The Neponset 400 Neponset Avenue Boston, MA 02122

Transcription

1 Location, Location, Location Approx 210,000 per day traffic count Phone: (617) Fax: (617) E Broadway Boston, MA

2 Table of Contents Real Estate Investment Details Biography Property Description Property Photos Maps and Aerials Executive Summary Pro Forma Summary Resale Report Internal Rate of Return Analysis Cash Flow Analysis Annual Property Operating Data Property Resale Analysis Financial Indicators Investment Return Analysis Property Equity Analysis Equity vs. Debt Cumulative Wealth Analysis Operating Income Analysis Gross Income Vs. Operating Expenses

3 Real Estate Investment Details ANALYSIS Analysis Date: May 2008 PROPERTY Property: Property Address: The Neponset PURCHASE INFORMATION Property Type: Multi-Family Purchase Price: $2,000,000 Fair Market Value: $2,700,000 Units: 25 Total Rentable Sq. Ft.: 19,168 Resale Valuation 3.000% (annual appreciation) Resale Expenses: 0% FINANCIAL INFORMATION Down Payment: $400,000 Passive Loss Rules: No Closing Costs: $0 LT Capital Gain: 15.00% Federal Tax Rate: 28.00% State Tax Rate: 5.00% Discount Rate: 8.00% LOANS Debt Term Rate Payment LO Costs Fixed $1,600, yrs % $10,309 INCOME & EXPENSES Gross Operating Income: $293,456 Monthly GOI: $24,455 Total Annual Expenses: ($104,285) Monthly Expenses: ($8,690) CONTACT INFORMATION DISCLAIMER: All information is believed to be accurate. The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projections and analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting, tax or other professional area before making any decisions.

4 Biography PROFESSIONAL BIO

5 Property Description The Neponset 19 Residential and 6 Retail Investment Asset in Boston, MA Income Producing, Condo Conversion or Value Added This 19 residential and 6 retail asset is located in a prime location bordering 93 North & South, Morrissey Blvd, Gallivan Blvd and Neponset Avenue. The location brings approximately a 210,000 traffic count per day. The asset is currently income producing, however, there is a tremendous amount of value added potential of a condo version, repositioning the retail or an office play.

6 Property Photos The Neponset

7 Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $2,000,000 Investment - Cash $400,000 First Loan $1,600,000 INVESTMENT INFORMATION Purchase Price $2,000,000 Price per Unit $80,000 Price per Sq. Ft. $ Income per Unit $12,101 Expenses per Unit ($4,171) INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $302,532 Total Vacancy and Credits ($9,076) Operating Expenses ($104,285) Net Operating Income $189,171 Debt Service ($123,706) Cash Flow Before Taxes $65,465 Total Interest (Debt Service) ($95,225) Depreciation and Amortization ($34,840) Taxable Income (Loss) $59,106 Tax Savings (Costs) ($19,505) Cash Flow After Taxes $45,960 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 16.37% Optimal Internal Rate of Return (yr 4) 45.72% Debt Coverage Ratio 1.53 Capitalization Rate 9.46% Gross Rent Multiplier 6.61 Gross Income / Square Feet $15.78 Gross Expenses / Square Feet ($5.44) Operating Expense Ratio 35.54%

