Real Estate Investment Analysis

120 E 33th as is nowTucson AZ 85713

Report Prepared By

Northpoint Asset Management520-300-5127 Office Phone520-300-5264 Fax1670 N Kolb Rd Suite 142Tucson AZ 85715

Miguel Heredia520-837-9794 Cell Phone

Michael.Heredia@northpointam.comRealtor, Senior Property Manager

Broker Anne Wille

Annual Report, Year 1120 E 33th as is now, Tucson AZ

Physical DataNumber of Units 10Number Occupied 9Number Vacant 1Price Per Unit $40,000Price Per Sq Ft $158Rentable Sq Ft 2530Year Built 1950Land Area SouthBuildings 2Parking Spaces 10Zoning South Tucson -

SR2

Proposed FinancingPurchase Price $400,000

IncomeGross Scheduled Income $60,000- Vacancy $6,000= Effective Rental Income $54,000= Annual Gross Operating Income $54,000= Monthly Gross Operating Income $4,500

Expenses Estimated Annual Expenses $5,400 Estimated Monthly Expenses $450

Net Operating IncomeAnnual Gross Operating Income $54,000- Annual Operating Expenses $5,400= Annual Net Operating Income $48,600= Monthly Net Operating Income $4,050

Cash FlowNet Operating Income $48,600= Annual Cash Flow Before Tax $48,600= Monthly Cash Flow Before Tax $4,050

Cash Flow Cont.- Tax Liability (Savings) @ 28 % $13,608= Annual Cash Flow After Tax $34,992= Monthly Cash Flow After Tax $2,916

Common IndicatorsCap Rate 12.15%Gross Rent Multiplier 6.67Default Ratio (Break Even) 10.00

Proceeds from SaleEnd of Year Property Value $420,004Gross Equity Before Tax $420,004- 6.00 % Cost of Sale $25,200= Proceeds from Sale Before Tax $394,804

Return on Initial InvestmentCash Flow Before Tax $48,600 %+ Appreciation @ 5.0% $20,004 %- Tax Liability @ 28.00% $13,608 %= Total Return $54,996 %

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Annual Report, Year 1 Cont.120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

INDICATORS

Cap Rate 12.15% 11.80% 1.91% 0.00% 0.00%Gross Rent Multiplier 6.67 6.86 42.39 0.00 0.00Cash On Cash 0.00% 0.00% 0.00% 0.00% 0.00%IRR Before Tax 0.00% 0.00% 0.00% 0.00% 0.00%IRR After Tax 0.00% 0.00% 0.00% 0.00% 0.00%

CASH FLOWCash Flow Before Tax $48,600 $49,572 $8,428 $0 $0Cash Flow After Tax $34,992 $35,692 $6,068 $0 $0

PROCEEDS FROM SALEEquity before Cost of Sale $420,004 $440,921 $0 $0 $0Proceeds after Cost of Sale $394,804 $414,461 $0 $0 $0

ANNUAL RETURN ON INVESTMENT

$ Return on Investment $54,996 $56,609 $9,656 $0 $0% Return on Initial Investment 0.00% 0.00% 0.00% 0.00% 0.00%

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Financing 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

PRICEPurchase Price $400,000 $400,000Escalated Price (BOY) $400,000 $420,004Escalated Price (EOY) $420,004 $441,004Price Escalator: Appreciation 5.00 % 5.00 %

INITIAL INVESTMENTDown Payment $0 $0+ Closing Costs + $0 + $0+ Loan Points + $0 + $0+ Other Costs + $0 + $0+ Rehab Costs + $0 + $0= Total Investment = $0 = $0

PRINCIPAL TRACKING- 1st Mortgage Loan Balance (EOY) - $0 - $0= Principal Paid (Interest Deferred) = $0 = $0

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Annual Cash Flow Before Tax 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

ANNUAL INCOMEGross Scheduled Income $60,000 $61,200- Vacancy - $6,000 - $6,120= Effective Rental Income = $54,000 = $55,080+ Other Income + $0 + $0= Gross Operating Income = $54,000 = $55,080

ANNUAL OPERATING EXPENSESEstimated Expenses $5,400 $5,508

NET OPERATING INCOMEGross Operating Income $54,000 $55,080- Annual Operating Expenses - $5,400 - $5,508= Net Operating Income = $48,600 = $49,572

