10 YEAR CASH FLOW MODEL

Transcription

1 3/23/18 10 YEAR CASH FLOW MODEL PROJECT NAME: ADDRESS: CITY: ST: COUNTY: 6410 Paseo Kansas City Kansas Jackson PROPERTY TYPE: Age Restricted Apartments (57+) DESCRIPTION: 82 Unit CREmodel TM V 1.4 Developed by SCDG, LLC All rights reserved.

2 Residential Rent Assumptions Proforma Rents # of % of Monthly Annual Gross Size Initial % Memo: Type Units Complex Size Rent/Unit Rent (Incl Common Area) p.s.f. Increase Total sf 1 1 Bedroom % 820 $ 1,100 $ 343,200 1,148 $ % 29, Bedroom % 915 $ 1,275 $ 306,000 1,281 $ % 25, Bedroom % 985 $ 1,400 $ 302,400 1,379 $ % 24,822 4 Studio West 6 7.3% 625 $ 950 $ 68, $ % 5, Bed West 6 7.3% 704 $ 1,100 $ 79, $ % 5,914 6 Efficiency 1 bed West 6 7.3% 594 $ 900 $ 64, $ % 4,990 7 Totals % 1,176 $ 1,183 $ 1,164,000 $ % 96,443 Comm SF Other Assumptions: 8 Vacancy Factor 6.0% Total SF 96,443 9 Annual Rent Growth 2.0% 10 Inflation 2.0% 10 Area Loss Factor 14.0% CREmodel tm V 1.4 Developed by SCDG, LLC All rights reserved.

3 DESCRIPTION: Uses and Sources Uses of Funds 1 Land Acquisition $ 402, Hard Costs $ 11,423,697 3 Site Costs 4 Soft Costs $ 763,473 Total Improvements $ 12,589,670 5 Financing Fees & Expenses $ 660,878 6 Developer Fee Paid $ 642,402 Sources of Funds Total Uses $ 13,892,951 7 Leverage $ 9,725,065 8 Equity $ 4,167,885 Total Sources $ 13,892,951

4 RESIDENTIAL PROFORMA Last Year Actual Seller's Projections (if any) Proforma $ $/unit $ $/unit $ $/unit Notes Income 1 Total Projected Market Rents $ 1,164,000 $ 14,195 2 Below Market Rent Leases 3 Total Rents $ 1,164,000 $ 14,195 4 Vacancy/Bad Debt $ (69,840) $ (852) 5 Model/Office Units 6 Employee Units 7 Rent Concessions 8 Effective Net Rental Income $ 1,094,160 $ 13,343 9 Electric 10 Storage $ 12,000 $ Laundry in Unit 12 Water and Sewer Chargebacks $ 34,440 $ Parking Coverd 14 Parking Garage 15 IT Services 16 Trash 17 Total Other Income $ 46,440 $ Total Income $ 1,140,600 $ 13,910 Operating Expenses 19 Contract Services Phone Lines $ 1,800 $ Contract Services Elevator $ 5,000 $ Contract Services Wifi $ 4,200 $ Contract Services Pests $ 2,500 $ Contract Services Fire $ 2,400 $ Washer Dryer Jetz Service ($30/unit) 24 Repairs & Maintenance $ 24,600 $ Turnover Costs $ 28,700 $ Supplies & Equipment $ 5,000 $ Water $ 24,600 $ Electric $ 19,680 $ Gas 30 Janitorial $ 26,000 $ Trash $ 4,800 $ Landscaping/Plowing $ 14,000 $ Advertising/Leasing Commissions $ 8,000 $ Management $ 45,624 $ Payroll $ 45,000 $ Real Estate Taxes $ 4,000 $ Insurance $ 36,900 $ Accounting & Administrative $ 2,500 $ Total Administrative $ 305,304 $ 3,723 27% 39 Total Operating Expenses $ 305,304 $ 3, Net Operating Income $ 835,296 $ 10, Replacement Reserves 42 Cash Flow $ 835,296 $ 10,187

