Residences at Riverwalk - Amesbury

PRO FORMA ANALYSIS

VACANCY

RATE

9.06%

7.50%

5.00%

5.00%

5.00%

5.00%

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

START:

SEP-2013

SEP-2014

SEP-2015

SEP-2016

SEP-2017

SEP-2018

CASH FLOW LINE ITEM

END:

AUG-2014 AUG-2015 AUG-2016 AUG-2017

AUG-2018 AUG-2019

GROSS POTENTIAL RENT

BASE RENTAL REVENUE

$1,881,336 $1,928,369 $1,976,579 $2,025,993

$2,076,643 $2,128,559

VACANCY & TURNOVER LOSS

(170,484)

(144,628)

(98,829)

(101,300)

(103,832)

(106,428)

SCHEDULED BASE RENTAL REVENUE

$1,710,852 $1,783,742 $1,877,750 $1,924,693

$1,972,811 $2,022,131

OTHER RENTAL INCOME

13,597

13,937

13,598

13,938

13,599

13,939

EFFECTIVE GROSS REVENUE

$1,724,449 $1,797,679 $1,891,348 $1,938,631

$1,986,410 $2,036,070

OPERATING EXPENSES:

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

% OF EGR

$/UNIT

ADMINISTRATIVE

3.14%

$622

54,076

55,428

56,814

58,234

59,690

61,182

MARKETING/ADVERTISING

1.88%

$373

32,434

33,245

34,076

34,928

35,801

36,696

PAYROLL & BENEFITS

13.02%

$2,581

224,560

230,174

235,928

241,827

247,872

254,069

ELECTRICITY

1.84%

$365

31,745

32,539

33,352

34,186

35,041

35,917

WATER & SEWER

1.03%

$204

17,774

18,218

18,674

19,141

19,619

20,110

GAS

0.51%

$101

8,802

9,022

9,248

9,479

9,716

9,959

OPERATING & MAINTENANCE *

5.11%

$1,014

88,200

90,405

92,665

94,982

97,356

99,790

REAL ESTATE TAXES

9.47%

$1,877

163,259

167,340

171,524

175,812

180,207

184,713

INSURANCE

2.61%

$517

44,995

46,120

47,273

48,455

49,666

50,908

TOTAL OPERATING EXPENSES

38.61%

$7,653

$665,845

$682,491

$699,553

$717,042

$734,968

$753,343

NET OPERATING INCOME

$1,058,604 $1,115,187 $1,191,794 $1,221,589

$1,251,441 $1,282,728

CASH FLOW BEFORE DEBT SERVICE

$1,058,604 $1,115,187 $1,191,794 $1,221,589

$1,251,441

INTEREST PAYMENT

582,003

571,920

561,401

550,426

538,975

PRINCIPAL PAYMENT

232,650

242,732

253,252

264,227

275,678

CASH FLOW AFTER DEBT SERVICE

$243,952

$300,535

$377,142

$406,937

$436,789

GROSS SALE PRICE

$17,692,793

TRANSACTION COSTS

$530,784

OUTSTANDING LOAN BALANCE

$12,531,462

NET REVERSION UPON SALE

$4,630,548

INVESTMENT PERFOMANCE MEASURES

AUG-2014 AUG-2015 AUG-2016 AUG-2017

AUG-2018

9/1/2013

CASH-ON-CASH RETURN ON EQUITY

7.1%

8.7%

10.9%

11.8%

12.7%

DEBT COVERAGE RATIO

1.30

1.37

1.46

1.50

1.54

GOING-IN CAPITALIZATION RATE

6.1%

*Note: Operating expenses are based on 2012 actual expenses. Two items were adjusted for this proforma. The actual Administrative Expense was $91,076, but included a non-recurring expense of $37,000 for an Audit. This amount was removed from our proforma. In addition Operating & Maintenance was $109,893 for 2012. A non-recurring charge of $21,693 for Decorating Supplies was removed from our proforma.

INVESTMENT PRESENT VALUE

$17,521,799

INTERNAL RATE OF RETURN

13.9%

2525