ANNUAL DEBT SERVICE

ANNUAL CASH FLOW BEFORE TAXNet Operating Income $48,600 $49,572- Annual Debt Service - $0 - $0- Capital Additions - $0 - $0= Annual Cash Flow Before Tax = $48,600 = $49,572

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Annual Cash Flow After Tax 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

ANNUAL CASH FLOW BEFORE TAXGross Scheduled Income $60,000 $61,200- Vacancy - $6,000 - $6,120= Effective Rental Income = $54,000 = $55,080+ Other Income + $0 + $0= Gross Operating Income = $54,000 = $55,080- Annual Operating Expenses - $5,400 - $5,508= Net Operating Income = $48,600 = $49,572- Annual Debt Service - $0 - $0- Capital Additions - $0 - $0= Annual Cash Flow Before Tax = $48,600 = $49,572

REAL ESTATE TAXABLE INCOMENet Operating Income $48,600 $49,572- Interest 1st Mortgage - $0 - $0- Points Amortization - $0 - $0- Cost Recovery (Improvements) - $0 - $0- Cost Recovery (Personal) - $0 - $0- Cost Recovery (Cap. Add.) - $0 - $0= R.E. Taxable Income (Loss) = $48,600 = $49,572

PASSIVE LOSS EXEMPTIONPassive Loss Exemption Available $0 $0Passive Losses Allowed $0 $0

ANNUAL SUSPENDED LOSSESR.E. Taxable Income (Loss) $48,600 $49,572Passive Losses Allowed $0 $0Annual Suspended Losses $0 $0

TAX LIABILITY (SAVINGS)R.E. Taxable Income (Min 0) $48,600 $49,572- Suspended Losses Allowed - $0 - $0= Adjusted R.E. Taxable Income = $48,600 = $49,572Tax Liability (Savings) @ 28.00% $13,608 $13,880

ANNUAL CASH FLOW AFTER TAXAnnual Cash Flow Before Tax $48,600 $49,572- Tax Liability (Savings) @ 28 % - $13,608 - $13,880= Cash Flow After Tax = $34,992 = $35,692

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Proceeds from Sale After Tax 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

SALE PROCEEDS BEFORE TAXSale Price (EOY) $420,004 $441,004- Cost of Sale @ 6.00% - $25,200 - $26,460- 1st Mortgage Loan Balance - $0 - $0= Sale Proceeds before Tax = $394,804 = $414,544

BASIS AT ACQUISITIONPurchase Price $400,000 $400,000+ Capitalized Closing Costs + $0 + $0+ Rehab Costs + $0 + $0+ Basis Adjustments + $0 + $0= Basis at Acquisition = $400,000 = $400,000

COST RECOVERY (CR)Annual CR (Improvements) $0 $0+ Annual CR (Personal) + $0 + $0+ Annual CR (Cap. Add.) + $0 + $0= Annual Cost Recovery Taken = $0 = $0

Total Cost Recovery Taken $0 $0

ADJUSTED BASIS AT SALEBasis at Beginning of Year $400,000 $400,000+ Annual Capital Additions + $0 + $0- Annual Cost Recovery Taken - $0 - $0= Adjusted Basis at Sale = $400,000 = $400,000

GAIN (LOSS) ON SALESale Price (EOY) $420,004 $441,004- Cost of Sale @ 6.00% - $25,200 - $26,460- Adjusted Basis at Sale - $400,000 - $400,000= Total Gain (Loss) = ($5,196) = $14,544- Total Cost Recovery Taken (LTG) - $0 - $0= Capital Gain from Apprec. (Min 0) = $0 = $14,544

TAXED AS ORDINARY INCOMEUnamortized Loan Points $0 $0+ Suspended Losses (from ATCF) + $0 + $0+ Loss at Disposition + ($5,196) + $0= Taxed as Ordinary Income = ($5,196) = $0

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Proceeds from Sale After Tax 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

SALE PROCEEDS AFTER TAX

Sale Proceeds before Tax $394,804 $414,544- Tax (Savings) Ord. Inc. @ 28.00% - ($1,455) - $0- Cost Recovery Recapture @ 25.00% - $0 - $0- Federal Tax on Gain @ 15.00% - $0 - $2,182- State Tax on Gain @ % - $0 - $0= Sale Proceeds after Tax = $396,259 = $412,362

