8 Units Hemet · 233 N Inez Street | Hemet, Ca 92543-4166 Joe Passerino, IPS Commercial Managing Director 951-378-3434 [email protected] CONFIDENTIALLY AND DISCLAIMER The information

8 Units Hemet233 N Inez Street • Hemet, Ca 92543-4166

Joe Passerino, IPS CommercialManaging [email protected]

22996 El Toro Road, Suite 115Lake Forest, California 92630www.ipsrecorp.com

PROPERTY HIGHLIGHTSTwo Story 8-Unit apartment building in Hemet centrally locatednear E Florida Ave and S State Street.

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All 1 Bedroom - 1 Bath apartments approximately 700 SF each.The upstairs units offer the tenants an open balcony

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The property has 4 detached garages as well as 11 CarportSpaces for Parking on a 19,602 SF lot

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New roof placed on property in 2015The building offers an on-site laundry facility for the occupants.

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Offering Price $715,000 ($127.68 Price Per SF)●

Prepared By

IPSRE DISCLAIMER8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


CONFIDENTIALLY AND DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from IPS Commercial. This marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. IPS Commercial has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and the square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with the State and Federal regulations, the physical condition of the improvements thereon, or the financial condition, or business prospects of any tenant or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in the Marketing Brochure has been obtained from sources we believe to be reliable; however, IPS Commercial has not verified, and will not verify, any of the information contained herein, nor has IPS Commercial conducted an investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

NON-ENDORSEMENT NOTICE IPS Commercial is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of IPS Commercial, its affiliates or subsidiaries, or any agent, product, service or commercial listing of IPS Commercial, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

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IPSRE OVERVIEW8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


IPS Commercial

Overview

Creating Maximum Value for our Clients.

At IPS our mission is to help our clients create and preserve wealth by providing the most thorough and professional service from real estate sales to arranging interim and permanent financing on their investment portfolio. We create value based on market knowledge, access to a vast pool of qualified investors and a marketing system which creates the broadest possible exposure. We exclusively represent clients who own apartment buildings, commercial property consisting of retail, office, industrial and hospitality. IPS Commercial offers a distinct advantage in the market with partners like the CCIM Institute, CoStar, Loopnet, and REI Wise by providing you with special pricing and benefits.

IPS Commercial Capital

Overview

IPS Commercial Capital has over 25 years of experience advising clients on a wide range of capital structures. Our approach consists of clear identification of a client’s requirements and possible financing structures, culminating in the matching of a client’s objective with the most appropriate loan programs available in today’s marketplace.

IPS Commercial Capital provides debt placement for permanent, repositioning and acquisition financing.

IPS Commercial Capital’s associates have strong relationships with capital providers. Through the years, IPS has earned the respect by consistently providing a substantial volume of high loan quality transactions. Capital providers know the level of analysis in our business proposals, and this puts our clients in a position to receive the absolute best terms available in the marketplace with efficient execution of the transaction.

Sources of Capital:

Fannie Mae Freddie Mac FHA/HUD

Insurance Companies Conduits (CMBS) Pension Funds

Agency Lenders Money Center Banks Regional Commerce Banks

Debt Funds Mezzanine Funds Private Equity Funds

We have extensive experience in securing financing for the following property types:

Multi-Family Office Retail

Industrial Hospitality Mixed Use

Mobile Home Parks Special Use Properties Land Development

877-536-5226

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INVESTMENT DETAILS8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


ANALYSIS

Analysis Date June 2018

PROPERTY

Property 8 Units Hemet

Property Address 233 N Inez StreetHemet, Ca 92543-4166

Year Built 1979

FINANCIAL INFORMATION

Down Payment $275,000

PURCHASE INFORMATION

Property Type MultiFamily

Purchase Price $715,000

Units 8

Total Rentable Sq. Ft. 5,600

LOANS

Type Debt Term Amortization Rate Payment LO Costs

Fixed $440,000 30 years 30 years 5.25% $2,430

INCOME & EXPENSES

Gross Operating Income $73,200

Monthly GOI $6,100

Total Annual Expenses $0

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PROPERTY PHOTOS8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


Street View Street View

Rear of Building Carports

Covered Garages Rear View to Street

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REGIONAL MAP8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


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AERIAL MAP8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


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LOCATION MAP8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


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DEMOGRAPHICS8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


