REI Wise Investment Analysis Software (cash flow + reversion) ($39,289) $187,189 $413,513 $639,751 $865,969 PV (NOI + reversion) $2,478,896 $2,685,304 $2,893,195 $3,102,534 $3,313,288

For more information contact:

Veranda Court8037 W Elizabeth LaneFort Worth, TX 76116

John McGregor

VP of Investments

214-771-2978

[email protected]

Jerad Rector

President

214-605-9907

[email protected]

Phone: (214) 771-2978 ● 7000 Parkwood Blvd., Ste B400 ● Frisco, TX 75034 ● www.CREfirm.com

48 Unit Multifamily Investment offering●

Immediate as-is value add opportunity. Comparable rents are $125 to$150 per unit higher than subject.

●

35+ units just renovated with new appliances, cabinets, lighting, fixturesand flooring

●

Year 1 Cash on Cash nearly 10%●

New roof in process●

Table of Contents

Exclusive Listing & Disclaimer ..................................................................................... 3

Property Description .................................................................................................... 4

Executive Summary ...................................................................................................... 5

Real Estate Investment Details ..................................................................................... 6

Pro Forma Income/Expense .......................................................................................... 7

Cash Flow Analysis ...................................................................................................... 9

Financial Indicators ...................................................................................................... 10

Cumulative Analysis .................................................................................................... 11

Investment Return Analysis .......................................................................................... 12

Information on Broker Services .................................................................................... 13

Property DescriptionVeranda Court

8037 W Elizabeth LaneFort Worth, TX 76116

John McGregor214-771-2978

Property Description

Veranda Court Apartments, a 48-unit value addmulti-family property located inside Loop 820 inwestern Fort Worth, was built in 1983 andconsists of 1 bed, 1 bath units sitting on 1.65acres. Current ownership is completing majorrenovations including new roofs (in process),new cabinets, faux wood floors, lightingpackage, windows, sliding glass doors,appliances and fixtures. Under market rents givethe buyer immediate and significant upside withimproved investment returns. Comparable rentsare $125 to $150 per unit higher than subject.Additional upside can be realized byimplementing utility bill-back programs. Within a few minute’s drive to downtown Fort Worth off of I-30 and Loop 820, Veranda CourtApartments sit just south of the Naval Air Station Joint Reserve Military Base and near the RidgmarMall and the Ridglea Country Club. Veranda Court is also within 10 minutes of Texas ChristianUniversity (“TCU”) and the vibrant, new development activity on West 7th Street.

page 4 of 13

Executive SummaryVeranda Court



ACQUISITION COSTS

Purchase Price, Points and Closing Costs $2,540,000

Investment - Cash $540,000

First Loan $2,000,000

INVESTMENT INFORMATION

Purchase Price $2,500,000

Price per Unit $52,083

Price per Sq. Ft. NA

Income per Unit $6,600

Expenses per Unit ($2,578)

INCOME, EXPENSES & CASH FLOW

Gross Scheduled Income $316,800

Total Vacancy and Credits ($12,672)

Operating Expenses ($123,733)

Net Operating Income $180,395

Debt Service ($133,400)

Cash Flow Before Taxes $46,995

FINANCIAL INDICATORS

Cash on Cash Return Before Taxes 8.70%

Optimal Internal Rate of Return (yr 5) 28.12%

Debt Coverage Ratio 1.35

Capitalization Rate 7.22%

Gross Rent Multiplier 7.89

Gross Income / Square Feet $0.00

Gross Expenses / Square Feet $0.00

Operating Expense Ratio 40.68%

page 5 of 13

Real Estate Investment DetailsVeranda Court



ANALYSIS

Analysis Date May 2016

PROPERTY

Property Veranda Court

Property Address 8037 W Elizabeth LaneFort Worth, TX 76116

Year Built 1983

FINANCIAL INFORMATION

Down Payment $500,000

Closing Costs $20,000

Discount Rate 5.00%

PURCHASE INFORMATION

Property Type MultiFamily

Purchase Price $2,500,000

Units 48

Total Rentable Sq. Ft. 0

Resale Valuation 7.0% (capitalization of noi)

Resale Expenses 6.0%

LOANS

Debt Term Amortization Rate Payment LO Costs

Balloon $2,000,000 10 years 25 years 4.5% $11,117 $20,000

INCOME & EXPENSES

Gross Operating Income $304,128

Monthly GOI $25,344

Total Annual Expenses ($123,733)

