CRE Investing 101 Resources

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Welcome to the course! This file contains resources and examples to help you solidify some key commercial real estate investing fundamental concepts. Great to have you here!
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1,750 SF 3,000 SF 10,000 SF
1,500 SF
Common Area Hallway - 5,000 SF
20,000 SF
Tenant Square Footage
Starbucks 1,500
In-N-Out 1,750
Verizon 3,000
Petco 10,000
Common Area Hallway 5,000
Target 20,000
Starbucks Pro Rata Share

1,750 SF 3,000 SF 10,000 SF
1,500 SF
Common Area Hallway - 5,000 SF
20,000 SF
Tenant Square Footage
Starbucks 1,500
In-N-Out 1,750
Verizon 3,000
Petco 10,000
Common Area Hallway 5,000
Target 20,000
Starbucks Pro Rata Share 4.14%

Annual Property Operating Income Reimbursements
Rental Revenue $100,000 NNN
Expense Reimbursement Income
Total Revenue $100,000
Property Taxes $12,000

Insurance $3,500
Repairs & Maintenance $5,000
Total Expenses $20,500
Net Operating Income $79,500

Rental Revenue $100,000 NNN
Expense Reimbursement Income $20,500

Insurance $3,500

Rental Revenue $100,000 FSG

Insurance $3,500

Rental Revenue $100,000 FSG
Expense Reimbursement Income $0

Insurance $3,500

Rental Revenue $100,000 MG
Total Revenue $100,000 Expenses Reimbursed
Property Taxes Yes
Property Taxes $12,000 Insurance Yes
Insurance $3,500 Repairs & Maintenance No

Rental Revenue $100,000 MG
Expense Reimbursement Income $15,500
Total Revenue $115,500 Expenses Reimbursed
Property Taxes Yes
Property Taxes $12,000 Insurance Yes
Insurance $3,500 Repairs & Maintenance No

Operating & Lease Assumptions Annual Property Operating Income
Revenue Growth Rate 3.00% Year 1 Year 2 Year 3
Expense Growth Rate 3.00% Rental Revenue $100,000 $103,000 $106,090
Base Year Year 1 Expense Reimbursement Income
Tenant SF 12,500 Total Revenue $100,000 $103,000 $106,090
Net Leasable Area 50,000
Pro Rata Share Property Taxes $12,000 $12,360 $12,731
Insurance $3,500 $3,605 $3,713
Repairs & Maintenance $5,000 $5,150 $5,305
Total Expenses $20,500 $21,115 $21,748
Net Operating Income $79,500 $81,885 $84,342

Income
Year 4 Year 5
$109,273 $112,551
$109,273 $112,551
$13,113 $13,506
$3,825 $3,939
$5,464 $5,628
$22,401 $23,073
$86,872 $89,478
Operating & Lease Assumptions Annual Property Operating Income
Revenue Growth Rate 3.00% Year 1 Year 2 Year 3
Expense Growth Rate 3.00% Rental Revenue $100,000 $103,000 $106,090
Base Year Year 1 Expense Reimbursement Income $0 $154 $312
Tenant SF 12,500 Total Revenue $100,000 $103,154 $106,402
Net Leasable Area 50,000
Pro Rata Share 25.00% Property Taxes $12,000 $12,360 $12,731
Insurance $3,500 $3,605 $3,713
Repairs & Maintenance $5,000 $5,150 $5,305
Total Expenses $20,500 $21,115 $21,748
Net Operating Income $79,500 $82,039 $84,654