8 Pro Forma Summary UNIT MIX & ANNUAL SCHEDULED INCOME Type Units Actual Total Market Total Retail 1 $25,200 $25,200 $30,000 $30,000 1 Br 1 $9,540 $9,540 $10,740 $10,740 2 Br 1 $9,600 $9,600 $10,800 $10,800 2 Br 1 $11,940 $11,940 $13,140 $13,140 2 Br 1 $12,000 $12,000 $13,200 $13,200 2 Br 1 $13,140 $13,140 $14,340 $14,340 Retail 1 $12,000 $12,000 $13,200 $13,200 INVESTMENT SUMMARY Price: $2,000,000 Units: 25 Price/Unit: $80,000 RSF: 19,168 Price/RSF: $ Cap Rate: 9.46% Pro Forma Cap Rate: 12.31% GRM: 6.6 Pro Forma GRM: 5.9 FINANCING SUMMARY Loan Amount: $1,600,000 Down Payment: $400,000 Loan Type: Fixed Interest Rate: % Term: 25 years Retail 1 $14,400 $14,400 $15,600 $15,600 1 Br 1 $9,300 $9,300 $10,500 $10,500 2 Br 1 $10,200 $10,200 $11,700 $11,700 1 Br Split 1 $10,200 $10,200 $11,400 $11,400 2 Br 1 $10,800 $10,800 $12,000 $12,000 Retail 1 $20,400 $20,400 $24,000 $24,000 Retail 1 $22,800 $22,800 $27,600 $27,600 2 Br 1 $10,200 $10,200 $11,400 $11,400 2 Br 1 $10,800 $10,800 $11,400 $11,400 2 Br 1 $7,812 $7,812 $9,012 $9,012 2 Br 1 $9,000 $9,000 $10,200 $10,200 Retail 1 $13,200 $13,200 $14,400 $14,400 2 Br 1 $10,200 $10,200 $11,400 $11,400 3 Br 1 $9,600 $9,600 $10,800 $10,800 2 Br 1 $8,400 $8,400 $9,600 $9,600 3 Br 1 $10,800 $10,800 $12,000 $12,000 3 Br 1 $9,600 $9,600 $10,800 $10,800 3 Br 1 $11,400 $11,400 $12,600 $12,600 TOTALS 25 $302,532 $341,832 Monthly Payment: $10, ANNUALIZED INCOME Actual Market Gross Potential Rent $302,532 $341,832 Less: Vacancy ($9,076) $0 Effective Gross Income $293,456 $341,832 Less: Expenses ($104,285) ($95,578) Net Operating Income $189,171 $246,254 Debt Service ($123,706) ($123,706) Net Cash Flow after Debt Service $65,465 $122,548 Principal Reduction $28,481 $28,481 Total Return $93,946 $151,029 ANNUALIZED EXPENSES Description Actual Market

9 Resale Report NET PROCEEEDS FROM SALE Adjusted Basis Basis At Acquisition $2,000,000 - Depreciation $724,160 Adjusted Basis at Sale $1,275,840 Capital Gain Sale Price $4,876,500 -Sale Expenses $0 -Adjusted Basis at Sale $1,275,840 Gain or (Loss) $3,600,660 -Depreciation (limited to gain) $724,160 Capital Gain from Appreciation $2,876,500 Sales Proceeds After Tax Sales Price $4,876,500 -Sale Expenses $0 -Mortgage Balance $533,230 Sale Proceeds Before Tax $4,343,271 Sale Proceeds Before Tax $4,343,271 -Tax On Depreciation $181,040 -Tax On Capital Gain $431,475 Sale Proceeds After Tax $3,730,756

10 Internal Rate of Return Analysis BEFORE TAX IRR Time Future Cash Flows Initial Investment ($400,000) End of Year 1 $65,465 End of Year 11 $250,018 End of Year 2 $80,138 End of Year 12 $273,919 End of Year 3 $95,544 End of Year 13 $299,014 End of Year 4 $111,721 End of Year 14 $325,364 End of Year 5 $128,707 End of Year 15 $353,032 End of Year 6 $146,542 End of Year 16 $382,083 End of Year 7 $165,268 End of Year 17 $412,587 End of Year 8 $184,931 End of Year 18 $444,616 End of Year 9 $205,577 End of Year 19 $478,246 End of Year 10 $227,256 End of Year 20* $4,856,829 IRR = 31.13% * ($513,558 + $4,343,271) AFTER TAX IRR Time Future Cash Flows Initial Investment ($400,000) End of Year 1 $45,960 End of Year 11 $162,411 End of Year 2 $55,713 End of Year 12 $177,370 End of Year 3 $65,420 End of Year 13 $193,064 End of Year 4 $75,605 End of Year 14 $209,530 End of Year 5 $86,292 End of Year 15 $226,805 End of Year 6 $97,504 End of Year 16 $244,929 End of Year 7 $109,269 End of Year 17 $263,944 End of Year 8 $121,613 End of Year 18 $283,893 End of Year 9 $134,565 End of Year 19 $304,822 End of Year 10 $148,154 End of Year 20* $4,057,033 IRR = 24.67% * ($326,277 + $3,730,756)

