Main Street Apartments

Main Street Apartments Abbey Square Apartments (54) 1 Bedroom units Richmond infill location Brick construction Stabilized occupancy Turn key investment Presented by jsloan@alpha-reia.com Alpha Real Estate Investment Advisors 999 Waterside Dr. Suite 2525 Norfolk, VA. 23510

Alpha Real Estate Investment Advisors Abbey Square Apartments Income, Expenses & Cash Flow Property Overview Potential Rental Income $ 353,112 Purchase/Asking Price $ 1,590,000 Property Type Apartments Other Income (2,292) Improvements - No. of Units 54 Total Vacancy and Credits (17,656) Other - Price Per Unit $ 29,444 Operating Expenses $ (184,760) Closing Costs - Total Sq Ft 23,840 Annual Reserves: $ (16,200) Finance Points - Price Per Sq Ft $ 67 Net Operating Income (NOI) $ 132,204 Income per Unit $ 6,497 MIP Payments $ Total Acquisition Cost $ 1,590,000 Expenses per Unit $ (3,421) Annual Reserves: $ Debt Service: $ (81,940) Cash Flow Before Taxes $ 50,264 Mortgage (s) $ 1,272,000 Income Taxes: Benefit (Expense) @ 34% (9,067) Down Payment / Investment $ 318,000 Cash Flow After Taxes $ 41,197 Assumptions Loan Information % of Asking % of Cost Rental Growth Rate: 2.00% Down Payment: $ 318,000 20.00% 20.00% Expense Growth Rate: 1.00% Initial Loan Balance: $ 1,272,000 80.00% 80.00% Appreciation Rate 1.00% Marginal Tax Rate: 34.00% Loan Amount Interest Rate Term Payment Capital Gain Tax Rate: 21.00% $ 1,272,000 5.00% 30 $6,828 $ 5.00% 30 $0 $ 4.00% 30 $0 Financial Measurements Year 1 Year 2 Year 3 Notes / Discussion Debt Coverage Ratio (DCR) 1.61 1.67 1.73 Loan-to-Value Ratio (LVR) 80.0% 78.8% 77.6% Capitalization Rate Based on Cost 8.31% 8.61% 8.91% Capitalization Rate Based on Resale Price 8.23% 8.44% 8.65% Gross Rent Multiplier 4.50 4.50 4.46 Net Present Value (NPV) - B/ Taxes Net Present Value (NPV) - A/Taxes 13.50% (47,888) (5,087) 33,462 10.00% (41,263) (9,709) 18,114 Cash on Cash Return - Before Taxes 15.81% 17.27% 18.77% Cash on Cash Return - After Taxes 12.96% 14.67% 15.57% Internal Rate of Return - Before Taxes 12.52% 17.92% Internal Rate of Return - After Taxes 8.20% 12.32% Modified Internal Rate of Return - Before Taxes Modified Internal Rate of Return - After Taxes 11.64% 15.66% 7.71% 10.93% Assumptions 5% vacancy 300 p/u reserves abovetheline 80% LTV 5% rate Disclaimer: All information presented is believed to be accurate. The information, calculations and data presented in this report are believed to be accurate but are not guaranteed. The information contained in this report shall not be considered as a substitution for legal, accounting or other professional advice. Please seek proper legal and tax advice as appropriate before making investments.

Property Description Abbey Square Apartments Main Street Apartments HIGHLIGHTS (54)1 bedroom units Infill location Brick construction Turn-key management Stabilized occupancy Proximate Richmond CBD Abbey Square is located at 3918 and 3920 Chamberlayne Ave, Richmond, VA. This location is proximate to Richmond s Central Business District, Virginia Commonwealth University's Monroe Park economic campus, VCU medical center and hospitals, Virginia Union University, Richmond s City Hall, the State Capitol complex of Virginia and the Broad Street corridor. The apartments consist of 2 buildings both 2 story with all units being 1 bedroom, 1 bathroom, kitchen, dining area and living room, with the exception of 4 studio apartments. The market rents are $495-$595 per month which includes heat (gas, radiator) hot and cold water and trash pick up. The tenants pay electric. There are through-the-wall electric A/C units in each apartment. Brick exterior, vinyl replacement windows throughout, and a tar and gravel roof. Each unit has carpet and tile, some with slate tile. Investors will find value acquiring this investment due to stable cash flow, infill location, turn-key management, and a location proximate the Richmond CBD. Alpha Real Estate Investment Advisors jsloan@alpha-reia.com 999 Waterside Dr. Suite 2525 0 Norfolk, VA. 23510

