SUNSHINE VILLAGE 1608 Sam Houston Drive, Harlingen, Texas | Offering Memoranda TABLE of CONTENTS

SUNSHINE VILLAGE 1608 Sam Houston Drive, Harlingen, Texas | Offering Memoranda TABLE OF CONTENTS

Investment Summary ��04

Property Information ��10

Apartment Mkt Comparable ��20

Pricing & Financial Analysis ��26

LEAD J. MICHAEL MOFFITT MANAGING PARTNER +1 512 584 4813 [email protected]

J. MICHAEL WATSON MANAGING PARTNER +1 512 557 5060 [email protected]

MARK V. DIEBOLD SENIOR DIRECTOR +1 512 667 4380 [email protected]

NICHOLAS T. LING SENIOR DIRECTOR +1 469 478 0772 [email protected]

RICHARD A. MIRELES SENIOR DIRECTOR +1 512 736 2449 [email protected]

201 W. 5TH STREET 1100 AUSTIN, TX 78701 SUNSHINE VILLAGE

INVESTMENT SUMMARY

4 INVESTMENT SUMMARY SUNSHINE VILLAGE

SUNSHINE VILLAGE

INDEPENDENCE COMMERCIAL ADVISORS 5 SUNSHINE VILLAGE

HIGHLIGHTS 1971 / 137,460 2020 RENTABLE SF YEAR BUILT / RENOVATED

171 804 UNITS AVG UNIT SF

93.6% 6.37 OCCUPANCY ACRES

$1.16 $930 AVG MKT RENT/SF AVG MKT RENT

HARLINGEN, TX 1608 SAM HOUSTON DRIVE, 78550

6 SUNSHINE VILLAGE

Value Enhancement with Upgraded Units Achieving 1 $350 Premium

Expense Reduction with Stabilization and no 2 Deferred Maintenance

Convenient Location Along Interstate 69E Corridor in 3 South Texas

Approximately $3,500,000 in Capital Expenditures 4 and Improvements

Potential Double-Digit Returns with Attractive 5 Financing Options

INDEPENDENCE COMMERCIAL ADVISORS 7 INVESTMENT SUMMARY

Independence Commercial Advisors is pleased to announce the exclusive listing of Sunshine Village, a Class-B apartment community in Harlingen, Texas. This 171-unit community has been completely renovated with ownership spending $3,500,000 in total capital expenditures. The luxurious upgrades feature one-bedroom and two-bedroom units with faux hardwood flooring, new granite countertops, black energy efficient appliances, designer cabinetry, upgraded lighting, and 40 units with washer/ dryer connections. Additionally, all roofs were replaced or repaired in 2020 and all parking area’s have new asphalt over layment. Located just off South 77 Business Highway and adjacent to the Harlin- gen Medical District, this property presents an investor with the opportunity to acquire a strategically located and stabilized property in the market. Harlingen offers all the advantages of a Texas location with proximity to Northern Mexico. See why major firms like United Healthcare, Dish Network, Penske Logistics, United Launch Alliance, Panasonic, Cardone Industries, and many others have established profitable and productive homes in Harlingen, Texas. Although agriculture is still very important to the Harlingen economy, Harlingen has veered further away from the agriculture-driven economy and has diversified their employment market, adding the health care and telecommunications industries. Three of the top 10 employers in Harlingen are in the medical field. Health care and related services are destined to play a key role in the future of Harlingen with the Regional Academic Health Center, a branch of the University of Texas-San Antonio Health Science Center; the recent opening of the South Texas Veterans Administration Health Care Center at Harlingen and the physician-owned Harlingen Medical Center all being important elements. Finally, the newly created University of Texas – Rio Grande Valley will include a Medical School – and Harlingen will play an important role in its location. Telecommunications is also a growing industry in Harlingen. Tapping into Harlingen’s talented and bi-lingual workforce are United Healthcare, Dish Network, Qualfon, Time Warner Cable and Advanced Call Center Technologies, calling Harlingen, Texas home. Texas State Technical College in Harlingen is known for its technology programs. SUNSHINE VILLAGE