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Equity 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

SALE PROCEEDS BEFORE TAXSale Price (EOY) $420,004 $441,004- Cost of Sale @ 6.00% - $25,200 - $26,460- 1st Mortgage Loan Balance - $0 - $0= Sale Proceeds before Tax = $394,804 = $414,544

GROSS EQUITY AT PURCHASEPurchase Price $400,000 $400,000- Loan Amount - $0 - $0= Gross Equity at Purchase = $400,000 = $400,000

GROSS EQUITY (EOY)Gross Equity (BOY) $400,000 $420,004+ Appreciation Equity + $20,004 + $20,917+ Principal Paydown Equity + $0 + $0= Gross Equity (EOY) = $420,004 = $440,921

GROSS EQUITY PLUS RESERVESGross Equity (EOY) $420,004 $440,921+ Reserve Balance + $0 + $0= Total Gross Equity = $420,004 = $440,921

RETURN ON GROSS EQUITY (EOY)Annual Cash Flow Before Tax $48,600 $49,572div Gross Equity (EOY) $420,004 $440,921= Return on Gross Equity = 11.57 % = 11.24 %

NET EQUITY (EOY)Gross Equity (EOY) $420,004 $440,921- Cost of Sale @ 6.00% - $25,200 - $26,460= Net Equity (EOY) = $394,804 = $414,461

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Indicators 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

INDICATORSCap Rate 12.15 % 11.80 %Gross Rent Multiplier 6.67 6.86Cash on Cash 0.00 % 0.00 %Debt Coverage Ratio 0.00 0.00Modified DCR 0.00 0.00Default Ratio (Break Even) 10.00 % 10.00 %IRR Before Tax 0.00 % 0.00 %IRR After Tax 0.00 % 0.00 %NPV After Tax $392,046 $402,103

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Return on Investment 120 E 33th as is now, Tucson AZ

Year Year 1 Year 2 Year 3 Year 4 Year 5

RETURN ON INVESTMENTCash Flow Before Tax $48,600 $49,572+ Appreciation + $20,004 + $20,917+ Principal Paydown + $0 + $0+ Tax Liability/Savings + ($13,608) + ($13,880)= Total Investment Return = $54,996 = $56,609

INITIAL INVESTMENT $0 $0Return on Cash Flow Before Tax 0.00 % 0.00 %+ Return on Appreciation + 0.00 % + 0.00 %+ Return on Principal Paydown + 0.00 % + 0.00 %+ Return Tax Liability/Savings + 0.00 % + 0.00 %= Return on Initial Investment = 0.00 % = 0.00 %

ACCUMULATED INVESTMENT $0 $20,917Return on Cash Flow Before Tax 0.00 % 236.99 %+ Return on Appreciation + 0.00 % + 100.00 %+ Return on Principal Paydown + 0.00 % + 0.00 %+ Return Tax Liability/Savings + 0.00 % + (66.36 %)= Return on Accumulated Investment = 0.00 % = 270.64 %

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Cash Flow Chart 120 E 33th as is now, Tucson AZ

This chart shows cash flow on a investmentin the property at 120 E 33th as is now over a period of 5 years.

The lower chart axis is years.Future assumptions have been factored in.See the spreadsheet for raw data.

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Equity Values Chart 120 E 33th as is now, Tucson AZ

This chart shows the Price, Net Equity, and Loan valuesfor the property at 120 E 33th as is now over a period of 5 years.

The lower chart axis is years.Future assumptions have been factored in.See the spreadsheet for raw data.

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.

Investment Comparison 120 E 33th as is now, Tucson AZ

This chart compares the return on a investment in the property at 120 E 33th as is nowwith a Bank CD at 0.0% and a Mutual Fund at 0.0% over a period of 5 years.

The lower chart axis is years.Future assumptions have been factored in.See the spreadsheet for raw data.

Prepared ByMiguel Heredia, 520-837-9794 Cell Phone, Michael.Heredia@northpointam.com, Realtor, Senior Property Manager, Broker Anne WilleNorthpoint Asset Management, 520-300-5127 Office Phone, 520-300-5264 Fax, 1670 N Kolb Rd Suite 142, Tucson AZ 85715

This report has been prepared based on information furnished by sources deemed reliable, however no representationor warranty, either express or implied, is made to its accuracy. All dollar values have rounded to the nearest dollar.