.USI.COMMERCIAL. (888) Funding Reserve Analysis. for. The Retreat at Gleannloch Farms Homeowners Association Spring, TX

.USI.COMMERCIAL (888)225-3755 www.usicommercial.com Funding Reserve Analysis for The Retreat at Gleannloch Farms Homeowners Association Spring, TX October 14, 2014 Page 1 of 31 Pages

Funding Reserve Analysis for The Retreat at Gleannloch Farms Homeowners Association Spring, TX Table of Contents Pages Subject 1 Report Cover Sheet 2 Table of Contents 3 to 17 Reserve Study Summary 18 to 22 Reserve Item Listing 23 to 24 Cash Flow 25 Dues Summary 26 to 31 Expense Summary Page 2 of 31 Pages

.USI.COMMERCIAL (888)225-3755 www.usicommercial.com October 14, 2014 Mr. Bert Williams The Retreat at Gleanloch Farms Home Owners Association Eastloch Dr. Spring, TX 77379 Subject: Reserve Study for The Retreat at Gleanloch Farms Home Owners Association - UQ22402C Mr. Williams, USI Commercial is pleased to present to Bert Williams and The Retreat at Gleanloch Farms Home Owners Association the requested reserve funding study. We believe that you will find the attached study to be thorough and complete. After you have had an opportunity to review the report you may have questions. Please do not hesitate to contact us - we would be pleased to answer any questions you may have. Project Description The Retreat at Gleanloch Farms is a townhome style condominium community comprised of 57 buildings with 206 individual dwelling units. Some of the common components are the buildings' exterior surfaces and roofs, concrete roadways and flatwork, one swimming pool with a pool house, street lights, mailboxes, and fencing. The Retreat at Gleanloch Farms is approximately 10 years old. Visit The site visit for The Retreat at Gleanloch Farms Home Owners Association was conducted by Reserve Analyst Steve Fusselman of USI Commercial on March 14, 2014. community representative was available to meet Mr. Fusselman on site; however a phone interview was conducted with Mr. Bert Williams and Reserve Specialist David Rothbart. Summary of Financial Assumptions The below table contains a partial summary of information provided to USI Commercial for the The Retreat at Gleannloch Farms Homeowners Association funding study. Reserve Study by Calendar Starting Funding Study Length January 1, 2014 Number of Dues Paying Members Reserve Balance as of January 1, 2014¹ 206 $ 400,000 Annual Inflation Rate 1.47% Tax Rate on Reserve Interest ² 30.00% Minimum Reserve Account Balance Dues Change Period $0 Annual Operating Budget $0 ¹ See ''Financial Condition of Association'' in this report. ² Taxed as an IRS exempt association Depth of Study A field inspection was made to verify the existing condition of the various reserve study components and to verify component quantities. In place testing, laboratory testing, and non-destructive testing of the reserve study components were not Page 3 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued performed. Field measurements of component quantities were made to either verify improvement plan take offs or determine directly the quantities of various components. Photographs were taken of the site improvements. Reserve Study Assumptions The below listed assumptions are implicit in this reserve study. Cost estimates and financial information provided to USI Commercial are accurate and current. unforeseen circumstances will cause a significant reduction of reserves. Sufficient comprehensive property insurance exists to protect from insurable risks. The association plans to continue to maintain the existing common areas and amenities. Reserve payments occur at the end of every calendar month. Expenses occur at the end of the expense year. Impact of Component The projected life expectancy of the major components and the reserve funding needs of the association are closely tied. Performing the appropriate routine maintenance for each major component generally increases the component useful life, effectively moving the component expense into the future which reduces the reserve funding payments of the association. Failure to perform such maintenance can shorten the remaining useful life of the major components, bringing the replacement expense closer to the present which increases the reserve funding payments of the association. Governing Documents The Conditions, Covenants, and Restrictions for The Retreat at Gleanloch Farms Home Owners Association were not provided to USI Commercial for review prior to report generation. Inflation Estimate Inflation for the last year has been reviewed and a best fit regression analysis for the last 12 months is 1.47 percent. An inflation multiplier of 1.47 percent per annum has been applied to all future expenses. Initial Reserves Initial reserves for this Reserve Study were known to be $ 400,000.00 on January 1, 2014. Per client directive, interest has not been factored into this reserve study report. The implicit assumption has been made that the reserve accounts were not drawn down between the date of the known reserve balance and the study start date. Financial Condition of Association The capital expenditures for this study period are projected to be $4,933,034.00. The recommended annual reserve payment is $170,331.00, which calculates to $68.90 per month, per member. Theoretically, a perfect funding plan achieves 100 percent funding; however this does not mean that anything less than 100 percent renders the association fiscally unhealthy. A percent funding level of 70 percent or greater is considered to be a "healthy" reserve fund. Additionally, it is quite normal for the percent funded to vary from year to year over the study period as the association realizes capital expenditures. Please see the Cash Flow Analysis and the Dues Summary reports for details. Special Assessments Special Assessments are not required for this reserve study. Reserve Funding Goal The reserve fund is set to be as close to Fully Funded as possible on an annual basis. Study Method Reserve studies may be done in several ways, but we believe that the value of a reserve study lies in the details. In this study, we have used the "Component" method because it is the only method which allows scrutiny of the funding details. The method is pragmatic, and allows human judgement and experience to enter into the equation. Whenever possible, the known costs of reserve items have been factored into this report. Known costs are provided to USI Page 4 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Commercial