Holly Knolls 1000 N. 8 th St. Reedsport, Oregon

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1 Holly Knolls 1000 N. 8 th St. Reedsport, Oregon Oregon Coast, Seller-Financed 63-space All-Ages Manufactured Home Community October 2008 Offered by: Commercial Brokerage Company 7007 SW Cardinal Lane, Suite 185 Portland, OR For Further Information Contact: Don Kilpatrick or Loren Landau

2 Holly Knolls MHP Reedsport, OR Terms of Sale Price: $ 1,950,000 Down Payment: 390,000 Balance: $ 1,560,000 Financing: Seller to provide financing based on 20% downpayment. Purchaser will provide appropriate financial statements and evidence of downpayment. The terms of the contract will be: 1) 10 year note with no prepayment, 2) payment of interest only at 6.5% interest in months 1-36, 3) payments in months of principal and interest on outstanding balance based on 6.5% interest amortized for 27 years: Principal Amortization Term (mos.) Interest Monthly Payments Annual Payments Interest Only 7-Year Fixed $ 1,560,000 $ 1,560, % 6.50% $ 8,450 $ 10,227 $ 101,400 $ 122,724 Seller Contract Terms: Savings * No Loan Fee (1.5%) $ 23,400 * No Appraisal or Environmental Report 5,000 Total Savings $ 28,400 Investment Summary Income as of 3/1/09 With Park Full Price per Space $ 30,952 Capitalization Rate 6.5% 7.1% Net Operating Income $ 127,653 $ 138,612 Cash Flow $ 26,253 $ 37,212 Return on Cash Invested 6.7% 9.5% 10/16/2008 Holly Knolls Pro Forma.xls

3 Holly Knolls MHP Reedsport, OR Pro Forma of Income and Expenses Income (1) Rent Income as of 3/1/09 32 $285 $ 109, $ , Space Rental Income 219,180 Less: Vacancy/Credit Loss (2) (10,959) Gross Effective Income $ 208,221 Operating Expenses Property Taxes (3) 16,299 Insurance (4) 1,390 Water/Sewer (6) 37,143 Electricity (4) 1,818 Garbage (4) 5,841 On-Site Manager Fees (5) Salary 3,000 Space Rent 5,130 Payroll Expense 900 Repair/Maintenance - Budget 6,247 Office Expenses 1,800 Legal and Accounting 1,000 Total Operating Expenses 38.7% 80,568 Net Operating Income $ 127,653 Debt Service 101,400 Before Tax Cash Flow $ 26,253 Notes 1. Reflects increase of $15.00 that will be in effect 3/1/ There are currently three (3) vacancies in the park. 3. Actual 2007/2008 Real Property Taxes before discount. 4. Based on actual current expenses. 5. The current manager makes $250 per month and receives free space rent and utilities. She owns her home. The person who performs landscaping receives 50% off the rent. 6. Water and sewer charges reflect increase in rates effective August, /16/2008 Holly Knolls Pro Forma.xls

4 Holly Knolls Reedsport, Oregon PROPERTY DESCRIPTION GENERAL DESCRIPTION: Holly Knolls is an attractive, established mobile home park located in the central Oregon coastal community of Reedsport. Reedsport is located approximately 30 miles north of Coos Bay and approximately 90 miles southwest of Eugene. Reedsport is located at the intersection of Hwy. 38 (the main highway going to the central and southern Oregon Coast from Eugene) and Hwy. 101 (Pacific Coast Hwy.). Reedsport was originally developed as a fishing and logging town but over the years has evolved into a retirement-oriented community with a stable population of approximately 4,300 residents. The park is configured as a series of private streets connecting to 8 th Street, which is a public street (see enclosed site plan and vicinity map). AGE: 1978 PROPERTY SIZE: ZONING: FAIR HOUSING STATUS: FLOOD PLAIN STATUS: 6.57 acres R-2 Multi-Family Residential High Density. Holly Knolls is in an approved use within the R-2 zone. Holly Knolls is designated as an all-ages community; however, a majority of the homes are occupied by older residents. The property is located outside of the 100-year flood plain zone in Zone B as shown on FEMA map D. LOT SIZES: Typical spaces measure wide by deep. SW/DW RATIO: There are currently 16 doublewide homes in the park. Approximately 50% of the spaces can accommodate a double wide home. Holly Knolls Narrative- 10/16/08

