Maple Valley Community Mobile Home Park for Sale

Maple Valley Community Mobile Home Park for Sale Presented February 19, 2010 By: Maple Valley Community LLC 4416 Quartz Lane Johnstown, CO 80534 Contact: Dennis Mauler Ph: 303.809.9023 Email: dennismauler@gmail.com This summary package contains information that is not to be shared, copied, disclosed or otherwise compromised without the consent of Maple Valley Community LLC

I. INTRODUCTION II. EXECUTIVE SUMMARY a. Property Summary b. Key Considerations c. Marketing Objectives III. THE BUSINESS a. Challenge Statement b. Management & Operations c. Opportunity IV. FINANCES a. Assumptions b. Historical P/L c. Projected P/L d. Rent Roll V. ATTACHMENTS a. Park Photos b. Legal Description c. Survey d. Map e. Aerial Photo Page 2

INTRODUCTION The following package contains general information regarding the mobile home park in Aliquippa, PA known as Maple Valley Community. Additionally, you will find a list of recent capital improvements, historical operating statements, projections for 2010 and 2011 as well as the current rent roll. Until we have a signed agreement or contract and you have permission, please do not contact either the park residents or manager. EXECUTIVE SUMMARY Property Summary: The mobile home park is located in the city of Aliquippa, PA and is comprised of approximately 47 home sites on 20 acres and one shop/office. Of the 47 home sites, there are currently about 25 occupied sites, with 1 being the last of the recent homes that have been moved in and fixed up and available for sale. The majority of the 22 vacant sites are ready for occupancy. Also included are 3 homes that have been sold on a rent to own basis with approximately $15,000 owed on the remaining balance. The park is on City water and sewer under a master meter with the occupied sites individually sub-metered. Park residents are responsible for water, sewer, heating oil, and electric. The park pays for common lights and electricity for the shop. Land Area: 20.56 acres (see attached Survey) Site Improvements: 47 Mobile Home Hookups Water/Sewer/Electricity Gravel roads with off road parking for each site Storage/Equipment Shop ~ 25 x 15 Key Considerations Since the purchase of this mobile home park approximately 12 months ago, there have been significant improvements made to the property. The following is a summary of those improvements: Page 3

The occupied sites were sub-metered to allow for tenant bill back of water/sewer utilities. Additionally, the main sewer lines were video inspected for integrity and minor water leaks located and repaired. The park has two creeks flowing through the property which over time had eroded away banks located near some tenant s mobile homes. As these creeks serve as drainage for the area it was required that banks be shored up and the flow of the creeks re-routed in some instances. Significant improvements were made regarding these issues. The property was applied for and qualified to participate in the Beaver County Clean and Green program whereby certain portions of property can be designated as open space thus drastically reducing the tax base for the property. Maple Valley Community qualified for approximately 15 acres designated to the program (consisting of the unusable hard wood forests surrounding the park homes) This effectively reduced taxes by 2/3 a savings of approximately $11,000.00 per year Several trailers in disrepair were demolished and removed in addition to substantial lot clean up on several of vacant lots. Rules and regulations were put in place to improve appearances, safety and sense of community New signage was put in place and the entrance and speed limit signs throughout the park New mailboxes were purchased and erected in a common area for the tenants The storage shop was clean-up and painted Four mobile homes were purchased from an existing park in Pittsburgh and moved into the park, refurbished and sold to residents (3) Lawn maintenance equipment was purchased including a John Deere riding mower, push mower, and weed trimmer. Approximate total in Capital Expenditure to date is $53,000.00 Aliquippa, PA is located approximately 20 minutes from the Pittsburgh Airport and greater Pittsburgh area. Aliquippa has some local industry in addition to serving as a commutable community for the greater Pittsburgh area. The primary priority of the park is to maximize cash flow and park value through continuing to increase occupancy within the park. This can be accomplished in several ways including relocation of mobiles homes from the greater Pittsburgh area and favorable move-in conditions for existing mobile home owners. The recent purchase and move in of mobile homes was met with good demand for resale and as this park continues under good management it should be expected to maintain if not increase demand for new tenants. The infrastructure of the park is good and with a focus on increasing the occupancy of the park in combination with good management, a new owner should expect to see increasing cash flow and create additional value to the park. Marketing Objectives The marketing objectives should be focused on increasing the occupancy of the park through aggressive move-in specials and advertising, purchasing additional homes and reselling them to Page 4

future residents, and through continuing to create a clean and a safe community. The following are a few ideas on how to accomplish this: Offering reduced or free rent to potential residents in addition to covering a portion of the moving costs to relocate to the park As management was poor in the past, continue to enforce strict but fair rules for the park to keep it safe and clean. This will help enhance the appearance and reputation and should improve resident referrals. Purchase good homes from the Pittsburgh area to bring into the park. Offer favorable rent to own terms for decent homes. Do so on a steady basis to match demand and allow for increased occupancy and cash flow in the park Work with mobile home manufacturers and dealer to encourage their sales into the community. Support a solid advertising budget that will allow for marketing in the area with an emphasis of affordability of housing relative to competing apartments and other residential units. Page 5

