Witte Oaks A P A R T M E N T H O M E S BROKER'S OPINION OF VALUE APARTMENTS FOR SALE. A 80 Unit Class C Multi-Family Asset

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1 BROKER'S OPINION OF VALUE Witte Oaks A P A R T M E N T H O M E S A 80 Unit Class C Multi-Family Asset APARTMENTS FOR SALE KET Enterprises Incorporated I 4295 San Felipe, Suite 355 I Houston, TX I

2 Witte Oaks A P A R T M E N T H O M E S 1655 Witte Road, Houston, TX Witte Oaks 1655 Witte Road Houston, TX Units: 124 Avg Size: 843 Date Built: 1964 Rentable Sq. Ft.: 104,527 Acreage: 3.18 Occupancy: 83% Class: B-/C+ Asking Price A P A R T M E N T S F O R S A L E MARKET INVESTMENT HIGHLIGHTS Available on an Assumption Basis Only Located in the Highly Sought After Spring Branch Area Good Blue Collar Profile Spring Branch Has Some of the Best Rated Schools in Houston Very Few New Apartments in the Spring Branch Area but There are Several New Home Lots and Office Buildings Long Term Land Play Strong and Rising Area Rents 8 units have been updated and are receiving $120/month more in rents, per management PLEASE CALL FOR MORE DETAILS: TOM WILKINSON Broker/Vice President twilk4@ketent.com ext 102 Broker No KET Enterprises Incorporated I 4295 San Felipe, Suite 355 I Houston, TX I I

3 Witte Oaks 1655 Witte Road Houston, TX Physical Information Financial Information Existing Loan Parameters Operating Information Number of Units 124 Asking Price Market Current Balance $4,767,295 Est Mkt Rent (Feb-19) $98,215 Avg Unit Size 843 Price Per Unit N/A Amortization (Months) Mo Avg $98,610 Net Rentable Area 104,527 Price Per Sq. Ft. N/A Debt Service $316,357 Physical Occ (Feb-19) 83% Land Area (Acres) Units per Acre Date Built Stabilized NOI $522,098 Monthly P & I Interest Rate Date Due $26, % 9/6/25 Est Ins per Unit per Yr Property Tax Information Tax Rate (2018) $ Water Meter / Master Elec Meter Master/RUBS Indiv/Master Est Res for Repl/Unit/Yr Defeasance $300 Yes 2018 Tax Assessment 2018 Taxes $4,950,000 $134,540 Roof Style Pitched Loan Type Conduit Est Future Tax Assessment $5,500,000 HVAC System HVAC/Chilled Water Est Future Taxes $149,489 INCOME PRO-FORMA INCOME Current Street Rent with a 12% Increase 1,320,013 Estimated Gross Scheduled Income 1,320,013 Estimated Loss to Lease (2% of Total Street Rent) (26,400) 2% Estimated Vacancy (5% of Total Street Rent) (66,001) 5% Estimated Concessions and Other Rental Losses (4% of Total Street Rent) (52,801) 4% Estimated Utilities Income (offset against utility expenses) Estimated Other Income 42,915 Estimated Total Rental Income 1,338,488 ESTIMATED TOTAL PRO-FORMA INCOME 1,338,488 6 Mo Avg Income Annualized EXPENSE December 2018 YTD Expenses 12/18 operating statement Estimated Expenses Fixed Expenses Estimated Fixed Expenses Fixed Expenses Taxes $134,540 $1,085 per Unit 2018 Tax Rate & 2018 Assessment $149,489 $1,206 per Unit $110,001 / Mo $110,001 / Mo 120,761 $974 / Unit / Yr $346 / Unit / Yr $111,541 / Mo Insurance $53,889 $435 per Unit $57,164 $461 per Unit 2018 Tax Rate & Est Future Assessment Estimated Total Fixed Expense 188,429 $1,520 per Unit 206,653 $1,667 per Unit Utilities Utilities Estimated Utilities Electricity $85,227 $687 per Unit $85,227 $687 per Unit Trash Removal $13,065 $105 per Unit $13,065 $105 per Unit Gas $20,043 $162 per Unit $20,043 $162 per Unit Cable $426 $3 per Unit $426 $3 per Unit $111,305 $898 per Unit $133,566 $1,077 per Unit Water & Sewer Total Utilities 230,065 $1,855 per Unit 252,326 $2,035 per Unit Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing Repairs & Maintenance Labor Costs Contract Services $13,406 $78,682 $181,373 $20,075 $108 per Unit $635 per Unit $1,463 per Unit $162 per Unit Higher Than Normal $13,406 $78,682 $161,200 $20,075 $108 per Unit $635 per Unit $1,300 per Unit $162 per Unit Management Fees $41, % $333 per Unit $46, % $378 per Unit Total Other Expense 334,848 $2,700 per Unit 320,210 $2,582 per Unit Total Operating Expense 753,343 $6,075 per Unit 779,189 $6,284 per Unit Reserve for Replacement 37,200 $300 per Unit 37,200 $300 per Unit Total Expense 790,543 $6,375 per Unit 816,389 $6,584 per Unit Net Operating Income (Actual Underwriting) 392, ,098 Asking Price Cap Rate Existing Debt Equity Estimated Debt Service Cash Flow Cash on Cash MODIFIED ACTUALS $1,183,326 4,767,295 4,767, , ,357 76, ,741 NOTES: ACTUALS: Taxes are based on 2018 Tax Rate & 2018 Assessment. Income and Expenses are based on owners 12/18 operating statement. PRO FORMA: Income is Pro Forma as Noted. Taxes were calculated using 2018 Tax Rate & Est Future Assessment. Insurance is estimated. Management Fees calculated as 3.5% of Gross Income, Other expenses are Estimated for the Pro Forma. DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period. 2/4/2019 WitteOaks Market PRO-FORMA Market