INDEPENDENCE COMMERCIAL ADVISORS 9 SUNSHINE VILLAGE

PROPERTY INFORMATION

10 INVESTMENT DESCRIPTION SUNSHINE VILLAGE

SUNSHINE VILLAGE

INDEPENDENCE COMMERCIAL ADVISORS 11 SUNSHINE VILLAGE

SUNSHINE VILLAGE

COMMUNITY AMENITIES • Three Sparkling Pools • Manicured Landscaping • Laundry Facilities Onsite • Playground • BBQ Area • High Speed Internet Included • Pet Friendly

UNIT FEATURES • Fully Renovated • Spacious Floor Plans • Granite Countertops • Carpet / Tile • Faux Hardwood Floors* • Dishwashers

*select units

12 INVESTMENT DESCRIPTION SUNSHINE VILLAGE

PROPERTY SUMMARY Number of Units 171 Units Year Completed 1971 Year Renovated 2020 Stories 2 Net Rentable Area 137,460 SF Average Unit Size 804 SF

SITE Address 1608 Sam Houston Drive Harlingen, Texas 78550 County Cameron County Size/Density 6.37 Acres / 26.84 Units per Acre Elementary School: Treasure Hills Elementary School Schools Middle School: Coakley Middle School High School: Harlingen High School Parking Parking Spaces

PROPERTY TAX INFORMATION Parcel Size 6.37 Acres Density 27 units/acre Parcel ID 65877 2020 Assessed Value $5,034,587 Total Tax Rate 2.30% 2020 Taxes $116,093

INDEPENDENCE COMMERCIAL ADVISORS 13 SUNSHINE VILLAGE

DEMOGRAPHICS

14 INVESTMENT DESCRIPTION SUNSHINE VILLAGE

DEMOGRAPHICS

2-MILE 5-MILE 10-MILE POPULATION 2025 Projection 33,958 96,992 156,705 2020 Population 33,905 96,337 155,381 2010 Population 34,367 94,922 151,658 Growth 2020-2025 0% 0.1% 0.2% Growth 2010-2020 -0.1% 0.1% 0.2% RESIDENTS 2025 Projection 11,123 31,199 48,468 2020 Household 11,104 30,997 48,075 2010 Household 11,239 30,572 46,989 Growth 2020 - 2025 0% 0.1% 0.2% Growth 2010 - 2020 0.3% 0.5% 0.6% Owner Occupied 5,736 19,909 33,821 Renter Occupied 5,367 11,088 14,254 HOUSING UNITS Household Income Base $52,724 $52,486 $55,151 <$25,000 4,016 11,072 16,342 $25,000 - $50,000 2,824 7,749 11,974 $50,000 - $75,000 2,069 5,540 8,627 $75,000 - $100,000 940 2,911 4,709 $100,000 - $125,000 426 1,337 2,094 $125,000 - $150,000 292 981 1,707 $150,000 - $200,000 247 902 1,728 $200,000+ 289 505 895 Average Household Income $36,007 $37,210 $39,058

INDEPENDENCE COMMERCIAL ADVISORS 15 SUNSHINE VILLAGE

Harlingen Medical District Valley Baptist Medical Center (5,000+ Employees) WONDERLAND OF AMERICAS MALL

FREDERICKSBURG ROAD

BANDERA ROAD

CULEBRA ROAD

WOODLAWN LAKE PARK

16 INVESTMENT DESCRIPTION SUNSHINE VILLAGE

Harlingen Medical District Valley Baptist Medical Center (5,000+ Employees) 5 MINUTES HARLINGEN MEDICAL DISTRICT VALLEY VISTA MALL

FREDERICKSBURG ROAD 10 MINUTES VALLEY HIGH INT’L AIRPORT TEXAS STATE TECHNICAL COLLEGE MARINE MILITARY ACADEMY

DOWNTOWN WOODLAWN SAN ANTONIO LAKE PARK AND THE PEARL

INDEPENDENCE COMMERCIAL ADVISORS 17 SUNSHINE VILLAGE

18 INVESTMENT DESCRIPTION SUNSHINE VILLAGE | 860-939 SF | 600-762 SF 2 BEDROOM, 1 BATH 1 BEDROOM, | 2 1 BEDROOM, 1 BATH 1 BEDROOM, | 1 THE ONE THE TWO THE

