10-Year After Tax Cash Flow Analysis INITIAL INVESTMENT Purchase Price + Acquisition Costs - 1st Mortgage + Total Loan Fees and Points Initial Investment $949900 $9499 $474950 $4750 $489198 MORTGAGE DATA 1ST LIEN Loan Amount Interest Rate Amortization Period Loan Term Loan Fees & Points Periodic Payment Annual Debt Service $474950 5.250% 30 Years 30 Years 1.00% $2623 $31472 10-YEAR CASH FLOW SUMMARY For the Year Ending POTENTIAL RENTAL INCOME (PRI) - Vacancy / Credit Loss EFFECTIVE RENTAL INCOME + Other Income GROSS OPERATING INCOME (GOI) - Operating Expenses NET OPERATING INCOME (NOI) - Depreciation - 1st Lien Interest Deduction - Amortized Loan Costs TAXABLE INCOME x Federal Marginal Tax Rate (25%) x Local Marginal Tax Rate (9.3%) x Medicare Surtax (3.8%) TAX LIABILITY (Savings) NET OPERATING INCOME (NOI) - Annual Debt Service 1st Lien CASH FLOW BEFORE TAXES - Tax Liability (Savings) CASH FLOW AFTER TAXES Year 1 Dec-2019 Year 2 Dec-2020 Year 3 Dec-2021 Year 4 Dec-2022 Year 5 Dec-2023 Year 6 Dec-2024 Year 7 Dec-2025 Year 8 Dec-2026 Year 9 Dec-2027 Year 10 Dec-2028 $46620 $48019 $49459 $50943 $52471 $54045 $55667 $57337 $59057 $60829 $2331 $2401 $2473 $2547 $2624 $2702 $2783 $2867 $2953 $3041 $44289 $45618 $46986 $48396 $49848 $51343 $52883 $54470 $56104 $57787 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $44289 $45618 $46986 $48396 $49848 $51343 $52883 $54470 $56104 $57787 $15160 $15186 $15214 $15242 $15271 $15301 $15332 $15363 $15396 $15430 $29129 $30432 $31772 $33154 $34577 $36042 $37551 $39107 $40708 $42357 $16717 $17444 $17444 $17444 $17444 $17444 $17444 $17444 $17444 $16717 $24775 $24415 $24036 $23636 $23214 $22770 $22302 $21809 $21289 $20741 $158 $158 $158 $158 $158 $158 $158 $158 $158 $158 ($12521) ($11585) ($9866) ($8084) ($6239) ($4330) ($2353) ($304) $1817 $4741 ($3130) ($2896) ($2467) ($2021) ($1560) ($1083) ($588) ($76) $454 $1185 ($1164) ($1077) ($918) ($752) ($580) ($403) ($219) ($28) $169 $441 ($476) ($440) ($375) ($307) ($237) ($165) ($89) ($12) $69 $180 ($4770) ($4413) ($3760) ($3080) ($2377) ($1651) ($896) ($116) $692 $1806 $29129 $30432 $31772 $33154 $34577 $36042 $37551 $39107 $40708 $42357 $31472 $31472 $31472 $31472 $31472 $31472 $31472 $31472 $31472 $31472 ($2343) ($1040) $300 $1682 $3105 $4570 $6079 $7635 $9236 $10885 ($4770) ($4413) ($3760) ($3080) ($2377) ($1651) ($896) ($116) $692 $1806 $2427 $3373 $4060 $4762 $5482 $6221 $6975 $7751 $8544 $9079 Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 1 of 8
Expense Detail Analysis INCOME For the Year Ending POTENTIAL RENTAL INCOME (PRI) - Vacancy / Credit Loss EFFECTIVE RENTAL INCOME (ERI) + Other Income GROSS OPERATING INCOME (GOI) EXPENSE DETAIL Real Estate Taxes Property Insurance Repairs And Maintenance Licenses/permits Landscape Maintenance TOTAL OPERATING EXPENSES NET OPERATING INCOME (NOI) Year 1 Dec-2019 Year 2 Dec-2020 Year 3 Dec-2021 Year 4 Dec-2022 Year 5 Dec-2023 Year 6 Dec-2024 Year 7 Dec-2025 Year 8 Dec-2026 Year 9 Dec-2027 Year 10 Dec-2028 $46620 $48019 $49459 $50943 $52471 $54045 $55667 $57337 $59057 $60829 $2331 $2401 $2473 $2547 $2624 $2702 $2783 $2867 $2953 $3041 $44289 $45618 $46986 $48396 $49848 $51343 $52883 $54470 $56104 $57787 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $44289 $45618 $46986 $48396 $49848 $51343 $52883 $54470 $56104 $57787 $11874 $11874 $11874 $11874 $11874 $11874 $11874 $11874 $11874 $11874 $1500 $1500 $1500 $1500 $1500 $1500 $1500 $1500 $1500 $1500 $886 $912 $940 $968 $997 $1027 $1058 $1089 $1122 $1156 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $15160 $15186 $15214 $15242 $15271 $15301 $15332 $15363 $15396 $15430 $29129 $30432 $31772 $33154 $34577 $36042 $37551 $39107 $40708 $42357 Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 2 of 8
