This letter and the enclosed documents are being provided to request your vote on important matters concerning AEI Income & Growth Fund 24, a limited liability company in which you have invested as a limited member. We refer to this company as "Fund 24" or "the Fund" throughout these documents. The enclosed Consent Form provides you with the opportunity to vote on two proposals:

We recommend that you vote "FOR" each proposal. Without your approval on Proposal #1, Fund 24 will not liquidate and will continue in operation.

Prior to voting, you should carefully read the enclosed Consent Statement to understand the proposals and the risks that may be associated with them. If you have any questions concerning this matter, please call AEI Investor Services, toll free, at 800-328-3519.

We are providing this Consent Statement to all limited members of AEI Income & Growth Fund 24 LLC who are unit owners of record as of December 1, 2017. We are soliciting your consent, through the enclosed Consent Form, to the two proposals below:

To vote, you must return a properly signed Consent Form that is received by AEI Fund Management XXI, Inc. at 1300 Wells Fargo Place, 30 East 7th Street, St. Paul, Minnesota 55101, on or before 5:00 P.M., Central Time, on January __, 2018.

The following summarizes the proposals being presented to the limited members of Fund 24. You should read this entire Consent Statement to fully understand the proposals.

AEI Income & Growth Fund 24 is a Delaware limited liability company organized in 2000. The Fund raised $24.83 million through a public offering of its units. The net proceeds from the offering were used to purchase, without mortgage debt, commercial real estate occupied by tenants under net leases. Fund 24 initially purchased ten properties, including partial interests in three of these properties. The prospectus by which the units were originally offered indicated that properties would be sold from time to time and the cash proceeds invested in similar net leased properties.

Although Fund 24 has not commenced the sale of properties in final liquidation, the Fund has sold properties and reinvested the majority of the proceeds in similar net leased properties. In all cases, the Fund has distributed enough cash for limited members to pay the taxes generated by any income or gain recognized by them on sale of such properties.

As of September 30, 2017, Fund 24 held interests in ten properties. It also held net cash reserves of approximately $850,000. All of the properties are subject to net leases under which the tenant pays substantially all of the property operating costs. The tenants in all of these properties are current with their rental payments and the properties are fully occupied.

The following table sets forth the properties held by Fund 24 as of September 30, 2017, the date each property was acquired, the ownership interest in the property, the acquisition cost, the date the initial lease term expires, the annual rental amount, and the Managing Members' estimate of the current value of the property:

The following table provides operational data about Fund 24 for the nine months ended September 30, 2017 and 2016 and for the years ended December 31, 2016 and 2015, on the basis of Fund 24 continuing as a going concern:

 

 

The following table provides data on the financial condition of Fund 24 on a historical cost basis at September 30, 2017 and 2016 and December 31, 2016 and 2015:

	September 30		December 31
	2017	2016	2016	2015
Cash	$1,263,767	$1,388,906	$1,320,236	$1,406,324
Current Portion of Note Receivable, Net	0	0	0	50,826
Investments in Real Estate, net	13,837,615	14,412,046	14,259,115	14,870,839
Total Assets	15,101,382	15,800,952	15,579,351	16,327,989
Payable to Affiliate	86,332	81,974	66,539	94,749
Distributions Payable	307,732	309,279	308,862	306,571
Unearned Rent	19,654	55,260	9,620	9,620
Total Liabilities	413,718	446,513	385,021	410,940
Managing Members' Equity (Deficit)	(49,492)	(31,309)	(35,707)	(16,248)
Limited Members' Equity	14,737,156	15,385,748	15,230,037	15,933,297

 

 

Operations. If limited members holding a majority of the outstanding units vote in favor of the liquidation proposal, the Managing Members will take action to commence the sale of Fund 24's properties and the liquidation of the Fund. The Managing Members will, from time to time, distribute the proceeds from the sale of properties to the extent they believe, in their sole discretion, that such proceeds are not required for operations during liquidation, not required to pay Fund obligations, or required to deal with contingent obligations. Once all of the Fund's properties are sold, the Managing Members would wind up the affairs of the Fund and distribute any net sales proceeds and remaining reserves to the limited members and the Managing Members. The Fund would then be dissolved and cease operations. Under Section 12.1 of the operating agreement, this dissolution does not require, and the Fund will not ask you for, any additional vote.

