Cullor Asset Management, LLC • P.O. Box 14763 Lenexa, KS ... · The Park Apartments has exceptional drive-by visibility, easy access to the major employment and retail corridor,

Cullor Asset Management, LLC • P.O. Box 14763 Lenexa, KS 66285 Phone: 913.324.5900 • Fax: 866.629.4703

The Park Apartments Investment Highlights Exclusive Partners, Exceptional Properties, and Dynamic Investments

THIS IS NOT AN OFFER TO SELL SECURITIES. This document does not provide the detailed information in the Private Placement Memorandum, which investors must read prior to investing. To receive a Private Placement Memorandum all parties must complete the Offeree Questionnaire, be qualified to invest, and have a substantive pre-existing relationship. All the information in this document is believed to be accurate but

is not guaranteed, nor indicative of future results.

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The Park Apartments .................................................... 3

Executive Summary ....................................................................... 4

Investment Plan ............................................................................. 6

Investment Overview .................................................................... 7

Marketing Plan .............................................................................. 7

Capital Improvement Plan ............................................................. 8

Market Overview ........................................................................... 8

Property Description ................................................... 10

Location Overview ........................................................................ 11

Pictures ......................................................................................... 13

Unit Mix & Rent Schedule ............................................................ 17

Competitive Occupancy and Rent Study ...................................... 18

Floor Plans .................................................................................... 19

Rent Comparison Summary .......................................................... 23

Property Tax Comparison ............................................................. 24

Financial Overview ...................................................... 24

Overview, Acquisition Costs, Financing ........................................ 24

5 Year Pro Forma .......................................................................... 25

Pro Forma Investor Returns ......................................................... 26

Investment Summary ................................................................... 27

Contact Information .................................................... 28

Table of Contents

Stock Photo



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The Park Investment Summary

Cullor Asset Management, LLC, (CAM) the managing member of ApartmentVestors Bravo Fund, LLC (“The Fund”) is arranging for the acquisition of The Park Apartments in Joplin, MO. An investment in ApartmentVestors Bravo Fund, LLC will provide the investor with preferred returns on their investment as well as profit sharing on additional returns.

The Park Apartments is a 192-unit apartment complex located in Joplin, MO. The Park Apartments has exceptional drive-by visibility, easy access to the major employment and retail corridor, a great unit-mix, and wonderful amenities.

The Park Apartments, a 2 story apartment complex, was constructed in 1976 with an exterior of wood, brick and siding. All foundations are concrete slab and block. The Park consists of fourteen residential buildings that contain forty-eight studio, sixty-four one bedroom, forty-eight two bedroom, and thirty-two three bedroom apartment units. Units range in size from 436 square feet to 1,000 square feet. Each unit is equipped with central air, individual water heaters, dishwashers, decks or patios, spacious kitchen and large closets. Units are individually metered for electric that is the responsibility of the residents. The owner pays trash, common area lighting and water. The Park also provides tenants with a private picnic area, pool, club house, 24-hour work-out facility, tennis court, playground, and laundry facilities.

The property is being purchased by the Fund for $7,400,000 and Cullor Asset Management is applying approximately $2,300,000 in Fund equity to complete the acquisition, reserves, and additional capital items. The purchase price includes an additional Capital Expense Budget of $300,000 to provide for upgrades to the property.

This package contains available information received from the current owner relating to the property location, description, rent roll, budget, and investment strategies. Please refer to the ApartmentVestors Bravo Fund, LLC Operating Agreement and Private Placement Memorandum for risk factors and other information. In addition, an independent inspection and report is being completed. Thorough information has been secured from sources that appear to be reliable; however, no representation by CAM, either expressed or implied, is made as to the accuracy of any information on this property. All

The Park Apartments Investment Overview

The Park is an opportunity for an investor to purchase a

quality multifamily property at a very attractive purchase price

with great existing cash flow and strong upside potential.”

“



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information contained herein is further subject to correction, modification or withdrawal without further notice.

Funds applied as an investment in this transaction will be applied and used for the acquisition of this property, corresponding expenses, acquisition costs, and property improvements, if any, as shown on the Pro-forma Acquisition Expense table in this package.