Unit Description Number of Units Per unit Total Percent of Monthly Rent Monthly Annual Sq Ft Sq Ft Total Rev/ Sq Ft Per Unit Rent Rent 1 bed 1 bath 4 410 1,640 6.88% 1.290 $ 530 $ 2,120 $ 25,440 Studio 1 bath 4 350 1,400 5.87% 1.410 $ 495 $ 1,980 $ 23,760 1 bed 1 bath Standard 44 450 19,800 83.05% 1.220 $ 549 $ 24,156 $ 289,872 1 bed 1 bath Large 2 500 1,000 4.19% 1.170 $ 585 $ 1,170 $ 14,040 0 0 0 0 0.00% 0.000 $ $ $ Totals 54 1,710 23,840 100.0% 1.234 2,159 $ 29,426 $ 353,112 Unit Mix 4% 7% 7% 1 bed 1 bath Studio 1 bath 1 bed 1 bath Standard 1 bed 1 bath Large 82%

Expense Description Annual Amount Annual Increase Per Unit Per Sq Ft % of % of Expenses Revenue Office/Computer/Supplies Advertising Internet Office Security Legal Bank Charges Office Payroll Maintenance Payroll Insurance Contract Services Management Fee R&M Supplies Property Taxes Trash Removal Gas Electricity Common Areas Water 2,311 1.0% 42.80 0.10 1.3% 0.7% 940 1.0% 17.41 0.04 0.5% 0.3% 1,387 1.0% 25.69 0.06 0.8% 0.4% 361 1.0% 6.69 0.02 0.2% 0.1% 15,283 1.0% 283.02 0.64 8.3% 4.6% 562 1.0% 10.41 0.02 0.3% 0.2% 9,600 1.0% 177.78 0.40 5.2% 2.9% 30,000 1.0% 555.56 1.26 16.2% 9.0% 6,356 1.0% 117.70 0.27 3.4% 1.9% 24,515 1.0% 453.98 1.03 13.3% 7.4% 15,431 1.0% 285.76 0.65 8.4% 4.6% 7,114 1.0% 131.74 0.30 3.9% 2.1% 17,940 1.0% 332.22 0.75 9.7% 5.4% 1,656 1.0% 30.67 0.07 0.9% 0.5% 21,020 1.0% 389.26 0.88 11.4% 6.3% 4,332 1.0% 80.22 0.18 2.3% 1.3% 25,952 1.0% 480.59 1.09 14.0% 7.8% Total Annual Operating Expenses $ 184,760 $ 3,421 23,840 100.0% 55.5%