Distributions. As set forth under the caption "Background of the Fund – Properties", the Managing Members estimate the current value of Fund 24's properties at approximately $16,131,000, not including net cash reserves of approximately $850,000. Neither the Managing Members nor Fund 24 has obtained any independent appraisal or opinion regarding the value of the Fund's properties. This valuation is based upon the rental rates generated by each property and the capitalization rates that the Managing Members believe are applicable in the markets in which the properties are located.

It is not possible for the Managing Members to predict the timing of the sale of the Fund's properties. Assuming that (a) the sale of properties can be completed over the next 12 to 24 months, (b) there are no events, such as tenant defaults or bankruptcies, that adversely affect the Fund's ability to sell its properties or the market value that can be obtained in such sales, (c) there are no increases or decreases in the market value of the properties and they can be sold at the amounts estimated by the Managing Members, and (d) there are no other extraordinary company expenses, the Managing Members estimate that approximately $16,981,000 of proceeds will be available for distribution from sale of properties and cash reserves. After deducting the Managing Members' interest in the proceeds, approximately $16,811,000 or $706 per unit would be available for distribution to the limited members. Because some of these assumptions will inevitably be inaccurate, and the Managing Members estimates of value cannot be precise, the actual amounts available for distribution to members will vary from these estimates and the variation may be material.

Assuming the Fund was liquidated as of September 30, 2017 and that the estimated liquidation proceeds from the sale of properties were realized, and factoring in prior cash distributions received, an original investor in the Fund who invested $1,000 per unit on October 31, 2001 would have received $1,600 in total distributions per unit over the life of the investment.

The federal income tax discussion set forth below addresses the material federal income tax consequences of the liquidation of a limited liability company treated as a partnership for income tax purposes. It does not purport to deal with all aspects of federal income taxation that may be relevant to a particular limited member with respect to such limited member's personal circumstances. The discussion is directed solely to limited members who hold the units as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"), and have acquired the units for investment and not as a dealer or for resale. This discussion may not be applicable to certain classes of taxpayers, including insurance companies, securities dealers, non-resident alien individuals, foreign entities, foreign trusts and estates and beneficiaries, financial institutions, real estate investment trusts, regulated investment companies, tax exempt organizations, trusts or persons who acquired Fund interests as compensation. This discussion is based upon the Code, Department of Treasury regulations, court decisions, published rulings of the Internal Revenue Service (the "IRS") and other applicable authorities, all as in effect on the date hereof and all of which are subject to change or differing interpretation (possibly on a retroactive basis). Limited members are urged to consult their own tax advisors as to the specific tax consequences to them of the liquidation of Fund 24, including the applicability and effect of federal, state, local and other tax laws.

General. Fund 24, as a partnership for federal income tax purposes, is not subject to federal income tax; instead, each member is required to take into account such member's distributive share of the Fund's income, gains, losses, deductions, credits and tax preference items in computing the member's federal income tax liability for any taxable year, without regard to whether the member has received any distribution from the Fund.

For federal income tax purposes, the liquidation process consists of two separate components: (1) the sale by Fund 24 of its properties; and (2) the distribution of cash to each limited member in liquidation (a "liquidating distribution") of the member's interest in Fund 24. Each of these is separately discussed below

Passive Activity Rules. Limited members that are individuals, trusts, estates, closely held corporations or personal service corporations are subject to the passive activity loss limitations rules of Section 469 of the Code. A limited member's allocable share of income, gain or loss from the sale of Fund 24's properties is generally treated as derived from a passive activity. Limited members may generally deduct losses from passive activities only to the extent of their income from passive activities. Passive activity losses that are not allowed in any taxable year are suspended and may be carried forward indefinitely and allowed in subsequent years as an offset against passive activity income. However, upon final liquidation of the Fund, any suspended passive activity losses of a limited member with respect to its investment in Fund 24 may be used to reduce other income of the limited member.

