Appraisal Analysis...Margaret Mobile Home Park 12 Mobile Home Pads and Separate Lot 3425 Edmonds Drive & 103 Field Street Scottsboro, Alabama 35769 As Is Value – September 21, 2019

REALESTATEMATRIX.COM

Property:

Date of Value:

REM File No:

Margaret Mobile Home Park 12 Mobile Home Pads and Separate Lot 3425 Edmonds Drive & 103 Field Street Scottsboro, Alabama 35769

As Is Value – September 21, 2019

1912561MXW

Appraisal Analysis Appraisal Report

Prepared for:

Mr. Scott P. Smith Real Estate Appraisal Manager Peoples Independent Bank 121 Billy B. Dyar Boulevard Boaz, Alabama 35957

Prepared by:

Real Estate Matrix, LLC Valuation & Advisory Services 2145 14th Avenue South Birmingham, Alabama 35205 877-453-0221

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October 1, 2019 Mr. Scott P. Smith Real Estate Appraisal Manager Peoples Independent Bank 121 Billy B. Dyar Boulevard Boaz, Alabama 35957 Re:

Appraisal of: Riverchase Mobile Home Park 12 Mobile Home Pads and Separate Lot 3425 Edmonds Drive and 103 Field Street Scottsboro, Alabama 35769 REM File No. 1912561MXW

Dear Mr. Smith: In accordance with your request, Real Estate Matrix, LLC completed an appraisal analysis of the Market Value of the referenced real property. The appraisal is transmitted as an "Appraisal Report" in accordance with Standards Rule 2-2(a), 8-2(a) and 10-2(a) of USPAP. The subject property is more fully described legally and physically in the attached Appraisal Report. The report contains the most pertinent data we gathered and utilized, the valuation techniques employed, and the reasoning culminating in the opinion of value. The appraisal analyses and report were developed in conformance with our interpretation of the guidelines and recommendations of the Uniform Standards of Professional Appraisal Practice (USPAP), the Financial Institutions Reform, Recovery and Enforcement Act, Title XI Regulations (FIRREA) OCC 94/55 and the Interagency Appraisal and Evaluation Guidelines. By reference herein, the appraisal report in its entirety, including all assumptions and limiting conditions and any extraordinary and/or hypothetical conditions, are an integral part of and inseparable from this transmittal letter. The subject property is a mobile home park comprised of 12 mobile home pads on a + 2.80-acre site (mobile home park site), located along Edmonds Drive and a single mobile home lot located along Field Street in the city limits of Scottsboro, Jackson County, Alabama. See various maps presented herein. According to information provided to the appraisers by the owner, some of the pads are currently rented with park-owned mobile homes in place. However, in accordance with your request, the subject property is appraised as a 12-pad mobile home park (with no mobile homes included) and a single mobile home lot. Therefore, the market value opinion stated herein does not include the mobile homes owned by the park, or any additional income that may be generated from the rental of the mobile homes.

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Mr. Smith October 1, 2019Peoples Independent Bank For purposes of reasonable analysis, the subject is valued as a 13-pad mobile home park. According to the sales contract, the seller, Margaret Scott, will pay a rental rate of $150 per-month for the individual mobile home lot (including mobile home in place) and will transfer ownership of the mobile home thereon to the purchaser when she moves. The Sales Comparison Approach and Income Approach are utilized to estimate the market value of the subject mobile home park. The Cost Approach is not applicable to the valuation of the mobile home park due to the age of the site improvements, and because it is not typical market behavior for buyers to consider the alternative replacement cost when weighing a purchase decision for similar mobile home parks. As a result of our analysis, we have concluded the following:

RECONCILED MARKET VALUE OPINION

Appraisal Premise Interest Appraised Date of Value Value Opinion

“As Is” Leased Fee September 21, 2019 $130,000Source: REAL ESTATE MATRIX, LLC

Extraordinary Assumptions: The market value opinion stated herein is subject to the Extraordinary Assumptions stated on Page 1. The use of Extraordinary Assumptions may have affected the appraisal assignment results. Thank you for employing Real Estate Matrix, LLC for this property valuation. Very truly yours,

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EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS

Extraordinary Assumptions An extraordinary assumption is “An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions.” 1 The use of an extraordinary assumption(s) may have affected the appraisal assignment results. The value opinion stated herein is made subject to the following Extraordinary Assumption(s):

The land size stated in this report is assumed to be correct. Any discrepancy between the land size stated herein and the land size obtained by a current survey could affect the market value opinion.

Real Estate Matrix, LLC does not, as part of this valuation, perform an audit, review or examination (as defined by

the AICPA) of any of the historical or prospective financial information used, and therefore, does not express any opinion with regard to this information. Neither a market study nor a feasibility analysis was performed by the appraisers. The market value opinion stated herein assumes the rent-roll provided by the purchaser is correct. If this information is found to be incorrect, the market value opinion stated herein could be affected significantly.

Sanitary services are provided via on-site septic tank systems. The market value opinion stated herein is predicated on the extraordinary assumption that the systems are operational and in compliance with all applicable regulations.

Although requested, detailed historical operating data were not provided to the appraisers. Therefore, stabilized operating expenses for the subject property are estimated based on expense comparables and national investor surveys. The market value opinion contained herein is predicated on the extraordinary assumption that the estimated operating expenses are reasonably correct and at market level.

Hypothetical Conditions A hypothetical condition is “That which is contrary to what exists but is supposed for the purpose of analysis.” 2 There are no Hypothetical Conditions considered in this appraisal report.

1 Uniform Standards of Professional Appraisal Practice (USPAP) 2018-2019 Edition - ©The Appraisal Foundation, Page 4 2 Uniform Standards of Professional Appraisal Practice (USPAP) 2018-2019 Edition - ©The Appraisal Foundation, Page 4

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INTRODUCTION & SUMMARY OF SALIENT FACTS & CONCLUSIONS EXECUTIVE SUMMARY

Client / Intended User(s) of Report: Peoples Independent Bank / Peoples Independent Bank Report Format: Appraisal Report Subject Property: Property Type 12-Pad Mobile Home Park & Single Mobile Home Lot Location 3425 Edmonds Drive & 103 Field Street

Scottsboro, Alabama 35769 County Jackson Assessor’s Parcel Number 27-08-27-0-000-015.002 (Mobile Home Park)

34-01-11-0-000-021.013 (Mobile Home Lot) Legal Description A legal description is included in the Addenda Property History: Current Owner Margaret A. Scott Summarized Sales History Under Contract - See Ownership and Sales History Section Intended Use of Appraisal: To Aid in Loan Underwriting and/or Credit Decisions Value Appraised: Market Value Appraisal Premise: "As Is" Property Rights Appraised: Leased Fee Date(s) of Value: Date Property was Observed September 21, 2019 Date of Appraisal Report October 1, 2019 Effective Date of Value – “As Is” September 21, 2019 Exposure Time / Marketing Period: 6 to 12 Months / 6 to 12 Months Zoning: Classification T-1 (Manufactured Home District) Zoning Authority City of Scottsboro Conforming / Legal Non-Conforming Conforming Highest & Best Use: As Though Vacant Residential Use As Improved Current Mobile Home Park Use

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INTRODUCTION & SUMMARY OF SALIENT FACTS & CONCLUSIONS - CONTINUED

Subject Land Description: Numbers of Pads 12 Mobile Home Pads & Separate Mobile Home Lot (Valued as a 13-Pad

Mobile Home Park). Land Size:

Description: SF Acres Based On: Total Land Area for MHP 121,968 2.80 Legal Description

Utilities

Electricity and Water

Shape Irregular Topography Basically Level Flood Plain Information "Zone X” Area of Minimal Flood Hazard; 01071C0436D (12/16/2008) Wetlands None; Source: U.S. Fish & Wildlife Service National Wetlands Inventory FF&E / Personal Property Not Included – Real Estate Only

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INTRODUCTION & SUMMARY OF SALIENT FACTS & CONCLUSIONS - CONTINUED

Based on the analyses described in this appraisal report, the market value opinion concluded for the subject property is:

Extraordinary Assumptions: The market value opinion stated herein is subject to the Extraordinary Assumptions stated on Page 1. The use of Extraordinary Assumptions may have affected the appraisal assignment results. APPRAISAL METHODOLOGY

The Sales Comparison Approach and Income Approach are utilized to estimate the market value of the of the mobile home park. The Cost Approach is not applicable to the valuation of the mobile home park due to the age of the site improvements, and because it is not typical market behavior for buyers to consider the alternative replacement cost when weighing a purchase decision for an older mobile home park.

FINAL VALUE RECONCILIATION MATRIX – “AS IS” COST APPROACH Not Applicable SALES COMPARISON APPROACH $ 137,000 INCOME APPROACH $ 127,000

RECONCILED MARKET VALUE OPINION APPRAISAL PREMISE

INTEREST APPRAISED

DATE OF VALUE

VALUE OPINION

“As Is” Leased Fee September 21, 2019 $ 130,000

Source: REAL ESTATE MATRIX, LLC

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CERTIFICATION OF THE APPRAISAL To the best of our knowledge and belief, we certify that:

1. Wayne Sumners physically observed the subject property. A physical observation of the subject property was not made by Mario Mazzei. 2. The statements of fact contained in this report are true and correct. 3. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal,

impartial, and unbiased professional analyses, opinions, and conclusions. 4. We have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties

involved. 5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in

value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

7. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of

Professional Appraisal Practice. 9. As of the date of this report, we have completed the requirements of the continuing education program of the State of Alabama Real Estate

Appraisers Board and are certified in the State of Alabama.

10. No one provided significant professional real property appraisal assistance to the persons signing this report. 11. The appraisers have sufficient experience in the appraisal of similar property types. 12. This assignment was made subject to regulations of the State of Alabama Real Estate Appraisers Board. The undersigned state licensed real

estate appraisers have met the requirements of the Board that allow this report to be regarded as a “certified appraisal.” 13. We have performed no prior services, as appraisers or in any other capacity, regarding the property that is the subject of this report within the

three year period immediately preceding acceptance of this assignment.

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REM Appraisal Analysis Cover Page Letter of Transmittal

EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS ....................................................................................... 1 INTRODUCTION & SUMMARY OF SALIENT FACTS & CONCLUSIONS ......................................................................................... 2 CERTIFICATION OF THE APPRAISAL ......................................................................................................................................... 5

GENERAL INFORMATION ................................................................................................................................................... 7

SUBJECT PHOTOGRAPHS .......................................................................................................................................................... 8 CLIENT / INTENDED USER(S) ................................................................................................................................................. 11 INTENDED USE....................................................................................................................................................................... 11 SUBJECT PROPERTY IDENTIFICATION .................................................................................................................................... 11 PROPERTY RIGHTS APPRAISED .............................................................................................................................................. 13 PURPOSE OF THE APPRAISAL ................................................................................................................................................. 13 DATE OF APPRAISAL REPORT AND EFFECTIVE DATE OF VALUE ............................................................................................ 14 OWNERSHIP SALES HISTORY OF SUBJECT PROPERTY ............................................................................................................ 14 SCOPE OF THE APPRAISAL ..................................................................................................................................................... 15 AD VALOREM TAX INFORMATION ......................................................................................................................................... 17 SITE SUMMARY AND ANALYSIS ............................................................................................................................................. 19

SUBJECT PROPERTY VALUATION ANALYSIS ............................................................................................................ 25

SALES COMPARISON APPROACH ............................................................................................................................................ 26 INCOME APPROACH ............................................................................................................................................................... 42 RECONCILIATION ................................................................................................................................................................... 59

SUBJECT AREA & NEIGHBORHOOD ANALYSIS ......................................................................................................... 63

REGIONAL AREA ANALYSIS .................................................................................................................................................. 64 NEIGHBORHOOD ANALYSIS ................................................................................................................................................... 71

ADDENDA (EXHIBITS AND QUALIFICATIONS OF APPRAISERS) .......................................................................... 75

FLOOD MAP ........................................................................................................................................................................... 76 WETLANDS MAP .................................................................................................................................................................... 77 RENT ROLL ............................................................................................................................................................................ 78 LEGAL DESCRIPTION ............................................................................................................................................................. 79 ENGAGEMENT LETTER ........................................................................................................................................................... 80 ASSUMPTIONS AND LIMITING CONDITIONS ........................................................................................................................... 82 APPRAISERS’ QUALIFICATIONS .............................................................................................................................................. 84

TABLE OF CONTENTS


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General Information

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SUBJECT PHOTOGRAPHS

View of Subject Property View of Subject Property



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SUBJECT PHOTOGRAPHS - CONTINUED

Street Scene -Edmonds Road Street Scene -Edmonds Road

View of 103 Field Street Street Scene -Field Street

Street Scene -Field Street

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AERIAL PHOTOGRAPH

3425 Edmonds Drive

103 Field Street

The approximate boundaries of the subject properties are highlighted in blue.

