OFFERING MEMORANDUM

A Rare, 28-Building Mixed-Use Portfolio Offering

N O N - E N D O R S E M E N T & D I S C L A I M E R N O T I C E

C O N F I D E N T I A L I T Y & D I S C L A I M E RThe 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 Marcus

& Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. 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. Marcus & Millichap 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 square footage of the property and improvements,

the presence or absence of contaminating substances, PCB's or asbestos, the compliance with 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 this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information

contained herein, nor has Marcus & Millichap conducted any 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. Marcus & Millichap is a service

mark of Marcus & Millichap Real Estate Investment Services, Inc.

© 2018 Marcus & Millichap. All rights reserved.

N O N - E N D O R S E M E N T N O T I C EMarcus & Millichap 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 Marcus & Millichap, its affiliates or subsidiaries, or

any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to

prospective customers. Activity ID: Z0091324

A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N L Y.P L E A S E C O N S U L T Y O U R M A R C U S & M I L L I C H A P A G E N T F O R M O R E D E T A I L S .

OFFICES THROUGHOUT THE U.S. AND CANADAwww.marcusmillichap.com

CONOR BRENNANFirst Vice President InvestmentsNational Multi Housing Group

San Diego OfficeDirect: (858) 373-3213Cell: (720) 841-8139

conor.brennan@marcusmillichap.comLicense: CA 01918598

E X C L U S I V E L Y L I S T E D B Y

TABLE OF CONTENTS

02LOCATION OVERVIEW// 15INVESTMENT OVERVIEW // 06

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INVESTMENT POSSIB IL IT IES // 16

03VALUE ADD // 17

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FINANCIAL ANALYS IS // 18

05RENT ROLL // 22

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Marcus & Millichap is pleased to exclusively present for sale the Downtown District of the City of Campo, California and the once-in-a-lifetime opportunity for an investor to decide the future of a small town. The sale includes twenty eight residential units and seven NNN commercial properties contained within twenty-eight buildings, three contiguous parcels and 15.75 acres of land.

A majority of the multifamily complexes were converted into apartment units from the same 3,600 square foot cookie-cutter army barracks that were originally built in the 1940’s. There are four 4-bedroom / 2-bath units (estimated 1,800sf), sixteen 3-bedroom / 1-bath units (estimated 900sf), three 2-bedroom / 1-bath units (estimated 850sf), two 1-bedroom / 1-bath units (estimated 800sf) and three single family homes (estimated 1,216sf on average).

The commercial buildings include a border patrol (estimated 5,000sf), post office (estimated 4,000sf), cabinet shop (estimated 8,000sf), metal shop (estimated 5,000sf), lumber shop (estimated 8,000sf), church (estimated 4,000sf) and VFW (estimated 4,000sf).

There are a handful of vacant, boarded-up, un-monetized buildings scattered throughout the town. Five of which (possibly a few others), are prime candidates for restoration and lease-up as they already include plumbing and electrical connections and current ownership does not have the bandwidth for the stabilization project. Of these vacant buildings, one is a vacant house (southwest of the property), one a vacant 4-unit complex (diagonal of the vacant house), one additional vacant 4-unit complex (towards the center of the property), another a vacant 4-unit office building (towards the northern edge of the property), and finally a miscellaneous-use building (towards the far east of the property). Restoration of these units would bring fourteen additional streams of income to the property.

INVESTMENTOVERVIEW01

Finally, there is opportunity to build additional units on the existing land or scrape and build 100% new construction across all 686,069 square feet of land (15.75 acres). Visible footprints of previously existing residential and commercial structures may be the path of least resistance if an investor chooses to add additional units to the current property in order to maximize returns. Zoning is RV-7 yielding seven units per acre. An astute investor has the flexibility to realize tremendous returns through pursuing higher tiers of capital improvements and the extremely rare opportunity to own and direct the future of an up-and-coming town an hour from the Pacific Ocean.

