Filed Pursuant to Rule 424(b)(3)
Registration No. 333-176604

PREFERRED APARTMENT COMMUNITIES, INC.
  
SUPPLEMENT NO. 1, DATED MAY 3, 2012,
TO THE PROSPECTUS, DATED NOVEMBER 18, 2011

This prospectus supplement (this “Supplement No. 1”) is part of the prospectus of Preferred Apartment Communities, Inc. (the “Company”), dated November 18, 2011 (the “Prospectus”). This Supplement No. 1 should be read, and will be delivered, with the Prospectus.

The purpose of this Supplement No. 1 is to:

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PREFERRED APARTMENT COMMUNITIES, INC.
  
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		Supplement No. 1 Page No.				Prospectus Page No.
OPERATING INFORMATION			S-1				N/A
Status of the Offering			S-1				N/A
Units Currently Available for Sale			S-1				N/A
Status of Distributions			S-1				N/A
Status of Fees Paid			S-2				N/A
Real Estate Investment Summary			S-2				N/A
PROSPECTUS UPDATES			S-3				N/A
Summary Risk Factors			S-3				Cover Page, 5
Settlement Methods; Escrow Changes			S-3				Cover Page
Secondary Investment Strategy			S-3				1, 74, 95, F-6, F-35
Our Investment Strategy			S-3				3, 101, 103
Risk Factors			S-4				28, 31
Distribution Policy			S-4				18, 69
Management’s Discussion and Analysis of Financial Condition and Results of Operations			S-6				78, 83, 85
Description of Securities			S-7				151, 155
Summary of Our Organizational Documents			S-7				164
Summary of Our Operating Partnership Agreement			S-7				168, 174
Plan of Distribution			S-8				204 – 205
Incorporation of Certain Information by Reference			S-10				207
Appendix B — Form of Direct Registration System Settlement Subscription Agreement			B-1				B-1 – B-12
Appendix C — Form of Depository Trust Company Settlement Agreement			C-1				N/A

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OPERATING INFORMATION

Status of the Offering

We commenced our reasonable best efforts public offering of up to 150,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one detachable warrant to purchase 20 shares of the our Common Stock, on November 18, 2011. On March 30, 2012, we satisfied the escrow conditions of our public offering. On such date, we received and accepted aggregate subscriptions in excess of $2.0 million and issued 2,155 shares of Series A Redeemable Preferred Stock and 2,155 warrants to our new Series A Redeemable Preferred Stock stockholders.

We will offer Units until December 31, 2012, which may be extended through December 31, 2013, in our sole discretion, provided that the offering will be terminated if all the 150,000 Units are sold before such date.

On May 2, 2012, the last reported sale price of our common stock on the NYSE AMEX was $7.96 per share.

Units Currently Available for Sale

As of April 13, 2012, there were 2,155 shares of Series A Redeemable Preferred Stock and 2,155 warrants outstanding. As of April 13, 2012, there were 147,845 shares of Series A Redeemable Preferred Stock and 147,845 warrants available for sale.

Status of Distributions

In order to obtain and maintain our status as a real estate investment trust for U.S. federal income tax purposes, or REIT, we must comply with a number of organizational and operating requirements, including a requirement to distribute 90% of our annual REIT taxable income to our stockholders. As a REIT, we generally will not be subject to federal income taxes on the taxable income we distribute to our stockholders. Generally, our objective is to meet our short-term liquidity requirement of funding the payment of our quarterly Common Stock dividends to stockholders, as well as monthly dividends to holders of our Series A Redeemable Preferred Stock, through net cash generated from operating results.

For the 12-month period ended December 31, 2011, our dividend and cash-generating activity was:

Three month period ended		Dividend per share of Common Stock				Dividends paid				Cash flow from operations
3/31/2011		$	—			$	—			$	(122,686	)
6/30/2011			0.125				646,487				(697,122	)
9/30/2011			0.125				646,675				553,596
12/31/2011			0.125				646,916				794,172
		$	0.375			$	1,940,078			$	527,960

We commenced business operations on April 5, 2011 and acquired three multifamily communities and a real estate loan during the second quarter of 2011. Our first full quarter of operations was the three-month period ended September 30, 2011. As shown above, our cash flow from operations for the twelve-month period ended December 31, 2011 was approximately $528,000, a shortfall of approximately $1.4 million, or 72.8%, to our dividends paid of $1,940,078 during such period. Funds from operations, or FFO, for fiscal 2011 were $(275,795). The shortfall of these measures to dividends declared and paid was substantially due to the incurrence of approximately $1.7 million in acquisition costs related to the three multifamily communities that we acquired.

Since these acquisition costs were funded from the proceeds of our initial public offering, including the underwriters’ exercise of their overallotment option, we adjusted FFO for these costs as well as other nonrecurring and/or non-cash costs to arrive at adjusted FFO, or AFFO, which has recently become our primary internal measure of operating performance. AFFO is not a U.S. generally accepted accounting principle, or GAAP, measure and is most closely related to net income or loss attributable to common stockholders under GAAP. We believe that AFFO is useful to investors as a supplemental guage of our operating performance and is useful in comparing our operating performance with the operating performance

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of other real estate companies that are not as involved in ongoing acquisition activities. See the section of the Prospectus entitled “Management’s Discussion and Analysis of Financial Condition and of Operations — Results of Operations” for definitions of non-GAAP measures presented in the Prospectus, as well as a reconciliation of FFO and AFFO to net loss attributable to the Company.

On February 2, 2012, our board of directors approved, and we declared, a quarterly Common Stock dividend of $0.13 per share, an increase of 4% from the previous quarter, which was paid on April 16, 2012 to stockholders of record on March 30, 2012. For the remainder of 2012, we currently expect to maintain a quarterly dividend payment to holders of our Common Stock of $0.13 per share. On April 13, 2012, our board of directors approved, and we declared, a dividend of $5.33 per share of Series A Redeemable Preferred Stock payable to stockholders of record on April 30, 2012, comprised of $5.00 per share for the month of April 2012 and $0.33 per share prorated from the initial issuance of shares of Series A Redeemable Preferred Stock on March 30, 2012 through the end of March 2012. Our board of directors will review the Common Stock dividend quarterly, and there can be no assurance that the current Common Stock dividend level will be maintained. Our board of directors will review the Series A Preferred Stock dividend monthly to determine whether we have funds legally available for the payment of such dividends in cash, and there can be no assurance that the Series A Preferred Stock dividend will be paid in cash consistently. Dividends can be paid as a combination of cash and stock in order to satisfy the annual distribution requirements applicable to REITs.

Status of Fees Paid

Through April 10, 2012, we have incurred approximately $1.6 million for organization and offering expenses related to our offering of Units and for the year to date through March 31, 2012, we have paid our manager approximately $100,000 for property management fees, $128,000 for asset management fees, and $53,000 for general and administrative fees.

Real Estate Investment Summary

As of the date of this Supplement No. 1, we have not made any additional real estate investments not disclosed in the Prospectus.

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PROSPECTUS UPDATES

Summary Risk Factors

The following disclosure replaces in its entirety the following: (i) the fourth bullet point on the cover of the Prospectus; and (ii) the fourth bullet point on page 5 of the Prospectus.

“• We paid aggregate dividends for the 12-month period ended December 31, 2011 of $0.375 per share of Common Stock, and our cash flow from operations was insufficient to fully fund such aggregate dividends.”

Settlement Methods; Escrow Changes

The following disclosure replaces in its entirety the penultimate paragraph on the cover page of the Prospectus.

“We will sell Units through the following settlement methods: Direct Registration System settlement, or DRS Settlement; or Depository Trust Company, or DTC, settlement, or DTC Settlement. We will deposit all subscription agreements and, in connection with DRS Settlement subscriptions only, subscription payments which will be held in trust for the subscriber’s benefit pending release to us as described herein, in an escrow account held by the escrow agent, UMB Bank N.A. Subscription payments for the sale of Units through DTC Settlement will not be held in escrow; instead, such subscription payments will be made by delivery on the closing date for the purchase of such Units by the subscriber in connection with “delivery versus payment” transactions processed by our dealer manager and the subscriber’s registered representative.”

Secondary Investment Strategy

The following disclosure replaces in its entirety the following sentences in the Prospectus: (i) the third sentence in the first paragraph under the section entitled “Prospectus Summary — Our Company” on page 1 of the Prospectus; (ii) the second sentence in the first paragraph under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation — Overview” on page 74 of the Prospectus; (iii) the third sentence in the first paragraph under the section entitled “Business — Our Company” on page 95 of the Prospectus; (iv) the fourth sentence in the first paragraph under note 1 to the Notes to Consolidated Financial Statements, September 30, 2011, on page F-6 of the Prospectus; and (v) the third sentence in the second paragraph under note 1 to the Notes to Unaudited Pro Forma Consolidated Statements of Operations on page F-35 of the Prospectus.

“As a secondary strategy, we also may acquire senior mortgage loans, subordinate loans or mezzanine debt secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest not more than 10% of our total assets in other real estate related investments, as determined by our manager as appropriate for us.”

Our Investment Strategy

The following disclosure replaces in its entirety the following: (i) the second bullet point under “Our Investment Strategy” on pages 3 and 101 of the Prospectus; and (ii) the fifth bullet point under the second paragraph on page 103 of the Prospectus.

“• multifamily properties which we believe will generate sustainable cash flow from operations sufficient to allow us to cover the dividends that we expect to declare and pay and which we believe will have the potential for capital appreciation;”

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Risk Factors

The following disclosure replaces in its entirety the risk factor on page 28 of the Prospectus under the heading “Distributions paid from sources other than our cash flow from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments, which may adversely affect our ability to fund future distributions with cash flow from operations and may adversely affect your overall return.”

“Distributions paid from sources other than our cash flow from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute your interests in us, which may adversely affect our ability to fund future distributions with cash flow from operations and may adversely affect your overall return.

Holders of Series A Redeemable Preferred Stock are entitled to receive, when, and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Redeemable Preferred Stock at an annual rate of six percent (6%) of the Stated Value. Dividends on shares of the Series A Redeemable Preferred Stock will begin accruing on the date of their issuance. On April 13, 2012, we declared a dividend of $5.33 per share of Series A Redeemable Preferred Stock payable to stockholders of record on April 30, 2012, comprised of $5.00 per share for the month of April 2012 and $0.33 per share prorated from the initial issuance of shares of Series A Redeemable Preferred Stock on March 30, 2012 through the end of March 2012. We expect to continue to authorize and declare dividends on the shares of Series A Redeemable Preferred Stock on a monthly basis, unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so, which generally will be payable on or around the 20^th day of the month following the month for which the dividend was declared. The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.

On May 5, 2011, we declared a quarterly cash dividend to our common stockholders of record as of June 30, 2011, that was paid on July 15, 2011, in the amount of $0.125 per share of common stock, totaling approximately $646,487. On August 4, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on October 17, 2011 to all common stockholders of record as of September 30, 2011, totaling $646,675. On November 10, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on January 17, 2012 to all common stockholders of record as of December 30, 2011, totaling $646,916. On February 2, 2012, we declared a quarterly cash dividend to our common stockholders of record as of March 30, 2012, that was paid on April 16, 2012, in the amount of $0.13 per share of common stock, totaling $673,181.

For the twelve-month period ended December 31, 2011, our cash flow from operations of approximately $528,000 was a shortfall of approximately $1.4 million, or 72.8%, to our dividends paid of $1,940,078 paid during such period. The shortfall of cash flow from operations to dividends declared and paid was substantially due to the incurrence of approximately $1.7 million in acquisition costs related to the three multifamily communities that we acquired.

As mentioned above, we have paid distributions from sources other than from our cash flow from operations. Until we acquire additional properties or other real estate-related investments, we may not generate sufficient cash flow from operations to pay distributions. Our inability to acquire additional properties or other real estate-related investments may result in a lower return on your investment than you expect. If we have not generated sufficient cash flow from our operations and other sources, such as from borrowings, the sale of additional securities, advances from our manager, our manager’s deferral, suspension and/or waiver of its fees and expense reimbursements, to fund distributions, we may use the proceeds from this offering. Moreover, our board of directors may change our distribution policy, in its sole discretion, at any time. Distributions made from offering proceeds are a return of capital to stockholders, from which we will have already paid offering expenses in connection with this offering. We have not established any limit on the amount of proceeds from this offering that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (3) jeopardize our ability to qualify as a REIT.

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If we fund distributions from the proceeds of this offering, we will have less funds available for acquiring properties or real estate-related investments. As a result, the return you realize on your investment may be reduced. Funding distributions from borrowings could restrict the amount we can borrow for investments, which may affect our profitability. Funding distributions with the sale of assets or the proceeds of this offering may affect our ability to generate cash flows. Funding distributions from the sale of additional securities could dilute your interest in us if we sell shares of our common stock or securities convertible or exercisable into shares of our common stock to third party investors. Payment of distributions from the mentioned sources could restrict our ability to generate sufficient cash flow from operations, affect our profitability and/or affect the distributions payable to you upon a liquidity event, any or all of which may have an adverse effect on your investment.”

The following risk factor is added on page 31 of the Prospectus immediately preceding “Risk Factors — Risks Related to Our Organization, Structure and Management.”

“If any of our public communication are held to be in violation of federal securities laws relating to public communications, we could be subject to potential liability. Investors in this offering should rely only on the statements made in this prospectus, as supplemented to date, in determining whether to purchase Units.

From time to time, we or our representatives make public statements relating to our business and its prospects. Such communications are subject to federal securities laws. If any of our public communications are held by a court to be in violation of Section 5 of the Securities Act and a claim for damages is brought against us in connection therewith by one or more of our stockholders that purchased Units on the basis of such communications before receiving a copy of this prospectus, as supplemented to date, and potentially other stockholders, we could be subject to liability in connection with the Units we sold such persons during such period. Such stockholders would have a period of 12 months following the date of any violation determined by a court to have occurred to bring a Section 5 claim. Our liability in a Section 5 claim could include statutory interest from the date of such stockholder’s purchase, in addition to possibly other damages determined by a court. In the event that any of our communications are claimed to have been made in violation of Section 5 of the Securities Act, we expect that we would vigorously contest such claim. Nevertheless, we could not give any assurance as to any court’s ultimate determination with respect to any such claim. Accordingly, there is a risk that we could be subject to potential liability with respect to any Section 5 claim brought against us, and such liability may adversely affect our operating results or financial position.”

Distribution Policy

The following disclosure replaces in its entirety the following: (i) the first paragraph under “Distribution Policy” on page 18 of the Prospectus and (ii) the second paragraph under “Distribution Policy” on page 69 of the Prospectus.

“We intend to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. We generally intend to pay, over time, quarterly dividends in an amount equal to 100% of our net taxable income. On May 5, 2011, we declared a quarterly cash dividend to our common stockholders of record as of June 30, 2011, that was paid on July 15, 2011, in the amount of $0.125 per share of common stock, totaling approximately $646,487. On August 4, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on October 17, 2011 to all common stockholders of record as of September 30, 2011, totaling $646,675. On November 10, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on January 17, 2012 to all common stockholders of record as of December 30, 2011, totaling $646,916. On February 2, 2012, we declared a quarterly cash dividend of $0.13 per share, which was paid on April 16, 2012 to all common stockholders of record as of March 30, 2012, totaling $673,181.

For the twelve-month period ended December 31, 2011, our cash flow from operations of approximately $528,000 was a shortfall of approximately $1.4 million, or 72.8%, to our dividends paid of $1,940,078 during such period. The shortfall of cash flow from operations to dividends declared and paid was substantially due to the incurrence of approximately $1.7 million in acquisition costs related to the three multifamily

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communities that we acquired in the second quarter of 2011. Subject to significant acquisition expenses, we currently anticipate that cash flow from operations with be sufficient to fund the dividend payments to our stockholders in 2012. Although not currently anticipated, if our board of directors determines to authorize distributions in excess of the income or cash flow generated from our target assets, we may make such distributions from the proceeds of this or future offerings of equity or debt securities or other forms of debt financing or the sale of our assets.”