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CLIENT / INTENDED USER(S) The client is “The party or parties who engage, by employment or contract, an appraiser in a specific assignment.” 3 The intended user refers to “The client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser, based on communication with the client at the time of the assignment.” 4 The client for this appraisal assignment is Peoples Independent Bank. The intended user is Peoples Independent Bank.

INTENDED USE The intended use refers to “The use(s) of an appraiser’s reported appraisal or appraisal review assignment opinions and conclusions, as identified by the appraiser based on the communication with the client at the time of assignment.” 5 The intended use of this appraisal is to aid in loan underwriting and/or credit decisions. The scope of the discussion in this appraisal report is specific to the needs of the stated client and to the stated intended user(s). Any use of this appraisal or reliance upon it by anyone other than the client or intended user(s) is strictly prohibited. No purchasers, sellers or borrowers of the subject property are intended users of this appraisal, and no such parties should use or rely upon this appraisal for any purpose. All such parties are advised to consult with appraisers or other professionals of their own choosing. The appraiser(s) is (are) not responsible for any unauthorized use of this appraisal. If you are not the client or an intended user named above, you are strongly warned to not rely upon or use this appraisal in any way. No one, client or other party, should rely upon this report to disclose the condition of the property or the presence / absence of any defects. This is an appraisal report, not a property inspection report. This report must be read in its entirety, including all attachments and addenda. Special attention should be given to the certification and limiting conditions.

SUBJECT PROPERTY IDENTIFICATION The subject property is located along Edmonds Drive (mobile home park) and Field Street (single mobile home lot) in the city limits Scottsboro in Jackson County, Alabama. See various maps presented herein.

Property Name Margaret Mobile Home ParkAddress 3425 Edmonds Drive & 103 Field StreetCity / State / Zip Code Scottsboro, Alabama 35769County JacksonTax Parcel ID Number 27-08-27-0-000-015.002 & 34-01-11-0-000-021.013 Legal Description A legal description is included in the Addenda.Comments:

Unless otherwise noted, standard utility and right-of-way easements are insignificant to the value. However, a current locational or boundary survey may reveal encroachments, easements, zoning violations or other matters of interest that could warrant modification of the appraised value. This appraisal assumes that the subject parcel constitutes a legal lot or parcel of record and is in compliance with all local, state, and federal ordinances, acts and/or regulations.

See following page for maps depicting the location of the subject property.

3 Uniform Standards of Professional Appraisal Practice (USPAP) 2018-2019 Edition - ©The Appraisal Foundation, Page 4 4 Uniform Standards of Professional Appraisal Practice (USPAP) 2018-2019 Edition - ©The Appraisal Foundation, Page 5 5 Appraisal Institute, The Dictionary of Real Estate Appraisal - 6th Edition. (Chicago: Appraisal Institute), 2015, 119

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SUBJECT LOCATION MAPS

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PROPERTY RIGHTS APPRAISED

The ownership interest appraised is the leased fee estate, subject to conditions stated herein, as well as easements and restrictions of record. A leased fee estate refers to the “The ownership interest that the landlord or lessor maintains in a property under a lease with the rights of use and occupancy being conveyed or granted to a tenant or lessee. The ownership interest in a leased property.” 6 The leased fee estate is often referred to as the leased fee interest, which is “A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a lease).” 7

PURPOSE OF THE APPRAISAL

The purpose of an appraisal refers to “The objective of an assignment-e.g., in an appraisal assignment, to develop an opinion of the defined value of any real property interest.” 8 The purpose of this appraisal is to develop an opinion of the Leased Fee Market Value of the subject property, as of the effective date of the appraisal. Unless otherwise stated, all factors pertinent to a determination of value have been considered as of this date. Definitions pertinent to this appraisal include the following:

MARKET VALUE DEFINED / SOURCE

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised and acting in what they consider their own best interests;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 9

The opinion of market value is based on terms of cash or financing terms equivalent to cash.

6 Appraisal Institute, The Dictionary of Real Estate Appraisal - 5th Edition. (Chicago: Appraisal Institute), 2010, 111 7 Appraisal Institute, The Dictionary of Real Estate Appraisal - 5th Edition. (Chicago: Appraisal Institute), 2010, 111 8 Appraisal Institute, The Dictionary of Real Estate Appraisal - 5th Edition. (Chicago: Appraisal Institute), 2010, 155 9 This definition is from regulations published by federal regulatory agencies pursuant to Title IX of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) between July 5, 1990, and August 24, 1990, by the Federal Reserve System (FRS), National Credit Union Administration (NCUA), Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS), and the Office of Comptroller of the Currency (OCC). This definition is also referenced in regulations jointly published by the OCC, OTS, FRS, and FDIC on June 7, 1994, and in the Interagency Appraisal and Evaluation Guidelines, dated December 2, 2010. This definition also appears as an example in the Glossary to the Uniform Standards of Professional Appraisal Practice (USPAP 2001 Edition). The opinion of market value is based on terms of cash or financing terms equivalent to cash.

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DATE OF APPRAISAL REPORT AND EFFECTIVE DATE OF VALUE

The date of the appraisal report is October 1, 2019. The “as is” effective date of value is September 21, 2019; the date the subject property was last observed. OWNERSHIP SALES HISTORY OF SUBJECT PROPERTY

According to Jackson County tax records, the subject property is owned by Margaret A. Scott. The subject is currently under a sales contract for sale to Riverchase Park, LLC for $104,000 (includes 12-pad mobile home park and mobile home lot located at 103 Field Street). The purchase price is less than the current market value based on analysis of market data contained herein. A copy of the sales contract is retained in the appraisers’ work file. The appraisers are unaware of any change in ownership within the past three (3) years prior to the effective date of this appraisal. The accuracy of the ownership stated herein is made subject to correction by a title search performed by a qualified entity. The appraisers are not qualified to conduct a title search. According to information provided by the purchaser and property contact, Stewart Phillips, the property was not actively listed for sale prior to being placed under contract. According to Mr. Phillips, they became aware of the park after purchasing the adjoining mobile home park. An offer was made and accepted. Other than the current contract, the appraisers are unaware of any other listings, offerings or contracts regarding the subject property within the past three (3) years prior to the effective of value stated herein.

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SCOPE OF THE APPRAISAL

Scope of work refers to “The amount and type of information researched, and the analysis applied in an assignment. Scope of work includes, but is not limited to, the following:

The degree to which the property is inspected or identified; The extent of research into physical or economic factors that could affect the property; The extent of data research; and The type and extent of analysis applied to arrive at opinions or conclusions.” 10

The following section summarizes the appraisal development and reporting procedure and the “scope” of work necessary to complete this appraisal assignment in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). The scope of the assignment pertains to the extent and manner in which research is conducted, and data are gathered and analyzed; all based upon the following appraisal problem-identifying factors stated previously in this report:

Client Intended use Intended user Type of value Effective date of value Relevant characteristics regarding the subject property Assignment conditions

Appraisal Premise:

The Leased Fee Market Value is appraised.

Appraisal Type: The appraisal is transmitted as an "Appraisal Report" in accordance with Standards Rule 2-2(a), 8-2(a) and 10-2(a) of USPAP. The appraisal analyses and report were developed in conformance with our interpretation of the guidelines and recommendations of the Uniform Standards of Professional Appraisal Practice (USPAP), the Financial Institutions Reform, Recovery and Enforcement Act, Title XI Regulations (FIRREA) OCC 94/55, the Interagency Appraisal and Evaluation Guidelines.

Extent of Property Identification:

The appraiser(s) collected information relevant to the subject property from the following sources:

Client - Peoples Independent Bank Property Contact / Purchaser – Stewart Phillips with Riverchase Park, LLC Public Records Physical Observation of the subject property made on September 21, 2019

The subject property is identified by postal address, assessor’s records and legal description. Economic characteristics of the subject property are identified via an analysis of the rent-roll.

10 Appraisal Institute, The Dictionary of Real Estate Appraisal - 5th Edition. (Chicago: Appraisal Institute), 2010, 176

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SCOPE OF THE APPRAISAL - CONTINUED

Extent of Data Research:

The appraisers review the micro and/or macro market environments with respect to physical and economic factors relevant to the valuation process. This process includes interviews with regional and/or local market participants, available published data and other various resources. Research is also conducted pertaining to regional and/or local applicable tax data, zoning requirements, flood zone status, demographics, comparable listings and sales, income / expense data and rental information. Publications referenced in this analysis include Realty Rates.com. Other data sources used throughout this appraisal report are specifically referenced herein. Extent of Property Observation:

The subject property and its surrounding environs were observed on September 21, 2019 by Wayne Sumners. An observation was not made by Mario Mazzei.

Extent of Comparable Property Observation:

The subject property is a mobile home park that required analysis of comparable market data outside its immediate market area. Unless noted otherwise, an observation was not made of the comparable improved sales and rentals located outside the subject property's immediate market area. Extent of Analysis Applied:

The appraiser(s) gather and analyze relevant market data employing appropriate appraisal procedures to arrive at the estimated value indication(s) for the subject property. The traditional methods of processing market data into a value indication include the Cost, Sales Comparison and Income Approaches. The Sales Comparison Approach and Income Approach are utilized to estimate the market value of the of the mobile home park. The Cost Approach is not applicable to the valuation of the mobile home park due to the age of the site improvements, and because it is not typical market behavior for buyers to consider the alternative replacement cost when weighing a purchase decision for an older mobile home park. The preliminary value indications derived from the methodologies employed are correlated and reconciled into a final value conclusion, as defined herein. A reasonable exposure and marketing time associated with the final value opinion is also estimated.

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AD VALOREM TAX INFORMATION The subject property is currently assessed to Margaret A. Scott, by the Jackson County, Alabama, Revenue Commissioner’s Office as follows: Assessment Rate 20 % Assessed Value* $18,180 Millage Rate 0.0457

Parcel ID No. Assessor’s Market Value

Taxes Land Improvements Total

27-08-27-0-000-015.002 $28,000 $48,900 $76,900 $695.4934-01-11-0-000-021.013 $8,600 $5,400 $14,000 $135.80 $36,600 $54,300 $90,900 $831.29*Appraised Value x Assessment Rate

The calculated millage rate depicted in the above table may be different from the actual millage rate for the subject’s location due to homestead exemption, current use exemptions, annexation, etc. The current millage rate for the subject location, excluding exemptions is:

Town of Scottsboro = 0.0485 The Revenue Commissioner’s value is less than the appraisers’ opinion of the current market value of the subject property, based on analysis of the market data presented herein. No changes are anticipated in the Revenue Commissioner’s assessment or ad valorem taxes in the near term. According to the Jackson County, Alabama, Revenue Commissioner’s Office, property taxes for 2018 have been paid. Ad Valorem taxes in Alabama are collected one year in "Arrears" - or as the title of property stood as of October 1 of the previous year and become delinquent January 1. The subject’s Ad Valorem taxes for 2019 become due October 1, 2019, and become delinquent if not paid by December 31, 2019. The ad valorem tax map is depicted on the following page.

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AD VALOREM TAX INFORMATION - CONTINUED

Ad Valorem Tax Maps

3425 Edmonds Drive

103 Field Street

The subject parcels are highlighted in blue.

