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The Place at

Green Trails Apartment Community Living

Katy Texas

A Business Plan Presented by MC Companies

I

Section I – The Summary

The Property Overview

The Place at Green Trails Apartments is a “Class B” 275-unit community located in Katy, TX. Katy is a suburb approximately 30 miles west of downtown Houston. The property was built in 1982 and features such amenities as a swimming pool, spa, washer/dryer connections, private patios or balconies, outside storage, fireplaces in select units and spacious walk-in closets.

The Place at Green Trails is a distressed asset for sale out of receivership. We believe the property presents a value-add opportunity through renovation and new management. We further discuss the value­ add components later in the Business Plan.

The Financial Overview

Purchase Price (not including renovations) Closing Costs and renovation costs Total Basis Loan Amount (Assumption) Equity Price per unit (unimproved) Price (improved) Price per square foot (improved) Number of units Estimated Average Annual Cash-on-Cash Return Total estimated 5-Year Deal IRR at a 7.0% cap rate Total estimated 5-Year Limited Partner IRR at a 7.0% cap rate Limited Partner Levered Equity Multiple

* Total equity includes renovation of approximately $1,600,000

$9,000,000 $2,400,000

$11,400,000 $7,200,000 $4,200,000*

$32,727 $41,454

$53.19 275

10.50% 18.24% 15.00%

1.88

The Reasons to Invest

Bank owned (REO) property being acquired significantly below replacement cost. We have received a preliminary appraisal report with an as-is value of the property equal to $9,600,000. We are purchasing the asset $600,000 below the current appraised value.

Value will be increased through property renovations and a new management plan Current management team is operating community at 84% physical occupancy and 68% of

potential revenue Exceptional below market debt financing Current Rents are $23/unit per month below comparable properties in the submarket Ability to generate an additional $25/unit per month with the installation of washers/dryers in each

unit

2010 MC Companies Confidential Page 3 of 18 www.mccompanies.com

The Place at Green Trails

SITE INFORl.1ATION

Seller Of’farin,i Price Seller olrertn.a. Pricii Per Onk Selle< OlftrfnJ. Prtce .,., SF 'Vw'Buii iio.Uiilis R;?..:ble S.9.Ft. I Lend Stu (i.. J.c. --> Dtn1

“Y£i “-< Acre) No.BuUd . .;..;.&;. Mech1nkal Systems Elodrioly HVAC Wale:!!ced Not?blo Not Applicable

Tm m

214,317 m

30.35 ?

lndMduaH lndMduaU

RUBS ··—

Projected $1,668,769 $1,805,069 $1,156,236

$648,833

Diffflleflce 13% 14% -6% 50%

LTC

– 87.92’11. 1.34 0.61

?_A69_

UNIT ‘.11X & CURRENT RENTS

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l’ROl’OSf D f!ENTS

?l’,T· -rr T lT … ‘f .. ·:::.r ‘ .. 1 r ‘,T r.p…,.- ,f:.? 48 1×1 17’11, 615 29,520 $529 $0.86 $25,392 “9$ 1×1 35” 657 63,072 1572 S0.87 $54,912 27 1×1 10% 711 19,197 $640 $0.90 $17,2n “4l) 2xl 15% 852 34 080 -ffls::::::::::::-$0.84 $28 &10 40 2×2 15’11. 954 38,160 $773 $0.81 $30,920 24 2×2 __ __ 1252 __ 30.236 ___ $862 ___ $0,68 ___ $20,688

275 100% rn 214,317

YEAR ONE PROFORMA INC0’.1E , 1 P, l , ‘(,

Gross Sc:heduled Rtnt’

113ill@# Management Fees

Contract & Turnover OPERATING EXPENSES t'”‘–!- ic——

$2,133,952

?123,750 -$85,358