INDEPENDENCE COMMERCIAL ADVISORS 19 SUNSHINE VILLAGE

APARTMENT MARKET

20 APARTMENT MARKET SUNSHINE VILLAGE

SUNSHINE VILLAGE

INDEPENDENCE COMMERCIAL ADVISORS 21 SUNSHINE VILLAGE

RENT COMPARABLES SUMMARY

PROPERTY # UNITS YEAR BUILT OCCUPANCY AVG. SF MKT. RENT EFF. RENT/SF

Sunshine Apartments 171 1971 93.60% 804 $930 $1.16

Sierra Apartments 208 1985 90.00% 813 $722 $0.89 1

Diamante Apartments 103 1973 98.10% 842 $693 $0.82 2

Oak Terrace Apartments 240 1994 97.90% 962 $695 $0.72 3

Rosemont of Highland 174 2002 90.80% 1,095 $789 $0.72 4 Gardens

Palm Terrace Apartments 124 1982 95.00% 1,058 $715 $0.68 5 TOTALS / AVERAGES 849 94.3% 954 $723 $0.77

NOTES: Rents are based on market advertised rents

22 APARTMENT MARKET SUNSHINE VILLAGE

4 3

1 2

INDEPENDENCE COMMERCIAL ADVISORS 23 SUNSHINE VILLAGE

FLOOR PLAN ANALYSIS

1 BR ANALYSIS MARKET GROSS UNIT TYPE # UNITS SIZE SF TOTAL SF RENT/SF COMP # RENT POT

1 BR / 1 BA 66 662 43,692 $885 $58,410 $1.34 S

1 BR/ 1 BA 31 625 19,375 $625 $19,375 $1.00 2

1 BR / 1 BA 112 647 72,464 $644 $72,128 $0.99 1

1 BR / 1.5 BA 8 875 7,000 $765 $6,120 $0.87 S

1 BR / 1 BA 54 854 46,116 $677 $36,558 $0.79 5

1 BR / 1 BA 104 725 75,400 $571 $59,384 $0.79 3

2 BR / 1 BA 55 902 49,610 $686 $37,730 $0.76 4

Total / Avg. 364 771 269,965 $661 $38,549 $0.87

2 BR ANALYSIS MARKET GROSS UNIT TYPE # UNITS SIZE SF TOTAL SF RENT/SF COMP # RENT POT

2 BR / 1 BA 71 868 61,628 $985 $69,935 $1.13 S

2 BR / 1.5 BA 15 900 13,500 $915 $13,725 $1.02 S

2 BR / 2 BA 10 1,024 10,240 $985 $9,850 $0.96 S

2 BR / 2 BA 80 984 78,720 $785 $62,800 $0.80 1

2 BR / 2 BA 64 925 59,200 $715 $45,760 $0.77 2

2 BR / 1 BA 55 902 49,610 $686 $37,730 $0.76 4

2 BR / 2 BA 136 1,144 155,584 $789 $107,304 $0.69 3

2 BR / 1 BA 70 1,216 85,120 $745 $52,150 $0.61 5

Total / Avg. 501 995 513,602 $826 $49,907 $0.84

24 APARTMENT MARKET SUNSHINE VILLAGE

3 BR ANALYSIS MARKET UNIT TYPE # OF UNITS SIZE TOTAL SF GROSS POT RENT / SF COMP # RENT

3 BR / 2 BA 16 1,111 17,776 $951 $15,216 $0.86 1

3 BR / 2 BA 8 1,025 8,200 $775 $6,200 $0.76 2

3 BR / 1 BA 1 1,400 1,400 $1,015 $1,015 $0.73 S

3 BR / 2 BA 62 1,112 68,944 $793 $49,166 $0.71 4

Total / Avg. 87 1162 96,320 $884 $17,899 $0.76

INDEPENDENCE COMMERCIAL ADVISORS 25 SUNSHINE VILLAGE

FINANCIAL ANALYSIS

26 FINANCIAL ANALYSIS SUNSHINE VILLAGE

SUNSHINE VILLAGE

INDEPENDENCE COMMERCIAL ADVISORS 27 SUNSHINE VILLAGE

SUNSHINE VILLAGE APARTMENTS

Address 1608 Sam Houston Street Harlingen, Texas 78550

County Cameron County 1 BR 43% Number of Units 171 Units Year Built 1971 / 2020 Renovations