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SITE SUMMARY AND ANALYSIS

Land Size Data: Square Feet Acres Based On:

Total Land Area for MHP 121,968 2.80 Legal Description

Additional Comments: The land size stated in this report is subject to revision by a current land survey. Any discrepancy between the land size stated herein and the land size obtained by a current survey could have an effect on the market value opinion.

Access / Frontage: Primary Road Secondary Road

Name of Road Edmonds Drive

Not Applicable

Number of Lanes Two-LanesDirection Two-WayAccess Both DirectionsMiddle Turn Lane NoMedian Divider NoCurb/Gutter NoSidewalks No

Additional Access / Frontage The pads within the park are accessed via internal streets within the park. The separate mobile home lot is accessed via Field Street

Physical Characteristics: Shape IrregularDimensions See Tax MapUtilities Electricity, WaterTopography Basically Level Street Grade At Street Grade Railroad Frontage None Flood Zone "Zone X”– Area of Minimal Flood HazardFEMA Flood Zone Map Info. 01071C0436D; Date – 12/16/2008 Wetlands None; Source: U.S. Fish & Wildlife Service National Wetlands Inventory

Additional Comments Sanitary services are provided via on-site septic tank systems. The market value opinion stated herein is predicated on the extraordinary assumption that the systems are operational and in compliance with all applicable regulations.

Zoning: Zoning Jurisdiction City of ScottsboroZoning Code / Classification T-1 Primary Permitted Uses Manufactured Home District Conformity ConformingVerification Zoning Department

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SITE SUMMARY AND ANALYSIS - CONTINUED

Comparative Analysis: Access AdequateVisibility AdequateFunctional Utility Adequate Traffic Volume Adequate Adequacy of Utilities AdequateDrainage Assumed Adequate Additional Comments: The subject site has adequate access and visibility for use as a mobile home park.

Other: Detrimental Easements Unknown / None Noted Encroachments Unknown / None Noted Deed Restrictions Unknown / None Noted Reciprocal Parking Rights Unknown / None Noted Common Ingress / Egress Unknown / None NotedAdverse Environmental Conditions Unknown / None NotedGround Contamination Issues Unknown / None Noted Comments: The subject property is a 12-pad mobile home park located along Edmonds Drive and a single mobile home lot located along Field Street in the Scottsboro city limits in Jackson County, Alabama. The park has gravel surfaced streets and gravel/dirt pads and parking areas. Sewage disposal is via on-site septic tank systems. The market value opinion stated in this report is predicated on the extraordinary assumption that the septic tank systems are operational and in compliance with all applicable regulations. The park has no common amenities. According to tax assessment records, the park was constructed in 1980. The park is in overall average condition. The subject is valued as a 13-pad mobile home park. Conclusion: There are no adverse factors observed that would impede development of the site to its highest and best use.

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HIGHEST AND BEST USE ANALYSIS

“To determine highest and best use, the appraiser must analyze data, not just compile it. As an analogy, in applying the sales comparison approach the appraiser does not just compile a list of comparable sales from the market data; he or she analyzes the relevant sales. It is critical that a careful highest and best use analysis precede the application of the approaches to value. Otherwise, there is a high likelihood that serious errors will be made in the valuation process.” 11

Highest and best use refers to “The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity.” 12 The following graphic depicts the Market Analysis Process and Four Parallel Tests.

To determine highly probable uses (a screening process) Property Productivity

• Physical Attributes • Legal / Regulatory Attributes • Legally Permissible • Locational Attributes

Supply and Demand financially feasible Subject Capture • Maximally Productive

Use Time

Source: Stephen F. Fanning, Market Analysis for Real Estate: Concepts and Applications in Valuation and Highest and Best Use (Chicago: Appraisal Institute, 2005, 280).

The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value.

• Physically Possible

Economic Overview and Alternative Use Scoping

Overview of economic base, site and location.

Market / Marketability Analysis Four Tests

• Use of Space • Most Probable Buyer(s)

Problem Definition

Financial Analysis

Conclusions

• Appropriately supported and

Specified in terms of

Market Participants

11 Appraisal Institute, The Appraisal of Real Estate, 13th Edition (Chicago: Appraisal Institute), 2008, 277 12 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 135

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HIGHEST AND BEST USE ANALYSIS - CONTINUED Having elicited the pertinent general factors influencing the value of the subject property in the Area/Neighborhood Analysis section, an analysis of the subject’s Highest and Best Use is now presented. “The highest and best use of land as though vacant and the highest and best use of the property as improved are connected but distinctly different concepts.” 13 There are typically two aspects of the highest and best use estimate, first for the site “as if vacant and available for development”, and second for the property “as currently improved”. Basically, there are four tests that are applied in estimating the highest and best use of the vacant or improved site.

SUMMARY AND CONCLUSION: Highest and Best Use (Land -As Though Vacant): The highest and best use of land or a site as though vacant is “Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements.” 14

The following tests are used to determine the highest and best use of the subject property, as if vacant. Legal Permissibility Test Legal permissibility refers to “One of the four criteria the highest and best use of a property must meet; a property use that is either currently allowed or most probably allowable under zoning codes, building codes, environmental regulations, and other applicable laws and regulations that govern land use restrictions.” 15 Zoning codes, land use plans, easements, and private deed restrictions often restrict permitted uses. The test of legal permissibility identifies uses permitted for the subject site. The principle permitted uses under the subject property’s T-1 (Manufactured Home District) zoning are single and multi-family residential. Surrounding land uses are primarily single and multi-family residential and vacant land tracts. Given prevailing land use patterns in the area, and recognizing the principle of conformity, only residential use is given further consideration in evaluating the highest and best use of the site, as though vacant. Physical Possibility Test Physical possibility refers to “One of the criteria the highest and best use of a property must meet; the land must be able to accommodate the size and shape of the ideal improvement.” 16 The test of physical possibility identifies the physical characteristics of the site that affect its highest and best use. The physical characteristics of the site should reasonably accommodate any use that is not restricted by its size, shape and frontage. Physical characteristics such as shape, access, and topography make the subject site suitable for residential use.

13 Stephen F. Fanning, Market Analysis for Real Estate: Concepts and Applications in Valuation and Highest and Best Use (Chicago: Appraisal Institute), 2005, 280 14 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 135 15 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 163 16 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 213

23

HIGHEST AND BEST USE ANALYSIS – CONTINUED

Highest and Best Use (Land -As Though Vacant) - Continued: Financial Feasibility Test Financial feasibility refers to “One of the four criteria the highest and best use of a property must meet; the ability of a property to generate sufficient income to support the use for which it was designed. See also economic feasibility.” 17 The test of financial feasibility considers the demand for uses that have passed the tests of legal permissibility and physical possibility. A potential use is considered financially feasible if it has value commensurate with its use. The subject is an interior site along Edmonds Drive in the City of Scottsboro, Jackson County, Alabama. Surrounding land uses primarily consist of residential properties and vacant land tracts. Analysis of neighborhood trends indicates that property uses in the immediate market area should remain constant with no significant change in the immediate future. Considering location, surrounding land uses, and neighborhood trends, residential is considered the most financially feasible use of the subject site. Maximum Productivity Test Maximum productivity refers to “One of the four criteria the highest and best use of a property must meet; the selected land use must yield the highest value of the possible uses.” 18 The maximum productivity test is applied to the uses that have passed the tests of legal permissibility, physical possibility, and financial feasibility. With consideration given to the legal, physical, and financial factors, the use that would maximize productivity of the subject site is residential. Conclusion Considering the four tests of highest and best use analysis, the highest and best use of the subject site, as though vacant, is residential. The subject is a 12-pad mobile home park and a separate mobile home lot. For purposes of reasonable analysis, the subject is valued as a 13-pad mobile home park.

17 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 115 18 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 180

24

HIGHEST AND BEST USE ANALYSIS - CONTINUED Highest and Best Use (As Improved): The highest and best use of property as improved refers to “The use that should be made of a property as it exists. An existing improvement should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one.” 19 The same tests used to evaluate the highest and best use of the subject property as if vacant are applied to the analysis for the property as improved. Legal Permissibility Test The existing improvements appear to meet or exceed all minimum requirements under the current zoning classification. Physical Possibility Test The subject is an existing mobile home park and meets the physically possible test. Financial Feasibility Test Use of the subject mobile home park is considered financially feasible, because it is capable of generating income to offset all operating expenses with remaining income to cover debt service and or profit. Maximum Productivity Test Considering the tests of legal permissibility, physical possibility, and financial feasibility, use of the current subject mobile home park is expected to produce the highest return to the land after all other agents of production have been satisfied. Conclusion The current mobile home park use is consistent with the highest and best use of the site as vacant. There are no alternative uses that could reasonably be expected to provide a higher market value than the current use. The total property value produced with the current improvements exceeds the value of the site, as if vacant. Therefore, the current mobile home park use is concluded to be maximally productive, and the highest and best use as improved. The subject is a 12-pad mobile home park and a separate mobile home lot. For purposes of reasonable analysis, the subject is valued as a 13-pad mobile home park.

19 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition (Chicago: Appraisal Institute), 2002, 135-136

25

Subject Property Valuation Analyses

Subject Property Valuation Analysis

26

SALES COMPARISON APPROACH The Sales Comparison Approach refers to “The process of deriving a value indication for the subject property by comparing similar properties that have recently sold with the property being appraised, identifying appropriate units of comparison, and making adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market-derived elements of comparison. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant, when an adequate supply of comparable sales is available.” 20 “A major premise of the sales comparison approach is that an opinion of the market value of a property can be supported by studying the market’s reaction to comparable and competitive properties.” 21

Market concepts and principles that influence property value are: anticipation, change, supply and demand, substitution, and balance. The following steps are taken in estimating the market value of the subject property using the Sales Comparison Approach:

Research recent sales and/or listings of comparable properties;

Select the most comparable sales and/or listings, and summarize the data pertinent to the comparables;

Adjust the comparables for differences in the various elements of comparison;

Summarize the analysis and conclude a value indication based upon the adjusted sale prices of the comparables.

In analyzing the individual comparables, the price per-pad is selected as the operative units of comparison. These are the units of comparison most commonly quoted and/or used by local market participants, brokers, developers, sellers, and purchasers when discussing sales transactions and is considered the most relevant in order to produce consistent results for the subject property. Sales activity in the subject neighborhood has been limited, and conveyances of properties similar to the subject property are scarce. Therefore, it is necessary to utilize some sales from the extended market area (State of Alabama). The following conveyances represent the best-known market data currently available. The subject is a 12-pad mobile home park and a separate mobile home lot. For purposes of reasonable analysis, the subject is valued as a 13-pad mobile home park.

20 Appraisal Institute, The Appraisal of Real Estate, 13th Edition (Chicago: Appraisal Institute), 2008, 297 21 Appraisal Institute, The Appraisal of Real Estate, 13th Edition (Chicago: Appraisal Institute), 2008, 297

27

SALES COMPARISON APPROACH – CONTINUED

Improved Sale No. 1

Property Identification Record ID 9804 Property Type Multi-Family, Mobile Home Park Address 5001 Glade Road, Anniston, Calhoun County, Alabama 36206 Tax ID 18-04-20-2-006-006.000 & 18-04-20-2-006-007.000 MSA Anniston-Oxford Sale Data Grantor B L&R Inc. Grantee Jason & Pamela Rowland Sale Date May 14, 2018 Deed Book/Page 3233/80 Property Rights Leased Fee Marketing Time 1 Month Conditions of Sale Arm's Length Verification Teri Acker-Keller Williams Realty Group; 256-241-1500, June 03,

2019; Other sources: Public Records, Deed, MLS#809050, Confirmed by Ashley Joseph

Sale Price $110,000 Cash Equivalent $110,000 Land Data Land Size 3.300 Acres or 143,748 SF Zoning Not Zoned Topography Level Utilities EW Shape Rectangular

28

Improved Sale No. 1 (Cont.)

