confidential · pest control, and fencing in yards for the zarzamora proper-ty, installing covered...

Seven Pines8027 South Zarzamora & 7907 Interstate 35 SouthSan Antonio, TX 78224

CONFIDENTIALOffering Memorandum

the multifamily group.opening doors and closing deals

Offer Summary

Exclusive Representation

The Multifamily Group has been exclusively retained to repre-

sent the Seller in the disposition of Seven Pines. All inquiries

about the Offering or the Property should be directed to The

Multifamily Group

Property Visitation

Prospective buyers will have the opportunity to visit the Prop-

erty through a pre-scheduled property tour. These tours will

viewing select units and access to common areas and other

facilities on the Property. In order to accommodate property's

ongoing operations, visitation will require advance notice and

scheduling through The Multifamily Group.

Offer Submission

Offers should be presented in the form of non-binding Letter

of Intent, spelling out the significant terms and conditions of

Purchaser's offers including, but not limited to.

1. Asset Pricing

2. Due Diligence and Closing Time Frame

3. Earnest Money Deposit

4. Description of the Debt / Equity Structure

5. Qualifications to Close

The purchase terms shall require that Cash-to-Notes be paid

at closing. Offers should be delivered to the attention of one

of the brokers at the address and/or emails listed.

32

Jon KrebbsManaging PartnerPhone: 972.379.9843E-mail: [email protected]

Paul YazbeckManaging PartnerPhone: 972.379.9844E-mail: [email protected]

Chase DavisVice PresidentPhone: 972.465.9533E-mail: [email protected]

Chris SiemaskoSenior AdvisorPhone: 224.364.4058E-mail: [email protected]

Bryce SmithSenior AdvisorPhone: 469.607.3837E-mail: [email protected]

Greg MillerSenior Advisor Phone: 469.250.6966E-mail: [email protected]

4 5

The BlueprintLocation Overview ...........................6

Property Overview ......................... 10

Rent Comparables......................... 28

Financial Overview .........................34

San Antonio

North

Location

35

Alamo Heights

BalconesHeights

410

1604

Seven Pines

410

10

37

1604

35

35

Long Valley

Macdona

Losoya

35

76

8790

90

181

Seven Pines8027 South Zarzamora

Seven Pines7907 Interstate 35 South

W Vestal Pl

Mar

ket S

t

Hutchins Elemtary School

S Za

rzam

ora

St

W Hutchins Pl

35

98

Property Overview

1110

The Multifamily Group is proud to present the exclusive offering of Seven Pines Apartments, a value-add opportunity in San Antonio, TX. Constructed in two phases, at two sep-arate sites a block down the street from each other, Seven Pines consists of 88 units (one unit is currently being used as an office), including two Laundry Buildings, which com-prise 22 buildings in all. These apartments were built in a low-density style, with plenty of space on the grounds. Both of the Laundry Rooms have been nicely renovated, with new electrical, new upgrade floors, and New Speed Queen machines. The property is almost entirely one-story 4-plex-es, spaced well apart, for comfortable living (Only 8 apart-ments are on the second floor of only 2 two-story buildings). Each apartment has a reserved parking spot in one of the six spacious parking lots, and there is also an abundance of additional open parking.

As an almost unheard-of bonus, all apartment units are con-structed with concrete block separating all apartment units from each other, making things quieter than expected. The original developers built these apartments for themselves, and went on to own the properties for 33 years, and the current owners acquired Seven Pines in 1999. The owners have meticulously maintained these apartments with long-term ownership in mind and preserved the building value by making only quality repairs and implementing a comprehen-sive Make-Ready program. The property recently received a REAC score of 93.

All of the roofs are pitched and have been replaced with up-grade materials during current ownership, so they will not all require replacement at once. The last roofs were replaced 5-6 years ago with upgrade laminated shingles, and all 20 apartment buildings now have full-length ridge vents, which extend the life of the roof by reducing temperatures and moisture, and increase comfort of -- and reduce A/C elec-trical costs for -- the residents. In 2019, current ownership replaced all 32 electrical panels at one site. All electrical branch circuit wiring is Copper at both sites (an electrician's report is available), and all building water supply lines are long-lasting Copper. About 1/3 of the property’s water heat-ers have been replaced over the years and were fitted with Full Port ¾” ball drain valves from new, allowing for easier maintenance flushing. New High Security USPS STD-4C

Horizontal Mailboxes along with additional USPS parcel lockers have recently been installed at both sites. Other capital improvements have been made as well, in accor-dance with current ownership’s resolve to carefully preserve and thoughtfully improve the property.

An opportunity exists for new ownership to continue to im-plement the rent increase schedule that is currently in place as units are renewed. Additional rent increases have been implemented for new move-ins, and there is room to further increase rents. Light upgrades of vinyl wood plank flooring, fresh paint, and carpet cleaning are fetching an average of $50/month rent increases. There are also multiple ways to increase revenue streams through implementing RUBS for pest control, and fencing in yards for the Zarzamora proper-ty, installing covered parking in the generous parking lots, or building a stand-alone rental office.