Population Characteristic 1 Mile 3 Mile 5 Mile

Ages 0-4 1,071 8,116 10,457

Ages 5-9 1,319 10,093 13,091

Ages 10-14 1,225 9,582 12,459

Ages 15-19 1,165 9,206 11,941

Ages 20-24 1,100 8,568 11,000

Ages 25-29 994 7,716 9,858

Ages 30-34 910 6,808 8,680

Ages 35-39 853 6,179 7,925

Ages 40-44 812 5,984 7,702

Ages 45-49 799 6,071 7,818

Ages 50-54 739 5,832 7,568

Ages 55-59 679 5,437 7,116

Ages 60-64 585 4,846 6,341

Ages 65-69 509 4,395 5,729

Ages 70-74 451 4,087 5,281

Ages 75-79 404 3,975 5,130

Ages 80-84 380 3,806 4,831

Household Income 1 Mile 3 Mile 5 Mile

Median Household Income $22,272 $37,680 $41,349

< $10000 637 2,849 3,261

$10000-$14999 928 4,223 4,734

$15000-$19999 573 3,647 4,137

$20000-$24999 483 3,498 4,321

$25000-$29999 541 3,493 3,961

$30000-$34999 295 2,385 2,903

$35000-$39999 253 2,494 2,995

$40000-$44999 257 2,084 2,603

$45000-$49999 236 1,805 2,337

$50000-$60000 240 3,510 4,644

$60000-$74000 432 3,904 5,117

$75000-$99999 518 4,268 5,741

$100000-$124999 102 1,890 2,969

$125000-$149999 60 548 1,148

$150000-$199999 35 798 1,167

> $200000 N/A 538 678

Race Characteristic 1 Mile 3 Mile 5 Mile

Non Hispanic White 8,849 77,299 99,983

Population Black 1,082 6,321 7,894

Population Am In/AK Nat 119 940 1,176

Characteristic Housing 1 Mile 3 Mile

Housing Units 6,332 49,074

Occupied Housing Units 5,339 42,185

Owner Occupied Housing Units 2,594 25,893

Renter Occupied Housing Units 2,745 16,292

Vacant Housing Units 993 6,889

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EXECUTIVE SUMMARY8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


Acquisition Costs

Purchase Price, Points and Closing Costs $715,000

Investment - Cash $275,000

First Loan $440,000

Investment Information

Purchase Price $715,000

Price per Unit $89,375

Price per Sq. Ft. $127.68

Income per Unit $9,150

Expenses per Unit $0

Income, Expenses & Cash Flow

Gross Scheduled Income $73,200

Total Vacancy and Credits $0

Operating Expenses $0

Net Operating Income $73,200

Debt Service ($29,156)

Cash Flow Before Taxes $44,044

Financial Indicators

Cash on Cash Return Before Taxes 16.02%

Debt Coverage Ratio 2.51

Capitalization Rate 10.24%

Gross Rent Multiplier 9.77

Gross Income / Square Feet $13.07

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UNIT MIX REPORT8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


Units Type Approx. SqFt Avg. Rents Monthly Mkt Rents Monthly

1 1 Bedroom/ 1 Bath 700 $775 $775 $800 $8001 1 Bedroom/ 1 Bath 700 $775 $775 $800 $8001 1 Bedroom/ 1 Bath 700 $775 $775 $800 $8001 1 Bedroom/ 1 Bath 700 $700 $700 $800 $8001 1 Bedroom/ 1 Bath 700 $775 $775 $800 $8001 1 Bedroom/ 1 Bath - 700 $800 $800 $800 $8001 1 Bedroom/ 1 Bath 700 $725 $725 $800 $8001 1 Bedroom/ 1 Bath 700 $775 $775 $800 $8008 5,600 $6,100 $6,400

UNIT MIX UNIT MIX SQUARE FEET

● 1 Bedroom/ 1 Bath





● 1 Bedroom/ 1 Bath - Vacant











UNIT MIX INCOME UNIT MIX MARKET INCOME

















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PRO FORMA SUMMARY8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


INCOME

Description Actual Per Unit Market Per Unit

Gross Potential Rent $73,200 $9,150 $76,800 $9,600

Less: Vacancy $0 $0 ($3,840) ($480)