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Retail

Industrial

Specialty

Government

Vacant

Multifamily

1. 2 Bedroom/ 1 Bathroom House - #9972. Lumber Shop - #9953. Cabinet Shop - #5374. Border Patrol - #5255. Border Patrol - #5256. 3 Bedroom/ 2 Bathroom House - #5247. Office Building - Vacant 4 Units8. Border Patrol - #5259. Metal Shop

10. Church - #42911. House - Vacant - #42612. Multifamily 4 Unit Vacant13. Post Office - #95114. Multifamily 4 Unit - #43115. Multifamily 4 Unit - #42716. Multifamily 4 Unit - #42817. Multifamily 4 Unit - Vacant18. Storage Shed

19. Multifamily 3 Unit - #41220. 3 Bedroom/ 1 Bathroom House - #41121. Multifamily 3 Unit - #40622. Misc. Structure - Vacant - #37023. Multifamily 2 Unit - #407 - #40924. Multifamily 5 Unit - #40425. VFW

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INVESTMENTHIGHLIGHTS

• Opportunity To Own And Operate Your Own Small Town An Hour From The Ocean

• High Cash Flow With Tremendous Upside Through Honed Operations

• Longer NNN Commercial Leases And Desirable Mix of 1, 2, 3 & 4-Bedroom Units

• Add Substantial Income By Restoring & Leasing Out Currently Vacant Buildings

• Build To Maximize Density Without Touching Existing Structures Or Scrape And Build New

• Build Additional Units Easily On Footprints of Previously Existing Buildings

• Most Residential Units Have New Roofs & New Vinyl Plank Flooring

• Most Residential Units Include Washer/Dryer Hookups & 100amps/Unit

• Tenants Highly Desire Gym, Laundromat, Day Care or Recreation Centers; Vacant Buildings Could Be Build Out For These Purposes

• City-Connected Water & Sewer And SDG&E Served

PROPERTY MAKE-UP

28 Residential

Units

7 Commercial Properties

5 Vacant

Properties

• Four 4-Bedroom Units• Sixteen 3-Bedroom Units• Three 2-Bedroom Units• Two 1-Bedroom Units• Three Stand Alone Houses

• Border Patrol• Post Office• Cabinet Shop• Metal Shop• Lumber Shop• Church• VFW

• One Single Family Home• Two Vacant Four-Unit

Buildings• One Vacant Four-Unit Office

Building• One Vacant Miscellaneous-

Use Building

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LOCATIONOVERVIEW02

CAMPO NEIGHBORHOOD

Campo is a rural, once-military, sleepy mountain town in San Diego County located 40 miles, or an hour drive, from Downtown San Diego and the Pacific Ocean. The population is just short of 3,000 residents in a 25-square mile area with a majority of its residents working in local shops, the border patrol, juvenile facility, various restaurants, outposts, shops and three local museums. Many of the residents have horses and animals, enjoy the outdoors and the strong local vibe, and enjoy the land and hiking trails that Campo offers. The average age is 37 and families represent 70% of the residents with 2.77 people per household.

HISTORY OF CAMPO

Campo was originally settled by the Gaskill Brothers in the 1860’s post-civil war after several ex-slave-traders, land-owners and ranchers in Texas were displaced and sought new lands in the California mountains. This area in today’s San Diego County mountains was nicknamed “Little Texas” due to the quantity of people emigrating after the civil war and eventually became a thriving town. With the entrance of WWII, Campo was a threat to homeland security due to its close proximity to the border and railway accessibility, resulting in the U.S. installation of a new army base called Camp Lockett to train buffalo soldiers and defend its borders from Japanese use of Mexico to the south as a neutral country as a means for border penetration.

Campo’s military town was constructed in 1941 as the last installation in California to train buffalo soldiers* in border protection in WWII and one of the final manifestations of the segregated army. Campo was also one of the last outposts training horse-back cavalry before the end of the war marking an evolution towards armored mechanics. With the end of WWII, the original barracks were converted into apartments, shops and the bustling town it is today.

*Buffalo soldiers were African-American horse-back cavalry units nicknamed by the Native Americans

Campo

Tecate

San Diego

Tijuana15

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5INVESTMENT

POSSIB IL IT IES03Levels of Investment (Tier 1-5*) to Optimize Future Returns*Tier 5 being highest capital investment

• Buy and Hold • Rehabilitate Existing Structures

• Raise Rents

• Rehabilitate Existing Structures

• Raise Rents

• Restore Vacant Functionally Obsolescent Structures to Rent-Ready Condition

• Rehabilitate Existing Structures

• Raise Rents

• Restore Vacant Functionally Obsolescent Structures to Rent-Ready Condition

• Build Units & Maximize Density On Previously Existing Multifamily Footprints to Optimal Zoning Density To Maximize Cash Flow

• Scrape and Develop, or Add Units to Existing Residential Parcel Zoned RV-7 (7 Dwelling Units Per Acre) – Will Yield 110 Residential Units. Subject Property Rests on 15.75 Acres Total

• An example of development, KB Development Recently Built a 221-Home Community a Mile North East of the Subject Property. The Average Home Sale within This Development in 2019 was $329,000 for an 1,829 Square Foot Home.

