Investment Summary Arizona Investment Opportunity August 2014 This document is not, and under no circumstances is to be considered as a public offering of securities This document is for information purposes only for persons who may qualify as purchasers under certain exemptions from prospectus requirements contained in securities legislation in jurisdictions where the securities referred to in summary form hereunder may be offered No securities commission or similar regulatory authority has passes on the merits of the securities referred to hereunder and any representation to the contrary is an offence
Investment Summary Scottsdale Haciendas 985 N Granite Reef Rd, Scottsdale, Arizona Executive Summary Western Wealth Capital III Limited Partnership is proud to offer investors an opportunity to purchase a cash-flowing property in one of North America s hottest real estate markets The limited partnership intends to acquire Scottsdale Haciendas - 79 townhomes and condos each with an individual garage in the exclusive Scottsdale, Arizona Investment Highlights Increase NOI - By integrating current market conditions with our assumptions (detailed below), we believe, the Net Operating Income (NOI) has the potential to increase from $525,000 to $740,000 in a 55 month period Incredible Price - Purchasing in an exclusive location at 50% of peak market sales price On May 30, 2014 a unit within this complex sold for $147,000 yet we are purchasing these units at a discounted rate averaging $118,000 per unit At peak market in 2007, these units were selling for $225,000 per unit Excellent Financing Leverage - Western Wealth Capital Management LTD has secured 75% financing Multiple Exit Options - Flexibility to sell units in bulk or individually to home buyers, snow birds and investors Annual Cash Distributions - The partnership plans to distribute 80%+ of free cash flow annually The projected annual returns are as follows: NET Cash Flows Cash Flow Per Year Return Year 1 Year 2 Year 3 Year 4 Year 5 $256,757 82% $331,521 105% $351,106 111% $371,288 118% $392,086 124% Total Cash Flow This will end up being the best buying opportunity in your lifetime - Elliott Pollack, Economist speaking on the state of the Metro Phoenix market $1,702,758
Property Description The Scottsdale Haciendas Condominiums and Townhomes located at 985 N Granite Reed Rd in Scottsdale Arizona is a turnkey offering for 79 out of 180 units with HOA control that provides an investor the opportunity to generate excellent cash flow with the added exit opportunity of individual sales as the housing market continues to excel Built in 1985 and converted to condos in 2006, the offering consists of condo and townhome units renovated with condo grade finishes and a few having private backyards With an emphasis on quality construction, extensive renovations were completed to all units with interior and exterior upgrades including constructing enclosed garages with full-size washer/dryers and storage space Many of the units have fully upgraded finishes including new cabinets, ceilings, fixtures, granite counters, tiled entry, kitchen, dining room, halls & bathrooms, upgraded carpet and pad in living room & bedrooms, mirrored closet doors and two-tone paint Total Units Number of Townhomes Number of Condominiums Year Built Net Rentable Square Feet 79 34 45 1985 Renovated 2006 100,090 Property Highlights Townhomes/Condominiums that cash flow like an apartment complex - Unique opportunity to buy condominiums and townhomes, in bulk, that offer cash flow distributions similar to an apartment complex but with the added benefit of being able to sell them individually to home buyers, snow birds and investors Desirable Location - Situated between the burgeoning economic epicenters of Downtown Scottsdale and Downtown Tempe, the property is within a 5-10 minute drive from the valley s premier employment and entertainment options with over $1 billion in new development underway High-density employment corridor - Minutes from some of the strongest and most exclusive employers in Metro Phoenix (Apple, General Dynamics, Microsoft) Privacy - Individual garages, personal patios and outside storage provide tenants with privacy and space they need Location Centrally located among some of Metro Phoenix strongest employers places Scottsdale Haciendas in constant demand for housing metro Phoenix market strength: 2nd fastest growing state at 109% (US overall 29%) 8th strongest US state for job growth Greater Phoenix population to grow 42% over next 20 years or 3 times the national average
Business Plan The business plan involves increasing the net operating income from $525,000-$740,000 over a five-year period The 3 drivers to increase the net operating income are 1) increasing rents within to normalize with the market 2) purchase washers and dryers and eliminate large monthly rental expense 3) improve the appearance of the building and property to enhance its premium appeal Adjust rents to market values Rents within the rent roll vary for identical units up to $200 per month This property has been managed remotely from Texas keeping management out of touch with current market rates and inconsistent with rent increases We will normalize rents within the community, simply increasing to rents already being charged Additionally, the property will be managed by a local property management firm with which we have a long and trusted relationship Purchase washer & dryer units Each unit offers a washer and dryer The washer/dryer unit is currently rented from an external company for an extremely high monthly cost The cost of renting these units as opposed to purchasing the units will increase the value of the property over $460,000 for the cost of $47,000 Invest in external appearance of the building and property The property is in need of cosmetic updates to continue to attract our desired tenant base These cosmetic updates include new signage, paint and pool furniture Strong Cash Flow + Washers/Dryers Purchased Cash Investment $3,150,000 June 30, 2014 NOI $525,413 Year 1 Year 2 Year 3 Year 4 Year 5 Starting NOI $525,413 $590,527 $680,291 $699,876 $720,058 Annual