F E A S I B I L I T Y S T U D YR E N T A L A N A L Y S I S

J O H N W A L S H

PROJECT

The purchase of 46 housing units in an Irish City for the mixed purpose of sale and rental.

3 partners with experience in con-struction and residential rental prop-erties - particularly in the Dublin and Galway areas.

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MAJOR CHARACTERISTICS

Purchase Price - €350,000 Total Acquisition Costs - €390,750Construction Upgrade - €198,149Planning Contributions - €297,000Part 5 Contributions - Nil

Gross Rental Income - €320,400Sale of 4 number Detached Units - Total €400,000Own Financing - €100,000Built Area - 47,019 ft²

46 Housing Units

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All properties are close to a completion with 3 number units occupied . Minor internal fit-out required to all with some external hard landscaping outstanding.

General Overview

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RENT ASSUMPTIONS RESIDENTIAL PROFORMA

12/04/2015

Housing Schemexxx,SCENARIO #: 1 - BASE CASE

ACQUISITION & DEVELOPMENT COSTS

Unit of Total PSFItem Measure Unit Cost Cost Cost

Acquisition1 Purchase Price N/A N/A 350,000€ 7.44€4 Legal Fees N/A N/A 12,500€ 0.27€5 Due Diligence N/A N/A 10,000€ 0.21€6 Other N/A N/A 4,500€ 0.10€7 Brokers Commission Plus Bonus % of purchase price 2.5% 13,750€ 0.29€8 Total Acquisition Costs 390,750€ 8.31€

Hard Costs (Construction)9 House Renovation / Completion €/sf of Houses 3.00€ 141,057€ 3.00€

11 Contingency % of Hard Costs 10.0% 14,106€ 0.30€12 Total Hard Costs 155,163€ 3.30€

Soft Costs (Construction)16 Development Fees/Bonds N/A N/A 1,500€ 0.03€21 Insurance (during construction) N/A N/A 2,500€ 0.05€23 Contingency % of Soft Costs 10.0% 400€ 0.01€24 Total Soft Costs 4,400€ 0.09€

Site Costs (Hard/Soft)25 Site Costs N/A N/A 25,000€ 0.53€30 Contingency % of Site Costs 10.0% 2,500€ 0.05€31 Total Site Costs 27,500€ 0.58€

Financing Costs32 Appraisal N/A N/A 1,000€ 0.02€33 Legal - Loan N/A N/A 500€ 0.01€34 Interest on Construction Loan from Financing Schedule N/A 9,586€ 0.20€37 Contingency % of Financing Costs 5.0% 554€ 0.01€38 Total Financing Costs 11,641€ 0.25€

39 Planning Contribution Treated in Cash Flow 0.0% -€ -€

40 **Total Acquisition & Development Costs** 589,453€ 12.54€

NOTES

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ACQUISITION & DEVELOPMENT COSTS FINANCING ASSUMPTIONS

12/04/2015

Housing Schemexxx,SCENARIO #: 1 - BASE CASE

CASH FLOW ANALYSIS

Year Year Year Year Year Year Year Year Year Year Year0 1 2 3 4 5 6 7 8 9 10

Transaction Costs1 Acquisition Costs 390,750-€ 2 Hard/Soft Costs 198,703-€ 3 Sales Price in Yr 10 5,375,266€4 Less: Transaction costs in Yr 10 134,382-€5 Historic Tax Credits -€ 6 Total Transaction Costs 589,453-€ -€ -€ -€ -€ -€ -€ -€ -€ -€ 5,240,884€

Gross Rental Income7 Houses 320,400€ 326,808€ 333,344€ 340,011€ 346,811€ 353,747€ 360,822€ 368,039€ 375,400€ 382,908€8 -€ -€ -€ -€ -€ -€ -€ -€ -€ -€9 Total Gross Rental Income 320,400€ 326,808€ 333,344€ 340,011€ 346,811€ 353,747€ 360,822€ 368,039€ 375,400€ 382,908€

