Ferns Hotel th Street Oakland, CA Below Market Price: $ 4,982,000

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1 Introducing 33 Beautiful SRO s Plus 1 Retail Commercial Ferns Hotel th Street Oakland, CA Below Market Price: $ 4,982,000 Located in Booming downtown Oakland Location Located in the Nation s Fastest Growing Rental Market Market Cash on Cash 11.5%, Existing Cash on Cash 6% Market Cap Rate 7.5; Existing Cap Rate 5.8% $84,594 or 19% Upside in Annual Rents Market GRM- 10.8; Existing GRM Clear Section 1 and Section 2 Pest Clearances Great Add Value Investment High Growth City influencing great appreciation potential No deferred maintenance Strong Rent Upside! Trouble free Income, management and tenants! Great Investment Short or Long Term For more information about this fabulous opportunity: Please call Fred Lewis at (209) Visit or info@hotdealsoakland.com

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4 Ferns Hotel th Street Oakland, CA Price: $4,982,000 Down Payment: $1,500,000 Existing Capitalization Rate: 5.8% Market Cap Rate: 7.5% Existing Gross Rent Multiplier: 13.4 Market GRM: 10.8 Existing Cash on Cash 6% Market Cash on Cash: 11.5 Cost Per Residential Unit: $139,000 Commercial Unit $395,000 Complex Description: Assessor s parcel Number: The Ferns Hotel originally known as the Majestic ( ) is a small boutique 34 unit residential hotel. The Property is a four story wood frame building with commercial space on the street level. The hotel has two bathrooms and a single shower on each level and a single coin operated washer and dryer on the second floor. The hotel has new electrical upgrades and updated bathrooms and a recent tasteful 9 color interior and exterior paint job. Each room comes with a television, dresser, microwave oven, a small refrigerator, bed, bedding sink, free cable and Wi-Fi. The subject is a 7,813 square-foot, single room occupancy residential property with 33 rooms plus one street level commercial unit located at th Street, Oakland, Alameda County, CA. The property is situated on a 2,531 square foot site. The building is wood frame on a concrete foundation construction. The single room occupancy hotel (SRO) is akin to a studio. Ferns Hotel is a (33) unit Residential Hotel & (1) Retail Commercial Building. The commercial space is occupied by Money Mart, the largest check cashing establishment in the world. The Ferns Hotel is located downtown Oakland. There is lots of foot traffic which is convenient for tenants. The are many close government and commercial offices nearby. This property is well maintained with low expenses and excellent income. There is $84,494 potential annual upside in rents. There are 20 SRO s that have been substantially rehabilitated to include hardwood floors, a tasteful 4-color paint combination inside,9 colors on the exterior, new finish electrical and plumbing to include sinks and fixtures, heaters, lighting, and cabinets. The building is self sufficient with low maintenance. The Ferns also provides on-site laundry facility, large basement, controlled entry security with 16 camera surveillance system. The sewer lateral has been completed. Solar Upgrades: Over the last 2 months a solar electric system and LED lights were installed to reduce the PG&E bill 40%-60%. The system has a 10 year warranty on inverters and a 25 year warranty on the solar panels which is owned by the building. There is also a brand new boiler system for the hot water with warranty. Federal Grant: This property was entered in a lottery system for a Federal Grant for seismic retrofitting. The building has been selected and FEMA will fund the grant in the next few months. The grant funds will cover 75% of the total cost and will not have to be repaid. The City will loan the balance of the amount at 0% over 10 years. The building is currently not listed in the soft story list but will be added once the grant money is available. The above income and expenses are only estimates. Although the information contained herein is deemed reliable, no representations of any kind, expressed or implied, are being made as to the accuracy of such information. All of the data in this prospectus areestimates and approximations to include square footage. Any prospective purchaser and their tax and legal advisor should carefully verify all information contained herein and conduct an independent investigation. Seller bears no liability of any errors, inaccuracies or omissions.