in the form of invoices, qualified contractor proposals, or directly from the client. If exact known costs are not available, present costs have been estimated by the Reserve Analyst's observations and experience; USI Commercial's proprietary internal database of costs; and industry recognized cost reference guides such as the National Construction Estimator, RS Means, and the Engineering News-Record Cost Book. In addition, every reserve item has been given an estimated remaining useful life, an estimated useful life when new, and has been cast into the future to determine future costs. Equal annual payments are calculated for each reserve item based upon a payment starting year and a payment ending year using the end of period payment method. If applicable, interest earned on accumulated reserve funds and taxes on the reserve interest are also calculated. Initial reserve funds are consumed as expenses occur until fully depleted, reducing annual reserve payments to a minimum. As you review this report, we are certain that you will appreciate the level of detail provided, allowing you to review each reserve item in detail. Summary of Findings USI Commercial has estimated future projected expenses for The Retreat at Gleanloch Farms Home Owners Association based upon preservation of existing improvements. The attached funding study is limited in scope to those expense items listed in the attached "The Retreat at Gleannloch Farms Homeowners Association Reserve Study Expense Items". Expense items which have an expected life of more than are not included in this reserve study unless payment for these long lived items overlaps the reserve study envelope. The primary concern is the preservation of a positive funding balance with funds sufficient to meet projected expenses throughout the study life. Based upon the attached funding study, it is our professional opinion that the recommended annual reserve fund contribution will realize this goal. It is implied that the information provided to USI Commercial by the client, including but not limited to that information contained in the attached Reserve Study Information Summary, and the maintenance records, are complete and accurate, and that USI Commercial may rely upon such information and documents without further verification or corroboration. Where the age of a particular reserve item (as listed in the reserve study) is unknown, the best-estimated age of that item has been used. If the association is unable to provide an estimate of a reserve item's age, USI Commercial shall make its own estimate of age of the reserve item. The reserve study is created for the association's use, and is a reflection of information provided to USI Commercial. This information is not for the purpose of performing an audit, historical records, quality or forensic analyses. The on-site reserve study inspection is not considered to be a project audit, quality inspection, or property condition assessment. Percent Funded Many reserve studies use the concept of "Percent Funded" to measure the reserve account balance against a theoretically perfect value. Percent Funded is often used as a measure of the "Financial Health" of an association. The assumption is, the higher the percentage, the greater the "Financial Health". The question of substance is simply: "How much is enough?" To answer the question, some understanding of Percent Funded is required. Percent Funded is the ratio of current cash reserves divided by the depreciated value of the association improvements. Percent Funded is then, the current reserve balance divided by the Fully Funded value multiplied by 100 (to give a percentage). The concept is useful when the reserve study is comprehensive, but misleading when the reserve study is superficial or constrained. As a result, we recommend that the statement "Percent Funded" be used with caution. Keeping Your Reserve Study Current USI Commercial believes that funding studies are an essential part of property management. People and property are constantly changing and evolving. As a result, the useful life of a funding study is not more than five years. It is recommended that this reserve study should be updated on an annual basis or when one of the following events occur: changes in interest rates, changes in inflation rates, changes in the number of dues paying members, before starting new improvements, before making changes to the property, after a flood or fire, after the change of ownership or management, or after Annexation or Incorporation. Items Beyond the Scope of this Report Building or land appraisals for any purpose. State or local zoning ordinance violations. Building code violations. Soils conditions, soils contamination or geological stability of site. Page 5 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Engineering analysis or structural stability of site. Air quality, asbestos, electromagnetic radiation, formaldehyde, lead, mercury, or radon. Water quality or other environmental hazards. Invasions by termites and any or all other destroying organisms or insects. Damage or destruction due to birds, bats or animals to buildings or site. This study is not a pest inspection. Adequacy or efficiency of any system or component on site. Specifically excluded reserve items. Septic systems and septic tanks. Buried or concealed portions of swimming pools, pool liners, Jacuzzis and spas or similar items. Items concealed by signs, carpets or other things. Missing or omitted information supplied by The Retreat at Gleanloch Farms Home Owners Association. Hidden improvements such as sewer lines, water lines, or other buried or concealed items. Items Maintained by Others Items Maintained by Others are those items that are not maintained by the specific association for which the study is conducted. These items are not included in the reserve study. The "Other" responsible parties may include the county, the utility company, the homeowner, or a separate association. For the purposes of this study, examples of Items Maintained by Others include: The individual unit interiors. The doors, windows, garage doors, and mechanical components that service in individual unit. The water supply piping. Long Lived Items Long Lived Items are considered to be those items that have remaining life expectancies that are unpredictable and/or beyond the study period. These items are not included in the reserve study. These items may require periodic