Seven Pines has significant frontage on South Zarzamora Street (23,100 VPD), which stretches over 12 miles north to south through San Antonio. The IDEA School Charter School has recently completed construction of its new Ewing Halsel campus, just two blocks away from Seven Pines. The property is located less than half a mile from I-35, a major artery in San Antonio and Texas that connects residents with different parts of the city, state, and country. South Park Mall, and many additional shops, stores and restaurants are located along nearby SW Military Drive, a thriving commercial corridor. The asset is situated in the heart of San Antonio’s south side, which is the center of the city’s development initiatives, and is seeing an influx of large investments from nationally and internationally recognized companies such as Toyota (3,200 employees), Navistar (600 employees), and Boeing (1,400 employees). Just 6.5 miles from the property is Brooks City-Base, a 1308-acre redevelopment of the Brooks Air Force Base, that is bring-ing additional major employers to the area such as Mission Solar Energy (200 employees), Nissei Plastic Industrial (60 employees and growing), and OKIN BPS (1,400 employees). Fifteen minutes north of Seven Pines lies the Central Busi-ness District of San Antonio, the country’s 7th largest city, which contains several significant tourist attractions such as the Alamo and the River Walk. San Antonio International Airport is located 15 miles north of the property.

Value-Add Opportunities

• Water Savings Plan – Implement water conservation overhaul program which projects that

Seven Pines can reduce water consumption by roughly $20,000 annually

• RUBS - Implement RUB for Pest Control

• Fenced in Yard - There is Enough Space in Front of the Units at the Zarzamora Location to

add Fenced in Front Yards to Attract New Residents Willing to Pay a Larger Premium.

• Covered Parking - There is Ample Room to Install Covered Parking, Charging Residents a

Premium for the Spaces.

• Office Building - New Ownership can Build a Stand-Alone Leasing Office at Zarzamora in the

Courtyard Area, Freeing Up an Additional 1-Bedroom Unit that is Currently Being Used as an

Office and can be Leased for $650+ per month

• Vending Machines - Add Additional Vending Machines near Laundry Facilities

Summary

Terms Free and Clear

Units 88

Year Built 1966/1969

Occupancy 95%

Average Unit Size 693 SF

Average In Place Rent $798

Electricity Resident Pays (Individually Metered)

HVAC Gas Furnace / Individual Electric

Hot Water Individual Gas

Highlights

• Single story cinder block construction

• Original Builder and Owner Held Property for 33 years, Currently Held by 2nd Owner Since

1999 who has Maintained the Property with Long-Term Ownership Interest

• Historically Low Resident Turnover - Less than 23% in 2018

• Current Ownership has Spent Roughly $220,000 in Capital Upgrades over the Past 3 years

with an Additional $25,000 to be Deployed in the last ten months

• All Roofs have been Replaced in the Last 20 years and Received Upgraded Attic Ventilation

• Exeptional Unit Mix - 82% Two and Three Bedrooms - 20 Three Bedroom Units

• Buildings are Spread Out Across the Property with Front Doors Located Well Away from One

Another, Creating a Quieter Community

1312

GeneralGeneral

Terms Free and Clear

Address 8027 South Zarzamora Street, 7907 Interstate 35 South

San Antonio TX, 78224

Year Built 1966/1969

Units 88

Net Rentable SF 60,984

Average Unit Size 693 SF

Site Size 6.58 Acres

Density 13.3 Units/Acre

Occupancy 95.5%

ConstructionConstruction

Foundation Concrete Slab

Exterior Masonry

Roof Pitched Composition

Number of Buildings 20

MechanicalMechanical

HVAC Gas Furnace / Individual Electric

Hot Water Individual Gas

Wiring Copper

Plumbing Copper

UtilitiesUtilities

Electricity Resident Pays (Individually Metered)

Water/Sewer RUB (Master Metered)

Gas RUB (Master Metered)

Cable/Internet Resident Pays

Laundry / Washer and DryersLaundry / Washer and Dryers

Laundry On-Site (1 at each location)

ParkingParking

Paving Grade

Total Spaces 170

Open Spaces Zarzamora -113 / Delight-57

Covered Spaces Value-Add Opportunity

Tax InformationTax Information

County Bexar

CAD Account No. 530361, 536473

Tax Rate 2.75%

School InformationSchool Information

School District South San Antonio

Elementary Hutchins

Middle School Robert C Zamora

High School South San Antonio

Leasing FeesLeasing Fees

Application Fee $35 Per Adult / $50 Per Married Couple

Administration Fee $60

Security Deposit 1BD-$400 / 2BD-$450 / 3BD-$500

Pet Deposit No Pets

Pet Rent No Pets

Reserved Parking No Charge (Value-Add)

Trash Fee RUB

Pest Control Fee No Charge (Value-Add)

Month-to-Month Fee $100

PersonnelPersonnel

Manager On-Site (1)