5 Ferns Hotel th Street Oakland, CA Complex Potential: There is $84,594 or 19% of immediate annual upside in the rents. The apartment community has many shorter term tenancies, that upon turnover, may be rented at full market rents with cosmetic improvements to maximize rental return. Pest Clearance: There is a clear Section 1 and Section 2 Pest Clearance on the subject property. The Building is clean as a whistle. Also the sewer lateral had been upgraded and completed. Compelling Multifamily Fundamentals: There are high barriers to entry and few large sites for development in the Downtown Oakland region. Vacancy rates in the area remain at historic laws, rental rates continue to rise at a fast pace Area Description: Immediate access to the I-80, I-880 and I-580 freeways close proximity to 12th Street BART Station and A/C Transit bus stops. Public transportation is very suitable just one block away with AC transit bus lines, Bay Area Rapid Transit (BART) and a free bus service servicing the downtown area. Ferns Hotel is located in the Downtown Oakland Historical District. This premiere location is between Franklin and Broadway two blocks from Oakland s City Center and at the entrance to Frank Ogawa Plaza. The hotel has good foot traffic in the area with government offices, schools, shopping and restaurants. It is within walking distance to Lincoln University, Chinatown and several major corporations in the downtown area including AC transit, ATT and Kaiser Permanente Headquarters. Ferns Hotel may be listed in the National Registers of Historical places and may be available for federal tax credits, façade improvement funds and other incentives in Oakland Historic Preservation. Public transportation is very suitable just one block away with AC transit bus lines, Bay Area Rapid Transit (BART) and a free bus servicing and the downtown area. Hottest Apartment Market in the Country: The bay Area continues to lead the nation s apartment market in rent growth. According to MPF Research, during the first quarter of 2015, Oakland saw year-over-year rent growth of 14.1%. While shipping is still a major part of the local economy, Oakland is home to the corporate headquarters for everything from established consumer brands to younger tech businesses. The cultural diversity of the city is vast, meaning that it s easy to find art, food, and people from every corner of the world by just walking down the street.

6 Ferns Hotel th Street Oakland, CA Commercial Tenant Background Since their founding in 1979 as the Monetary Management Corporation, DFC Global has provided accessible and convenient financial services to unbanked and under-banked consumers. DFC Global Corp. is the largest provider of accessible consumer financial services in the world. By providing a wide variety of innovative and accessible financial solutions for over 30 years via a technology enabled web based underwriting and approximately 1,300 retail locations throughout the world. DFC s brands include Money Mart, Money Shop, Money Corner, Loan Mart, Payday Loans, Insta-Cheques, Check Casher, The Check Cashing Store, Cash Advance and Cash Advance USA, with many franchised locations across Canada, the United Kingdom and the United States. They offer financial products and services such as check cashing, single-payment consumer loans, longer term loans, money order services, money transfers, Western Union money orders, electronic tax filing, bill payments, foreign currency exchange, photo ID, Visa brand debit cards, gift cards and as well as preparation of legal documents. Rent Trends: As of September 2017, the average apartment rent in Oakland, CA is $1,316 for a studio, $1,660 for one bedroom, $2,122 for two bedrooms, and $2,548 for three bedrooms. Apartment rent in Oakland has increased by 3.8% in the past year. Commission Owner is a principal and not a broker. A selling commission of 3% will be paid for the procurement and actual consummation of the transaction. A higher commission can be negotiated if multiple brokers are involved. Two 30 day extensions need to be included in the agreement as seller is completing a 1031 exchange.