THE BUSINESS Challenge Statement The largest hurdle or problem of the past was the poor management and consequential reputation that the park had. This has been mostly resolved over the past year as solid management from local managers have performed well; the community has witnessed substantial clean-up and improvements within the park from the current owners; and homes have recently been brought in and met with good buying demand. The next challenge and opportunity is to continue to find quality homes to purchase and relocate into the park for resell to future residents. Based on recent purchases, the cost per home is approximately $10,000 per unit to purchase, relocate, and refurbish for sale. One could expect to profit 10% on the resale and owner financing. However, the greater value is created by the lot rent that would generate approximately an additional $2,700.00 per year in net profit. The following calculations demonstrate the potential value added for executing this business strategy. Financial Summary for the Business Strategy of purchasing mobile homes for relocation and resale into the park to future residents: Purchase of Home Costs: Purchase of Home: $5,500.00 Cost to Move and Setup: $3,500.00 Refurbishing Costs: $1,000.00 Total Home Cost: $10,000.00 Typical Sale of Home Scenario Increase in Park Value/Lot Filled Sales Price of Home: $11,000.00 Average Lot Rent $225.00 Less: Down Payment $1,000.00 Annual Increase Rent $2,700.00 Balance Financed $10,000.00 Capitalization Rate 11.00% Number of Payments 60 Increase in Park Value $24,547.54 Interest Rate 10.00% Monthly Payment on Home $210.71 Page 6

The competition is a few other mobile home parks in the area as well as other means of residential housing. One should continue to make this an attractive mobile home community as well as make it affordable compared to other housing solutions. This can be done by keeping rates and prices near that of the competition as well as offering creative solutions to those that demonstrate a good worth ethic as well as a desire to be financially responsible. Management & Operations: 1) Current Owner: Maple Valley Community LLC 2) Current Manager: Marilyn Baron (Local) Opportunity: The manager is responsible for record keeping, collecting and depositing rent, property maintenance, showing available lots and homes to prospective residents, enforcing rules and regulations of the community, handling resident problems and questions, and all duties involved with managing the property. The manager currently receives $500.00/month for her services The overall opportunity is to increase occupancy and maximize the profitability of this mobile home community to provide an excellent return on investment as well as increase the value of the community for a possible sale or refinance in the future. Sales Price: The mobile home park of Maple Valley Community is being offered for sale at a price of $397,000.00 and a capitalization rate over 11%. With the potential for significant cash flow increase and subsequent park value, this property will not last long. There is no owner financing or assumable financing being offered at this time. Page 7

FINANCES Assumptions The following assumptions were made in preparing these forecasts: Capital Expenditures under Current Ownership Historical P/L Under Current Ownership Year 1 Projections (2010) Based upon existing residents plus the sale of the last remaining home to be sold on a rent-to-own basis. Year 2 Projections (2011) Based upon a scenario that brings in 5 additional homes. This is an example of the potential cash flow increase and value added to the park Capital Expenditures -Purchase, Relocate and Refurbish (4) homes $32,045.52 -Stream Improvement $1,500.00 -Sub-meter water $9,770.08 -Clean-up/Demo old trailers $5,680.00 -Replace Mailboxes $468.11 -Signage $577.14 -Storage Shed/Shop Improvements $1,833.82 -Lawn Care Equipment $1,332.32 (JD riding mower, push mower, trimmer) TOTAL Capital Expenditures $53,206.99 \ Page 8

Profit and Loss Historical Maple Valley Community LLC Aliquippa, PA 15001 Partial 2009 (Feb - Dec) Profit and Loss Statement Income Partial 2009 Lot Rent $ 45,252.20 Total Income $ 45,252.20 Expenses Advertising $ 417.00 Bank Fees $ 40.58 Business License/Permits $ 67.00 Insurance $ 1,140.00 Landscaping and Grounds keeping $ 1,942.64 Office Supplies $ 130.35 Park Management $ 5,500.00 Postage and Delivery $ 374.38 Printing and Reproduction $ 172.94 Repairs and Maintenance $ 3,442.45 Taxes - Property $ 16,658.97 Utilities -Electric $ 1,418.66 Utilities - Water $ 1,536.55 Total Expenses $ 32,841.52 Note: Lot rent was raised to $225 in April, 2009 Page 9