Rent Increase $29,855 $86,216 $29,116 $29,990 $30,889 W/D Expense Removed $13,000 $13,736 Expense Adjustment $22,260 ($10,188) ($9,532) ($9,808) ($10,092) NEW NOI $590,527 $680,291 $699,876 $720,058 $740,856 New Property Value $10,736,859 $12,368,936 $12,725,018 $13,091,964 $13,470,103 Investment Timeframe Expected timeframe of ownership for Scottsdale Haciendas is 3-5 years Property Management Allison Shelton will oversee the day-to-day operations Allison Shelton currently employs approximately 325 people in 5 states and manage real estate investments valued in excess of $12 billion Investment Management & General Partner The general partner is Western Wealth Capital Management LTD and the principals are Janet LePage and Dave Steele They will be responsible for the strategic and financial direction on Scottsdale Haciendas Janet LePage has completed over 65 real estate projects in Arizona Dave Steele has developed over 85 projects, valued at over $1,500,000,000 and has helped individual investors acquire over 10,000 investment properties in Canada and the United States Together, Janet and Dave have over 30 years of experience in acquiring, managing, repositioning and divesting multi-family real estate
Equity Required Western Wealth Capital III Limited Partnership is looking to raise $3,150,000 by October 10th, 2014 The breakdown of the equity is as follows: Investment Breakdown COST Purchase Price $9,250,000 Mortgage ($6,900,000) Down Payment $2,350,000 Legal & Closing Costs $238,744 Management Fees $319,000 Deposit Accounts $67,450 Reserves & Capital Improvements $174,806 TOTAL EQUITY REQUIRED $3,150,000 Investor Worksheets Using the assumptions outlined in this document, Western Wealth Capital Management LTD believes investors could realize returns as high as 25% per year Below is the breakdown of the modeled profits on a three year and five year investment timeframe 3 Year Investor Worksheet Cash Investment $3,150,000 New Property Value $12,725,018 Sales Costs ($381,751) Initial Costs ($10,050,000) Total Cash Flow $939,385 Total $3,232,653 Management Fee ($894,161) Total Profit $2,338,492 Return on Investment 74% Annual Return on Investment 25% 5 Year Investor Worksheet Cash Investment $3,150,000 New Property Value $13,470,103 Sales Costs ($404,103) Initial Costs ($10,050,000) Total Cash Flow $1,702,758 Total $4,718,759 Management Fee ($1,292,790) Total Profit $3,425,969 Return on Investment 109% Annual Return on Investment 22% Limited Partnership Partnership Name - Western Wealth Capital III Limited Partnership Western Wealth Capital III Limited Partnership (WWC III) has been organized to enable investors to realize strong rates of return through distributions and capital appreciation by participating in the acquisition and management of an apartment building located in the US
Private Placement Terms General Issuer - Western Wealth Capital III Limited Partnership (WWC III) Minimum Subscription - $150,000 USD Fees Fees paid to the General Partner: Acquisition fee - 1% of the total costs of the acquisition of the identified asset to be paid upon closing of the identified asset Asset management fee - 3% of monthly rents Mortgage guarantee fee - 1% of the amount guaranteed for any acquisition loan, financing or refinancing Disposition fee - 5% paid upon liquidation of the identified asset, payable only on the amount of the increase over the purchase price of the identified asset Fees paid for capital raising: Capital raising fees paid to individuals or companies who qualify under the relevant securities legislation in an amount up to 5% of the funds raised by such individuals or companies Any such capital raising fees will be paid upon closing of acquisition of the identified asset Annual Distributions The partnership plans to distribute 80% of free cash flow annually net Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Cash Flow $256,757 $331,521 $351,106 $371,288 $392,086 Per Year Return 82% 105% 111% 118% 124% Total Cash Flow $1,702,758 Disposition Waterfall The Limited Partners will be paid back their initial investment first Limited Partners will then be paid 75% of the profit The General Partner will then receive 25% of the profit Assumptions Below are a series of assumptions used by Western Wealth Capital Management LTD to model the costs and create the worksheets laid out in this document Annual rent increase average of 3% per year after 24 months of ownership Occupancy remains at an average of 96% per year Sales commissions at time of sale are 3% Asset value at time of sale is calculated using a 55% CAP rate We will purchase 79 washer and dryer units for $600 per set
Risk Factors Investment in the Partnership involves a high degree of risk and is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in the Partnership No assurance, representation or warranty can be given that the Partnership s investment objectives will be achieved or that investors will receive a return of their capital An investment in Units is subject to risk Standard risks applicable to investments of this nature include: No market for Units - There is currently no resale market for these Units and it is not guaranteed that any market will develop The Units are not transferable without the approval of General Partner and in compliance with applicable securities laws and regulations Vacancy Rates - The apartment building business relies on a steady supply of good quality tenants A shortage of quality tenants due to an economic down turn or job losses in a given market place could result in higher than expected vacancy and lower than expected revenue No guaranteed return - The projected returns described in this Investment Summary are not guaranteed An investment in Units is not suitable for investors who cannot afford to assume significant risks in connection with their investments Tax matters - Investors should consult their own tax advisors for advice with respect to the tax consequences of an investment in the Units based on their particular circumstances Contact Us Please visit our website to find out more on how to participate in this exceptional opportunity: wwwwesternwealthcapitalcom