11 Cash Flow Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $302,532 $317,659 $333,542 $350,219 $367,730 $386,116 $405,422 $425,693 $446,978 $469,326 General Vacancy ($9,076) ($9,530) ($10,006) ($10,507) ($11,032) ($11,583) ($12,163) ($12,771) ($13,409) ($14,080) Total Operating Expenses ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) NET OPERATING INCOME $189,171 $203,844 $219,250 $235,427 $252,413 $270,248 $288,974 $308,637 $329,283 $350,962 Loan Payment ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) NET CASH FLOW (b/t) $65,465 $80,138 $95,544 $111,721 $128,707 $146,542 $165,268 $184,931 $205,577 $227,256 Cash On Cash Return b/t 16.37% 20.03% 23.89% 27.93% 32.18% 36.64% 41.32% 46.23% 51.39% 56.81% NET OPERATING INCOME $189,171 $203,844 $219,250 $235,427 $252,413 $270,248 $288,974 $308,637 $329,283 $350,962 Depreciation ($34,840) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) Loan Interest ($95,225) ($93,469) ($91,604) ($89,624) ($87,522) ($85,290) ($82,920) ($80,405) ($77,734) ($74,899) TAXABLE INCOME (LOSS) $59,106 $74,015 $91,287 $109,443 $128,531 $148,598 $169,694 $191,872 $215,189 $239,703 Income Taxes ($19,505) ($24,425) ($30,125) ($36,116) ($42,415) ($49,037) ($55,999) ($63,318) ($71,012) ($79,102) CASH FLOW (a/t) $45,960 $55,713 $65,420 $75,605 $86,292 $97,504 $109,269 $121,613 $134,565 $148,154 Cash On Cash Return a/t 11.49% 13.93% 16.35% 18.90% 21.57% 24.38% 27.32% 30.40% 33.64% 37.04% Footnotes: b/t = before taxes;a/t = after taxes

12 Cash Flow Analysis Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 GROSS SCHEDULED INCOME $492,793 $517,432 $543,304 $570,469 $598,993 $628,942 $660,389 $693,409 $728,079 $764,483 General Vacancy ($14,784) ($15,523) ($16,299) ($17,114) ($17,970) ($18,868) ($19,812) ($20,802) ($21,842) ($22,934) Total Operating Expenses ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) NET OPERATING INCOME $373,724 $397,624 $422,720 $449,070 $476,738 $505,789 $536,293 $568,322 $601,952 $637,264 Loan Payment ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) ($123,706) NET CASH FLOW (b/t) $250,018 $273,919 $299,014 $325,364 $353,032 $382,083 $412,587 $444,616 $478,246 $513,558 Cash On Cash Return b/t 62.50% 68.48% 74.75% 81.34% 88.26% 95.52% % % % % NET OPERATING INCOME $373,724 $397,624 $422,720 $449,070 $476,738 $505,789 $536,293 $568,322 $601,952 $637,264 Depreciation ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($36,360) ($34,840) Loan Interest ($71,888) ($68,692) ($65,299) ($61,697) ($57,872) ($53,812) ($49,501) ($44,924) ($40,065) ($34,906) TAXABLE INCOME (LOSS) $265,476 $292,572 $321,061 $351,013 $382,506 $415,617 $450,432 $487,038 $525,527 $567,518 Income Taxes ($87,607) ($96,549) ($105,950) ($115,834) ($126,227) ($137,154) ($148,643) ($160,722) ($173,424) ($187,281) CASH FLOW (a/t) $162,411 $177,370 $193,064 $209,530 $226,805 $244,929 $263,944 $283,893 $304,822 $326,277 Cash On Cash Return a/t 40.60% 44.34% 48.27% 52.38% 56.70% 61.23% 65.99% 70.97% 76.21% 81.57% Footnotes: b/t = before taxes;a/t = after taxes