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The following disclosure replaces in its entirety the last paragraph under “Results of Operations – Overview” on page 78 of the Prospectus.

“Adjusted Funds from Operations, or AFFO, for the three-month and twelve-month periods ended December 31, 2011 were approximately $778,000 and $1,871,000, respectively. On May 5, 2011, we declared a quarterly cash dividend to our common stockholders of record as of June 30, 2011, that was paid on July 15, 2011, in the amount of $0.125 per share of common stock, totaling approximately $646,487. On August 4, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on October 17, 2011 to all common stockholders of record as of September 30, 2011, totaling $646,675. On November 10, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on January 17, 2012 to all common stockholders of record as of December 30, 2011, totaling $646,916. On February 2, 2012, we declared a quarterly cash dividend of $0.13 per share, which was paid on April 16, 2012 to all common stockholders of record as of March 30, 2012, totaling $673,181. We currently expect that cash flow from operations for the first quarter of 2012 will be sufficient to fund our first quarter 2012 dividend.”

Cash Available For Distribution

The heading “Cash available for Distribution (“CAD”)” on page 83 of the Prospectus and the first paragraph following the heading are deleted in their entirety.

The following heading replaces in its entirety the heading to the table that appears on page 83 of the Prospectus.

“Reconciliation of Funds From Operations and Adjusted Funds From Operations to Net Loss Attributable to the Company”

The following rows contained in the table on page 83 of the Prospectus are deleted in their entirety: (i) “AFFO per share- basic and diluted”; (ii) “Less: REIT establishment costs”; (iii) “Cash available for distribution”; and (iv) “CAD per share – basic and diluted”.

Distributions

The following disclosure replaces in its entirety the first paragraph under “Distributions” on page 85 of the Prospectus.

“On May 5, 2011, we declared a quarterly cash dividend to our common stockholders of record as of June 30, 2011, that was paid on July 15, 2011, in the amount of $0.125 per share of common stock, totaling approximately $646,487. On August 4, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on October 17, 2011 to all common stockholders of record as of September 30, 2011, totaling $646,675. On November 10, 2011, we declared a quarterly cash dividend of $0.125 per share, which was paid on January 17, 2012 to all common stockholders of record as of December 30, 2011, totaling $646,916. On February 2, 2012, we declared a quarterly cash dividend of $0.13 per share, which was paid on April 16, 2012 to all common stockholders of record as of March 30, 2012, totaling $673,181. We expect to use net cash flow from operations to fund the dividend payments to holders of Common Stock. If net cash flow from operations is not sufficient to meet its anticipated dividend payment rate, we would need to use our working capital and dividend reserve to fund dividend payments. Our Board of Directors will review the dividend on the Common Stock quarterly, and there can be no assurance that the current dividend level will be maintained. Our board of directors will review the Series A Preferred Stock dividend monthly to determine whether we have funds legally available for the payment of such dividends in cash, and there can be no assurance that the

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Series A Preferred Stock dividend will be paid in cash consistently. Dividends can be paid as a combination of cash and stock in order to satisfy the annual distribution requirements applicable to REITs. We expect that net cash flow from operations will be sufficient to meet the dividend requirements necessary to maintain our REIT status under the Internal Revenue Code of 1986, as amended. In addition, we currently expect that cash flow from operations for the first quarter of 2012 will be sufficient to fund our first quarter 2012 dividend.”

Description of Securities

The following disclosure replaces the first sentence of the second paragraph under the section entitled “Description of Securities — General” on page 151 of the Prospectus.

“Our charter authorizes us to issue up to 400,066,666 shares of common stock, $0.01 par value per share, and 15,000,000 shares of undesignated preferred stock, $0.01 par value per share.”

The following disclosure replaces the first three paragraphs under the section entitled “Description of Securities — Common Stock Warrants” on page 155 of the Prospectus.

“The following is a brief summary of the Warrants and is subject to, and qualified in its entirety by, the terms set forth in the amended and restated warrant agreement and global warrant certificate filed with the SEC as exhibits to the registration statement, of which this prospectus is a part.

Amended and Restated Warrant Agreement.  The Warrants to be issued in this offering will be governed by an amended and restated warrant agreement, or the Warrant Agreement, between us and Computershare Trust Company, N.A., as agent for our company in respect of the Warrants. The Warrants shall be issued by “book-entry only” form to the DTC and evidenced by one or more global warrants. Those investors who own beneficial interests in a global warrant do so through participants in DTC’s system, and the rights of these indirect owners will be governed solely by the applicable procedures of DTC and its participants. The Warrants may be exercised by notifying a broker who is a DTC participant prior to the expiration of such Warrants and providing payment of the exercise price for the shares of our common stock for which such warrants are being exercised. The foregoing description of the terms of the Warrant Agreement is subject to the detailed provisions of the Warrant Agreement.

Exercisability.  Holders may exercise the Warrants at any time beginning one year from the date of issuance up to 5:00 p.m., New York time, on the date that is four years after the date of issuance. The Warrants are exercisable, at the option of each holder, in whole, but not in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless exercise in the circumstances discussed below). Each Warrant is exercisable for 20 shares of our common stock (subject to adjustment, as discussed below). The holder of Warrants does not have the right to exercise any portion of the Warrant if the holder would beneficially own in excess of 9.8% in value of the shares of our capital stock outstanding or in excess of 9.8% (in value or number of shares, whichever is more restrictive) of the shares of our common stock outstanding immediately after giving effect to such exercise.”

Summary of Our Organizational Documents

The following disclosure replaces the first paragraph under the section entitled “Summary of Our Organizational Documents — Board of Directors” on page 164 of the Prospectus.

“Under our organizational documents, we must have at least two but not more than ten directors. A director may resign at any time. A director may be removed from office with or without cause by the affirmative vote of the holders of not less than 66-2/3% of the total voting power of all outstanding common stock of the Company. A vacancy on the board caused by the death, removal or resignation of a director or by an increase in the number of directors, within the limits described above, may be filled by the vote of a majority of the remaining directors whether or not the voting directors constitute a quorum.”

Summary of Our Operating Partnership Agreement

The following disclosure replaces the third paragraph under the section entitled “Summary of Our Partnership Agreement — Description of Partnership Units — Limited Partnership Units Generally” beginning on page 168 of the Prospectus.

“Distributions on the Series A Redeemable Preferred Units, each Class A Unit and each Class B Unit (and GP Unit) are as set forth in the operating partnership agreement. See the section entitled “— Distributions” below for a detailed discussion on this subject. In addition, a portion of the items of income, gain, loss and deduction of the operating partnership for U.S. federal income tax purposes may be allocated to a limited partnership unit, regardless of whether any distributions are made by the operating partnership. See the section entitled “Material U.S. Federal Income Tax Considerations — Tax Aspects of Investments in Partnerships” included elsewhere in this prospectus for a description of the manner in which income, gain, loss and deductions are allocated under the operating partnership agreement. As general partner, we may amend the allocation and distribution sections of the operating partnership agreement to reflect the issuance of additional units and classes of units without the consent of the limited partners.”

The following disclosure replaces the fourth paragraph under the section entitled “Summary of Our Partnership Agreement — Distributions” on page 174 of the Prospectus.

“The return calculation described above applies to all distributions received and not just distributions of net sale proceeds. Achievement of a particular threshold, therefore, is determined with reference to all prior distributions made by our operating partnership to any limited partners, and to us, which we may then distribute to our stockholders.”

The following disclosure replaces the second bullet point of the second paragraph under the section entitled “Summary of Our Partnership Agreement — Allocations” on page 174 of the Prospectus.

Plan of Distribution

The following disclosure replaces in its entirety the third paragraph under the section entitled “Plan of Distribution — General” on page 203 of the Prospectus.

“We will sell Units through the following settlement methods: DRS Settlement; or DTC Settlement. We will deposit all subscription agreements and, in connection with DRS Settlement subscriptions only, subscription payments which will be held in trust for the subscriber’s benefit pending release to us as described herein, in an escrow account held by the escrow agent, UMB Bank N.A. Subscription payments for the sale of Units through DTC Settlement will not be held in escrow; instead, such subscription payments will be made by delivery on the closing date for the purchase of such Units by the subscriber in connection with “delivery versus payment” transactions processed by our dealer manager and the subscriber’s registered representative. See “— Subscription Procedures” for a description of the subscription procedures with respect to each of these settlement methods.”

The following disclosure is added as a new paragraph at the end of the section entitled “Plan of Distribution — Compensation of Dealer Manager and Participating Broker-Dealers” on page 204 of the Prospectus.

“We will not pay any selling commissions, but will pay dealer manager fees, in connection with the sale of Units to investors whose contracts for investment advisory and related brokerage services include a fixed or “wrap” fee feature. Investors may agree with their participating brokers to reduce the amount of selling commissions payable with respect to the sale of their Units down to zero (i) if the investor has engaged the services of a registered investment advisor or other financial advisor who will be paid compensation for investment advisory services or other financial or investment advice, or (ii) if the investor is investing through a bank trust account with respect to which the investor has delegated the decision-making authority for investments made through the account to a bank trust department. The net proceeds to us will not be affected by reducing the commissions payable in connection with such sales. Neither our dealer manager nor its

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affiliates will directly or indirectly compensate any person engaged as an investment advisor or a bank trust department by a potential investor as an inducement for such investment advisor or bank trust department to advise favorably for an investment in Units.”

The following disclosure replaces in its entirety the disclosure under the heading “Plan of Distribution —  Subscription Procedures” on page 205 of the Prospectus.

“Subscription Procedures

You have the option to decide whether to use DRS Settlement or DTC Settlement to purchase Units in this offering. If you elect to use DRS Settlement, you should complete and sign the Direct Registration System Settlement Subscription Agreement similar to the one incorporated in this prospectus as Appendix B, which is available from your registered representative and which will be delivered to the escrow agent. In connection with a DRS Settlement subscription, you should pay the full purchase price of the Units to the escrow agent as set forth in the subscription agreement. Subscribers may not withdraw funds from the escrow account. If you elect to use DTC Settlement, you can: (i) complete and sign the Depository Trust Company Settlement Subscription Agreement similar to the one incorporated in this prospectus as Appendix C, which is available from your registered representative and which will be delivered to the escrow agent; or (ii) place an order for the purchase of Units through your registered representative. In connection with a DTC Settlement, you should coordinate with your registered representative to pay the full purchase price of the Units. Subscriptions will be effective upon our acceptance, and we reserve the right to reject any subscription in whole or in part. Irrespective of whether you subscribe for Units using DRS Settlement or DTC Settlement, by accepting Units you will be deemed to have accepted the terms of our charter.

Subject to compliance with Rule 15c2-4 of the Exchange Act, in connection with DRS Settlement subscriptions, our dealer manager or the broker-dealers participating in the offering promptly will deposit any checks received from subscribers in an escrow account maintained by UMB Bank N.A. on the next business day following receipt of the subscriber’s subscription documents and check. In certain circumstances where the subscription review procedures are more lengthy than customary or pursuant to a participating broker-dealer’s internal supervising review procedures, a subscriber’s check will be transmitted by the end of the next business day following receipt by the review office of the dealer, which will then be promptly deposited by the end of the next business day following receipt by the review office. Any subscription payments received by the escrow agent will be deposited into a special non-interest bearing account in our name until such time as we have accepted or rejected the subscription and will be held in trust for your benefit, pending our acceptance of your subscription. Subscriptions will be accepted or rejected within 10 business days of receipt by us and, if rejected, all funds shall be returned to the rejected subscribers within 10 business days. If accepted, the funds will be transferred into our general account on our next closing date. You will receive a confirmation of your purchase. We generally will admit stockholders on a monthly basis.

Subscription payments for the sale of Units through DTC Settlement will not be held in escrow; instead, such subscription payments will be made by delivery on the closing date for the purchase of such Units by the subscriber in connection with “delivery versus payment” transactions processed by our dealer manager and the subscriber’s registered representative.

Each participating dealer who sells shares on our behalf has the responsibility to make every reasonable effort to determine that the purchase of shares is appropriate for the investor. In making this determination, the participating broker-dealer will rely on relevant information provided by the investor, including information as to the investor’s age, investment objectives, investment experience, income, net worth, financial situation, other investments and other pertinent information. Each investor should be aware that the participating broker-dealer will be responsible for determining whether this investment is appropriate for your portfolio. However, you are required to represent and warrant in the subscription agreement or, if placing an order through your registered representative not through a subscription agreement in connection with a DTC Settlement subscription, to the registered representative, that you have received a copy of this prospectus and have had sufficient time to review this prospectus. International Assets Advisory, LLC and each participating broker-dealer shall maintain records of the information used to determine that an investment in the Units is suitable and appropriate for an investor. These records are required to be maintained for a period of at least six years.”

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The disclosure under the heading “Plan of Distribution — Minimum Offering” on page 205 of the Prospectus is deleted in its entirety.

Incorporation of Certain Information by Reference

The following section is added following the section entitled “Where you can Find Additional Information” on page 207 of the Prospectus.”

“INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

We have elected to “incorporate by reference” certain information into this prospectus. By incorporating by reference, we are disclosing important information to you by referring you to documents we have filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus.

The following documents filed with the SEC are incorporated by reference in this prospectus, except for any document or portion thereof deemed to be “furnished” and not filed in accordance with SEC rules:

The section entitled “Where you can Find Additional Information” above describes how you can obtain or access any documents that we have incorporated by reference herein. The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.”

Appendix B — Form of Direct Registration System Settlement Subscription Agreement

The form of Subscription Agreement contained on pages B-1 to B-12 of the Prospectus is hereby replaced in its entirety with the revised form of Direct Registration System Settlement Subscription Agreement attached to this Supplement No. 1 as Appendix B. The form of Direct Registration System Settlement Subscription Agreement supersedes and replaces the form of Subscription Agreement contained in the Prospectus.

Appendix C — Form of Depository Trust Company Settlement Subscription Agreement

The form of Depository Trust Company Settlement Subscription Agreement attached to this Supplement No. 1 as Appendix C is added to the Prospectus.

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PREFERRED APARTMENT COMMUNITIES, INC.
  
INSTRUCTION PAGE

We, Preferred Apartment Communities, Inc., are selling up to a maximum of 150,000 Units ($150,000,000) in connection with this offering (the “Offering”).

Funds in the escrow account will be held in a non-interest bearing account.

Your broker-dealer or registered investment advisor should MAIL properly completed and executed ORIGINAL documents, along with your check payable to “UMB Bank N.A., Escrow Agent for Preferred Apartment Communities, Inc.” to UMB Bank, National Association at the following address or with a wire using the following instructions:

Address:    UMB Bank, National Association 1010 Grand Boulevard, 4th Floor Mail Stop: 1020409 Kansas City, Missouri 64106 Attention: Lara Stevens, Corporate Trust Phone: (816) 860-3017 Fax: (816) 860-3029		Wire Instructions:    UMB Bank, N.A. ABA No: 101000695 Acct No: 9800006823 Acct Name: Trust Clearance Reference: 138242 Preferred Apt Communities Attn: Lara Stevens

*For IRA Accounts, mail investor signed documents to the IRA Custodian for signatures.

Instructions to Subscribers

Section 1: Indicate investment amount (Make all checks payable to “UMB Bank N.A., Escrow Agent for Preferred Apartment Communities, Inc.”)

Section 2: Choose type of ownership

Non-Custodial Ownership

Custodial Ownership

For New IRA/Qualified Plan Accounts, please complete the form/application provided by your custodian of choice in addition to this subscription document and forward to the custodian for processing.

For existing IRA Accounts and other Custodial Accounts, information must be completed BY THE CUSTODIAN. Have all documents signed by the appropriate officers as indicated in the Corporate Resolution (which are also to be included).