Flood Info Zone X General Physical Data Number of Pads 10 Year Built 1976 Income Analysis Net Operating Income $12,375 Indicators Sale Price/Pad $11,000 Occupancy at Sale 100% Overall or Cap Rate 11.25% Net Operating Income/Pad $1,238 Remarks Sale of a 10-pad mobile home park located along Glade Road in Anniston, Alabama. The property was originally listed for $149,900 and sold for $110,000 (73% of asking) after being on the market for approximately one month. The park has no amenities.

29

Improved Sale No. 2

Property Identification Record ID 9805 Property Type Multi-Family, Mobile Home Park Address 100 Solomon Road, Wilsonville, Shelby County, Alabama 35186 Tax ID 20-5-22-0-000-001.000 MSA Birmingham-Hoover Sale Data Grantor Claudia Smith McKenzie Grantee Daryl A. Parks Sale Date May 26, 2017 Deed Book/Page 20170531/189370 Property Rights Leased Fee Marketing Time 1 Day Conditions of Sale Arm's Length Verification Debra King-Down South Realty; 205-669-1933, June 04, 2019; Other

sources: Public Records, Deed, MLS#782341, Confirmed by Wayne Sumners

Sale Price $125,000 Cash Equivalent $125,000 Land Data Land Size 6.700 Acres or 291,852 SF Zoning Not Zoned Topography Level

30


Utilities EW Shape Basically Rectangular Flood Info Zone X General Physical Data Number of Pads 7 Year Built 2010 Income Analysis Net Operating Income $12,650 Indicators Sale Price/Pad $17,857 Occupancy at Sale 85% Overall or Cap Rate 10.12% Net Operating Income/Pad $1,807 Remarks Sale of a 7-pad mobile home park located along Solomon Road in Wilsonville, Alabama. According to information provided by the listing agent, the property was 85% occupied at the time of sale. The property was originally listed for $125,000 and sold for $109,000 (87% of asking) after being on the market for one day.

31

Improved Sale No. 3

Property Identification Record ID 9803 Property Type Multi-Family, Mobile Home Park Address 3701 Highway 78, Oxford, Calhoun County, Alabama 36203 Tax ID 22-08-33-0-002-011.000 MSA Anniston-Oxford Sale Data Grantor Lindy & Cindy Herrell Grantee Sears Properties, LLC Sale Date April 07, 2017 Deed Book/Page 3216/62 Property Rights Leased Fee Marketing Time 22 Months Conditions of Sale Arm's Length Verification Linda Charles-ERA King Real Estate; 256-831-5656, June 03, 2019;

Other sources: Public Records, Deed, MLS#625923, Confirmed by Wayne Sumners

Sale Price $175,000 Cash Equivalent $175,000 Land Data Land Size 2.340 Acres or 101,930 SF Zoning Not Zoned Topography Level Utilities EW Shape Rectangular Flood Info Zone X

32


General Physical Data Number of Pads 15 Year Built 1980 Income Analysis Net Operating Income $19,200 Indicators Sale Price/Pad $11,667 Occupancy at Sale 93% Overall or Cap Rate 10.97% Net Operating Income/Pad $1,280 Remarks Sale of a 15-pad mobile home park located in Oxford, Alabama along Highway 78. The property was originally listed for $199,000, reduced to $185,000 and sold for $175,000 (88% of asking) after being on the market for approximately 22 months.

33

Improved Sale No. 4

Property Identification Record ID 9256 Property Type Multi-Family, Mobile Home Park Property Name Country Estates Mobile Home Park Address 275 Gate 5 Road, Alexandria, Calhoun County, Alabama 36250 Tax ID 17-02-03-2-002-039.001 MSA Anniston-Oxford Sale Data Grantor Harold D. Patterson Jr. Grantee DJM Equity, LLC Sale Date August 03, 2017 Deed Book/Page 3221/856 Property Rights Leased Fee Marketing Time 4.5 Months Conditions of Sale Arm's Length Verification Stewart Phillips-KW Commercial; 423-664-1900, July 18, 2018; Other

sources: Public Records, CoStar, Confirmed by Ashley Joseph Sale Price $530,000 Cash Equivalent $530,000 Land Data Land Size 6.000 Acres or 261,360 SF General Physical Data Property Type Mobile Home Park Number of Pads 40 Year Built 1973

34


Income Analysis Net Operating Income $53,000 Indicators Sale Price/Pad $13,250 Occupancy at Sale 95% Overall or Cap Rate 10% Net Operating Income/Pad $1,325 Remarks Sale of a 40-pad mobile home park located along Gate 5 Road in Alexandria, Alabama. The property reportedly sold for the original asking price of $530,000 after being on the market for approximately four and one-half months.

35

Improved Sale No. 5

Property Identification Record ID 8673 Property Type Multi-Family, Mobile Home Park Address 100 Cabana Lane, Albertville, Marshall County, Alabama 35951 Tax ID 16-07-35-0-000-016.000, 16-07-35-0-000-16.001 and 16-07-35-0-00-

011.000 MSA Albertville Micropolitan Area Sale Data Grantor John C. Weathers & Tracy Honea Grantee Building 242, LLC Sale Date August 24, 2017 Deed Book/Page 5902/329 Property Rights Leased Fee Marketing Time >9 Months Conditions of Sale Arm's Length Verification Tracy Honea-The Real Estate Group; 256-878-1000, September 29,

2017; Other sources: Public Records, Deed, MLS#274662, Confirmed by Ashley Joseph

Sale Price $400,000 Cash Equivalent $400,000 Land Data Land Size 18.700 Acres or 814,572 SF Zoning Not Zoned Topography Level Utilities EW Shape Irregular

36


Flood Info Zone X General Physical Data Property Type Mobile Home Park Number of Pads 19 Year Built 2001 Income Analysis Potential Gross Income $64,500 Net Operating Income $45,500 Indicators Sale Price/Pad $21,053 Occupancy at Sale 90% Gross Income Multiplier 6.20 Overall or Cap Rate 11.38% Net Operating Income/Pad $2,395 Remarks Sale of a 19-pad mobile home park located in Albertville, Alabama. The property was listed for $439,900 and sold for $400,000 after being on the market for over nine months.

37

SALES COMPARISON APPROACH - CONTINUED

Comparable Improved Sales Location Map

Comparable Improved Sales Summary Table

Sale No.

Record No.

City Date Sold Sale Price PadsSale Price

per PadYear Built

Cap. Rate (Ro)

O ccupancy At Sale

1 9804 Anniston, AL 05/14/18 $110,000 10 $11,000 1976 11.25% 100%

2 9805 Wilsonville, AL 05/26/17 $125,000 7 $17,857 2010 10.12% 85%

3 9803 Oxford, AL 04/07/17 $175,000 15 $11,667 1980 10.97% 93%

4 9256 Alexandria, AL 08/03/17 $530,000 40 $13,250 1973 10.00% 95%

5 8673 Albertville, AL 08/24/17 $400,000 19 $21,053 2001 11.38% 90%

$268,000 18 $14,965 1988 10.74% 93%

Improved Sales Summary

Average

38


Comparable Improved Sales Adjustment Grid

OTHER A D J US TM EN TS :

85% 93% 95% 90%100%92% (Stabilized)Occupancy a t Sa le

High

Ov e ra ll

$ 273,689

Una djus te d

$ 232,636

$ 143,000

A VER A GE

$ 135,850

$ 194,550 $ 180,079

A djus te d

Lo w

P e r-P a d

Lo w

$ 17,895.05$ 21,053.00

-15 %

High

A VER A GE $ 14,965.40 $ 13,852.26

-5 % -15 %N e t % A djus tm e nt - Othe r A djus tm e nts Only

$ 11,000.00

A djus te d P ric e B e fo re Othe r A djus tm e nts

Ov e ra ll A djus tm e nt

$ 11,0 0 0 $ 17 ,8 5 7

0.0% 0.0%

0%

Adjus ted P rice $ 11,000.00 $ 17,857.00 $ 11,667.00 $ 13,250.00 $ 21,053.00

N o n-R e a lty C o m po ne nts

Adjus tment 0% 0% 0% 0%

$ 11,6 6 7 $ 13 ,2 5 0 $ 2 1,0 5 3

-10 % 15 %

Similar

0%

Inferio r

0.0% 0.0%

Similar Similar

Similar

C o m pa ra ble N o .

$ 110,000Actua l Sa le P rice

Date o f Sale

$ 11,000 $ 17,857

1980

Lo c a t io n

P ercentage Adjus tment

Similar

0%

$ 17,857.00

0%

Augus t 3, 2017

$ 530,000$ 125,000 $ 175,000

P ads 7 15

Augus t 24, 2017

S ubje c t 1 42 3 5

May 14, 2018 May 26, 2017 April 7, 2017

$ 400,000

1913 10 40

2010 1980

0%

$ 21,053

0% 0%

20011973

$ 11,667.00 $ 13,250.00 $ 21,053.00

0%

$ 11,667 $ 13,250

$ 11,667.00

$ 17,857.00

0% 0% 0% 0%

$ 11,667.00 $ 13,250.00 $ 21,053.00

0% 0%0%0%

Superio r Infe rio r Simila r

-10%

$ 21,053.00$ 17,857.00$ 11,000.00 $ 13,250.00

10%

Gross % Adjustment - Other Adjustments Only 5 %

$ 17 ,8 9 5$ 15 ,2 3 8$ 10 ,5 0 0

10 % 15 % 15 %

Indic a te d Va lue

Times Es timated Marke t Va lue pe r Unit 10,500.00$

F ina l A djus te d P ric e pe r Unit $ 10 ,4 5 0

2 5 %

$ 10,450.00

R a ng e o f Va lue :

$ 15 ,17 8

-$Other

Es tima ted Va lue o f Subjec t P ro perty 136,500$

Number o f P ads 13

Sub-To ta l 136,500$

R o unde d To ………. 13 7 ,0 0 0$

1976Year Built

C o ndit io n

Adjus tment 0%

P ro pe rty R ig hts C o nv e ye d

Adjus ted P rice

0%

Simila r

Simila r Simila r0% 0%

0% 0%Simila r

Adjus ted P rice $ 11,000.00

$ 11,000.00

Adjus tment

Adjus tment

Adjus ted P rice

0%

P ercentage Adjus tment

Qua lity o f C o ns truc t io n

0%

Similar Superio r

0.0%

Simila r-15%0% -20% 0%

Superio rInfe rio r5%

Simila rP ercentage Adjus tment 0% 0%

5% 0%

Oc c upa nc y a t S a le Superio r

A m e nit ie s Similar Simila r

Simila r Simila r0% 0%

P ercentage Adjus tment 0% 0% 0%

P ercentage Adjus tmentSimila r

F ina nc ing Te rm s

C o ndit io ns o f S a le

Tim e -M a rke t C o ndit io ns

-5%

Copyright © 20 03 -2 019 Real Es tate Matrix, LLC. All Rights Reserved

P ric e / P a d

39


Elements of Comparison:

Elements of comparison are characteristics or attributes of properties and transactions that cause the prices of real property to vary. In some instances, adjustments for the first three elements of comparison (real property rights conveyed, financing terms, and conditions of sale) were already adjusted for in the sales comparable write-up sheets. Adjustments for the elements of comparison are typically applied in the following order:

Real Property Rights Conveyed This refers to “an element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the real property rights involved in a transaction.” 22 The type or level of property rights conveyed in a sale directly affects the price paid for a given property. No adjustments required.

Financing Terms This refers to “an element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the financing terms of a transaction.” 23 Financing terms are also referred to as cash equivalency adjustments. No adjustments required.

Conditions of Sale This refers to “an element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the motivations of either the buyer or a seller in a transaction, e.g., when the comparable transaction is not an arm's-length sale.” 24 No adjustments required.

Non-Realty Components This refers to non-realty items that may have been included in the sale price of either the comparables or the subject property. Examples are furnishings or business equipment. No adjustments required.

These adjustments are applied sequentially in the order indicated.

