Sears Hometown Store Fredericksburg $199,000 Possible Owner Finance Potential SBA Loan 30.37% CAP

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Duane Felix Chapman
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1 Sears Hometown Store Fredericksburg $199,000 Possible Owner Finance Potential SBA Loan 30.37% CAP

2 Graphics Pack Branded

3 Proforma Net Operating Income, Est. Net Cash Flow & CAP Rate Sears Hometown Store Fredericksburg, TX Proforma Annual Financial Mode # Category Description $/# 1 Sale Price List $ $ 199,000 2 Annual Sales 2014 Actual $ 1,972,418 3 Cost of Goods Sold Calculated $ 1,707,420 4 Annual Gross Revenue #2 - #3 $ 264,998 5 Salaries, Wages, Payroll Taxes 2014 Actual $ (84,087) 6 Rent 2014 Actual $ (89,156) 7 Other Expenses 2014 Actual $ (31,312) 8 Total Expenses #5 + #6 + #7 $ (204,555) 9 Net Operating Income #4 + #8 $ 60, Annual Debt Service *See below $ (15,948) 11 Est. Net Cash Flow #9 + #10 $ 44, Capitalization Rate #11 / # % *80% 1st loan, 5.75% APR interest, 20-year amortization. 10% 2nd loan 5% APR interest, 10-year amortization.

4 $195,496 EST LESS COST to Acquire vs. Start Up Sears Home Store # Description Description $ 1 Sears required ability to borrow capital Sears site $ 100,000 2 Sears required cash available Sears site $ 25,000 3 Cost to establish lease (1st, last & security) SWPRE EST $ 25,000 4 Minimum Start Up Capital Reserve SWPRE EST $ 25,000 5 Truck, trailer, delivery equipment SWPRE EST $ 30,000 6 Operating cost pre opening (1 month average operating expense) AVG 2014 Actual $ 17, % of monthly operating cost (1st month of operation) #5 *.666 $ 11, % of monthly operating cost (2nd month of operation) #6 *.333 $ 5,625 9 SWPRE EST Start Up Cost for NEW Sears Home Store $ 238, % of list price (80% 1st loan & 10% owner 2nd loan) Calculated $ 19, Est Closting costs (2.5% of 1st loan, $2,500 for 2nd loan) Calculated $ 6, Month MIN Operating Capital Reserve SWPRE EST $ 17, SWPRE Estimated Out-of-Pocket to Acquire Sears Home Store Fredericskburg $ 43, SWPRE EST Savings Acquire Sears Home Store Fredericskburg vs. Start Up #9 - #13 $ 195,496

5 Retail Gap Map 5 Minute Drive Time Service Area

6 Retail Gap Top 2 Unmet Opportunities 5 Minute Drive Time Service Area # Top 2 Categories of Unmet Local Retail Opportunities from CCIM $ 1 Unmet Electronics & Appliances $ 1,957,432 2 Unmet Bldg Materials & Supplies $ 1,074,004 3 Top 2 Unmet Opportunities $ 3,031, Sales $ 1,972,418 5 Top 4 Unmet Opportunities / 2014 Sales 154%

7 Retail Gap Top 2 Unmet Opportunities 5 Minute Drive Time Service Area $1,600,000 Annual Revenue Increase Capturing % of Top 2 Unmet Retail Gap Opportunities $1,515,718 $1,400,000 $1,200,000 $1,212,574 $1,000,000 $909,431 $800,000 $600,000 $606,287 $400,000 $303,144 $200,000 $- 10% 20% 30% 40% 50%

8 Retail Gap Map US-16 to Kerr County Service Area

9 Retail Gap Top 4 Unmet Opportunities US-16 to Kerr County Service Area # Top 4 Categories of Unmet Local Retail Opportunities from CCIM $ 1 Unmet Home Furnishings $ 226,794 2 Unmet Electronics & Appliances $ 991,823 3 Unmet Bldg Materials & Supplies $ 98,499 4 Unmet Lawn & Garden Equip & Supplies $ 198,758 5 Top 4 Unmet Opportunities $ 1,515, Sales $ 1,972,418 7 Top 4 Unmet Opportunities / 2014 Sales 77%

10 Retail Gap Top 4 Unmet Opportunities US-16 to Kerr County Service Area $800,000 Annual Revenue Increase Capturing % of Top 4 Unmet Retail Gap Opportunities $757,937 $700,000 $600,000 $606,350 $500,000 $454,762 $400,000 $300,000 $303,175 $200,000 $151,587 $100,000 $- 10% 20% 30% 40% 50%

Minimum Sears Home Store Authorized Owner Financial Requirements There is not an initial licensing fee to become a Sears Hometown Store Authorized Owner.