Executive Summary

The acquisition of The Park Apartments provides ApartmentVestors Bravo Fund, LLC, with a unique opportunity to acquire a high-quality multifamily property with in-place cash flow and opportunities to enhance the revenue and value of the property through minor renovations, utility reimbursements, achieving market occupancy, and efficient management. The Park Apartments recently received a major exterior renovation including all new roofs, exterior paint, exterior windows, an updated club house, pool and exercise area. Approximately 40% of the interiors have also been upgraded with new flooring, paint colors, lighting, and cabinets in some units. It is just now seeing the results of that renovation with occupancy steadily climbing. The Park Apartments is centrally located close to major thoroughfares, shopping, medical and business areas and across the street from a major city park. The Park Apartments has operated at the upper 80% to lower 90% level in terms of occupancy, in a market with average occupancy’s in the mid 90% range. By purchasing The Park at a very attractive purchase price and financing, immediately adding interior improvements as apartment’s turnover, and deploying efficient property management, market occupancy can be achieved and rental rates can be increased providing additional revenue and value enhancements. CAM projects pro forma annualized investor returns of approximately 15%1.

Overview

The Park is a multifamily property built in 1976 with 192-unit garden-style, market-rate community located in Joplin, MO. The Park enjoys a good central location on the north side of Campbell Parkway. Residents are drawn to this location between Joplin’s historic downtown to the west and Joplin’s newer, retail growth corridor just one mile to the east. Joplin offers its residents big city amenities with a hometown feel. Joplin is home to three colleges – Ozark Christian College, Messenger College and Missouri Southern State University

The Park Apartments Overview

1 This 19% does not take depreciation into account. It is anticipated that depreciation expense (which is a non-cash deduction) may offset current taxable income such that the current distributions received will be equivalent to an after-tax yield. If one were to invest in an alternative investment that did not have depreciation expense shielding current taxable income, to achieve a similar after-tax yield of approximately 10%, assuming a 35% tax rate, the pre-tax yield would need to be approximately 15%.



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(MSSU). Of the three, MSSU is the largest with an estimated enrollment of over 5,600 students. MSSU is located less than two miles northeast of The Park. Also located less than two miles northeast is Northpark Mall anchored by Macy’s JCPenny’s, Best Buy, etc. Walmart, Target, Home Depot and Lowe’s, among many restaurants, are all located along Range Line Road just one mile east of The Park.

With over 51,000 residents, Joplin is the largest city in Jasper County. Joplin is considered the center of business and professional life for the greater Joplin metropolitan area. In fact, it is the focus of a 40 mile radius trade area with a population near 500,000. Being the center of employment and retail services in this large trade area, its daytime population is estimated to swell to over 240,000.

Joplin’s unique location also makes it the metropolitan center of the “Four State Area,” an official term used to describe a loosely defined region of southwest Missouri, southeast Kansas, northeast Oklahoma and northwest Arkansas. It is called so because the extreme corners of Missouri, Kansas, Oklahoma and Arkansas converge in the region. Joplin is seven miles from Kansas, 10 miles from Oklahoma and roughly 55 miles from Arkansas.

The Park offers investors numerous promising features to be capitalized upon.

» The Park is located centrally and near shopping, entertainment, jobs, and major highways.

» The property is being purchased at a very attractive purchase price of approximately $38,800 per unit, well below replacement costs.

» The property has undergone significant exterior renovations recently including new roofs, exterior paint, new windows and doors.

» There is a clear opportunity to improve “the operations of the property” both in marketing, occupancy, rental increases, and in on-site management presentation.

» The property cash flows strongly at current rental rates and occupancy rates which are both below market.

» There is a significant opportunity to raise rents to market levels of $25-$50+ per month per unit more than current rental rates.

» The property will be purchased from out-of-state owners, giving us many opportunities to improve marketing, operations, and value.

» There is a potential opportunity to add additional revenue by billing back for water charges, and add premiums for renovated units and fireplaces.

» Much of the heavy lifting of exterior upgrades are complete, allowing us to focus on updating apartment interiors and rebranding the property which will allow us to increase rents.