TIER 1 TIER 2 TIER 3 TIER 4 TIER 5

Buyer to do their own investigations of development potential and hold agent and seller harmless of any liability

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VALUE ADD04

• Most Units Are Standard Cookie-Cutter Units With Proven Rent Growth Simply By Noticing Rental Increases

• Current Ownership Has Spent Significantly More On Unit Interiors Than Exteriors Offering A Bang-For-Your-Buck Asset With Solid “Bones” to Improve Curb Appeal

• Build Additional Units Around Current Buildings Or Scrape & Build Out Full Property

• Five Additional Buildings are Vacant, Plumbed and Electricity-Serviced; Ready for Minor Improvements to be Rented & Monetized. Best Uses for Vacant Spaces Based on Tenant Demand* Include Extra Apartments, a Gym, Day-Care, Office Units, Laundry Facility, or Community Recreation Oriented Uses. The Five Vacant Buildings Could Easily Lease Up to Fourteen Additional Tenants of Various Product Types Based on Existing Structure/Purpose

• Divide 4-Bedroom Units Into 2-Bedroom Units For Higher Occupancy, And Better Bang For Your Buck. 2-Bedrooms In Campo Are Also Easier To Rent

• Unused Laundry Machines Currently Occupy The 4th Vacant Office Unit. Convert This into A Functioning Laundromat For The Town

TENANT DEMAND*

Town surveys by the onsite manager have revealed high demand for installation of a gym, day-care, laundromat, recreation center which could be filled using the vacant buildings

Vacant Buildings* - owner does not currently have the bandwidth to restore/lease these spaces

Financing Options

• Seller Will Carry-Back 1st Trust Deed With 50% Down

• Private Or Conventional Financing

• All Cash

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F INANCIALANALYS IS05 SUMMARY

Price $5,470,000

Number of Units 35

Price Pr Unit $156,286

Price Per SF $80.86

Rentable SF 67,650

Lot Size 686,069

Approx. Year Built 1941

CURRENT RENOVATED CURRENT + RESTORED RENOVATED + RESTORED

Cap Rate 5.01% 7.07% 8.11% 10.17%

GRM 11.10 8.95 7.88 6.73

Cash-on-Cash 3.80% 7.92% 10.00% 14.13%

Debt Coverage Ratio 1.61 2.28 2.61 3.27

# OF UNITS UNIT TYPE SF/UNIT AVE CURRENT RENTS MARKET RENTS POST RENO

4 4-Bedroom / 2-Bath 1800 $1,119 $1,250 $1,400

16 3-Bedroom / 1-Bath 900 $908 $1,050 $1,200

3 2-Bedroom / 1-Bath 850 $750 $950 $1,100

2 1-Bedroom / 1-Bath 800 $603 $850 $1,000

3 Stand Alone Houses 1216 $1,058 $1,275 $1,417

1 Border Patrol 5000 $4,400 $4,600 $4,600

1 Post Office 4000 $1,288 $1,700 $1,700

1 Cabinet Shop 8000 $2,400 $2,600 $2,600

1 Metal Shop 5000 $2,450 $2,450 $2,450

1 Lumber Shop 8000 $3,450 $3,450 $3,450

1 Church 4000 $600 $700 $700

1 VFW 4000 $850 $850 $850

1 Vacant House 1300 $- $- $1,200

8 Vacant 3-Bedroom / 1-Bath 900 $- $- $1,200

4 Vacant Office Spaces 1250 $- $- $1,000

1 Vacant Miscellaneous 1500 $- $- $2,000

FINANCING 1ST LOAN

Down Payment $2,735,000

Loan Ammount $2,735,000

Loan Type Seller Carryback

Interest Rate 4.60%

Amortization 30 Years

Term 10 Years

50%

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INCOME APARTMENTS COMMERCIAL TOTAL VACANCY RESTORATION

GRAND TOTAL

Current Renovated Current Renovated Current Renovated Restored Current + Restored

Renovated +Restored

Gross Scheduled Rent $307,500 $415,200 $185,256 $196,200 $492,756 $611,400 $201,600 $694,356 $813,000

Less: Vacancy / Deductions $15,375 $20,760 $9,263 $9,810 $24,638 $30,570 $10,080 $34,718 $40,650