Effective Gross Income $73,200 $9,150 $72,960 $9,120

OPERATING EXPENSES

Description Actual Per Unit Market Per Unit

Property Management Fee $0 $0 $3,840 $480

Accounting $0 $0 $500 $63

Building Insurance $0 $0 $2,100 $263

Grounds Maintenance $0 $0 $1,250 $156

Maintenance $0 $0 $2,500 $313

Repairs $0 $0 $2,000 $250

Reserves $0 $0 $2,100 $263

Taxes - Real Estate $0 $0 $8,200 $1,025

Trash Removal $0 $0 $1,200 $150

Utilities $0 $0 $4,800 $600

Utility - Electricity $0 $0 $950 $119

Utility - Gas $0 $0 $750 $94

Total Expenses $0 $0 ($30,190) ($3,774)

NET OPERATING INCOME $73,200 $9,150 $42,770 $5,346

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PRO FORMA SUMMARY8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


UNIT MIX & ANNUAL SCHEDULED INCOME

Type Units Actual Total Market Total 1 Bedroom/ 1 Bath 1 $9,300 $9,300 $9,600 $9,6001 Bedroom/ 1 Bath 1 $9,300 $9,300 $9,600 $9,6001 Bedroom/ 1 Bath 1 $9,300 $9,300 $9,600 $9,6001 Bedroom/ 1 Bath 1 $8,400 $8,400 $9,600 $9,6001 Bedroom/ 1 Bath 1 $9,300 $9,300 $9,600 $9,6001 Bedroom/ 1 Bath -Vacant

1 $9,600 $9,600 $9,600 $9,6001 Bedroom/ 1 Bath 1 $8,700 $8,700 $9,600 $9,6001 Bedroom/ 1 Bath 1 $9,300 $9,300 $9,600 $9,600TOTALS 8 $73,200 $76,800

ANNUALIZED INCOME Description Actual Market

Gross Potential Rent $73,200 $76,800Less: Vacancy $0 ($3,840)Effective Gross Income $73,200 $72,960Less: Expenses $0 ($30,190)Net Operating Income $73,200 $42,770Debt Service ($29,156) ($29,156)Net Cash Flow after Debt Service $44,044 $13,614Principal Reduction $6,204 $6,204Total Return $50,248 $19,818

ANNUALIZED EXPENSES Description Actual Market

Property Management Fee $0 $3,840Accounting $0 $500Building Insurance $0 $2,100Grounds Maintenance $0 $1,250Maintenance $0 $2,500Repairs $0 $2,000Reserves $0 $2,100Taxes - Real Estate $0 $8,200Trash Removal $0 $1,200Utilities $0 $4,800Utility - Electricity $0 $950Utility - Gas $0 $750Total Expenses $0 $30,190Expenses Per RSF $0.00 $5.39Expenses Per Unit $0 $3,774

INVESTMENT SUMMARY Price: $715,000

Year Built: 1979

Units: 8

Price/Unit: $89,375

RSF: 5,600

Price/RSF: $127.68

Lot Size: 19,602 sf

Floors: 2

APN: 443-193-027

Cap Rate: 10.24%

Market Cap Rate: 5.98%

GRM: 9.77

Market GRM: 9.31

FINANCING SUMMARY Loan Amount: $440,000

Down Payment: $275,000

Loan Type: Fixed

Interest Rate: 5.25%

Term: 30 years

Monthly Payment: $2,430

DCR: 2.51

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INTERNAL RATE OF RETURN ANALYSIS8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


BEFORE TAX IRR

Time Future Cash Flows Time Future Cash Flows

Initial Investment ($275,000)

End of Year 1 $44,044 End of Year 11 $44,044









End of Year 10 $44,044 End of Year 20* $532,587

IRR = 16.64% * ($44,044 + $488,543)

AFTER TAX IRR

Time Future Cash Flows Time Future Cash Flows

Initial Investment ($275,000)










End of Year 10 $44,044 End of Year 20* $403,143

IRR = 16.27% * ($44,044 + $359,099)

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OPERATING INCOME ANALYSIS8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166

Joe Passerino, IPSManaging [email protected]

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

$7,400

$14,800

$22,200

$29,600

$37,000

$44,400

$51,800

$59,200

$66,600

$74,000

Legend

GROSS OPERATING INCOME NET OPERATING INCOME NET CASH FLOW (b/t)

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GROSS INCOME VS. OPERATING EXPENSES8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166

Joe Passerino, IPSManaging [email protected]

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

$7,400

$14,800

$22,200

$29,600

$37,000

$44,400

$51,800

$59,200

$66,600

$74,000

Legend

GROSS SCHEDULED INCOME Total Operating Expenses

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JOSEPH PASSERINO8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


Joseph R. L. Passerino

Managing Director | Broker

Sales License 1978 Broker’s License 1992 35 Years in Banking Retired from banking 2000

Managing Director | Broker IPSRECORP – IPS Commercial Capital - IPSRE

Banking National Bank - Sr. Vice President - National Production Director Built loan production portfolio from $75mm per year to over $2.8 billion per year in a five (5) year period. Opened and managed four regional lending offices nationwide with a professional staff of over 800 employees in Florida, Massachusetts, Colorado, San Jose, CA and Riverside, CA.