maintenance or repairs which would typically be funded from the operating budget. For the purpose of this study, examples of Long Lived Items are: The replacement of hardiboard siding. The replacement of stone veneer. The replacement of brick veneer. The irrigation system. The storm water system. Although concrete surfaces and the storm water management system are considered to be Long Lived Items, a repair and replacement allowance has been factored into this analysis. Routine maintenance of these items will not only enhance the look of the community, it may extend the design life of these items. Operating Budget Items Operating Budget Items are those items that have a relatively low cost - typically less than $1,000 - and/or are considered to be short-term maintenance. These items are not included in the Reserve Study. For the purposes of this study, examples of Operating Budget Items include: The general landscaping. The pool maintenance contract. The general signage replacement. The irrigation system maintenance. The exterior building mounted lights. Tax Considerations Certain items that may be included in this reserve study, such as painting and reserve study fees, may not be tax deductible per IRS guidelines. Consultation with a tax advisor is recommended. Page 6 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Statement of Qualifications David Rothbart, Director of Reserve Study Services for USI Commercial, is a CAI designated Reserve Specialist. Mr. Rothbart has been a professional in the inspection industry for over 13 years, performing over 5,000 commercial and residential building inspections, as well as completing numerous Reserve Studies. Mr. Rothbart earned a BA from Fairleigh Dickinson University, and is a Certified Environmental Professional, completing his studies through the Lincoln Graduate Center. Having successfully owned and sold several businesses, Mr. Rothbart is familiar with construction practices, construction costs, and contracting practices. Currently he is a HI Certified Home Inspector, a Radon Technician certified with the National Environmental Health Association, and a licensed WDI Inspector. Mr. Rothbart was formerly an EMT in a trauma center in New Jersey. Conflict of Interest As the preparer of this reserve study report, USI Commercial certifies that we do not have any vested interests, financial interests, or other interests that would cause a conflict of interest in the preparation of this reserve study report. USI Commercial would like to thank The Retreat at Gleanloch Farms Home Owners Association for the opportunity to be of service in the preparation of the attached reserve study report. Again, please feel free to contact us if you have any questions. This report was prepared by: Steve Fusselman Reserve Analyst David Rothbart, RS Director of Reserve Study Operations Cheryl Rorrer Technical Report Writer Enclosures: 4 Pages of Photographs Attached Category Photograph of Category Photograph of Roofs - Residential Buildings Category Photograph of Category Photograph of Category Photograph of Hardscape Page 7 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Typical residential building Pool house Page 8 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Pool area Spa Page 9 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Entrance gate Mailboxes Page 10 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Typical metal fence Deteriorated metal fence at pool equipment Page 11 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Reserve Category - Category Photograph with Reserve Items in the Category: Item Name Present Cost Remaining Expected First Expense First Expense Repeating Item? Painting - Cycle 1-76 Units $ 41,198.30 0 Yrs 7 Yrs 2014 $ 41,808.01 Painting - Cycle 2-33 Units $ 17,889.30 1 Yr 7 Yrs 2015 $ 18,422.72 Painting - Cycle 3-33 Units $ 17,889.30 2 Yrs 7 Yrs 2016 $ 18,695.37 Painting - Cycle 4-33 Units $ 17,889.30 3 Yrs 7 Yrs 2017 $ 18,972.05 Painting - Cycle 5-31 Units $ 16,805.10 4 Yrs 7 Yrs 2018 $ 18,085.99 Page 12 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Reserve Category - Roofs - Residential Buildings Category Photograph with Reserve Items in the Category: Roofs - Residential Buildings Item Name Present Cost Remaining Expected Asphalt Shingle Roof Replacement - Cycle 1 $ 233,400.00 6 Yrs 15 Yrs Asphalt Shingle Roof Replacement - Cycle 2 $ 233,400.00 8 Yrs 15 Yrs Asphalt Shingle Roof Replacement - Cycle 3 $ 233,400.00 10 Yrs 15 Yrs Asphalt Shingle Roof Replacement - Cycle 4 $ 233,400.00 12 Yrs 15 Yrs Asphalt Shingle Roof Replacement - Cycle 5 $ 233,400.00 14 Yrs 15 Yrs Gutters & Downspouts Cycle 1 $ 23,309.20 18 Yrs Gutters & Downspouts Cycle 2 $ 23,309.20 19 Yrs Gutters & Downspouts Cycle 3 $ 23,309.20 20 Yrs Gutters & Downspouts Cycle 4 $ 23,309.20 21 Yrs Gutters & Downspouts Cycle 5 $ 23,309.20 22 Yrs First Expense 2020 2022 2024 2026 2028 2032 2033 2035 2036 First Expense Repeating Item? $ 258,679.73 $ 266,393.02 $ 274,336.31 $ 282,516.45 $ 290,940.50 $ 30,814.25 $ 31,270.28 $ 31,733.07 $ 32,202.70 $ 32,679.28 Roof costs of $23,000 per 4 unit building and $14,000 per 2 unit building provided by client. Replacements have been divided into 5 equal cycles to allow the association to decide which buildings to address per cycle. Page 13 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Reserve Category - Category Photograph with Reserve Items in the Category: Item Name Present Cost Remaining Expected Metal Fence - Eastloch Road - 6 Ft. $ 116,320.00 20 Yrs Metal Fence - Bordering Golf Course - 6 Ft. $ 62,720.00 20 Yrs Wood Fence - Southern Border of Property - 8 Ft. $ 60,750.00 10 Yrs 20 Yrs Metal Access Control Entrance Gates $ 10,000.00 25 Yrs Swing Style Gate Opener Motors $ 12,000.00 4 Yrs 7 Yrs Access Control Gate Entry Call Box $ 14,000.00 7 Yrs 15 Yrs Mailbox Kiosks - 3 Boxes Per Location - Cycle 1 $ 4,200.00 20 Yrs Mailbox Kiosks - 3 Boxes Per Location - Cycle 2 $ 4,200.00 23 Yrs Mailbox Kiosks - 3 Boxes Per Location - Cycle 3 $ 4,200.00 28 Yrs Mailbox Kiosks - 3 Boxes Per Location - Cycle 4 $ 4,200.00 Street Light Poles - Cycle 1 $ 12,000.00 18 Yrs Street Light Poles - Cycle 2 $ 12,000.00 20 Yrs Street Light Poles - Cycle 3 $ 12,000.00 22 Yrs First Expense First Expense Repeating Item? $ 158,357.65 $ 85,386.79 $ 71,405.02 $ 14,651.62 $ 12,914.64 $ 15,745.98 $ 5,717.87 $ 5,975.51 $ 6,430.96 $ 6,622.72 2032 $ 15,863.74 $ 16,336.76 2036 $ 16,823.89 Page 14 of 31 Pages 2024 2039 2018 2021 2037 2042 2044