Total Effective Rental Income $292,125 $394,440 $175,993 $186,390 $468,118 $580,830 $191,520 $659,638 $772,350

Other Income $1,665 $1,665 $- $- $1,665 $1,665 $- $1,665 $1,665

Effective Gross Income $293,790 $396,105 $175,993 $186,390 $469,783 $582,495 $191,520 $661,303 $774,015

Less: Expenses $120,044 $120,044 $75,944 $75,944 $195,987 $195,987 $21,821 $217,808 $217,808

Net Operating Income $173,746 $276,061 $100,049 $110,446 $273,796 $386,508 $169,699 $443,495 $556,207

Cash Flow $173,746 $276,061 $100,049 $110,446 $273,796 $386,508 $169,699 $443,495 $556,207

Debt Service $169,887 $169,887 $169,887 $169,887

Net Cash Flow After Debt Service $103,909 $216,621 $273,608 $386,320

Principal Reduction $44,077 $44,077 $44,077 $44,077

Total Return $147,986 $260,698

EXPENSES APARTMENTS COMMERCIAL TOTAL VACANCY RESTORATION

GRAND TOTAL

Current Renovated Current Renovated Current Renovated Restored Current + Restored

Renovated +Restored

Real Estate Tax $29,544 $29,544 $29,544 $29,544 $59,087 $59,087 $- $59,087 $59,087

Insurance $27,500 $27,500 $27,500 $27,500 $55,000 $55,000 $- $55,000 $55,000

Water $22,800 $22,800 $3,200 $3,200 $26,000 $26,000 $8,142 $34,142 $34,142

Sewer $11,400 $11,400 $1,600 $1,600 $13,000 $13,000 $4,071 $17,071 $17,071

SDG&E $- $- $- $- $- $- $- $- $-

Trash Removal $5,400 $5,400 $- $- $5,400 $5,400 $1,928 $7,328 $7,328

Repairs & Maintenance $9,600 $9,600 $9,600 $9,600 $19,200 $19,200 $7,680 $26,880 $26,880

Manager's Unit $9,300 $9,300 $- $- $9,300 $9,300 $- $9,300 $9,300

Management Fee $4,500 $4,500 $4,500 $4,500 $9,000 $9,000 $- $9,000 $9,000

Total Expense $120,044 $120,044 $75,944 $75,944 $195,987 $195,987 $21,821 $217,808 $217,808

Expense as a % of EGI 40.86% 30.31% 43.15% 40.74% 41.72% 33.65% 11.39% 32.94% 28.14%

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NOTES & ASSUMPTIONS

• Real Estate Tax, Insurance, Repairs, And Management Fee Are Dispersed 50-50 Between Apartments And Commercial For Accounting Purposes

• Real Estate Taxes - Based On 1.08021% Of Acquisition Price

• Insurance - Insurance Budget Of $55,000 Is A Recent Quote For Full Property, Fire, And Hazard Insurance (Current Ownership Has No Fire Coverage)

• Water - There Are Eight Water Meters; Owner Pays $65/Meter Plus Usage Fee. Owner Estimates $1900/Month For Residential & $400/Month For Commercial

• Trash - Landlord Only Pays For Residential Trash At $450/Month, Commercial Tenants Pay Their Own Trash

• Onsite Manager - Compensated With Free 3-Bedroom Apartment Plus $750/Month

• Repairs & Maintenance - Onsite Handyman Received $1,600/Month

• Restoration Units Only Apply To Restoring The Five Vacant, Boarded Up, Buildings (14 Units) That Would Be Easiest To Restore. These Include The Two 4-Unit Multifamily Buildings, The 4-Unit Office Building, The Vacant House And The Vacant Misc-Use Building

• Restored Unit Income Is Based On Renovated Rents For Similar Units

• There Are Other Vacant Buildings Such As An Old Office, An Old Meat Shop, And Post-Fire Burnt Warehouse That Are Within The Realm Of Or Beyond Repair (In Decending Order Of Potential) That Have Not Been Factored Into The Maps, Financials, Or Proforma

• There Is A Large Storage Shed Shown On The Map That Hasn’t Been Factored Into Current Or Proforma Financials That Could Be Monetized

• Restored Unit Expenses Are Based On A Ratio To Current Operating Expenses

• Owner Owns Free And Clear And Willing To Carry Back The 1St Trust Deed - Call Agent For Details