13 Annual Property Operating Data Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $302,532 $317,659 $333,542 $350,219 $367,730 $386,116 $405,422 $425,693 $446,978 $469,326 GROSS SCHEDULED INCOME $302,532 $317,659 $333,542 $350,219 $367,730 $386,116 $405,422 $425,693 $446,978 $469,326 General Vacancy ($9,076) ($9,530) ($10,006) ($10,507) ($11,032) ($11,583) ($12,163) ($12,771) ($13,409) ($14,080) GROSS OPERATING INCOME $293,456 $308,129 $323,535 $339,712 $356,698 $374,533 $393,259 $412,922 $433,568 $455,247 Expenses Building Insurance ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) Maintenance ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) Management Fees ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) Taxes - Real Estate ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) Trash Removal ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) Utility - Electricity ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) Utility - Water & Sewer ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) TOTAL OPERATING EXPENSES ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) NET OPERATING INCOME $189,171 $203,844 $219,250 $235,427 $252,413 $270,248 $288,974 $308,637 $329,283 $350,962

14 Annual Property Operating Data Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Rental Income $492,793 $517,432 $543,304 $570,469 $598,993 $628,942 $660,389 $693,409 $728,079 $764,483 GROSS SCHEDULED INCOME $492,793 $517,432 $543,304 $570,469 $598,993 $628,942 $660,389 $693,409 $728,079 $764,483 General Vacancy ($14,784) ($15,523) ($16,299) ($17,114) ($17,970) ($18,868) ($19,812) ($20,802) ($21,842) ($22,934) GROSS OPERATING INCOME $478,009 $501,909 $527,005 $553,355 $581,023 $610,074 $640,578 $672,607 $706,237 $741,549 Expenses Building Insurance ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) ($9,662) Maintenance ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) Management Fees ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) ($8,707) Taxes - Real Estate ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) ($44,553) Trash Removal ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) ($11,400) Utility - Electricity ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) ($2,400) Utility - Water & Sewer ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) ($18,856) TOTAL OPERATING EXPENSES ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) ($104,285) NET OPERATING INCOME $373,724 $397,624 $422,720 $449,070 $476,738 $505,789 $536,293 $568,322 $601,952 $637,264

15 Property Resale Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projected Property Value $2,781,000 $2,864,430 $2,950,363 $3,038,874 $3,130,040 $3,223,941 $3,320,659 $3,420,279 $3,522,888 $3,628,574 Resale Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Proceeds b/f Debt Payoff $2,781,000 $2,864,430 $2,950,363 $3,038,874 $3,130,040 $3,223,941 $3,320,659 $3,420,279 $3,522,888 $3,628,574 Basis at Acquisition $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 Depreciation ($34,840) ($71,200) ($107,560) ($143,920) ($180,280) ($216,640) ($253,000) ($289,360) ($325,720) ($362,080) Adjusted Tax Basis $1,965,160 $1,928,800 $1,892,440 $1,856,080 $1,819,720 $1,783,360 $1,747,000 $1,710,640 $1,674,280 $1,637,920 Resale Tax Gain (Loss) $815,840 $935,630 $1,057,923 $1,182,794 $1,310,320 $1,440,581 $1,573,659 $1,709,639 $1,848,608 $1,990,654 Resale Tax Benefit (Cost) ($125,860) ($147,465) ($169,444) ($191,811) ($214,576) ($237,751) ($261,349) ($285,382) ($309,863) ($334,806) Loan Principal Balance ($1,571,519) ($1,541,282) ($1,509,180) ($1,475,098) ($1,438,913) ($1,400,497) ($1,359,712) ($1,316,411) ($1,270,439) ($1,221,632) Net Resale Proceeds $1,083,621 $1,175,683 $1,271,739 $1,371,965 $1,476,551 $1,585,693 $1,699,599 $1,818,487 $1,942,586 $2,072,136 Footnotes: b/f = before

