MIRAMONTE FOREST APARTMENTS 25 Howland Road Asheville, NC 28804

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1 MIRAMONTE FOREST APARTMENTS 25 Howland Road Asheville, NC This 32 unit freehold is one of the finest in Asheville located on the high ground of the Grove Park area in North Asheville. These homes are super convenient, priced to meet the middle class market and positioned in the most peaceful, quiet, and green 4 acres in the WNC area. Each Office Independently Owned and Operated 8 6 A SHE LA N D A V E A S HEVI L LE N O R T H C AR OL I N A

2 TABLE OF CONTENTS Property Information Location Information Property Photos and Site Plans 25 Howland Road Asheville, NC 28804

3 MLS

4 PRO FORMA April 3, 2015 Property: 32 Unit Multifamily-North Asheville (Grove Park) 32 units.. New Property Management now on site. Rental rates increasing vacancy rate stabilized = 4.7%. Gross Potential Income $20,800/mo or $249,600/yr Expense Factor (ALL) 35% or $87,360 Net Operating Income $162,240 Value Calculation at different cap rates: = $2,317,714 = $2,028,000 = $1,802,666 = $1,622,400 Purchase Price = $1.8mil. First mortgage %/ 65 35/ 20 year am. Debt service is $7400/mo - $90,000 a year. Cash flow should be $72,000/yr. Cash on cash return would be 11.5%. See also Ownership Concept and Potential 25 Howland Road Asheville, NC 28804

5 2014 PROFIT AND LOSS

6 NOTES ON 2014 PROFIT AND LOSS The 2014 profit and loss statement should be viewed in the context of history. This property was poorly managed for several years. As many as 10 units at a time were not rentable. We came on as the Listing Agents in November 2014 and brought with us very good and professional property management...phoenix Properties. Following this, the decision was made to spend as much of the rental income as necessary to get the property into decent shape. The list of repairs was extensive and the costs ate deeply into the rental income. In the 5 months we have been involved the spending on deferred maintenance has been significant. The problem is behind us now. Please see this profit and loss in the context of poor management and in the context of future possibilities. We have excellent management now. We have all the units online and have 100% occupancy most of the time. We expect the future cost to maintain all of the units is going to be right on "book". The end of year 2015 projected Net Operating Income is expected to be $174,720. See also Ownership Concept and Potential 25 Howland Road Asheville, NC 28804

7 OWNERSHIP CONCEPT & POTENTIAL April 3, 2015 The property is in good shape now and 5% of the GPI should be budgeted for continuous upgrades and improvements. This will allow for a steady increase of average rent to $700 within 12 months. The property has had 100% occupancy several times in the past 2 months but due to human mobility we estimate a steady average vacancy of 1.5 units at all times. This is 4.7%--below the average for large, good quality, multifamily properties. See "here and now" below. "Here and now" math... APR 2015 GPI = 32 X 650 = $20,800/mo or $249,600 Expenses (ALL-inclusive) = $ Net Operating Income = $162,240 Purchase Price = $1.8mil. First mortgage %/ 65 35/ 20 year am. Debt service is $7400/mo - $90,000 a year. Cash flow should be $72,000/yr. Cash on cash return would be 11.5%. Worksheet 6 to 12 months -- late 2015 GPI = 32 X 700 = $22,400/mo or $268,800 Expenses (ALL-inclusive) = $94,080 Net Operating Income = $174,720 PP = $1.8mil. First mortgage %/ 65 35/ 20 year am. Debt service is $7400/mo - $90,000 a year. Cash flow should be $85,000/yr. Cash on cash return would be 13.4%. Worksheet DEC years out--5% rent increase per year--rent average =$975 GPI = $31,200/mo or $374,400 Expenses (ALL-inclusive) = $131,040 Net Operating Income = $243,360 Same note features...end of term...cash flow = $153,360. Cash on cash return = 24.3% The five-year term of the loan will cause our debt service to increase slightly at the 5 year point (because of the interest rate rising to, say, 6.5% from 4.5%). The new debt service would be $104,000($14,000 more than the previous). Meanwhile, the NOI would be increased by 50%. Math is in our favor. At some point in the future, a condo conversion would be attractive. Decent condos in Asheville sell for at least $100,000. All the units on this site look good, work properly, and are attractive to the public. They should sell at an average of $125,000. This is a $4.0 million sale at a minimum. Acquisition cost is approx $1.85 million. SO there is a nice margin, even with some expenditure for paint, landscaping, etc. So we start the business as a nicely profitable rental and make slow, steady progress on appearance and substance. Rents will increase at a greater rate than the local average. NOI will increase at a greater rate than total expenses and debt service combined (50% in 5 years). Run this solid business as long as you like with the understanding that you have the option of condo conversion for a nice profit anytime you want to exit. 25 Howland Road Asheville, NC 28804

8 FACT SHEET PURCHASE INFORMATION Price: $1,900, Tax: $23,500 Units: 32 Total Square Footage: 18,024 Property Status: Available PROPERTY INFORMATION Building Name: Miramonte Forest Apartments Address: 25 Howland Road Asheville, NC County: Buncombe Year Built: 1965 PID #: DEMOGRAPHIC INFORMATION Population (5 mile radius): 173,000 (est 2014) Median Household Income: $43,000 Average Household Income: $45, Howland Road Asheville, NC 28804

9 AREA OVERVIEW The Grove Park neighborhood is an excellent intact example of an early twentieth century planned suburban residential development, featuring a wide array of revival and eclectic domestic architecture in an appropriately landscaped setting. The Grove Park plan was the first in Asheville to abandon the typical grid street layout and to provide curvilinear streets, parks, and trees in a naturalistic setting. Grove Park Inn builder Edwin Wiley Grove purchased the land surrounding the Grove Park Inn and sold it to developers and prominent individuals who created a housing stock of remarkable and delightful dwellings, while Charlotte Street became the setting for a number of important buildings, such as the Manor Inn. Richard Sharp Smith, the supervising architect of the Biltmore Estate, influenced much of the neighborhood s distinctive architectural style, English Derived Craftsman, which was inspired by the American and English Arts and Crafts Movement. The streetcar lines in the turn of the last century and the accessibility and affordability of the automobile played an important role in the neighborhood s platting as a streetcar suburb with garages, communal parking and larger lots for homes. 25 Howland Road Asheville, NC 28804

10 AERIAL PHOTOS

11 GEOGRAPHIC INFORMATON

12 PROPERTY PHOTOS

13 PROPERTY PHOTOS

14 SITE MAP

15 SURVEY

16 SURVEY

17 BREAKDOWN OF UNIT DETAIL

18 CONTACT INFORMATION Martin Luna, Broker Direct: Cell: George Lycan, Broker Cell: Georgelycan.kwrealty.com OFFICE MULTIFAMILY INVESTMENT Each Office Independently Owned and Operated 8 6 A SHE LA N D A V E A S HEVI L LE N O R T H C AR OL I N A