Income
Year 4 Year 5
$109,273 $112,551
$475 $643
$109,748 $113,194
$13,113 $13,506
$3,825 $3,939
$5,464 $5,628
$22,401 $23,073
$87,347 $90,121
Lease Terms Breakpoint Calculation
Square Feet 2,000 Annual Rent
Rent/SF/Year $30.00 Natural Breakpoint ($)
Natural Breakpoint % 6.00% Amount Over Breakpoint
Percentage Rent
Year 1 Net Sales
Net Sales $1,200,000
Lease Terms Breakpoint Calculation
Square Feet 2,000 Annual Rent $60,000
Rent/SF/Year $30.00 Natural Breakpoint ($) $1,000,000
Natural Breakpoint % 6.00% Amount Over Breakpoint $200,000
Percentage Rent $12,000
Year 1 Net Sales
Net Sales $1,200,000
Lease Terms Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Term 10 Years Scheduled Base Rent $75,000 $77,250 $79,568 $81,955 $84,413 $86,946 $89,554 $92,241 $95,008 $97,858
Free Rent Period 9 Months Free Rent ($56,250) $0 $0 $0 $0 $0 $0 $0 $0 $0
SF 5,000 Net Base Rent $18,750 $77,250 $79,568 $81,955 $84,413 $86,946 $89,554 $92,241 $95,008 $97,858
Base Rent/SF/Year $15.00
Annual Rent Increases 3.00%
TI/SF $10
Leasing Commissions (Years 1-5) 6.00%
TI Allowance ($)
Leasing Commissions ($)
Lease Terms Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Term 10 Years Scheduled Base Rent $75,000 $77,250 $79,568 $81,955 $84,413 $86,946 $89,554 $92,241 $95,008 $97,858
Free Rent Period 9 Months Free Rent ($56,250) $0 $0 $0 $0 $0 $0 $0 $0 $0
SF 5,000 Net Base Rent $18,750 $77,250 $79,568 $81,955 $84,413 $86,946 $89,554 $92,241 $95,008 $97,858
Base Rent/SF/Year $15.00
Annual Rent Increases 3.00%
TI/SF $10
TI Allowance ($) $50,000

Leasing Commissions ($) $34,364
Loan Terms Acquisition Year 1 Year 2 Year 3
Loan Amount $1,000,000 Loan Proceeds $1,000,000
Interest Rate 4.25% Principal Payment ($22,952) ($23,947) ($24,985)
Amortization 25 Years Interest Payment ($42,056) ($41,062) ($40,024)
Term 10 Years Loan Payoff $0 $0 $0
Balloon Payment $720,130 Ending Loan Balance $977,048 $953,101 $928,116
Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
($26,068) ($27,197) ($28,376) ($29,606) ($30,889) ($32,227) ($33,624)

($38,941) ($37,811) ($36,633) ($35,403) ($34,120) ($32,781) ($31,385)
$0 $0 $0 $0 $0 $0 ($720,130)
$902,049 $874,851 $846,475 $816,870 $785,981 $753,754 $0
Deal Metrics Maximum Loan Amount
Purchase Price $10,000,000 LTV
Appraised Value $10,000,000 LTC
Closing & Renovation Costs $500,000 DSCR
Debt Yield
Loan Terms
Interest Rate 4.50%
Amortization 25 Years
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Purchase Price $10,000,000 LTV $6,500,000
Debt Yield
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Debt Yield
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Appraised Value $10,000,000 LTC $7,350,000
Debt Yield
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Debt Yield
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Closing & Renovation Costs $500,000 DSCR $5,997,011
Debt Yield
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Debt Yield
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Debt Yield $6,578,947
Loan Terms
Interest Rate 4.50%
Loan Constraints
LTV 65.00%
LTC 70.00%
DSCR 1.25x
Debt Yield 7.60%
Deal Metrics
Purchase Price $10,000,000
LTV 80%
Loan Amount $8,000,000
Starting Equity Balance $2,000,000
Value Change 20%
New Equity Balance
Equity % Increase
Multiple on Value Increase
Deal Metrics
LTV 80%
Loan Amount $8,000,000
Starting Equity Balance $2,000,000
Value Change 20%
New Equity Balance $4,000,000
Equity % Increase 100%
Multiple on Value Increase 5.0x
Cap Rate Solution
Cap Rate
NOI Solution
Cap Rate 5.15%
Net Operating Income
Purchase Price Solution

Cap Rate 4.80%
Purchase Price
Exit Value Solution

Year 10 Projected NOI $300,000
NOI Growth/Year 3.00%
Exit Cap Rate @ End of Year 10 5.00%
Sale Price
Cap Rate Solution
Cap Rate 5.67%
NOI Solution
Cap Rate 5.15%
Purchase Price Solution