22 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition. (Chicago: Appraisal Institute), 2002, 234 23 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition. (Chicago: Appraisal Institute), 2002, 115 24 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition. (Chicago: Appraisal Institute), 2002, 59

40


Time - Market Conditions

This refers to “an element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the points in the real estate cycle at which the transactions occur. Also called a time adjustment, because the differences in dates of sale are often compared.”25 Real estate values normally change over time due to changes in market conditions. The rate of change fluctuates as a function of changing perceptions regarding prevailing market conditions when values have appreciated or depreciated. This adjustment category reflects differences in market conditions occurring between the effective date of the appraisal and the sale date of a comparable, not just the passage of time. Time - Market Conditions adjustments are applied after the previously described elements of comparison are adjusted, and before adjustments for any of the following combined adjustments for physical characteristics: condition, quality of construction, building size, etc.

Property values have remained relatively static in the subject market area over the past few years. All comparable sales reflect current market conditions; therefore, no adjustments are required.

Physical Characteristics

This refers to “An element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in characteristics such as size, age (at the time of the transaction), condition, functional utility, and quality of the improvements.” 26

This adjustment category reflects differences between the subject property and the comparables in terms of building size, architectural style, condition, quality of construction, functional utility, site size or other physical characteristics that influence sale prices. The value added or lost by the presence or absence of a particular item in a comparable property does not necessarily equal the cost of installing or removing the item. Therefore, an adjustment according to the contributory value of the item or component must be applied. The following adjustments are based on qualitative analysis:

Condition: This adjustment considers the overall condition of the subject property and comparables based on year constructed and renovations. The subject property was constructed in 1980. Comparables #1 and #3 are considered overall similar to the subject and require no adjustments. Comparables #2 and #5 are of newer construction, are considered superior to the subject and require downward adjustments. Comparable #4 is of older construction, is considered inferior to the subject and requires an upward adjustment. Quality of Construction: This adjustment considers the overall construction quality of the subject and comparables based on construction costs and the overall design and/or appeal of the improvements to the typical investor. All comparables are considered overall similar to the subject and require no adjustments. Amenities The subject property has no significant amenities. All comparables are considered overall similar to the subject and require no adjustments.

25 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition. (Chicago: Appraisal Institute), 2002, 175 26 Appraisal Institute, The Dictionary of Real Estate Appraisal - 4th Edition. (Chicago: Appraisal Institute), 2002, 213

41


Occupancy at Sale The subject’s stabilized occupancy is estimated at 92% (Physical). Comparable #1 was 100% occupied on the date of sale, is considered superior to the subject and requires a downward adjustment. Comparable #2 was 85% occupied on the date of sale, is considered inferior to the subject and requires an upward adjustment. Comparables #3, #4 and #5 are considered overall similar to the subject and require no adjustments.

Location This adjustment category considers general market area influences as well as a property’s accessibility and visibility from a main thoroughfare. Comparables #1, #2 and #5 are considered overall similar to the subject and require no adjustments. Comparable #3 is considered superior to the subject due to its location in an area with greater property values and requires a downward adjustment. Comparable #4 is considered inferior to the subject due to its location in an area with lower property values and requires an upward adjustment. Sales Comparison Approach Conclusion While all sales are considered, primary consideration is given to Comparable #1 which requires the least gross adjustments and is the most recent sale. Therefore, the market value opinion via the Sales Comparison Approach is:

Value Indication via the Sales Comparison Approach – “As Is”

Rounded To………$137,000

42

INCOME APPROACH

The Income Approach uses one or more techniques in which the subject property’s anticipated net operating income is capitalized into a value indication. The validity of this approach depends on the quality of the data available to estimate income, vacancy, operating expenses and a capitalization rate. Other important factors concern the characteristics of the income stream, its economic life span, and the method used to convert the net income into value.

Following is an overview of the steps used in the Income Approach:

Estimate potential gross income. If the property is leased, this involves analyzing the subject’s current leases to establish the potential income from leased space, and then estimating market rent to apply to the subject’s vacant space by surveying comparable rental properties in the market,

Estimate vacancy and credit loss,

Estimate expenses,

Select a capitalization rate to use in direct capitalization,

Calculate the reconstructed net operating income,

If necessary, perform a discounted cash flow analysis to estimate value through yield analysis,

Reconcile a value indication for the income approach.

The two generally accepted techniques used in this approach are direct capitalization and yield capitalization (Discounted Cash Flow (DCF) analyses).

Yield Capitalization or Discounted Cash Flow (DCF) analysis is the capitalization method used to convert future benefits into present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investment’s income pattern, value change, and yield rate.

Direct Capitalization is a method used to convert an estimate of a single year’s income expectancy into an indication of value in one direct step, either by dividing the income estimate by an appropriate income rate or multiplying the income estimate by an appropriate factor.

The Direct Capitalization method are used in the analysis, since investors for this property type are currently emphasizing this method.

If applicable, the Realtyrates.com Investor Survey is also used to estimate appropriate capitalization and discount rate(s), market rent and expense change rate(s), vacancy rates, etc. used in the Income Approach analysis.

43

INCOME APPROACH – CONTINUED

Analysis of Income

Subject Status: The subject consists of 12 mobile home pads and a separate mobile home lot. For purposes of reasonable analysis, the subject is valued as a 13-pad mobile home park. According to information provided by the purchaser, 11 pads and the single mobile home lot are currently leased. Some of the mobile home pads and the single mobile home lot are currently leased with mobile homes in place. The contract rental rates for the mobile home park pads (pad only) range from $125 per-month to $215 per-month. Per the purchase agreement, the single mobile home lot will be leased for $150 per-month until the current owner (the seller of the mobile home park) moves. At the client’s request, the subject property is appraised as a mobile home park with no mobile homes included. Therefore, the market value opinion stated herein does not include the mobile homes owned by the park, or any additional income that may be generated from the rental of the mobile homes. A market rental rate is estimated for the subject pads. Water, septic services and trash removal are included in the rent; tenants pay all other utilities. The current occupancy of the park is reportedly 92% (11 of 12 pads rented). Including the single mobile home lot, the current occupancy rate is also 92% (12 of 13 pads/lots rented). According to information provided by the purchaser, the occupancy rate for the park has remained in the 90% to 100% range.

44

INCOME APPROACH - CONTINUED

Comparable Rentals: To estimate the market rental rates for the pad-only rentals, brokers and property owners in the competing market area are surveyed. The survey consists of asking and actual lease rates, terms, concessions, expense structure and other pertinent factors. Data regarding the comparable rentals used in the analysis, and a map depicting the location of the subject property in relation to the comparables, are presented as follows: Mobile Home Park Rental No. 1 Oak Grove Meadows Mobile Home Park 53 Road 9038 Rainsville, Alabama

Oak Grove Meadows Mobile Home Park has 50 pads and is currently 88% occupied. Pad rental rates (pad only) range from $130 to $150 per-month. Rental rates for pads with mobile homes in place rent in the range of $350 to $500 per-month (depending on size, age and condition of the mobile home). The owner pays trash removal and the tenant is responsible for all other utilities. The park has paved, and gravel streets and pads are dirt-surfaced. The park offers no significant common amenities. Verification: Manager, September 2019; Verified by David Z. Mazzei.

45

Mobile Home Park Rental No. 2 K&K Mobile Home Park 1706 Veterans Drive Scottsboro, Alabama

K & K is a 130-pad mobile home park located along Veterans Drive in the Scottsboro, Alabama area. According to the manager, the park is currently 92% occupied. The rental rates for the pads (pad only) range from $130 to $170 per-month. Pads with mobile homes in place rent in the range of $400 to $600 per-month (depending on size, age and condition of the mobile home). The park has paved roads and gravel-surfaced pads. The park offers no significant amenities and is in overall average condition. The tenants are responsible for all utilities. Verification: Manager, September 2019; Verified by David Z. Mazzei.

46

Mobile Home Park Rental No. 3 Mountain View Mobile Home Park 24 Happiness Drive Scottsboro, Alabama

Mountain View Mobile Home Park has 30 pads and is currently 97% occupied. Pad rental rates (pad only) are $140 per-month. Pads with mobile homes in place rent in the range of $350 to $525 per-month (depending on size, age and condition of the mobile home). The owner pays for trash removal and the tenant is responsible for all other utilities. The park has dirt/gravel streets and pads are dirt-surfaced. The park offers no significant amenities and is in overall average condition. Verification: Manager, September 2019; Verified by David Z. Mazzei.

47

Mobile Home Park Rental No. 4 North Woods Mobile Home Park 700 Saddle Club Drive Centre, Alabama

North Woods Mobile Home Park has 24 pads and is currently 88% occupied. Pad rental rates (pad only) range from $120 to $140 per-month. Pads with mobile homes in place rent in the range of $375 to $450 per-month (depending on size, age and condition of the mobile home). The park has gravel streets and pads are dirt-surfaced. The tenant is responsible for all utilities. There are no significant park amenities. Verification: Manager, September 2019; Verified by David Z. Mazzei.

48

Mobile Home Park Rental No. 5 Country Estates Mobile Home Park 26 Estate Drive Rainsville, Alabama 35986

Country Estates Mobile Home Park has 39 pads and is currently 95% occupied. Pad rental rates (pad only) are $140 per-month. Pads with mobile homes in place rent for $450 per-month. The park has paved streets and pads are dirt-surfaced. The owner pays for septic services; the tenant is responsible for all other utilities. There are no significant park amenities. Verification: Owner & REM Appraisal, July 2019; Verified by Wayne Sumners.

49


Comparable Rental Mobile Home Parks Location Map

50


Conclusion: The monthly contract rental rates for the comparable mobile home parks are depicted in the following table:

Low High Low High1 Oak Grove Meadows MHP Rainsville, AL 50 88% $130 $150 $350 $5002 K & K MHP Scottsboro, AL 130 92% $130 $170 $400 $6003 Mountain View MHP Scottsboro, AL 30 97% $140 $140 $350 $5254 North Woods MHP Centre, AL 24 88% $120 $140 $375 $4505 Country Estates MHP Rainsville, AL 39 95% $140 $140 $450 $450

55 92% $132 $148 $385 $505

Mobile Home Pads - Comparable Rentals Summary

Monthly Rental Rates (Pad & MH)

Average

Rental # Park Location Pads OccupancyMonthly Rental Rates

(Pad Only)

A total of five rental comparables from the subject property’s immediate and more general market area are employed in the analysis. The comparables have pad rental rates (pad only) ranging from $130 per-month to $170 per-month. All comparables are considered overall similar to the subject in terms of location, condition, quality and amenities. The subject is rented with some mobile homes, but most pads are pad-only rentals. At the request of the client, the mobile home park is valued based on pad-only rentals. A pad rental rate of $140 per-month is estimated for the subject and is deemed market rent. Water, septic services and trash removal are included in the rental rate; tenants are responsible for all other utilities. According to information provided by the purchaser, the rental rate for one pad is limited to $125 per-month until the tenant moves, and the separate mobile home lot is leased for $150 per-month until the seller moves. There is no stated move date and the tenants can remain as long as desired.

51


Estimate of Potential Gross Income The annual potential gross income at market rent for the subject property is estimated below:

Pad Rentals 11 $140 $1,680 $18,480Pad Rental 1 $125 $1,500 $1,500Lot Rental 1 $150 $1,800 $1,800

Weighted Average - $138 - -Total 13 - $4,980 $21,780

Estimated Potential Gross IncomeTotal Annual Income

Annual Rental Rate / Pad

Monthly Rate / Pad

PadsDescription

Other Income No other income is estimated for the subject property.

Vacancy / Credit Loss: The subject is currently 92% occupied. Occupancy rates for the comparable rentals are depicted in the chart below:

1 Oak Grove MHP 88%2 K&K MHP 92%3 Mountain View MHP 97%4 North Woods MHP 88%5 Country Estates MHP 95%

92%Average

Comparable Rental Occupancy Rates

Rental # Park Occupancy

The comparable rentals indicate occupancy rates in the range of 88% to 97% (Average of 92%). Based on the occupancy rates of the comparable rentals and discussions with market participants, the stabilized vacancy and credit loss for the subject is estimated at 10% (8% physical vacancy and 2% credit loss).

