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TEXAS A&M UNIVERSITY

LDEV 689: ENTREPRENEURIAL REAL ESTATE

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PROJECT 3: PRESENTATION GROUP 3

JOSH GILES

JAMES LOONEY

COLIN MCCREARY

18 APRIL 2019

*Disclaimer: this project is a simulation and any experience mentioned is hypothetical for the benefit of

said simulation. Not to be duplicated for professional use.*

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INDEX

EXECUTIVE SUMMARY …...………………………………………………………………… 2

MARKET OVERVIEW AND ANALYSIS ………………………………………………… 6

BUSINESS MODEL ……….……………………………………………………………………. 9

OPERATION STRATEGY …………………………………………………………………….. 11

ORGANIZATION AND MANAGEMENT ………………………………………………. 16

ORGANIZATIONAL LEADERSHIP CHART ……………………………………………. 17

SERVICE AND PRODUCT LINE ….………………………………………………………. 13

FUNDING REQUEST ……..………………………………………………………………… 14

FINANCIAL PROJECTIONS …...……………………………………………………………. 15

ASSET DEVELOPMENT PLAN…..…………………………………………………………. 17

PROPERTY MANAGEMENT…….…………………………………………………………… 19

PORTFOLIO OVERVIEW AND PLAN …...………………………………………………. 26

RENT ROLL AND COMPARISON…..………………………………………………………. 29

DISCOUNTED CASH FLOW……..…………………………………………………………… 34

EXECUTIVE TEAM PROFILES…….……………………………………………………….. 39

RESOURCES APPENDIX …….………………………………………………………………. 43

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EXECUTIVE SUMMARY

Our business, LGM Development, is primarily focused on providing quality

investment choices to equity contributors, acquiring and operating boutique garden

apartment assets and repositioning them to capitalize on growth in the Austin,

Texas market. This growth is centered around the strategic planning of rezoning,

redeveloping, and restructuring products that are both feasible and risk averse.

Planning, building, managing and operating these assets as a part of a larger

portfolio allows for our company to be flexible, and provides optimal returns for

like-minded investors.

LGM Development LLC was founded in January of 2019 as a partnership

amongst three founding members; Josh Giles, James Looney, and Colin McCreary.

These three founding members became acquainted through their like-minded

ventures into the real estate markets of Austin, Texas. Proposing an exit strategy

that allowed for each founding member to capitalize on their individual strengths

and experience, the three members assigned themselves roles as Asset Manager,

Property Manager, and Portfolio Manager, respectively.

Each LGM Development member has acquired a vast amount of real estate

development experience through their work at other corporations. All three

members are graduates of Texas A&M University, where they each earned their

Master of Land and Property Development. Prior to working together in this LLC

and partnership, each individual has approximately a dozen years working in a

variety of urban cores, predominantly Dallas, Austin, and Houston. The company

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aims to use this experience to insure the longevity of the portfolio, assets, and

individual products as they are repositioned and capitalized on.

The company’s Asset Manager, Josh Giles, gained substantial experience

working first as a leasing associate for Greystar, one of the Nation’s largest

apartment developers. He then was promoted to Senior Asset Manager and

managed a $500M portfolio of multifamily holdings.

The company’s Property Manager, James Looney honed his craft of team

building and successful property management working for Red Oak Realty, one of

the largest property management firms in Texas, known for their exceptional

service and attention to detail. There, James Looney worked as a Property Manager

for several multifamily buildings, and was promoted to oversee a team of Property

Managers across several types of real estate.

The company’s Portfolio Manager, Colin McCreary has gained a wealth of

experience at Trendmaker Homes, where he was quickly promoted from Land

Acquisitions Analyst to Vice-President of Development. In addition, Colin McCreary

spearheaded the market entrance of Trendmaker Homes into their multi-family,

central living concept called ‘Urban Village’.