Maintenance Two

Tax DetailTax Detail

Assessed Value $4,487,690

City 0.558270

ISD 1.450000

County 0.277429

College 0.149150

Hospital 0.276235

Other 0.023668

Other 2 0.018580

Total 2.753332%

NotesProperty Details

Unit Amenities

• 46 Units have been Converted to

Vinyl Wood Plank Flooring

• Individual Water Heaters

• Upgraded Ceiling Insulation

• Replaced all Light Bulbs Throughout

Interiors with Long-Life Energy-Saving

LED Bulbs

• Solar Screens throughout

• 52 Units have Received New Energy

Efficient Refrigerators

• 72 Units have New Energy Efficient

Electronic Ignition Furnaces

• Reserved Parking

• Programmable Thermostats

Community Amenities

• All but Eight Units are One Story - no upstairs neighbors

• 2 Renovated Laundry Rooms – 1 with Electrical Upgrades including New Panel and

Circuits

• Upgraded Mailboxes and Parcel Lockers

• All Walls Separating Units from Each Other are 6" Concrete Block - Very Quiet

Compared to Conventional Wood-Framed Walls

• Exterior Walls are 10” thick and are Entirely Concrete Block Framed at the Zarzamora

Site; all Exterior Walls have been Recently Painted with Sherwin Williams Superpaint.

• Replaced all Light Bulbs Throughout Exteriors with Long-Life Energy-Saving LED Bulbs

Amenities

1514

Demographic and Income Profile8027 S Zarzamora St, San Antonio, Texas, 78224 Prepared by EsriDrive Time: 10 minute radius Latitude: 29.34636

Longitude: -98.53417

Summary Census 2010 2019 2024Population 146,554 155,711 162,715Households 45,621 48,655 50,819Families 34,444 36,272 37,712Average Household Size 3.18 3.17 3.17Owner Occupied Housing Units 28,721 29,143 30,317Renter Occupied Housing Units 16,900 19,512 20,502Median Age 32.9 33.9 35.6

Trends: 2019 - 2024 Annual Rate Area State NationalPopulation 0.88% 1.59% 0.77%Households 0.87% 1.55% 0.75%Families 0.78% 1.53% 0.68%Owner HHs 0.79% 1.63% 0.92%Median Household Income 2.37% 2.50% 2.70%

2019 2024 Households by Income Number Percent Number Percent

<$15,000 8,922 18.3% 7,825 15.4%$15,000 - $24,999 7,899 16.2% 7,255 14.3%$25,000 - $34,999 6,900 14.2% 6,751 13.3%$35,000 - $49,999 8,000 16.4% 8,272 16.3%$50,000 - $74,999 9,015 18.5% 10,339 20.3%$75,000 - $99,999 4,077 8.4% 5,080 10.0%$100,000 - $149,999 2,785 5.7% 3,833 7.5%$150,000 - $199,999 623 1.3% 897 1.8%$200,000+ 434 0.9% 566 1.1%

Median Household Income $35,804 $40,254Average Household Income $47,079 $54,210Per Capita Income $14,897 $17,164

Census 2010 2019 2024 Population by Age Number Percent Number Percent Number Percent

0 - 4 12,099 8.3% 12,009 7.7% 12,341 7.6%5 - 9 11,619 7.9% 11,815 7.6% 11,838 7.3%10 - 14 11,662 8.0% 11,465 7.4% 11,915 7.3%15 - 19 12,093 8.3% 11,195 7.2% 11,612 7.1%20 - 24 10,662 7.3% 10,909 7.0% 10,530 6.5%25 - 34 18,975 12.9% 22,788 14.6% 21,832 13.4%35 - 44 18,231 12.4% 18,210 11.7% 20,381 12.5%45 - 54 18,744 12.8% 17,616 11.3% 17,677 10.9%55 - 64 14,843 10.1% 17,331 11.1% 17,911 11.0%65 - 74 9,502 6.5% 13,092 8.4% 15,128 9.3%75 - 84 6,089 4.2% 6,804 4.4% 8,714 5.4%

85+ 2,033 1.4% 2,475 1.6% 2,836 1.7%Census 2010 2019 2024

Race and Ethnicity Number Percent Number Percent Number PercentWhite Alone 109,154 74.5% 114,638 73.6% 120,744 74.2%Black Alone 1,788 1.2% 2,074 1.3% 2,348 1.4%American Indian Alone 1,636 1.1% 1,727 1.1% 1,787 1.1%Asian Alone 385 0.3% 449 0.3% 508 0.3%Pacific Islander Alone 59 0.0% 74 0.0% 79 0.0%Some Other Race Alone 29,527 20.1% 32,450 20.8% 32,807 20.2%Two or More Races 4,006 2.7% 4,299 2.8% 4,442 2.7%

Hispanic Origin (Any Race) 135,233 92.3% 145,500 93.4% 152,827 93.9%Data Note: Income is expressed in current dollars.

Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2019 and 2024.

September 10, 2019

©2019 Esri Page 1 of 2

Source: This infographic contains data provided by Esri. The vintage of the data is 2019.