7 Annual Property Operating Data PURPOSE: Property Analysis PRICE: $ 4,652,000 NAME: Ferns Hotel DOWN PAYMENT: $ 1,396,000 LOCATION: th Street Oakland, CA TYPE OF PROPERTY: (33) Unit Apartment Building plus 1 Retail Commercial ASSESSED APPRAISED VALUES LAND: $ 1,152,000 IMPROVEMENTS: $ 3,750,000 PERSONAL PROPERTY: $ 80,000 TOTAL $ 4,982,000 PROPOSED: 1ST 70% LTV 4% 30 years $16,623 Monthly Payment EXISTING MARKET GROSS RENTAL INCOME $ 371,352 $ 456,420 Laundry $ 1,800 $ 1,800 TOTAL GROSS OPERATING INCOME $ 373,152 $ 458,220 LESS OPERATING EXPENSES Vacancy $ 8,100 $ 8,100 Property Insurance $ 8,440 $ 8,440 Real Estate Taxes $ 54,000 $ 54,000 Resident Manager $ 10,400 $ 10,400 Repairs & Maintenance $ 6,800 $ 6,800 Business Tax $ 1,972 $ 1,972 Rap Fee $ 2,587 $ 2,587 Cleaning $ 11,400 $ 11,400 SERVICES Rubbish $ 15,868 $ 15,868 UTILITIES **Electric & Gas $ 11,670 $ 11,670 Water & Sewer $ 8,587 $ 8,587 TOTAL OPERATING EXPENSES (50% Expense) NET OPERATING INCOME LESS: TOTAL ANNUAL DEBT SERVICE CASH FLOW $ 85,824 $ 85,824 $ 287,328 $ 372,396 $ 199,476 $ 199,476 $ 87,852 $ 172,920 The above income and expenses are only estimates. Although the information contained herein is deemed reliable, no representations of any kind, expressed or implied, are being made as to the accuracy of such information. All of the data in this prospectus are estimates and approximations to include square footage. Any prospective purchaser and their tax and legal advisor should carefully verify all information contained herein and conduct an independent investigation. Seller bears no liability of any errors, inaccuracies or omissions. ** A brand new solar system was installed in August 2017 with a 10 year warranty. The full impact of the savings has not been tracked at this time. A saving of 30% was assumed however 40%-70% is expected.

8 Summary Rent Roll Fern's Hotel Property Address: th Street Oakland, CA Unit Unit Current Market # Mix Rent Rent A SRO $ 648 $ 995 B SRO $ 913 $ 1,095 C SRO $ 687 $ 1, SRO $ 995 $ SRO $ 811 $ SRO $ 995 $ 1, SRO $ 648 $ 1, SRO $ 995 $ SRO $ 995 $ SRO $ 995 $ SRO $ 809 $ 1, SRO $ 882 $ 1, SRO $ 1,100 $ SRO $ 995 $ SRO $ 648 $ SRO $ 995 $ 1, SRO $ 995 $ 1, SRO $ 995 $ SRO $ 687 $ SRO $ 690 $ SRO $ 382 $ 1, SRO $ 813 $ 1, SRO $ 690 $ SRO $ 995 $ SRO $ 916 $ SRO $ 867 $ 1, SRO $ 694 $ 1, SRO $ 995 $ SRO $ 813 $ SRO $ 995 $ SRO $ 793 $ 1, SRO $ 1,095 $ 1, SRO $ 795 $ Store Money Mart $ 2,730 $ 3,800 Laundry Laundry $ 150 $ Units $ 31,200 $ 38,185 $ 374,396 $ 458,220 The above income and expenses are only estimates. Although the information contained herein is deemed reliable, no representations of any kind, expressed or implied, are being made as to the accuracy of such information. All of the data in this prospectus are estimates and approximations to include square footage. Any prospective purchaser and their tax and legal advisor should carefully verify all information contained herein and conduct an independent investigation. Seller bears no liability of any errors, inaccuracies or omissions.

9 Sales Comparables Subject Property Address # of Units Unit Mix Sales Price Cost Per Unit GRM CAP Close of Escrow th Street Oakland, CA SROs 1-Commerical $ 4,982,000 $ 139, % Active 1568 Madison Street Oakland, CA SRO $5,250,000 $291,667 1/11/ SROs 32 1/1 4-2/1 1-3/ Harrison Street 1-4/1 Oakland, CA $15,800,000 $259, % 12/20/ th Street Oakland, CA th Avenue Oakland, CA /1 6-2/1 $4,629,000 $220,428 4% Active 1- S/1 29-1/1 5-2/1 $7,150,000 $204, /26/ Jefferson St Oakland, CA th Street Oakland, CA /1 6- Studios $3,500,000 $175, % Active 2- Commercial 10- S/1 1-1/1 $2,035,000 $156, % 12/21/ th Street Oakland, CA SRO $5,340,000 $133, % 5/5/ th Street 1- Commercial Oakland, CA SROs $ 11,795,000 $114, % 06/09/17 The above income and expenses are only estimates. Although the information contained herein is deemed reliable, no representations of any kind, expressed or implied, are being made as to the accuracy of such information. All of the data in this prospectus are estimates and approximations to include square footage. Any prospective purchaser and their tax and legal advisor should carefully verify all information contained herein and conduct an independent investigation. Seller bears no liability of any errors, inaccuracies or omissions.

