$255, & 5314 Hershe St., Houston, TX Price/Unit: $10,625. Price/Sq. Ft.: $ Terms: All Cash. Proforma Cap Rate: 10.

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1 , APARTMENTS FOR SALE A 24 UNIT CLASS D GARDEN APARTMENT COMMUNITY $255,000 Price/Unit: Price/Sq. Ft.: Terms: Proforma Cap Rate: $10,625 $14.17 All Cash 10.00% Recent Foreclosure by a Conduit Special Servicer Close-in neighborhood located north of downtown Houston, Off I-10 Blue collar tenant profile. Substantial brick construction. Offered as "All Cash" KET ENTERPRISES INCORPORATED Tom Wilkinson, Broker xt 102 twilk4@ketent.com UNIT MIX OCT 2009 Type No. Units Sq Ft Total SqFt Rent 2BR / 1BA ,000 $400 2BR / 1BA ,750 $450 2BR / 1BA $525 2BR / 1BA ,500 $500 PROPERTY INFORMATION Units: 24 Avg Size: 750 Date Built: Rentable Sq. Ft.: ,000 Acreage: 0.46 Occupancy Oct 09: 54% Total Rent Rent/SF $6,400 $0.53 $2,250 $0.60 $525 $0.70 $1,000 $0.67 HOUSTON INCOME PROPERTIES, INC. Jim Hurd, Broker jhurd@houstonincomeproperties.com Total / Avg ,000 $424 $10,175 $ /30/2009

2 Key Map: 494G Construction Quality: D ( Rounded to $60,000) Recent Foreclosure, a value enhancement opportunity & 5314 Hershe is a 24 unit garden style apartment complex located on Hershe St., just east of downtown Houston. Blue collar area. The property was foreclosed the first week Assumption of September According to the new management, the property is in fair overall condition. There are 11 units with no appliances, A/C/heating units or blinds. or All Many cashof the gas water heaters are missing or in need of replacement. Several of the units have significant water damage to sheetrock and ceilings. Second story units have laminate flooring, while the first floor units have ceramic tile. There appears to be some minor slab movement in several of the first floor units. Occupied units have updated cabinets and appliances in apparently good condition. The roofs appear to be in good condition as well. A substantial rehab had been performed in the past. Strong management will lease this asset up! Comments Taxing Authority - Harris County PLEASE DO NOT VISIT THE SITE WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER. Property Tax ID: Rate / $100 This is an "All Cash" Offering Recent foreclosure Close to a bus line. Located off I-10 just east of Hwy 59 North A recent inspection revealed updated cabinets, decent appliances, Houston ISD Harris County, Texas Harris County Flood Central Port of Houston Authority Harris County Hospital District Harris County Education Department Houston Community College City of Houston Total 2009 Rate $ faux wood (vinyl) floors, apparently decent pitched roofs 2009 Preliminary Tax Assessment APPROXIMATE TOTAL TAX $502,468 $12,681 FINANCIAL INFORMATION PROPERTY INFORMATION TOTAL COLLECTIONS (Approximately 54 % Occupancy as of Oct '09) Asking Price: $255,000 Age: 1955 Avg Mo 2009 $5,016 Avg Mo 2009 Terms: All Cash Elec Meter: Indiv-E Jan 2009 $4,025 Jan 2009 Loan: A/C Type: Indiv Feb 2009 $6,550 Feb 2009 Price/Unit: $10,625 Water RUBS March 2009 $4,700 March 2009 Price/SqFt.: $14.17 Wiring: Copper April 2009 April 2009 Equity: $255,000 Roof: Pitched May 2009 May 2009 Paving: Asphalt June 2009 June 2009 Units 24 Materials: Brick/Stone July 2009 July 2009 Aug 2008 Avg Size 750 # of Stories: 2 Aug 2008 $4,220 Sept 2008 Land Area: 0.46 Parking: Sept 2008 $3,680 Oct 2008 Rentable Sq. Ft. 18,000 Buildings: 6 Oct 2008 $5,050 Nov 2008 Occupancy: 54% Units/Acre: Nov 2008 $7,770 Dec 2008 MORTGAGE INFORMATION Dec 2008 $4,129 Mortgage Balance Amortization Period Disclaimer: The information contained in this Memorandum reflects P & I material from sources deemed to be reliable, including data such as Type operating statements, rent rolls, etc. provided by the Owner. Assumable Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Monthly Escrow Every prospective purchaser should verify the information and rely on his Due Date accountants or attorneys for legal and tax advice. This offer is "As-Is, Interest Rate Where-Is". Answers to specific inquiries will have to be supplied by the Yield Maintenance Owner and are available upon request. Rates of return vary daily. No Origination Date representations are made concerning environmental issues, if any. Transfer Fee 11/30/ Hershe.xls

