1. Waterview
Apartments
FINANCIAL PROJECTIONS DISCUSSION & ANALYSIS
JIANGYINAN ZHAI (NICHOLAS)

2. Property Summary
Location: Excellent market with high growth
Type: Multifamily and Value add
Size: 650,550 SF with 562 units
Tenant Profile: Upper middle class
Quality of Property: Class B
Occupancy: 95.9%
Waterview Apartments
Operating Statements
Trailing-12
Actuals
INCOME
Rental Income
Apartment Income $10,158,440
Renovation Income $0
Loss to Lease ($889,942)
Total Rental Income $9,268,498
Rental Vacancy
Apartment Vacancy ($359,259)
Renovation Vacancy $0
Total Rental Vacancy ($359,259)
Other Rental Losses
Concessions to Tenants ($1,065)
Marketing Concessions ($104,262)
Employee Concessions ($17,799)
Bad Debt ($12,038)
Total Other Rental Losses ($135,163)
Net Rental Income $8,774,076
Total Expenses $4,665,466
Net Operating Income $4,583,920

3. Value Creation: Market Rents & Occupancy
Current Rents Renovated Rent Change
Total Total Total
# of Square Total Current Mos Annual Rent Mos Annual Rent Annual
Tenant Units Feet SF Rent Rent Rent Per SF GPI Rent Rent Per SF Rent
Studio, 1 Bath 64 750 48,000 $1,137 $72,783 $873,394 $1.52 $1,350 $86,400 $1,036,800 $1.80 $163,406
Studio, 1 Bath -
Renovated 2 750 1,500 $1,282 2,564 30,768 $1.71 $1,350 2,700 32,400 $1.80 1,632
1 Bedroom, 1 Bath 209 1,000 209,000 $1,283 268,250 3,219,000 $1.28 $1,550 323,950 3,887,400 $1.55 668,400
1 Bedroom, 1 Bath -
Renovated 17 1,000 17,000 $1,375 23,378 280,538 $1.38 $1,550 26,350 316,200 $1.55 35,662
2 Bedroom, 2 Bath 191 1,353 258,375 $1,528 291,890 3,502,681 $1.13 $1,800 343,800 4,125,600 $1.33 622,919
2 Bedroom, 2 Bath -
Renovated 21 1,413 29,675 $1,638 34,391 412,696 $1.16 $1,800 37,800 453,600 $1.27 40,904
3 Bedroom, 2 Bath 47 1,500 70,500 $1,749 82,195 986,338 $1.17 $2,100 98,700 1,184,400 $1.40 198,062
3 Bedroom, 2 Bath -
Renovated 11 1,500 16,500 $1,755 19,300 231,594 $1.17 $2,100 23,100 277,200 $1.40 45,606
Total 562 1,158 650,550 $794,751 $9,537,010 $1.22 $942,800 $11,313,600 $1.45
$1,776,59
0
Average $1,678
Current # Units Occupied 539 Average $1,414.15 Increase 18.6%
Current Vacancy % 4.1%
Loss to
Lease 0.0%

4. Value Creation: Renovation
Number of units that are upgraded
each year
Total # Already To be 1 2 3 4
Unit Size of Units Upgraded Upgraded 2014 2015 2016 2017
Studio, 1 Bath 64 0 64 16 16 16 16
Studio, 1 Bath -
Renovated 2 2 0 0 0 0 0
1 Bedroom, 1 Bath 209 0 209 52 52 52 52
1 Bedroom, 1 Bath -
Renovated 17 17 0 0
2 Bedroom, 2 Bath 191 0 191 48 48 48 48
2 Bedroom, 2 Bath -
Renovated 21 21 0 0 0 0 0
3 Bedroom, 2 Bath 47 0 47 12 12 12 12
3 Bedroom, 2 Bath -
Renovated 11 11 0 0 0 0 0
Total 562 51 511
Year 1 2 3 4 5
Gross Potential
Income 10,022,76210,927,527 11,999,378 13,179,328 13,920,725
Growth 9.0% 9.8% 9.8% 5.6%
Loss to Lease -260,592 -284,116 -311,984 -342,663 -361,939
Margin -2.6% -2.6% -2.6% -2.6% -2.6%
Effective Gross
Revenue 9,762,17010,643,411 11,687,394 12,836,666 13,558,786
Vacancy & Credit -595,492 -936,550 -1,028,414 -1,129,542 -949,115
Margin -6.1% -8.8% -8.8% -8.8% -7.0%
Total Other Income -123,125 -126,819 -130,623 -134,542 -138,578
Total Revenue 9,043,553 9,580,042 10,528,357 11,572,581 12,471,092
Growth 5.9% 9.9% 9.9% 7.8%