5 ACQUISITION & DEVELOPMENT COSTS Unit of Total PSF Per Per Item Measure Unit Cost Cost Cost Unit SF Acquisition 1 Purchase Price N/A N/A 400,000 $ 4.15 $ 4, $ $ Transfer Tax % of purchase price 0.00% $ 3 Recordation Tax $/1000 of purchase price $ 4 Legal Fees N/A N/A $ 5 Due Diligence Phase I & II N/A N/A $ $ Title Insurance N/A N/A 2,500 $ 0.03 $ $ 7 Brokers Commission % of purchase price 0.0% $ $ Total Acquisition Costs 402,500 $ 4.17 $ 4, $ Hard Costs (Construction) 9 Total Construction Cost $/sf of Apt Bldg $ 11,090,968 $ $ 135, $ $ Car Ports $ $ Contingency 3.0% 332,729 $ 3.45 $ 4, $ $ Total Hard Costs 11,423,697 $ $ 139, $ Soft Costs (Construction) 13 Tenant Improvements from Rent Schedule N/A 1 Tenant Commission 14 Architectural 1.65% $ 188,491 $ 1.95 $ 2, $ MEP N/A 0.40% $ 45,695 $ 0.47 $ $ Landscape Architecture N/A 0.30% $ 34,271 $ 0.36 $ $ Structural 0.40% $ 42, Civil Engineering N/A 0.50% $ 57,118 $ 0.59 $ $ GeoTech $ 6, Phase I Studies $ 2, Special Testing (.51%) 0.35% $ 39, CM/PM N/A 0.8% $ 85,678 $ 0.89 $ 1, $ Accounting/Bookkeeping N/A $ 3,000 $ 0.03 $ $ Legal N/A N/A $ 5,000 $ Lease Up Costs in Addition to yearly expenses N/A N/A 26 Marketing/Brokerage $ 50,000 $ 0.52 $ $ Pre Development from Rent Schedule N/A $ 75,000 $ 0.78 $ $ 0.78 Carry Mortgage 28 Permitting Recording $ 20,000 $ 0.21 $ $ EDC ($4000$6500 plus EDC $2500) N/A N/A $ 10,000 $ 0.10 $ $ 0.10 Blight Study $ 7,000 Third Party Financial Analysis (EDC Requirement for Tax Abatement) $ 15,000 LCRA Fee $ 7, Parks and Rec N/A N/A $ 30,000 $ 0.31 $ $ UR Application Fes N/A N/A $ 5,000 $ Insurance (during construction) N/A N/A $ 6,000 $ 0.06 $ $ 0.06 FHA FEES 33 FHA Exam Fee: $3 per $1,000 of the loan balance 34 Financing Fee: 1%3% depending on loan size and loan complexity 0.00% 35 Permanent Placement Fee: 1%2% 0.00% 36 First Year Mortgage Insurance Premium: 1% of loan amount 0.00% Legal: Estimated at $10, Property Taxes During Construction N/A N/A $ 6,000 $ 0.06 $ $ Contingency % of Soft Costs 3.0% $ 22,237 $ 0.23 $ $ Total Soft Costs $ 763,473 $ 7.92 $ 9, $ 7.92 Site Costs (Hard/Soft) 40 Additional Site Costs N/A N/A $ 41 Landscape Materials N/A N/A $ 42 Storm Water N/A N/A $ 43 EPA WORK N/A N/A $ 44 N/A N/A $ 45 Contingency % of Site Costs 5.0% $ 46 Total Site Costs $ Financing Costs Cost of Equity 0% $ 47 Appraisal N/A N/A 5,000 $ $ 48 Legal Loan N/A N/A 4,500 $ $ $ Interest on Construction Loan from Financing Schedule N/A 527,932 $ 5.47 $ 6, $ $ Points (construction loan) from Financing Schedule N/A 55,572 $ 0.58 $ $ $ Points (seller financing/permanent loan) from Financing Schedule N/A 48,625 $ 0.50 $ $ $ Contingency % of Financing Costs 3.0% 19,249 $ 0.20 $ $ $ Total Financing Costs 660,878 $ 6.85 $ 8, $ 54 Development Fee % of Development Costs 5.0% 642,402 $ 6.66 $ 7, $ $ 6.66 (excl Acquisition Costs) 55 **Total Acquisition & Development Costs** 13,892,951 $ $ 169, $ $ $ 56 Development Costs Qualified for Historic Tax Credits 10,281, Effective Historic Tax Credit Rate 0.0% $ 58 Historic Tax Credits 0.0% NOTES