Profit and Loss Year 1 Maple Valley Community LLC Aliquippa, PA 15001 Income Lot Rent $ 67,500.00 Home Payments on Sold Homes $ 8,400.00 Total Income $ 75,900.00 Expenses Advertising $ 500.00 Bank Fees $ 50.00 Business License/Permits $ 67.00 Capital Expenditure Reserve $ 6,000.00 Insurance $ 1,135.00 Landscaping and Grounds keeping $ 3,500.00 Office Supplies $ 150.00 Park Management $ 6,000.00 Postage and Delivery $ 250.00 Printing and Reproduction $ 150.00 Professional fees $ 500.00 Repairs and Maintenance $ 5,000.00 Taxes - Property $ 4,866.00 Utilities -Electric $ 1,700.00 Utilities - Water $ 1,500.00 Total Expenses $ 31,368.00 Net Operating Income $ 44,532.00 Assumptions: 4 homes with monthly payment of $175.00. 25 total residents. Lot rent remains at $225.00. Note: Taxes have been reduced to 1/3 of 2009 taxes due to Clean and Green designation. Page 10

Profit and Loss Year 2 Maple Valley Community LLC Aliquippa, PA 15001 Income Lot Rent $ 84,600.00 Home Payments on Sold Homes $ 20,400.00 Total Income $ 105,000.00 Expenses Advertising $ 500.00 Bank Fees $ 50.00 Business License/Permits $ 67.00 Capital Expenditure Reserve $ 6,000.00 Insurance $ 1,135.00 Landscaping and Grounds keeping $ 3,500.00 Office Supplies $ 150.00 Park Management $ 6,000.00 Postage and Delivery $ 250.00 Printing and Reproduction $ 150.00 Professional fees $ 500.00 Repairs and Maintenance $ 5,000.00 Taxes - Property $ 4,866.00 Utilities -Electric $ 1,700.00 Utilities - Water $ 1,500.00 Total Expenses $ 31,368.00 Net Operating Income $ 73,632.00 Assumptions: $50,000 investment to purchase 5 homes and resell at 10% profit. Monthly payments to be estimated at $200/home. Lot rent raised $10.00 to $235.00/month Page 11

February 2009 Rent Roll Lot# Name Lot Rent Utility Billback Prev Bal. Total Due 1 Edward Bartoles 225.00 25.00 207.59 457.59 2 Peggy Dale 225.00 25.00 1,135.61 1,385.61 5 Keith & Melissa Schmidt 225.00 25.00-250.00 7 Home for Sale 8 Home Sold - March Move in 23 Dale Babik 225.00 25.00 238.76 488.76 25 George and Dawn Freeman 225.00 25.00 22.60 272.60 30 Jerod Fallen 225.00 25.00 873.58 1,123.58 32 Cheryl E. Gandee 225.00 25.00 17.58 267.58 33 Kathleen F. Sambol 225.00 25.00 51.17 301.17 34 Jane E. Hyde 225.00 25.00 4.41 254.41 35 Pauline and Kenny Hyde 225.00 25.00 33.85 283.85 36 Carol J. Booher 225.00 25.00 199.02 449.02 38 Stanley & Brenda Varner 225.00 25.00 122.62 372.62 40 James R. Anderson, Jr. 225.00 25.00-250.00 40 1/2 Joseph E. Adamski 225.00 25.00 28.06 278.06 41 Timmothy Denniston 225.00 25.00 0.06 250.06 47 Jeff Losco 225.00 25.00 (24.47) 225.53 48 James Shaulis 225.00 25.00 97.58 347.58 52 Jeff Booher 225.00 25.00 2.53 252.53 55 William L. Hennigan, Jr. 225.00 25.00 (15.00) 235.00 57 Charles McMullen 225.00 25.00 18.59 268.59 59 Christa Walter/Dan Frank 225.00 25.00 41.39 291.39 62 Cindy Walter 225.00 25.00 84.05 334.05 63 Tom Walter Jr/Mindy Craig 225.00 25.00 149.69 399.69 TOTALS 5,175.00 575.00 3,289.27 9,039.27 Page 12

