Laurel Canyon Apartments

Laurel Canyon Apartments

Laurel Canyon Apartments Fresno, California Property Summary Built 1984 8 buildings (2 story garden) 100 Apartment units Lot size: 166,835 Sf

Building size: 75,000 Sf Wood frame Mix of stucco and wood panel exterior 210 covered parking spaces Controlled access Swimming pool Laundry facility Every unit has a balcony Density: 26.11 units per acre Individually metered utilities Individual unit A/C Reasons to buy Project IRR to capital partner of 29% to 33% Excellent loan commitment @ 3.341% Under market rents

Proven rent increases with renovation Poorly marketed property Low purchase price Very favorable debt Strong market trends compared to the national average Centrally Located near downtown Fresno across from a middle school Rents are under market by approximately $100 per unit. The current owner has been able to prove an increased rent with renovations (upgraded kitchen, bathroom and addition of ceiling fans in every room and nicer lights). There are three levels of renovation on the property but this is the most saleable according to the current on-site manager. The other needed renovation is exterior painting to include the balconies of the units. The on-site manager says that most prospective tenants mention that the balconies look work out. The property has no web presence except a weebly.com page that does not even come up in a google search. Further, the property has never had a rent special.

Purchase price is $6,550,000. Property is being sold as part of an estate clean-up. Debt terms are $5,200,000 loan with 1 year I/o then 30 year amortization with a rate of 2.4% over LIBOR currently 3.341% A BIT ABOUT THE MARKET: One of the larger apartment markets in the Central Valley and home to Californias fifth-largest city (just over half a million people), Fresno continues to trend in a favorable direction. Vacancies tightened near the historical low in 2016 as demand outpaced a limited number of deliveries, a common theme in Fresno this cycle. Both population and job growth have outperformed the national average in recent years. However, employment here is heavily concentrated in government, education, and health services, sectors that typically don't offer robust income growth meaning that we are not going to see drastic rent increases across the market but also meaning that employment is stable and generally long term. New construction, while more active here than in neighboring secondary metros, has been measured, helping to avoid a supply-driven rise in vacancies. The current 12 month vacancy rate for this market is 4% with 12 month rent growth at 5.5%. Value Add

Property Layout Comparable Rents and Market Rent Growth Laurel C anyon Apartments Fresno, C alifornia Sources and Uses Statement 22-May-17 Sources: Equity Debt $ $ 2,072,000 5,200,000 Total Sources: $ 7,272,000 Total Uses: 7,272,000 Uses: Purchase Price

$ Acquisition C losing C osts: Rehabilitation Acquisition Fee Travel Legal Services Due Dilligence Survey -ALTA Finance C osts: Origination Fee Mortgage Title Premium Lender's Legal Fee Lender Due Diligence Deposit Appraisal Miscellanious Sources and uses Partnership Model 6,600,000 250,000 200,000 40,000 15,000 50,000

10,000 52,000 6,000 12,000 24,500 7,500 5,000 $ Investor Returns Partnership Model IRR3 Year Sale 10% Pref. then 70/30 thereafter C ash Flows Preferred Return Preferred Return Defecit C ash After Preferred Return Excess C ash to Investor Purchase $ Year 1 (2,072,000) $ 291,456 $

207,200 $ $ 84,256 $ 58,979 Year 2 $ 242,843 $ 207,200 $ $ 35,643 $ 24,950 Year 3 $ $ $ $ 5,047,339 207,200 4,840,139

3,388,097 IRR Total Investor C ash Flow $ (2,072,000) $ 266,179 $ 207,200 $ 3,595,297 Capital Multiple 27% $ 1.96 X Laurel C anyon Apartments Fresno, C alifornia Sources and Uses Statement 22-May-17 Sources: Equity Debt

$ $ 2,642,000 5,200,000 Total Sources: $ 7,842,000 Total Uses: 7,842,000 Uses: Purchase Price Acquisition C losing C osts: Rehabilitation Acquisition Fee Travel Legal Services Due Dilligence Survey -ALTA Finance C osts: Origination Fee Mortgage Title Premium Lender's Legal Fee Lender Due Diligence Deposit

Appraisal Miscellanious Sources and uses SALE MODEL $ 6,600,000 250,000 770,000 40,000 15,000 50,000 10,000 52,000 6,000 12,000 24,500 7,500 5,000 $ Investor Returns Sale Model IRR3 Year Sale (Deal Level)

Cash Flows Purchase $ Year 1 Year 2 Year 3 (2,642,000) $ 291,456 $ 242,843 5,047,339 IRR Capital Multiple 30% 2.113 X

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