Section 3: All names, addresses, dates of birth, Social Security or Tax I.D. numbers of all investors or Trustees

Section 4: Choose Dividend Allocation option

Section 6: To be signed and completed by your Financial Advisor (be sure to include CRD number for Financial Advisor and Broker Dealer Firm and the Branch Manager’s signature)

Section 7: Have ALL investors initial and sign where indicated

Section 8: All investors must complete and sign the substitute W9

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PREFERRED APARTMENT COMMUNITIES, INC.
SUBSCRIPTION AGREEMENT

o I/WE AM/ARE DIRECTORS, OFFICERS, EMPLOYEES OR OTHER INDIVIDUALS ASSOCIATED WITH THE COMPANY OR A FAMILY MEMBER OF ONE OF THE FOREGOING.

o CHECK HERE IF ADDITIONAL PURCHASE AND COMPLETE NUMBER 3 BELOW.

Payment Instructions: Make all checks payable to “UMB Bank N.A., Escrow Agent for Preferred Apartment Communities, Inc.”

Number of Units purchased: ______________________		Brokerage Account No.:
Purchase price per Unit: $________________		_______________________
Aggregate purchase price: $ _____________________		(If applicable)

NOTE: Cash, cashier’s checks/official bank checks in bearer form, foreign checks, money orders, third party checks, or traveler’s checks will not be accepted.

Non-Custodial Ownership		Custodial Ownership
Individual o		Third Party Administered Custodial Plan (new IRA accounts will require an additional application)
Joint Tenant (Joint accounts will be registered as joint tenants with rights of survivorship unless otherwise indicated) o		o IRA o ROTH/IRA o Simple Employee Pension (S.E.P.) o IRA o SIMPLE o OTHER (specify) _______________________
Tenants in Common o		Name of Custodian: ____________________________________    Mailing Address: ______________________________________    City, State Zip: ________________________________________
TOD — Optional designation of beneficiaries for individual joint owners with rights of survivorship or tenants by the entireties. (Please complete Transfer on Death Registration Form which you can obtain from International Assets Advisory, LLC) o
Corporation or Partnership (Authorized signature required. Include Corporate Resolution or Partnership Agreement, as applicable) o		Custodian Information (To be completed by Custodian above)
Uniform Gift/Transfer to Minors (UGMA/UTMA) o		Custodian Tax ID #: ____________________________________
Under the UGMA/UTMA of the State of _____________		Custodian Account #: ___________________________________
Pension or Other Retirement Plan (Include Plan Documents) o		Custodian Phone #: ____________________________________
Trust (Include title and signature pages of Trust Documents) o
Other o ______________________________ (Include title and signature pages)

First Name: __________________________________________		Middle Name: _____________________________________________
Last Name: __________________________________________		Tax ID or SS#: ____________________________________________
Street Address: _______________________________________		City: ____________________		State: ________		Zip: ___________
Date of Birth: (mm/dd/yyyy): ____/____/________
If Non-U.S. Citizen, specify Country of Citizenship: __________________________________
Daytime Phone #:________________________________________________
U.S. Driver’s License Number (if available):_________________________________________				State of Issue: _________________
Issue Date: _____________________________________________				Expiration Date: _______________
Email Address: __________________________________________________

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First Name: __________________________________________		Middle Name: _____________________________________________
Last Name: __________________________________________		Tax ID or SS#: ____________________________________________
Street Address: _______________________________________		City: ____________________		State: ________		Zip: ___________
Date of Birth: (mm/dd/yyyy): ____/____/________
If Non-U.S. Citizen, specify Country of Citizenship: __________________________________
Daytime Phone #:________________________________________________
U.S. Driver’s License Number (if available):_________________________________________				State of Issue: _________________
Issue Date: _____________________________________________				Expiration Date: _______________
Email Address: __________________________________________________

Street Address: __________________________________________________________________________________________________
City: _____________________________________________________		State: __________________		Zip: ___________________

Date of Trust: ___/__/_______

Entity Name/Title of Trust: __________________________________________________________

Tax ID Number: ___________________________________________________________________

Place of Birth: ________________________________________				________________________		________________________
City				State/Providence		Country
Immigration Status:		Permanent resident  o		Non-permanent resident  o		Non-resident  o
Check which type of document you are providing:
o  U.S. Driver’s License		o  INS Permanent resident     alien card		o  Passport with U.S. Visa		o  Employment Authorization     Document
o  Passport without U.S. Visa
Bank Name (required): __________________________________				Account No. (required): ________________________________
o  Foreign national identity documents
Bank address (required): _________________________________				Bank Phone No. (required):_____________________________
Number for the document checked above and country of issuance:    ___________________________________________________________________

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Complete this section to elect how to receive your dividend distributions.

IRA accounts may not direct distributions without the custodian’s approval.

I hereby subscribe for Units of Preferred Apartment Communities, Inc. and elect the distribution option indicated below:

FOR CUSTODIAL OR CLEARING FIRM/PLATFORM ACCOUNTS:

FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS:

Name/Entity Name/Financial Institution: _________________________________________________________________

Mailing Address: ____________________________________________City: _________________  State: ________  Zip:________

Account Number: ______________________________________  Your Bank’s ABA/Routing Nbr: _______________________

Your Bank’s Account Number: _______________________________

Checking Acct: _____________________________________________  Savings Acct: ___________________________________

PLEASE ATTACH COPY OF VOIDED CHECK TO THIS FORM IF FUNDS ARE TO BE SENT TO A BANK

Owner Signature ________________________________________  Date ____________

Co-Owner Signature (if applicable) _________________________  Date ____________

o  Check the box if you consent to the electronic delivery of documents, including the prospectus, prospectus supplements, annual and quarterly reports, and other stockholder communication and reports. E-mail address in Section 3 is required. Please carefully read the following representations before consenting to receive documents electronically. By checking this box and consenting to receive documents electronically, you represent the following:

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The financial advisor must sign below to complete order. The financial advisor hereby represents and warrants that he/she is duly licensed and may lawfully sell Units of Preferred Apartment Communities, Inc.

BROKER-DEALER: __________________________  Financial Advisor Name/RIA: ____________________________
Mailing Address: ____________________________________________________________________________________
City: ________________________________________  State: ___________________________  Zip: ____________________
Business No. (required) _________________________
Financial Advisor E-mail Address (required): _______________________________
Fax No.:_____________________
Broker-Dealer CRD Number: _____________________  Financial Advisor CRD Number:_________________________

o RIA Submission Check this box to indicate whether submission is made through the Registered Investment Advisor (RIA) in its capacity as the RIA and not in its capacity as a Registered Representative of a Broker-Dealer, if applicable, whose agreement with the subscriber includes a fixed or “wrap” fee feature for advisory and related brokerage services. If an owner or principal or any member of the RIA firm is a FINRA licensed Registered Representative affiliated with a Broker-Dealer, the transaction should be completed through that Broker-Dealer, not through the RIA.

I acknowledge that (1) by checking the above box or (2) if the sale of Units pursuant to this Subscription Agreement is to our directors, officers, employees and other individuals associated with us and members of their families, I WILL NOT RECEIVE A SALES COMMISSION. Further, I acknowledge that if the sale of Units pursuant to this Subscription Agreement is to a holder of interests in one or both of the Funds, I WILL RECEIVE A REDUCED SELLING COMMISSION.

The undersigned further represents and certifies that in connection with this subscription for Units, he/she has complied with and has followed all applicable policies and procedures under his firm’s existing Anti-Money Laundering Program and Customer Identification Program.

Financial Advisor and /or RIA Signature: ________________________________________________________  Date: ________________

Branch Manager Signature:____________________________________________________________________  Date: ________________

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7. SUBSCRIBER ACKNOWLEDGEMENTS AND SIGNATURES

The undersigned hereby confirms her/his/its agreement to purchase the Units on the terms and conditions set forth herein and acknowledges and/or represents (or in the case of fiduciary accounts, the person authorized to sign on such subscriber’s behalf) the following: (you must initial each of the representations below)

__________		__________
Owner		Co-Owner		a) I/We have received the final prospectus of Preferred Apartment Communities, Inc.
__________		__________
Owner		Co-Owner		b) I/We accept the terms of the charter, as amended, of Preferred Apartment Communities, Inc.
__________		__________
Owner		Co-Owner		c) I/We am/are purchasing Units for my/our own account.
__________		__________
Owner		Co-Owner		d) I/We am/are in compliance with the USA PATRIOT Act and not on any governmental authority watch list.
__________		__________
Owner		Co-Owner		e) If an affiliate of Preferred Apartment Communities, Inc., I/we represent that the Units are being purchased for investment purposes only and not for immediate resale.
		Owner Signature: _______________________________________________________________  Date: _______________
		Co-Owner Signature: ____________________________________________________________  Date: _______________
		Signature of Custodian(s) or Trustee(s) (if applicable). Current Custodian must sign if investment is for an IRA Account
		Authorized Signature (Custodian or Trustee): ________________________________________  Date: _______________

WE INTEND TO ASSERT THE FOREGOING REPRESENTATIONS AS A DEFENSE IN ANY SUBSEQUENT LITIGATION WHERE SUCH ASSERTION WOULD BE RELEVANT. WE HAVE THE RIGHT TO ACCEPT OR REJECT THIS SUBSCRIPTION IN WHOLE OR IN PART, SO LONG AS SUCH PARTIAL ACCEPTANCE OR REJECTION DOES NOT RESULT IN AN INVESTMENT OF LESS THAN THE MINIMUM AMOUNT SPECIFIED IN THE PROSPECTUS. AS USED ABOVE, THE SINGULAR INCLUDES THE PLURAL IN ALL RESPECTS IF UNITS ARE BEING ACQUIRED BY MORE THAN ONE PERSON. THIS SUBSCRIPTION AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS.

By executing this Subscription Agreement, the subscriber is not waiving any rights under federal or state law.

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To prevent backup withholding on any payment made to a stockholder with respect to subscription proceeds held in escrow, the stockholder is generally required to provide a current taxpayer identification number, or TIN (or the TIN of any other payee), and certain other information by completing the form below, certifying that the TIN provided on Form W-9 is correct (or that such investor is awaiting a TIN), that the investor is a U.S. person, and that the investor is not subject to backup withholding because (i) the investor is exempt from backup withholding, (ii) the investor has not been notified by the IRS that the investor is subject to backup withholding as a result of failure to report all interest or dividends or (iii) the IRS has notified the investor that the investor is no longer subject to backup withholding. If the box in Part 3 is checked and a TIN is not provided by the time any payment is made in connection with the proceeds held in escrow, 28% of all such payments will be withheld until a TIN is provided and if a TIN is not provided within 60 days, such withheld amounts will be paid over to the IRS. See the instructions included with the Form W-9 below on how to fill out the Form W-9.

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PREFERRED APARTMENT COMMUNITIES, INC.
  
INSTRUCTION PAGE

We, Preferred Apartment Communities, Inc., are selling up to a maximum of 150,000 Units ($150,000,000) in connection with this offering (the “Offering”).

Your broker-dealer or registered investment advisor should MAIL properly completed and executed ORIGINAL documents to UMB Bank, National Association at the following address:

UMB Bank, National Association
1010 Grand Boulevard, 4^th Floor
Mail Stop: 1020409
Kansas City, Missouri 64106
Attention: Lara Stevens, Corporate Trust
Phone: (816) 860-3017
Fax: (816) 860-3029

*For IRA Accounts, mail investor signed documents to the IRA Custodian for signatures.

Instructions to Subscribers

Section 1: Indicate investment amount

Section 2: Please make sure you include all of the information requested regarding the account with your Financial Advisor where you want delivery versus payment to occur.

Section 3: All names, addresses, dates of birth, Social Security or Tax I.D. numbers of all investors or Trustees

Section 5: To be signed and completed by your Financial Advisor (be sure to include CRD number for Financial Advisor and Broker Dealer Firm and the Branch Manager’s signature)

Section 6: Have ALL investors initial and sign where indicated

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PREFERRED APARTMENT COMMUNITIES, INC.
SUBSCRIPTION AGREEMENT

o I/WE AM/ARE DIRECTORS, OFFICERS, EMPLOYEES OR OTHER INDIVIDUALS ASSOCIATED WITH THE COMPANY OR A FAMILY MEMBER OF ONE OF THE FOREGOING.

o CHECK HERE IF ADDITIONAL PURCHASE AND COMPLETE NUMBER 3 BELOW.

Payment Instructions: Please deliver payment for your purchase to your Financial Advisor pursuant to their instructions.

Number of Units purchased: ______________________		Brokerage Account No.:
Purchase price per Unit: $________________		_______________________
Aggregate purchase price: $ _____________________		(If applicable)

Broker-Dealer: _________________________________________________

Broker-Dealer DTCC Number: ____________________________________

Account Title: __________________________________________________

Account Number: _______________________________________________

First Name: __________________________________________		Middle Name: _____________________________________________
Last Name: __________________________________________		Tax ID or SS#: ____________________________________________
Street Address: _______________________________________		City: ____________________		State: ________		Zip: ___________
Date of Birth: (mm/dd/yyyy): ____/____/________
If Non-U.S. Citizen, specify Country of Citizenship: __________________________________
Daytime Phone #:________________________________________________
U.S. Driver’s License Number (if available):_________________________________________				State of Issue: _________________
Issue Date: _____________________________________________				Expiration Date: _______________
Email Address: __________________________________________________

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First Name: __________________________________________		Middle Name: _____________________________________________
Last Name: __________________________________________		Tax ID or SS#: ____________________________________________
Street Address: _______________________________________		City: ____________________		State: ________		Zip: ___________
Date of Birth: (mm/dd/yyyy): ____/____/________
If Non-U.S. Citizen, specify Country of Citizenship: __________________________________
Daytime Phone #:________________________________________________
U.S. Driver’s License Number (if available):_________________________________________				State of Issue: _________________
Issue Date: _____________________________________________				Expiration Date: _______________
Email Address: __________________________________________________

Street Address: __________________________________________________________________________________________________
City: _____________________________________________________		State: __________________		Zip: ___________________

Date of Trust: ___/__/_______

Entity Name/Title of Trust: __________________________________________________________

Tax ID Number: ___________________________________________________________________

Place of Birth: ________________________________________				________________________		________________________
City				State/Providence		Country
Immigration Status:		Permanent resident  o		Non-permanent resident  o		Non-resident  o
Check which type of document you are providing:
o  U.S. Driver’s License		o  INS Permanent resident     alien card		o  Passport with U.S. Visa		o  Employment Authorization     Document
o  Passport without U.S. Visa
Bank Name (required): __________________________________				Account No. (required): ________________________________
o  Foreign national identity documents
Bank address (required): _________________________________				Bank Phone No. (required):_____________________________
Number for the document checked above and country of issuance:    ___________________________________________________________________

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All distributions will be paid to the account where the Units are held on the record date for the distribution.

The financial advisor must sign below to complete order. The financial advisor hereby represents and warrants that he/she is duly licensed and may lawfully sell Units of Preferred Apartment Communities, Inc.

BROKER-DEALER: __________________________  Financial Advisor Name/RIA: ____________________________
Mailing Address: ____________________________________________________________________________________
City: ________________________________________  State: ___________________________  Zip: ____________________
Business No. (required) _________________________
Financial Advisor E-mail Address (required): _______________________________
Fax No.:______________________
Broker-Dealer CRD Number:_____________________  Financial Advisor CRD Number: ______________________

o RIA Submission Check this box to indicate whether submission is made through the Registered Investment Advisor (RIA) in its capacity as the RIA and not in its capacity as a Registered Representative of a Broker-Dealer, if applicable, whose agreement with the subscriber includes a fixed or “wrap” fee feature for advisory and related brokerage services. If an owner or principal or any member of the RIA firm is a FINRA licensed Registered Representative affiliated with a Broker-Dealer, the transaction should be completed through that Broker-Dealer, not through the RIA.