National Bank - Chief Credit Officer Responsible for all monitoring, writing and reviewing all Bank loan policies as well as all loans underwritten and funded by the Bank Nationwide Published: Co-Authored and Created NINA Guidelines (No Income No Asset Loan)

Authored Lending Guidelines: Residential Guidelines for A, Alt A, A-, B and C Loan Product, Commercial Lending Guidelines; Construction Lending Guidelines; Correspondent Lending Guidelines Supervised: Residential Wholesale Lending Division Nationwide: Correspondent Lending Division – Residential; Commercial Lending Division – Nationwide; Construction Lending Division – California; Servicing Department- Portfolio over $3.5 Billion; REO Divisions – Nationwide; CRA - Community Redevelopment Act Committee President; Broker Approval Department with over 5,000 approved Mortgage Brokers Nationwide

IPO (Initial Public Offering - NASDAQ): Worked closely with Wall Street Investment Banks in preparing De Novo Bank for a successful IPO. Commercial Real Estate Sales: Represented clients in closing over $500 Million in multifamily and commercial properties. Commercial Lending: Arranged and funded over $1.5 Billion in loans 2008-2013 - FDIC/OCC-Independent Financial Advisor and Consultant - Sr. Asset Manager for FDIC as Receiver, provided oversight for asset disposition services to failed banking institutions nationwide. FDIC clearance 2008-2013. Performed due diligence and file review determining borrower’s total liability and the effectiveness of the receiver’s lien position. Served in strategic planning and evaluation of numerous loan and REO portfolio’s totaling over $1 Billion for the sale and securitization of the residual value. Managed REO special asset group with a portfolio of $225 Million, Conducted a comprehensive forensic review of foreclosures in process from 2009 – 2012, Due diligence audit reviews of Suspicious Activity Reports (SARS) and Suspicious Incident Reports (SIRS), Reviewed Anti-Money Laundering (AML) policies and standards, Conduit Financing: Originated, underwrote commercial and multifamily loans for a national insurance company. Introduced client base to CMBS (Commercial Mortgage Backed Securities) and subordinated REMIC (Real Estate Mortgage Investment Conduit) investors.

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JOSEPH PASSERINO8 Units Hemet233 N Inez Street | Hemet, Ca 92543-4166


Seminars: Joseph Passerino Seminars was developed from personal and professional experience finding that there is a lack of quality education for real estate agents, commercial mortgage lenders and the public about investment real estate. Southern California seminars now offer the following:

Introduction to Commercial Real Estate Professional Guide to Selling Apartments Professional Guide to Selling Apartments Workshop Introduction to Financing Investment Real Estate In Depth Guide to Financing Investment Real Estate Emotional Selling Techniques and the Lost Art of Cold Calling

Personal Investments Owned, operated, and managed over 50 buildings in personal investment portfolio. Owned investments as a single entity, general partnerships, LLC’s and C Corporations and as general partner in over 10 Limited Partnerships.

IPSRE: Commercial and Residential Real Estate Services IPS COMMERCIAL CAPITAL: Financing Multifamily and Commercial Real Estate

CONSTRUCTION LOANS: Non-Owner | SFR- 1 to 4 Units as well as Commercial | Retail | Multifamily | Industrial

PORTFOLIO: Bulk Purchases of REO and Loan Portfolios

877.536.5226 Real Estate Services

Sales | Commercial Financing | Construction Loans | Private Equity | Training | Bulk Purchases | REO’s | Performing and Non-Performing Assets

| Performing and Non-Performing Loans BRE# 00631090

Email: [email protected] Web Site: www.ipsrecorp.com

IPS Commercial Capital and IPSRE are wholly owned subsidiary of IPSRECORP

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Documents

8 Units Hemet · 233 N Inez Street | Hemet, Ca 92543-4166 Joe Passerino, IPS Commercial Managing Director 951-378-3434 [email protected] CONFIDENTIALLY AND DISCLAIMER The information