s first taxable year as a REIT is the taxable year ending December 31, 2016, or (ii) January 30, 2018, if the Company’s first taxable year as a REIT is the taxable year ending December 31, 2017 (b) the Company will not be “closely held” within the meaning of Section 856(a)(6) of the Code and (c) the business and affairs of the Company, the General Partner and the Operating Partnership and their respective subsidiaries will be conducted as provided in the Offering Circular and in the organizational documents of the Company, the General Partner and the Operating Partnership listed above and in accordance with the law of the jurisdiction in which each such entity is formed.

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page 3

1.2.5 We have, with your consent, (a) relied upon the Certificate and (b) assumed that the factual matters contained therein are, and will continue to be, true without regard to any qualification as to knowledge, belief or intent. We note that any alteration of such facts may adversely affect our opinion.

2. Opinion. On the basis of the foregoing, and subject to the qualifications and assumptions set forth below, in our capacity as counsel to the Company, we are of the opinion that as of the date hereof:

2.1 The Company’s organization and current and proposed method of operation should enable the Company to be taxed as a real estate investment trust (“REIT”) pursuant to Sections 856 through 860 of the Code, commencing with the Company’s taxable year ending December 31, 2016, which may be delayed by the Company’s board of directors until the taxable year ending December 31, 2017.

2.2 The description of the law and the legal conclusions contained in the Offering Circular under the caption “Material Federal Income Tax Considerations” are correct in all material aspects, and the discussion thereunder fairly summarizes the United States federal income tax considerations that are likely to be material to a holder of the Shares.

2.3 The Operating Partnership will be treated as a disregarded entity for United States federal income tax purposes; however, if the Operating Partnership admits additional partners it will be treated as a partnership for United States federal income tax purposes.

3. Qualifications. In addition to the provisions of Section 1.2, our opinion above is subject to and limited by the following qualifications:

3.1 Our opinion in Section 2.1 regarding the qualification of the Company as a REIT depends upon the Company’s ability, through its actual operations, distribution levels, and diversity of ownership of its Shares, to meet the various qualification tests imposed by the Code, and our opinion implies no prediction as to those actual operating results. Further, we note that the Company may engage in transactions in connection with which we have not provided legal advice, and have not reviewed, and of which we may be unaware.

3.2 A number of issues discussed in the Offering Circular, including issues on which we have expressed an opinion herein, have not been definitively resolved by statutes, regulations, rulings or judicial opinions. Accordingly, no assurances can be given that the conclusions expressed herein will be accepted by the IRS, or that, if those conclusions were contested, they would be sustained by a court, or that legislative changes or administrative pronouncements or court decisions may not be forthcoming that would significantly alter or modify the conclusions expressed herein.

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page 4

3.3 This opinion is based upon the Code as in effect as of the date of this opinion letter. There can be no assurance that legislative changes may not significantly alter the statutory basis for this opinion.

3.4 Our opinion relates only to matters of United States federal income tax law. There are a variety of state and local tax laws that could apply to the Company, the General Partner, the Operating Partnership and/or the purchasers of Shares, and our opinion does not purport to address the effect of any such laws.

3.5 We express no opinion on any matters other than those expressly set forth herein, and no opinion should be inferred as to any other matters.

3.6 Except as described herein, we have performed no due diligence and have made no efforts to verify the accuracy or genuineness of the documents and assumptions set forth above or the representations set forth in the Certificate. We will not review on a continuing basis the Company’s, the General Partner’s or the Operating Partnership’s compliance with such documents, assumptions, or representations. We are not undertaking any obligation to update this opinion letter at any time after the date hereof.

Cottonwood Multifamily REIT II, Inc.

July 1, 2016

Page 5

This opinion is solely for your information and assistance and, other than as set out in the last sentence of this paragraph, may not be relied upon by any other person or for any other purposes, nor may it be quoted from or referred to, or copies delivered to any other person, without our prior, specific written consent. Our willingness to render the opinion set forth herein neither implies, nor should be viewed as implying, any approval or recommendation of an investment in the Company. You may discuss this opinion with any prospective investor, but only in connection with delivering to such person the full text of this opinion, together with the full text of the Offering Circular.