Cap Rate 4.80%
Exit Value Solution

Year 10 Projected NOI $300,000
NOI Growth/Year 3.00%
Exit Cap Rate @ End of Year 10 5.00%
Sale Price $6,180,000
Deal Metrics
Purchase Price $10,000,000 Purchase Price
Closing Costs $100,000 Closing Costs
Year 1 Net Operating Income (NOI) $600,000 NOI
Annual NOI Growth 3.00% Unlevered Net Cash Flow
Loan Terms Unlevered Cash-on-Cash Return

LTV 70%
Loan Amount $7,000,000 Average 10-Year Cash-on-Cash
Loan Origination Fees (as % of Loan Amount) 1.00%
Interest Rate 4.50%
Amortization 30 Years Purchase Price
Closing Costs
NOI
Unlevered Net Cash Flow
Loan Proceeds
Loan Origination Fees
Loan Payment
Levered Net Cash Flow
Levered Cash-on-Cash Return
Average 10-Year Cash-on-Cash

Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
($10,000,000)
($100,000)
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
($10,100,000) $600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924

($10,000,000)
($100,000)
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
($10,100,000) $600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
$7,000,000
($70,000)
($425,616) ($425,616) ($425,616) ($425,616) ($425,616) ($425,616) ($425,616) ($425,616)
($3,170,000) $174,384 $192,384 $210,924 $230,021 $249,690 $269,949 $290,816 $312,309
Year 9 Year 10
$760,062 $782,864
$760,062 $782,864
Year 9 Year 10
$760,062 $782,864
$760,062 $782,864
($425,616) ($425,616)
$334,446 $357,248
Deal Metrics
Purchase Price $10,000,000 Purchase Price
Closing Costs $100,000 Closing Costs
Annual NOI Growth 3.00% Unlevered Net Cash Flow
Loan Terms Unlevered Cash-on-Cash Return

LTV 70%
Loan Amount $7,000,000 Average 10-Year Cash-on-Cash
Interest Rate 4.50%
Amortization 30 Years Purchase Price
Closing Costs
NOI
Unlevered Net Cash Flow
Loan Proceeds
Loan Origination Fees
Loan Payment
Levered Net Cash Flow
Levered Cash-on-Cash Return
Average 10-Year Cash-on-Cash

($10,000,000)
($100,000)
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
($10,100,000) $600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
5.94% 6.12% 6.30% 6.49% 6.69% 6.89% 7.09% 7.31%
6.81%

($10,000,000)
($100,000)
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
($10,100,000) $600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924
$7,000,000
($70,000)
($425,616) ($425,616) ($425,616) ($425,616) ($425,616) ($425,616) ($425,616) ($425,616)
($3,170,000) $174,384 $192,384 $210,924 $230,021 $249,690 $269,949 $290,816 $312,309
5.50% 6.07% 6.65% 7.26% 7.88% 8.52% 9.17% 9.85%
8.27%
Year 9 Year 10
$760,062 $782,864
$760,062 $782,864
7.53% 7.75%
Year 9 Year 10
$760,062 $782,864
$760,062 $782,864
($425,616) ($425,616)
$334,446 $357,248
10.55% 11.27%
Deal Metrics Acquisition
Purchase Price $10,000,000 Purchase Price ($10,000,000)
Closing Costs $100,000 Closing Costs ($100,000)
Annual NOI Growth 3.00% Sale Proceeds
Costs of Sale
Loan Terms Unlevered Net Cash Flow ($10,100,000)
LTV 70%
Loan Amount $7,000,000 Unlevered IRR
Interest Rate 4.50% Acquisition
Amortization 30 Years Loan Proceeds $7,000,000
Loan Origination Fees ($70,000)
Sale Metrics Principal Payment
Exit Cap Rate 6.75% Interest Payment
Costs of Sale 2.50% Loan Payoff
Sale Year Year 10 Levered Net Cash Flow ($3,170,000)
Levered IRR
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431

$0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431
($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854)

($312,690) ($307,502) ($302,076) ($296,400) ($290,464) ($284,256) ($277,761)
$0 $0 $0 $0 $0 $0 $0
$174,384 $192,384 $210,924 $230,021 $249,690 $269,949 $290,816
Year 8 Year 9 Year 10 Year 11
$737,924 $760,062 $782,864 $806,350