16 Property Resale Analysis Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Projected Property Value $3,737,431 $3,849,554 $3,965,041 $4,083,992 $4,206,512 $4,332,707 $4,462,689 $4,596,569 $4,734,466 $4,876,500 Resale Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Proceeds b/f Debt Payoff $3,737,431 $3,849,554 $3,965,041 $4,083,992 $4,206,512 $4,332,707 $4,462,689 $4,596,569 $4,734,466 $4,876,500 Basis at Acquisition $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 Depreciation ($398,440) ($434,800) ($471,160) ($507,520) ($543,880) ($580,240) ($616,600) ($652,960) ($689,320) ($724,160) Adjusted Tax Basis $1,601,560 $1,565,200 $1,528,840 $1,492,480 $1,456,120 $1,419,760 $1,383,400 $1,347,040 $1,310,680 $1,275,840 Resale Tax Gain (Loss) $2,135,871 $2,284,354 $2,436,201 $2,591,512 $2,750,392 $2,912,947 $3,079,289 $3,249,529 $3,423,786 $3,600,660 Resale Tax Benefit (Cost) ($360,225) ($386,133) ($412,546) ($439,479) ($466,947) ($494,966) ($523,553) ($552,725) ($582,500) ($612,515) Loan Principal Balance ($1,169,814) ($1,114,801) ($1,056,394) ($994,385) ($928,551) ($858,657) ($784,452) ($705,670) ($622,029) ($533,230) Net Resale Proceeds $2,207,393 $2,348,621 $2,496,101 $2,650,129 $2,811,014 $2,979,084 $3,154,683 $3,338,174 $3,529,937 $3,730,756 Footnotes: b/f = before

17 Financial Indicators Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Multiplier Capitalization Rate 9.46% 10.19% 10.96% 11.77% 12.62% 13.51% 14.45% 15.43% 16.46% 17.55% Cash On Cash Return b/t 16.37% 20.03% 23.89% 27.93% 32.18% 36.64% 41.32% 46.23% 51.39% 56.81% Cash On Cash Return a/t 11.49% 13.93% 16.35% 18.90% 21.57% 24.38% 27.32% 30.40% 33.64% 37.04% Debt Coverage Ratio Gross Income per Sq. Ft. $15.78 $16.57 $17.40 $18.27 $19.18 $20.14 $21.15 $22.21 $23.32 $24.48 Expenses per Sq. Ft. ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) Net Income Multiplier Operating Expense Ratio 35.54% 33.84% 32.23% 30.70% 29.24% 27.84% 26.52% 25.26% 24.05% 22.91% Loan To Value Ratio 56.51% 53.81% 51.15% 48.54% 45.97% 43.44% 40.95% 38.49% 36.06% 33.67% Footnotes: b/t = before taxes; a/t = after taxes

18 Financial Indicators Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Gross Rent Multiplier Capitalization Rate 18.69% 19.88% 21.14% 22.45% 23.84% 25.29% 26.81% 28.42% 30.10% 31.86% Cash On Cash Return b/t 62.50% 68.48% 74.75% 81.34% 88.26% 95.52% % % % % Cash On Cash Return a/t 40.60% 44.34% 48.27% 52.38% 56.70% 61.23% 65.99% 70.97% 76.21% 81.57% Debt Coverage Ratio Gross Income per Sq. Ft. $25.71 $26.99 $28.34 $29.76 $31.25 $32.81 $34.45 $36.18 $37.98 $39.88 Expenses per Sq. Ft. ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) ($5.44) Net Income Multiplier Operating Expense Ratio 21.82% 20.78% 19.79% 18.85% 17.95% 17.09% 16.28% 15.50% 14.77% 14.06% Loan To Value Ratio 31.30% 28.96% 26.64% 24.35% 22.07% 19.82% 17.58% 15.35% 13.14% 10.93% Footnotes: b/t = before taxes; a/t = after taxes