The Managing Members have estimated the market value of the properties based upon rental rates and market capitalization rates. The rate at which such rents are capitalized is dependent upon prevailing interest rates in the markets where the properties are located. To the extent prevailing interest rates increase, the value of the properties calculated using these methods may decline. Further, the market value of properties is dependent upon the financial strength of the tenants occupying the properties owned by Fund 24. A general economic downturn may affect the financial strength of the tenants. If tenants occupying the Fund's properties are adversely affected, the Fund may experience an increased level of default in rental payments, or a general decrease in the willingness of purchasers to acquire its properties because of the increased risk involved.

If the proposal to liquidate Fund 24 is approved, the Managing Members will attempt to dispose of Fund 24's properties during the next 12 to 24 months. The disposition of properties could generate less value to the Fund and its limited members than estimated, particularly if sales must be completed rapidly.

If a tenant defaults on its lease obligations, or abandons a property, prior to its sale by Fund 24, the value of the property would likely be adversely affected, the Fund might have difficulty selling the property, and the sale might be delayed until an alternative tenant can be located. If a tenant filed for protection under applicable bankruptcy laws, the tenant (if a debtor in possession) or the bankruptcy trustee would have a period of time to assume or reject the lease and the Fund may be delayed in its disposition of the property and final liquidation of the Fund.

Sales of properties will generate an income and gain recognition event for federal income tax purposes with respect to the value of the properties and proceeds received, while continued operation of properties would generate income for tax purposes primarily related to rental income received. For properties that Fund 24 has held and depreciated for tax purposes for a significant period of time, a significant portion of the sales price could represent depreciation recapture taxable to limited members at higher tax rates.

Fund 24 owns joint venture interests in seven properties that were purchased consistent with authority in the operating agreement to purchase joint venture interests with AEI Affiliated Funds. In particular, Fund 24 owns a 45.0% interest in a Advance Auto Parts store in Middletown, Ohio, a 50.0% interest in a Tractor Supply Company store in Grand Forks, North Dakota, a 35% interest in a Dick's Sporting Goods store in Fredericksburg, Virginia, a 45% interest in a Fresenius Medical Center in Shreveport, Louisiana, a 34% interest in a Best Buy store in Lake Geneva, Wisconsin, a 50% interest in a Coliseum Health Clinic in Macon, Georgia, and a 27% interest in a PetSmart store in Gonzales, Louisiana. Because most investors in net leased real estate desire ownership of an entire property, we believe that it would be difficult for Fund 24 to attempt to sell these interests in the open real estate market.

The operations of Fund 24 are governed by its operating agreement. Section 6.6 of the operating agreement permits joint ventures with other AEI Affiliated Funds, subject to certain conditions, including that each Fund has a right of first refusal to purchase the other party's interest in the event of an attempted sale of an interest in a property. This right of first refusal was included in the agreements under which Fund 24 acquired its joint venture interests in the seven properties. The Managing Members of Fund 24 believe that this implicitly allows, or requires, sale of an interest to an affiliate. Nevertheless, Section 6.5(vii) of the operating agreement prohibits a sale of a "property" by Fund 24 to an affiliate. Although the Managing Members believe this was intended to prohibit only sale of a whole property rather than a joint-venture interest such as the interests held by Fund 24 in the seven properties, the Managing Members believe it is unwise to proceed with a sale to an affiliate absent a confirming vote of limited members.

In addition, although the Managing Members believe the same provisions of the operating agreement that authorized the purchase with AEI Affiliated Funds also provides a basis to sell to AEI Affiliated Funds, the provisions are not unambiguous. As a result, we are asking you to vote on a proposal to make clear that Fund 24 may sell its joint venture interests in these properties to other AEI Affiliated Funds. The sale price for properties sold in this manner will be based upon an independent, third-party, commercial property appraisal.