$0 $0 $11,945,923
$0 $0 ($298,648)
$737,924 $760,062 $12,430,139
($154,647) ($161,751) ($169,182)

($270,969) ($263,865) ($256,434)
$0 $0 ($5,606,260)
$312,309 $334,446 $6,398,263
Costs of Sale
LTV 70%
Loan Amount $7,000,000 Unlevered IRR 7.76%
Levered IRR 12.66%

$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431

$0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431
($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854)

($312,690) ($307,502) ($302,076) ($296,400) ($290,464) ($284,256) ($277,761)
$0 $0 $0 $0 $0 $0 $0
$174,384 $192,384 $210,924 $230,021 $249,690 $269,949 $290,816
$737,924 $760,062 $782,864 $806,350

$0 $0 $11,945,923
$0 $0 ($298,648)
$737,924 $760,062 $12,430,139
($154,647) ($161,751) ($169,182)

($270,969) ($263,865) ($256,434)
$0 $0 ($5,606,260)
$312,309 $334,446 $6,398,263
Costs of Sale
LTV 70%
Loan Amount $7,000,000 Equity Multiple
Equity Multiple
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924 $760,062

$0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924 $760,062
($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854) ($154,647) ($161,751)

($312,690) ($307,502) ($302,076) ($296,400) ($290,464) ($284,256) ($277,761) ($270,969) ($263,865)
$0 $0 $0 $0 $0 $0 $0 $0 $0
$174,384 $192,384 $210,924 $230,021 $249,690 $269,949 $290,816 $312,309 $334,446
Year 10 Year 11
$782,864 $806,350
$11,945,923
($298,648)
$12,430,139
Year 10 Year 11
($169,182)
($256,434)
($5,606,260)
$6,398,263
Costs of Sale
LTV 70%
Loan Amount $7,000,000 Equity Multiple 1.83x
Equity Multiple 2.73x

$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924 $760,062

$0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0
$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924 $760,062
($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854) ($154,647) ($161,751)

($312,690) ($307,502) ($302,076) ($296,400) ($290,464) ($284,256) ($277,761) ($270,969) ($263,865)
$0 $0 $0 $0 $0 $0 $0 $0 $0
$174,384 $192,384 $210,924 $230,021 $249,690 $269,949 $290,816 $312,309 $334,446
Year 10 Year 11
$782,864 $806,350
$11,945,923
($298,648)
$12,430,139
Year 10 Year 11
($169,182)
($256,434)
($5,606,260)
$6,398,263
Going-In Cap Rate 4.84% Closing Costs ($80,000)
Closing Costs $80,000 Revenue
Net Leasable Area 25,000 Expenses
Year 1 Operating Revenue/SF/Year $27.50 NOI
Year 1 Operating Expenses/SF/Year $12.00 Capital Reserves
Year 1 Capital Reserves/SF/Year $0.30 Cash Flow Before Debt Service
Annual Revenue Growth 3.00% Principal Payment
Annual Expense Growth 2.50% Interest Payment
Annual Capital Reserve Growth 2.50% Cash Flow After Debt Service
Sale Proceeds
Loan Terms Costs of Sale
LTV 70% Unlevered Net Cash Flow ($8,080,000)
Loan Origination Fees (as % of Loan Amount) 1.00% Loan Origination Fees ($56,000)
Interest Rate 4.50% Loan Payoff
Amortization 30 Years Levered Net Cash Flow ($2,536,000)
Sale Metrics Levered Cash-on-Cash Return

Exit Cap Rate 6.25%
Costs of Sale 2.50%
Sale Year Year 10
Return Metrics Target

Levered IRR 7.61% 14.00%
Levered Equity Multiple 1.96x 3.00x
Levered Average Cash-on-Cash Return 4.07% 8.00%
$687,500 $708,125 $729,369 $751,250 $773,787 $797,001 $820,911 $845,538 $870,904