I acknowledge that (1) by checking the above box or (2) if the sale of Units pursuant to this Subscription Agreement is to our directors, officers, employees and other individuals associated with us and members of their families, I WILL NOT RECEIVE A SALES COMMISSION. Further, I acknowledge that if the sale of Units pursuant to this Subscription Agreement is to a holder of interests in one or both of the Funds, I WILL RECEIVE A REDUCED SELLING COMMISSION.

The undersigned further represents and certifies that in connection with this subscription for Units, he/she has complied with and has followed all applicable policies and procedures under his firm’s existing Anti-Money Laundering Program and Customer Identification Program.

Financial Advisor and /or RIA Signature: ________________________________________________________  Date: ________________

Branch Manager Signature:____________________________________________________________________  Date: ________________

The undersigned hereby confirms her/his/its agreement to purchase the Units on the terms and conditions set forth herein and acknowledges and/or represents (or in the case of fiduciary accounts, the person authorized to sign on such subscriber’s behalf) the following: (you must initial each of the representations below)

__________		__________
Owner		Co-Owner		a) I/We have received the final prospectus of Preferred Apartment Communities, Inc.
__________		__________
Owner		Co-Owner		b) I/We accept the terms of the charter, as amended, of Preferred Apartment Communities, Inc.
__________		__________
Owner		Co-Owner		c) I/We am/are purchasing Units for my/our own account.
__________		__________
Owner		Co-Owner		d) I/We am/are in compliance with the USA PATRIOT Act and not on any governmental authority watch list.
__________		__________
Owner		Co-Owner		e) If an affiliate of Preferred Apartment Communities, Inc., I/we represent that the Units are being purchased for investment purposes only and not for immediate resale.
		Owner Signature: _______________________________________________________________  Date: _______________
		Co-Owner Signature: ____________________________________________________________  Date: _______________
		Signature of Trustee(s) (if applicable).
		Authorized Signature (Trustee): ___________________________________________________  Date: _______________

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WE INTEND TO ASSERT THE FOREGOING REPRESENTATIONS AS A DEFENSE IN ANY SUBSEQUENT LITIGATION WHERE SUCH ASSERTION WOULD BE RELEVANT. WE HAVE THE RIGHT TO ACCEPT OR REJECT THIS SUBSCRIPTION IN WHOLE OR IN PART, SO LONG AS SUCH PARTIAL ACCEPTANCE OR REJECTION DOES NOT RESULT IN AN INVESTMENT OF LESS THAN THE MINIMUM AMOUNT SPECIFIED IN THE PROSPECTUS. AS USED ABOVE, THE SINGULAR INCLUDES THE PLURAL IN ALL RESPECTS IF UNITS ARE BEING ACQUIRED BY MORE THAN ONE PERSON. THIS SUBSCRIPTION AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS.

By executing this Subscription Agreement, the subscriber is not waiving any rights under federal or state law.

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-176604

PREFERRED APARTMENT COMMUNITIES, INC.
  
SUPPLEMENT NO. 2, DATED MAY 11, 2012,
TO THE PROSPECTUS, DATED NOVEMBER 18, 2011

This prospectus supplement (this “Supplement No. 2”) is part of the prospectus of Preferred Apartment Communities, Inc. (the “Company”), dated November 18, 2011 (the “Prospectus”), as supplemented by Supplement No. 1, dated May 3, 2012 (“Supplement No. 1”). This Supplement No. 2 supplements certain information contained in the Prospectus. This Supplement No. 2 should be read, and will be delivered, with the Prospectus and Supplement No. 1.

The purpose of this Supplement No. 2 is to supplement the disclosure under the heading “Experts” to account for the addition of the consent of PricewaterhouseCoopers LLP with respect to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, which is being incorporated by reference in the Prospectus.

PREFERRED APARTMENT COMMUNITIES, INC.
  
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		Supplement No. 2 Page No.				Prospectus Page No.
PROSPECTUS UPDATES			S-1				N/A
Experts			S-1				206

PROSPECTUS UPDATES

Experts

The following disclosure is added at the end of the section entitled “Experts” on page 206 of the Prospectus.

“The consolidated financial statements of Preferred Apartment Communities, Inc. appearing in Preferred Apartment Communities, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011, incorporated by reference in this prospectus and elsewhere in the registration statement, have been incorporated by reference in reliance upon the report of PricewaterhouseCoopers LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing in giving said reports.”

Filed Pursuant to Rule Number 424(b)(3)
Registration No. 333-176604

PREFERRED APARTMENT COMMUNITIES, INC.

SUPPLEMENT NO. 3 DATED AUGUST 23, 2012
TO THE PROSPECTUS, DATED NOVEMBER 18, 2011

This prospectus supplement (this “Supplement No. 3”) is part of the prospectus of Preferred Apartment Communities, Inc. (the “company,” “us,” “our” or “we”), dated November 18, 2011 (the “Prospectus”), as supplemented by Supplement No. 1, dated May 3, 2012 (“Supplement No. 1”) and Supplement No. 2, dated May 11, 2012 (“Supplement No. 2). This Supplement No. 3 supplements, modifies or supersedes certain information contained in the Prospectus. This Supplement No. 3 should be read, and will be delivered, with the Prospectus, Supplement No. 1 and Supplement No. 2.

The purpose of this Supplement No. 3 is to, among other things:

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PREFERRED APARTMENT COMMUNITIES, INC.

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		Supplement No. 3 Page No.				Prospectus Page No.
Certain Operating Information			S-1				N/A
Status of the Offering			S-1				N/A
Follow-On Offering			S-1				N/A
REIT Qualification			S-1				N/A
Management Updates			S-1				N/A
Prospectus Updates			S-2				N/A
Prospectus Cover			S-2				Cover Page
Table of Contents			S-2				ii, v
Prospectus Summary			S-2				1-4, 7, 150, 9, 15-19, 158, 20, 22-23, 67-68
Risk Factors			S-13				24, 25, 27-29, 31, 34, 35, 55, 59
Forward-Looking Statements			S-19				64-65
Estimated Use of Proceeds			S-20				66-67
Distribution Policy			S-20				69
Market Price Range of Our Common Stock and Distributions			S-22				71
Capitalization			S-23				72
Selected Financial Information			S-24				73
Management’s Discussion and Analysis of Financial Condition and Results of Operations			S-25				74
Quantitative and Qualitative Disclosures about Market Risk			S-25				N/A
Prior Performance Summary			S-25
Business			S-26				95
Description of Real Estate Investments			S-44				113
Our Management			S-51				118-127, 129
Our Sponsor, Our Manager and the Management Agreement			S-55				132, 135-136, 141
Principal Stockholders			S-64				142
Certain Relationships and Related Transactions			S-65				143-144, 148-149
Description of Securities			S-67				151-153, 155, 157-159, 162
Shares of Common Stock Eligible for Future Sale			S-68				163
Summary of Our Organizational Documents			S-69				164
Summary of Our Operating Partnership Agreement			S-69				169, 171, 174, 176
Material U.S. Federal Income Tax Considerations			S-70				177, 179-180, 187, 189, 191, 192-193, 195-196
Investment by Tax-Exempt Entities and ERISA Considerations			S-83				197
Electronic Delivery of Documents			S-83				206
Incorporation of Certain Information by Reference			S-83				N/A
Appendix A			S-84				A-1 – A10
Prospectus Back Cover			S-84				Back Cover Page

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CERTAIN OPERATING INFORMATION

Status of the Offering

On November 18, 2011, we commenced this offering on a “reasonable best efforts” basis of up to 150,000 units, or Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one detachable warrant to purchase 20 shares of our common stock. On March 30, 2012, we satisfied the escrow conditions of this offering, received and accepted aggregate subscriptions in excess of $2.0 million and issued 2,155 shares of Series A Redeemable Preferred Stock and 2,155 Series A Warrants to the holders of our Series A Redeemable Preferred Stock. As of August 16, 2012, we had received from this offering total gross proceeds of approximately $10,827,000 from the sale of 10,827 Units. As of August 16, 2012, there were 139,173 Units available for sale pursuant to this offering.

We will offer Units until December 31, 2012, which may be extended through December 31, 2013, in our sole discretion, provided that this offering will be terminated if all the 150,000 Units are sold before such date.

Our common stock is traded on the NYSE MKT (previously known as NYSE AMEX), or NYSE MKT, under the symbol “APTS.” On August 13, 2012, the last reported sale price of our common stock on the NYSE MKT was $8.20 per share.

Follow-On Offering

On August 16, 2012, we filed a Registration Statement on Form S-11 (Registration No. 333-183355) with the Securities and Exchange Commission in connection with a follow-on public offering on a “reasonable best efforts” basis of up to 850,000 units, with each unit consisting of one share of Series A Redeemable Preferred Stock and one detachable warrant to purchase 20 shares of our common stock. Such Registration Statement has not yet been declared effective by the Securities and Exchange Commission.

REIT Qualification

We have elected and qualified to be taxed as a real estate investment trust for U.S. federal income tax purposes commencing with our tax year ended December 31, 2011.

Management Updates

Effective as of August 15, 2012, our board of directors approved a realignment of the duties and responsibilities of certain officers and directors of the company. Leonard A. Silverstein, formerly the company’s Vice Chairman of the Board, Executive Vice President, General Counsel and Secretary, has been appointed to the new positions of President and Chief Operating Officer, and remains a member of the Board. In connection with Mr. Silverstein’s realignment of duties and responsibilities, John A. Williams will continue to serve as Chairman of the Board and Chief Executive Officer, and Daniel M. DuPree, the Company’s lead independent director, will serve as the Vice Chairman of the Board. In addition, Michael J. Cronin, the company’s Chief Accounting Officer and Treasurer, has been appointed Executive Vice President of the company.

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PROSPECTUS UPDATES

Where applicable, the following disclosure changes are made to the Prospectus:

Prospectus Cover

The following disclosure replaces in its entirety the fourth paragraph on the cover of the Prospectus.

“We have elected and qualified to be taxed as a real estate investment trust for U.S. federal income tax purposes, or REIT, commencing with our tax year ending December 31, 2011.”

The following disclosure is added following the fourth paragraph on the cover of the Prospectus.

“Our charter contains various restrictions on the ownership and transfer of our securities. You should read the information under the section entitled “Description of Securities — Restrictions on Ownership and Transfer of our Securities” in this prospectus for descriptions of these restrictions.”

The final sentence of the fifth paragraph and each of the subsequent bullet points on the cover of the Prospectus are deleted in their entirety.

The following disclosure replaces in its entirety the first footnote under the table on the cover of the Prospectus.

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The heading entitled “Prior Performance Summary” and the sub-heading thereunder on page ii of the Prospectus are deleted in their entirety.

The second paragraph below the Table of Contents on page v of the Prospectus is deleted in its entirety.

Prospectus Summary

The following disclosure replaces in its entirety the first three sentences of the first paragraph on page 1 of the Prospectus under the heading “Prospectus Summary.”

“This summary highlights some of the information in this prospectus. It does not contain all the information that you should consider before investing in our securities. You should read carefully the detailed information set forth in the section entitled “Risk Factors” and other information included in this prospectus, and the information incorporated by reference into this prospectus, including our audited consolidated financial statements and the accompanying notes in our latest Annual Report on Form 10-K and our consolidated financial statements and the accompanying notes in our subsequent Quarterly Reports on Form 10-Q.”

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The following disclosure is added immediately preceding the first paragraph on page 2 of the Prospectus.

“On August 16, 2012, we filed a Registration Statement on Form S-11 (Registration No. 333-183355) with the Securities and Exchange Commission, or the SEC, in connection with a follow-on public offering on a “reasonable best efforts” basis of up to 850,000 units, with each unit consisting of one share of Series A Redeemable Preferred Stock and one detachable warrant to purchase 20 shares of our common stock. Such Registration Statement has not yet been declared effective by the SEC. We refer in this prospectus to such offering, the units offered thereby and the warrants forming a part of such units, as the Follow-On Series A Offering, the Follow-On Series A Units and the Follow-On Warrants, respectively.”

The following disclosure replaces in its entirety the second paragraph on page 2 of the Prospectus.

“We have registered “A Preferred Apartment Community” as a trademarked logo with the United States Patent and Trademark Office. Our manager has branded, and in the future will continue to brand, all apartment communities owned by the company as “A Preferred Apartment Community” and intends to make it an ultimate tagline for each of our communities that signifies certain brand and management standards. This strategy will allow each individual community to be part of a centralized marketing and advertising campaign, in addition to property level marketing and advertising campaigns. We expect that these campaigns will further enhance each individual property’s presence in the marketplace, and we believe that this will allow our communities to be perceived as premier over other properties within the marketplace. Our manager has entered into a non-exclusive license agreement with the company as licensee with respect to all intellectual property of the manager other than trademarks. The license agreement will terminate automatically upon termination of our management agreement or will terminate upon a material breach of the license agreement that remains uncured for more than 30 days after receipt of notice of such breach. Our manager has entered into a separate non-exclusive license agreement with the company as licensee with respect to the manager’s trademarks on substantially similar terms as the initial intellectual property license agreement.”

The following language replaces in its entirety the first sentence of the sixth paragraph on page 2 of the Prospectus.

“On June 30, 2011, we made a mezzanine loan investment of $6.0 million to Oxford Hampton Partners, LLC, a Georgia limited liability company, to partially finance the construction of a 96-unit multifamily community located adjacent to our existing Trail Creek multifamily community in Hampton, Virginia, or the Oxford Hampton Mezzanine Loan.”

The following disclosure is added following the sixth paragraph on page 2 of the Prospectus.

“On March 26, 2012, we made a loan in the amount of $650,000 to Oxford Properties, LLC, a Georgia limited liability company, to fund certain expenses in connection with transactions we are pursuing, or the Oxford Properties Loan.

On May 7, 2012, Summit Crossing Mezzanine Lending LLC, a wholly owned subsidiary of our operating partnership, made a mezzanine loan in the amount of $6,103,027 to Oxford Summit Apartments II LLC, a Georgia limited liability company, in connection with the borrower’s plans to construct a 140-unit multifamily community in suburban Atlanta, Georgia, or the Oxford Summit II Mezzanine Loan. The full amount of the mezzanine loan was funded by the lender to the borrower on the closing date.

On May 21, 2012, we made a loan in an amount of up to $575,000 to Madison Retail, LLC, a Georgia limited liability company, to fund certain expenses in connection with transactions we are pursuing, or the Madison Retail Loan.

On June 29, 2012, Iris Crosstown Mezzanine Lending, LLC, a wholly owned subsidiary of our operating partnership, made a real estate acquisition bridge loan in the amount of $2,868,471 to Iris Crosstown Apartments, LLC, or Iris, a Georgia limited liability company, in connection with the borrower’s acquisition of a parcel of land located in suburban Tampa, Florida, upon which a multifamily community is to be constructed, or the Iris Bridge Loan.

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On August 21, 2012, our operating partnership entered into a revolving line of credit arrangement in the amount of up to $1,000,000 with our manager, or the Manager Loan. The amounts payable under the terms of the Manager Loan are secured by the amounts payable to our manager under the Management Agreement.”

The final sentence of the penultimate paragraph under the section entitled “Prospectus Summary — Our Investment Strategy” on page 3 of the Prospectus is deleted in its entirety.

The following disclosure replaces in its entirety the first two sentences of the second paragraph under the section entitled “Prospectus Summary — Our Financing Strategy” on page 4 of the Prospectus.

“We intend to target leverage levels (secured and unsecured) between 50% and 65% of the value of our tangible assets (including our real estate assets, real estate loans and other real estate-related investments, accounts receivable and cash and cash equivalents) on a portfolio basis based on fair market value. As of June 30, 2012, our outstanding debt (both secured and unsecured) was approximately 46.8% of the value of our tangible assets on a portfolio basis based on fair market value.”