Maple Valley Community Mobile Home Park For Sale Aliquippa, PA ATTACHMENTS Park Photos Page 13

Maple Valley Community Mobile Home Park For Sale Aliquippa, PA Page 14

Legal Description ALL THAT CERTAIN piece, parcel or tract of land situate in the City of Aliquippa, County of Beaver and Commonwealth of Pennsylvania, bounded and described as follows, to wit: BEGINNING at an iron pin, which iron pin is situate on the southwesterly corner of Lot No. 14 in a plan of lots laid out by the Woodlawn Land Company known as the Carrol Street Extension Plan of Lots as said plan is recorded in the Office of the Recorder of Deeds for Beaver County in Plan Book Vol. 5, page 172; thence from said point of beginning along the southerly line of said Lot No. 14, North 89 degrees 48 minutes East, a distance of 193.429 feet to a point; thence North 30 degrees 10 minutes 15 seconds East, a distance of 159.333 feet to a point of curve; thence northwestwardly by the arc of a circle curving to the left, having a radius of 375 feet, a distance of 453.348 feet to a point of tangent; thence North 54 degrees 37 minutes West, a distance of 201.567 feet to a point on the easterly line of a ten foot alley; thence by the said line of the said alley, North 44 degrees 34 minutes 36 seconds East, a distance of 597.219 feet to a point on the southerly line of a fifteen foot alley as said alley is shown on the Woodlawn Land Company Plan of Lots No. 8, Second Addition, as the same is recorded in the Recorder s Office of Beaver County in Plan Book Vol. 2, page 124; thence by the said line of said alley, South 68 degrees 15 minutes 26 seconds East, a distance of 397.069 feet to an iron pin in Spring Street, as the same is shown in said Plan No. 8, Second Addition; thence still in said street, South 7 degrees 20 minutes West, a distance of 21.75 feet to a monument at corner of lands formerly of E. Hall; thence by the line dividing lands now or formerly of E. Hall and the land herein described, South 7 degrees 25 minutes 28 seconds West, a distance of 793.96 feet to a concrete monument on line of lands now or formerly of John DeHaven; thence by said lands now or formerly of John DeHaven, South 83 degrees 40 minutes 27 seconds West, a distance of 64.35 feet to a point; thence by the same, South 7 degrees 21 minutes 07 seconds East, a distance of 939.10 feet to a point; thence still by the same, South 82 degrees 53 minutes 01 seconds West, a distance of 209.56 feet to a concrete monument; thence by a line dividing the tract herein described and other lands now or formerly of Woodlawn Land Co. South 82 degrees 53 minutes 01 seconds West, a distance of 120.44 feet to an iron pin; thence still by the same, North 7 degrees 21 minutes 07 seconds West, a distance of 150 feet to a point; thence South 82 degrees 53 minutes 01 seconds West, a distance of 200 feet to an iron pin; thence by land of same, North 12 degrees 09 minutes 15 seconds West, a distance of 747.38 feet to the iron pin, the place of beginning. BEING known as Spring Street Trailer Court formerly known as Aliquippa Mobile Estates located on Spring Street, Aliquippa, PA 15001 HAVING erected thereon a Mobile Home Park known as Spring Street Trailer Court formerly known as Aliquippa Mobile Estates located on Spring Street, Aliquippa, PA 15001. PARCEL No. 08-034-0301.000-01-1 and 08-034-0301.983-01-1 NOTICE-THIS DOCUMENT MAY NOT SELL, CONVEY, TRANSFER, INCLUDE OR INSURE THE TITLE TO THE COAL AND RIGHT OF SUPPORT UNDERNEATH THE SURFACE LAND DESCRIBED OR REFERRED TO HEREIN, AND THE OWNER OR OWNERS OF SUCH COAL MAY HAVE THE COMPLETE LEGAL RIGHT TO LAND AND ANY HOUSE, BUILDING OR OTHER STRUCTURE ON OR IN SUCH LAND. THE INCLUSION OF THIS NOTICE DOES NOT ENLARGE OR RESTRICT OR MODIFY ANY LEGAL RIGHTS OR ESTATES OTHERWISE CREATED, TRANSFERRED, EXCEPTED, OR RESERVED BY THIS INSTRUMENT. (This notice is set forth in the manner provided in Section 1 of the Act of July 17, 1957, P.L. 984, as amended.) Page 15

Survey Page 16

Maple Valley Community Mobile Home Park For Sale Aliquippa, PA Map Page 17

Maple Valley Community Mobile Home Park For Sale Aliquippa, PA Aerial Photo Page 18