Less: Adjustments to GRI10 Houses - Vacancy/Bad Debt 22,428-€ 22,877-€ 23,334-€ 23,801-€ 24,277-€ 24,762-€ 25,258-€ 25,763-€ 26,278-€ 26,804-€11 Houses - Maintenance Concessions 7,200-€ 7,344-€ 7,491-€ 7,641-€ 7,794-€ 7,949-€ 8,108-€ 8,271-€ 8,436-€ 8,605-€12 Planning Contributions 49,000-€ 99,000-€ 99,000-€ 50,000-€ -€ -€ -€ -€ -€ -€13 Total Adjustments to GRI 78,628-€ 129,221-€ 129,825-€ 81,441-€ 32,070-€ 32,712-€ 33,366-€ 34,033-€ 34,714-€ 35,408-€

14 Net Rental Income 241,772€ 197,587€ 203,519€ 258,570€ 314,741€ 321,036€ 327,456€ 334,006€ 340,686€ 347,499€

15 Houses Other Income 12,600€ 12,852€ 13,109€ 13,371€ 13,639€ 13,911€ 14,190€ 14,473€ 14,763€ 15,058€

19 Total Income 254,372€ 210,439€ 216,628€ 271,941€ 328,380€ 334,947€ 341,646€ 348,479€ 355,449€ 362,558€

Operating Expenses20 Houses Operating Expenses 54,010€ 55,090€ 56,192€ 57,316€ 58,462€ 59,631€ 60,824€ 62,041€ 63,281€ 64,547€21 -€ -€ -€ -€ -€ -€ -€ -€ -€ -€22 Total Operating Expenses 54,010€ 55,090€ 56,192€ 57,316€ 58,462€ 59,631€ 60,824€ 62,041€ 63,281€ 64,547€

23 Net Operating Income 200,362€ 155,349€ 160,436€ 214,625€ 269,917€ 275,316€ 280,822€ 286,439€ 292,167€ 298,011€

Reserves24 House Reserves 28,883€ 29,460€ 30,049€ 30,650€ 31,263€ 31,889€ 32,526€ 33,177€ 33,840€ 34,517€25 -€ -€ -€ -€ -€ -€ -€ -€ -€ -€26 Total Reserves 28,883€ 29,460€ 30,049€ 30,650€ 31,263€ 31,889€ 32,526€ 33,177€ 33,840€ 34,517€

27 Pretax Cash Flow Before Financing 589,453-€ 171,480€ 125,889€ 130,387€ 183,975€ 238,654€ 243,427€ 248,296€ 253,262€ 258,327€ 5,504,377€28 Return on Investment 29.1% 21.4% 22.1% 31.2% 40.5% 41.3% 42.1% 43.0% 43.8% 933.8%29 Internal Rate of Return (IRR) 40.6%

NPV Calculations30 @ Following Rates ->> 5.0% 7.0% 8.0% 10.0% 15.0%31 Net Present Value 4,013,602€ 3,271,590€ 2,955,868€ 2,415,441€ 1,460,720€

Financing32 Proceeds from Own Financing 100,000€ 33 Proceeds from Permanent Loan 89,453€ 34 Own Financing Debt Service 69,067-€ 34,533-€ -€ -€ -€ -€ -€ -€ -€ -€35 Permanent Loan Debt Service 12,189-€ 12,189-€ 12,189-€ 12,189-€ 12,189-€ 12,189-€ 12,189-€ 12,189-€ 12,189-€ 12,189-€36 Loan Balance in Yr 10 0-€

37 Pretax Cash Flow After Financing 400,000-€ 90,224€ 79,167€ 118,198€ 171,786€ 226,465€ 231,238€ 236,107€ 241,073€ 246,138€ 5,492,189€38 Return on Equity 22.6% 19.8% 29.5% 42.9% 56.6% 57.8% 59.0% 60.3% 61.5% 1373.0%39 Leveraged IRR 45.6%

40 Loan-to-Value Ratio (LTV; permanent loan only) 15.2%41 Loan-to-Value Ratio (LTV; all loans) 32.1%42 Debt Coverage Ratio (DCR) 8.40 7.50 10.70 15.09 19.58 19.97 20.37 20.78 21.19 451.60

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CASH FLOW ANALYSIS

F E A S I B I L I T Y S T U D YR E N T A L A N A L Y S I S

C O N T A C T D E T A I L S

John Walsh: Phone: 087-9767485 Email: johnmartinwalsh@gmail.com Address: 88 Coill Tire, Doughiska, Galway City