($300,000) ($307,500) ($315,188) ($323,067) ($331,144) ($339,422) ($347,908) ($356,606) ($365,521)
$387,500 $400,625 $414,181 $428,183 $442,643 $457,578 $473,003 $488,933 $505,384
($7,500) ($7,688) ($7,880) ($8,077) ($8,279) ($8,486) ($8,698) ($8,915) ($9,138)
$380,000 $392,938 $406,302 $420,106 $434,365 $449,093 $464,305 $480,017 $496,246
($90,341) ($94,491) ($98,832) ($103,372) ($108,121) ($113,088) ($118,283) ($123,717) ($129,401)
($250,152) ($246,002) ($241,661) ($237,120) ($232,371) ($227,404) ($222,209) ($216,775) ($211,092)
$39,507 $52,445 $65,809 $79,613 $93,872 $108,600 $123,813 $139,525 $155,753
$0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0
$380,000 $392,938 $406,302 $420,106 $434,365 $449,093 $464,305 $480,017 $496,246
$0 $0 $0 $0 $0 $0 $0 $0 $0
$39,507 $52,445 $65,809 $79,613 $93,872 $108,600 $123,813 $139,525 $155,753
1.56% 2.07% 2.59% 3.14% 3.70% 4.28% 4.88% 5.50% 6.14%

Year 10 Year 11
$897,032 $923,943
($374,659) ($384,025)
$522,373 $539,917
($9,366)
$513,006
($135,345)
($205,147)
$172,514
$8,638,674
($215,967)
$8,935,714
($4,485,008)
$4,110,213
6.80%
Going-In Cap Rate 5.96% Closing Costs ($80,000)
Closing Costs $80,000 Revenue
Net Leasable Area 25,000 Expenses
Year 1 Operating Revenue/SF/Year $27.50 NOI
Year 1 Operating Expenses/SF/Year $12.00 Capital Reserves
Year 1 Capital Reserves/SF/Year $0.30 Cash Flow Before Debt Service
Annual Revenue Growth 3.00% Principal Payment
Annual Expense Growth 2.50% Interest Payment
Annual Capital Reserve Growth 2.50% Cash Flow After Debt Service
Sale Proceeds
Loan Terms Costs of Sale
LTV 70% Unlevered Net Cash Flow ($6,580,000)
Loan Origination Fees (as % of Loan Amount) 1.00% Loan Origination Fees ($45,500)
Interest Rate 4.50% Loan Payoff
Amortization 30 Years Levered Net Cash Flow ($2,075,500)
Sale Metrics Levered Cash-on-Cash Return

Exit Cap Rate 6.25%
Costs of Sale 2.50%
Sale Year Year 10
Return Metrics Target

Levered IRR 14.03% 14.00%
Levered Equity Multiple 3.11x 3.00x
Levered Average Cash-on-Cash Return 8.05% 8.00%
$687,500 $708,125 $729,369 $751,250 $773,787 $797,001 $820,911 $845,538 $870,904

($300,000) ($307,500) ($315,188) ($323,067) ($331,144) ($339,422) ($347,908) ($356,606) ($365,521)
$387,500 $400,625 $414,181 $428,183 $442,643 $457,578 $473,003 $488,933 $505,384
($7,500) ($7,688) ($7,880) ($8,077) ($8,279) ($8,486) ($8,698) ($8,915) ($9,138)
$380,000 $392,938 $406,302 $420,106 $434,365 $449,093 $464,305 $480,017 $496,246
($73,402) ($76,774) ($80,301) ($83,990) ($87,848) ($91,884) ($96,105) ($100,520) ($105,138)
($203,248) ($199,876) ($196,349) ($192,660) ($188,802) ($184,766) ($180,545) ($176,130) ($171,512)
$103,350 $116,287 $129,651 $143,456 $157,715 $172,443 $187,655 $203,367 $219,595
$0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0
$380,000 $392,938 $406,302 $420,106 $434,365 $449,093 $464,305 $480,017 $496,246
$0 $0 $0 $0 $0 $0 $0 $0 $0
$103,350 $116,287 $129,651 $143,456 $157,715 $172,443 $187,655 $203,367 $219,595
4.98% 5.60% 6.25% 6.91% 7.60% 8.31% 9.04% 9.80% 10.58%

