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A B C D E F G H I J K L MAnalysts Name: Matthew Lazarus

Project Name: 1536 NW 3rd Ave Date: 4/18/2016

PERFORMANCE SUMMARY

Holding Period 1 2 3 4 5 6 7 8 9 10

1 NPV (80,541) (55,583) (35,223) (18,742) (5,528) 4,942 13,115 19,372 24,036 27,382

2 IRR -24.84% -0.27% 8.39% 12.33% 14.36% 15.48% 16.10% 16.45% 16.63% 16.71%

ASSUMPTIONS

PROPERTY CHARACTERISTICS

1 Purchase Price ($) 775,000$

2 Selling Costs (%) 10%

3 Potential Gross Income ($)

Unit Type

2BR/1Bath 680$ 16$ 10,880$

Efficiency -$ -$ -$

Inefficiency -$ -$ -$

Broom Closet -$ -$ -$

Monthly Potential Gross Income 10,880$

Other Income ($) -$

4 Operating Expenses (first year)

Expenses Tied to EGI

Management: Percent of EGI 7%

Other Expenses: Percent of EGI 38%

Total Operating Expenses Tied to EGI 55,814

Itemized Expenses

Real Estate Taxes -$

Insurance -$

Utilities -$

Garbage Collection -$

Supplies -$

Repairs -$

Reserves/"Above-line" CAP-X 5,500$

Maintenance -$

Management -$

Hot water heater replacement -$

Air Conditioner Replacement -$

Other -$

Total Itemized Operating Expenses 5,500$

Total Operating Expenses 61,314$

5 Capital Expenditures ("Below-line" CapX) -$

Year: 1 2 3 4 5 6 7 8 9 10 11

6 Rental Income Growth Rate (%) 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

7 Other Income Growth Rate (%) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

8 Vacancy/Collection Loss (%) 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%

10 Growth Rate of Itemized Operating Expenses 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

12 Growth Rate of CapX 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

11 Terminal ("Going Out") Cap Rate 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5%

FINANCING TERMS

1 Loan Amount 542,500$

2 Annual Interest Rate 5.5%

3 Loan Term for Amortization 20

4 Loan Maturity 11

5 Number of Payments/Year 12

6 Loan Fee 0%

7 Prepayment Penalty

Investor Information

1 Required Yield 15%

ANALYST'S NAME Matthew Lazarus

PROJECT NAME 1536 NW 3rd Ave DATE 4/18/2016

Operating Statement

Year: 1 2 3 4 5 6 7 8 9 10 11

1 Potential Gross Income 130,560$ 134,477$ 138,511$ 142,666$ 146,946$ 151,355$ 155,895$ 160,572$ 165,390$ 170,351$ 175,462$

2 less: Vacancy/Collection (6,528)$ (6,724)$ (6,926)$ (7,133)$ (7,347)$ (7,568)$ (7,795)$ (8,029)$ (8,269)$ (8,518)$ (8,773)$

PRO-FORMA OPERATING STATEMENTS AND REVERSION ESTIMATES

78798081828384858687888990919293949596979899100101102103104105106107108109110111

112113114115116117118119120121122123124125126127128129130131132133134

A B C D E F G H I J K L M3 plus: Other Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

4 Effective Gross Income 124,032$ 127,753$ 131,586$ 135,533$ 139,599$ 143,787$ 148,101$ 152,544$ 157,120$ 161,834$ 166,689$

5 less: Operating Expenses (61,314)$ (63,154)$ (65,048)$ (67,000)$ (69,010)$ (71,080)$ (73,213)$ (75,409)$ (77,671)$ (80,001)$ (82,401)$

6 NET OPERATING INCOME 62,718$ 64,599$ 66,537$ 68,533$ 70,589$ 72,707$ 74,888$ 77,135$ 79,449$ 81,832$ 84,287$

7 less: Capital Expenditures (CapX) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