Rentable Area 137,460 3 BR 0%1% Site Size 6.37 Acres

Density 26.84 Units per Acre 2 BR 56% Occupancy* 93.6%

*As of May 25, 2021

UNIT MIX MARKET RENT LEASE RENT

# OF MARKET MARKET MONTHLY ANNUAL # UNITS LEASE UNIT TYPE SIZE SF TOTAL SF LEASE RENT/SF UNITS RENT RENT/SF RENT RENT OCCUPIED RENT

1 BR / 1 BA 66 662 43,692 $885 $1.34 $58,410 $700,920 32 $586 $0.78 1 BR / 1.5 BA 8 875 7,000 $765 $0.87 $6,120 $73,440 18 $688 $08 .6 2 BR / 1 BA 71 868 61,628 $985 $1.13 $69,935 $839,220 27 $680 $0.79 2 BR / 1.5 BA 15 900 13,500 $915 $1.02 $13,725 $164,700 39 $733 $00 .6 2 BR / 2 BA 10 1,024 10,240 $985 $0.96 $9,850 $118,200 1 $725 $00 .6 3 BR / 1 BA 1 1,400 1,400 $1,015 $0.73 $1,015 $12,180

TOTALS / 171 804 137,460 $930 $1.16 $159,055 $1,908,660 AVERAGES 117 $674 $01 .7

28 FINANCIAL ANALYSIS THE ONE | 1 BEDROOM, 1 BATH | 600-762 SF

THE TWO | 2 BEDROOM, 1 BATH | 860-939 SF SUNSHINE VILLAGE

Hide Unused Rows MARCH 2021 MARCH 2021 MARCH 2021 MARCH 2021 YEAR 1 T-12 ACTUAL T-6 INCOME / T-12 EXPENSES T-3 INCOME / T-12 EXPENSES T-1 INCOME / T-12 EXPENSES PRO FORMA TOTAL PER UNIT PER MONTH TOTAL PER UNIT PER MONTH TOTAL PER UNIT PER MONTH TOTAL PER UNIT PER MONTH TOTAL PER UNIT 0 INCOME Scheduled Market Rent 1,908,660 11,162 $159,055 1,908,660 11,162 $159,055 1,908,660 11,162 $159,055 1,908,660 11,162 $159,055 $1,908,660 $11,162 1 Gain/(Loss) to Lease (365,999) (2,140) (30,500) (374,012) (2,187) (31,168) (401,664) (2,349) (33,472) (406,548) (2,377) (33,879) (187,006) -1.5%

Total Gross Potential $1,542,662 $9,021 $128,555 $1,534,648 $8,975 $127,887 $1,506,996 $8,813 $125,583 $1,502,112 $8,784 $125,176 $1,721,654 $10,068 2 Vacancy (416,420) (2,435) (34,702) (262,100) (1,533) (21,842) (176,620) (1,033) (14,718) (125,580) (734) (10,465) (137,732) -8.0%

Net Rental Income $1,126,242 $6,586 $93,853 $1,272,548 $7,442 $106,046 $1,330,376 $7,780 $110,865 $1,376,532 $8,050 $114,711 $1,583,922 $9,263 3 Other Income 8,088 47 674 4,945 29 412 2,900 17 242 480 3 40 8,250 48

Total Other Income $8,088 $47 $674 $4,945 $29 $412 $2,900 $17 $242 $480 $3 $40 $8,250 $48 Total Operating Income $1,134,329 $6,634 $94,527 $1,277,493 $7,471 $106,458 $1,333,276 $7,797 $111,106 $1,377,012 $8,053 $114,751 $1,592,171 $9,311 25% vs T-6 Income