The following disclosure replaces in its entirety the section entitled “Prospectus Summary — Summary Risk Factors” beginning on page 4 of the Prospectus.

“Summary Risk Factors

Investing in our securities involves a high degree of risk. If we are unable to effectively manage the impact of these risks, we may not meet our investment objectives, and therefore, you should purchase these securities only if you can afford a complete loss of your investment. See the section entitled “Risk Factors” included elsewhere in this prospectus for a discussion of the risks that should be considered in connection with your investment in our securities. Some of the more significant risks relating to this offering and an investment in our securities include:

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The following disclosure replaces in its entirety the following: (i) the first, fourth, fifth and seventh footnotes below the chart on page 7 of the Prospectus; and (ii) the first, fourth, fifth and seventh footnotes below the chart on page 150 of the Prospectus.

The following disclosure replaces in its entirety the following: (i) the first paragraph on page 9 of the Prospectus; and (ii) the first paragraph under the section entitled “Our Sponsor, Our Manager and the Management Agreement — Management Compensation” on page 136 of the Prospectus.

“The following table summarizes the fees and expense reimbursements that we will pay to our manager (or persons affiliated with or related to our manager, including our officers):”

The following disclosure replaces in its entirety the table and accompanying footnotes under the section entitled “Prospectus Summary — Management Agreement” beginning on page 9 of the Prospectus.

“Type of Compensation		Determination of Amount
		Offering, Acquisition and Operational Stage
Acquisition Fees		Fees payable to our manager in the amount of 1.0% of the gross contract purchase price of the property, loan or other real estate-related investment purchased or made, as applicable, for services in connection with selecting, evaluating and acquiring or making such investment. For purposes of this prospectus, “gross contract purchase price” means the amount actually paid or allocated in respect of the acquisition of a property or the amount actually paid or allocated in respect of the purchase or issuance of loans or other real-estate related investments, in each case inclusive of acquisition expenses and any indebtedness assumed or incurred in respect of such investment, but exclusive of acquisition fees. The gross contract purchase price allocable for an investment held through a joint venture shall equal the product of (i) the gross contract purchase price, determined as stated above, and (ii) the direct or indirect ownership percentage in the joint venture held directly or indirectly us.

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Type of Compensation		Determination of Amount
Acquisition Expenses(1)		We will reimburse our manager for expenses actually incurred (including personnel costs) related to selecting, evaluating and making investments on our behalf, regardless of whether we actually make the related investment. Personnel costs associated with providing such services will be determined based on the amount of time incurred by the applicable employee of our manager and the corresponding payroll and payroll related costs incurred by our manager. In addition, we also will pay third parties, or reimburse our manager or its affiliates, for any investment-related expenses due to third parties, including, but not limited to, legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses, third-party brokerage or finder’s fees, title insurance expenses, survey expenses, property inspection expenses and other closing costs, regardless of whether we acquire the related assets.
Asset Management Fee(2)		We will pay our manager a monthly fee equal to one-twelfth of 0.50% of the total value of our assets (including cash or cash equivalents) based on the adjusted cost of our assets and amounts actually paid or allocated in respect of the issuance of loans, before reduction for depreciation, amortization, impairment charges and cumulative acquisition costs charged to expense in accordance with generally accepted accounting principles, or GAAP (adjusted cost will include the purchase price, acquisition expenses, capital expenditures and other customarily capitalized costs). This fee will be payable monthly in arrears, based on assets held by us on the last date of the prior month, adjusted for appropriate closing dates for individual investments.
Property Management and Leasing Fee(2)		We will pay our manager a monthly fee equal to 4% of the monthly gross revenues of our properties managed, for services in connection with the rental, leasing, operation and management of our properties and the supervision of any third parties that are engaged by our manager to provide such services. Our manager may subcontract the performance of its property management and leasing services duties to third parties or affiliates and pay all or a portion of its property management fee to such persons with whom it contracts for these services. Our manager will be responsible for all fees payable to third parties or affiliates in connection with subcontracted property management and leasing duties. The property management and leasing fee will be payable monthly in arrears, based on the actual gross revenues for the prior month.
General and Administrative Expenses Fee(1)(2)(3)		We will pay our manager a monthly fee equal to 2% of our monthly gross revenues.
Disposition Fee on Sale of Assets		We may pay our manager a commission upon the sale of one or more of our properties or other assets in an amount equal to the lesser of (a) one-half of the commission that would be reasonable, customary and competitive in light of the size, type and location of the asset, and (b) 1% of the sale price of the asset. Payment of such fee may be made only if the manager provides a substantial amount of services in connection with the sale of the asset as determined by a majority of our independent directors. In addition, the amount paid when added to all other commissions paid to unaffiliated parties in connection with such sale shall not exceed the lesser of (1) the commission that would be reasonable, customary and competitive in light of the size, type and location of the asset and (2) an amount equal to 6% of the sale price of such asset.

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Type of Compensation		Determination of Amount
Construction Fee, Development Fee and Landscaping Fee		We will pay our manager a construction fee, development fee and landscaping fee at market rates customary and competitive in light of the size, type and location of the asset in connection with the construction, development or landscaping of a property, or for management and oversight of expansion projects and other capital improvements.
Reimbursement of Certain Offering Expenses		We will reimburse our manager up to 1.5% of gross offering proceeds for actual expenses incurred in connection with this offering. Such offering expenses include all expenses to be paid by us in connection with this offering, such as our legal, accounting, printing, mailing and filing fees, charges of our escrow agent and transfer agent, and reimbursement of bona fide, itemized and detailed due diligence expenses of our dealer manager.
Accrued Fees Upon Termination		If the management agreement is terminated by reason of a change of control of our company, by us without cause (upon the vote of at least 75% of our independent directors) in connection with the expiration of a renewal term, by the manager for good reason or upon our liquidation, the manager will be entitled to receive payment of any earned but unpaid compensation and expense reimbursements accrued as of the date of termination.
		Liquidation Stage
Special Limited Partnership Interest		Our manager has a special limited partnership interest in our operating partnership entitling it to distributions from our operating partnership equal to 15% of any net sale proceeds from an asset (which equals the proceeds actually received by us from the sale of such asset after paying off outstanding debt related to the sold asset and paying any seller related closing costs, including any commission paid to our manager in connection with the sale of the asset, less expenses allocable to the sold asset) remaining after the payment of (i) the capital and expenses allocable to all realized investments (including the sold asset), and (ii) a 7% priority annual return, or Priority Return, on such capital and expenses; provided, however, that all accrued and unpaid dividends on our preferred stock have been paid in full. This distribution with respect to the special limited partnership interest is payable upon the sale of an asset even if holders of our preferred stock have not received a return of their capital, but only after the holders of our preferred stock have received payment in full of all accrued and unpaid dividends on their preferred stock. It is also possible that holders of common stock will receive additional distributions from the sale of a property (in excess of their capital attributable to the asset sold) before the holders of Series A Redeemable Preferred Stock receive a return of their capital.
		The special limited partner shall be entitled to tax distributions, at our sole discretion as the general partner, provided such distributions do not prevent us from satisfying the requirements for qualification as a REIT. Any tax distributions shall offset future distributions to which the special limited partner is entitled.

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The following disclosure replaces in its entirety the eighth bullet point under the section entitled “Prospectus Summary — Conflicts of Interest” beginning on page 15 of the Prospectus.

The following disclosure replaces in its entirety the second sentence of the second paragraph under the section entitled “Prospectus Summary — Operating and Regulatory Structure — REIT Qualification” on page 16 of the Prospectus.

“Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they distribute annually to their stockholders at least 90% of their REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain.”

The following language replaces in its entirety the fifth sentence of the third paragraph on page 17 of the Prospectus.

“We have not requested that the staff of the SEC approve our treatment of any entity as a majority owned subsidiary and the SEC staff has not done so.”

The final sentence of the first paragraph under the section entitled “Prospectus Summary — Restrictions on Ownership and Transfer of our Securities” on page 18 of the Prospectus is deleted in its entirety.

The following disclosure replaces in its entirety the first paragraph under the section entitled “Prospectus Summary — Distribution Policy” on page 18 of the Prospectus.

“We intend to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. We generally intend to pay, over time, dividends in an amount equal to 100% of our net taxable income.”

The following disclosure is added following the first paragraph under the section entitled “Prospectus Summary — Distribution Policy” on page 18 of the Prospectus.

“The following tables set forth the dividends that have been authorized by our board of directors and paid by us to date:

Common Stock

Quarter Ended		Amount Paid Per Share				Total Amount Paid				Date Paid				Cash Flow from Operations
06/30/2011		$	0.125			$	646,487				07/15/2011			$	(697,122	)
09/30/2011		$	0.125			$	646,675				10/17/2011			$	553,596
12/31/2011		$	0.125			$	646,916				01/17/2012			$	794,172
03/31/2012		$	0.13			$	673,181				04/16/2012			$	927,394
06/30/2012		$	0.13			$	677,477				07/16/2012			$	869,992	(8)
09/30/2012		$	0.14				(7)				(7)

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Series A Redeemable Preferred Stock

Month Ended		Amount Paid Per Share				Total Amount Paid				Date Paid
04/30/2012		$	5.33	(1)		$	11,486				05/21/2012
05/31/2012		$	5.00/5.17	(2)		$	25,406				06/20/2012
06/30/2012		$	5.00/5.17	(3)		$	42,793				07/20/2012
07/31/2012		$	5.00/5.50	(4)(6)		$	50,879	(6)			08/20/2012	(6)
08/31/2012		$	5.00/7.50/5.17	(5)(6)			(6)				(6)

The following disclosure replaces in its entirety the following: (i) the second paragraph under the section entitled “Prospectus Summary — Distribution Policy” on page 18 of the Prospectus; and (ii) the first two paragraphs under the heading “Description of Securities — Distribution Policy and Distributions” on page 158 of the Prospectus.

“Holders of Series A Redeemable Preferred Stock are entitled to receive, when, and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Redeemable Preferred Stock at an annual rate of six percent (6%) of the initial stated value of $1,000 per share, or the Stated Value. Dividends on each share of Series A Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of issuance. We paid the initial dividend on our Series A Redeemable Preferred Stock in the month following the first full month after we received and

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accepted aggregate subscriptions in excess of the minimum offering pursuant to this offering, and thereafter have consistently paid monthly dividends on the Series A Redeemable Preferred Stock. We expect to continue to pay dividends on the Series A Redeemable Preferred Stock monthly, unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. We also expect to continue to authorize and declare dividends on the shares of Series A Redeemable Preferred Stock on a monthly basis payable on the 20^th day of the month following the month for which the dividend was declared (or the next business day if the 20^th day is not a business day). The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.”

The following section replaces in its entirety the following: (i) the disclosure under the heading “Prospectus Summary — Ratio of Earnings to Fixed Charges” on page 19 of the Prospectus; and (ii) the disclosure under the heading “Ratio of Earnings to Fixed Charges” on page 68 of the Prospectus.

“Our consolidated ratio of earnings to fixed charges and preferred stock dividends for the six months ended June 30, 2012 and the year ended December 31, 2011 are set forth below. We did not have any shares of preferred stock outstanding at December 31, 2011. Since we commenced revenue-generating operations in April 2011, the ratio of earnings to fixed charges is not a meaningful measure for any period prior to 2011.

		Six months ended June 30, 2012				Twelve months ended December 31, 2011
Earnings:
Net loss		$	(790,911	)		$	(8,495,424	)
Add:
Combined fixed charges and preferred dividends (see below)			1,153,342				1,514,581
Total earnings		$	362,431			$	(6,980,843	)
Fixed charges:
Interest expensed		$	1,030,670			$	1,450,101
Amortization of deferred loan costs related to mortgage indebtedness			42,986				64,480
Total fixed charges			1,073,657				1,514,581
Preferred dividends			79,685				—
Total Combined fixed charges and preferred dividends		$	1,153,342			$	1,514,581
Ratio of Earnings to Combined fixed charges and preferred dividends			(1)				(1)

Our ratio of earnings to combined fixed charges is computed by dividing earnings by the total of fixed charges and preferred stock dividends. For these purposes, “earnings” consist of net loss plus fixed charges, less the value of unamortized deferred loan costs. Net loss is computed in accordance with GAAP and includes such non-cash items as real estate depreciation, amortization of the value of customer relationships, leases in place and above (below) market rents and amortization of deferred loan costs. Net loss also includes one-time transactional costs relating to our IPO and organizational costs. “Fixed charges” consist of interest expense on mortgage debt secured by our three multifamily communities, capitalization and amortization of deferred loan costs, and preferred dividend requirements. Interest income is not included in this computation.”

The following disclosure replaces in its entirety the fourth full paragraph in the chart under the section entitled “Prospectus Summary — The Offering” on page 20 of the Prospectus.

“Dividends.  Holders of Series A Redeemable Preferred Stock are entitled to receive, when, and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Redeemable Preferred Stock at an annual rate of six percent (6%) of the

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Stated Value. Dividends on each share of Series A Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of issuance. We paid the initial dividend on our Series A Redeemable Preferred Stock in the month following the first full month after we received and accepted aggregate subscriptions in excess of the minimum offering pursuant to this offering, and thereafter have consistently paid monthly dividends on the Series A Redeemable Preferred Stock. We expect to continue to pay dividends on the Series A Redeemable Preferred Stock monthly, unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. We also expect to continue to authorize and declare dividends on the shares of Series A Redeemable Preferred Stock on a monthly basis payable on the 20^th day of the month following the month for which the dividend was declared (or the next business day if the 20^th day is not a business day). The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.”

The following language replaces in its entirety the following: (i) the second, third and fourth sentences of the disclosure in the chart under the section entitled “Prospectus Summary — The Offering —  Estimated Use of Proceeds” on page 22 of the Prospectus; and (ii) the second full paragraph on page 67 of the Prospectus.

“We intend to invest the net proceeds of this offering in connection with the acquisition of multifamily properties, other real estate-related investments and for general working capital purposes. If all the net proceeds of this offering are used to directly acquire multifamily properties and other real estate-related investments, we estimate that these investments would have an aggregate gross value (inclusive of mortgage indebtedness) of approximately $357.9 million assuming the maximum offering. We intend to acquire such investments through the incurrence of indebtedness (secured and unsecured) of approximately 65% of the value of our tangible assets on a portfolio basis, with the balance of the acquisition cost thereof funded through the use of the net proceeds of this offering.”

The following language replaces in its entirety the third sentence of the footnote below the chart in the section entitled “Prospectus Summary — The Offering” ending on page 22 of the Prospectus.

“This number excludes (a) shares of common stock that may be issued upon redemption of the Series A Redeemable Preferred Stock offered hereby and (b) the maximum of 3,000,000 shares of common stock issuable upon the exercise of the Warrants offered hereby.”

The following disclosure replaces in its entirety the first sentence of the first paragraph under the section entitled “Prospectus Summary — Capital Structure” on page 23 of the Prospectus.

“The Series A Redeemable Preferred Stock ranks senior to our common stock and to the Class A Units and Class B Units issued by our operating partnership and on parity with the Series A Redeemable Preferred Limited Partnership Units issued by our operating partnership with respect to both payment of dividends and distribution of amounts upon liquidation.”

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Risk Factors

The following disclosure replaces in its entirety the first paragraph on page 24 of the Prospectus under the heading “Risk Factors.”

“The purchase of our securities involves a number of risks. You should carefully consider the following risk factors and the risk factors described in our latest Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus, in conjunction with the other information contained in, and incorporated by reference into, this prospectus before making an investment in our securities. The risks discussed in, and incorporated by reference into, this prospectus could adversely affect our business, operating results, prospects and financial condition. See “Where You Can Find Additional Information” and “Incorporation of Certain Documents by Reference.” This could cause the value of our securities to decline and/or you to lose part or all of your investment. The risks and uncertainties described below and incorporated by reference herein are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not presently known to us or that, as of the date of this prospectus, we deem immaterial also may harm our business.”