The Park Apartments Overview



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Investment Plan

The Park Apartments offers a unique opportunity to buy a quality multifamily property that is very well located, with recently completed major exterior renovations which eliminated major potential expenses and increased curb appeal. The Park is being purchased at a very attractive price point that will produce strong cash flow at the current occupancy levels and rental rates, which are below market averages, with multiple value-add opportunities to significantly increase the value and potential returns of the investment. The most significant opportunity to increase the income and value of the property is to achieve market rental occupancy level at the Park. Although, there have been renovations done, The Park has not yet taken advantage of potential rental increases that could be achieved with minor interior upgrades. However, The Park already produces strong cash flow at below market occupancy levels and the success of our investment plan does not rely on achieving major rental rate increases. Other value-add opportunities include premium pricing for fireplaces, vaulted ceilings and adding additional revenue through the collection of late fees and eliminating major potential expenses through capital improvements at acquisition.

Cullor Asset Management plans on immediately rebranding the property, deploying capital improvements aimed at asset protection and increasing the appeal to quality renters through strategic interior renovations and amenity upgrades. The rebranding and interior improvements will help to raise the property occupancy to market levels, increase rental rates and control future expenses. These capital improvements are essential and will allow us to significantly improve the property and its financial performance which will enhance investor returns.

An aggressive marketing and rebranding strategy will be implemented on the property to enhance its appeal to potential renters. This includes a new web site, online apartment walk-through’s, new name, marketing materials, aggressive on-line marketing, strategic advertising, resident referral and preferred employer programs.

CAM plans on holding The Park for 5-7 years and then either selling the property at a maximized value or refinancing (returning the investors initial investment) and holding it long term. Investors will benefit from any cash flow, appreciation, loan principal pay down and the tax benefits such as depreciation.

Investment Plan



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Purchase Price

The purchase price for The Park is $7,400,000 or $38,802 per unit and $55.93 per square foot (SF). CAM will also add another $300,000 in capital improvements funded through equity at closing. Therefore, investors will be investing in a property that will be significantly improved shortly after acquisition.

ApartmentVestors Private Equity LLC Equity

The equity will be $2,300,000(estimated) including all closing costs, fees, reserves, and capital upgrades.

Mortgage Financing

Mortgage Financing will be determined, but preliminary conversations with major local and regional lending institutions indicate that the property will qualify for financing consisting of 75%-80% loan to value and a 7 to 10 year fixed term with 30 year amortization and interest rates that are currently under 4.50%. We will lock rates after the due diligence is completed to satisfaction. Current financing is very favorable for quality multifamily properties with strong cash flow such as The Park.

Marketing Plan

The Park Apartments has great drive-by visibility from Campbell Parkway. CAM will utilize new signage, banners and flags to attract new potential renters that drive-by. While The Park has great amenities, they will really benefit from upgraded furnishings and an upgraded presentation. CAM will add additional furniture and a business center in the clubhouse, tables, chairs and umbrellas around the pool, and add a dog park on the property that will bring our amenities on par with the top properties in the area. CAM will also create a “model” apartment (which the property currently does not have) to show off the upgraded apartments and help lease at higher rates. CAM will position The Park as the leader in the B-Class multifamily properties in the area.

In addition to the curb appeal, we plan on using our proven online and off-line marketing program for lead generation. The online focus will be to create a new website for the property focused on lead generation in addition to utilizing free online advertising and resources. Virtual walk-through’s and videos of the apartments will be utilized to take advantages of renters using their phones and computers to find their next apartment. Offline, CAM will be creating all new marketing materials for the property including updated signage, new brochures, and implementing a resident referral program that will bring in highly qualified

Investment Plan

The Park already produces strong cash flow and the

success of our investment plan does not rely on major

increases in rental rates.”

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potential residents to The Park.

Capital Improvements & Asset Protection

Cullor Asset Management plans to spend $300,000 ($1,563 per unit overall, $2,500 per non-upgraded unit) in capital improvements immediately after acquisition to improve amenities, create a model apartment, upgrade signage, and upgrade the remaining 100 units that have not been remodeled.

Below is a summary of the planned capital improvements.