3 ( Rounded to $60 000) DIRECTIONS TO PROPERTY: From downtown houston - Take I 10 E towards Beaumont. Exit Lockwood Dr. Make a left onto Lockwood Dr. Keep straight. Make a left onto Hershe St. The property is on the left. UNIT MIX 4/09 SALES COMPARABLES (Sorted by Price/Sq. Ft.) RENT COMPARABLES (November 2009 O'Connor Online) Property Name Date Cost Cost Yr. Price Total SF Sold Unit SF Blt Units Property Name Yr Blt Occ #Units Avg SF Avg Rent P/SF Oak Brook Gardens 08/31/09 $1,350, ,576 $6,081 $ Wheatley Plaza % $ Wheatley Manor % $ Antoine Village 08/11/09 $1,100, ,834 $7,432 $ Kennedy Place % $ Cleme Manor % $ Oaks on Antoine 11/03/09 $3,350, ,200 $19,940 $ Central Apts 05/08/09 $1,850,000 56,475 $23,125 $ Averages $1,912, ,271 $12, & 5314 HERSHE $ Valuation $255,000 18,000 $10,625 $ & 5314 HERSHE % $424 Totals/Averages Comps 79% $ Sub-Market Averages 88% 9, $ Houston Market Avgs 85% 546, $ $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 $600 $500 $400 $300 $200 $100 $0 11/30/ Hershe.xls

4 HOUSTON, TEXAS. Houston, deemed the Bayou City, is the nation s fourth largest city, home to 2 million people and a hub of international businesses. It is a vibrant international city that heartily enjoys its tradition of being a place of firsts. Since its founding more than 170 years ago, the city now spreads over three counties: Harris, Fort Bend and Montgomery. Harris County is the nation s third largest county. Houston is home to the first major freeway in Texas and has two major airports, Bush Intercontinental Airport and William P. Hobby Airport. Located only 50 miles from the Gulf of Mexico, the city has a diverse population, including 34 percent Hispanic, 44 percent Caucasian, 12 percent African American and 6 percent Asian, according to the 2007 census. Houston is well known for the Texas Medical Center, home to 42+ nonprofit institutions, and is the largest medical center in the world. The city is branded as the U.S. energy headquarters with more than 5,000 energy related U businesses, and The Port of Houston, a $15 billion petrochemical complex. With a four discipline theater district, a 15 institution museum district, a multitude of parks, and recreational dwellings, such as golf courses and boat basins, and poised economic growth, it's no wonder why Houston has been ranked among the top cities to live and work in DEMOGRAPHICS - Geography 1 Mile 14% White Black 17% Asian 60% 8% 2% Other Hispanic 2009 DEMOGRAPHICS - Geography 1 Mile Median Income Subject: $23,269 Median Income Houston: $61,429 Total Housing Units: Owner Occupied: Renter Occupied: Vacant Units: 7, % 42.40% 19.80% Unit Mix by Unit Type Unit Mix by Unit Size 2BR / 1BA, 769 1BR / 1BA, Hershe.xls