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5 Witte Oaks 1655 Witte Road Houston, TX Age: 1964 Mortgage Balance $4,767,295 Property Overview Renovated: 2016/2017 Debt Service $316,357 Spring Branch ISD $ Elec Meter: Indiv/Master Amortization 300 Harris County $ A/C Type: HVAC/Chilled Water P & I (when amortizing) $26, Harris County Flood Control $ Water: Master/RUBS Type Conduit Port of Houston Authority $ Wiring: Copper? Assumable Yes Harris County Hospital District $ Roof: Pitched Monthly Escrow $300 Harris County Education Dept. $ Paving: Concrete Origination Date 12/1/2015 City of Houston $ Materials: Brick/Wood Due Date Sep-25 Spring Branch Mgmt District $ # of Stories: 2 Interest Rate 4.45% 2018 Tax Rate/$100 $ Buildings: 15 Yield Maintenance* Yes 2018 Tax Assessment $4,950,000 Units/Acre: Transfer Fee 1%+app+legal HCAD Net Rentable SqFt 104,436 Parking Spaces: 119 Interest only initially! Zoned Schools Garages: Quality: Key Map: PROPERTY INFORMATION COLLECTIONS No B-/C+ 450S $120,000 CURRENT MORTGAGE TAXING AUTHORITY Harris County Account #: Pine Shadows Elementary School Spring Woods Middle School Spring Woods High School AVERAGES Jan 2018 $ 92,646 $100,000 Feb 2018 $ 92,514 2 Mo Avg $ 97,394 $80,000 Mar 2018 $ 91,308 Apr 2018 $ 92,906 $60,000 3 Mo Avg $ 97,979 May 2018 $ 90,574 $40,000 June 2018 $ 86,967 6 Mo Avg $ 98,610 July 2018 $ 97,060 $20,000 Aug 2018 $ 105,114 9 Mo Avg $ 95,790 Sept 2018 $ 95,552 $- Oct 2018 $ 99, Mo Avg $ 94,881 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 June 2018 July 2018 Aug 2018 Sept 2018 Oct 2018 Nov 2018 Dec 2018 Nov 2018 $ 104,599 Dec 2018 $ 90,189 Total Income $ 1,138,577 PLEASE DO NOT VISIT THE PROPERTY WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER Witte Oaks is a 124 unit, garden style complex, well located in the Spring Branch area of northwest Houston, just minutes from I-10, Beltway 8 and convenient to major shopping at Memorial City Mall as well as other retail shops and centers. Constructed in 1964, the property appears to be in good condition and provides a pool, a fitness center, storage areas, playgrounds and laundry rooms. Residents enjoy cable ready units, walk-in closets, mini-blinds, ceiling fans and patios/balconies. Per owner, 14 units are indiviually metered with individual HVAC and the rest of the property is master metered/chilled water. Approximately $824,000 was spent in rehab during 2016 and 2017, per owner. Upgrades include extensive work to the chiller and exterior paint. 8 units were upgraded; these units bring $150/month increased rents, per management. Per Owner, current leasing concessions are: $ Move-in 1st Month's rent 1x1 $ Deposit 2x1 $ Deposit $45.00 app fee single person... $60.00 Married There was a lockbox for cash management but this has been resolved. Most properties in Spring Branch run 94%+ occupancy. It is assumed by the Broker that performance will continue to increase, particularly with a rehab and upgrade program. Property hit 100% occupancy as of 11/24/17! Perhaps it is time to cancel concessions! Note: 14 units are individually metered for electric, the rest are master metered, but management charges $40 - $50/mo for water plus $6/mo for gas, trash, pest control. Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent roll, etc. provided by the Owner. Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Every prospective purchaser should verify the information and rely on his accountants or attorneys for legal and tax advice. This offer is As-Is, Where-Is. Answers to specific inquiries will have to be supplied by the Owner and are available upon request. Rates of return vary daily. No representations are made concerning environmental issues, if any.