52


Estimated Stabilized Expenses Although requested, detailed historical operating data were not provided to the appraisers. Therefore, stabilized operating expenses for the subject property are estimated utilizing expense comparables and national investor surveys. The estimated operating expenses are for the 12 months following the effective date of the appraisal and assume typical professional management.

Mobile home parks similar to the subject property are typically leased on a gross basis. Under a gross lease arrangement, the landlord is responsible for paying property taxes, insurance, repairs and maintenance. The tenant is responsible for paying utilities. In the case of the subject, water and septic services are paid by the owner; the tenant pays all other utilities. Operating expense data obtained from other mobile home parks are presented in the chart below.

$/Pad % EGI $/Pad % EGI $/Pad % EGI $/Pad % EGI $/Pad % EGI $/Pad % EGI $/Pad % EGI $/Pad % EGI

1 $48 3.00% $20 1.20% $60 3.80% $75 4.70% $26 1.70% $15 1.00% $52 3.30%

2 $123 6.00% $34 1.70% $50 2.40% $23 1.10% $20 1.00% $60 2.90% $62 3.00%

3 $53 3.00% $117 6.66% $27 1.50% $25 1.40% $153 8.70% $63 3.60% $48 2.70%

4 $141 8.00% $51 2.90% $25 1.40% $110 6.20% $60 3.40% $65 3.70% $60 3.40%

5 $58 2.80% $80 3.94% $33 1.60% $26 1.26% $143 7.02% $61 3.00% $60 2.95%

6 $100 8.00% $44 3.50% $54 4.30% $50 4.00% $20 1.60% $24 1.90% $52 4.20%

7 $201 5.00% $101 2.34% $57 1.25% $100 2.49% $1,200 30.91% $50 1.25% $125 3.12%

8 $267 7.00% $52 1.40% $80 2.10% $250 6.60% $500 13.10% $75 2.00% $0 0.00%

9 $110 5.00% $34 1.50% $41 1.90% $180 8.20% $56 2.50% $115 5.20% $191 8.70%

Average $122 5.31% $59 2.79% $47 2.25% $93 3.99% $242 7.77% $59 2.73% $81 3.92%

Number

MOBILE HOME PARK EXPENSE COMPARABLESManagement

Included in Mgt.

Included in Mgt.

Taxes Misc/Adm.Insurance Maint./Repairs Utilities

Included in Mgt.

Included in Mgt.

Included in Mgt.

Included in Mgt.

Trash Removal

Included in Mgt.

Included in Mgt.

Included in Mgt.

Included in Mgt.

Payroll

53


Management:

Management fees are estimated at 7% of the Effective Gross Income (EGI). This estimate is within the range indicated by real estate professionals, who state that management fees for similar properties are generally in the range of 3% to 8% of EGI. This estimate is also within the range indicated by the expense comparables (2.8% to 8%) retained in the appraisers’ work file and incorporated herein by reference.

Ad Valorem Taxes:

Current Ad Valorem Taxes are $831 annually (rounded) or approximately $64 per-pad.

Property Insurance:

Property insurance is estimated at $780 annually or $60 per-pad. This estimate is within the range indicated by the expense comparables ($25 to $80 per-pad) retained in the appraisers’ work file and incorporated herein by reference.

Repairs / Maintenance:

Repairs and maintenance expenses are estimated at $975 annually or $75 per pad. This estimate is within the range indicated by the expense comparables ($23 to $250 per-pad) retained in the appraisers’ work file and incorporated herein by reference. Utilities:

The owner pays for common area utilities, septic service and trash removal. Utility expenses are estimated at $1,300 annually or $100 per pad. This estimate is within the range indicated by the expense comparables (range of $20 to $1,200 per-pad) retained in the appraisers’ work file and incorporated herein by reference.

Administrative and Miscellaneous:

Administrative and miscellaneous expenses are estimated at $325 annually or $25 per pad. This estimate is within the range indicated by the expense comparables ($15 to $115 per-pad) retained in the appraisers’ work file and incorporated herein by reference.

Payroll Expenses:

Payroll expense is included in the management fee and administrative expenses. Trash Removal:

Trash removal expense is included in the utilities expense.

54


Reserves:

This expense category accounts for the cost of periodic replacement of capital items. Reserves for the subject are estimated at $650 annually or $50 per pad, which is in the lower end of the range indicated by the RealtyRates.com Investor Survey. Reserve expense in the lower-end of the range is deemed reasonable as capital expenditures for pad-only mobile home parks are less than for parks that must maintain mobile homes.

55


VALUE BASED ON DIRECT CAPITALIZATION Direct Capitalization is defined as:

(1) - A method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, either by dividing the income estimate by an appropriate rate or by multiplying the income estimate by an appropriate factor. (2) - A capitalization technique that employs capitalization rates and multipliers extracted from sales. Only the first year income is considered. Yield and value change are implied, but not identified. Source: The Dictionary of Real Estate Appraisal – 4th Edition

Derivation of Overall Capitalization Rate: Overall capitalization rates can be extracted directly from comparable sales, by mortgage-equity techniques (band-of-investment), or from national publications such as the PwC. A debt coverage ratio is typically used to determine the overall viability of the final reconciled capitalization rate. The various methods employed to develop an appropriate capitalization rate for the subject property are described as follows:

Mortgage-Equity Capitalization Method: This method develops a capitalization rate that is a weighted average of the return on investment required to provide a competitive return on equity and to simultaneously service any mortgage debt on the subject property. This recognizes that a typical investor will obtain the most favorable mortgage financing available in order to maximize yield on a minimum down payment. Comparable Sales Method: This method involves researching comparable sales and analyzing the relationship between the net operating income and value of the property. Specifically, if net operating income after expenses is known, an indicated overall rate can be obtained by dividing the income of the property by the sale price. If a sufficient number of sales are available to discern a pattern, the applicable overall rate for the subject property is selected by inference.

Debt Coverage Ratio Method: This method considers the ratio of Net Operating Income (NOI) to Annual Debt Service. This is a formula whereby lenders attempt to ensure a “cushion,” whereas if the property income declines; the borrower can still meet the debt service on the mortgage loans.

Each method is separately analyzed on the following pages.

56

INCOME APPROACH - CONTINUED Mortgage-Equity Capitalization Method: The following table depicts typical capitalization rates, mortgage rates and terms for the Mobile Home Parks market, as indicated by the most recent edition of the RealtyRates.com – Investor Survey.

Comparable Sales Method: Capitalization rates extracted from the comparable sales previously presented in this report are depicted in the following table:

Record No. City, State Date Sold Sale Price NO I PadsSale Price

per PadNO I per

PadCap. Rate

(Ro)

9804 Anniston, AL 05/14/18 $110,000 $12,375 10 $11,000 $1,238 11.25%

9805 Wilsonville, AL 05/26/17 $125,000 $12,650 7 $17,857 $1,807 10.12%

9803 Oxford, AL 04/07/17 $175,000 $19,200 15 $11,667 $1,280 10.97%

9256 Alexandria, AL 08/03/17 $530,000 $53,400 40 $13,250 $1,325 10.00%

8673 Albertville, AL 08/24/17 $400,000 $45,500 19 $21,053 $2,395 11.38%

$268,000 $28,625 18 $14,965 $1,609 10.74%

Improved Sales Capitalization Rates

Average

57

INCOME APPROACH - CONTINUED The methods used to estimate the overall capitalization rate for the subject property are depicted in the following graphic. A reconciled overall capitalization rate of 10.5% is estimated for the subject property.

9804 $ 11,000 $ 1,238 $ 746 11.25% 20% 2.25%

9805 $ 17,857 $ 1,807 $ 1,123 10.12% 20% 2.02%

9803 $ 11,667 $ 1,280 $ 416 10.97% 20% 2.19%

9256 $ 13,250 $ 1,325 $ 431 10.00% 20% 2.00%

8673 $ 21,053 $ 2,395 11.38% 20% 2.28%

65% x 7.73% = 5.03%

35% x 14.00% = 4.900%

9.93%

9.95% $ 13 ,4 4 4 $ 1,4 13 10 .5 9 %

100% 10.74%

10.75%

M e tho d R o % Applied To ta l

9.95% 30% 2.99%

10.75% 70% 7.53%

10 .3 5 % - -

10 0 % -

10 .5 1%

10 .5 0 %

x DCR = R o

65% x 7.73% = 5.03% x 2 .0 9 = 10.50%

x DCR = R o

65% x 7.73% = 5.03% x 1.2 = 6.03%

65% x 7.73% = 5.03% x 1.3 = 6.53%

65% x 7.73% = 5.03% x 1.4 = 7.04%

65% x 7.73% = 5.03% x 1.5 = 7.54%

A v e ra g e

Indic a te d D e bt C o v e ra g e R a t io :

M o rtg a g e C o m po ne nt

M o rtg a g e C o m po ne nt

R a ng e o f D e bt C o v e ra g e R a t io s :

R e c o nc ile d C a pita liza t io n R a te

R o unde d To …………….

Debt Coverage Ratio

To ta l

Band of Investment

6.00%

Lo an to Va lue Ratio

Amortization Period (Years)

A s s um pt io ns :

25

Fixed Inte res t Ra te

65%

Capita liza tio n Rate

R o unde d To

Mo rtgage Co mpo nent

14.00%

7.73%

Equity Dividend Rate

Annua l Co ns tant

Equity Co mpo nent

Ro Bas ed o n Co mparable Sales

Ro Bas ed o n Band o f Inves tment

Reconciled Capitalization Rate

A v e ra g e

To ta l

R o unde d To …………………………….

Ro Bas ed o n Inves tment Survey Da ta

14-May-18

26-May-17

7-Apr-17

3-Aug-17

24-Aug-17

Comparable Sales

N OI / Unit

Expe ns e s P e r-P a d

C a p. R a te

P ric e / Unit

R e c o rd N o .

% A pplie d

To ta lD a te S o ld

Debt Coverage Ratio Method: The debt coverage ratio calculated based on the reconciled overall capitalization rate of 10.50% is 2.09, which is slightly above the upper-end of the range indicated by the RealtyRates.com – Investor Survey, but is deemed reasonable based on the subject’s size, location, condition and quality.

58


Income: % of PGI

21,780$ 1,675$ 100.0%

-$ -$

-$ -$

21,780$ 1,675$ 100.0%

(2,178)$ 168$ 10.0%

19,602$ 1,508$ 90.0%

% of EGI

1,372$ 106$ 7.0%

831$ 64$ 4.2%

780$ 60$ 4.0%

975$ 75$ 5.0%

1,300$ 100$ 6.6%

325$ 25$ 1.7%

-$ -$

650$ 50$ 3.3%

(6,233)$ 479$ 31.8%

13,369$ 1,028$ 68.2%

NOI \ Cap Rate = Value

$13,369 \ 10.50% = 127,322$

-$

-$

127,322$

127,000$

Value by Direct Capitalization Approach

Description: Total Per Pad %

Base Rental Revenue

Miscellaneous Income

Expense Reimbursement Revenue

Potential Gross Income

Less Vacancy & Credit Loss

Effective Gross Income

Expenses:

Mng.

Taxes

Insurance

Maintenance/Repairs

Utilities

Admin.