8 CASH FLOW BEFORE D.S. AND TAXES 62,718$ 64,599$ 66,537$ 68,533$ 70,589$ 72,707$ 74,888$ 77,135$ 79,449$ 81,832$ 84,287$

9 less: Debt Service (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$ (44,781)$

10 less: Debt Reduction -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

11 BEFORE TAX CASH FLOW 17,936$ 19,818$ 21,756$ 23,752$ 25,808$ 27,925$ 30,107$ 32,353$ 34,667$ 37,051$ 39,506$

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REVERSION

1 Estimated Selling Price 759,990$ 782,789$ 806,273$ 830,461$ 855,375$ 881,036$ 907,467$ 934,692$ 962,732$ 991,614$

2 less: Selling Costs (75,999)$ (78,279)$ (80,627)$ (83,046)$ (85,538)$ (88,104)$ (90,747)$ (93,469)$ (96,273)$ (99,161)$

3 Net Sales Proceeds 683,991$ 704,510$ 725,646$ 747,415$ 769,838$ 792,933$ 816,721$ 841,222$ 866,459$ 892,453$

4 less: Mortgage Balance (527,174)$ (510,982)$ (493,878)$ (475,809)$ (456,721)$ (436,556)$ (415,253)$ (392,749)$ (368,975)$ (343,860)$

5 Prepayment Penalty -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

6 BTCF FROM REVERSION 156,817$ 193,528$ 231,768$ 271,606$ 313,117$ 356,377$ 401,468$ 448,474$ 497,484$ 548,592$

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Year 1 2 3 4 5 6 7 8 9 10

INVESTMENT YIELD AND VALUE

1 Initial Equity 232,500$

2 NPV ($80,541) (55,583) (35,223) (18,742) (5,528) 4,942 13,115 19,372 24,036 27,382

3 IRR -25% 0% 8.4% 12.3% 14.4% 15.5% 16.1% 16.5% 16.6% 16.7%

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FINANCIAL RATIOS

4 Loan/Original Value (end of year) 68% 66% 64% 61% 59% 56% 54% 51% 48% 44%

5 Loan/Current Value (end of year) 69% 65% 61% 57% 53% 50% 46% 42% 38% 35%

6 Debt Service Coverage 1.40 1.44 1.49 1.53 1.58 1.62 1.67 1.72 1.77 1.83

7 Operating Expense Ratio 49% 49% 49% 49% 49% 49% 49% 49% 49% 49%

8 Break-even Occupancy Level 81% 80% 79% 78% 77% 77% 76% 75% 74% 73%

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RATES OF RETURN:

9 BTR on Original Equity (EDR) 7.7%

10 Overall Rate of Return (OAR) 8.1%

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TOTAL BEFORE TAX CASH FLOWS

0 1 2 3 4 5 6 7 8 9 10

(232,500)$ 174,753$

(232,500)$ 17,936$ 213,346$

(232,500)$ 17,936$ 19,818$ 253,523$

(232,500)$ 17,936$ 19,818$ 21,756$ 295,358$

(232,500)$ 17,936$ 19,818$ 21,756$ 23,752$ 338,925$

(232,500)$ 17,936$ 19,818$ 21,756$ 23,752$ 25,808$ 384,303$

(232,500)$ 17,936$ 19,818$ 21,756$ 23,752$ 25,808$ 27,925$ 431,574$

(232,500)$ 17,936$ 19,818$ 21,756$ 23,752$ 25,808$ 27,925$ 30,107$ 480,827$

(232,500)$ 17,936$ 19,818$ 21,756$ 23,752$ 25,808$ 27,925$ 30,107$ 32,353$ 532,151$

(232,500)$ 17,936$ 19,818$ 21,756$ 23,752$ 25,808$ 27,925$ 30,107$ 32,353$ 34,667$ 585,643$

INVESTMENT PERFORMANCE AND ANALYSIS