Sales Proceeds Analysis Improvement Allocation (50%) $479700 Interest Deduction Yes Depreciation Life 27.5 Years Loan Cost Deduction Yes U.S. Mid-Month Convention Yes For the Year Ending CAP Rate at Sale (subsequent year NOI) Sale Price - Cost of Sale - 1st Lien Balance SALES PROCEEDS BEFORE TAX Original Purchase & Costs (Basis) - Depreciation Taken Net Adjusted Basis Sale Price - Cost of Sale - Original Purchase & Costs (Basis) Capital Gain (Loss) Loan Fees & Points Paid - Loan Fees & Points Amortized Loan Fees & Points Remaining x Marginal Income Tax Rate Loan Fees & Points Tax Savings Sales Proceeds Before Tax - Federal Capital Gain Tax (20%) - Local Capital Gain Tax (9.3%) Year 1 Dec-2019 Year 2 Dec-2020 Year 3 Dec-2021 Year 4 Dec-2022 Year 5 Dec-2023 Year 6 Dec-2024 Year 7 Dec-2025 Year 8 Dec-2026 Year 9 Dec-2027 Year 10 Dec-2028 3.11% 3.15% 3.19% 3.23% 3.27% 3.31% 3.35% 3.38% 3.42% 3.45% $978000 $1008000 $1038000 $1069000 $1101000 $1134000 $1168000 $1203000 $1239000 $1277000 $48900 $50400 $51900 $53450 $55050 $56700 $58400 $60150 $61950 $63850 $468253 $461196 $453759 $445922 $437664 $428962 $419791 $410128 $399944 $389213 $460847 $496404 $532341 $569628 $608286 $648338 $689809 $732722 $777106 $823937 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $16717 $34161 $51605 $69049 $86493 $103937 $121381 $138825 $156269 $172986 $942682 $925238 $907794 $890350 $872906 $855462 $838018 $820574 $803130 $786413 $978000 $1008000 $1038000 $1069000 $1101000 $1134000 $1168000 $1203000 $1239000 $1277000 $48900 $50400 $51900 $53450 $55050 $56700 $58400 $60150 $61950 $63850 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $959399 $959399 ($30299) ($1799) $26701 $56151 $86551 $117901 $150201 $183451 $217651 $253751 $4750 $4750 $4750 $4750 $4750 $4750 $4750 $4750 $4750 $4750 $158 $317 $475 $633 $792 $950 $1108 $1267 $1425 $1583 $4591 $4433 $4275 $4116 $3958 $3800 $3641 $3483 $3325 $3166 38.10% 38.10% 38.10% 38.10% 38.10% 38.10% 38.10% 38.10% 38.10% 38.10% $1749 $1689 $1629 $1568 $1508 $1448 $1387 $1327 $1267 $1206 $460847 $496404 $532341 $569628 $608286 $648338 $689809 $732722 $777106 $823937 ($6060) ($360) $5340 $11230 $17310 $23580 $30040 $36690 $43530 $50750 ($2818) ($167) $2483 $5222 $8049 $10965 $13969 $17061 $20242 $23599 Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 3 of 8
Measures of Investment Performance Analysis Acquisition CAP Rate 3.07% Combined LTV at Acquisition 50.00% Cost of Sale upon Disposition 5.00% Combined DSCR at Acquisition 0.93 Summary of Investment Measures For the Year Ending Loan-to-Value (LTV) - 1st Lien Combined LTV Debt Service Coverage Ratio (DSCR)-1st Lien Combined DSCR Before Tax Cash on Cash After Tax Cash on Cash Year 1 Dec-2019 Year 2 Dec-2020 Year 3 Dec-2021 Year 4 Dec-2022 Year 5 Dec-2023 Year 6 Dec-2024 Year 7 Dec-2025 Year 8 Dec-2026 Year 9 Dec-2027 Year 10 Dec-2028 47.88% 45.75% 43.71% 41.71% 39.75% 37.83% 35.94% 34.09% 32.28% 30.48% 47.88% 45.75% 43.71% 41.71% 39.75% 37.83% 35.94% 34.09% 32.28% 30.48% 0.93 0.97 1.01 1.05 1.10 1.15 1.19 1.24 1.29 1.35 0.93 0.97 1.01 1.05 1.10 1.15 1.19 1.24 1.29 1.35-0.48% -0.21% 0.06% 0.34% 0.63% 0.93% 1.24% 1.56% 1.89% 2.23% 