40% vs T-12 Income

EXPENSES Utilties 149,767 876 12,481 149,767 876 12,481 149,767 876 12,481 149,767 876 12,481 152,762 893 Repairs / Make Ready / Appliances 49,424 289 4,119 49,424 289 4,119 49,424 289 4,119 49,424 289 4,119 85,500 500 4 Payroll & Burden 52,414 307 4,368 52,414 307 4,368 52,414 307 4,368 52,414 307 4,368 128,250 750 5 General & Administrative 10,204 60 850 10,204 60 850 10,204 60 850 10,204 60 850 8,550 50 6 Advertising 5,475 32 456 5,475 32 456 5,475 32 456 5,475 32 456 17,100 100 7 Property Management Fee 1,000 6 83 1,000 6 83 1,000 6 83 1,000 6 83 47,765 3.0% 8 Real Estate Taxes 116,868 683 9,739 116,868 683 9,739 116,868 683 9,739 116,868 683 9,739 116,868 683 9 Property Insurance 34,636 203 2,886 34,636 203 2,886 34,636 203 2,886 34,636 203 2,886 82,422 482

Total Operating Expenses $419,787 $2,455 $34,982 $419,787 $2,455 $34,982 $419,787 $2,455 $34,982 $419,787 $2,455 $34,982 $639,218 $3,738 NET OPERATING INCOME $714,542 $4,179 $59,545 $857,706 $5,016 $71,476 $913,489 $5,342 $76,124 $957,225 $5,598 $79,769 $952,954 $5,573

Unless otherwise noted on the footnotes page, Independence Commercial Advisors Pro forma figures are based on a 2.0% increase over the respective Other 1 figure.

30 FINANCIAL ANALYSIS SUNSHINE VILLAGE

PRO FORMA FINANCIAL MODEL INCOME ASSUMPTIONS PRO FORMA OPERATING EXPENSE ASSUMPTIONS

1 Scheduled Market Rent 6 Property Management Fee The Scheduled Market Rent of $1,091,604, or $90,967 per month, is based on the current The pro forma Management Fee is 5.0% of Total Operating Income. leased rent shown on the Rent Roll dated 1-1-21. 7 Real Estate Taxes 2 Gain/(Loss) to Lease The pro forma assumes half of the current under-market rents will be increased to market PROPERTY TAXES rate, thus reducing our Loss to Lease by 50%. State Texas 2020 Tax Value $4,340,972 County Cameron Assessed Value $4,340,972 3 Vacancy City San Benito Millage Rate 23.059 mills The pro forma assumes vacancy equivalent to -5.0% of the Gross Potential Income. Real Property Tax $100,098 General & Administrative 4 Tax Assessment Ratio 100% Stormwater Fees $0 The General & Administrative Expenses are projected $50/unit. Tax Parcel ID Number(s) 1-000-000.000 Property Tax Rebate $0 5 Advertising Personal Prop/Bus Tax $0 The Advertising Expenses are projected at $100/unit. ** Based on a contested and approved reduction2019 Total Property Taxes $100,098

8 Property Insurance The Pro Forma Insurance expense is projected to be 2.0% above the trailing 12 figures.

INDEPENDENCE COMMERCIAL ADVISORS 31 SUNSHINE VILLAGE

SUNSHINE VILLAGE APTS. NEW DEBT

TARGET Price $14,000,000 VALUE-ADD / CAPITAL NEEDS ASSESSMENT Per Unit $81,871 DESCRIPTION NUMBER COST PER UNIT TOTAL Per Square Foot $101.85 Unit Upgrades 0 $0 $0 Prepayment Penalty $0 Additional Capital Needs $0 $0 Net to Seller $14,000,000 Total Value-Add / Capital Needs $0 $0 Net to Seller Per Unit $81,871

DEBT YEAR ONE PRO FORMA CAP RATE AND YIELDS Loan Amount $10,500,000 LTV 75.0% 20% Equity Required $3,500,000 Value-Add/Capital Needs $0 Total Equity Required $3,500,000 18% Monthly Payments (P&I) ($45,697) Monthly Payments (I/O) ($28,438) 16% Loan Constant 5.2% 17.48%