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RENT ROLLCOMMERCIAL06

UNIT UNIT TYPE SQUARE FEET

CURRENT RENT / MONTH

CURRENT RENT / SF /MONTH

MARKET STABILIZED RENT / MONTH

MARKET STABILIZED RENT / SF /MONTH

RENOVATED RENT / MONTH

RENOVATED RENT / SF / MONTH

525 Border Patrol 5,000 $4,400 $0.88 $4,600 $0.92 $4,600 $0.92

951 Post Office 4,000 $1,288 $0.32 $1,700 $0.43 $1,700 $0.43

537 Cabinet Shop 8,000 $2,400 $0.30 $2,600 $0.33 $2,600 $0.33

Metal Shop 5,000 $2,450 $0.49 $2,450 $0.49 $2,450 $0.49

995 Lumber Shop 8,000 $3,450 $0.43 $3,450 $0.43 $3,450 $0.43

429 Church 4,000 $600 $0.15 $700 $0.18 $700 $0.18

VFW 4,000 $850 $0.21 $850 $0.21 $850 $0.21

Total 38,000 $15,438 $0.41 $16,350 $0.43 $16,350 $0.43

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UNIT UNIT TYPE SQUARE FEET

CURRENT RENT / MONTH

CURRENT RENT / SF /MONTH

MARKET STABILIZED RENT / MONTH

MARKET STABILIZED RENT / SF /MONTH

RENOVATED RENT / MONTH

RENOVATED RENT / SF / MONTH

404A 1-bedroom / 1-bath 800 $640 $0.80 $850 $1.06 $1,000 $1.25

404B 2-bedroom / 1-bath 850 $775 $0.91 $950 $1.12 $1,100 $1.29

404C 3-bedroom / 1-bath mgr 900 $775 $0.86 $1,050 $1.17 $1,200 $1.33

404D 3-bedroom / 1-bath 900 $895 $0.99 $1,050 $1.17 $1,200 $1.33

404E 2-bedroom / 1-bath 850 $700 $0.82 $950 $1.12 $1,100 $1.29

406A 4-bedroom / 2-bath 1800 $1,175 $0.65 $1,250 $0.69 $1,400 $0.78

406B 1-bedroom / 1-bath 800 $565 $0.71 $850 $1.06 $1,000 $1.25

406C 4-bedroom / 2-bath 1800 $1,100 $0.61 $1,250 $0.69 $1,400 $0.78

407 3-bedroom / 2-bath (duplex) 1050 $1,050 $1.00 $1,225 $1.17 $1,350 $1.29

409 3-bedroom / 1-bath (duplex) 1000 $1,050 $1.05 $1,200 $1.20 $1,300 $1.30

411 3-bedroom / 1-bath house 1200 $1,050 $0.88 $1,250 $1.04 $1,400 $1.17

412A 4-bedroom / 2-bath 1800 $1,100 $0.61 $1,250 $0.69 $1,400 $0.78

412B 4-bedroom / 2-bath 1800 $1,100 $0.61 $1,250 $0.69 $1,400 $0.78

412C 2-bedroom / 1-bath 850 $775 $0.91 $950 $1.12 $1,100 $1.29

427A 3-bedroom / 1-bath 900 $900 $1.00 $1,050 $1.17 $1,200 $1.33

427B 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

427C 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

427D 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

428A 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

428B 3-bedroom / 1-bath 900 $900 $1.00 $1,050 $1.17 $1,200 $1.33

428C 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

428D 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

431A 3-bedroom / 1-bath 900 $975 $1.08 $1,050 $1.17 $1,200 $1.33

431B 3-bedroom / 1-bath 900 $975 $1.08 $1,050 $1.17 $1,200 $1.33

431C 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

431D 3-bedroom / 1-bath 900 $875 $0.97 $1,050 $1.17 $1,200 $1.33

524 3-bedroom / 2-bath house 1600 $1,250 $0.78 $1,350 $0.84 $1,500 $0.94

997 2-bedroom / 1-bath house 850 $875 $1.03 $1,225 $1.44 $1,350 $1.59

Total 29,650 $25,625 $0.86 $30,500 $1.03 $34,600 $1.17

Note: managers unit is 404C; manager does not pay rent and this is reimbursed in expenses

RENT ROLLAPARTMENTS06

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CONOR BRENNANFirst Vice President InvestmentsNational Multi Housing Group

San Diego OfficeDirect: (858) 373-3213Cell: (720) 841-8139

conor.brennan@marcusmillichap.comLicense: CA 01918598

E X C L U S I V E L Y L I S T E D B Y

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