Year 10 Year 11
$897,032 $923,943
($374,659) ($384,025)
$522,373 $539,917
($9,366)
$513,006
($109,968)
($166,682)
$236,356
$8,638,674
($215,967)
$8,935,714
($3,644,069)
$5,014,994
11.39%
Year Built 1975 2020 1975 Acquisition Year 1
Property Value $1,000,000 $1,000,000 Purchase Price ($1,000,000)
LTV 65% 65% Loan Proceeds $650,000
Loan Amount $650,000 $650,000 NOI $40,000
Equity Invested $350,000 $350,000 Capital Costs ($50,000)
Going-In NOI $40,000 $52,500 Sale Proceeds
Going-in Cap Rate 4.00% 5.25% Loan Payoff
Renovation Costs $150,000 $0 Net Cash Flow ($350,000) ($10,000)
Total Project Cost $1,150,000 $1,000,000
Year 4 NOI (For Valuation) $80,000 $57,368 2020 Acquisition Year 1
Exit Cap Rate 5.75% 5.25% Purchase Price ($1,000,000)
Value at Exit $1,391,304 $1,092,727 Loan Proceeds $650,000
Profit $401,304 $255,095 NOI $52,500
Equity Multiple 2.11x 1.73x Capital Costs $0
IRR 28.68% 22.51% Sale Proceeds
Loan Payoff
Net Cash Flow ($350,000) $52,500
Year 2 Year 3
$53,333 $66,667
($50,000) ($50,000)
$1,391,304
($650,000)
$3,333 $757,971
Year 2 Year 3
$54,123 $55,745
$0 $0
$1,092,727
($650,000)
$54,123 $498,472
Acquisition & Operating Information
Purchase Price $8,000,000 NOI
Closing Costs $75,000 Asset Management Fee
Going-In Cap Rate 6.00% Renovation Costs
Annual NOI Growth 4.00% Construction Management Fee
Cash Flow Before Debt Service
Renovation Information Principal Payment
Rehab Budget $50,000 Interest Payment
Year Rehab Begins Year 1 Cash Flow After Debt Service
Year Rehab Complete Year 2 Purchase Price
Closing Costs
Loan Information Acquisition Fee
LTV 65% Sale Proceeds
Loan Amount $5,200,000 Costs of Sale
Loan Fees 1.00% Disposition Fee
Interest Rate 4.25% Unlevered Net Cash Flow
Interest-Only Period 3 Years Loan Proceeds
Amortization 30 Years Loan Fees
Loan Payoff
Sale Information Levered Net Cash Flow
Exit Cap Rate 6.50%
Costs of Sale 2.50% Levered Cash-on-Cash
Sale Year Year 5
Average Cash-on-Cash
Fee Information
Acquisition Fee 1.00% Internal Rate of Return
Construction Management Fee 4.00%
Asset Management Fee 0.50% Equity Multiple
Disposition Fee 1.00%
Waterfall Structure GP Contributions

GP Equity 5% LP Contributions
LP Equity 95% Total Contributions
Preferred Return 8.00%
Promote Over Preferred Return 20.00% Preferred Return
Beginning Balance
Partnership Return Metrics Preferred Interest Accrued
GP IRR 21.19% LP Contributions
GP Equity Multiple 2.41x LP Distributions
LP IRR 10.70% LP IRR Check Ending Balance
LP Equity Multiple 1.57x 8.00% Total LP Cash Flow
GP Contributions
GP Distributions
Total GP Cash Flow
Total Distributions
Cash Flow Remaining
Cash Flows Above Preferred Return

Distributions to LP
Distributions to GP
Total Distributions
LP Cash Flow
GP Cash Flow
Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
480,000 499,200 519,168 539,935 561,532 583,993 0
(15,035) (15,035) (15,035) (15,035) (15,035) 0 0
(25,000) (25,000) 0 0 0 0 0
(1,000) (1,000) 0 0 0 0 0
438,965 458,165 504,133 524,900 546,497 0 0
0 0 0 (87,665) (91,464) 0 0
(221,000) (221,000) (221,000) (219,305) (215,506) 0 0
217,965 237,165 283,133 217,929 239,527 0 0
(8,000,000) 0 0 0 0 0 0 0
(75,000) 0 0 0 0 0 0 0
(80,000) 0 0 0 0 0 0 0
0 0 0 0 8,984,514 0 0
0 0 0 0 (224,613) 0 0
0 0 0 0 (89,845) 0 0
(8,155,000) 438,965 458,165 504,133 524,900 9,216,553 0 0
5,200,000 0 0 0 0 0 0 0
(52,000) 0 0 0 0 0 0 0
0 0 0 0 (5,020,871) 0 0
(3,007,000) 217,965 237,165 283,133 217,929 3,888,712 0 0
7.25% 7.89% 9.42% 7.25% 7.97%
7.95%
11.34%
1.61x
Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