Drive time of 10 minutes

DEMOGRAPHIC SUMMARY8027 S Zarzamora St, San Antonio, Texas, 78224

INCOME

$35,804Median Household

Income

$14,897Per Capita Income

$34,917Median Net Worth

KEY FACTS

155,711Population

33.9

Median Age

48,655Households

$30,907Median Disposable Income

8,0006,0004,0002,0000

HOUSEHOLD INCOME

200000+

150000-199999

100000-149999

75000-99999

50000-74999

35000-49999

25000-34999

15000-24999

0-14999

EDUCATION

32%

No HighSchool

Diploma 35%High School

Graduate

24%Some College 9%

Bachelor's/Grad/ProfDegree

EMPLOYMENT

46%White Collar

32%Blue Collar

22%Services

7.1%

UnemploymentRate

1716

NotesDemographic and Income Profile

2

1. Toyota PlantIn September of 2019, Toyota announced plans to invest an additional $391 million in its San Antonio Assembly Plant. Located just 6.5 miles away, the plant currently employs over 7,200 people and the new investment will create an economic impact of over $10 billion with an employment multiplier of over 40,000 jobs over the next ten years for the region

2. Brooks City-BaseAbout 15 minutes east of the property lies Brooks City-Base, a 1,308-acre mixed use development which houses more than 30 businesses as well as apartment homes, a full-service hotel, event venues, retail and dining options, and a 43-acre park. This has brought more than 3,000 jobs to the area with an average salary of $50,000

3. Navistar PlantNavistar, a leading manufacturer of commercial trucks and busses, announced plans to invest more than $250 million to build a new manufacturing plant in south San Antonio, along U.S. 281 near Mitchell Lake. The economic impact of the plant is expected to be $5.6 billion over 10 years, and the plant will create 600 jobs with average wages of $50,000-$90,000 a year.

4. Texas A&M San AntonioThe property sits less than 10 minutes away from the San Antonio branch of Texas A&M University, a 694-acre campus that offers 36 different degrees and has a current enrollment of about 5,511 students.

5. Downtown San AntonioJust 15 minutes north lies the heart of Downtown San Antonio, the 7th largest city in the country. Thousands are drawn to its offices, restaurants, and hotels; it is home to both the Alamo and the River Walk, which contribute a combined $18 billion in economic impact and draw 37 million visitors to San Antonio each year.

3

North

Economic Drivers

San Antonio

1

2

4

5

410

35

10

Seven Pines

410

410

35

1918

181

90 87

1604

1604

1604

Additional Images

2120

2322

NotesUnit Mix

Average: 693 $808 $857 $902 $1.17 $1.24 $1.30

Total: 88 100% 60,984 $71,104 $75,440 $79,400

Annual: $853,248 $905,280 $952,800

TypeType # Units# Units % of Total% of Total Square FeetSquare Feet Effective RentEffective Rent Market Rent Market Rent Comp Supported Rent Comp Supported Rent Effective $/SFEffective $/SF Market $/SFMarket $/SF Pro Forma $/SFPro Forma $/SF

1-1 - Zarzamora 16 18% 495 $648 $690 $725 $1.31 $1.39 $1.46

2-1 - Zarzamora 20 23% 673 $803 $850 $900 $1.19 $1.26 $1.34

2-1 - Delight 32 36% 747 $803 $850 $900 $1.07 $1.14 $1.20

3-1 - Zarzamora 20 23% 785 $949 $1,010 $1,050 $1.21 $1.29 $1.34

NotesFloorplans

2524

1 Bedroom: 1 Bed / 1 Bath / 495 Sqft




2726

Rent Comparables

NotesNotes

2928

Pla

no R

oad

North

Cornerstone

S Zarzam

ora St.

410

Seven Pines

Villa De Oro

Aristocrat

410

35

35

SW Military Dr.

Riverbend

Rent Comparable Summary

Property NameProperty Name AddressAddress CityCity StateState ZipZip Year Built # of Units Occupancy Avg. Size Avg. Rent/Unit Avg. $/SF

Cornerstone Apartments 1002 Grosvenor Blvd San Antonio TX 78221 1985 91 92% 643 $823 $1.28

Riverbend 8237 S Flores Street San Antonio TX 78221 1970 138 91% 730 $883 $1.21

Villa de Oro 130 Camino De Oro San Antonio TX 78224 1987 150 93% 607 $855 $1.41

Aristocrat Apartments 555 W Hutchins Place San Antonio TX 78221 1970 45 98% 780 $874 $1.12

Averages 1978 106 94% 690 $859 $1.25

Seven Pines 8027 South Zarzamora St, 7907 I-35 South San Antonio TX 78224 1966/1969 88 95% 693 $808 $1.17

Variance +3 ($51) ($0.09)

Rent Comparison This study compares market rents

from nearby properties to Seven

Pines effective rents.

One Bedroom

PROPERTY SIZE RENT $/SF

Villa de Oro 482 $701 $1.45 Villa de Oro 586 $849 $1.45 Aristocrat 660 $795 $1.20 Cornerstone 535 $745 $1.39 Cornerstone 535 $770 $1.44 Riverbend 516 $833 $1.61 Riverbend 678 $836 $1.23

AVERAGE 570 $790 $1.40 Seven Pines* 495 $648 $1.31 Variance ($142) ($0.09)

Two Bedroom


Villa de Oro 776 $999 $1.29 Aristocrat 920 $995 $1.08 Cornerstone 800 $900 $1.13 Riverbend 837 $912 $1.09 Riverbend 910 $966 $1.06 AVERAGE 849 $954 $1.13 Seven Pines* 673 $803 $1.19 Variance ($151) $0.06 Seven Pines* 747 $803 $1.07 Variance ($151)