Monthly Expenses ($10,311)

CONTACT INFORMATION

John McGregor

214-771-2978

[email protected]

Jerad Rector

214-605-9907

[email protected]

The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projectionsand analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax orother professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting,tax or other professional area before making any decisions.

page 6 of 13

Pro Forma Income/ExpenseVeranda Court



INCOME

Actual Per Unit Pro Forma Per Unit

Gross Potential Rent $316,800 $6,600 $388,800 $8,100

Less: Vacancy ($12,672) ($264) $0 $0

Misc. Income $0 $0 $38,004 $792

Effective Gross Income $304,128 $6,336 $426,804 $8,892

OPERATING EXPENSES

Actual Per Unit Pro Forma Per Unit

Property Management Fee $12,165 $253 $15,552 $324

Replacement Reserves $12,000 $250 $12,000 $250

water $28,671 $597 $28,671 $597

electricity $3,800 $79 $3,800 $79

trash $4,180 $87 $4,180 $87

Maintenance & Repairs $13,360 $278 $13,360 $278

taxes $36,000 $750 $36,000 $750

insurance $10,499 $219 $10,499 $219

pest control $1,299 $27 $1,299 $27

misc $1,759 $37 $1,759 $37

Total Expenses ($123,733) ($2,578) ($127,120) ($2,648)

Net Operating Income $180,395 $3,758 $299,684 $6,243

page 7 of 13

Pro Forma Income/ExpenseVeranda Court



UNIT MIX & ANNUAL SCHEDULED INCOME

Type Units Actual Total Pro Forma Total

1 bed/bath 48 $6,600 $316,800 $8,100 $388,800

TOTALS 48 $316,800 $388,800

ANNUALIZED INCOMEActual Pro Forma

Gross Potential Rent $316,800 $388,800

Less: Vacancy ($12,672) $0

Misc. Income $0 $38,004

Effective Gross Income $304,128 $426,804

Less: Expenses ($123,733) ($127,120)

Net Operating Income $180,395 $299,684

Debt Service ($133,400) ($133,400)

Net Cash Flow after Debt Service $46,995 $166,284

Principal Reduction $44,306 $44,306

Total Return $91,301 $210,590

ANNUALIZED EXPENSES

Actual Pro FormaProperty Management Fee $12,165 $15,552

Replacement Reserves $12,000 $12,000

water $28,671 $28,671

electricity $3,800 $3,800

trash $4,180 $4,180

Maintenance & Repairs $13,360 $13,360

taxes $36,000 $36,000

insurance $10,499 $10,499

pest control $1,299 $1,299

misc $1,759 $1,759

Total Expenses $123,733 $127,120

Expenses Per RSF $123,733.12 $127,120.00

Expenses Per Unit $2,578 $2,648

INVESTMENT SUMMARY

Price: $2,500,000

Year Built: 1983

Units: 48

Price/Unit: $52,083

RSF: 1

Price/RSF: $2,500,000.0

Lot Size: 1.65 acres

Floors: 2

Parking Spaces: 2.5/unit

Cap Rate: 7.22%

Pro Forma Cap Rate: 11.99%

GRM: 7.89

Pro Forma GRM: 5.86

FINANCING SUMMARY

Loan Amount: $2,000,000

Down Payment: $500,000

Loan Type: Balloon

Interest Rate: 4.5%

Term: 10 years

Monthly Payment: $11,117

DCR: 1.35

page 8 of 13

Cash Flow AnalysisVeranda Court



Description Year 1 Year 2 Year 3 Year 4 Year 5

GROSS SCHEDULED INCOME $316,800 $332,640 $349,272 $366,736 $385,072

Turnover Vacancy ($12,672) ($13,306) ($13,971) ($14,669) ($15,403)

Total Operating Expenses ($123,733) ($127,276) ($130,937) ($134,720) ($138,631)

NET OPERATING INCOME $180,395 $192,059 $204,365 $217,346 $231,039

Loan Payment ($133,400) ($133,400) ($133,400) ($133,400) ($133,400)