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Item Name Storm Water Management System Allowance Present Cost $ 1,500.00 Remaining Expected 0 Yrs 1 Yr Page 15 of 31 Pages First Expense 2014 First Expense $ 1,522.20 Repeating Item?

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Reserve Category - Category Photograph with Reserve Items in the Category: Remaining Expected $ 1,344.00 0 Yrs 5 Yrs $ 720.00 0 Yrs $ 17,130.00 20 Yrs Metal Pool Fence - South End - 6 Ft. $ 6,000.00 20 Yrs Asphalt Shingle Roof at Pool House $ 5,160.00 10 Yrs 15 Yrs Exterior Painting Allowance $ 1,500.00 4 Yrs 7 Yrs Item Name Concrete Pool Deck - 3% Repair Allowance Metal Fence at Pool Equipment Area Metal Pool Perimeter Fence 4 Ft. Present Cost Restroom Refurbish - Pool House $ 5,000.00 20 Yrs 25 Yrs Exterior Shower $ 3,000.00 15 Yrs 20 Yrs Pool Filtration & Pump Equipment $ 1,200.00 2 Yrs 7 Yrs Pool Furniture Allowance $ 5,000.00 3 Yrs 5 Yrs $ 10,000.00 5 Yrs 10 Yrs $ 9,000.00 15 Yrs 20 Yrs Pool & Integrated Spa Resurfacing Pool & Integrated Spa Coping & Waterline Tile Refurbish First Expense 2014 2014 2024 2018 2029 2016 2017 2019 First Expense Repeating Item? $ 1,363.89 $ 730.66 $ 23,320.72 $ 8,168.38 $ 6,065.02 $ 1,614.33 $ 6,806.98 $ 3,794.94 $ 1,254.07 $ 5,302.62 $ 10,921.48 $ 11,384.82 2029 Page 16 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Summary - Continued Reserve Category - Hardscape Category Photograph with Reserve Items in the Category: Hardscape Item Name Concrete Roads Present Cost $ 100,000.00 Remaining Expected First Expense 2044 Restripe Concrete Parking Lot at Pool $ 1,497.60 1 Yr 7 Yrs Concrete Sidewalks - 3% Repair or Replacement Allowance $ 3,468.00 0 Yrs 5 Yrs 2015 First Expense Repeating Item? $ 157,683.73 $ 1,542.26 $ 3,519.32 2014 Page 17 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Reserve Study Expense Item Listing Reserve Items Unit Cost Units Current Cost When New Estimated Remaining Expected When New Calendar Estimated Future Cost Raw Annual Payment 2014 $ 41,808 $ 41,808.01 2021 $ 46,336 $ 6,619.47 2028 $ 51,355 $ 7,336.43 2035 $ 56,917 $ 8,131.04 2042 $ 63,082 $ 9,011.72 2049 $ 69,915 $ 9,987.79 2015 $ 18,423 $ 9,211.36 2022 $ 20,418 $ 2,916.87 2029 $ 22,630 $ 3,232.80 2036 $ 25,081 $ 3,582.95 2043 $ 27,797 $ 3,971.02 2016 $ 18,695 $ 6,231.79 2023 $ 20,720 $ 2,960.04 2030 $ 22,965 $ 3,280.64 2037 $ 25,452 $ 3,635.97 2044 $ 28,209 $ 4,029.79 2017 $ 18,972 $ 4,743.01 2024 $ 21,027 $ 3,003.85 2031 $ 23,304 $ 3,329.20 2038 $ 25,828 $ 3,689.78 2045 $ 28,626 $ 4,089.43 2018 $ 18,086 $ 3,617.20 2025 $ 20,045 $ 2,863.56 2032 $ 22,216 $ 3,173.71 2039 $ 24,622 $ 3,517.46 2046 $ 27,289 $ 3,898.44 2020 $ 258,680 $ 36,954.25 2035 $ 322,452 $ 21,496.83 2050 $ 401,947 $ 26,796.48 2022 $ 266,393 $ 29,599.23 2037 $ 332,067 $ 22,137.82 2052 $ 413,932 $ 27,595.50 2024 $ 274,336 $ 24,939.66 2039 $ 341,969 $ 22,797.93 2054 $ 426,275 $ 28,418.34 2026 $ 282,516 $ 21,732.03 0 s Painting - Cycle 1-76 Units $ 1.30 / Sqft. 31691 Sqft. $ 41,198 7 s 7 s 1 Painting - Cycle 2-33 Units $ 1.30 / Sqft. 13761 Sqft. $ 17,889 7 7 s 2 s Painting - Cycle 3-33 Units $ 1.30 / Sqft. 13761 Sqft. $ 17,889 7 s 7 s 3 s Painting - Cycle 4-33 Units $ 1.30 / Sqft. 13761 Sqft. $ 17,889 7 s 7 s 4 s Painting - Cycle 5-31 Units $ 1.30 / Sqft. 12927 Sqft. $ 16,805 7 s 7 s Roofs - Residential Buildings Asphalt Shingle Roof Replacement Cycle 1 Asphalt Shingle Roof Replacement Cycle 2 6 s $ 233,400 / Lump Sum 1 Lump Sum $ 233,400 15 s 15 s 8 s $ 233,400 / Lump Sum 1 Lump Sum $ 233,400 15 s 15 s Asphalt Shingle Roof Replacement Cycle 3 $ 233,400 / Lump Sum Asphalt Shingle $ 233,400 / Lump Sum 10 s 1 Lump Sum $ 233,400 15 s 15 s 1 Lump Sum $ 233,400 12 s Page 18 of 31 Pages 15 s