Very truly yours,

/s/ DLA Piper LLP (US)

DLA PIPER LLP (US)

EX1A-15 ADD EXHB

EXHIBIT 15.1

PRIOR PERFORMANCE TABLES

The following prior performance tables provide information relating to the real estate investment programs sponsored by Cottonwood Residential, Inc., Cottonwood Residential O.P., LP and their affiliates, collectively referred to herein as the “prior real estate programs.” These programs were not prior programs of Cottonwood Multifamily REIT II, Inc. Cottonwood Residential, Inc. is a real estate investment trust that, through its affiliates and subsidiaries, provides real estate investment and management services. Cottonwood Capital Property Management II, Inc., an indirect subsidiary of Cottonwood Residential, Inc., sponsored Cottonwood Multifamily REIT I, Inc. which is a real estate investment trust that has investment objectives similar to us. The other prior programs consisted of tenant in common offerings which had investment objectives that targeted investors who were completing tax deferred exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended and entities that were formed to accept the contribution of tenant in common interests in property in exchange for interests in such entity. Thus, while these prior programs acquired multifamily real estate, the investment objectives of the prior programs were not similar to those of Cottonwood Multifamily REIT II, Inc.

This information should be read together with the summary of information included in the “Prior Performance Summary” section of this prospectus.

INVESTORS SHOULD NOT CONSTRUE INCLUSION OF THE FOLLOWING TABLES AS IMPLYING, IN ANY MANNER, THAT WE WILL HAVE RESULTS COMPARABLE TO THOSE REFLECTED IN SUCH TABLES. DISTRIBUTABLE CASH FLOW, FEDERAL INCOME TAX DEDUCTIONS OR OTHER FACTORS COULD BE SUBSTANTIALLY DIFFERENT. INVESTORS SHOULD NOTE THAT, BY ACQUIRING OUR SHARES, THEY WILL NOT BE ACQUIRING ANY INTEREST IN ANY PRIOR PROGRAM.

Description of the Tables

All information contained in the Tables in this Exhibit 15.1 is as of December 31, 2015. The following tables are included herein:

Table III – Annual Operating Results of Prior Real Estate Programs

Table IV – Operating Results of Prior Real Estate Programs Which Have Completed Operations

Table III includes information regarding the last five prior programs offered by Cottonwood Residential O. P., LP and its affiliates. Table IV includes information regarding the last five completed prior programs offered by Cottonwood Residential O.P., LP and its affiliates.

We have not included in this Exhibit 15.1 Table I (Experience in Raising and Investing Funds), Table II (Compensation to Sponsor) or Table V (Sale or Disposition of Properties by Prior Real Estate Programs) because the information contained in these tables is not applicable to the prior programs.

Prior performance information regarding Cottonwood Multifamily REIT I, Inc. is not available because Cottonwood Multifamily REIT I, Inc. has not yet begun operations as of the date of this offering circular.

TABLE III

ANNUAL OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Table III sets forth the annual operating results of prior real estate programs during the five years ending December 31, 2015. All figures are as of December 31, 2015 (amounts in dollars and thousands). All of the offerings for the prior real estate programs described in this Table III have closed.

Brook Highland Place
	2011		2012			2013			2014			2015
Summary Balance Sheet Data at December 31,
Total assets (before depreciation)		—		1,061			27,377			27,944			28,529
Total assets (after depreciation)		—		1,042			26,816			26,440			25,987
Liabilities		—		(1,183	)		(16,626	)		(16,426	)		(16,030	)
Summary Income Statement Data (1)
Gross revenues		—		1,226			3,799			3,822			3,840
Operating expenses		—		(611	)		(1,841	)		(1,860	)		(2,105	)
Operating income		—		615			1,958			1,962			1,735
Interest expense		—		(163	)		(346	)		(580	)		(569	)
Non-operating, including depreciation and amortization		—		(489	)		(1,564	)		(979	)		(1,084	)
Net income (loss)		—		(37	)		48			403			82
Summary Cash Flows Data (1)
Cash provided by operating activities		—		566			1,611			1,453			1,128
Cash provided by (used in) investing activities		—		26			(484	)		(661	)		(654	)
Cash (used in) financing activities		—		(123	)		(352	)		(314	)		(326	)
Net increase in cash		—		468			775			477			147
Amount and Source of Distributions
Cash distributions paid to investors (2)		—		390			787			580			139

⁽¹⁾  Operating results and cash flow data represent 100% of the property results from Cottonwood Residential O.P., LP’s initial acquisition date forward.