6 3/23/18 FINANCING ASSUMPTIONS Construction Loan Gap Amortization Schedule of Permanent Loan Rate 4.75% Points (%) 0.50% Acquisition Costs $ 402,500 Term (mo) 24 Development Costs $ 13,490,451 Equity (%) 20.0% Total Project Costs $ 13,892,951 Loan Amount $ 11,114,361 Less: Equity $ (4,167,885) Gap Points ($) $ 55,572 Loan Amount $ 9,725,065 Total Interest $ 527,932 Permanent Loan Gap Financing Year Principal Interest Payment Balance Year Principal Interest Payment Balance Rate 1.00% 1 1 $ 200,522 $ 481,699 $ 682,221 $ 9,524,544 Points (%) 3.00% 2 2 $ 210,781 $ 471,440 $ 682,221 $ 9,313,763 Term (yr) $ 221,565 $ 460,656 $ 682,221 $ 9,092, $ 232,900 $ 449,321 $ 682,221 $ 8,859,298 Monthly Payment 5 5 $ 244,816 $ 437,405 $ 682,221 $ 8,614,481 Points ($) 6 6 $ 257,341 $ 424,880 $ 682,221 $ 8,357, $ 270,507 $ 411,714 $ 682,221 $ 8,086,633 Permanent Loan 8 8 $ 284,347 $ 397,874 $ 682,221 $ 7,802,285 Rate 5.00% 9 9 $ 298,895 $ 383,326 $ 682,221 $ 7,503,391 Points (%) 0.50% $ 314,187 $ 368,034 $ 682,221 $ 7,189,204 Term (yr) 25 Equity (%) 30.0% Monthly Payment $ 56,852 Points ($) $ 48,625 Refinance Loan FHA FEES Rate 0.00% Value Projection FHA Exam Fee: $3 per $1,000 of the loan balance $ 3.00 $ 28, Points (%) 0.00% NOI YR2 $ 852, Financing Fee: 1%3% depending on loan size and loan complexity 3.00% $ 285, Term (yr) CR 7.00% Permanent Placement Fee: 1%2% 2.00% $ 190, Equity (%) 0.0% VALUE $ 12,171, First Year Mortgage Insurance Premium: 1% of loan amount 1.00% $ 95, Balance End Year 2 $ 9,524,544 LTV 75/25 $ 9,128, Legal: Estimated at $10,000 $ 10, Refinance Amt $ 9,524,544 Delta $ (596,473.49) Total $ 610, Monthly Payment LTV 60/40 $ 7,302, Points ($) 70/30 $ 8,520, Life Insurance Fees Processing Fee $ 5,000 Appraisal, Engineering, Environemtal $ 8,000 Legal $ 5,000 $ 18,000 Grandbridge 1.00% MISC OTHER ASSUMPTIONS Investors/Manager Distributions Assumption on Sale of Property in Year 10 Cap Rate of Year 11 Pretax Cash Flow 7.0% Cumulative Preferred Return Rate 7.0% Transaction Costs (as a % of Sales Price) 4.0%