The Retreat at Gleannloch Farms Homeowners Association Reserve Study Expense Item Listing - Continued Reserve Items Asphalt Shingle Roof Replacement Asphalt Shingle Roof Replacement Cycle 5 Unit Cost Units Current Cost When New $ 233,400 / Lump Sum 1 Lump Sum $ 233,400 Estimated Remaining Expected When New 15 s 15 s 14 s $ 233,400 / Lump Sum 1 Lump Sum $ 233,400 Calendar Estimated Future Cost Raw Annual Payment 2041 $ 352,166 $ 23,477.71 2056 $ 438,986 $ 29,265.72 2028 $ 290,940 $ 19,396.03 2043 $ 362,667 $ 24,177.77 15 s 15 s Gutters & Downspouts Cycle 1 $ 7.60 / Lnft. 3067 Lnft. $ 23,309 18 s 2032 $ 30,814 $ 1,621.80 Gutters & Downspouts Cycle 2 $ 7.60 / Lnft. 3067 Lnft. $ 23,309 19 s 2033 $ 31,270 $ 1,563.51 Gutters & Downspouts Cycle 3 $ 7.60 / Lnft. 3067 Lnft. $ 23,309 20 s $ 31,733 $ 1,511.10 Gutters & Downspouts Cycle 4 $ 7.60 / Lnft. 3067 Lnft. $ 23,309 21 s 2035 $ 32,203 $ 1,463.76 Gutters & Downspouts Cycle 5 $ 7.60 / Lnft. 3067 Lnft. $ 23,309 22 s 2036 $ 32,679 $ 1,420.84 Metal Fence Eastloch Road 6 Ft. $ 40.00 / Lnft. 2908 Lnft. $ 116,320 20 s $ 158,358 $ 7,540.84 Metal Fence Bordering Golf Course - 6 Ft. $ 40.00 / Lnft. 1568 Lnft. $ 62,720 20 s $ 85,387 $ 4,066.04 Wood Fence Southern Border of Property - 8 Ft. 2024 $ 71,405 $ 6,491.37 $ 45.00 / Lnft. 1350 Lnft. $ 60,750 2044 $ 95,793 $ 4,789.64 Metal Access Control Entrance Gates $ 5,000 / Each 2039 $ 14,652 $ 563.52 2018 $ 12,915 $ 2,582.93 2025 $ 14,313 $ 2,044.78 2032 $ 15,864 $ 2,266.25 2039 $ 17,582 $ 2,511.71 2046 $ 19,486 $ 2,783.75 2021 $ 15,746 $ 1,968.25 2036 $ 19,628 $ 1,308.52 2051 $ 24,467 $ 1,631.12 10 s 20 s 20 s 2 Each $ 10,000 25 s 4 s Swing Style Gate Opener Motors Access Control Gate Entry Call Box $ 1,500 / Each 8 Each $ 12,000 7 s 7 s 7 s $ 7,000 / Each 2 Each $ 14,000 15 s Page 19 of 31 Pages 15 s

The Retreat at Gleannloch Farms Homeowners Association Reserve Study Expense Item Listing - Continued Estimated Remaining Expected When New Calendar Reserve Items Unit Cost Units Current Cost When New Mailbox Kiosks 3 Boxes Per Location - Cycle 1 $ 1,400 / Each 3 Each $ 4,200 20 s Mailbox Kiosks 3 Boxes Per Location - Cycle 2 $ 1,400 / Each 3 Each $ 4,200 23 s Mailbox Kiosks 3 Boxes Per Location - Cycle 3 $ 1,400 / Each 3 Each $ 4,200 Mailbox Kiosks 3 Boxes Per Location - Cycle 4 $ 1,400 / Each 3 Each Street Light Poles - Cycle 1 $ 1,200 / Each Street Light Poles - Cycle 2 Street Light Poles - Cycle 3 Estimated Future Cost Raw Annual Payment $ 5,718 $ 272.28 2037 $ 5,976 $ 248.98 28 s 2042 $ 6,431 $ 221.76 $ 4,200 2044 $ 6,623 $ 213.64 10 Each $ 12,000 18 s 2032 $ 15,864 $ 834.93 $ 1,200 / Each 10 Each $ 12,000 20 s $ 16,337 $ 777.94 $ 1,200 / Each 10 Each $ 12,000 22 s 2036 $ 16,824 $ 731.47 2014 $ 1,522 $ 1,522.20 2015 $ 1,545 $ 1,544.73 2016 $ 1,568 $ 1,567.59 2017 $ 1,591 $ 1,590.79 2018 $ 1,614 $ 1,614.33 2019 $ 1,638 $ 1,638.22 2020 $ 1,662 $ 1,662.47 2021 $ 1,687 $ 1,687.07 2022 $ 1,712 $ 1,712.04 2023 $ 1,737 $ 1,737.37 2024 $ 1,763 $ 1,763.09 2025 $ 1,789 $ 1,789.18 2026 $ 1,816 $ 1,815.66 2027 $ 1,843 $ 1,842.53 2028 $ 1,870 $ 1,869.80 2029 $ 1,897 $ 1,897.47 2030 $ 1,926 $ 1,925.55 2031 $ 1,954 $ 1,954.05 2032 $ 1,983 $ 1,982.97 2033 $ 2,012 $ 2,012.31 0 s Storm Water Management System Allowance $ 1,500 / Lump Sum 1 Lump Sum $ 1,500 1 s Page 20 of 31 Pages 1