The Managing Members believe that sale of a joint venture interest in the open market is difficult, takes considerable time, likely would result in higher sales costs such as commissions, and could generate a lower price to Fund 24. Unless otherwise provided by contract, minority interests in properties do not allow the holder to control management of the properties or the timing of the disposition of properties, and the partnership/operating agreements of AEI Funds effectively require that AEI Funds have such control. Because a buyer would likely negatively view this lack of liquidity, lack of management control and control over disposition, the Managing Members believe these interests are more difficult to sell than the entire fee simple interest in a property, and take considerable time to sell in the open market. Further, to complete such a sale, Fund 24 would likely need to retain a broker, and pay brokerage commissions of 3% to 6% on any such sale. For all of these reasons, the Managing Members believe it is in the best interests of the Fund and its limited members to allow Fund 24 to complete the sale of these properties to AEI Affiliated Funds.

If limited members holding a majority of the outstanding units vote in favor of the proposal, Fund 24 will be allowed to sell its joint venture interest in a property to an AEI Affiliated Fund. At the time Fund 24 is ready to sell a joint venture interest in a property, the Fund will determine if the Affiliated Fund(s) that owns the remaining interest(s) in the property is ready to sell also. If an Affiliated Fund is not ready to sell its interest in the property, Fund 24 will take action to sell its interest to an Affiliated Fund. To determine the price of each property interest, the Fund will obtain an appraisal from an independent, third-party, commercial property appraiser. Fund 24 will pay the cost of the appraisals and the customary closing costs that a seller incurs in the state where the property is located. However, the Fund will not pay a brokerage commission, which typically ranges from 3% to 6% of the gross sale price. The sales will be made on an "as is, where is" basis.

If the Affiliated Fund(s) that owns the remaining interest(s) in a property is ready to sell, then Fund 24 and the Affiliated Fund(s) will jointly take action to sell 100% of the property on the open real estate market. The sales proceeds and expenses of the sale would be allocated pro rata based on the ownership percentage of the property.

The proposal to allow Fund 24 to sell joint venture interests in seven of its properties to other AEI Affiliated Funds will be implemented, if approved by limited members, through the amendment to Section 6.5 of the operating agreement that is set forth in Exhibit A to this Consent Statement.

If the proposal is approved, each property interest that is sold to an AEI Affiliated Fund will be sold at a price as determined by an independent, third-party, commercial property appraiser. The appraiser will research each property by reviewing market data and other information to form an opinion as to the value of the property. It is possible that a higher price could be realized if the property was listed in the open real estate market where the interaction of many buyers and sellers determine the value of the property. However, listing the property in the real estate market could also result in a lower price.

Because of the ambiguity of the language in the operating agreement of Fund 24, the Managing Members do not intend to proceed with sale of joint venture interests to AEI Affiliated Funds unless they receive the affirmative vote of holders of a majority of the outstanding units of Fund 24 on the proposal. The Managing Members believe it is very difficult to sell joint venture interests in the open market, and expects that a failure to approve the proposal will result in considerable delay in the sale of these interests, the final liquidation of Fund 24, and the distribution of liquidation proceeds. Such a delay can also be expected to increase ongoing administrative costs and reduce the amount of proceeds eventually distributed.

The following table sets forth information pertaining to the ownership of the units by each person known to us to beneficially own 5% or more of the units, by AEI Fund Management XXI, Inc. (Fund 24's Managing Member), and by each officer or director of the Managing Member as of September 30, 2017:

Your vote is important. As a limited member, we urge you to mark your vote, sign and date the enclosed Consent Form and return it in the enclosed postage prepaid envelope. If you require assistance completing the Consent Form, please call AEI Investor Services, toll free at 800-328-3519.

We have fixed the close of business on December 1, 2017 as the record date for the determination of the limited members entitled to vote on the proposals; the close of business on January __, 2018 as the date by which Consent Forms must be received by us in order to be counted; and January __, 2018 as the date on which the consents will be counted. You may withdraw or revoke your consent at any time prior to 5:00 p.m. Central Time, on January __, 2018, provided we receive written revocation prior to that time.

To vote for any of these proposals, you must return a properly signed Consent Form that is received by AEI Fund Management XXI, Inc. at 1300 Wells Fargo Place, 30 East 7th Street, St. Paul, Minnesota 55101, on or before 5:00 P.M., Central Time, on January __, 2018. The Managing Members will tabulate the votes.