19 Investment Return Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cash Flow - To Date $45,960 $101,673 $167,093 $242,698 $328,989 $426,494 $535,763 $657,377 $791,941 $940,095 Net Resale Proceeds $1,083,621 $1,175,683 $1,271,739 $1,371,965 $1,476,551 $1,585,693 $1,699,599 $1,818,487 $1,942,586 $2,072,136 Invested Capital ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) Net Return on Investment $729,581 $877,357 $1,038,832 $1,214,663 $1,405,540 $1,612,187 $1,835,362 $2,075,863 $2,334,527 $2,612,232 Internal Rate of Return N/A N/A N/A 45.72% 39.62% 35.76% 33.13% 31.23% 29.81% 28.71% Modified IRR % 78.96% 53.65% 42.32% 35.89% 31.73% 28.81% 26.64% 24.96% 23.61% NPV (cash flow + reversion) $663,968 $737,280 $814,715 $895,721 $979,797 $1,066,483 $1,155,360 $1,246,045 $1,338,189 $1,431,476 PV (NOI + reversion) $2,750,158 $2,805,709 $2,866,063 $2,930,678 $2,999,056 $3,070,735 $3,145,292 $3,222,336 $3,301,510 $3,382,484 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital.

20 Investment Return Analysis Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Cash Flow - To Date $1,102,506 $1,279,876 $1,472,940 $1,682,470 $1,909,275 $2,154,205 $2,418,149 $2,702,042 $3,006,864 $3,333,142 Net Resale Proceeds $2,207,393 $2,348,621 $2,496,101 $2,650,129 $2,811,014 $2,979,084 $3,154,683 $3,338,174 $3,529,937 $3,730,756 Invested Capital ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) ($400,000) Net Return on Investment $2,909,899 $3,228,497 $3,569,041 $3,932,599 $4,320,289 $4,733,289 $5,172,832 $5,640,216 $6,136,802 $6,663,897 Internal Rate of Return 27.86% 27.17% 26.61% 26.16% 25.79% 25.48% 25.22% 25.00% 24.82% 24.67% Modified IRR 22.50% 21.57% 20.78% 20.10% 19.49% 18.96% 18.49% 18.06% 17.67% 17.31% NPV (cash flow + reversion) $1,525,617 $1,620,351 $1,715,439 $1,810,668 $1,905,841 $2,000,785 $2,095,341 $2,189,368 $2,282,737 $2,375,418 PV (NOI + reversion) $3,464,957 $3,548,649 $3,633,309 $3,718,703 $3,804,618 $3,890,861 $3,977,255 $4,063,637 $4,149,863 $4,235,798 Footnotes: a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Reversion = Amount received from the resale; Net Return on Investment = Cash Flow (a/t To Date) + Net Proceeds from Resale - Invested Capital.

21 Property Equity Analysis $4,400,000 $3,960,000 $3,520,000 $3,080,000 $2,640,000 $2,200,000 $1,760,000 $1,320,000 $880,000 $440,000 Year Legend Initial Equity Equity (loan reduction) Equity (appreciation)

22 Equity vs. Debt $4,400,000 $3,960,000 $3,520,000 $3,080,000 $2,640,000 $2,200,000 $1,760,000 $1,320,000 $880,000 $440,000 Year Legend Equity Loan Principal Balance

23 Cumulative Wealth Analysis $7,300,000 $6,570,000 $5,840,000 $5,110,000 $4,380,000 $3,650,000 $2,920,000 $2,190,000 $1,460,000 $730,000 Year Legend Equity (loan reduction) Equity (appreciation) CASH FLOW (a/t)

24 Operating Income Analysis $750,000 $675,000 $600,000 $525,000 $450,000 $375,000 $300,000 $225,000 $150,000 $75,000 Year Legend GROSS OPERATING INCOME NET OPERATING INCOME NET CASH FLOW (b/t)

25 Gross Income Vs. Operating Expenses $770,000 $693,000 $616,000 $539,000 $462,000 $385,000 $308,000 $231,000 $154,000 $77,000 Year Legend GROSS SCHEDULED INCOME Total Operating Expenses