7 3/23/18 CASH FLOW ANALYSIS Year Year Year Year Year Year Year Year Year Year Year Transaction Costs 1 Acquisition Costs $ (402,500) 2 Hard/Soft Costs $ (13,490,451) 3 Sales Price in Yr 10 $ 14,546, Less: Transaction costs in Yr 10 $ (581,841) 5 Less: Transaction costs in Yr 10 $ 6 Total Transaction Costs $ (13,892,951) $ 13,964,176 Gross Rental Income 7 Apartments $ 1,164,000 $ 1,187,280 $ 1,211,026 $ 1,235,246 $ 1,259,951 $ 1,285,150 $ 1,310,853 $ 1,337,070 $ 1,363,812 $ 1,391,088 8 Retail/Office $ 9 Total Gross Rental Income $ 1,164,000 $ 1,187,280 $ 1,211,026 $ 1,235,246 $ 1,259,951 $ 1,285,150 $ 1,310,853 $ 1,337,070 $ 1,363,812 $ 1,391,088 Less: Adjustments to GRI 10 Apartment Vacancy/Bad Debt $ (90,000) $ (71,237) $ (72,662) $ (74,115) $ (75,597) $ (77,109) $ (78,651) $ (80,224) $ (81,829) $ (83,465) 11 Apt Model and Employee Units/Rent Concessions $ 12 Retail/Office Vacancy $ 13 Total Adjustments to GRI $ (90,000) $ (71,237) $ (72,662) $ (74,115) $ (75,597) $ (77,109) $ (78,651) $ (80,224) $ (81,829) $ (83,465) 14 Net Rental Income $ 1,074,000 $ 1,116,043 $ 1,138,364 $ 1,161,131 $ 1,184,354 $ 1,208,041 $ 1,232,202 $ 1,256,846 $ 1,281,983 $ 1,307, Apartment Other Income $ 46,440 $ 47,369 $ 48,316 $ 49,282 $ 50,268 $ 51,274 $ 52,299 $ 53,345 $ 54,412 $ 55,500 Retail/Office Other Income: 16 Recoveries (CAM, RE Taxes, Mgmt Fee) $ 17 Other $ 18 Total Retail/Office Other Income: $ 19 Total Income $ 1,120,440 $ 1,163,412 $ 1,186,680 $ 1,210,414 $ 1,234,622 $ 1,259,315 $ 1,284,501 $ 1,310,191 $ 1,336,395 $ 1,363,123 Operating Expenses 20 Apartment Operating Expenses $ 305,304 $ 311,410 $ 317,638 $ 323,991 $ 330,471 $ 337,080 $ 343,822 $ 350,698 $ 357,712 $ 364, Retail/Office Operating Expenses $ 22 Total Operating Expenses $ 305,304 $ 311,410 $ 317,638 $ 323,991 $ 330,471 $ 337,080 $ 343,822 $ 350,698 $ 357,712 $ 364, Net Operating Income $ (13,892,951) $ 815,136 $ 852,002 $ 869,042 $ 886,423 $ 904,151 $ 922,234 $ 940,679 $ 959,493 $ 978,682 $ 998, % 6.1% 6.3% 6.4% 6.5% 6.6% 6.8% 6.9% 7.0% 7.2% Reserves 24 Apartment Reserves $ 25 Retail/Office Reserves $ 26 Total Reserves $ 27 Pretax Cash Flow Before Financing $ (13,892,951) $ 815,136 $ 852,002 $ 869,042 $ 886,423 $ 904,151 $ 922,234 $ 940,679 $ 959,493 $ 978,682 $ 14,962, Return on Investment 5.9% 6.1% 6.3% 6.4% 6.5% 6.6% 6.8% 6.9% 7.0% 107.7% 29 Internal Rate of Return (IRR) 6.5% NPV Calculations Following Rates >> 6.0% 7.0% 8.0% 31 Net Present Value $ 522,376 $ (429,377) $ (1,280,055) Financing 32 Proceeds from Seller Financing $ 33 Proceeds from Permanent Loan $ 9,725, Gap Financing Costs $ 35 Permanent Loan Debt Service $ (682,221) $ (682,221) $ (682,221) $ (682,221) $ (682,221) $ (682,221) $ (682,221) $ (682,221) $ (682,221) $ (682,221) Refinance Loan (year 3) $ 36 Loan Balance in Yr 10 $ (7,189,204) 37 Pretax Cash Flow After Financing $ (4,167,885) $ 132,915 $ 169,781 $ 186,821 $ 204,202 $ 221,930 $ 240,013 $ 258,458 $ 277,271 $ 296,461 $ 7,091, Return on Equity 3.2% 4.1% 4.5% 4.9% 5.3% 5.8% 6.2% 6.7% 7.1% 170.1% 39 Leveraged IRR 9.3% 40 LoantoValue Ratio (LTV; permanent loan only) 70.0% 41 LoantoValue Ratio (LTV; all loans) 70.0% 42 Debt Coverage Ratio (DCR) Developed CREmodel TM V 1.4 by SCDG, LLC All rights reserved.