7542 and 7656 S Colfax Ave

Thank you for raising this proposal. I support transparent accounting, but I recommend voting NO on distributing 100% of the property’s funds at this time.

Approximately $160,000 is already held in the LLC account. The issue is therefore not whether the funds have been transferred to the LLC, but whether distributing all of them immediately is prudent given the property’s upcoming obligations.

The property is approaching an eviction and sheriff lockout. After possession is recovered, 7542 Floor 3 will require turnover and likely rehabilitation before it can generate rental income again. Work is also anticipated for 7542 Floor 2 in preparation for an MLS rental listing and/or a potential sale of the building. Distributing the entire balance now would leave the LLC without sufficient working capital to restore, operate, and protect the property.

The property’s financial records have also been available to co-owners. The general ledger and cash-flow statement are maintained in Dropbox and updated at least weekly. These records provide transaction-level visibility into receipts, interest, taxes, insurance, repairs, rehabilitation costs, and other property expenses.

The current insurance-proceeds reconciliation, based on the ledger through August 18, 2026, is:

Gross insurance proceeds received: $275,714.75.

Pre-existing Colfax obligations settled before the reserve was established: $52,741.93, consisting of $37,772.42 in property operating and management obligations, $12,091.67 in property taxes, and $2,877.84 in insurance premiums and reinstatement costs.

Net insurance proceeds placed into the property reserve: $222,972.82.

Subsequent Colfax property outlays: $58,594.36, consisting of $42,849.56 for rehabilitation, capital improvements, repairs, labor, and materials; $5,266.66 for insurance; $3,664.86 for property taxes; $4,757.94 for eviction, legal, and registration costs; and $2,055.34 for utilities, cleaning, pest control, grounds, other operating costs, and bank fees.

Rent and account interest credited back against those outlays: $12,898.29.

Governance-authorized Colfax token repurchase and burn: $17,769.82.

Remaining property funds: approximately $159,506.93, rounded to $160,000.

Because cash is fungible, this is a ledger-based sources-and-uses reconciliation rather than a claim that individual insurance dollars can be traced to a particular invoice. The figures reconcile as follows: $222,972.82 - $58,594.36 + $12,898.29 - $17,769.82 = $159,506.93.

I support adding a concise accounting summary to the property dashboard showing:

The approximately $160,000 currently in the LLC account.

Interest or yield credited to the account.

Itemized deductions and property expenditures.

Known outstanding obligations.

The proposed rehabilitation and turnover reserve.

Any unrestricted surplus remaining after those needs are funded.

If Option 1 is approved, the following protections must apply before any distribution:

1. At least $30,000 must be retained as a rehabilitation reserve, subject to increase if contractor estimates or property conditions support a higher amount.

2. All taxes, insurance, legal, eviction, utility, safety, turnover, and operating obligations must be reserved first.

3. Only the unrestricted surplus remaining afterward may be distributed.

4. The previously approved 5% property-management equity compensation must be recognized, with the remaining grant accelerated before a distribution that would materially alter or terminate the management mandate.

5. The updated accounting and reserve calculation must be published before the payout is processed.

A complete distribution may create a short-term payout, but it would materially increase the risk of another capital call, delayed rehabilitation, continued vacancy, and deterioration in the property’s value. The responsible course is to preserve adequate reserves, complete the eviction and turnover, restore the units to income-producing condition, and consider distributing only the genuine surplus afterward.