The following disclosure replaces in its entirety the risk factor on page 24 of the Prospectus under the heading “We will be required to terminate this offering if our common stock is no longer listed on the AMEX or another national securities exchange.”

“We will be required to terminate this offering if our common stock is no longer listed on the NYSE MKT or another national securities exchange.

The Series A Redeemable Preferred Stock is a “covered security” and therefore is not subject to registration under the state securities, or “Blue Sky,” regulations in the various states in which it may be sold due to its seniority to our common stock, which is listed on the NYSE MKT. If our common stock is no longer listed on the NYSE MKT or another appropriate exchange, we will be required to register this offering in any state in which we subsequently offer the Units. This would require the termination of this offering and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering is sold. This would reduce our ability to purchase additional properties and limit the diversification of our portfolio.

Although the Warrants are not “covered securities,” most states include an exemption from securities registration for warrants that are exercisable into a listed security. Therefore, the Warrants are subject to state securities registration in any state that does not provide such an exemption and this offering must be registered in order to sell the Warrants in these states.”

The following disclosure replaces in its entirety the risk factor on page 25 of the Prospectus under the heading “The Series A Redeemable Preferred Stock is a senior security and ranks prior to our common stock with respect to dividends and payments upon liquidation.”

“Shares of Series A Redeemable Preferred Stock may be redeemed for shares of common stock, which rank junior to the Series A Redeemable Preferred Stock with respect to dividends and upon liquidation.

Beginning two years from the date of original issuance, the holder of shares of Series A Redeemable Preferred Stock may require us to redeem such shares, with the redemption price payable, in our sole discretion, in cash or in equal value of common stock, based on the volume weighted average price of our common stock for the 20 trading days prior to the redemption. We may opt to pay the redemption price in shares of our common stock. The rights of the holders of shares of Series A Redeemable Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation. Unless full cumulative dividends on our shares of Series A Redeemable Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our common stock for any period. Upon liquidation, dissolution or winding up of our company, the holders of shares of our Series A Redeemable Preferred Stock are entitled to receive a liquidation preference of Stated Value, $1,000 per share, plus all accrued but unpaid dividends at the rate of 6% per annum, prior and in preference to any distribution to the holders of shares of our common stock or any other class of our equity securities.”

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The following disclosure replaces in its entirety the risk factor on page 25 of the Prospectus under the heading “Our limited operating history makes it difficult for you to evaluate our likely performance and this investment.”

“Our limited operating history makes it difficult for you to evaluate our likely performance and this investment.

We were incorporated on September 18, 2009, and our manager was organized on May 18, 2010. Thus, we and our manager are both recently formed entities with limited operating histories and we both may be unable to successfully operate our businesses or achieve our investment objectives. The past performance of other real estate investment programs sponsored by our sponsor, John A. Williams, or his affiliates may not be indicative of the performance we may achieve. We have limited income, cash flow, funds from operations and cash available for distribution from which we can make distributions to you. We may not be able to conduct our business as planned and/or successfully carry out our business as planned.

You should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies like ours that do not have a substantial operating history, many of which may be beyond our control. Therefore to be successful in this market, we must among other things:

We cannot guarantee that we will succeed in achieving these goals, and our failure to do so could limit our ability to make or sustain distributions to you and cause you to lose all or a portion of your investment.”

The following disclosure replaces in its entirety the risk factor on page 27 of the Prospectus under the heading “The cash distributions you receive may be less frequent or lower in amount than you expect.”

“The cash distributions you receive may be less frequent or lower in amount than you expect.

Our board of directors will determine the amount and timing of distributions on our Series A Redeemable Preferred Stock. In making this determination, our directors will consider all relevant factors, the amount of cash available for distribution, capital expenditure and reserve requirements and general operational requirements. We cannot assure you that we will consistently be able to generate sufficient available cash flow to fund distributions on our Series A Redeemable Preferred Stock nor can we assure you that sufficient cash will be available to make distributions to you. With limited prior operations, we cannot predict the amount of distributions you may receive and we may be unable to pay, maintain or increase distributions over time. Our inability to acquire properties or real estate-related investments or operate profitably may have a negative effect on our ability to generate sufficient cash flow from operations to pay distributions on our Series A Redeemable Preferred Stock.”

The following risk factor is added on page 27 of the Prospectus immediately preceding the risk factor under the heading “Upon the sale of any individual property, holders of Series A Redeemable Preferred Stock do not have a priority over holders of our common stock regarding return of capital.

“We may incur additional indebtedness, which may harm our financial position and cash flow and potentially impact our ability to pay dividends on the Series A Redeemable Preferred Stock and our common stock.

Our governing documents do not have limitations on the amount of leverage we may use. As of June 30, 2012, we and our subsidiaries had outstanding approximately $55.6 million of secured indebtedness and no unsecured indebtedness. We may incur additional indebtedness and become more highly leveraged, which could harm our financial position and potentially limit our cash available to pay dividends. As a result, we may not have sufficient funds remaining to satisfy our dividend obligations relating to the Series A Redeemable Preferred Stock and our common stock if we incur additional indebtedness.”

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The following disclosure replaces in its entirety the risk factor on page 28 of the Prospectus under the heading “Distributions paid from sources other than our cash flow from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real-estate related investments, which may adversely affect our ability to fund future distributions with cash flow from operations and may adversely affect your overall return.”

“Distributions paid from sources other than our cash flow from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute your interests in us, which may adversely affect our ability to fund future distributions with cash flow from operations and may adversely affect your overall return.

Holders of Series A Redeemable Preferred Stock are entitled to receive, when, and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Redeemable Preferred Stock at an annual rate of six percent (6%) of the Stated Value. Dividends on each share of Series A Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of issuance. We paid the initial dividend on our Series A Redeemable Preferred Stock in the month following the first full month after we received and accepted aggregate subscriptions in excess of the minimum offering pursuant to this offering, and thereafter have consistently paid monthly dividends on the Series A Redeemable Preferred Stock. We expect to continue to pay dividends on the Series A Redeemable Preferred Stock monthly, unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. We also expect to continue to authorize and declare dividends on the shares of Series A Redeemable Preferred Stock on a monthly basis payable on the 20^th day of the month following the month for which the dividend was declared (or the next business day if the 20^th day is not a business day). The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.

For the 12-month period ended December 31, 2011, our cash flow from operations of approximately $528,000 was a shortfall of approximately $1.4 million, or 72.8%, to our dividends paid of $1,940,078 paid during such period. The shortfall of cash flow from operations to dividends declared and paid was substantially due to the incurrence of approximately $1.7 million in acquisition costs related to the three multifamily communities that we acquired.

As mentioned above, we have paid distributions from sources other than from our cash flow from operations. Until we acquire additional properties or other real estate-related investments, we may not generate sufficient cash flow from operations to pay distributions. Our inability to acquire additional properties or other real estate-related investments may result in a lower return on your investment than you expect. If we have not generated sufficient cash flow from our operations and other sources, such as from borrowings, the sale of additional securities, advances from our manager, our manager’s deferral, suspension and/or waiver of its fees and expense reimbursements, to fund distributions, we may use the proceeds from this offering. Moreover, our board of directors may change our distribution policy, in its sole discretion, at any time. Distributions to holders of Series A Redeemable Preferred Stock that purchase shares in this offering made from proceeds of this offering are a return of capital to such stockholders, from which we will have already paid offering expenses in connection with this offering. We have not established any limit on the amount of proceeds from this offering that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (3) jeopardize our ability to qualify as a REIT.

If we fund distributions from the proceeds of this offering, we will have less funds available for acquiring properties or real estate-related investments. As a result, the return you realize on your investment may be reduced. Funding distributions from borrowings could restrict the amount we can borrow for investments, which may affect our profitability. Funding distributions with the sale of assets or the proceeds of this offering may affect our ability to generate cash flows. Funding distributions from the sale of additional securities could dilute your interest in us if we sell shares of our common stock or securities convertible or exercisable into shares of our common stock to third party investors. Payment of distributions from the

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mentioned sources could restrict our ability to generate sufficient cash flow from operations, affect our profitability and/or affect the distributions payable to you upon a liquidity event, any or all of which may have an adverse effect on your investment.”

The following disclosure replaces in its entirety the risk factor on page 29 of the Prospectus under the heading “Your percentage of ownership may become diluted if we issue new shares of stock or other securities, and issuances of additional preferred stock or other securities by us may further subordinate the rights of the holders of our common stock.”

“Your percentage of ownership may become diluted if we issue new shares of stock or other securities, and issuances of additional preferred stock or other securities by us may further subordinate the rights of the holders of our common stock (which you may become upon receipt of redemption payments in shares of common stock, conversion of any of your shares of Series A Redeemable Preferred Stock or exercise of any of your Warrants).

We may make redemption payments under the terms of the Series A Redeemable Preferred Stock in shares of our common stock. Although the dollar amounts of such payments are unknown, the number of shares to be issued in connection with such payments may fluctuate based on the price of our common stock. Any sales or perceived sales in the public market of shares of our common stock issuable upon such redemption payments could adversely affect prevailing market prices of shares of our common stock. The issuance of common stock upon such redemption payments also may have the effect of reducing our net income per share (or increasing our net loss per share). In addition, the existence of Series A Redeemable Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the market price of shares of our common stock.

Our board of directors is authorized, without stockholder approval, to cause us to issue additional shares of our common stock or to raise capital through the issuance of additional preferred stock (including equity or debt securities convertible into preferred stock), options, warrants and other rights, on such terms and for such consideration as our board of directors in its sole discretion may determine. Any such issuance could result in dilution of the equity of our stockholders. Our board of directors may, in its sole discretion, authorize us to issue common stock or other equity or debt securities (a) to persons from whom we purchase apartment communities, as part or all of the purchase price of the community, or (b) to our manager in lieu of cash payments required under the management agreement or other contract or obligation. Our board of directors, in its sole discretion, may determine the value of any common stock or other equity or debt securities issued in consideration of apartment communities or services provided, or to be provided, to us.

Our charter also authorizes our board of directors, without stockholder approval, to designate and issue one or more classes or series of preferred stock in addition to the Series A Redeemable Preferred Stock offered in this offering (including equity or debt securities convertible into preferred stock) and to set or change the voting, conversion or other rights, preferences, restrictions, limitations as to dividends or other distributions and qualifications or terms or conditions of redemption of each class or series of shares so issued. If any additional preferred stock is publicly offered, the terms and conditions of such preferred stock (including any equity or debt securities convertible into preferred stock) will be set forth in a registration statement registering the issuance of such preferred stock or equity or debt securities convertible into preferred stock. Because our board of directors has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock or the Series A Redeemable Preferred Stock. If we ever create and issue additional preferred stock or equity or debt securities convertible into preferred stock with a distribution preference over common stock or the Series A Redeemable Preferred Stock, payment of any distribution preferences of such new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on our common stock and our Series A Redeemable Preferred Stock. Further, holders of preferred stock are normally entitled to receive a preference payment if we liquidate, dissolve, or wind up before any payment is made to the common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of additional preferred stock may delay, prevent, render more difficult or tend to discourage a merger, tender offer, or proxy contest, the assumption of control by a holder of a large block of our securities, or the removal of incumbent management.

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Stockholders have no rights to buy additional shares of stock or other securities if we issue new shares of stock or other securities. We may issue common stock, convertible debt or preferred stock pursuant to a subsequent public offering or a private placement, or to sellers of properties we directly or indirectly acquire instead of, or in addition to, cash consideration. Investors purchasing Units in this offering who do not participate in any future stock issuances will experience dilution in the percentage of the issued and outstanding stock they own. In addition, depending on the terms and pricing of any additional offerings and the value of our investments, you also may experience dilution in the book value and fair market value of, and the amount of distributions paid on, your shares of Series A Redeemable Preferred Stock and common stock, if any.”

The risk factor on page 31 immediately below the heading “Risk Factors — Risks Related to Our Organization, Structure and Management” is deleted in its entirety.

The following sentence is added immediately following the third sentence of the first paragraph of the risk factor on page 34 of the Prospectus under the heading “Stockholders have limited control over changes in our policies and operations.”

“Our common stock is the only class of our securities that carries voting rights.”

The following risk factor is added on page 35 of the Prospectus immediately preceding the risk factor under the heading “Our ability to redeem shares of Series A Redeemable Preferred Stock may be limited by Maryland Law.”

“The Series A Redeemable Preferred Stock will be subordinate in right of payment to any corporate level debt that we incur in the future, and your interests could be diluted by the issuance of additional preferred stock, including additional Series A Redeemable Preferred Stock, and by other transactions.

The Series A Redeemable Preferred Stock will be subordinate in right of payment to any corporate level debt that we incur in the future. Future debt we incur may include restrictions on our ability to pay dividends on our preferred stock, including the Series A Redeemable Preferred Stock. The issuance of additional preferred stock on a parity with or senior to the Series A Redeemable Preferred Stock would dilute the interests of the holders of the Series A Redeemable Preferred Stock, and any issuance of preferred stock senior to the Series A Redeemable Preferred Stock or of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on the Series A Redeemable Preferred Stock. The terms of the Series A Redeemable Preferred Stock do not restrict our ability to authorize or issue shares of a class or series of preferred stock with rights to distributions or upon liquidation that are on parity with or senior to the Series A Redeemable Preferred Stock or to incur additional indebtedness. The Series A Redeemable Preferred Stock does not contain any provision affording the holders of the Series A Redeemable Preferred Stock protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all of our assets or business, that might adversely affect the holders of the Series A Redeemable Preferred Stock.”

The following risk factor replaces in its entirety the risk factor on page 55 of the Prospectus under the heading “If we fail to qualify as a REIT, we will be subjected to tax on our income and the amount of distributions we make to our stockholders will be less.”

“If we fail to continue to qualify as a REIT, we will be subjected to tax on our income and the amount of distributions we make to our stockholders will be less.

We have elected to be taxed as a REIT commencing with our tax year ended December 31, 2011 and intend to operate in a manner that would allow us to continue to qualify as a REIT. However, we may terminate our REIT qualification if our board of directors determines that not qualifying as a REIT is in our best interest, or inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. We currently intend to structure our activities in a manner designed to satisfy all requirements for qualification as a REIT. However, the REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, any opinion of our counsel, including tax counsel, as to our eligibility to qualify or remain qualified as a REIT is not binding on

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the IRS and is not a guarantee that we will qualify, or continue to qualify, as a REIT. Accordingly, we cannot be certain that we will be successful in operating so we can qualify or remain qualified as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income or quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the IRS such recharacterization would jeopardize our ability to satisfy all requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

If we fail to continue to qualify as a REIT for any taxable year and we do not qualify for certain statutory relief provisions, we will be subject to U.S. 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 qualification. Losing our REIT qualification would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders 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.

Although we intend to operate in a manner intended to continue to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause our board of directors to determine to delay or revoke our REIT election. Even if we continue to qualify as a REIT, we expect to incur some taxes, such as state and local taxes, taxes imposed on certain subsidiaries and potential U.S. federal excise taxes.

We have obtained a favorable ruling from the IRS stating that the inclusion of certain assets on our GAAP balance sheet for the calendar quarter ended March 31, 2011 will not cause us to fail the gross asset tests, as described under the section of the prospectus entitled “Material U.S. Federal Income Tax Considerations — REIT Qualification Tests — Asset Tests,” for such quarter.”

The following disclosure replaces in its entirety the risk factor on page 59 of the Prospectus under the heading “We may choose to make distributions in our own stock, in which case you may be required to pay income taxes in excess of the cash dividends you receive.”

“We may choose to make distributions in our own stock, in which case you may be required to pay U.S. federal income taxes in excess of the cash dividends you receive.