5. Sources & Uses
Sources: Uses:
Equity $28,485,710 31% Purchase Price $85,000,000
1st Mortgage 63,750,000 69% Closing Costs (see below) 695,000
2nd Mortgage 0 0% Reserves 200,000
Total $92,235,710 100% Working Capital 100,000
Initial CapX 5,603,210
1st Mortgage Fees 637,500
1st Mortgage LTV 75.00% 2nd Mortgage Fees 0
1st Mortgage Rate 5.00% Total $92,235,710
Closing Costs:
Closing Costs $100,000
Transfer Tax 170,000
Financing Fee 425,000
Total $695,000

6. Internal Rates of Return
IRR MATRIX - Levered Returns
1 2 3 4 5 6 7 8 9 10
Cash Flows 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Hold Period One Year Two Year Three Year Four Year Five Year Six Year Seven Year Eight Year Nine Year Ten Year
Initial Equity -28,485,710 -28,485,710 -28,485,710 -28,485,710 -28,485,710 -28,485,710 -28,485,710 -28,485,710 -28,485,710 -28,485,710
2014 14,434,066 -644,183 -644,183 -644,183 -644,183 -644,183 -644,183 -644,183 -644,183 -644,183
2015 27,404,645 210,754 210,754 210,754 210,754 210,754 210,754 210,754 210,754
2016 41,614,836 960,292 960,292 960,292 960,292 960,292 960,292 960,292
2017 53,762,288 878,658 878,658 878,658 878,658 878,658 878,658
2018 60,293,109 2,815,520 2,815,520 2,815,520 2,815,520 2,815,520
2019 65,260,277 3,029,989 3,029,989 3,029,989 3,029,989
2020 70,398,554 3,250,994 3,250,994 3,250,994
2021 75,714,200 3,478,733 3,478,733
2022 81,213,722 3,713,408
2023 86,903,879
Leveraged IRR -3.04% 12.94% 17.41% 16.74% 16.23% 15.83% 15.48% 15.19% 14.94%
Residual Value Calculations
Exit Cap Rate NOI 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50%
Exit Value 80,500,255 92,778,129 106,431,049 117,851,575 121,387,122 125,028,736 128,779,598 132,642,986 136,622,276 140,720,944

7. Future Buyer
1 2 3 4 5
2019 2020 2021 2022 2023
NOI $7,890,163 $8,126,868 $8,370,674 $8,621,794 $8,880,448
Total Non-Operating Items 753,488 769,188 785,256 801,700 818,531
Other Inputs (as needed) 0 0 0 0 0
Debt Service - Next Buyer 5,059,524 5,059,524 5,059,524 5,059,524 5,059,524
Net Cash Flow 2,077,151 2,298,155 2,525,894 2,760,570 3,002,393
Cash-on-Cash % 5% 6% 7% 7% 8%
Year of Sale 5 Year of Sale for the Next Buyer
Exit Cap Rate 6.50%
Exit Value - - - - 140,720,944
Less: Debt & Fees - - - - -80,210,938
Add: Reserves check - - - - 0
Net Value 0 0 0 0 60,510,006
Invest
Cash Flows -38,479,718 2,077,151 2,298,155 2,525,894 2,760,570 63,512,399
IRR 14.9%