Capital Expenditure Budget Exterior Painting $ 15,000 Clubhouse and Pool Upgrades $ 15,000 Parking Lot Repairs $ 7,500 Dog Park Addition $ 10,000 Landscaping $ 10,000 Interior Upgrades $ 250,000 TOTAL $ 300,000

Market Overview

Convenient Access to Retail, Jobs, Highways, Schools The Park is centrally located between downtown Joplin and the main retail, job, and entertainment district on Rangeline Road. It is just minutes from schools, the hospital, and major Highway access of Interstate 44 and US Highway 71.

Low Unemployment Rate & Income Growth Joplin, MO boosts one of the lowest unemployment rates in the state at only 3.7%, a 1.2% below the National average (Bureau of Labor Statistics). Low unemployment and a diverse job base have pushed household incomes up 2.85% over the last year, almost three times the national growth rate. Household income has grown three consecutive years and is now over $42,700 (Department of Numbers, US Census).

Population Growth Joplin, Missouri’s population has grown 12.8%+ since 2000, which is remarkable considering that population growth took a substantial hit after a major tornado hit Joplin in 2011. Joplin has fully recovered from that storm that wiped out a significant portion of the city. Future job growth over the next ten years is predicted to be 34.5% (BestPlaces.net).

Market Overview

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Stable Market Joplin, Missouri’s diverse work force results in a very stable market. The Midwest and Joplin in particular do not have the major upswings and downswings in their economies as you might find on the east and west coasts. This diverse and stable market makes the rental market predictable.

Major Employers # Employees Con-Way Truckload Inc 3,050 Mercy Health of Joplin Inc 1,310 Tri-State Motor Transit Co 1,135 Mercy Hospital Springfield 1,000 ABM Janitorial Services Inc 702 Leggett & Platt Inc 650 Leggett & Platt Incorporated 600 Sunbeam Products Inc (Jarden Cons Sol) 550 Bordertown Bingo & Casino 550 Wal-Mart Stores Inc 500 Aegis Communications Group LLC 480 Twin Rivers Foods Inc 450 Eaglepicher Technologies LLC 450 Cardinal Scale Mfg Co 450 Jasper Products LLC 399 Eaglepicher Technologies LLC 350 Ducommun Labarge Tech Inc 350 Yrc Inc 325 Freeman Neosho Hospital Inc 305 McCune-Brooks Regional Hospital 290

Major Area Employers



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Property Description

Property Overview

Name The Park Apartments Address 1703 Campbell Parkway, Joplin, MO

Assessor’s Parcel # 33-011237-000 Lot Size 9.05 Acres

Year Built 1976 Foundation Concrete Slab

No. of Stories 2 Fire Protection Smoke Detectors

Building SF 133,200 No. of Parking Spaces

310

$ per SF $55.56 # of Buildings 14 Residential, 1 Clubhouse

Washer/Dryer 2 On-Ste Facilities $ per Unit $38,514

HVAC Central Pool Yes

Roofs Pitched (Composite) with Flat Sections (TCP) New 2016

Mechanical Individual Water Heater, HVAC, Electrical

Utilities Water, Sewer, Trash – Landlord Paid Electric – Tenant Paid

Construction Hardie/Cedar/Brick Pitched – Asphalt Shingle, Flat - TCP

Amenities

Common Area Amenities Unit Amenities

Leasing Office Central Heat and Air

Pool Patios & Balconies

24 Hour Fitness Center Multiple Walk-in Closets

Playground, Picnic Areas Extra Storage

Tennis Court Ceiling Fans

Great Central Location Two-tone Paint

2 Laundry Facilities Dishwashers & Garbage Disposals

Across Street from Large City Park Vaulted Ceilings & Fireplaces* (in select units)

Property Description



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Property Location

Property Location



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Property Location



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Exterior Pictures

Property Location



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Pictures



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Pictures



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Apartment Interiors

Pictures



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Unit Mix & Rent Schedule

Unit Mix Units Sq Ft (SF)