Payroll Expenses

Reserves

Total Expenses

Total Value Indication

Rounded To…………………………

Net O perating Income (NO I)

Value Indication by Direct Capitalization Approach:

Other

Value Indication via the Income Approach – “As Is”

Rounded To………$127,000

59

RECONCILIATION Reconciliation involves weighing each value indication derived from the various valuation methodologies to arrive at a final value conclusion. Reconciliation is required because different value indications can result from the use of multiple approaches and sometimes within the application of a single approach. Reconciliation criteria are “The criteria that enable an appraiser to form a meaningful, defensible conclusion about the final value opinion. Value indications are tested for the appropriateness of the approaches and adjustments applied, the accuracy of the data, and the quantity of evidence analyzed.” 27 The reconciliation process is now undertaken for the subject property. The Cost Approach assumes that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility. This approach is particularly applicable when the improvements being appraised are proposed construction, or relatively new and represent the highest and best use of the land, or when the property has unique or specialized improvements for which there are little or no sales data from comparable properties. The subject improvements are of older construction and exhibit higher levels of depreciation as compared to properties that were more recently constructed. From a Cost Approach standpoint, depreciation can be difficult to measure in older properties, although current cost new estimates are usually reliable. The Cost Approach is deemed inapplicable because of the age of the site improvements and the inherent difficulty in accurately measuring accrued depreciation, and because market participants typically do not give any consideration to this approach when purchasing an older mobile home park.

The Sales Comparison Approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is more reliable when sufficient reliable, verifiable market data are available, but is less reliable in an inactive market, or when estimating the value of properties for which no reliable comparable sales data are available. It is also questionable when sales data cannot be verified with principals in the transaction. All the comparable sales are located in Alabama and are reflective of current market conditions. The Sales Comparison Approach is given consideration in the final reconciliation. The Income Capitalization Approach reflects the market’s perception of a relationship between a property’s potential income and its market value; a relationship expressed as a capitalization rate. This approach converts the anticipated benefits (dollar income or amenities) to be derived from the property ownership into a value indication through capitalization. This approach is widely applied when appraising income-producing properties. Mobile Home Park properties are typically purchased for the income-generating capability. Therefore, the Income Approach is given primary consideration in the final reconciliation.


60

RECONCILIATION - CONTINUED

Final reconciliation is “The last phase in the development of a value opinion in which two or more value indications derived from market data are resolved into a final value opinion, which may be either a final range of value or a single point estimate. See also point estimate; range of value.” 28 Primary consideration is given to the Income Approach, leading to the following final market value opinion:

Extraordinary Assumptions: The market value opinion stated herein is subject to the Extraordinary Assumptions stated on Page 1. The use of Extraordinary Assumption may have affected the appraisal assignment results.


FINAL VALUE RECONCILIATION MATRIX PROSPECTIVE “AT STABILIZATION”

COST APPROACH Not Applicable SALES COMPARISON APPROACH $137,000 INCOME APPROACH $127,000

RECONCILED MARKET VALUE OPINION APPRAISAL PREMISE

INTEREST APPRAISED

DATE OF VALUE

VALUE OPINION

“As Is” Leased Fee September 21, 2019 $130,000

Source: REAL ESTATE MATRIX, LLC

61

EXPOSURE TIME AND MARKETING PERIOD

Exposure Time Exposure time refers to: “1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. (Appraisal Standards Board of The Appraisal Foundation, Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions") Market value estimates imply that an adequate marketing effort and reasonable time for exposure occurred prior to the effective date of the appraisal. In the case of disposition value, the time frame allowed for marketing the property rights is somewhat limited, but the marketing effort is orderly and adequate. With liquidation value, the time frame for marketing the property rights is so severely limited that an adequate marketing program cannot be implemented. (The Report of the Appraisal Institute Special Task Force on Value Definitions qualifies exposure time in terms of the three above-mentioned values.) See also marketing time.” 29 Generally, exposure time relates to what has occurred (retrospective) and is occurring (current) in the market; whereas, marketing period is a projection (prospective) of what is likely to occur in the market. Any sound opinion of value must consider what has occurred and what is most likely to occur. Both time periods are a function of price, time, property use, and the cost and availability of funds. The primary difference between the two time periods is that the marketing period also considers anticipated changes in market conditions (trends). Verified sales data, such as the number of days on the market for listed and sold properties and interviews with market participants, are the primary sources for both time estimates. Other important factors are consideration of buyer and seller motivations and their financial assumptions; identification of the most likely purchasers, and how available financing influences their buying decisions.


62

EXPOSURE TIME AND MARKETING PERIOD - CONTINUED

Inasmuch as the time periods are based on similar considerations, each of the following scenarios compares the estimated typical exposure period and marketing period based on how the market is perceived before and after the effective date of the appraisal:

When the market is stable before and after the effective date, the exposure and marketing periods are generally equal.

When the market is increasing before and after the effective date, then the exposure period is generally longer than the marketing period.

When the market is decreasing before and after the effective date, then the exposure period is generally shorter than the marketing period.

When the market is increasing before, but decreasing or stable after the effective date, then the exposure period is generally shorter than the marketing period.

When the market is decreasing before the effective date of the appraisal, but increasing or stable afterwards, then the exposure period is generally longer than the marketing period.

Based on these criteria, the obvious conclusion is that properties sell more quickly in stronger markets. The estimated exposure period for the subject property is 6 to 12 months. Marketing Period Marketing time refers to “An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, “Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions” address the determination of reasonable exposure and marketing time.) See also exposure time.” 30 Assuming professional marketing of the subject property at a price at or near the market value opined in this report, the estimated marketing period is 6 to 12 months. The marketing period estimate is based on the comparable sales data, interviews with local real estate professionals and investment survey data, if available.


63

Subject Area & Neighborhood Analysis

64

REGIONAL AREA ANALYSIS

REGIONAL MAP - SCOTTSBORO MICROPOLITAN AREA

The Scottsboro Micropolitan Area is comprised of Jackson County, Alabama which is located in the far northeastern portion of the state. The population and number of households have remained relatively static since 2010 (slight decline). Jackson County is a relatively stable market area. According to local real estate agents, the Jackson County market has remained relatively stable. The overall development and demographic nature of Jackson County should remain relatively static over the near and mid-term.

65

REGIONAL AREA ANALYSIS – CONTINUED

66


67


68


69

NEIGHBORHOOD ANALYSIS – RAINSVILLE, ALABAMA (CONTINUED)

70

NEIGHBORHOOD ANALYSIS – RAINSVILLE, ALABAMA (CONTINUED)

71

NEIGHBORHOOD ANALYSIS Location

The subject property is located in the city limits of Scottsboro, Alabama. The city of Scottsboro is located in Jackson County, Alabama at the far north eastern portion of the state. The general location of the subject’s neighborhood is depicted in the map below:

Boundaries

The boundaries of the neighborhood are characterized as Lake Guntersville to the south, Willow Street to the north, Alabama Highway 79 to the west and County Road 186 to the east. Access

The neighborhood has average access via a combination of federal and state highways. U.S. Highway 72, Alabama Highways 279, 21 and 35 are the major traffic and commercial arterial into the City of Scottsboro.

72

NEIGHBORHOOD ANALYSIS - CONTINUED

Immediate Land Uses & Growth Trends

Land uses within the neighborhood consist of a mixture of residential, commercial and vacant undeveloped land. Commercial development is light in nature and includes gas stations and older neighborhood retail located primarily along U.S. Highway 72. The city of Scottsboro consists of two main commercial districts. The first district is the downtown district, which includes the courthouse square where the Jackson County Courthouse is located. Commercial activity in this area has remained relatively stable during the current economic climate. Businesses in the area consist primarily of retail and office uses including law offices, banks, clothing boutiques, hardware stores and restaurants. The second district is located along the U.S Highway 72 corridor and consists primarily of newer commercial developments along a four-lane highway. Commercial activity in this market area has also remained somewhat stable.

Subject

73

NEIGHBORHOOD ANALYSIS –CONTINUED

Population and Household Projections

Population and household projections for a one, three and five-mile radius from the subject property are depicted in the table below.

1-M ile R adius 3-M ile R adius 5-M ile R adius

2023 Population 1,641 8,995 14,809

2018 Population 1,673 9,167 15,017

2010 Population 1,720 9,401 15,132

2000 Population 1,721 9,405 15,090

Projected Growth 2018 ‐ 2023 ‐1.91% ‐1.88% ‐1.39%

Growth 2010 ‐ 2018 ‐2.73% ‐2.49% ‐0.76%

Annual Growth 2000 ‐ 2010 ‐0.01% 0.00% 0.03%


2023 Households 576 3,737 6,163

2018 Households 592 3,820 6,264

2010 Households 622 3,953 6,356

2000 Households 654 3,995 6,320

Projected Growth 2018 ‐ 2023 ‐2.70% ‐2.17% ‐1.61%

Growth 2010 ‐ 2018 ‐4.82% ‐3.36% ‐1.45%

Annual Growth 2000 ‐ 2010 ‐0.49% ‐0.11% 0.06%

Population

Households

Population by Age

Population by age for a one, three and five-mile radius from the subject property are depicted in the table below.


0 ‐ 4 4.7% 5.0% 5.0%

5 ‐ 9 4.7% 5.3% 5.3%

10 ‐ 14 4.9% 5.7% 5.7%

15 ‐ 19 5.3% 5.6% 5.6%

20 ‐ 24 6.6% 5.3% 5.3%

25 ‐ 35 14.1% 12.2% 12.2%

35 ‐ 44 12.7% 11.7% 11.7%

45 ‐ 54 12.4% 12.7% 12.7%

55 ‐ 64 11.6% 14.3% 14.3%

65 ‐ 74 9.9% 12.2% 12.2%

75 ‐ 84 7.8% 7.4% 7.4%

85+ 5.3% 2.8% 2.8%

Source: STDBOnline

Year - 2018

Population by Age

74

NEIGHBORHOOD ANALYSIS –CONTINUED

Income Levels

The median and average household incomes and per-capita income for a one, three and five-mile radius from the subject.

Income ‐ 2018 1‐Mile Radius 3‐Mile Radius 5‐Mile Radius

$25,218 $37,350 $39,313

$39,124 $52,083 $56,487

$17,471 $22,182 $24,022

Income ‐ 2023 1‐Mile Radius 3‐Mile Radius 5‐Mile Radius

$26,825 $39,508 $41,514

$42,056 $55,543 $59,928

$18,485 $23,548 $25,404

Annual Percentage Change (2018‐2023)

1.27% 1.16% 1.12%

1.50% 1.33% 1.22%

1.16% 1.23% 1.15%

Source: STDBOnline

Median Household Income

Average Household Income

Per Capita Income

HOUSEHOLDS BY INCOME LEVELS

Per Capita Income





Per Capita Income

Households by Income Distribution

Households by income distribution for a one, three and five-mile radius from the subject are compared to the state and national income levels in the table below.

1‐Mile Radius 3‐Mile Radius 5‐Mile Radius

<$15,000 31.2% 20.1% 17.2%

$15,000 ‐ $24,999 18.4% 15.4% 14.5%

$25,000 ‐ $34,999 9.0% 11.6% 13.2%

$35,000 ‐ $49,999 9.8% 14.2% 14.2%

$50,000 ‐ $74,999 19.4% 17.5% 17.7%

$75,000 ‐ $99,999 5.9% 10.0% 9.6%

$100,000 ‐ $149,999 4.4% 7.2% 8.2%

$150,000 ‐ $199,999 1.5% 2.5% 3.2%

$200,000+ 0.2% 1.5% 2.1%

Source: STDBOnline

Year ‐ 2018

Households by Income Distribution

Conclusion:

The subject neighborhood can be characterized as a relatively stable market area. Overall, the population and number households are projected to stay relatively stable in to the near future. The neighborhood has a modest level of residential and commercial development. The overall development and demographic nature of the neighborhood should remain relatively constant over the near and mid-term

75

Addenda (Exhibits and Qualifications of Appraisers)

76

FLOOD MAP

77

WETLANDS MAP

78

RENT ROLL

79

LEGAL DESCRIPTION

Parcel No. 27-08-27-0-000-015.002

Source of Legal: Recorded Deed

Parcel No. 34-01-11-0-000-021.013

Lot 13 Shady Acres Subdivision.