The Retreat at Gleannloch Farms Homeowners Association Reserve Study Expense Item Listing - Continued Reserve Items Storm Water Management System Allowance Unit Cost $ 1,500 / Lump Sum Units 1 Lump Sum Current Cost When New Estimated Remaining $ 1,500 1 s Expected When New 1 Calendar Estimated Future Cost Raw Annual Payment $ 2,042 $ 2,042.10 2035 $ 2,072 $ 2,072.32 2036 $ 2,103 $ 2,102.99 2037 $ 2,134 $ 2,134.11 2038 $ 2,166 $ 2,165.69 2039 $ 2,198 $ 2,197.74 2040 $ 2,230 $ 2,230.27 2041 $ 2,263 $ 2,263.28 2042 $ 2,297 $ 2,296.77 2043 $ 2,331 $ 2,330.76 2044 $ 2,365 $ 2,365.26 2014 $ 1,364 $ 1,363.89 2019 $ 1,468 $ 293.57 2024 $ 1,580 $ 315.95 2029 $ 1,700 $ 340.03 $ 1,830 $ 365.94 2039 $ 1,969 $ 393.84 2044 $ 2,119 $ 423.85 2014 $ 731 $ 730.66 2044 $ 1,135 $ 37.84 0 s Concrete Pool Deck - 3% Repair Allowance $ 12.00 / Sqft. 112 Sqft. $ 1,344 5 s 5 s Metal Fence at Pool Equipment Area $ 30.00 / Lnft. Metal Pool Perimeter Fence - 4 Ft. $ 30.00 / Lnft. 571 Lnft. $ 17,130 20 s $ 23,321 $ 1,110.51 Metal Pool Fence - South End - 6 Ft. $ 40.00 / Lnft. 150 Lnft. $ 6,000 20 s $ 8,168 $ 388.97 2024 $ 6,065 $ 551.37 2039 $ 7,560 $ 504.02 2054 $ 9,424 $ 628.27 2018 $ 1,614 $ 322.87 2025 $ 1,789 $ 255.60 2032 $ 1,983 $ 283.28 2039 $ 2,198 $ 313.96 2046 $ 2,436 $ 347.97 Asphalt Shingle Roof at Pool House 0 s 24 Lnft. $ 720 10 s $ 4.00 / Sqft. 1290 Sqft. $ 5,160 15 s 15 s 4 s Exterior Painting Allowance $ 1,500 / Lump Sum 1 Lump Sum $ 1,500 7 s 7 s Restroom Refurbish - Pool House $ 2,500 / Each 2 Each $ 5,000 20 s 25 s $ 6,807 $ 324.14 Exterior Shower $ 1,500 / Each 2 Each $ 3,000 15 s 20 s 2029 $ 3,795 $ 237.18 Page 21 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Reserve Study Expense Item Listing - Continued Reserve Items Unit Cost Units Current Cost When New Estimated Remaining Expected When New Estimated Future Cost Raw Annual Payment 2016 $ 1,254 $ 418.02 2023 $ 1,390 $ 198.56 2030 $ 1,540 $ 220.06 2037 $ 1,707 $ 243.90 2044 $ 1,892 $ 270.31 2017 $ 5,303 $ 1,325.66 2022 $ 5,707 $ 1,141.36 2027 $ 6,142 $ 1,228.35 2032 $ 6,610 $ 1,321.98 2037 $ 7,114 $ 1,422.74 2042 $ 7,656 $ 1,531.18 2047 $ 8,239 $ 1,647.89 2019 $ 10,921 $ 1,820.25 2029 $ 12,650 $ 1,264.98 2039 $ 14,652 $ 1,465.16 2049 $ 16,970 $ 1,697.02 20 s 2029 $ 11,385 $ 711.55 2044 $ 157,684 $ 5,086.57 2015 $ 1,542 $ 771.13 2022 $ 1,709 $ 244.19 2029 $ 1,894 $ 270.63 2036 $ 2,100 $ 299.95 2043 $ 2,327 $ 332.43 2014 $ 3,519 $ 3,519.32 2019 $ 3,788 $ 757.51 2024 $ 4,076 $ 815.25 2029 $ 4,387 $ 877.39 $ 4,721 $ 944.26 2039 $ 5,081 $ 1,016.24 2044 $ 5,468 $ 1,093.69 2 s Pool Filtration & Pump Equipment $ 1,200 / Lump Sum 1 Lump Sum $ 1,200 7 s 7 s 3 s Pool Furniture Allowance $ 5,000 / Lump Sum 1 Lump Sum $ 5,000 5 s 5 s 5 s Pool & Integrated Spa Resurfacing Pool & Integrated Spa Coping & Waterline Tile Refurbish $ 10,000 / Lump Sum $ 50.00 / Lnft. 1 Lump Sum 180 Lnft. $ 10,000 $ 9,000 10 s 15 s 10 s Calendar Hardscape Concrete Roads $ 100,000 / Lump Sum 1 Lump Sum $ 100,000 1 Restripe Concrete Parking Lot at Pool $ 0.40 / Sqft. 3744 Sqft. $ 1,498 7 7 s 0 s Concrete Sidewalks - 3% Repair or Replacement Allowance $ 12.00 / Sqft. 289 Sqft. $ 3,468 5 s 5 s Raw Annual Payments do not include earned interest, tax adjustments or payments made with inital reserves. Months Remaining in Calendar 2014: 12 Expected annual inflation: 1.47% Interest earned on reserve funds: 0.00% Initial Reserve: $ 400,000 Page 22 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Cash Flow Analysis Calendar Annual Dues Net Reserve Funds Annual Expenses % Funded 2014 $ 48,944 $ 521,387 70.2% 2015 $ 21,510 $ 670,208 81.6% 2016 $ 21,517 $ 819,021 87.9% 2017 $ 25,865 $ 963,487 92.1% 2018 $ 34,229 $ 1,099,588 94.9% 2019 $ 17,815 $ 1,252,104 98.7% 2020 $ 260,342 $ 1,162,092 83.2% 2021 $ 63,769 $ 1,268,654 98.7% 2022 $ 295,939 $ 1,143,045 83.2% 2023 $ 23,848 $ 1,289,528 104.8% 2024 $ 380,252 $ 1,079,607 79.2% 2025 $ 37,937 $ 1,212,001 106.3% 2026 $ 284,332 $ 1,097,999 87.0% 2027 $ 7,984 $ 1,260,346 110.5% 2028 $ 344,165 $ 1,086,511 83.7% 2029 $ 60,338 $ 1,196,504 106.6% 2030 $ 26,430 $ 1,340,404 108.8% 2031 $ 25,258 $ 1,485,476 107.6% 2032 $ 95,334 $ 1,560,474 101.7% 2033 $ 33,283 $ 1,697,522 104.7% $ 344,421 $ 1,523,431 85.9% 2035 $ 413,645 $ 1,280,117 79.9% 2036 $ 98,414 $ 1,352,034 99.4% 2037 $ 374,450 $ 1,147,915 79.9% 2038 $ 27,994 $ 1,290,251 104.6% 2039 $ 432,482 $ 1,028,100 74.3% 2040 $ 2,230 $ 1,196,200 106.3% 2041 $ 354,429 $ 1,012,102 77.6% 2042 $ 79,466 $ 1,102,967 97.7% 2043 $ 395,121 $ 878,176 71.2% 2044 $ 301,288 $ 747,218 75.3% $ 5,280,253 $ 4,933,034 Totals : The cash distribution shown in this table applies to repair and replacement cash reserves only. Basis of Funding Study Cash reserves have been set to a minimum of $ 0 Months Remaining in Calendar 2014: 12 Study = 30 years Inflation = 1.47 % Initial Reserve Funds = $ 400,000.00 Annual Payments Held Constant for 30 years Interest = 0.00 % Final Reserve Value = $ 747,218.44 Page 23 of 31 Pages