⁽²⁾  Cash distributions may exceed cash generated due to funds set aside for capital improvements.

TABLE III

ANNUAL OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Table III sets forth the annual operating results of prior real estate programs during the five years ending December 31, 2015. All figures are as of December 31, 2015 (amounts in dollars and thousands). All of the offerings for the prior real estate programs described in this Table III have closed.

Toscana at Valley Ridge
	2011		2012		2013		2014		2015
Summary Balance Sheet Data at December 31,
Total assets (before depreciation)		—		—		—		—		31,114
Total assets (after depreciation)		—		—		—		—		30,636
Liabilities		—		—		—		—		(19,911	)
Summary Income Statement Data (1)
Gross revenues		—		—		—		—		1,250
Operating expenses		—		—		—		—		(630	)
Operating income		—		—		—		—		620
Interest expense		—		—		—		—		(358	)
Non-operating, including depreciation and amortization		—		—		—		—		(1,284	)
Net (loss)		—		—		—		—		(1,021	)
Summary Cash Flows Data (1)
Cash provided by operating activities		—		—		—		—		690
Cash (used in) investing activities		—		—		—		—		(13	)
Cash (used in) financing activities		—		—		—		—		(43	)
Net increase in cash		—		—		—		—		635
Amount and Source of Distributions
Cash distributions paid to investors (2)		—		—		—		—		—

⁽¹⁾  Operating results and cash flow data represent 100% of the property results from Cottonwood Residential O.P., LP’s initial acquisition date forward.

⁽²⁾  Cash distributions may exceed cash generated due to funds set aside for capital improvements.

TABLE III

ANNUAL OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Table III sets forth the annual operating results of prior real estate programs during the five years ending December 31, 2015. All figures are as of December 31, 2015 (amounts in dollars and thousands). All of the offerings for the prior real estate programs described in this Table III have closed.

Scott Mountain
	2011			2012			2013			2014			2015
Summary Balance Sheet Data at December 31,
Total assets (before depreciation)		24,315			24,514			24,909			25,363			40,239
Total assets (after depreciation)		23,179			22,626			22,248			21,884			39,403
Liabilities		(15,983	)		(15,827	)		(15,949	)		(15,640	)		(23,837	)
Summary Income Statement Data (1)
Gross revenues		2,898			2,892			2,976			3,144			3,567
Operating expenses		(1,210	)		(1,227	)		(1,363	)		(1,433	)		(1,427	)
Operating income		1,689			1,666			1,612			1,711			2,140
Interest expense		(816	)		(807	)		(792	)		(791	)		(834	)
Non-operating, including depreciation and amortization		(776	)		(799	)		(819	)		(850	)		(2,474	)
Net income (loss)		97			60			1			70			(1,168	)
Summary Cash Flows Data (1)
Cash provided by operating activities		889			898			850			865			1,564
Cash (used in) investing activities		(166	)		(131	)		(437	)		(354	)		(393	)
Cash provided by (used in) financing activities		(223	)		(233	)		(247	)		(260	)		7,364
Net increase in cash		499			535			165			250			8,535
Amount and Source of Distributions
Cash distributions paid to investors (2)		401			455			502			125			6,692

⁽¹⁾  Operating results and cash flow data represent 100% of the property results from Cottonwood Residential O.P., LP’s initial acquisition date forward.

⁽²⁾  Cash distributions may exceed cash generated due to funds set aside for capital improvements.

TABLE III

ANNUAL OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Table III sets forth the annual operating results of prior real estate programs during the five years ending December 31, 2015. All figures are as of December 31, 2015 (amounts in dollars and thousands). All of the offerings for the prior real estate programs described in this Table III have closed.