Aristocrat Apartments

1500 $1,250 $0.83

AVERAGE 1500 $1,250 $0.83 Seven Pines* 785 $922 $1.17 Variance ($328) $0.34

Three Bedroom

3130

3332

Notes

Financial Overview

Notes

3534

T-12 INCOME Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 T-12 TOTALMarket Rent 70,275 70,275 70,275 70,275 70,275 70,275 74,750 74,750 74,750 74,750 74,750 74,750 $870,150

Less: Loss to Lease (3,206) (2,961) (2,486) (2,290) (2,964) (1,062) (6,695) (6,660) (5,242) (4,872) (4,385) (4,210) ($47,033)

Gross Potential Rent 67,069 67,314 67,789 67,985 67,311 69,213 68,055 68,090 69,508 69,878 70,365 70,540 $823,117

Less: Vacancy (4,394) (3,087) (2,271) (800) (2,526) (3,537) (5,011) (4,003) (6,757) (8,217) (9,660) (4,887) ($55,150)

Less: Non-Revenue Units (885) (885) (885) (885) (885) (885) (885) (885) (885) (885) (885) (885) ($10,620)

Less: Bad Debt (1,621) 0 0 (187) 0 (1,331) (487) 20 (2,716) (1,354) 0 0 ($7,677)

NET RENTAL INCOME 60,169 63,342 64,633 66,113 63,900 63,460 61,671 63,222 59,150 59,422 59,820 64,768 $749,670

Plus: RUBS Income 4,314 3,939 4,416 3,030 5,040 5,397 4,585 4,361 5,040 3,603 4,868 4,175 $52,768

Water/Sewer 3,854 3,470 3,946 2,547 4,501 4,900 4,119 3,897 4,497 3,128 4,324 3,730 $46,912

Trash 460 469 470 483 539 497 466 465 543 475 544 445 $5,855

Electric/Gas 0 0 0 0 0 0 0 0 0 0 0 0 $0

Plus: Other Income 2,255 2,564 718 1,806 6,208 4,199 3,445 865 2,610 2,045 792 982 $28,488

TOTAL INCOME 66,738 69,846 69,767 70,949 75,147 73,056 69,701 68,447 66,800 65,070 65,480 69,925 $830,925

T-12 EXPENSESContract Services 1,971 1,971 2,090 1,971 1,973 2,233 1,974 2,124 1,974 2,081 1,974 2,233 $24,568

Repairs & Maintenance 6,725 8,277 5,913 1,822 3,224 1,574 2,095 4,987 8,452 3,547 2,022 6,397 $55,035

Administrative 5,085 8,501 6,749 5,290 9,463 6,858 6,132 5,727 6,189 5,538 5,697 6,469 $77,698

Marketing 109 135 139 104 239 121 330 276 218 47 161 151 $2,030

Payroll 11,912 14,427 17,304 11,726 13,418 11,802 13,879 20,583 13,263 15,861 14,409 14,173 $172,757

Total Utilities 6,453 6,287 6,674 7,724 6,561 6,452 6,368 6,926 7,209 6,343 7,010 6,649 $80,655

Water/Sewer 4,573 3,847 4,567 5,604 4,569 4,028 3,981 4,254 4,392 4,204 4,023 4,140 $52,181

Trash 1,150 1,134 1,149 1,149 1,149 1,219 1,149 1,166 1,634 1,149 1,840 1,224 $15,111

Electric 554 972 593 605 542 428 462 478 441 473 620 738 $6,905

Gas/Other 176 334 365 367 302 777 775 1,028 741 518 528 547 $6,458

Management Fee 0 0 0 0 0 0 0 0 0 0 0 0 $0

Insurance 2,951 2,951 2,951 2,951 2,951 2,951 4,899 3,790 3,790 3,790 3,790 3,790 $41,558

Real Estate Taxes 8,889 8,889 8,889 8,889 8,889 8,889 14,007 9,813 9,813 9,813 9,813 9,813 $116,406

TOTAL EXPENSES 44,095 51,438 50,709 40,477 46,719 40,881 49,684 54,225 50,908 47,018 44,877 49,676 $570,707

NET OPERATING INCOME 22,643 18,408 19,058 30,471 28,429 32,175 20,017 14,222 15,892 18,052 20,603 20,249 $260,218

Less: Recurring Capital 1,833 1,833 1,833 1,833 1,833 1,833 1,833 1,833 1,833 1,833 1,833 1,833 $22,000

NOI (with reserves) 20,810 16,574 17,225 28,638 26,595 30,342 18,184 12,389 14,059 16,218 18,770 18,415 $238,218

3736

TRENDING ANALYSISTRAILING 12

MONTHST-3 ANNUALIZED

INCOME T-1 ANNUALIZED

INCOMEYEAR 1 UNDER-

WRITING NOTES

Market Rent 870,150 9,888 897,000 10,193 897,000 10,193 950,544 10,802 Year 1 Rents have been grown at 5.0% based on comparable properties

Less: Loss to Lease (47,033) 5.4% (53,868) 6.0% (50,520) 5.6% (38,022) 4.0% Loss to Lease has been estimated at 4.0% of Total Market Rent

Gross Potential Rent 823,117 9,354 843,132 9,581 846,480 9,619 912,522 10,370

Less: Vacancy (55,150) 6.7% (91,053) 10.8% (58,641) 6.9% (36,501) 4.0% Vacancy has been normalized at 4.0% based on historical operations and current market conditions