PRO FORMA INCOME / EXPENSES 14% Net Operating Income $952,954 Total Debt Service (P&I) ($548,360) Cash Flow $404,594 12% Year One Cap Rate 6.81% Cash on Cash Return (P&I) 11.56% 10% Cash on Cash Return (I/O) 17.48% 11.56% Internal Rate of Return (5 Year Hold) 27.93%

Debt Coverage Ratio (P&I) 1.74 8%

T-1 INCOME / T-12 EXPENSES Net Operating Income $957,225 6% Total Debt Service (P&I) ($548,360) 6.81% Cash Flow $408,865 4% Trailing Cap Rate 6.84% Cash on Cash Return (P&I) 11.68% Cash on Cash Return (I/O) 17.60% 2% Debt Coverage Ratio (P&I) 1.75 Debt Coverage Ratio (I/O) 2.81 0%

T-3 INCOME / T-12 EXPENSES TARGET 0.00% Net Operating Income $857,706 0.00% 0.00% 0.00% 0.00% 0.00% Total Debt Service (P&I) ($548,360) Pro Forma Cap Rate Cash on Cash Cash on Cash (I/O) Cash Flow $309,346 Trailing Cap Rate 6.13% Cash on Cash Return (P&I) 8.84% Cash on Cash Return (I/O) 14.76% Debt Coverage Ratio (P&I) 1.56 Debt Coverage Ratio (I/O) 2.51

T-6 INCOME / T-12 EXPENSES Net Operating Income $913,489 Total Debt Service (P&I) ($548,360) Cash Flow $365,129 Trailing Cap Rate 6.52% Cash on Cash Return (P&I) 10.43% Cash on Cash Return (I/O) 16.35% Debt Coverage Ratio (P&I) 1.67 Debt Coverage Ratio (I/O) 2.68

T-12 ACTUAL Net Operating Income $714,542 Total Debt Service (P&I) ($548,360) Cash Flow $166,182 Trailing Cap Rate 5.10% Cash on Cash Return (P&I) 4.75% Cash on Cash Return (I/O) 10.67% Debt Coverage Ratio (P&I) 1.30 Debt Coverage Ratio (I/O) 2.09

32 FINANCIAL ANALYSIS SUNSHINE VILLAGE

SUNSHINE VILLAGE APTS. NEW DEBT

OFFERING SUMMARY PROPOSED LOAN TERMS INTERNAL RATE OF RETURN Price: $14,000,000 Value: $14,000,000 Year 5 NOI: $1,243,712 Price per Unit: $81,871 Loan Type: Fixed Year 6 NOI (3.0% over Year 5): $1,281,023 Price per Sq. Ft.: $102 Loan to Value: 75% Terminal Cap Rate: 8.00% Cap Rate: 6.81% Loan Amount: $10,500,000 Sale Price: $16,012,786 Number of Units: 171 Interest Rate: 3.25% Sale Price/Unit: $93,642 Rental Sq. Ft.: 137,460 Amortization (Years): 30 Less: Sales Expense (2.0%): ($320,256) Market Rent per Unit: $930 Term (Years): 10 Less: Mortgage Balance: ($10,500,000) Market Rent per Sq.Ft.: $1.16 Interest Only (Years): 5 Net Proceeds: $5,192,530 Expense Ratio Year 1: 40.15% Monthly P&I Payments: $45,697 Net Proceeds/Unit: $30,366 Expense per Unit: $3,738 Monthly I/O Payments: $28,438 IRR - Levered 27.93% Expense per Sq. Ft.: $4.65 Equity Required : $3,500,000 IRR - Percent from Cash Flow 70.61% Capital Reserves per Unit: $0 Upgrade/Capital Needs: $0 IRR - Percent from Resale 29.39% Year Built: 1971 Total Equity Required: $3,500,000 IRR - Unlevered 10.15%