Rent/ Month

Rent/ SF Total SF GPRI* GPRI/ Month

Junior 48 436 $450 $1.03 20,928 $259,200 21,600

1/1 Bed/Bath 64 649 $525 $0.81 41,536 $403,200 $33,600

2 /1 Bed/Bath 48 807 $575 $0.71 38,736 $331,200 $27,600

3/2 Bed/Bath 32 1,000 $679 $0.68 32,000 $259,200 $21,600

Total (Avg). 192 694 $543.75 $0.78 133,200 $1,252,800 $104,400

*GPRI – Gross Potential Rental Income

The Park Apartments consists of Junior, 1 Bedroom, 2 Bedroom and 3 Bedroom Apartments

Additional Revenue Opportunities

The Park Apartments has several additional revenue opportunities that are not being capitalized on. CAM believes that they will be able to charge a premium of 5-10% on newly renovated apartments. CAM also believes that there are opportunities to charge extra for units that have vaulted ceilings and fireplaces. The current management is not being diligent in collecting late fees and other income such as damages, administrative fees, and have not been billing back for water/sewer which is a future opportunity for revenue growth. The Park currently collects about $366 per unit in other income. CAM’s portfolio averages over $540 per unit in additional revenue not including utility bill-backs. CAM plans on testing, and if successful, implementing a Resident Utility Bill-back Program to start collecting for trash, water, and sewer over the first year. CAM believes they can potentially achieve utility bill-back charges of $20 per month for a Junior or 1 bedroom, $30 for 2 bedrooms, and $40 for a 3 bedroom apartment.

Unit Mix & Rent Schedule



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Rent Comparables – Competitive Summary*

Property Address Occupancy Units

The Park 1703 Campbell 90% 192

Terrace Green 3900 E 7th St 95% 184

Royal Orleans 3902 College View 95% 127

The Plaza 1617 Rex Ave. 97% 224

SpringView Gardens 1736 W. 22nd St 100% 80

Tanglewood 2525 E. 32nd St. 100% 178

Casa Grande 33rd and Texas 100% 100

Market Occupancy 97% 155

*Current Rental Rates, Square Footage, and Terms were verified by phone on 7/2016 and are subject to change.

84% 86% 88% 90% 92% 94% 96% 98%

100%

90%

97%

Market Occupancy

SprngView Gardens

Tanglewood

Terrace Green

Roayal Orleans

Casa Grande

The Plaza

The Park

Market Occupancy

Rent Comparables – Competitive Summary



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Floor Plans

Junior (Studio) Apartments

Floor Plans



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Floor Plans

One Bedroom Apartments

1 Bedrooms Address SF Rate $/SF Tanglewood 2525 E. 32nd St. 520 $460.00 $ 0.88 Casa Grande 2319 Texas Ave 600 $500.00 $ 0.83 SpringView Gardens

1736 W. 22nd St 726 $508.00 $ 0.70

The Park 1703 Campbell 649 $525.00 $ 0.81 Royal Orleans 3902 College View 665 $535.00 $ 0.80 Royal Orleans II 665 $575.00 $ 0.86 Terrace Green 3900 E 7th St 830 $650.00 $ 0.78 The Plaza 1617 Rex Ave. 875 $675.00 $ 0.77 Average 691.25 $553.50 $ 0.81

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Floor Plans

2 Bedroom Apartments

2 Bedrooms Address SF Rate $/SF Tanglewood 2525 E. 32nd St. 700 $510.00 $ 0.73 Casa Grande 33rd and Texas 950 $550.00 $ 0.58 The Park 1703 Campbell 807 $575.00 $ 0.71 Royal Orleans 3902 College

View 925 $610.00 $ 0.66

Royal Orleans II 925 $660.00 $ 0.71 SpringView Gardens 1736 W. 22nd St 1120 $694.00 $ 0.62 Terrace Green 3900 E 7th St 1057 $750.00 $ 0.71 The Plaza 1617 Rex Ave. 1327 $900.00 $ 0.68 Average 976.375 $656.13 $ 0.68

0

500

1000

1500

2 Bedroom SF

$- $200.00 $400.00 $600.00 $800.00

$1,000.00

2 Bed Rent/Unit



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Floor Plans

3 Bedroom Apartments

Property Address SF Rate $/SF The Park 1703 Campbell 1,000 $675.00 $ 0.68 SpringView Gardens 1736 W. 22nd St 1,120 $694.00 $ 0.62