(150,350) 0 0 0 0 0 0 0
(2,856,650) 0 0 0 0 0 0 0
(3,007,000) 0 0 0 0 0 0 0
0 2,856,650 2,878,115 2,883,058 2,844,726 2,865,271 0 0

0 228,532 230,249 230,645 227,578 229,222 0 0
(2,856,650) 0 0 0 0 0 0 0
0 207,067 225,307 268,976 207,033 3,094,493 0 0
(2,856,650) 2,878,115 2,883,058 2,844,726 2,865,271 0 0 0
(2,856,650) 207,067 225,307 268,976 207,033 3,094,493 0 0
(150,350) 0 0 0 0 0 0 0
0 10,898 11,858 14,157 10,896 162,868 0 0
(150,350) 10,898 11,858 14,157 10,896 162,868 0 0
0 217,965 237,165 283,133 217,929 3,257,361 0 0
0 0 0 0 0 631,351 0 0
0 0 0 0 0 479,826 0 0
0 0 0 0 0 151,524 0 0
0 0 0 0 0 631,351 0 0
(2,856,650) 207,067 225,307 268,976 207,033 3,574,319 0 0
(150,350) 10,898 11,858 14,157 10,896 314,392 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0

0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
Acquisition & Operating Information Property-Level Cash Flows Acquisition
Purchase Price $10,000,000 NOI
Closing Costs $100,000 Renovation Costs
Going-In Cap Rate 6.00% Cash Flow Before Debt Service
Annual NOI Growth 3.50% Principal Payment
Interest Payment
Renovation Information Cash Flow After Debt Service
Renovation Budget $125,000 Purchase Price (10,000,000)
Year Renovation Begins Year 1 Closing Costs (100,000)
Year Rehab Complete Year 2 Sale Proceeds
Costs of Sale
Loan Information Unlevered Net Cash Flow (10,100,000)
LTV 65% Loan Proceeds 6,500,000
Loan Amount $6,500,000 Loan Fees (65,000)
Loan Fees 1.00% Loan Payoff
Interest Rate 4.20% Levered Net Cash Flow (3,665,000)
Interest-Only Period 2 Years Depreciation Expense
Amortization 30 Years Income Taxes
Capital Gains Taxes
Sale Information Depreciation Recapture Taxes
Exit Cap Rate 6.50% Net After Tax Cash Flow (3,665,000)
Costs of Sale 2.50% Implied Tax Rate
Sale Year Year 5
Individual Income Tax Analysis Acquisition
Land vs. Building Value Allocation Pre-Tax Cash Flow - Investor (50,000)
Land Value $3,000,000 30% Income Taxes - Investor 0
Building Value $7,000,000 70% Net After Tax Cash Flow - Investor (50,000)
Tax Assumptions Levered Cash-on-Cash

Property Type Residential
Depreciation Timeline 27.5 Years Post-Tax Average Cash-on-Cash 6.83%
Income Tax Rate 25%
Capital Gains Tax Rate 15% Post-Tax Internal Rate of Return 9.02%
Depreciation Recapture Tax Rate 25%
Post-Tax Equity Multiple 1.47x
Investment Assumptions
Equity Investment $50,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
600,000 621,000 642,735 665,231 688,514 712,612 0 0
(62,500) (62,500) 0 0 0 0 0 0
537,500 558,500 642,735 665,231 688,514 0 0 0
0 0 (110,545) (115,279) (120,215) 0 0 0
(273,000) (273,000) (270,888) (266,155) (261,219) 0 0 0
264,500 285,500 261,302 283,797 307,080 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 10,963,258 0 0 0
0 0 0 0 (274,081) 0 0 0
537,500 558,500 642,735 665,231 11,377,691 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 (6,153,961) 0 0 0
264,500 285,500 261,302 283,797 4,842,296 0 0 0
(254,545) (254,545) (254,545) (254,545) (254,545) 0 0 0
(18,114) (23,364) (29,325) (36,133) (43,187) 0 0 0
0 0 0 0 (69,627) 0 0 0
0 0 0 0 (318,182) 0 0 0
246,386 262,136 231,976 247,665 4,411,300 0 0 0
6.85% 8.18% 11.22% 12.73% 8.90% 0.00% 0.00% 0.00%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