8. Profit & loss
Profit & Loss
Calendar Years 1 2 3 4 5 6 7 8 9 10 11
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Gross Potential Income 10,022,762 10,927,527 11,999,378 13,179,328 13,920,725 14,338,346 14,768,497 15,211,552 15,667,898 16,137,935 16,622,073
Growth 9.0% 9.8% 9.8% 5.6% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Per Unit per Month $1,486 $1,620 $1,779 $1,954 $2,064 $2,126 $2,190 $2,256 $2,323 $2,393 $2,465
Loss to Lease -260,592 -284,116 -311,984 -342,663 -361,939 -372,797 -383,981 -395,500 -407,365 -419,586 -432,174
Effective Gross Revenue 9,762,170 10,643,411 11,687,394 12,836,666 13,558,786 13,965,549 14,384,516 14,816,051 15,260,533 15,718,349 16,189,899
Per Unit per Month $1,448 $1,578 $1,733 $1,903 $2,010 $2,071 $2,133 $2,197 $2,263 $2,331 $2,401
Credit Loss -195,243 -212,868 -233,748 -256,733 -271,176 -279,311 -287,690 -296,321 -305,211 -314,367 -323,798
General Vacancy -400,249 -723,682 -794,666 -872,809 -677,939 -698,277 -719,226 -740,803 -763,027 -785,917 -809,495
Other Rental Losses -123,125 -126,819 -130,623 -134,542 -138,578 -142,736 -147,018 -151,428 -155,971 -160,650 -165,470
Other Income 2 0 0 0 0 0 0 0 0 0 0 0
Total Revenue 9,043,553 9,580,042 10,528,357 11,572,581 12,471,092 12,845,225 13,230,582 13,627,499 14,036,324 14,457,414 14,891,137
EXPENSES
Real Estate Taxes 708,004 729,244 751,122 773,655 796,865 820,771 845,394 870,756 896,878 923,785 951,498
Insurance 185,105 190,658 196,378 202,269 208,337 214,587 221,025 227,655 234,485 241,520 248,765
Ground 165,595 170,563 175,680 180,950 186,379 191,970 197,729 203,661 209,771 216,064 222,546
Repairs & Maintenance 520,706 536,327 552,417 568,989 586,059 603,641 621,750 640,402 659,614 679,403 699,785
Other 0 0 0 0 0 0 0 0 0 0 0
Payroll 893,752 920,564 948,181 976,627 1,005,925 1,036,103 1,067,186 1,099,202 1,132,178 1,166,143 1,201,128
W&S 536,924 553,031 569,622 586,711 604,312 622,442 641,115 660,348 680,159 700,564 721,581
Gas 306,556 315,753 325,225 334,982 345,031 355,382 366,044 377,025 388,336 399,986 411,986
Electric 407,431 419,654 432,244 445,211 458,567 472,324 486,494 501,089 516,122 531,605 547,553
Trash Removal 35,151 36,205 37,291 38,410 39,562 40,749 41,972 43,231 44,528 45,863 47,239
Admin & Legal 129,473 133,358 137,358 141,479 145,723 150,095 154,598 159,236 164,013 168,933 174,001
Management 271,307 287,401 315,851 347,177 374,133 385,357 396,917 408,825 421,090 433,722 446,734
Marketing 53,172 54,767 56,410 58,102 59,846 61,641 63,490 65,395 67,357 69,377 71,459
Other 0 0 0 0 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0 0 0 0 0
Total Expenses 4,213,175 4,347,525 4,497,779 4,654,563 4,810,740 4,955,062 5,103,714 5,256,826 5,414,530 5,576,966 5,744,275
Net Operating Income 4,830,378 5,232,517 6,030,578 6,918,018 7,660,352 7,890,163 8,126,868 8,370,674 8,621,794 8,880,448 9,146,861
Margin 53.4% 54.6% 57.3% 59.8% 61.4% 61.4% 61.4% 61.4% 61.4% 61.4% 61.4%
Expenses Growth 3.09% 3.34% 3.37% 3.25% 2.91% 2.91% 2.91% 2.91% 2.91% 2.91%

9. Graphic Representation
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
1 2 3 4 5 6 7 8 9 10
Internal Rates of Return
Leveraged IRR IRR
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Income vs. Expenses
Effective Gross Revenue Total Expenses Net Operating Income

10. Graphic Representation
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
1 2 3 4 5 6 7 8 9 10 11
NOI & Vacancy
Net Operating Income Vacancy & Credit
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
1 2 3 4 5 6 7 8 9 10
Equity vs. Debt
Debt Equity

11. Summary
Overview
Purch. Price (PP) $85,000,000
Price per Unit 92,000
Price per SF $130.66
# of Units 562
Total SF 650,550
Returns
Initial CapRate 5.7%
Stable CapRate 8.3%
Stable Year 5
IRR 16.74%
Year 5
Exit Cap Rate 6.5%
Avg 5Yr ConC % 3%
Total Purchase Price (TPP)
Purchase Price $85,000,000
Closing Costs 695,000
Reserves 200,000
Working Capital 100,000
Initial CapX 5,603,210
Motgage Fee(s) 637,500
Total $92,235,710
Stable Year 5
Stable Value 121,387,122
TPP 92,235,710
TPP/Stable Value 76%
Stable Profit % 24%
Credit: The tenants have ability to pay the rent
Liquidity: Quickly to sell the asset after Year 5
Investment Period: 5 years hold period
Investor Returns & Leverage: IRR, Cash-on-Cash, 3
years interest-only payments