Source of Legal: Tax Records

80

ENGAGEMENT LETTER

81

82

ASSUMPTIONS AND LIMITING CONDITIONS

1. The liability of Real Estate Matrix, LLC, its employees and independent contractors is limited to the client only, and to the amount of the appraisal fee actually received. Further, there is no accountability, obligation, or liability to any third party. If this report is placed in the hands of anyone other than the client, the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions. Further, notwithstanding anything herein to the contrary, the client will forever indemnify and hold Real Estate Matrix, LLC, its officers, employees, and independent contractors harmless from any claims by third parties related in any way to the appraisal or study which is the subject hereof. Third parties shall include limited partners of client if client is a partnership and stockholders of client, if client is a corporation, and all lenders, tenants, past owners, successors, assigns, transferees and spouses of client. The appraiser is in no way to be responsible for any costs incurred to discover or correct any deficiencies of any type present in the property; physically, financially, and/or legally. In the event of any litigation between the parties, and if the appraiser(s)/Real Estate Matrix, LLC is/are the prevailing party, then the appraiser(s)/Real Estate Matrix, LLC shall be entitled to recover from the non-prevailing party to such litigation its attorney fees and costs.

2. This appraisal was obtained from Real Estate Matrix, LLC and consists of “trade secrets and commercial or financial information” which is privileged and confidential and exempted from disclosure under 5 U.S.C. 552 (b) (4). Notify the appraiser(s) signing the report of any request to reproduce this appraisal in whole or in part.

3. Unless otherwise specifically noted in the body of this report, it is assumed that title to the property or properties appraised is clear and marketable and that there are no recorded or unrecorded matters or exceptions to total that would adversely affect marketability or value. Real Estate Matrix, LLC is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. Real Estate Matrix, LLC, however, has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances, easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. All mortgages, liens, encumbrances, leases and servitudes have been disregarded unless so specified within the report. Insurance against financial loss resulting in claims that may arise from defects in the subject property’s title should be sought from a qualified title company that issues or insures title to real property.

4. Unless otherwise specifically noted in the body of this report, it is assumed: that the existing improvements on the property or properties being appraised are structurally sound, seismically safe and code conforming; that all building systems (mechanical, electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; that the roof and exterior are in good condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that the improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. Real Estate Matrix, LLC professionals are not engineers and are not competent to judge matters of an engineering nature. Real Estate Matrix, LLC has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. Unless otherwise specifically noted in the body of this report, no problems were brought to the attention of Real Estate Matrix, LLC by ownership or management; Real Estate Matrix, LLC observed less than 100% of the entire interior and exterior portions of the improvements; and Real Estate Matrix, LLC was not furnished any engineering studies by the owners or by the party requesting this appraisal. If questions in these areas are critical to the decision process of the reader, the advice of competent engineering consultants should be obtained and relied upon. It is specifically assumed that any knowledgeable and prudent purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. Structural problems and/or building system problems may not be visually detectable. If engineering consultants retained should report negative factors of a material nature, or if such are later discovered, relative to the condition of improvements, such information could have a substantial negative impact on the conclusions reported in this appraisal. Accordingly, if negative findings are reported by engineering consultants, or later discovered, Real Estate Matrix, LLC reserves the right to amend the appraisal conclusions reported herein.

5. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraisers. Real Estate Matrix, LLC has no knowledge of the existence of such materials on or in the property. Real Estate Matrix, LLC, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. We have inspected as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal.

6. All furnishings, equipment and business operations, except as specifically stated and typically considered as part of real property, have been disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or off-site, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices based upon the information submitted to Real Estate Matrix, LLC. This report may be subject to amendment upon re-inspection of the subject property subsequent to repairs, modifications, alterations, and completed new construction. Any estimate of Market Value is as of the date indicated; based upon the information, conditions, and projected levels of operation.

7. It is assumed that all factual data furnished by others, including but not limited to the client, property owner, owner’s representative, or persons designated by the client or owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically noted in the appraisal report, Real Estate Matrix, LLC has no reason to believe that any of the data furnished contain any material error. Information and data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, legal descriptions, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in any of the above data could have a substantial impact on the conclusions reported. Thus, Real Estate Matrix, LLC reserves the right to amend any conclusions reported if made aware of any such error. Accordingly, the client-addressee should carefully review all assumptions, data, relevant calculations, and conclusions within 30 days after the date of delivery of this report and should immediately notify Real Estate Matrix, LLC of any questions or errors.

8. The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal. Further, the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date. This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions which occur subsequent to the date of the appraisal. However, Real Estate Matrix, LLC will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject.

9. Real Estate Matrix, LLC assumes there are no private deed restrictions limiting the use of the subject property in any way.

10. Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposit or subsurface rights of value involved in this appraisal, whether they be gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered unless otherwise stated in this appraisal report. Unless otherwise stated, it is also assumed that there are no air or development rights of value that may be transferred.

11. Real Estate Matrix, LLC is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly affect the value of the subject.

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ASSUMPTIONS & LIMITING CONDITIONS - CONTINUED

12. The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time. Market Value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value estimate(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market.

13. Any cash flows included in the analysis or forecasts of estimated future operating characteristics are predicated on the information and assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be assured. Actual results may vary from the projections considered herein. Real Estate Matrix, LLC does not warrant these forecasts will occur. Projections may be affected by circumstances beyond the current realm of knowledge or control of Real Estate Matrix, LLC.

14. Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect recommendations of Real Estate Matrix, LLC to buy, sell, or hold the properties at the values stated. Such decisions involve substantial investment strategy questions and must be specifically addressed on consultation form.

15. Unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing the use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based, unless otherwise stated.

16. Possession of this report or a copy thereof does not carry with it the right of publication. It may not be used for any purpose by any person or entity other than the party to whom it is addressed without the written consent of appraiser/Real Estate Matrix, LLC, and in any event only with properly written qualifications and only in its entirety. This report may not be duplicated in whole or in part without the specific written consent of Real Estate Matrix, LLC. Nor may this report or copies thereof be transmitted to third parties without said consent, which consent Real Estate Matrix, LLC reserves the right to deny. Exempt from this restriction is duplication for the internal use of the client-addressee and/or transmission to attorneys, accountants, or advisors of the client-addressee. Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, or otherwise conveyed, in whole or in part, in any public document without the express written consent of Real Estate Matrix, LLC, which consent Real Estate Matrix, LLC reserves the right to deny. Finally, this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a “sale” or “offer for sale” of any “security,” as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the exemptions herein, which may possess this report, is advised that they should rely on their own independently secured advice for any decision in connection with this property. Real Estate Matrix, LLC shall have no accountability or responsibility to any such third party.

17. Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report.

18. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. Component values for land and/or buildings are not intended to be used in conjunction with any property or appraisal and are invalid if so used.

19. The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized only to assist in visualizing matters discussed in this report. Except as specifically stated, data relative to size or area of the subject and comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced, or used apart from this report.

20. No opinion is intended to be expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Values and opinions expressed presume that environmental and other governmental restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or architectural analysis has been made known to Real Estate Matrix, LLC unless otherwise stated within the body of this report. If the appraiser(s) has not been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranty is made concerning obtaining these items. Real Estate Matrix, LLC assumes no responsibility for any costs or consequences arising due to the need, or lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance.

21. Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in this report. It is the responsibility of the client, or client’s designees, to read in full, comprehend and thus become aware of the aforementioned contingencies and limiting conditions. Neither the appraiser nor Real Estate Matrix, LLC assumes responsibility for any situation arising out of the client’s failure to become familiar with and understand the same. The client is advised to retain experts in areas that fall outside the scope of the real estate appraisal/consulting profession if so desired.

22. Real Estate Matrix, LLC assumes that the subject property analyzed herein will be under prudent and competent management and ownership; neither inefficient nor super-efficient.

23. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report.

24. No survey of the boundaries of the property was undertaken. All areas, dimensions and legal descriptions provided are assumed to be correct. It is further assumed that no encroachments to the realty exist.

25. The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable barrier removal construction items in this report, Real Estate Matrix, LLC has not made a specific compliance survey and analysis of the property to determine whether it is in conformance with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect on the value estimated herein. Since Real Estate Matrix, LLC has no specific information relating to this issue, and nor is Real Estate Matrix, LLC qualified to make such an assessment, the effect of any possible non-compliance with the requirements of the ADA was not considered in estimating the value of the subject property.

26. Client shall indemnify appraiser(s) and Real Estate Matrix, LLC to the extent that the client or its agents misrepresent, distort, or provide incomplete or inaccurate appraisal results to others, which acts of the client or its agents proximately result in damage to the appraiser(s) and/or Real Estate Matrix, LLC. The client shall indemnify and hold appraiser(s)/Real Estate Matrix, LLC harmless from any claims, expenses, judgments, or other items or costs arising as a result of the client’s failure or the failure of any of the client’s agents to provide a complete copy of the appraisal report to any third party. In the event of any litigation between the parties, and if the appraiser(s)/Real Estate Matrix, LLC is/are the prevailing party, then the appraiser(s)/Real Estate Matrix, LLC shall be entitled to recover from the non-prevailing party to such litigation its attorney fees and costs.

27. The appraiser(s) will not be required to give testimony or appear in court because of having made this appraisal with reference to the property in question, unless arrangements have been previously made therefore.

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APPRAISERS’ QUALIFICATIONS

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CURRENT STATUS

David Wayne Sumners is presently employed as a Certified

Commercial Real Estate Analyst/Advisor with:

EDUCATION BACKGROUNDYear Institution

1972-75 Auburn Universtiy1976 The University of Alabama at Birmingham, Birmingham, Alabama

Bachelor of Science » Major: History/Political Science

1985 The University of Alabama at Birmingham, Birmingham, Alabama Master of Arts » Major: Administration & Supervision

Noted Course Work & Professional Advancement from 2004 to Present

Course: Descript ion:

USPAP - Uniform Standards of Professional Appraisal Standards

The Appraisal of Real Estate

Blueprints and Construction

Marshall and Swift Residential Cost

Comparative Analysis - Appraisal Institute

Case Studies in Highest and Best Use - Appraisal Institute

Appraising Distressed Commercial Real Estate - Appraisal Institute

Appraisal Review - Appraisal Institute

Forecasting Revenue - Appraisal Institute

Rates and Ratios: Making Sense of GIMs, OARs and DCF - Appraisal Institute

Attacking and Defending an Appraisal in Litigation - Appraisal Institute

310 Basic Income Capitalization - Appraisal Institute

510 Advanced Income Capitalization - Appraisal Institute

This is a partial list, Mr. Sumners has attended numerous additional real estate and financial courses and seminars.

PROFESSIONAL MEMBERSHIP & LICENSUREFrom To Type of Membership/License

2007 Present State of Alabama Certified General Real Property Appraiser (G00805)

APPRAISAL/CONSULTING CLIENTS

Investors, Attorneys, Mortgage Companies, Municipalities and many other type entities that utilize valuation services.

REAL ESTATE EXPERIENCE

2145 14th Avenue SouthBirmingham, Alabama 35205

205.453.0222 Phone205.453.0211 Fax

PROFESSIONAL QUALIFICATIONS OF

David Wayne Sumners

REAL ESTATE MATRIX , LLCValuation & Advisory Services

Mr. Sumners is current with USPAP and in compliance according to the Appraisal Institute's Standards of Professional Appraisal Practice, and Appraisal Institute/State of Alabama continuing education standards.

Fortune 50 & Community Banks, S&L's, Credit Unions, Finance Companies, Institutional & Insurance Investors, Corporations, Individual

Mr. Sumnres began his appraisal experience in 1976 with I.N.A. Mapping and Appraisal Service. In 1978, he was employed by the Shelby County Tax Assessor's Office as a Mapper and Appraiser where he remained until 1980.0 He served as a member of the Shelby County Planning Commission from 1986 to 1992 including four years as chairman. Mr. Sumners has worked as a commercial appraiser since May 2004. He obtained the Certified General Appraiser license in 2007. Mr. Sumners joined Real Estate Matrix, LLC in January 2010. He has performed appraisals on a variety of property types including but not limited to the following: (existing and proposed construction) office, office/service and office/warehouse, retail buildings, shopping centers, medical facilities, religious and institutional properties, restaurants, special events facilities, apartments, mobile home parks, residential and commercial subdivisions, and vacant land.

web - www.realestatematrix.com; email - [email protected]

