Multifamily Real Estate

Investment

OVERVIEW & INVESTMENT STRATEGY

Confidential
Attractive Opportunity to Invest in a Proven System

§ Strong track record since 1989

§ 25% Internal Rate of Return to date
§ 9% Cash on Cash Return to date
§ Current portfolio >$600mm in 11 high-growth markets
§ 20 properties, more than 6,500 units
§ Proprietary Econometric Market Segmentation model
§ Seasoned, proven management team - >80 years’ combined multifamily
experience
§ Established industry relationships, strong deal flow, and a proprietary
underwriting model
§ Bringing the time-tested successful model to investors via fund

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Our Method

Track and compare

Identify Subsegment, target
key metrics using
geographies of at neighborhood
Proprietary
interest level
Econometric model

High-ROI value-add
investment, Examine potential
Acquire property
upgrade property to transactions
Class B+

Acquire additional
Increase rents
properties in area (Potentially)
(average rent
for Economies of Refinance
increase 20-30%)
Scale

EXIT AFTER 3-7 YEARS

(market-driven)
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Deal Criteria
Geography-agnostic; markets ranked and evaluated by Proprietary Econometric Model

Class C+, B-, B properties, 200-500 units 75%-80% LTV, non-recourse debt

Performing properties
Capex funded with equity
(~92%occupancy at acquisition)

Total investment (acquisition + capex investments)

Sweet spot: $15 - $35 million acquisition
70%-80% of Replacement Value/After-Repair Value

Buy performing assets at a good prices in the best markets using our proprietary data-driven
model, upgrade them to Class B+ with targeted investments, raise rents, refinance, rinse & repeat.

Confidential 4
Case Study
REFI VALUE-ADD - 528 UNITS, BUILT 1985

$1.49M upgrade, $300K of exterior and $984K of interior upgrades (264 apts. / $3.6k ea.).

Before After

RETURNS
Average Operating 8.5%
Total Operating 20.2%
Refi. Distribution 38.9%
Appreciation 229.0%
Total Return 288.1%
IRR 64.6% Appliances Plumbing fixtures
Faux wood flooring Lighting
PURCHASE CURRENT* DELTA
Date 5/15 9/17 43 Months Paint cabinets Exterior doors
Price $47.0M $78.6M +77%
$/Unit $89.0K $148.9K +77%
NOI $3.0M $4.5M +51%

Amenities
Confidential * Est. based on 5.45% current market cap. Assumes debt carried to maturity (no defeasance). 5
Track Record of Success
Acquired 57 properties totaling $840M
2002- in asset value
2017:

TWIN PINES:
Began purchasing value-add properties Purchased for $33.6m (Nov. 2011)
2011: Sold 3.6 years later for $59.2m
Total return 209.8% / 58% annual return

16 Value-Add Acquisitions now

2012- complete for $386.3M with 6,068 units
2017:

Property Management: 151 employees

who professionally manage circa 7,000 HERON WALK:
Today: units, including for third party investors Purchased for $30.4M (Nov. 2014)
Sold 28 months later for $45.4m
Total return 186% / 80% annual return
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Existing Property Portfolio
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1Y Job Growth 1Y Rent Growth

Population Growth 2010-2016 1Y Per Capita Income Growth

Confidential 7
Market Selection Process

§ Since our founding in 1989, we have focused market

selection and investment decisions on the results of our
PROPERTY Age of Multi-
time-tested econometric model
SELECTION Crime Rates Family
FACTORS Properties
§ We use relevant statistics to track and compare over 35
key metrics in 275 MSAs (Metropolitan Statistical Areas)

§ Through a stringent weighting process, the econometric

model highlights the importance of key factors year-to- Job Specific
year Income
Location Job Type
Brackets
Areas
§ Global macroeconomic conditions, global capital flows,
migration patterns, job growth, affordability, and State
taxes and regulations

§ Threats and opportunities that exist for multi-family that Disposable Millennial
could stem from social, legal, economic, political and Unemployment
Incomes Preferences
technology are also analyzed.

Confidential 8
Fund Key Stats

First Fund
§ $100m in 2018

Acquire
§ $300m-$400m multi-family
§ Early absorption markets
§ Principal 10% investment Returns
§ Target Cash-on-cash 7%
§ Target IRR 16%
§ 7 year life of fund

Goal: Generate market-beating returns for investors, just like we have since 1989.

Confidential 9
Why Invest with Us?

PROVEN STRATEGY PERFORMANCE LEADERSHIP

Investment strategy that
has been consistently
applied for great investor
returns.
Since the beginning of
our focus on value add
multifamily we have
achieved an annual
return of 25%
Combined total of 80+
years of multifamily real
estate experience.

Our vision and focus for the next 7 years:

Continue to acquire strong performing assets consistent with strategy for long-term
growth
Maintain investor IRRs of 16%
Maintain annual Cash-on-cash returns 7%%
Continue to provide strong management practices to drive income return
No style drift: Our focus and expertise is on value add multifamily real estate

Confidential 10
CHECK OUT MORE OF
OUR WORK ON OUR
WEBSITE!

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