Annual Property Operating Data Year 1 Sq Ft Per Unit Year 2 Sq Ft Per Unit Year 3 Sq Ft Per Unit Year 4 Sq Ft Per Unit Year 5 Sq Ft Per Unit Potential Rental Income $ 353,112 1.23 6,539.11 $ 360,174 1.26 6,669.89 $ 367,378 1.28 6,803.29 $ 374,725 1.31 6,939.36 $ 382,220 1.34 7,078.14 Less: Vacancy & Credit Losses (17,656) -0.06-326.96 (18,009) -0.06-333.49 (18,369) -0.06-340.16 (18,736) -0.07-346.97 (19,111) -0.07-353.91 Other Income (2,292) -0.01-42.44 (2,338) -0.01-43.29 (2,385) -0.01-44.16 (2,432) -0.01-45.04 (2,481) -0.01-45.94 Effective Gross Income $ 333,164 1.16 6,169.71 $ 339,828 1.19 6,293.11 $ 346,624 1.21 6,418.97 $ 353,557 1.24 6,547.35 $ 360,628 1.26 6,678.29 Operating Expenses Office/Computer/Supplies 2,311 0.01 42.80 2,334 0.01 43.22 2,357 0.01 43.66 2,381 0.01 44.09 2,405 0.01 44.53 Advertising 940 0.00 17.41 949 0.00 17.58 959 0.00 17.76 968 0.00 17.93 978 0.00 18.11 Internet 1,387 0.00 25.69 1,401 0.00 25.94 1,415 0.00 26.20 1,429 0.00 26.46 1,443 0.01 26.73 Office Security 361 0.00 6.69 365 0.00 6.75 368 0.00 6.82 372 0.00 6.89 376 0.00 6.96 Legal 15,283 0.05 283.02 15,436 0.05 285.85 15,590 0.05 288.71 15,746 0.06 291.59 15,904 0.06 294.51 Bank Charges 562 0.00 10.41 568 0.00 10.51 573 0.00 10.62 579 0.00 10.72 585 0.00 10.83 Office Payroll 9,600 0.03 177.78 9,696 0.03 179.56 9,793 0.03 181.35 9,891 0.03 183.16 9,990 0.03 185.00 Maintenance Payroll 30,000 0.10 555.56 30,300 0.11 561.11 30,603 0.11 566.72 30,909 0.11 572.39 31,218 0.11 578.11 Insurance 6,356 0.02 117.70 6,420 0.02 118.88 6,484 0.02 120.07 6,549 0.02 121.27 6,614 0.02 122.48 Contract Services 24,515 0.09 453.98 24,760 0.09 458.52 25,008 0.09 463.11 25,258 0.09 467.74 25,510 0.09 472.41 Management Fee 15,431 0.05 285.76 15,585 0.05 288.62 15,741 0.06 291.50 15,899 0.06 294.42 16,058 0.06 297.36 R&M Supplies 7,114 0.02 131.74 7,185 0.03 133.06 7,257 0.03 134.39 7,330 0.03 135.73 7,403 0.03 137.09 Property Taxes 17,940 0.06 332.22 18,119 0.06 335.54 18,301 0.06 338.90 18,484 0.06 342.29 18,668 0.07 345.71 Trash Removal 1,656 0.01 30.67 1,673 0.01 30.97 1,689 0.01 31.28 1,706 0.01 31.60 1,723 0.01 31.91 Gas 21,020 0.07 389.26 21,230 0.07 393.15 21,443 0.07 397.08 21,657 0.08 401.05 21,873 0.08 405.06 Electricity Common Areas 4,332 0.02 80.22 4,375 0.02 81.02 4,419 0.02 81.83 4,463 0.02 82.65 4,508 0.02 83.48 Water 25,952 0.09 480.59 26,212 0.09 485.40 26,474 0.09 490.25 26,738 0.09 495.16 27,006 0.09 500.11 Total Operating Expenses $ 184,760 0.65 3,421.48 $ 186,608 0.65 3,455.70 $ 188,474 0.66 3,490.25 $ 190,358 0.67 3,525.16 $ 192,262 0.67 3,560.41 Less: Funded Reserves and/or Improvements 16,200 0.06 300.00 16,362 0.06 303.00 16,526 0.06 306.03 16,691 0.06 309.09 16,858 0.06 312.18 Net Operating Income (NOI) $ 132,204 0.46 2,448.23 $ 136,858 0.48 2,534.41 $ 141,625 0.50 2,622.68 $ 146,507 0.51 2,713.10 $ 151,508 0.53 2,805.71 Less: Annual Debt Service (81,940) -0.29-1,517.42 (81,940) -0.29-1,517.42 (81,940) -0.29-1,517.42 (81,940) -0.29-1,517.42 (81,940) -0.29-1,517.42 Cash Flow Before Taxes $ 50,264 0.18 930.81 $ 54,918 0.19 1,016.99 $ 59,684 0.21 1,105.27 $ 64,567 0.23 1,195.68 $ 69,568 0.24 1,288.29 1993-2012 Cash Flow Analyzer http://rentalsoftware.com