10 Rent Comparables Surveyed Property Efficiency th Street Oakland, CA $382-$1,095 $60/night th Street, Oakland, CA $1,800 Month $380 weekly th Street - Avondale Hotel $1520 Month 1415 Harrison St - Harrison Hotel $1, th Street - Oakland Hotel $1, Jackson St - Lakehurst Residential Hotel $950 The above income and expenses are only estimates. Although the information contained herein is deemed reliable, no representations of any kind, expressed or implied, are being made as to the accuracy of such information. All of the data in this prospectus are estimates and approximations to include square footage. Any prospective purchaser and their tax and legal advisor should carefully verify all information contained herein and conduct an independent investigation. Seller bears no liability of any errors, inaccuracies or omissions.

11 About Oakland, California Oakland is the seventh largest city in the state of California with a population of 400,000 people and covers 54 square miles. Oakland has had a rent increase of 11.6% with a vacancy rate of 1.7%. The current median monthly rent for Oakland is $2, Oakland s rent increase has been partially fueled by renters priced out of the San Francisco rental market. Oakland is a major West Coast port, and there are nearly 200,000 jobs related to marine cargo transport. These jobs range from minimum wage hourly positions to Transportation Storage and Distribution Managers who earn an annual average salary of $91,520. Forbes Magazine listed Oakland as one of the Top 10 Places for business and employment. The city is home to several major corporations including Matson, Kaiser Permanente and Clorox, as well as corporate headquarters for national retailers like Dreyer s and Cost Plus World Market. Tech companies such as Ask.com and Pandora Radio are located in Oakland, and in recent years many start-up high tech and green energy companies have found a home in the downtown neighborhoods of Uptown, City Center, Jack London Square and Lake Merritt Financial District. The Port of Oakland is one of the five largest container ports in North America and one of the top 20 worldwide. Oakland is the only city in California with three professional sports teams: the Oakland Raiders, the Oakland Athletics, and the Golden State Warriors. Recently ranked by Movoto.com, Oakland is one of the most exciting cities in America on its roster of the The 10 Most Exciting Cities in America. According to the New York Times. Oakland ranked as the 5 th most desirable destination to visit this year in The 45 Places to Go. In the past decade, Oakland has ranked among the top cities for business in Forbes and other publications. As part of the ninth largest regional economy in the United States with a Gross Regional Product exceeding $200 billion, Oakland boasts a strong and diverse business environment. This diversity allows Oakland to remain stable even during economic downturns. The Gross Metropolitan Product (GMP) for Oakland ranks in the top 20 metropolitan economies in the United States and among the top 60 in the world. Oakland s GMP ranks higher than the GMP for San Jose, St. Louis, Sacramento, Pittsburgh and Cleveland and also exceeds the Gross National Product of Hungary, Columbia, Singapore and the Philippines. Oakland s GMP also eclipses the Gross State Product of Nevada, Oklahoma and Kansas. In recent years, Oakland has gained national recognition as a travel destination. In 2012, Oakland was named the top North American city to visit, highlighting its growing number of sophisticated restaurants and bars, top music venues, and increasing nightlife appeal. Oakland also took the No. 16 spot in America s Coolest Cities, ranked by metrics like entertainment options and recreational opportunities per capita, etc. In 2013, Oakland topped the No. 1 spot in America s Most Exciting Cities, notably having the most movie theaters, theater companies, and museums per square mile. In America s Most Hipster Cities, Oakland took the No. 5 spot, cited for luring San Francisco hippies into the city. Since owner has not owned property stabilized for more than 1 year, the above income and expenses are only estimates. Although the information contained herein is deemed reliable, no representations of any kind, expressed or implied, are being made as to the accuracy of such information. All of the data in this prospectus are estimates and approximations to include square footage. Any prospective purchaser and their tax and legal advisor should carefully verify all information contained herein and conduct an independent investigation. Seller bears no liability of any errors, inaccuracies or omissions.

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15 33 SRO s Apartment Building th Street 1 Large Retail Commercial Space th Street Local Map Overhead Oblique

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