3,608 3,895 3,565 3,872 66,061 0 0 0
(247) (319) (400) (493) (5,880) 0 0 0
3,361 3,576 3,165 3,379 60,181 0 0 0
6.72% 7.15% 6.33% 6.76% 7.20%

Year 9 Year 10 Year 11
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0.00% 0.00% 0.00%
Year 9 Year 10 Year 11

0 0 0
0 0 0
0 0 0
Deal Metrics
Annual NOI at Acquisition $500,000
Valuation at Purchase $10,000,000
LTV 70%
Acquisition Loan Proceeds $7,000,000
Year 3 NOI $625,000
Cap Rate Used For Valuation 5.00%
Year 3 Valuation $12,500,000
LTV 70%
Refinance Loan Amount $8,750,000
Acquisition Loan Payoff ($7,000,000)
Cash Surplus (Shortfall) $1,750,000

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Common Area Hallway - 5,000 SF

Starbucks Pro Rata Share

Common Area Hallway - 5,000 SF

Starbucks Pro Rata Share 4.14%

Property Taxes $12,000

Net Operating Income $79,500

Property Taxes $12,000

Net Operating Income $100,000

Property Taxes $12,000

Net Operating Income $79,500

Property Taxes $12,000

Net Operating Income $79,500

Net Operating Income $79,500

Net Operating Income $95,000

Net Operating Income $79,500 $81,885 $84,342

Net Operating Income $79,500 $82,039 $84,654

TI Allowance ($) $50,000

($26,068) ($27,197) ($28,376) ($29,606) ($30,889) ($32,227) ($33,624)

Purchase Price Solution

Exit Value Solution

Purchase Price Solution

Exit Value Solution

Loan Terms Unlevered Cash-on-Cash Return

Levered Cash-on-Cash Return

Average 10-Year Cash-on-Cash

Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Loan Terms Unlevered Cash-on-Cash Return

Levered Cash-on-Cash Return

Average 10-Year Cash-on-Cash

5.94% 6.12% 6.30% 6.49% 6.69% 6.89% 7.09% 7.31%

Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

5.50% 6.07% 6.65% 7.26% 7.88% 8.52% 9.17% 9.85%

$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854)

$737,924 $760,062 $782,864 $806,350

Year 8 Year 9 Year 10 Year 11

($154,647) ($161,751) ($169,182)

Levered IRR 12.66%

$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854)

$737,924 $760,062 $782,864 $806,350

Year 8 Year 9 Year 10 Year 11

($154,647) ($161,751) ($169,182)

$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924 $760,062

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854) ($154,647) ($161,751)

Equity Multiple 2.73x

$600,000 $618,000 $636,540 $655,636 $675,305 $695,564 $716,431 $737,924 $760,062

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

($112,926) ($118,114) ($123,540) ($129,215) ($135,151) ($141,360) ($147,854) ($154,647) ($161,751)

Sale Metrics Levered Cash-on-Cash Return

Return Metrics Target

$687,500 $708,125 $729,369 $751,250 $773,787 $797,001 $820,911 $845,538 $870,904

1.56% 2.07% 2.59% 3.14% 3.70% 4.28% 4.88% 5.50% 6.14%

Sale Metrics Levered Cash-on-Cash Return

Return Metrics Target

$687,500 $708,125 $729,369 $751,250 $773,787 $797,001 $820,911 $845,538 $870,904

4.98% 5.60% 6.25% 6.91% 7.60% 8.31% 9.04% 9.80% 10.58%

Waterfall Structure GP Contributions