Less: Non-Revenue Units (10,620) 1.3% (10,620) 1.3% (10,620) 1.3% (10,620) 1.2% Non-Revenue Units are projected at 1.2% of Gross Potential Rent based on historical operations

Less: Collection Loss (7,677) 0.9% (5,417) 0.6% 0 0.0% (9,125) 1.0% Bad Debt/Other Rent Loss is projected at 1.0% of Gross Potential Rent based on historical operations

NET RENTAL INCOME 749,670 8,519 736,042 8,364 777,219 8,832 856,276 9,730

Plus: RUBS Income 52,768 600 50,581 575 50,098 569 52,768 600 RUBS Income is projected at $48,875 based on historical operations

Water/Sewer 46,912 533 44,728 508 44,760 509 46,912 533

Trash 5,855 67 5,853 67 5,338 61 5,855 67

Electric/Gas 0 0 0 0 0 0 0 0

Plus: Other Income 28,488 324 15,274 174 11,779 134 28,488 324 Other Income is projected at $28,488 based on historical operations

TOTAL INCOME 830,925 9,442 801,897 9,112 839,096 9,535 937,531

EXPENSES

Contract Services 24,568 279 24,568 279 24,568 279 17,600 200 Contract Services have been normalized at $200 per unit based on comparable properties

Repairs & Maintenance 55,035 625 55,035 625 55,035 625 44,000 500 Repairs and Maintenance have been normalized at $500 per unit based on comparable properties

Administrative 77,698 883 77,698 883 77,698 883 13,200 150 Administration Costs have been normalized at $150 per unit based on comparable properties

Marketing 2,030 23 2,030 23 2,030 23 4,400 50 Marketing has been normalized at $50 per unit based on comparable properties

Payroll 172,757 1963 172,757 1,963 172,757 1,963 100,000 1,136 Payroll is projected at $1,136 per unit based on comparable properties

Total Utilities 80,655 917 80,655 917 80,655 917 80,655 917 Utilities are projected at $917 per unit

Water/Sewer 52,181 593 52,181 593 52,181 593 52,181 593

Trash 15,111 172 15,111 172 15,111 172 15,111 172

Electric 6,905 78 6,905 78 6,905 78 6,905 78

Gas/Other 6,458 73 6,458 73 6,458 73 6,458 73

Management Fee 0 0 0 0 0 0 37,501 426 Management Fee is projected at 4.0% of Gross Revenue

Insurance 41,558 472 41,558 472 41,558 472 41,558 472 Insurance is projected at $472 per unit based on current policy

Taxes 116,406 1323 116,406 1,323 116,406 1,323 140,420 1,596 Taxes are $111,846 based on the 2019 assessment and rate of 2.755%

TOTAL EXPENSES 570,707 6735 570,707 6485 570,707 6485 479,334 5447

NET OPERATING INCOME 260,218 2957 231,190 2627 268,388 3050 458,197 5207

Less: Recurring Capital 22,000 250 22,000 250 22,000 250 22,000 250 Recurring capital expenditures have been estimated at $250 per unit

NOI (with reserves) 238,218 2,707 209,190 2,377 246,388 2,800 436,197 4,957

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5 YEAR CASHFLOW ASSUMPTIONS CURRENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Gross Potential Rent Growth 5.00% 5.00% 3.00% 3.00% 3.00%

Total Economic Loss 13.72% 9.92% 9.00% 8.00% 7.00% 5.00%

Other/RUBS Income Growth 0.00% 2.00% 2.00% 2.00% 2.00%

Operating Expense Growth 0.00% 2.00% 2.00% 2.00% 2.00%

Real Estate Taxes Growth 0.00% 2.00% 2.00% 2.00% 2.00%

INCOME CURRENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Gross Potential Rent 823,117 950,544 998,071 1,028,013 1,058,854 1,090,619

Less: Total Economic Loss (73,447) (94,268) (89,826) (82,241) (74,120) (54,531)

Economic Occupancy 90% 91% 92% 93% 95%

Net Rent Per Unit 710 854 905 943 982 1,033

Net Rental Income 749,670 856,276 908,245 945,772 984,734 1,036,088

Plus: RUBS Income 52,768 52,768 53,823 54,899 55,997 57,117

Plus: Other Income 28,488 28,488 29,057 29,638 30,231 30,836

Total Income 830,925 937,531 991,125 1,030,310 1,070,963 1,124,042

Monthly Revenue 69,244 78,128 82,594 85,859 89,247 93,670

% Increase Over Previous Year 12.83% 5.72% 3.95% 3.95% 4.96%

EXPENSES CURRENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Contract Services 24,568 17,600 17,952 18,311 18,677 19,051

Repairs & Maintenance 55,035 44,000 44,880 45,778 46,693 47,627

Administrative 77,698 13,200 13,464 13,733 14,008 14,288

Marketing 2,030 4,400 4,488 4,578 4,669 4,763

Payroll 172,757 100,000 102,000 104,040 106,121 108,243

Utilities 80,655 80,655 82,268 83,913 85,592 87,303

Management Fee 0 37,501 38,251 39,016 39,797 40,593

Insurance 41,558 41,558 42,389 43,237 44,102 44,984

Taxes 116,406 140,420 143,228 146,093 149,015 151,995

Recurring Capital Expenditures 22,000 22,000 22,000 22,000 22,000 22,000

Total Expenses with Reserves (592,707) (501,334) (511,361) (521,588) (532,020) (542,660)

NET OPERATING INCOME 238,218 436,197 479,764 508,722 538,943 581,381

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Jon KrebbsManaging PartnerThe Multifamily Group

Prior to forming The Multifamily Group, Jon was an Executive Direc-tor of Investment Sales with Sperry Van Ness (SVN) and finished as the company’s 22nd highest performing broker out of over 1,100 brokers world-wide in 2016. Prior to that he was a top producer at the Henry S. Miller Company in Dallas.