In connection with our qualification as a REIT, we are required to distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order to satisfy this requirement, we may make distributions that are payable in cash and/or shares of our common stock (which could account for up to 80% of the aggregate amount of such distributions) at the election of each stockholder. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, U.S. stockholders may be required to pay U.S. federal income taxes with respect to such distributions in excess of the cash portion of the distribution received. Accordingly, U.S. stockholders receiving a distribution of our shares may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a U.S. stockholder sells the stock that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distribution, including in respect of all or a portion of such distribution that is payable in stock, by withholding or disposing of part of the shares included in such distribution and using the proceeds of such disposition to satisfy the withholding tax imposed. In addition, if a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our common stock.

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Various tax aspects of such a taxable cash/stock distribution are uncertain and have not yet been addressed by the IRS. No assurance can be given that the IRS will not impose requirements in the future with respect to taxable cash/stock distributions, including on a retroactive basis, or assert that the requirements for such taxable cash/stock distributions have not been met.”

Forward-Looking Statements

The following disclosure replaces in its entirety the first bullet point on page 64 of the Prospectus.

The following disclosure replaces in its entirety the twenty-first bullet point on page 64 of the Prospectus.

The following language replaces in its entirety the fourth sentence of the last paragraph on page 65 of the Prospectus.

“Some of these factors are described in this prospectus under the sections entitled “Prospectus Summary,” “Risk Factors” and “Business,” as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as included in our latest Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus.”

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Estimated Use of Proceeds

The following disclosure replaces in its entirety the first full paragraph on page 64 of the Prospectus.

“The table below sets forth our estimated use of proceeds from this offering, assuming we sell the maximum of 150,000 Units in this offering at the public offering price of $1,000 per Unit for maximum gross offering proceeds of $150 million.”

The columns entitled “Minimum Offering — Amount” and “Minimum Offering — Percent” in the table on page 65 of the Prospectus under the heading “Estimated Application of Proceeds of the Offering” are deleted in their entirety.

The following disclosure replaces in its entirety the last sentence of the footnote (1) on page 66 of the Prospectus.

“Our dealer manager will repay to the company any excess payments made to our dealer manager over FINRA’s 10% cap if this offering is abruptly terminated before reaching the maximum amount of offering proceeds.”

The following disclosure replaces in its entirety the first two sentences of the footnote (3) on page 67 of the Prospectus.

“Although the net proceeds are expected to be used in connection with the acquisition of multifamily properties and other real estate-related investments and the payment of fees and expenses related thereto, the proceeds are available for our other capital needs, whether related to the repayment of debt or otherwise. For purposes of this table, however, we have assumed that we will use all the net proceeds for acquisitions of real property and other real estate-related investments and the payment of related fees and expenses.”

The second sentence of footnote (4) on page 67 of the Prospectus is deleted in its entirety.

Distribution Policy

The following disclosure replaces in its entirety the section under the heading “Distribution Policy” beginning on page 69 of the Prospectus.

“Holders of Series A Redeemable Preferred Stock are entitled to receive, when, and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Redeemable Preferred Stock at an annual rate of six percent (6%) of the Stated Value. Dividends on each share of Series A Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of issuance. We paid the initial dividend on our Series A Redeemable Preferred Stock in the month following the first full month after we received and accepted aggregate subscriptions in excess of the minimum offering pursuant to this offering, and thereafter have consistently paid monthly dividends on the Series A Redeemable Preferred Stock. We expect to continue to pay dividends on the Series A Redeemable Preferred Stock monthly, unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. We also expect to continue to authorize and declare dividends on the shares of Series A Redeemable Preferred Stock on a monthly basis payable on the 20^th day of the month following the month for which the dividend was declared (or the next business day if the 20^th day is not a business day). The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.

Holders of our common stock are entitled to receive, when, and as authorized by our board of directors and declared by us out of legally available funds, cash dividends on each share of our common stock.

We intend to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually to its stockholders at least 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. We generally intend to pay, over time, dividends in an amount equal to 100% of our net taxable income.

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The following tables set forth all dividends that have been authorized by our board of directors and paid by us to date.

Common Stock

Quarter Ended		Amount Paid Per Share				Total Amount Paid				Date Paid				Cash Flow from Operations
06/30/2011		$	0.125			$	646,487				07/15/2011			$	(697,122	)
09/30/2011		$	0.125			$	646,675				10/17/2011			$	553,596
12/31/2011		$	0.125			$	646,916				01/17/2012			$	794,172
03/31/2012		$	0.13			$	673,181				04/16/2012			$	927,394
06/30/2012		$	0.13			$	677,477				07/16/2012			$	869,992	(8)
09/30/2012		$	0.14				(7)				(7)

Series A Redeemable Preferred Stock

Month Ended		Amount Paid Per Share				Total Amount Paid				Date Paid
04/30/2012		$	5.33	(1)		$	11,486				05/21/2012
05/31/2012		$	5.00/5.17	(2)		$	25,406				06/20/2012
06/30/2012		$	5.00/5.17	(3)		$	42,793				07/20/2012
07/31/2012		$	5.00/5.50	(4)(6)		$	50,879	(6)			08/20/2012	(6)
08/31/2012		$	5.00/7.50/5.17	(5)(6)			(6)				(6)

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For the 12-month period ended December 31, 2011, our cash flow from operations of approximately $528,000 was a shortfall of approximately $1.4 million, or 72.8%, to our dividends paid of $1,940,078 during such period. The shortfall of cash flow from operations to dividends declared and paid was substantially due to the incurrence of approximately $1.7 million in acquisition costs related to the three multifamily communities that we acquired in the second quarter of 2011. Subject to significant acquisition expenses, we currently anticipate that cash flow from operations will be sufficient to fund the dividend payments to our stockholders for the remainder of 2012. Although not currently anticipated, if our board of directors determines to authorize distributions in excess of the income or cash flow generated from our target assets, we may make such distributions from the proceeds of this or future offerings of equity or debt securities or other forms of debt financing or the sale of our assets. See “Risk Factors — Distributions paid from sources other than our cash flow from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute your interests in us, which may adversely affect our ability to fund future distributions with cash flow from operations and may adversely affect your overall return” and “Risk Factors — We may incur additional indebtedness, which may harm our financial position and cash flow and potentially impact our ability to pay dividends on the Series A Redeemable Preferred Stock and our common stock.”

To the extent that, in respect of any calendar year, cash available for distribution is less than our REIT taxable income, we could be required to sell assets or borrow funds to make cash distributions or make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities. We generally will not be required to make distributions with respect to activities conducted through any TRS that we form following the completion of this offering. For more information, see the section entitled “Material U.S. Federal Income Tax Considerations — General” included elsewhere in this prospectus.

To satisfy the requirements to qualify as a REIT and generally not be subject to U.S. federal income and excise tax, we intend to make regular distributions of all or substantially all the remainder of our REIT taxable income to our stockholders out of assets legally available therefor. The amount of cash available for distribution will be decreased by any fees or expenses payable by us to our manager under the management agreement. Any distributions we make to our stockholders will be at the discretion of our board of directors and will depend upon our earnings, financial condition, liquidity, debt covenants, funding or margin requirements under credit facilities, repurchase agreements or other secured and unsecured borrowing agreements, maintenance of our REIT qualification, applicable provisions of the MGCL, and such other factors as our board of directors deems relevant. Our earnings, financial condition and liquidity will be affected by various factors, including the net income from our portfolio, our operating expenses and any other expenditures. See the section entitled “Risk Factors” included elsewhere in this prospectus.

We anticipate that our distributions generally will be taxable as ordinary income to our stockholders, although a portion of the distributions may be designated by us as qualified dividend income or capital gain or may constitute a return of capital. In addition, a portion of such distributions may be taxable stock dividends payable in our shares. We will furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income, return of capital, qualified dividend income or capital gain. For more information, see the section entitled “Material U.S. Federal Income Tax Considerations — Taxation of U.S. Holders” included elsewhere in this prospectus.”

Market Price Range of Our Common Stock and Distributions

The following disclosure replaces in its entirety the second and third paragraphs on page 71 of the Prospectus.

“Our common stock began trading on the NYSE MKT on April 1, 2011 with the closing of our IPO. The last reported sales price of our common stock on August 13, 2012 was $8.20.

As of August 3, 2012, our common stock was held by approximately 100 stockholders of record. Because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we were unable to estimate the total number of beneficial owners represented by these stockholders of record.

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The following table sets forth, for the periods indicated, the high and low sales price per share of our common stock reported on the NYSE MKT, and the distributions we declared with respect to such shares:

Quarter Ended		High				Low				Distributions
June 30, 2011		$	10.39			$	8.17			$	0.125
September 30, 2011		$	9.01			$	5.68			$	0.125
December 31, 2011		$	6.96			$	5.61			$	0.125
March 31, 2012		$	8.97			$	5.62			$	0.13
June 30, 2012		$	8.45			$	6.72			$	0.13”

Capitalization

The following disclosure replaces in its entirety the section under the heading “Capitalization” on page 72 of the Prospectus.

“The following table sets forth (a) our actual capitalization at June 30, 2012, and (b) our capitalization as adjusted to reflect the effect of the issuance of 150,000 shares of Series A Redeemable Preferred Stock in this offering, assuming the sale of the maximum offering after deducting estimated offering expenses, including selling commissions and the dealer manager fee, payable by us. You should read this table together with the sections entitled “Estimated Use of Proceeds” and “Selected Financial Information” included elsewhere in this prospectus, as well as our consolidated financial statements and notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our most recent Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus.

		June 30, 2012
		Actual				Maximum Offering
		(unaudited)
Stockholders’ equity:
Series A Redeemable Preferred Stock, par value $0.01 per share; 150,000 shares authorized and 10,018 or 150,000 issued and outstanding		$	100			$	1,500
Common Stock, par value $0.01 per share; 400,066,666 shares authorized and 5,178,313 issued and outstanding			51,783				51,474
Additional paid-in capital(1)			51,953,388				175,835,958
Accumulated deficit			(9,972,849	)			(9,972,849	)
Non-controlling interest			1				1
Total equity		$	42,032,423			$	165,914,893

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Selected Financial Information

The following disclosure replaces in its entirety the section under the heading “Selected Financial Information” on page 73 of the Prospectus.

“SELECTED FINANCIAL INFORMATION

The following table sets forth selected financial and operating data for the company on a historical basis. Financial and operating data as of and for the three months ended June 30, 2012 and 2011 are presented to illustrate our realization of a full quarter of operating financial results from our three acquired communities, as well as the trend in interest income from our real estate loans and notes receivable and the related effects on our financial condition.

The following selected financial and operating data should be read in conjunction with our consolidated financial statements and notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our most recent Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus.

		Three months ended								Six months ended								For the Year Ended
		June 30, 2012				June 30, 2011				June 30, 2012				June 30, 2011				December 31, 2011				December 31, 2010
Revenues:
Rental revenues		$	2,241,663			$	1,691,663			$	4,473,385			$	1,691,663			$	6,199,946			$	—
Other property revenues			282,039				185,275				546,220				185,275				700,512				—
Interest income on loans and note receivable			337,279				1,333				476,277				1,333				250,245				—
Total revenues			2,860,981				1,878,271				5,495,882				1,878,271				7,150,703				—
Expenses:
Total expenses			3,095,570				5,858,886				6,207,108				6,292,119				15,646,127				766,199
Net loss attributable to the Company			(234,589	)			(3,980,615	)			(711,226	)			(4,413,848	)			(8,495,424	)			(766,199	)
Dividends to preferred stockholders			(78,967	)			—				(79,685	)			—				—				—
Net loss attributable to common stockholders		$	(313,556	)		$	(3,980,615	)		$	(790,911	)		$	(4,413,848	)		$	(8,495,424	)		$	(766,199	)
Net loss per share of Common Stock, basic and diluted		$	(0.06	)		$	(0.81	)		$	(0.15	)		$	(1.78	)		$	(2.23	)		$	(20.90	)
Cash dividends declared per share of Common Stock		$	0.13			$	0.125			$	0.26			$	0.25			$	0.375			$	—
Total assets		$	100,021,726			$	97,245,235			$	100,021,726			$	97,245,235			$	92,465,540			$	829,812
Liabilities:
Mortgage notes payable (long term)			55,637,000				55,637,000				55,637,000				55,637,000				55,637,000				—
Accounts payable and accrued expenses			992,586				710,307				992,586				710,307				1,158,530				—
Related party note payable and lines of credit			—				—				—				—				—				1,470,948
Accrued interest payable			169,456				168,056				169,456				168,056				176,084				15,064
Dividends payable			720,269				646,487				720,269				646,487				646,916				—
Security deposits and prepaid rents			311,586				148,180				311,586				148,180				163,663				—
Deferred income			158,406				74,333				158,406				74,333				65,446				—
Total liabilities			57,989,303				57,384,363				57,989,303				57,384,363				57,847,639				1,486,012
Total (deficit) equity		$	42,032,423			$	39,860,872			$	42,032,423			$	39,860,872			$	34,617,901			$	(656,200)”

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Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following disclosure replaces in its entirety the section under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operation” beginning on page 74 of the Prospectus.

“The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our most recent Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q is incorporated by reference into this prospectus.”

Quantitative and Qualitative Disclosures about Market Risk

The following section is added immediately following the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

“QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK”

Our primary market risk exposure is interest rate risk. Our floating-rate debt is tied to the 30-day London Interbank Offered Rate, or LIBOR. $19.5 million of our floating-rate debt has LIBOR effectively capped at 4.48% (all-in rate of 7.25%) and approximately $15.3 million of our floating-rate debt has LIBOR effectively capped at 4.05% (all-in rate of 6.85%), both through caps on the maximum interest rate on our debt under Freddie Mac’s capped adjustable-rate mortgage program. We have limited market risk associated with debt maturity as all of our debt was incurred in April 2011 and does not mature until May 2018. We have no business operations which subject us to trading risk.

We have and will continue to manage interest rate risk as follows:

We use various financial models and advisors to achieve our objectives.

If interest rates under our floating-rate LIBOR-based indebtedness fluctuated by 100 basis points, our interest costs, based on outstanding borrowings at June 30, 2012, would increase by approximately $348,000 on an annualized basis, or decrease by approximately $84,000 on an annualized basis. The difference between the interest expense amounts related to an increase or decrease in our floating-rate interest cost is because LIBOR was 0.245% at June 30, 2012, therefore we have limited the estimate of how much our interest costs may decrease because we use a floor of 0% for LIBOR.”

Prior Performance Summary

The section entitled “Prior Performance Summary” beginning on page 89 of the Prospectus is deleted in its entirety.

Business

The following disclosure replaces in its entirety the section entitled “Business” beginning on page 95 of the Prospectus.

“BUSINESS

Our Company

We are a Maryland corporation formed primarily to acquire multifamily properties in select targeted markets throughout the United States. As part of our property acquisition strategy, we may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and we may make mezzanine loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the construction of these properties. As a secondary strategy, we also may acquire senior mortgage loans, subordinate loans or mezzanine debt secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest not more than 10% of our total assets in other real estate-related investments, as determined by our manager as appropriate for us. We refer to these asset classes as our target assets.

Our promoters were John A. Williams and Leonard A. Silverstein. Since our formation, John A. Williams has served as the Chief Executive Officer of our company and as the Chairman of our board of directors. Mr. Williams also served as the President of our company from our formation until August, 2012. Leonard A. Silverstein has served as President and Chief Operating Officer of our company since August, 2012. Mr. Silverstein also served as Executive Vice President, General Counsel and Secretary of our company and as the Vice Chairman of our board of directors from formation until August, 2012. We are externally managed and advised by our manager, which is controlled by John A. Williams, our sponsor and a veteran of the multifamily industry with over four decades of experience, including the founding of the multifamily REIT, Post Properties, and Leonard A. Silverstein. Pursuant to the terms of a management agreement between our manager and us, our manager is responsible for administering our day-to-day business operations, identifying and acquiring targeted real estate investments, overseeing the management of the investments, handling the disposition of the real estate investments and providing us with our management team and appropriate support personnel.