Only holders of record of limited membership units as of December 1, 2017, the record date, will be entitled to vote on the proposals. Voting by the limited members is based upon the number of units held. As of December 1, 2017, there were 23,657.21 units outstanding. Each unit is entitled to one vote. Fractions of units will be included in the total.

Pursuant to the operating agreement of Fund 24, in order for a proposal to be approved, a majority of the outstanding units (excluding any units held by the Managing Member) must be voted in favor of such proposal. Accordingly, 11,828.61 units must be voted "FOR" a proposal for such proposal to be approved. Because an abstention would not be counted as a vote for the proposal, it would have the effect of a vote against the proposal. The Managing Members recommend a vote "FOR" both proposals.

We are proposing to amend and restate Section 6.5 of the Operating Agreement of AEI Income and Growth Fund 24 to read in its entirety as follows:

6.5  Prohibited Transactions.  Notwithstanding anything to the contrary contained herein, the Managing Members and Affiliates of the Managing Members (i) may not receive interest and other financing charges or fees on loans made to the Company in excess of the amounts that would otherwise be charged by unaffiliated lending institutions on comparable loans for the same purpose and in the same locality of the Property if the loan is made in connection with a particular Property, (ii) may not require a prepayment charge or penalty on any loan from the Managing Members to the Company, (iii) may not provide financing to the Company that is payable over a period exceeding 48 months or for which more than 50% of the principal is due in more than 24 months, (iv) may not grant to themselves an exclusive listing for the sale of any Property, (v) may not directly or indirectly pay or award any commissions or other compensation to any person engaged by a potential investor for investment advice as an inducement to such adviser to advise the purchaser of the Units, provided, however, that this provision shall not prohibit the normal sales commissions payable to a registered broker-dealer or other properly licensed person for selling the Units, (vi) may not commingle Company funds with the funds of any other person, (vii) may not sell property to, purchase property from, or lease property to or from the Company, provided that the Company may purchase real property from the Managing Members or their Affiliates (but not from affiliated programs unless the interest purchased by the Company from the affiliated program is equal to or smaller than the interest retained by the affiliated program and the joint venture so created complies with section 6.6 of this agreement) if the Managing Members or their Affiliates purchased the property in their own name and temporarily held title thereto for a period not in excess of twelve months for the purpose of facilitating the acquisition of the property, the borrowing of money, the obtaining of financing for the Company or any other purpose related to the business of the Company, and the property is purchased by the Company for a price no greater than the price paid by the Managing Members or their Affiliates plus Acquisition Expenses in accordance with the provisions of this agreement, and any profit or loss on such property during such period is paid to or charged against the Company, and there is no other benefit arising out of such transaction to the Managing Members or their Affiliates apart from compensation otherwise permitted by this agreement (the prohibitions of this Section 6.5(vii) shall also apply to any program in which the Managing Members have an interest), (viii) may not receive a commission or fee in connection with the reinvestment or distribution of the proceeds of the resale, exchange or refinancing of the Properties (ix) may not cause the Company to incur indebtedness directly or indirectly related to the purchase of properties, from any source, (x) may not cause the Company to invest in other limited partnerships or limited liability companies, provided that joint venture arrangements set forth in Section 6.6 shall not be prohibited, (xi) may not cause the Company to acquire property in exchange for Units, (xii) may not cause the Company to pay a fee to the Managing Members or their Affiliates for insurance coverage or brokerage services, (xiii) may not cause the Company to make loans or investments in real property mortgages other than in connection with the purchase or sale of the Company's properties, (xiv) may not cause the Company to operate in a manner as to be classified as an "investment company" for purposes of the Investment Company Act of 1940, (xv) may not cause the Company to underwrite or invest in the securities of other issuers, except as specifically discussed in Section 6.6 and in the Prospectus, (xvi) may not cause the Company to incur the cost of that portion of liability insurance that insures the Managing Members or their Affiliates for any liability as to which such Managing Members or their Affiliates are prohibited from being indemnified under Section 6.4., (xvii) may not receive a real estate commission in connection with the purchase, sale or financing of a Property and will not permit aggregate compensation to others in connection with the sale of any Property to exceed a Competitive Real Estate Commission, (xviii)