The Plaza 1617 Rex Ave. 950 $800.00 $ 0.84 Terrace Green 3900 E 7th St 1,152 $850.00 $ 0.74 Average 1055.5 $754.75 $ 0.72

0 200 400 600 800

1000 1200

3 Bedroom SF

$- $200.00 $400.00 $600.00 $800.00

$1,000.00

3 Bedroom Rent/Unt



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Rental Comparison Summary

Rental Comparison Summary

The Park is currently 5%-7%+ below market occupancy levels. CAM believes this is due to lack of advertising (management currently does not advertise at all), current management getting rid of tenants to renovate units, the lack of available “rent-ready” units, and lack of a “model” apartment to show to prospective tenants, and current onsite leasing agents. CAM believes that these challenges can all be solved very quickly and market occupancy can be reached with new on-site management, adding a model unit, bringing on additional make-ready staff temporarily to make sure all units are rent-ready, and by strategic advertising.

CAM believes there is an opportunity to position The Park as the true middle-ground between the A class properties and the C class properties, thus raising rental rates on renovated apartments. CAM believes they can achieve rental rate increases of $25 for the Junior and 1 Bedroom Apartments and $50 for the 2 and 3 bedroom apartments that have been renovated with new paint colors, lighting, and flooring.

CAM believes, to achieve these rental rates, CAM will have to improve the amenities finishes and add stylistic upgrades to the interiors of the apartments (see the Capital Improvements plan). CAM believes these higher rental rates can be achieved while keeping occupancy high once the capital improvement plan has been implemented.

CAM will immediately upgrade vacant units and lease them at higher rates. Current tenant increases will be implemented at lease renewal. CAM’s experience has shown that current tenants will accept gradual increases, but will be resistant to bigger ones, unless they get to participate in the upgrades being done across the property. CAM expects a higher than normal turnover during the first 2 years as changes are implemented. However, the turnover rate will be greatly reduced after the initial increases due to more updated and energy efficient apartments. CAM has a plan in place to replace vacating tenants with those of a higher tenant profile and at a higher rental rate through their diligent marketing and tenant screening.

There is only one new multifamily property being built in Joplin currently (1 mile down the road), however those apartments should rent for close to double what The Park does, allowing management to increase rental rates over time..



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Property Taxes

Property Taxes Total Assessed Value

Estimated Property Taxes

Current $6,142,100

$614,210 $28,351.32

Residential Properties in Jasper County, Missouri are assessed at 19% of value with 20% taken off price and allocated to land cost.

At 80% Sale Price $5,920,000 $1,124,800 $51,919.64

Property taxes in Jasper County, Missouri are re-assessed every year based on the value on January 1st. They are scheduled to be re-assessed on January 1st, 2017. Residential property taxes are assessed at 19% of the market value of the improvements and Mill rates change every year. Property taxes could go up to almost $24,000 and we have factored this potential increase into our underwriting of the property.

Financial Overview

Projected Closing/Acquisition Costs Closing Costs 0.5% $37,000 Loan Points

1.0%

Loan Point Cost $55,500 Acquisition Fee %

2%

Acquisition Expense $148,000 Capital Budget

$300,000

Total Closing Costs $540,500 Total Acquisition Costs $2,390,500

Projected Financing Purchase Price $7,400,000 Additional CAPEX Budget $300,000 % Down

25.0%

Down Payment $1,850,000 Mortgage Amount

$5,550,000

Interest Rate 4.50% Amortization Period 30 Annual Debt Service $337,452 Term 7-10 Years

Property Taxes



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5 Year Proforma



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Equity Return at Disposition Acquisition Price $ 7,400,000 Exit Price (Year 5 NOI/8% CAP)

$ 9,084,283

Exit Price $/Unit

$ 47,314 Sales Expense @ 3% $ 272,528 Net Proceeds from Sale

$ 8,811,755

Initial Loan Principal $ 5,550,000 Loan Principal Paydown

$ 490,736

Net Loan Balance $ 5,059,264 Equity Proceeds

$ 3,752,490

Less Initial Basis (Cash, CAP Ex) $ 2,390,500 Net Equity Creation

$ 1,361,990

Investor Net Equity Share $ 680,995 ** Distributions according to PPM & OA

Summary of Projected Owner Cash Flow and Equity Year 1 Year 2 Year 3 Year 4 Year 5 Total Equity Partners Cash Flow