0.50% 0.69% 0.83% 0.97% 1.12% 1.27% 1.43% 1.58% 1.75% 1.86% Year Property Sold 1 2 3 4 5 6 7 8 9 10 Before Tax Unleveraged Property Yield (IRR) After Tax Unleveraged Property Yield (IRR) N/A 3.01% 4.06% 4.60% 4.94% 5.17% 5.34% 5.47% 5.57% 5.67% N/A 2.10% 2.81% 3.19% 3.44% 3.62% 3.75% 3.86% 3.96% 4.04% Effective Unleveraged Tax Rate Effective Tax Rate (Includes Leverage) Effective Annual Cost of Borrowed Funds Before Tax Impact of Leverage After Tax Effective Cost of Funds After Tax Impact of Leverage Before Tax EQUITY Yield (IRR) After Tax EQUITY Yield (IRR) 91.67% 30.23% 30.79% 30.65% 30.36% 29.98% 29.78% 29.43% 28.90% 28.75% 0.00% -76.92% 16.98% 21.05% 22.44% 22.58% 22.68% 22.38% 22.16% 22.03% 6.28% 5.76% 5.59% 5.50% 5.45% 5.42% 5.39% 5.37% 5.36% 5.35% N/A 2.62% 1.41% 0.80% 0.44% 0.21% 0.05% 0.07% 0.16% 0.23% 3.89% 3.57% 3.46% 3.40% 3.37% 3.36% 3.34% 3.32% 3.32% 3.31% N/A 1.41% 0.61% 0.19% 0.05% 0.22% 0.34% 0.44% 0.50% 0.56% N/A 0.39% 2.65% 3.80% 4.50% 4.96% 5.29% 5.54% 5.73% 5.90% N/A 0.69% 2.20% 3.00% 3.49% 3.84% 4.09% 4.30% 4.46% 4.60% Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 4 of 8
Cash-on-Cash Analysis Annual Cash-on-Cash Dividend Return Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Before Tax Cash on Cash Return After Tax Cash on Cash Return -0.48% -0.21% 0.06% 0.34% 0.63% 0.93% 1.24% 1.56% 1.89% 2.23% 0.50% 0.69% 0.83% 0.97% 1.12% 1.27% 1.43% 1.58% 1.75% 1.86% Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 5 of 8
Optimal Holding Period Analysis Before Tax Optimal Holding Period 10 Years After Tax Optimal Holding Period 10 Years Before Tax Optimal Hold Annual Yield 5.9% After Tax Optimal Hold Annual Yield 4.6% Optimal Holding Period by Annual Equity Yield (IRR) Year of Sale Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Before Tax EQUITY Yield (IRR) After Tax EQUITY Yield (IRR) N/A 0.39% 2.65% 3.80% 4.50% 4.96% 5.29% 5.54% 5.73% 5.90% N/A 0.69% 2.20% 3.00% 3.49% 3.84% 4.09% 4.30% 4.46% 4.60% Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 6 of 8
Impact of Leverage Analysis Impact of Leverage Analysis (Before Tax) Year of Sale Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Property Yield (IRR) Before Tax Effective Cost of Borrowed Funds Equity Yield (IRR) Before Tax N/A 3.01% 4.06% 4.60% 4.94% 5.17% 5.34% 5.47% 5.57% 5.67% 6.28% 5.76% 5.59% 5.50% 5.45% 5.42% 5.39% 5.37% 5.36% 5.35% N/A 0.39% 2.65% 3.80% 4.50% 4.96% 5.29% 5.54% 5.73% 5.90% Impact of Leverage on Yield N/A 2.62% 1.41% 0.80% 0.44% 0.21% 0.05% 0.07% 0.16% 0.23% Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 7 of 8
Impact of Leverage Analysis Impact of Leverage Analysis (After Tax) Year of Sale Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Property Yield (IRR) After Tax After Tax Effective Cost of Funds Equity Yield (IRR) After Tax N/A 2.10% 2.81% 3.19% 3.44% 3.62% 3.75% 3.86% 3.96% 4.04% 3.89% 3.57% 3.46% 3.40% 3.37% 3.36% 3.34% 3.32% 3.32% 3.31% N/A 0.69% 2.20% 3.00% 3.49% 3.84% 4.09% 4.30% 4.46% 4.60% Impact of Leverage on Yield N/A 1.41% 0.61% 0.19% 0.05% 0.22% 0.34% 0.44% 0.50% 0.56% Copyright 2011-2018 CRE Tech Inc. All Rights Reserved. DISCLAIMER: All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is without warranty of any kind. Neither nor CRE Tech Inc. assume any liablity for errors or ommissions. This information is not intended to replace or serve as substitute for any legal investment real estate or other professional advice consultation or service. Page 8 of 8