MABRY MANOR - PROPERTY REPORT. Mabry Manor Tampa, FL

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1 MABRY MANOR - PROPERTY REPORT Mabry Manor Tampa, FL RADCO Newport Villas, LLLP Presented August 2016

2 Letter from Norman Radow Dear Investor, I am pleased to provide you with the July Investor Report for Mabry Manor, our 372-unit, Class B-minus property in Tampa, Florida. This is our first investor report for Mabry Manor, formerly known as Newport Villas. RADCO Residential assumed management when we closed on this acquisition June 30, 2016, and the residents felt the impact immediately. Even now, a month after we arrived at the property, residents come in the office and tell us how much they recognize and appreciate the changes we are making. We brought in a new property manager, assistant manager and maintenance supervisor, keeping only one leasing agent from the previous company. We even hired a security company to help curtail loitering, loud music and rowdy behavior that had been allowed to go unchecked prior to our arrival. And the first thing we did was perform a unit by unit clean out of bugs and vermin. So yes, the residents happily understood that a new sheriff was in town. Total revenue in July was $258,010, which is favorable to budget by $1,291. In-place rents were $669 in July. Both revenue and in-place rents have already moved substantially in August. The property was percent occupied at the end of July and percent preleased. The site team secured nine move-ins with average rents of $678 and ten lease renewals with average increases of 11.7 percent. Twelve residents moved out in July, and eight of those units were turned over to construction for renovation. However, none of the units rented to date were for upgraded apartments. Our first deliveries are happening throughout September. One of the biggest operational challenges when we first acquire a property is the backlog of work orders that have been left unresolved by prior ownership. The site team completed 202 work orders in the first month and, as residents come in to pay rent or renew their leases, they are making us aware of other maintenance problems in their units. We $750 $725 $700 $675 $650 $625 $664 Mabry Manor In-Place Rent have dedicated the resources to tackle these as they are one of the first steps to help residents feel the sense of improved value in their homes. Operating expenses were $142,388, which is favorable to budget by $6,374. Savings in payroll and taxes/insurance more than offset overages in general/administrative and repairs/maintenance. Accrued legal fees were the cause of the general/administrative expense variance. Repairs and maintenance were over budget due to security service costs and carpet repair for water extraction and humidifiers for 20 units, following a sewer line back up in three buildings. Still, expenses will not be normalized for another month or so when all invoices catch up to their accruals. Net operating income after debt service was $76,864 which equates to a 2.98x debt service coverage ratio. This is $6,768 better than budget and remarkably even more favorable to pro forma. That is really unusual, and why this property could be a huge winner for us. We have extensive property improvement plans for Mabry Manor. We $669 Underwritten Starting Rent Jul 2016 Year 1 Pro Forma (June 2017) $730

3 Letter from Norman Radow kicked off the capital work with a systemic community-wide tree trimming followed by the start of roof replacements. Three are underway and will be finished this week. The elimination of pest control issues was of prime importance. We have completed the clean-out of all buildings. All dumpsters got new covers, improving the look of the property. Exterior wood replacement, pressure washing and prep for painting started in August. We have signed a contract for the demolition of the racquetball court. Two of the new golf carts arrived, improving the prospective customer experience right off the bat. We have eight units in construction with completion expected in September. The unit renovation bids range from $6,000-8,700 depending on the unit size and we anticipate initial rent premiums of around $100 or more depending on the apartment size and location. We are thrilled to have Mabry Manor as part of our four-property Tampa-Clearwater, FL portfolio. Thank you for investing with us. Warmest Regards,

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5 July Rent Trends Mabry Manor New Move-Ins By Unit Type $950 $900 $870 $885 $850 $800 $791 $750 $700 $650 $600 $550 $556 $612 $601 $637 $700 $675 $558 $614 $580 $500 1x1 A 1x1 C 2x2 B Studio A Going In Rent Pro Forma Rent Actual Rent During July, Mabry Manor obtained a total of 9 new move ins. One Bedroom, One Bath A 475 sq. ft.: Four new move in was secured. The non-renovated units leased for an average of $601. One Bedroom, One Bath C 650 sq. ft.: Two new move ins were secured. The non-renovated unit leased for an average of $675. Two Bedroom, Two Bath B 900 sq. ft.: Two new move ins were secured. The non-renovated units leased for an average of $885. Three Bedroom, Two Bath 580 sq. ft.: One new move in was secured. The non-renovated unit leased for $580.

6 July Renewals Mabry Manor Renewal Summary Unit Type # Renewals Previous Rent New Rent Change in Rent % Rent Change 1x1 A 1 $565 $645 $ % 1x1 C 3 $638 $676 $ % 1x1 E 1 $689 $805 $ % 2x2 B 5 $762 $864 $ % Totals/Averages 10 $698 $780 $ % July Renewals: During July, Mabry Manor secured a total of 10 renewals. The average increase on the renewals was $82, or 11.7 percent.

7 July Financial Overview Mabry Manor Mabry Manor July 2016 Actual to Actual to Actual to Account Actual Budget Budget YTD Actual YTD Budget Budget YTD Proforma Proforma Rental Income $227,198 $231,494 ($4,296) $238,358 $231,494 $6,864 $220,544 $6,654 Other Income $30,813 $25,225 $5,588 $5,350 $25,225 ($19,875) $35,246 ($4,433) Total Income $258,010 $256,719 $1,291 $243,707 $256,719 ($13,012) $255,790 $2,220 Payroll $30,866 $37,054 $6,188 $30,866 $37,054 $6,188 $36,288 $5,421 General & Administrative $10,893 $8,297 ($2,596) $10,953 $8,297 ($2,656) $10,075 ($818) Management Fee $7,943 $7,702 ($241) $7,943 $7,702 ($241) $7,674 ($269) Advertising & Marketing $4,409 $4,608 $199 $4,471 $4,608 $137 $4,650 $241 Utilities $28,642 $27,861 ($781) $27,725 $27,861 $136 $28,055 ($587) Taxes & Insurance $31,516 $38,322 $6,806 $31,516 $38,322 $6,806 $35,806 $4,290 Repairs & Maintenance $28,119 $24,918 ($3,201) $28,221 $24,918 ($3,303) $21,700 ($6,419) Operating Expenses $142,388 $148,762 $6,374 $141,695 $148,762 $7,067 $144,248 $1,860 Net Operating Income $115,622 $107,957 $7,665 $102,013 $107,957 ($5,944) $111,542 $4,080 Debt Service $38,758 $37,861 ($897) $44,982 $37,861 ($7,121) $43,083 $4,325 NOI After Debt $76,864 $70,096 $6,768 $57,031 $70,096 ($13,065) $68,459 $8,405 Capital Improvements $5,520 $13,098 $7,578 $5,520 $13,098 $7,578 $9,300 $3,780 Partnership Expenses $6,490 $6,490 ($0) $6,490 $6,490 ($0) $6,200 ($290) Net Income $64,853 $50,508 $14,345 $45,020 $50,508 ($5,488) $52,959 $11,894

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