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7 Witte Oaks 1655 Witte Road Houston, TX UNIT MIX FEB 2019 Unit Mix Type Bed/Baths No. Units Sq Ft Total SqFt Market Rent Total Rent Rent/SF 1 Bed/1 Bath ,992 $730 $39,440 $ Bed/1.5 Bath ,800 $832 $39,942 $ Bed/1 Bath 21 1,015 21,315 $849 $17,838 $ Bed/2 Bath 1 1,420 1,420 $995 $995 $0.70 TOTALS AND AVERAGES Total Units ,527 $792 $98,215 $0.94 Average Sq. Ft. Total Sq. Feet Average Rent/Unit Total Rent Average Rent/ SF 1 21 UNIT TYPE 648 UNIT SIZE 54 1 Bed/1 Bath 2 Bed/1.5 Bath 2 Bed/1 Bath 1, Bed/1 Bath 2 Bed/1.5 Bath 2 Bed/1 Bath 48 3 Bed/2 Bath 1,015 3 Bed/2 Bath Apartment Amenities Central Air and Heat(excluding 14 units) Cable Ready Ceilng Fans Dishwashers Disposals Refrigerators Patios & Balconies Outside Storage Spacious Walk-in Closets Community Amenities Convenient to Major Highways On-site Maintenance Sparkling swimming pool Close to Shopping, Dining and Entertainment Short Term Lease Covered Parking Playground Fitness Center Laundry Facility