PRO FORMA YEAR 2 YEAR 3 YEAR 4 YEAR 5 INCOME Scheduled Market Rent $1,908,660 $1,946,833 $1,985,770 $2,025,485 $2,065,995 Upgrade Premium 0 0 0 - - Total Market Rent $1,908,660 $1,946,833 $1,985,770 $2,025,485 $2,065,995 Gain/(Loss) to Lease (187,006) (29,202) (29,787) (30,382) (30,990) Total Gross Potential $1,721,654 $1,917,631 $1,955,983 $1,995,103 $2,035,005 Vacancy (137,732) (95,882) (97,799) (99,755) (101,750) Write-Offs 0 0 0 0 0 Non-Revenue Units 0 0 0 0 0 Concessions 0 0 0 0 0 Net Rental Income $1,583,922 $1,821,749 $1,858,184 $1,895,348 $1,933,255

Other Income 8,250 8,415 8,583 8,755 8,930

Total Operating Income $1,592,171 $1,830,164 $1,866,767 $1,904,102 $1,942,184

EXPENSES Utilities $152,762 155,817 158,934 162,112 165,355 Variable $239,400 244,188 249,072 254,053 259,134 Property Taxes $116,868 119,206 121,590 124,022 126,502 Franchise/Excise Tax $0 0 0 0 0 Insurance $82,422 84,070 85,752 87,467 89,216 Management Fee $47,765 54,905 56,003 57,123 58,266 NOI BEFORE RESERVES $952,954 $1,171,977 $1,195,417 $1,219,325 $1,243,712 Capital Reserves 0 0 0 0 0 Total Expenses $639,218 $658,187 $671,350 $684,777 $698,473 NET OPERATING INCOME $952,954 $1,171,977 $1,195,417 $1,219,325 $1,243,712

DEBT SERVICE: Interest Payments ($341,250) ($341,250) ($341,250) ($341,250) ($341,250) Principal Payments $0 0 0 0 0 Total Debt Service ($341,250) ($341,250) ($341,250) ($341,250) ($341,250) DEBT COVERAGE RATIO 2.79 3.43 3.50 3.57 3.64

CASH FLOW $611,704 $830,727 $854,167 $878,075 $902,462

CAP RATE 6.81% 8.37% 8.54% 8.71% 8.88% CASH ON CASH 17.48% 23.74% 24.40% 25.09% 25.78% 5 YEAR AVERAGE CASH ON CASH 23.30%

INDEPENDENCE COMMERCIAL ADVISORS 33 Information About Brokerage Services Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords. TYPES OF REAL ESTATE LICENSE HOLDERS: AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between • A BROKER is responsible for all brokerage activities, including acts per- the parties the broker must first obtain the written agreement of each party formed by sales agents sponsored by the broker. to the transaction. The written agreement must state who will pay the broker • A SALES AGENT must be sponsored by a broker and works with clients and, in conspicuous bold or underlined print, set forth the broker's obliga- on behalf of the broker. tions as an intermediary. A broker who acts as an intermediary: • Must treat all parties to the transaction impartially and fairly; A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person • May, with the parties' written consent, appoint a different license holder or party that the broker represents): associated with the broker to each party (owner and buyer) to communi- • Put the interests of the client above all others, including the broker’s own cate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. interests; • Must not, unless specifically authorized in writing to do so by the party, • Inform the client of any material information about the property or trans- disclose: action received by the broker; • that the owner will accept a price less than the written asking price; • Answer the client’s questions and present any offer to or counter-offer • that the buyer/tenant will pay a price greater than the price submitted from the client; and in a written offer; and • Treat all parties to a real estate transaction honestly and fairly. • any confidential information or any other information that a party specifically instructs the broker in writing not to disclose, unless required A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANS- to do so by law. ACTION: AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the a transaction without an agreement to represent the buyer. A subagent can property owner's agent through an agreement with the owner, usually in a assist the buyer but does not represent the buyer and must place the inter- written listing to sell or property management agreement. An owner's agent ests of the owner first. must perform the broker’s minimum duties above and must inform the own- TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER er of any material information about the property or transaction known by SHOULD BE IN WRITING AND CLEARLY ESTABLISH: the agent, including information disclosed to the agent or subagent by the • The broker’s duties and responsibilities to you, and your obligations under buyer or buyer’s agent. the representation agreement. • Who will pay the broker for services provided to you, when payment will The broker becomes the buyer/tenant's AS AGENT FOR BUYER/TENANT: be made and how the payment will be calculated. agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum LICENSE HOLDER CONTACT INFORMATION: This notice is being provided duties above and must inform the buyer of any material information about for information purposes. It does not create an obligation for you to use the the property or transaction known by the agent, including information dis- broker’s services. Please acknowledge receipt of this notice below and retain a closed to the agent by the seller or seller’s agent. copy for your records.