We also hope to benefit from Mr. Williams’ current organization and platform that specializes in multifamily real estate investment and management. With operations in over 20 nationwide markets, Mr. Williams’ organization includes WRA, WAM, RAM and PRM. We believe these organizations provide the full range of services necessary to fulfill our investment objectives and we hope to benefit from their depth and breadth of experience in a number of ways, including, but not limited to: (i) our manager’s intent to contract directly with each of these firms to provide a substantial portion of the services our manager is required to provide in connection with running our day-to-day operations under the management agreement with us, and (ii) key employees of these firms serving as our officers and as officers of our manager.

We have registered “A Preferred Apartment Community” as a trademarked logo with the United States Patent and Trademark Office. Our manager has branded, and in the future will continue to brand, all apartment communities owned by the company as “A Preferred Apartment Community” and intends to make it an ultimate tagline for each of our communities that signifies certain brand and management standards. This strategy will allow each individual community to be part of a centralized marketing and advertising campaign, in addition to property level marketing and advertising campaigns. We expect that these campaigns will further enhance each individual property’s presence in the marketplace, and we believe that this will allow our communities to be perceived as premier over other properties within the marketplace. Our manager has entered into a non-exclusive license agreement with the company as licensee with respect to all intellectual property of the manager other than trademarks. The license agreement will terminate automatically upon termination of our management agreement or will terminate upon a material breach of the license agreement that remains uncured for more than 30 days after receipt of notice of such breach. Our manager has entered into a separate non-exclusive license agreement with the company as licensee with respect to the manager’s trademarks on substantially similar terms as the initial intellectual property license agreement.

Upon the acquisition of each of our communities, we plan to implement what we believe to be an innovative and unique marketing and branding strategy by rolling out the PAC Concierge, PAC Rewards and

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PAC Partners programs (as described below). We completed what we believe to be a successful roll-out and implementation of our PAC Concierge, PAC Rewards and PAC Partners programs at all of our communities by January 2012. We anticipate implementing these programs at any newly acquired community approximately thirty days following acquisition.

The PAC Concierge program is a complimentary service for our residents designed to offer them the type of personal concierge services that you would expect at a high end resort. The concierge services are provided by a professionally trained team ready to coordinate services such as running errands and making dinner reservations, golf tee times and travel arrangements, as well as many other services. Our concierge service is available to our residents 24/7 by telephone, email or web access through our unique resident web portal.

The PAC Rewards program allows residents to accumulate and redeem rewards points for services and upgrades to their home, such as painting an accent wall, carpet cleaning or installing a ceiling fan or kitchen backsplash. Residents may accumulate Preferred Rewards, for example, when they sign their lease, pay their rent online, enroll in our direct debit/automatic payment program, renew their leases, or when a resident’s referral signs a new lease.

The PAC Partners program establishes reciprocal relationships between a Preferred Apartment Community and neighborhood businesses to provide our residents with benefits such as discounts, perks and other incentives as an enticement to frequent those businesses and to support the local community.

Our Properties

On April 15, 2011, we completed the acquisition of 100% of the membership interests in Stone Rise Apartments, LLC, a Delaware limited liability company (f/k/a Oxford Rise JV LLC), the fee-simple owner of a 216-unit multifamily apartment community located in suburban Philadelphia, Pennsylvania for a total purchase price of $30.15 million, exclusive of acquisition-related and financing-related transaction costs.

On April 21, 2011, we completed the acquisition of 100% of the membership interests in PAC Summit Crossing, LLC, a Georgia limited liability company (f/k/a Oxford Summit Partners LLC), the fee-simple owner of a 345-unit multifamily apartment community located in suburban Atlanta, Georgia for a total purchase price of $33.2 million, exclusive of acquisition-related and financing-related transaction costs.

On April 29, 2011, we, through our indirectly wholly owned subsidiary Trail Creek Apartments, LLC, completed the acquisition of Oxford Trail, a 204-unit multifamily townhome community located in Hampton, Virginia for a total purchase price of $23.5 million, exclusive of acquisition-related and financing-related transaction costs.

Real Estate Loan Investments

Oxford Hampton Mezzanine Loan

On June 30, 2011, we, through our indirectly wholly owned subsidiary, Trail Creek Mezzanine Lending, LLC, made the $6.0 million Oxford Hampton Mezzanine Loan to Oxford Hampton Partners LLC, a Georgia limited liability company, in connection with the borrower’s plans to construct a 96-unit multifamily community in Hampton, Virginia located adjacent to our existing Trail Creek community. The borrower was required to fully draw down the Oxford Hampton Mezzanine Loan on June 30, 2011. WRF has contributed 100% of the cash equity in Oxford Hampton Partners LLC to date.

The Oxford Hampton Mezzanine Loan matures on June 29, 2016, with no option to extend and pays interest at a fixed rate of 8.0% per annum. Interest will be paid monthly with principal and any accrued but unpaid interest (including the exit fee) due at maturity. Under the terms of a purchase option agreement entered into concurrently with and in connection with the closing of the Oxford Hampton Mezzanine Loan, the lender has an option (but not an obligation) to purchase the property between and including April 1, 2014 and June 30, 2014 for $17,825,600, which is the amount of the aggregate project costs as set forth in the approved construction budget on the closing date. If the property is sold to, or refinanced by, a third party before July 1, 2014, the lender will be entitled to receive an exit fee equal to the amount required to provide it with a 14% cumulative internal rate of return on the loan. If the property is sold to, or refinanced by, a third party on or after July 1, 2014, then the lender will be entitled to receive an exit fee equal to the amount required to provide it with a 12% cumulative internal rate of return on the loan. The calculation of the

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cumulative internal rate of return will include the fees received by the lender at the closing of the Oxford Hampton Mezzanine Loan. Since the minimum exit fee, assuming the purchase option is not exercised is the amount needed to provide a 12% cumulative internal rate of return, the lender will accrue each period the additional exit fee earned based on the 12% rate assuming the loan was paid off at period end. The accrued exit fee will be recorded as interest income in the consolidated statements of operations the company. As of June 30, 2012, the lender earned approximately $64,250 of additional exit fee income.

If the lender exercises the purchase option and acquires the property, any accrued and unpaid exit fee will be treated as additional basis in the acquired project.

The Oxford Hampton Mezzanine Loan is secured by a pledge of 100% of the membership interests of the borrower. Partial prepayment of the Oxford Hampton Mezzanine Loan is not permitted without the lender’s consent. The Oxford Hampton Mezzanine Loan is subordinate to a senior loan of up to an aggregate amount of $10 million that is held by an unrelated third party. W. Daniel Faulk, Jr. and Richard A. Denny, both unaffiliated third parties, have guaranteed to us the completion of the project in accordance with the plans and specifications. This guaranty is subject to the rights held by the senior lender pursuant to a customary intercreditor agreement between the lender and the senior lender.

In connection with the closing of the Oxford Hampton Mezzanine Loan, the lender received a loan fee of 2% of the loan amount, or $120,000, and a loan commitment fee of $14,333. From the loan fee paid in connection with the closing of the Oxford Hampton Mezzanine Loan, we paid a fee of $60,000, or 1.0% of the maximum loan amount, to our manager, as an acquisition fee pursuant to the management agreement of which WOF received $600 through its special limited liability company interest in our manager. In addition, the borrower used proceeds of the Oxford Hampton Mezzanine Loan to pay approximately $302,300 to WRF to retire an outstanding short-term loan from WRF that matured on the closing date of the Oxford Hampton Mezzanine Loan. The net fees received by us will be recognized as an adjustment of yield over the term of the loan using the effective interest method.

Oxford Summit II Mezzanine Loan

On May 7, 2012, Summit Crossing Mezzanine Lending LLC, a wholly owned subsidiary of our operating partnership, made the $6,103,027 Oxford Summit II Mezzanine Loan to Oxford Summit Apartments II LLC, a Georgia limited liability company, in connection with the borrower’s plans to construct a 140-unit multifamily community in suburban Atlanta, Georgia. The full amount of the Oxford Summit II Mezzanine Loan was funded by the lender to the borrower on the closing date.

A portion of the proceeds of the Oxford Summit II Mezzanine Loan were used by the borrower to purchase from Oxford Forsyth Development LLC the land on which the borrower will construct the property. The seller used a portion of the purchase price to pay down a portion of a loan guaranteed by John A. Williams, which originally was obtained by the seller to acquire, in part, the land on which the property is to be constructed. The terms of the Oxford Summit II Mezzanine Loan and the overall transaction structure were approved by our conflicts committee, which consists entirely of independent directors not otherwise interested in the transaction.

In connection with the closing of the Oxford Summit II Mezzanine Loan, the lender received a loan fee of 2% of the maximum loan amount, or $122,061. In addition, we paid a fee of $61,030, or 1.0% of the maximum loan amount, to our manager as an acquisition fee in accordance with the terms of the management agreement of which WOF received $610 through its special limited liability interest in our manager. The net fees received by us will be recognized as an adjustment of yield over the term of the loan using the effective interest method.

The Oxford Summit II Mezzanine Loan matures on May 8, 2017, with no option to extend, and bears interest at a fixed rate of 8.0% per annum. Interest will be paid monthly with principal and any accrued but unpaid interest due at maturity. The Oxford Summit II Mezzanine Loan is secured by a pledge of 100% of the membership interests in the borrower. Prepayment of the Oxford Summit II Mezzanine Loan is permitted in whole, but not in part, without lender consent. The Oxford Summit II Mezzanine Loan is subordinate to a senior loan of up to an aggregate amount of approximately $12.4 million that is held by an unrelated third party. W. Daniel Faulk, Jr. and Richard A. Denny, both unaffiliated third parties, have guaranteed to us the

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completion of the project in accordance with the plans and specifications and have provided a full payment guaranty. These guaranties are subject to the rights held by the senior lender pursuant to a customary intercreditor agreement between the lender and the senior lender.

Under the terms of a purchase option agreement entered into concurrently and in connection with the closing of the Oxford Summit II Mezzanine Loan, the lender has an option (but not an obligation) to purchase the property between and including October 1, 2014 and February 28, 2015 for a pre-negotiated purchase price of $19,254,155. If the property is sold to, or refinanced by, a third party at any time, or is paid off at any time, the lender will be entitled to an exit fee to increase the aggregate interest paid on the Oxford Summit II Mezzanine Loan to 14.0% per annum, provided, however, that such exit fee shall not be required to be paid if the lender or a wholly owned direct or indirect subsidiary of the lender acquires the property. Since the exit fee, assuming the purchase option is not exercised, is the amount needed to increase the aggregate interest paid on the Oxford Summit II Mezzanine Loan to 14.0% per annum, the lender will accrue each period the additional exit fee earned based on the 14.0% rate assuming the loan was paid off at period end. The accrued exit fee will be recorded as interest income in the consolidated statements of operations of the company. If the lender exercises the purchase option and acquires the property, any accrued and unpaid exit fee will be treated as additional basis in the acquired project. As of June 30, 2012, the lender earned approximately $55,596 of additional exit fee income.

Iris Bridge Loan

On June 29, 2012, Iris Crosstown Mezzanine Lending, LLC, a wholly-owned subsidiary of our operating partnership, made the $2,868,471 Iris Bridge Loan to Iris in connection with the borrower’s acquisition of a parcel of land located in suburban Tampa, Florida, upon which a multifamily community is to be constructed.

The Iris Bridge Loan matures on December 31, 2012, with no option to extend and pays interest at a rate of 8.0% per annum. Interest will be paid monthly with the principal and any accrued but unpaid interest (including the exit fee) due at maturity. If the property is sold to, or refinanced by, a third party, the lender will be entitled to an exit fee to increase the aggregate interest paid on the Iris Bridge Loan to 14.0% per annum.

The Iris Bridge Loan is secured by a mortgage, an assignment of project documents and unconditional guaranties of payment and performance by W. Daniel Faulk, Jr., Richard A. Denny and J. Michael Morris, unaffiliated parties and principals of the borrower.

In connection with the closing of the Iris Bridge Loan, we received a loan fee of 2% of the loan amount, or $57,369, and we paid a fee of $28,685, or 1.0% of the loan amount, to our manager as an acquisition fee pursuant to the management agreement of which WOF received $286 through its special limited liability company interest in our manager. The net fees received by us will be recognized as an adjustment of yield over the term of the loan using the effective interest method.

Other Loan Investments

Oxford Properties Loan

On March 26, 2012, we made the $650,000 Oxford Properties Loan to Oxford Properties, LLC, a Georgia limited liability company, in the form of a promissory note. The loan bears interest at 15% per annum and interest only payments were due beginning May 1, 2012, and continue on a monthly basis until the maturity date of September 30, 2012. Oxford Properties, LLC may prepay the loan at any time, in whole or in part, without penalty. The amounts payable under the terms of the loan are backed by a personal guaranty of repayment issued by the principals of Oxford Properties, LLC.

Madison Retail Loan

On May 21, 2012, we made the up to $575,000 Madison Retail Loan to Madison Retail, LLC, a Georgia limited liability company, in the form of a promissory note. The amount drawn by Madison Retail, LLC as of June 30, 2012 was $255,290. The loan bears interest at 15% per annum and interest only payments were due beginning June 1, 2012, and continue on a monthly basis until the maturity date of September 30, 2012. Madison Retail, LLC may prepay the loan at any time, in whole or in part, without penalty. The amounts payable under the terms of the loan are backed by a personal guaranty of repayment issued by the principal of Madison Retail, LLC.

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The Manager Loan

On August 21, 2012, our operating partnership entered into the Manager Loan with our manager. The loan bears interest at 8.0% per annum and interest only payments are due beginning September 1, 2012, and continue on a monthly basis until the maturity date of July 31, 2013. Our manager may prepay the loan at any time, in whole or in part, without penalty. The amounts payable under the terms of the Manager Loan are secured by the amounts payable to our manager under the Management Agreement.

Market Opportunities

In the wake of the financial system troubles and downturn in the United States economy after 2007 – 2008, multifamily assets saw a dramatic drop in their value as the combination of higher capitalization rates and dwindling incomes created formidable headwinds for operators across the country. Many transactions consummated in 2005 – 2008 were highly leveraged with favorable financing terms. In many instances, these deals are financially troubled or the debt associated with these deals is about to mature. These transactions present problems for undercapitalized owners as the ability to refinance has diminished significantly and the only options that may be available are a sale at a dramatic discount to their basis or foreclosure. However, based on the lack of new supply projected for the next several years, the introduction of the “echo boom” generation into the market and the dwindling rate of homeownership, we believe multiple opportunities will be created for acquisitions.

Supply Constraints:  With the economic conditions curtailing financing and construction, we believe the new supply pipeline will remain below historical averages for the next few years. As can be seen from the charts below, for the last three years, permits for multifamily construction have averaged approximately 175,000 units annually. In addition, we believe that annually the U.S. apartment stock loses an average of 118,000 units per year to obsolescence or conversion to other uses. We believe that this combination should result in a few years of net completions of new units being well below historical averages. As the economy rebounds and demand for apartment inventory increases, we believe that there will be a shortage of new supply to keep up with the expected increased demand. We believe this window of opportunity will allow owners with desirable product to experience rent growth and enhanced occupancy levels as the market expands and supply struggles to keep pace.

Historical US MultiFamily Permits*

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Historical Permitting Comparison*

Economic Improvement:  While the overall economy struggles to show consistent signs of improvement, we believe that the multifamily sector seems to be the most resilient sector in the real estate market. We believe that the historical correlation between job growth and absorption has not applied. As demonstrated in the chart below, since the third quarter of 2008, apartment absorption on a year-over-year basis has outperformed the corresponding drop in employment, with absorption posting only modest declines in the face of dramatic job losses.