Jon specializes in asset valuation, coordination of the marketing pro-cess, property tours and contract negotiations for sellers of multifamily

properties. Jon analyzes each assign-ment carefully and finds creative ways to add value to his clients. When he is not working, Jon enjoys playing sports, playing his guitar and spend-ing time with his wife Stacie and their children Libby, Jackson and Finley.

Jon earned a B.B.A. in Finance and an MBA from Texas Tech University.

E-mail: [email protected]

4228 North Central Expy, Suite #110

Dallas, Texas 75206

Phone: 972.379.9843

Cell: 806.786.9515

Fax: 972.957.7662

Paul YazbeckManaging PartnerThe Multifamily Group

Prior to forming The Multifamily Group, Paul was an Executive Director in Investment Sales with Sperry Van Ness (SVN) and finished as the com-pany’s 7th highest performing broker out of over 1,100 brokers worldwide in 2017, the highest ranked broker in the Southwest Region and the top producer in the office in 2017. In 2016, Paul was the 3rd ranked broker in the Southwest Region, was the 25th high-est producing Broker worldwide and top producer in the office. He quali-fied for the company’s Partner’s Circle recognition in both 2016 and 2017.

Paul’s volunteer involvement includes

Big Brother Big Sisters (BBBS), Ameri-can Corporate Partners, Gen Next and Carter Bloodcare.

Paul earned an MBA from the Univer-sity of Texas at Austin and a B.B.A. in Finance from The University of Colorado at Boulder where he at-tended on an ROTC scholarship. He was awarded the Bronze Star Medal for his service in Iraq during his sec-ond deployment as a Captain in the Army. Between his two deployments, he spent 27 months in Baghdad from 2003-2008.



Dallas, Texas 75206

Phone: 972.379.9844

Cell: 972.310.1032

Fax: 972.957.7662

4342

Chase DavisVice President The Multifamily Group

Chase began remodeling rental prop-erties in high school and developed an understanding of how to add value and increase cash flow. In college, he managed a major redevelopment in Austin and started a management company with a significant portfolio of Student Housing.

Chase graduated with a B.S. in Psy-chology from Texas Tech University and went on to start his own construc-tion company completing hundreds of remodels and effectively rehabbing buildings that were deemed lost caus-es.

At The Multifamily Group, Chase spe-cializes in Tertiary Markets and uses his extensive knowledge of under-writing and apartment rehabilitation to help principals drive value and achieve desired returns. Chase looks to add value in whatever he does through wise negotiations and un-matched tenacity, always approaching life from his personal business motto, “Striving for Perfection, Producing Excellence.”


4228 N. Central Expy, Suite 110

Dallas, TX 75206

Phone: 972.465.9533

Cell: 806.543.5980

Fax: 972.957.7662

Bryce SmithSenior AdvisorThe Multifamily Group



Dallas, Texas 75206

Phone: 469.607.3837

Cell: 806.368.1250

Fax: 972.957.7662

Bryce began his career in 2015 leasing out luxury Class A apartment complexes and has personally toured 1,500+ individual units. He grew up in a small town West of Lubbock and received his Bachelor's Degree in Information Technology from Lubbock Christian University in 2011.

After graduating, Bryce was hired at Raytheon to work in their IT department as an Information Systems Analyst. He stumbled upon Real Estate in 2014 and decided to make it his full time career in 2015.

Bryce focuses on small to medium sized properties with a focus on value add deals in the major Texas markets. Bryce’s determination and perseverance is what makes him a valuable asset to the team and also to his clients.

He goes above and beyond for his clients and strives to provide the best experience possible. Outside of work, Bryce likes to spend his time with his wife Amber and their son Jaxon.

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Chris began his commercial real estate career in 2016 as an analyst at SVN. Prior to TMG, Chris worked on institutional sponsor Westmount Realty Capital’s acquisition desk and Coldwell Banker’s marketing team.

A perspective built from both principal and brokerage platforms enables Chris to provide clients with unique guidance on all aspects of multifamily acquisition and disposition. Chris focuses on tertiary core-plus product as well as operational value-add deals in major Texas metros.

Over the course of his career, Chris has been involved in transactions exceeding $250,000,000.

Chris actively volunteers with Big Brothers Big Sisters Dallas and spends as much free time as he can in the yoga studio and traveling. He holds a B.B.A. in Real Estate Finance from Southern Methodist University.