Courtney Oaks
	2011		2012		2013		2014			2015
Summary Balance Sheet Data at December 31,
Total assets (before depreciation)		—		—		—		1,125			38,157
Total assets (after depreciation)		—		—		—		N/A			37,432
Liabilities		—		—		—		(238	)		(24,527	)
Summary Income Statement Data (1)
Gross revenues		—		—		—		567			3,451
Operating expenses		—		—		—		(205	)		(1,325	)
Operating income		—		—		—		362			2,126
Interest expense		—		—		—		(138	)		(538	)
Non-operating, including depreciation and amortization		—		—		—		(353	)		(2,812	)
Net (loss)		—		—		—		(129	)		(1,224	)
Summary Cash Flows Data (1)
Cash provided by operating activities		—		—		—		418			1,604
Cash (used in) investing activities		—		—		—		(88	)		(408	)
Cash provided by (used in) financing activities		—		—		—		(57	)		7,391
Net increase in cash		—		—		—		272			8,587
Amount and Source of Distributions
Cash distributions paid to investors (2)		—		—		—		—			7,617

⁽¹⁾  Operating results and cash flow data represent 100% of the property results from Cottonwood Residential O.P., LP’s initial acquisition date forward.

⁽²⁾  Cash distributions may exceed cash generated due to funds set aside for capital improvements.

TABLE III

ANNUAL OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Table III sets forth the annual operating results of prior real estate programs during the five years ending December 31, 2015. All figures are as of December 31, 2015 (amounts in dollars and thousands). All of the offerings for the prior real estate programs described in this Table III have closed.

Sanctuary at Highland Oaks
	2011		2012		2013		2014		2015
Summary Balance Sheet Data at December 31,
Total assets (before depreciation)		—		—		—		—		52,703
Total assets (after depreciation)		—		—		—		—		51,870
Liabilities		—		—		—		—		(34,284	)
Summary Income Statement Data (1)
Gross revenues		—		—		—		—		2,488
Operating expenses		—		—		—		—		(1,055	)
Operating income		—		—		—		—		1,433
Interest expense		—		—		—		—		(324	)
Non-operating, including depreciation and amortization		—		—		—		—		(2,271	)
Net (loss)		—		—		—		—		(1,161	)
Summary Cash Flows Data (1)
Cash provided by operating activities		—		—		—		—		1,860
Cash (used in) investing activities		—		—		—		—		(206	)
Cash provided by (used in) financing activities		—		—		—		—		—
Net increase in cash		—		—		—		—		1,654
Amount and Source of Distributions
Cash distributions paid to investors (2)		—		—		—		—		48

⁽¹⁾  Operating results and cash flow data represent 100% of the property results from Cottonwood Residential O.P., LP’s initial acquisition date forward.

⁽²⁾  Cash distributions may exceed cash generated due to funds set aside for capital improvements.

TABLE III

ANNUAL OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Table III sets forth the annual operating results of prior real estate programs during the five years ending December 31, 2015. All figures are as of December 31, 2015 (amounts in dollars and thousands). All of the offerings for the prior real estate programs described in this Table III have closed.

Summer Park
	2011		2012		2013		2014			2015
Summary Balance Sheet Data at December 31,
Total assets (before depreciation)		—		—		—		40,592			41,683
Total assets (after depreciation)		—		—		—		40,226			40,322
Liabilities		—		—		—		(21,274	)		(22,965	)
Summary Income Statement Data (1)
Gross revenues		—		—		—		1,505			4,313
Operating expenses		—		—		—		(586	)		(1,677	)
Operating income		—		—		—		919			2,636
Interest expense		—		—		—		(403	)		(1,091	)
Non-operating, including depreciation and amortization		—		—		—		(438	)		(1,641	)
Net income (loss)		—		—		—		78			(97	)
Summary Cash Flows Data (1)
Cash provided by operating activities		—		—		—		418			1,565
Cash (used in) investing activities		—		—		—		(135	)		(193	)
Cash provided by (used in) financing activities		—		—		—		(164	)		1,726
Net increase in cash		—		—		—		119			3,098
Amount and Source of Distributions
Cash distributions paid to investors (2)		—		—		—		403			1,972

⁽¹⁾  Operating results and cash flow data represent 100% of the property results from Cottonwood Residential O.P., LP’s initial acquisition date forward.