Independence Commercial Advisors 9009629 [email protected] 512-557-5060 Broker Assumed Business Name License No. Email Phone J. Michael Watson 507689 [email protected] 512-557-5060 Designated Broker of Firm License No. Email Phone J. Michael Moffitt 599728 [email protected] 512-584-4813 Licensed Supervisor of Sales Agent/Associate License No. Email Phone

Sales Agent/Associate’s Name License No. Email Phone

Buyer Initials Seller Initials Date Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov CONFIDENTIALITY AGREEMENT

This Offering Memoranda of the Property is being delivered subject to the terms of the Confidentiality Agreement (the “Confidentiality Agreement”) signed by you and constitutes part of the Confidential Information (as defined in the Confidentiality Agreement). It is being given to you for the sole purpose of evaluating the possible sale of Sunshine Village Apartments, Harlingen, TX (the “Property”), and is not to be used for any other purpose or made available to any other party without the prior written consent of Independence Commercial Advisors. This Proposal was prepared by Independence Commercial Advisors based primarily on information supplied by the Owner. It contains select information about the Property and the real estate market but does not contain all the information necessary to evaluate the Property. The financial projections contained herein (or in any other Confidential Information) are for general reference only. They are based on assumptions relating to the overall economy and local competition, among other factors. Accordingly, actual results may vary materially from such projections. Various documents have been summarized herein to facilitate your review; these summaries are not intended to be a comprehensive statement of the terms or a legal analysis of such documents. While the information contained in this Proposal and any other Confidential Information is believed to be reliable, neither Independence Commercial Advisors nor Owner guarantees its accuracy or completeness. Because of the foregoing and since the investment in the Property is being offered on an “As Is, Where Is” basis, a prospective investor or other party authorized by the prospective investor to use such material solely to facilitate the prospective purchaser’s investigation, must make its independent investigations, projections and conclusions regarding the investment in the Property without reliance on this Proposal or any other Confidential Information. Although additional Confidential Information, which may include engineering, environmental or other reports, may be provided to qualified parties as the marketing period proceeds, prospective purchasers should seek advice from their own attorneys, accountants, engineers and environmental experts. Neither Independence Commercial Advisors nor Owner guarantees the accuracy or completeness of the information contained in this Proposal or any other Confidential Information provided by Independence Commercial Advisors and Owner. Owner expressly reserves the right, at its sole discretion, to reject any offer to invest in the Property or to terminate any negotiations with any party at any time with or without written notice. Owner shall have no legal commitment or obligations to any prospective investor unless and until a written sale agreement has been fully executed, delivered and approved by Owner and any conditions to Owner’s obligations thereunder have been satisfied or waived. Owner has retained Independence Commercial Advisors as its exclusive broker and will be responsible for any commission due to Independence Commercial Advisors in connection with a transaction relating to the Property pursuant to a separate agreement. Independence Commercial Advisors is not authorized to make any representation or agreement on behalf of Owner. Each prospective investor will be responsible for any claims for commissions by any other broker in connection with an investment in the Property if such claims arise from acts of such prospective investor or its broker. This Proposal is the property of Owner and all parties approved by Owner and may be used only by parties approved by Owner. No portion of this Proposal may be copied or otherwise reproduced or disclosed to anyone except as permitted under the Confidentiality Agreement.

©2021 Independence Commercial Advisors NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IS MADE TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, AND SAME IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICE, RENTAL OR OTHER CONDITIONS, WITHDRAWAL WITHOUT NOTICE, AND TO ANY SPECIAL LISTING CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). AS APPLICABLE, WE MAKE NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY (OR PROPERTIES) IN QUESTION. ANY SPECIAL LISTING CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). AS APPLICABLE, WE MAKE NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY (OR PROPERTIES) IN QUESTION. 201 W. 5TH STREET 1100 AUSTIN, TX 78701

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