Dallas, Texas 75206

Phone: 469.607.3403

Cell: 224.515.0607

Fax: 972.957.7662

Chris SiemaskoSenior AdvisorThe Multifamily Group

Greg MillerAdvisorThe Multifamily Group


4228 N. Central Expy, Suite 110

Dallas, TX 75206

Phone: 469.250.6966

Cell: 210.901.0254

Fax: 972.957.7662

Prior to forming The Multifamily Group, Jon was an Executive Director

of Investment Sales with Sperry Van Ness (SVN) and finished as the company’s #22 highest performing

broker out of over 1,100 brokers worldwide in 2016. Prior to that he was a top producer at the Henry S.

Miller Company in Dallas.Jon specializes in asset valuation,

coordination of the marketing process, property tours and contract negotiations for sellers of multifamily

properties. Jon analyzes each assignment carefully and finds

creative ways to add value to his clients. When he is not working, Jon

enjoys playing sports, playing his guitar and spending time with his

wife Stacie and their children Libby, Jackson and Finley.

Jon’s education includes a B.B.A. in Finance and an M.B.A. from Texas Tech University.

The material contained in this Offering Memorandum is furnished solely for the purpose of considering the pur-chase of the property within and is not to be used for any other purpose. This information should not, under any cir-cumstance, be photocopied or disclosed to any third party without the written consent of The Multifamily Group or Property Owner, or used for any purpose whatsoever oth-er than to evaluate the possible purchase of the Property.

The only party authorized to represent the Owner in connection with the sale of the Property is The Multifamily Group Advisor listed in this Offering Memorandum, and no other person is authorized by the Owner to provide any information or to make any representations other than contained in this Offering Memorandum. If the person receiving these materials does not choose to pursue a purchase of the Property, this Offering Memorandum must be returned to The Multifamily Group Advisor.

Neither The Multifamily Group Advisor nor the Owner makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied upon as a promise or representation as to the future condition, operations or financial performance of the Property. This Offering Memorandum may include cer-tain statements and estimates with respect to the Property based on certain assumptions. These assumptions may or may not be proven to be correct, and there can be no assurance that such results will be achieved. Further, The Multifamily Group Advisor and the Owner disclaim any and all liability for representations or warranties, expressed or implied, contained in or omitted from this Offering Memo-randum, or any other written or oral communication trans-mitted or made available to the recipient. The recipient shall be entitled to rely solely on those representations and warranties that may be made to it in any final, fully

executed and delivered Real Estate Purchase Agreement between it and Owner.

The information contained herein is subject to change without notice and the recipient of those materials shall not look to Owner or The Multifamily Group Advisor nor any of their officers, employees, representatives, indepen-dent contractors or affiliates, for the accuracy or complete-ness thereof. Recipients of this Offering Memorandum are advised and encouraged to conduct their own compre-hensive review and analysis of the Property.

This Offering Memorandum is a solicitation of interest only and is not an offer to sell the Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest to purchase the Property and expressly reserves the right, at its sole discretion, to terminate negotiations with any entity, for any reason, at any time with or without notice. The Owner shall have no legal commitment or obligation to any entity reviewing the Offering Memorandum or making an offer to purchase the Property unless and until the Owner executes and delivers a signed Real Estate Purchase Agreement on terms ac-ceptable to Owner, in Owner’s sole discretion. By submit-ting an offer, a prospective purchaser will be deemed to have acknowledged the foregoing and agreed to release the Owner and The Multifamily Group Advisor from any liability with respect thereto.

To the extent Owner or any agent of Owner or any agent of Owner corresponds with any prospective purchaser, any prospective purchaser should not rely on any such correspondence or statements as binding Owner. Only a fully executed Real Estate Purchase Agreement shall bind the property and each prospective purchaser proceeds at its own risk.

NotesDisclaimer

11-2-2015

TYPES OF REAL ESTATE LICENSE HOLDERS: A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker. A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.

A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): Put the interests of the client above all others, including the broker’s own interests; Inform the client of any material information about the property or transaction received by the broker; Answer the client’s questions and present any offer to or counter-offer from the client; and Treat all parties to a real estate transaction honestly and fairly.

A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:

AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.

AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.

AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary: Must treat all parties to the transaction impartially and fairly; May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and

buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. Must not, unless specifically authorized in writing to do so by the party, disclose:

ᴑ that the owner will accept a price less than the written asking price;ᴑ that the buyer/tenant will pay a price greater than the price submitted in a written offer; andᴑ any confidential information or any other information that a party specifically instructs the broker in writing not to

disclose, unless required to do so by law.

AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: The broker’s duties and responsibilities to you, and your obligations under the representation agreement. Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.

LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.

Information About Brokerage Services Texas law requires all real estate license holders to give the following information about

brokerage services to prospective buyers, tenants, sellers and landlords.

.

Designated Broker of Firm License No. Email Phone

Licensed Supervisor of Sales Agent/Associate

License No. Email Phone

Licensed Broker /Broker Firm Name or Primary Assumed Business Name

License No. Email Phone

Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov IABS 1-0

Date Buyer/Tenant/Seller/Landlord Initials

Sales Agent/Associate’s Name License No. Email Phone

9007084The Multifamily Group LLC [email protected] 972-379-9843

4746

4228 North Central Expy, Suite #110 Dallas, Texas 75206

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