5 IMPROVEMENTS: Interior Streets: Interior Lighting: Perimeter Fencing: Off-Street Parking: Carports/Storage Units: RV Storage: Fire Suppression: Interior streets are 27 wide and all in average condition. The streets have no curbs or sidewalks. 8 th street, a public street, provides access to the three private streets in Holly Knolls. Overhead streetlights are located throughout the community. A 6 wood fence extends around the south and west boundaries of the property. The remainder of the perimeter is unfenced. Park signs are located off 8 th Street at the two entrances to Holly Knolls. Each space is provided with off-street parking for two vehicles on concrete driveways/parking pads. Approximately 50% of the homes in the park have wood or aluminum style carports. Carports are not required by the park rules. Detached, storage sheds are located on each space. The storage sheds and carports are owned and maintained by the residents. Holly Knolls provides residents with free RV storage in an unfenced, graveled parking area located at the northeast corner of the park. Fire hydrants are located along 8 th Street. UTILITIES: Sewer: Electricity: Cable TV and Telephone: Water: Public sewer is provided to the property by the City of Reedsport. Sewer service is included in the base rent. The sewer lines are made of PVC. Underground 200 amp electrical service is provided to each space and is billed directly to the homeowner by the utility provider. Cable TV and telephone service are provided by a private vendor and billed directly to each homeowner. Public water is provided by the City of Reedsport and is included in the base rent. Water lines are made of PVC. Holly Knolls Narrative- 10/16/08

6 Storm Sewer: Garbage: Storm sewer catch basins are located at the intersection of each private street and 8 th Street. The catch basis drain water off the property to public drainage ditches. Individual can garbage service and recycling is provided by a private vendor and is included in the base rent. 2007/2008 REAL PROPERTY TAX INFORMATION: PARCEL NUMBER LAND VALUE IMPROVEMENT VALUE TOTAL VALUE TAXES R12203 $226,512 $282,555 $509,067 $6, R12275 $255,262 $326,025 $581,287 $7, R11355 $90,604 $115,920 $206,524 $2, TOTAL $572,378 $724,500 $1,296,878 $16, VACANT SPACES: Spaces 10, 20 and 62 are currently vacant. The current owner has not purchased any home to fill spaces. Space 10 will accommodate a double wide home less than 50. Space 20 will accommodate a full size double wide home. Space 62 will accommodate a full size singlewide home. Reedsport has a strong manufactured home resale market in all parks. NON-RESIDENT OWNED HOMES: There are five homes in Holly Knolls that are owned by an outside party and sublet. These homes have been in the park for several years. The rent is paid by the owner of the home not the occupant. UNDERLYING FINANCING: There are no liens or loans against the property. Holly Knolls Narrative- 10/16/08

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10 Holly Knolls - Reedsport, Oregon

11 Holly Knolls - Reedsport, Oregon

12 Holly Knolls - Reedsport, Oregon

13 Date Prepared October, Mobile Home Park Survey - Reedsport, Oregon # YEAR BASE EXTRA TENANT DATE/AMOUNT NAME/LOCATION SPACES BUILT AMENITIES RENT CHARGES LAST INCREASE VACANCY Holly Knolls MHP F,City W/S 32@$285 C 3/09 $ N 8 th Street, 31@$295 Reedsport, Or River Bend Mobile Resort Sr, City W/S 100@$279 W,S,G,C 1/07 $ Railroad Ave Water Front 26@ $379 Reedsport, Or, Highland MHP F,City W/S $300 G,C 9/08 $25 2 RV Frontage Rd Reedsport, Or Umpqua Mobile Villa est F, City W/S $235 C 1/08 $ th Street Reedsport, Or \SURVEYS\ COUNTY - PAGE 1-16-Oct-08 - R = REC BLDG; RV = RECREATIONAL VEHICLE PARKING; S = SENIORS; F = FAMILY; EXTRA CHARGES: WATER/SEWER/GARBAGE/CABLE; SP = SWIMMING POOL; T = TENNIS; SW = SINGLE WIDE; DW = DOUBLE WIDE; CP = CARPORTS