⁽²⁾  Cash distributions may exceed cash generated due to funds set aside for capital improvements.

TABLE IV

OPERATING RESULTS OF COMPLETED PRIOR PROGRAMS

(UNAUDITED)

Table IV presents information regarding the operating results of the last five prior real estate programs that have completed operations (no longer hold properties) during the five years ended December 31, 2015. All amounts presented are as of December 31, 2015.

	Blue Swan			Northwest Corners			Scott Mountain			Tramore Village			Valencia Park
Aggregate Dollar Amount Raised	$	8,818,000		$	8,140,000		$	10,020,000		$	11,410,000		$	12,530,000
Duration of Program (Months)		85			114			116			114			108
Date of Program Closing		10/10/2015			3/26/2015			6/5/2015			6/19/2015			3/24/2015
Total Compensation Paid to Sponsor (1)	$	907,843		$	3,006,664		$	2,170,770		$	3,531,866		$	1,985,768
Median Leverage		51	%		58	%		61	%		64	%		70	%
Annualized Return on Investment(2)		4.06	%		2.89	%		10.01	%		-0.63	%		-9.96	%
Start Date		9/9/2008			9/22/2005			9/29/2005			12/1/2005			3/30/2006
End Date		10/10/2015			3/26/2015			6/5/2015			6/19/2015			3/24/2015
Median Month		March-12			June-10			August-10			September-10			September-10

⁽¹⁾  Includes acquisition fees, property and asset management fees, disposition fees, financing fees, and other ancillary services. A portion of these fees are used to reimburse costs incurred by the Sponsor.

⁽²⁾  Annualized return on investment is the internal rate of return over the program period using the respective cash flows from invested capital, distributions received, and proceeds from sale.

EX1A-15 ADD EXHB

EXHIBIT 15.2

UNAUDITED BALANCE SHEETS AND INCOME STATEMENTS OF

COTTONWOOD RESIDENTIAL, INC.

The following table sets forth selected consolidated balance sheet and operating results of Cottonwood Residential, Inc., the general partner of Cottonwood Residential O.P, LP for the periods presented (amounts in thousands):

	September 30,			December 31,
	2015			2014			2013			2012
Summary Consolidated Balance Sheet Data:
Total Assets (before depreciation)	$	864,765		$	520,042		$	417,700		$	255,803
Total Assets (after depreciation)		829,998			497,162			405,508			250,697
Liabilities		655,849			420,089			332,127			185,997
	Ten Months Ended			Year ended December 31,
	October 31, 2015			2014			2013			2012
Summary Consolidated Income Statement Data:
Gross Revenues	$	59,582		$	59,215		$	48,748		$	27,359
Operating Expenses		(56,211	)		(53,077	)		(44,198	)		(25,553	)
Operating Income		3,371			6,138			4,550			1,806
Interest Expense, net		(18,493	)		(19,096	)		(13,597	)		(7,547	)
Net Other		42,534			(20,078	)		(5,528	)		(5,040	)
Net Income (Loss)		27,412			(33,036	)		(14,575	)		(10,781	)
Summary Cash Flows Data(1):
Cash Generated from Operating Activities				$	7,100		$	5,115		$	968
Cash Used in Investing Activities					(46,225	)		(27,852	)		(45,705	)
Cash Provided by Financing Activities					37,614			29,417			48,596
Net Increase (Decrease) in Cash					(1,511	)		6,680			3,859
Amount and Source of Distributions
Cash Distributions to Controlling and Non-Controlling Interests	$	11,293		$	10,637		$	8,497		$	7,578

⁽¹⁾ Interim cash flow data not available, will be updated as of December 31, 2015.

A summary of the experience of Cottonwood Residential, Inc. and its operating partnership Cottonwood Residential O.P., LP is summarized in this offering circular. See “Prior Performance Summary.”