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10 Witte Oaks 1655 Witte Road Houston, TX AREA DEVELOPMENT Spring Branch/Memorial West Oaks Mall, is conveniently located at the intersection of Westheimer and Highway 6. Just off I-10 and only minutes away from Katy, Sugar Land, Cinco Ranch, Energy Corridor, Spring Branch and Memorial. The unique shopping center in Houston is considered to be one of the last "regional malls" in the city. The mall sold in 2009 for a reported $115,000,000 and was recently bought back for $15,000,000. There are plans in the works for a major rehab, which is certain to attract new business and customers to the area. West Oaks Mall Memorial City Mall is located at the intersection of Interstate 10 and Gessner Road, adjacent to the large Memorial Hermann medical complex. Constructed in the early 1960s, the mall has since grown to be one of the city's more popular malls, mostly due to a large renovation project that took place in the early 2000s. By the early 2000s, the area surrounding Memorial City Mall had returned to prosperity thanks to a $500 million renovation project that took place from 2001 to 2005 During the period, over 100 new retail shops were added to the complex, including five new anchor stores. Texas Children's Hospital - West Campus is greater Houston's first suburban hospital designed exclusively for children, offering the expert coupled with a location that's convenient and accessible for area families. Completed in 2011, everything about Texas Children s Hospital West Campus is dedicated to the health and wellness of children There is a serene, park-like setting, bright and inviting spaces, playrooms on every floor and medical equipment created for children s needs, the entire facility has been designed with children and families in mind. Expert pediatric outpatient services, inpatient care, surgical services is offered in addition to a fully dedicated pediatric emergency center. Texas Children's Hospital - West Campus Shell Technology Center Houston, located off of Highway 6, near Westpark, is Shell's largest center in the world, with 2,000 scientists and engineers on staff. The $300 million newly renovated and expanded center is more modern and now boasts one million square feet of laboratory and office space. The recent expansion will create great demand for housing and the need for retail and recreational opportunities. Shanksa USA Commercial Development, is planning construction of a 325,000 square foot, 12-story office building and a 9- level parking garage. The project, which will be called West Memorial Place, will be located on 12 acres south of Memorial Drive, west of Eldridge. Petroleum JGeo-Services will lease 122,000 square in the development. The project expected completion is the first quarter Shanksa Development - West Memorial Place

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14 Witte Oaks 1655 Witte Road Houston, TX Location

15 Witte Oaks 1655 Witte Road Houston, TX Aerial

16 Witte Oaks 1655 Witte Road Houston, TX Rent Comparables Rent Comparables (Source: Apartment Data Services 2018) Property Name Year Built Year Rehabbed Occ #Units Avg SF Avg Rent EWG P/SF 1 Red Apple 9005 Long Point 2 Spring Wood Park 1500 Witte 3 Le Renaissance 970 Bunker Hill Rd 4 Waterford Grove 3125 Crestdale Dr 5 Gardens at Spring Shadow Kempwood Dr N/A N/A N/A N/A N/A 90% 95% 78% 94% 93% $1,072 $1,128 $1,132 $1,132 $1,263 N/A EWG EWG EWG E *Resident Pays E(Electric), W(Water), G(Gas) M- Master Metered(excluding 14 units) Totals/Averages Comps 1971 N/A 90% $1,199 $1.16 Witte Oaks 1655 Witte Road Sub-Market Averages(Spring Branch) / % 93% , $792 $927 M $0.94 $1.012 Houston Market Averages 88% 661, $974 $

17 Witte Oaks 1655 Witte Road Houston, TX Sales Comparables Property Name Date Sold Price Total Sq. Ft. Sales Comparables Units Price/SF Price/Unit Built 1 Spring Pine 1554 Gessner 2 Spring Woods 1500 Witte 3 Hammerly Walk 8787 Hammerly 4 Hunters Chase Hammerly 5 Hammerly Oaks 8791 Hammerly 8/18 $10,200,000 88, $ $75, /18 $16,350, , $ $112, /16 $15,340, , $85.17 $65, /18 $23,500, , $91.21 $71, /18 $36,920, , $96.94 $71, Totals/Averages Comps $20,462, , $ $79, Witte Oaks 1655 Witte Road Market 104,