NET CASH FLOW (b/t) $46,995 $58,659 $70,965 $83,946 $97,639

Cash On Cash Return b/t 8.70% 10.86% 13.14% 15.55% 18.08%

Footnotes: b/t = before taxes;a/t = after taxes

page 9 of 13

Financial IndicatorsVeranda Court




Gross Rent Multiplier 8.13 8.25 8.36 8.47 8.57

Capitalization Rate 7.22% 7.68% 8.17% 8.69% 9.24%

Cash On Cash Return b/t 8.70% 10.86% 13.14% 15.55% 18.08%

Cash On Cash Return a/t 8.70% 10.86% 13.14% 15.55% 18.08%

Debt Coverage Ratio 1.35 1.44 1.53 1.63 1.73

Gross Income per Sq. Ft. $0.00 $0.00 $0.00 $0.00 $0.00

Expenses per Sq. Ft. $0.00 $0.00 $0.00 $0.00 $0.00

Net Income Multiplier 14.29 14.29 14.29 14.29 14.29

Operating Expense Ratio 40.68% 39.86% 39.05% 38.27% 37.50%

Loan To Value Ratio 75.89% 69.59% 63.74% 58.30% 53.24%

Footnotes: b/t = before taxes; a/t = after taxes

page 10 of 13

Cumulative AnalysisVeranda Court




Equity (appreciation) $77,070 $243,696 $419,493 $604,943 $800,554

Equity (loan reduction) $44,306 $90,648 $139,118 $189,816 $242,842

CASH FLOW (a/t) $46,995 $105,654 $176,619 $260,565 $358,204

Totals - To Date $168,371 $439,998 $735,230 $1,055,323 $1,401,600

Invested Capital ($540,000) ($540,000) ($540,000) ($540,000) ($540,000)

ROIC - To Date 31.18% 81.48% 136.15% 195.43% 259.56%

Footnotes: a/t = after taxes; ROIC = Return On Invested Capital

page 11 of 13

Investment Return AnalysisVeranda Court




Cash Flow - To Date $46,995 $105,654 $176,619 $260,565 $358,204

Net Resale Proceeds $478,752 $648,867 $851,679 $1,065,792 $1,292,737

Invested Capital ($540,000) ($540,000) ($540,000) ($540,000) ($540,000)

Net Return on Investment ($14,253) $214,521 $488,298 $786,357 $1,110,941

Internal Rate of Return N/A 18.90% 25.62% 27.65% 28.12%

Modified IRR -2.64% 18.39% 24.26% 25.59% 25.51%

NPV (cash flow + reversion) ($39,289) $187,189 $413,513 $639,751 $865,969

PV (NOI + reversion) $2,478,896 $2,685,304 $2,893,195 $3,102,534 $3,313,288

Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating IncomeReversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital.

page 12 of 13

North Texas Commercial Association of Realtors®

INFORMATION ABOUT BROKERAGE SERVICES

Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

TYPES OF REAL ESTATE LICENSE HOLDERS:

• A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.• A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.

A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents):

• Put the interests of the client above all others, including the broker’s own interests;

• Inform the client of any material information about the property or transaction received by the broker;

• Answer the client’s questions and present any offer to or counter-offer from the client; and

• Treat all parties to a real estate transaction honestly and fairly.

A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:

AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with theowner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum dutiesabove and must inform the owner of any material information about the property or transaction known by the agent, including informationdisclosed to the agent or subagent by the buyer or buyer’s agent.

AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through awritten representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any material

information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.

AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the writtenagreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined

print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary:

• Must treat all parties to the transaction impartially and fairly;

• May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and buyer) to

communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction.

• Must not, unless specifically authorized in writing to do so by the party, disclose:

• that the owner will accept a price less than the written asking price;

• that the buyer/tenant will pay a price greater than the price submitted in a written offer; and

• any confidential information or any other information that a party specifically instructs the broker in writing not to disclose,

unless required to do so by law.

AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. Asubagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND

CLEARLY ESTABLISH:

• The broker’s duties and responsibilities to you, and your obligations under the representation agreement.

• Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.

LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for

you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records

Worldwide Commercial, PLLC

Licensed Broker/Broker Firm Name or

Primary Assumed Business Name

Designated Broker of Firm

Licensed Supervisor of Sale Agent/Associate

Sales Agent/Associates's Name

9001217

License No.

License No.

License No.

License No.

[email protected]

Email

Email

Email

Email

800-474-5068

Phone

Phone

Phone

Phone

1996 NTCAR FORM 15 (1/96) PRODUCED WITH WINAIR FORMS© Page 1

Documents

REI Wise Investment Analysis Software (cash flow + reversion) ($39,289) $187,189 $413,513 $639,751 $865,969 PV (NOI + reversion) $2,478,896 $2,685,304 $2,893,195 $3,102,534 $3,313,288