Offering Memorandum. Echo Palms Apartment Complex Echo Rd Redding, CA

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1 Offering Memorandum Apartment Complex 1013 Echo Rd Redding, CA

2 The Offering Property Highlights Apartment complex is located in highly desirable neighborhood of Enterprise Acres Well maintained 32 units complex generating approx. $278,000 Gross Rents Annually 12 units 2 bdrm 1 bath with garage 8 units 2 bdrm 1 bath with carport 4 units 2 bdrm 2 bath with carport 8 units 2 bdrm 1 bath with carport Spacious layouts Most of the units have HVAC Laundry on-site On-site Management Pool 20 carports-12 garages Great location within minutes to I5, shopping and the Mt. Shasta Mall. Nearby schools: Shasta Union High, Enterprise Elementary School District, Lassen View Elementary School, Parsons Junior High School All square footages are approximate

3 Location Overview Location Highlights Redding, officially the City of Redding, is the county seat of Shasta County California, in the northern part of the state. It lies along the Sacramento River, which provided transportation and power in its early years. Interstate 5 bisects the entire city, which has a population of 58,861, from the south to north before it approaches Shasta Lake, located about 15 miles (24 km) north of downtown. Redding is the largest city in the Shasta Cascade region, and it is the fourth-largest city in the Sacramento Valley, behind Sacramento, Elk Grove and Roseville. Redding is located at the very northwestern end of the Central Valley, which transitions into the Cascade foothills. The city is surrounded by mountains to the north, east, and west and fertile farm land to the south. Outermost parts of the city are part of the Cascade foothills, whereas southern and central areas are in the Sacramento Valley. The 2010 United States Census reported that Redding had a population of 89,861. Redding has a diversified service economy with employment spread across a wide range of professional services, including health care services, retail, and tourism. As of April 2014, the employment rate in Redding was 90.5 percent, with the majority of Redding citizens being employed in the Educational and Health Services industry. Other notable categories of employment includes the Shasta County and Redding Municipal Government, the Trade, Transportation and Utilities industry, as well as the Leisure and Hospitality Industry. Since the late 1990s, Redding's economy has diversified away from timber mills and other wood-products industries. Through much of the post-world War II era, Redding's economy was supported by timber mills and other wood-products industry based on lumber from the forests, public and private, in the surrounding mountains. In the late 1980s and early 1990s, environmental restrictions, most notably the listing of the northern spotted owl as a threatened species under the Endangered Species Act, led to a dramatic reduction in timber harvests in the national forest. Industrial logging on private lands continues but automation has also reduced lumber employment. Sierra Pacific Industries, the largest private landowner in California, has its headquarters and several mills in the greater Redding area. The city is the medical hub of rural far northern California, with two major general hospitals, Mercy Medical Center, and Shasta Regional Medical Center, as well as other specialty hospitals. It is also the major retail center of the North State and the Black Bear Diner restaurant chain is headquartered here. It is the headquarters for many

4 Property Summary The Offering Property Address 1013 Echo Rd Redding, CA, Offered at $2,900,000 Assessor's Parcel Number Zoning Site Description Number Units 32 Number of Buildings 6 Number of Stories (3) 2 Story & (3) 1 Story Year Built Rentable Square Feet 37,605 Lot Size 39,139 Type of Ownership Fee Simple Parking Spaces 32 Topography Flat Construction Utilities Foundation Slab Water Present Framing Wood Siding Phone Present Exterior Stucco Electric Present Parking Surface Asphalt Gas Present Roof Flat / TG & Bitunim

5 Financial Overview --- Apartment Complex Redding, CA Location 1013 Echo Rd Annualized Operation Data Redding, CA Income Current Pro Forma Gross Potential Rents $ 280,980 $ 343,680 Property Information Less: Rental Vacancy $ 8,429 $ 10,310 Price $ 2,900,000 Gross Potential Income $ 272,551 $ 333,370 Down Payment $ 2,030,000 Plus: Other Income $ - $ - Number of Units 32 Plus: Annual Reimbursement $ - $ - Price/Unit $ 90,625 Effective Gross Income $ 272,551 $ 333,370 Rentable Sq. Ft. 37,605 Operating Expenses $ 113,061 $ 113,061 Price/Sq. Ft. $ 77 Net Operation Income $ 159,490 $ 220,309 Year Built 0 Debt Service $ 64,111 $ 64,111 Lot Size 39,139 Capital Additions $ - $ - Net Cash Flow $ 95,379 $ 156,198 Financing First Loan Expenses Current Pro Forma Loan Amount $ 870,000 Total Operating Expenses $ 113,061 $ 113,061 Interest Rate 5.500% Expenses/Unit $ 3,533 $ 3,533 Amortization 300 Expenses % of Gross 40.24% 32.90% Loan Type Fixed Term of Loan in Years 7 Indicators Second Loan CAP Rate 5.50% 7.60% Loan Amount $ - GRM Interest Rate 8.000% Cash on Cash 4.65% 7.61% Amortization 300 Cost Recovery Basis $ 2,175,000 Total Loan to Value 30% Years 39.0 Annually 55,769

6 Units Configuration

7 Property Photos

8 Property Photos

9 Plot Map

10 Street Maps

11 Aerial Photo