5 Physical Information Number of Units 24 Value Based on Income Approach* $219,597 Lender Est Mkt Rent (Oct-09) Avg Unit Size 750 Price Per Unit $9,150 Int Rate Est Mo Collections 2009 Net Rentable Area 18,000 Price Per Sq. Ft. $12.20 Loan Amount Est Occupancy (Oct-09) Land Area (Acres) Stabilized NOI $34,260 Amortization Est Ins per Unit per Yr Units per Acre Stabilized Value 10.% $342,597 Monthly P & I Property Tax Information Date Built 1955 Est $3000/unit $72,000 Est Res for Repl/Unit/Yr Tax Rate (2009) Water Meter / Master RUBS Est. Entrepreneurial Profit $36,000 Yield Maintenance 2009 Prelim Tax Assessment Elec Meter Indiv-E Est. Carry to Stabilization $15,000 Est 2009 Taxes Roof Style Pitched "All-In" Cost (Rehab+Profit+Carry) $342,597 Est 2009 Tax/Unit HVAC System Indiv *Valuation is Asking less Rehab, Profit and Carry INCOME PRO-FORMA INCOME Current Street Rent with a 5.0% Increase 128,205 Estimated Water RUBS at % of Water BiIl 0 Estimated Other Income 4,200 Estimated Gross Scheduled Income 132,405 Estimated Loss to Lease (2.0% of Total Street Rent) (2,648) 2% Estimated Vacancy (7% of Total Street Rent) (9,268) 7% Estimated Concessions and Other Rental Losses (2% of Total Street Rent) (2,648) 2% Estimated Total Rental Income 117,840 ESTIMATED TOTAL PRO-FORMA INCOME 117,840 Estimated 2009 Income EXPENSE Financial Information MODIFIED ACTUALS Modified Actuals $60,186 Current Loan Parameters PRO-FORMA Estimated 2009 Operating Information $10,684 / Mo $ / Unit / Yr $175 / Unit / Yr $11,034 / Mo 89% $9,820 / Mo Fixed Expenses Fixed Expenses Estimated Fixed Expenses Taxes $12,681 $528 per Unit 2009 Tax Rate & 2009 Prelim Assmt $12,681 $528 per Unit 2009 Tax Rate & 2009 Prelim Assmt Insurance $8,400 $350 per Unit Estimated $8,400 $350 per Unit Estimated Total Fixed Expense 21,081 $878 per Unit 21,081 $878 per Unit Utilities Utilities Estimated Utilities Electricity $1,398 $58 per Unit $1,200 $50 per Unit Water $8,616 $359 per Unit $7,700 $321 per Unit Trash $2,261 $94 per Unit $1,500 $63 per Unit Total Utilities 12,274 $511 per Unit 10,400 $433 per Unit Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing $4,729 $197 per Unit $5,000 $208 per Unit Repairs & Maintenance $11,829 $493 per Unit $14,000 $583 per Unit Labor Costs $2,665 $111 per Unit $20,000 $833 per Unit Contract Services $ per Unit $ per Unit Management Fees $9, % $400 per Unit $5, % $246 per Unit 28,823 44,900 $1,201 per Unit $1,871 per Unit Total Operating Expense 62,178 $2,591 per Unit 76,381 $3,183 per Unit Reserve for Replacement 7,200 $300 per Unit 7,200 $300 per Unit Total Expense 69,378 $2,891 per Unit 83,581 $3,483 per Unit Net Operating Income (Actual Underwriting) Total Price (9,192) 219,597 "As Is" Value 34, ,597 "All In" Cost Cap Rate Debt Equity Debt Service Cash Flow Cash on Cash -4.19% 219, % 0 342, , % NOTES: PRO FORMA: Income is Pro Forma as Noted. Taxes were calculated using 2009 est assessed value x the 2008 rate. Insurance is estimated. Management Fees calculated as 5% of Gross Income, Other expenses are Estimated for the proforma. $10,175 $5,016 54% $ $502,468 $12,681 $528 DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period. 11/30/ Hershe.xls

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7 ( Rounded to $60,000) FEMA Zone X Areas of Lowest Risk UNIT MIX 4/09

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