The Retreat at Gleannloch Farms Homeowners Association Funding Study Cash Flow by Calendar - Continued Percent Funded Cash Reserves Expenses $ 0 Minimum Cash Reserve 1.8 120% 100% 1.4 1.2 80% 1.0 60% 0.8 0.6 40% 0.4 20% Calendar s Page 24 of 31 Pages 0% 2044 2039 2029 2024 2019 0.0 2014 0.2 Percent Funded Cash Reserves in Millions of Dollars 1.6

The Retreat at Gleannloch Farms Homeowners Association Reserve Dues Summary Projected Dues by Month and by Calendar Calendar Member Monthly Operations Payment Member Monthly Reserve Payment Member Total Monthly Payment Member Total Annual Payment Monthly Reserve Payment Annual Reserve Payment 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 In the context of the Reserve Payment Summary, the ''Annual Reserve Payment'' corresponds with the ''Annual Revenue'' in the Cash Flow report. Number of Payment Months in Calendar 2014: 12 Number of s of Constant Payments: 30 of Dues Paying Members: 206 Page 25 of 31 Pages

.USI.COMMERCIAL (888)225-3755 www.usicommercial.com October 14, 2014 Annual Expense Summary Report 2014 Category Item Name Expense Painting - Cycle 1-76 Units $ 41,808 $ 1,522 Concrete Pool Deck - 3% Repair Allowance $ 1,364 Metal Fence at Pool Equipment Area $ 731 Subtotal = $ 2,095.00 Hardscape Concrete Sidewalks - 3% Repair or Replacement Allowance $ 3,519 2014 Annual Expense Total = $ 48,944 2015 Painting - Cycle 2-33 Units $ 18,423 $ 1,545 Hardscape Restripe Concrete Parking Lot at Pool $ 1,542 2015 Annual Expense Total = $ 21,510 2016 Painting - Cycle 3-33 Units $ 18,695 $ 1,568 Pool Filtration & Pump Equipment $ 1,254 2016 Annual Expense Total = $ 21,517 2017 Painting - Cycle 4-33 Units $ 18,972 $ 1,591 Pool Furniture Allowance $ 5,303 2017 Annual Expense Total = $ 25,866 Painting - Cycle 5-31 Units $ 18,086 Swing Style Gate Opener Motors $ 12,915 2018 $ 1,614 Subtotal = $ 14,529.00 Exterior Painting Allowance $ 1,614 2018 Annual Expense Total = $ 34,229 $ 1,638 Concrete Pool Deck - 3% Repair Allowance $ 1,468 2019 Page 26 of 31 Pages

Category Item Name Expense Pool & Integrated Spa Resurfacing $ 10,921 Subtotal = $ 12,389.00 2019 Hardscape Concrete Sidewalks - 3% Repair or Replacement Allowance $ 3,788 2019 Annual Expense Total = $ 17,815 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 1 $ 258,680 2020 $ 1,662 2020 Annual Expense Total = $ 260,342 2021 Painting - Cycle 1-76 Units $ 46,336 Access Control Gate Entry Call Box $ 15,746 $ 1,687 Subtotal = $ 17,433.00 2021 Annual Expense Total = $ 63,769 2022 Painting - Cycle 2-33 Units $ 20,418 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 2 $ 1,712 Pool Furniture Allowance $ 5,707 Hardscape Restripe Concrete Parking Lot at Pool $ 1,709 $ 266,393 2022 Annual Expense Total = $ 295,939 2023 Painting - Cycle 3-33 Units $ 20,720 $ 1,737 Pool Filtration & Pump Equipment $ 1,390 2023 Annual Expense Total = $ 23,847 Painting - Cycle 4-33 Units $ 21,027 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 3 Wood Fence - Southern Border of Property - 8 Ft. $ 274,336 $ 71,405 $ 1,763 Subtotal = $ 73,168.00 2024 Concrete Pool Deck - 3% Repair Allowance $ 1,580 Asphalt Shingle Roof at Pool House $ 6,065 Subtotal = $ 7,645.00 Hardscape Concrete Sidewalks - 3% Repair or Replacement Allowance $ 4,076 2024 Annual Expense Total = $ 380,252 Painting - Cycle 5-31 Units $ 20,045 Swing Style Gate Opener Motors $ 14,313 2025 Page 27 of 31 Pages

Category Item Name Expense 2025 $ 1,789 Subtotal = $ 16,102.00 Exterior Painting Allowance $ 1,789 2025 Annual Expense Total = $ 37,936 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 4 $ 282,516 2026 $ 1,816 2026 Annual Expense Total = $ 284,332 $ 1,843 Pool Furniture Allowance $ 6,142 2027 2027 Annual Expense Total = $ 7,985 2028 Painting - Cycle 1-76 Units $ 51,355 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 5 $ 290,940 $ 1,870 2028 Annual Expense Total = $ 344,165 Painting - Cycle 2-33 Units $ 1,897 Concrete Pool Deck - 3% Repair Allowance $ 1,700 Exterior Shower $ 3,795 2029 $ 22,630 Pool & Integrated Spa Resurfacing $ 12,650 Pool & Integrated Spa Coping & Waterline Tile Refurbish $ 11,385 Subtotal = $ 29,530.00 Hardscape Restripe Concrete Parking Lot at Pool $ 1,894 Concrete Sidewalks - 3% Repair or Replacement Allowance $ 4,387 Hardscape Subtotal = $ 6,281.00 2029 Annual Expense Total = $ 60,338 2030 Painting - Cycle 3-33 Units $ 22,965 $ 1,926 Pool Filtration & Pump Equipment $ 1,540 2030 Annual Expense Total = $ 26,431 Painting - Cycle 4-33 Units $ 23,304 2031 $ 1,954 2031 Annual Expense Total = $ 25,258 Painting - Cycle 5-31 Units $ 22,216 Roofs - Residential Buildings Gutters & Downspouts - Cycle 1 $ 30,814 2032 Page 28 of 31 Pages