$174,438 $208,491 $228,167 $235,142 $242,270 $1,088,508

COC Return Equity Partners (Preferred) 7.33% 8.76% 9.58% 9.87% 10.17% 45.71% Investor Equity Appreciation

$685,620 28.79%

Total Investor Return on Investment $1,774,128 74.50%

Average Annual Return on Investment

14.90% *Valuation assumes NOI after Capital Reserves in year 5 divided by cap rate of 8%

What's in it for Me? Projection Cash on Cash Year 1 Year 2 Year 3 Year 4 Year 5 Exit Total ROI Cash Back Return 7.33% 8.76% 9.58% 9.87% 10.17% 28.79% 74.50% Investment of $50,000 Annualized 14.90% Annual Ret. $3,663 $4,378 $ 4,791 $4,937 $5,087 $14,396 $37,252 $87,252 Quarterly Ret. $916 $1,094 $1,198 $1,234 $1,272

Investment of $100,000 Annual Ret. $7,325 $8,756 $ 9,582 $9,875 $10,174 $28,792 $74,504 $174,504 Quarterly Ret. $1,831 $2,189 $2,395 $2,469 $2,544

Investment of $150,000 Annual Ret. $10,988 $13,133 $14,373 $14,812 $15,261 $43,189 $111,756 $261,756 Quarterly Ret. $2,747 $3,283 $3,593 $3,703 $3,815

Investment of $200,000 Annual Ret. $14,651 $17,511 $19,164 $19,749 $20,348 $57,585 $149,008 $349,008 Quarterly Ret. $3,663 $4,378 $4,791 $4,937 $5,087

Financial Overview



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Financial Summary

Cullor Asset Management believes The Park financials and underwriting are conservative in nature, but represent a very realistic possible scenario. CAM believes that rents will be able to be pushed more aggressively as soon as interior upgrades are completed. CAM also believes that it will be able to increase other income through diligent collection of administrative, late fees, and other fees. For underwriting purposes, an 8% CAP rate (after Reserves) was used to determine value of the property at the end of year 5, which is conservative.

Investor returns are projected (on a pro forma basis) at an average annual return of almost 15% using this conservative potential scenario. These returns will vary depending on many factors. Please refer to the complete Private Placement Memorandum and Operating Agreement for more details.

Underwriting & Pro forma Notes

» Overall Income – The pro forma assumes overall income increases of 2% per year.

» Overall Expenses – The pro forma assumes overall expense increases of 2% per year.

» Income – The pro forma assumes year 1 at current rental rates and year 2, 3, 4 and 5 at normal 2% rental rate increases.

» Other Income – CAM boosted other income to reflect the average of collected other income across their portfolio.

» Occupancy – Assumes 90% in year 1, 93% in year 2 and 95% in years 3-5.

» Property taxes increased to reflect the new purchase price.

» Insurance costs are based on CAM’s current portfolio insurance costs.

» Payroll – The pro forma assumes two office personnel and three full-time maintenance personnel.

» Standard management fees were assumed for this size of property at 4%.

» Utility expenses reflect 2015 annual and 2016 trailing actual numbers.

» Contract Services were kept flat to reflect historical expenses.

» Capital Replacement Reserves – The pro forma uses a standard of $300 per unit for this vintage property.

» Sale Price – The sales price was calculated using the year 5 net operating income (after capital reserves) at a 8% capitalization rate. Sale CAP Rates will vary depending on many market factors at the time. CAM believes this is a conservative scenario.

Financial Summary



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Contact Information

Cullor Asset Management, LLC PO Box 14763 Lenexa, KS 66285 Office 913.324.5900 Fax 866.629.4703 www.ApartmentVestors.com

Gary Cullor Mobile 620.224.0304 [email protected]

Spencer Cullor Mobile 816.728.0400 [email protected]

Contact Information

Documents

Cullor Asset Management, LLC • P.O. Box 14763 Lenexa, KS ... · The Park Apartments has exceptional drive-by visibility, easy access to the major employment and retail corridor,