18 Witte Oaks 1655 Witte Road Houston, TX Demographics 1 Mile Radius 2 Mile Radius 3 Mile Radius SUMMARY PROFILE Census, 2017 Estimates with 2022 Projections Calculated using Weighted Block Centroid from Block Groups Witte Oaks 1655 Witte Road Houston, TX Ethnicity - 1 Mile Radius 2017 Estimated Population 20,733 69, , Projected Population 23,106 76, ,762 POPULATION 2010 Census Population 19,489 64, , Census Population 21,640 67, ,972 Projected Annual Growth 2017 to % 2.0% 2.0% Historical Annual Growth 2000 to % 0.2% 0.4% 23% 2% 2017 Median Age % 11% 12% EDUCATION BUSINESS INCOME RACE AND ETHNICITY HOUSEHOLDS (AGE 25+) 2017 Estimated Households 7,177 24,993 45, Projected Households 8,027 27,554 50, Census Households 6,591 22,655 40, Census Households 7,006 23,108 40,868 Projected Annual Growth 2017 to % 2.0% 2.0% Historical Annual Growth 2000 to % 0.5% 0.7% 2017 Estimated White 59.6% 58.9% 61.9% 2017 Estimated Black or African American 5.9% 6.6% 6.0% 2017 Estimated Asian or Pacific Islander 4.8% 6.8% 8.3% 2017 Estimated American Indian or Native Alaskan 0.8% 0.8% 0.8% 2017 Estimated Other Races 28.8% 26.9% 23.0% 2017 Estimated Hispanic 60.9% 57.5% 52.0% 2017 Estimated Average Household Income $74,751 $77,991 $103, Estimated Median Household Income $57,333 $59,410 $79, Estimated Per Capita Income $25,896 $28,252 $36, Estimated Elementary (Grade Level 0 to 8) 17.5% 15.6% 14.3% 2017 Estimated Some High School (Grade Level 9 to 11) 10.3% 9.5% 8.4% 2017 Estimated High School Graduate 23.5% 24.2% 22.0% 2017 Estimated Some College 20.1% 18.7% 16.2% 2017 Estimated Associates Degree Only 5.3% 5.5% 4.5% 2017 Estimated Bachelors Degree Only 15.8% 17.4% 21.3% 2017 Estimated Graduate Degree 7.5% 9.1% 13.3% 2017 Estimated Total Businesses 742 4,795 7, Estimated Total Employees 4,957 51,741 83, Estimated Employee Population per Business Estimated Residential Population per Business White Black Asian Other Hispanic 39% 61% Non-Hispanic Hispanic Average Income Subject - 1 Mile Radius $75,000 $74,751 $74,500 $74,000 $73,500 $73,000 $72,500 $72,073 $72,000 $71,500 $71,000 $70,500 Subject Houston

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23 Witte Oaks 1655 Witte Road Houston, TX Floodplain Map Witte Oaks PLEASE VERIFY

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25 Witte Oaks A P A R T M E N T H O M E S D I S C L A I M E R & N O N-E N D O R S E M E N T N O T I C E Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent rolls, etc. However, we (KET Enterprises Incorporated or any of the owners or officers, directors, employees, agents or representatives of any such entities) have not verified its accuracy and make no guarantee or representation about it. It is submitted subject to the possibility of errors, omissions, change of rental or other conditions. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. We make no representations or warranties, expressed or implied, as to the validity, accuracy or completeness of the information provided or to be provided, and nothing herein shall be deemed to constitute a representation, warranty or promise by any such parties as to the future performance of the Property or any other matters set forth herein. You and your tax and legal advisors should verify the information and rely on his accountants or attorneys for legal and tax advice. Rates of return vary daily. No representations are made concerning environmental issues, if any. Non-Endorsement Notice: KET Enterprises Incorporated is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by KET Enterprises Incorporated or any of the owners or officers, directors, employees, agents or representatives of any such entities, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY FOR INFORMATION PLEASE CONTACT: TOM WILKINSON Broker/Vice President twilk4@ketent.com ext 106 KET Enterprises Incorporated 4295 San Felipe St. I Suite 355 I Houston, Tx Broker License #