Category Item Name Expense Swing Style Gate Opener Motors $ 15,864 Street Light Poles - Cycle 1 $ 15,864 2032 $ 1,983 Subtotal = $ 33,711.00 Exterior Painting Allowance $ 1,983 Pool Furniture Allowance $ 6,610 Subtotal = $ 8,593.00 2032 Annual Expense Total = $ 95,334 Roofs - Residential Buildings Gutters & Downspouts - Cycle 2 $ 31,270 2033 $ 2,012 2033 Annual Expense Total = $ 33,282 Roofs - Residential Buildings Gutters & Downspouts - Cycle 3 $ 31,733 Metal Fence - Eastloch Road - 6 Ft. Metal Fence - Bordering Golf Course - 6 Ft. Mailbox Kiosks - 3 Boxes Per Location - Cycle 1 Street Light Poles - Cycle 2 $ 158,358 $ 85,387 $ 5,718 $ 16,337 $ 2,042 Subtotal = $ 267,842.00 Concrete Pool Deck - 3% Repair Allowance Metal Pool Perimeter Fence - 4 Ft. $ 1,830 $ 23,321 Metal Pool Fence - South End - 6 Ft. $ 8,168 Restroom Refurbish - Pool House $ 6,807 Subtotal = $ 40,126.00 Hardscape Concrete Sidewalks - 3% Repair or Replacement Allowance $ 4,721 Annual Expense Total = $ 344,422 Painting - Cycle 1-76 Units $ 56,917 Asphalt Shingle Roof Replacement - Cycle 1 $ 322,452 Roofs - Residential Buildings 2035 Gutters & Downspouts - Cycle 4 $ 32,203 Roofs - Residential Buildings Subtotal = $ 354,655.00 $ 2,072 2035 Annual Expense Total = $ 413,644 Painting - Cycle 2-33 Units $ 25,081 Roofs - Residential Buildings Gutters & Downspouts - Cycle 5 $ 32,679 Access Control Gate Entry Call Box $ 19,628 Street Light Poles - Cycle 3 $ 16,824 2036 Page 29 of 31 Pages $ 2,103

Category Item Name Expense Subtotal = $ 38,555.00 Hardscape Restripe Concrete Parking Lot at Pool $ 2,100 2036 Annual Expense Total = $ 98,415 Painting - Cycle 3-33 Units $ 25,452 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 2 $ 332,067 Mailbox Kiosks - 3 Boxes Per Location - Cycle 2 $ 5,976 $ 2,134 2037 Subtotal = $ 8,110.00 Pool Filtration & Pump Equipment $ 1,707 Pool Furniture Allowance $ 7,114 Subtotal = $ 8,821.00 2037 Annual Expense Total = $ 374,450 Painting - Cycle 4-33 Units $ 25,828 2038 $ 2,166 2038 Annual Expense Total = $ 27,994 Painting - Cycle 5-31 Units Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 3 $ 24,622 $ 341,969 Metal Access Control Entrance Gates $ 14,652 Swing Style Gate Opener Motors $ 17,582 $ 2,198 Subtotal = $ 34,432.00 2039 Concrete Pool Deck - 3% Repair Allowance $ 1,969 Asphalt Shingle Roof at Pool House $ 7,560 Exterior Painting Allowance $ 2,198 Pool & Integrated Spa Resurfacing $ 14,652 Subtotal = $ 26,379.00 Hardscape Concrete Sidewalks - 3% Repair or Replacement Allowance $ 5,081 2039 Annual Expense Total = $ 432,483 2040 $ 2,230 2040 Annual Expense Total = $ 2,230 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 4 $ 352,166 2041 $ 2,263 2041 Annual Expense Total = $ 354,429 Painting - Cycle 1-76 Units Mailbox Kiosks - 3 Boxes Per Location - Cycle 3 $ 63,082 2042 Page 30 of 31 Pages $ 6,431

Category Item Name Expense 2042 $ 2,297 Subtotal = $ 8,728.00 Pool Furniture Allowance $ 7,656 2042 Annual Expense Total = $ 79,466 Painting - Cycle 2-33 Units $ 27,797 Roofs - Residential Buildings Asphalt Shingle Roof Replacement - Cycle 5 $ 2,331 Hardscape Restripe Concrete Parking Lot at Pool $ 2,327 $ 362,667 2043 2043 Annual Expense Total = $ 395,122 Painting - Cycle 3-33 Units $ 28,209 Wood Fence - Southern Border of Property - 8 Ft. $ 95,793 Mailbox Kiosks - 3 Boxes Per Location - Cycle 4 $ 6,623 $ 2,365 Subtotal = $ 104,781.00 2044 Concrete Pool Deck - 3% Repair Allowance $ 2,119 Metal Fence at Pool Equipment Area $ 1,135 Pool Filtration & Pump Equipment $ 1,892 Subtotal = $ 5,146.00 Concrete Roads Hardscape $ 157,684 Concrete Sidewalks - 3% Repair or Replacement Allowance $ 5,468 Hardscape Subtotal = $ 163,152.00 2044 Annual Expense Total = $ 301,288 Page 31 of 31 Pages