11 Minimum Sears Home Store Authorized Owner Financial Requirements There is not an initial licensing fee to become a Sears Hometown Store Authorized Owner. Prospective owners who wish to open a new store must have: $25,000 cash available and ability to borrow $100,000 in capital. Type of Expenditure Interior Fixtures Required by Sears $32,000 POS, Office Equipment, and Furniture Required by Sears $25,000 Leasehold Improvements $25,000 Initial Insurance Fees (per contract) $6,000 Utility Deposits $1,000 Initial Permits and Fees $500 Start-up Travel and Training $1,500 Legal and Professional Fees $1,500 Miscellaneous $3,500 TOTAL $96,000 Low

12 2014 IRS Tax Return Based Hard Asset Values Included in Sale # Description Cost 1 Computers # & Description Printer Cost $ 3,417 1 Computers & Printer $ 3,417 2 Equipment 2& Equipment Trailer & Trailer $ 32,000$ 32,000 3 Signs $ Signs $ Delivery Truck $ 9,235 5 Office TV $ Delivery Truck $ 9,235 6 Leasehold Improvements $ 14,469 5 Office TV 7 Other Equipment $ 1,158$ Other Shelving $ Leasehold Improvements 9 Total IRS Asset Investment Cost $ 61,078$ 14,469 7 Other Equipment $ 1,158 8 Other Shelving $ Total IRS Asset Investment Cost $ 61,078

13 List Price at 61% of SWPRE Estimated Retail Valuation # Description $ 1 SBDC Max EST Price for Cash Flow with 20% Down* $ 237, % of IRS Tax Value of Assets Conveyed $ 30,539 3 SWPRE EST Sears Home Store Franchise Value $ 25,000 4 SWPRE Estimated Upfront Cost of New Lease (1st, last, security) $ 25,000 5 Manager Training and Transition Assistance $ 10,000 6 Total SWPRE Estimated Retail Valuation $ 328,039 7 List Price $ 199,000 8 List Price / Total SWPRE Estimated Retail Valuation 61% *SBDC = Small Business Development Center

14 Build to Suit Site Plan

15 Satellite

16 TXDOT 11,290 AVG Daily Traffic Count in 2013

17 11,500 11,000 10,500 TXDOT Daily 2-Way Traffic Data 2013 Traffic Exceeded 2007 Post Recession Traffic 10,900 10,600 Volume in ,900 11,290 10,000 9,600 9,700 9,600 9,500 9,000 8,

18 Microsoft Excel Exponential Trend Model 36% Increase in Traffic from 2016 to ,000 20,000 15,000 10,000 5,000 9,700 9,600 11,290 36% projected traffic increase 1/1/ ,275 EST 1/1/ ,150 EST

19 HWY 16 Location Shared with new HEB, new Walgreens & HCM Hospital DOWNTOWN

20 Only 5 Blocks from Downtown Fredericksburg

21 60 Miles to San Antonio & Austin: Mile Radii Map

22 60 MIN to San Antonio, 90 MIN to Austin: MIN Drive Time Map

23 Eligible for Real Estate Philanthropy $8,000 $7,000 Hill Country Memorial Hospital Foundation Real Estate Philanthropy Gift Model Based on $199,000 List Price $7,164 $6,000 $5,000 $4,776 $4,000 $3,000 $2,000 $1,000 $597 $1,194 $- We Represent 1 Side No Matches We Represent 2 Sides No Matches We Represent 2 Sides 1 Max Match We Represent 2 Sides 2 Max Matches

24 Don Stefanov, Partner Realtor, GRI, ABR SWPRE Real Estate Philanthropy Board M O don@swpre.com

25 Pam Stefanov, Partner Realtor, GRI, ABR SWPRE Real Estate Philanthropy Board M O pam@swpre.com

26 Sears Hometown Store Fredericksburg $199,000 Possible Owner Finance Potential SBA Loan 30.37% CAP

SmallBizU WORKSHEET 1: REQUIRED START-UP FUNDS. Online elearning Classroom. Item Required Amount ($) Fixed Assets. 1 -Buildings $ 2 -Land $

SmallBizU WORKSHEET 1: REQUIRED START-UP FUNDS. Online elearning Classroom. Item Required Amount ($) Fixed Assets. 1 -Buildings $ 2 -Land $ WORKSHEET 1: REQUIRED START-UP FUNDS Item Required Amount () Fixed Assets 1 -Buildings 2 -Land 3 -Initial Inventory 4 -Equipment 5 -Furniture and Fixtures 6 -Vehicles 7 Total Fixed Assets Working Capital