LGM Development LLC aims to provide investors with the opportunity to

capitalize on the growth of the Austin market by acquiring garden style apartments,

holding and renovating these products, and making capital off of the holdings. The

five products that are proposed to be acquired are located in the East Austin growth

corridor, and each range between 10-30 units in size. The five property addresses

are: Studio 34 (302 East 34th St, Austin, Texas), Richland Studio (2412 Richcreek

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Road, Austin, Texas), Casa 39 (301 West 39th Street, Austin, Texas), Hampton Park

Terrace (3604 and 3606 Clawson Road, Austin, Texas), and Sunwest (404-502 West

35th Street, Austin, Texas).

The company aims to provide services through way of portfolio, asset, and

property management. The five properties will be packaged together as a portfolio

of assets, which will be managed by James Looney, and repositioned eventually as

the properties reach their respective critical ages and Austin’s regulatory practices

allow the company to reposition the assets. These assets are currently profitable as

is, and will only continue to have positive returns as the market continues to heat up

for garden style, class B apartments.

Financially, the LLC is looking for investors to provide $1,165,000 amount of

capital equity for with an expected Before-tax-cash-flow of $8,151,951. This capital

will be used as private equity, as the track record of our individual partners proves

that we can capitalize on holding and repositioning assets. With a proven track

record of management and development, our team of professionals will provide

competitive and aggressive returns, with a cash-on-cash return of 2.51x on the

portfolio.

Future plans for the current portfolio include, as previously alluded to,

repositioning and redeveloping the assets as their structures reach their critical age

rate. This will allow each of the individual assets to be repositioned and properly

capitalized upon. With experience in developing urban village concepts and mixed

use districts, our team of professionals believe in the longevity of the portfolio, and

the viability of the long term mission of capitalizing on Austin’s continuously

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improving density. With regulatory allowance and future rezoning outlooks, the

portfolio will look to improve on already attractive returns by developing boutique

concepts that maximize the feasibility of investing in LGM’s development portfolio.

The company aims to reposition these assets between 5-10 years after acquisition,

when the land use map is likely to update and zoning is likely to improve.

MARKET OVERVIEW AND ANALYSIS

The Austin multifamily market is currently seeing an expansion of growth,

with going-in Cap rates, asking rents, and vacancy rates all seeing moderate to high

levels of growth in both Urban Class A and Suburban Class A projects. Absorption of

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these products into the market are also growing at a strong rate, and future outlooks

project similar growth with moderate/high employment growth in 2018,

medium/high rental rate growths, moderate/high levels of new construction, high

levels of absorption, and decreasing vacancy rates. All of these factors indicate the

market and industry is expanding with regards to multifamily development,

projecting over 4% annual growth for the four main multifamily product types

(urban class A & B, and suburban class A & B) and roughly 6,000 units under

construction during that time frame.

The 36-month multifamily forecast displays similar growth patterns, with a

market rent change expected of 4.00% for Class A assets and a 3.00% market rent

change for Class B assets. These same assets are expected to have roughly 3.00%

expense rate change, and an increase of over 4.00% of the positive change in value,

indicating these assets will be adding value to the market. These figures will

translate into an estimated annual absorption of 506 units of Urban Class A, 130

units of Urban Class B, 2,140 Suburban Class A, and 420 Suburban Class B. Data with

regards to conventional multifamily properties (79% of the market) within the

Austin market have also shown promising expansion, with an increase of +1.6%

annual occupancy in 2018 (up to 91.4%, a good indicator for high absorption), a unit

change of +7,219 with +9,329 units absorbed. These figures provide a positive

outlook on the need for additional units in the area as expansion continues into a

second phase. Asking rents are up 2.9%, with an asking rent of $1.48 per SF and an

effective rent per SF of $1.46.

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The top five submarkets seeing the best annual change in occupancy within

the Austin market are West Parmer (94.5%, up 5.9%), Barton Springs/South

Congress (94.5%, up 5.3%), Riverside (94.3%, up 4.7%), Pflugerville (90.1%, up

4.2%), and Downtown (95.0%, up 3.7%). Of these five districts, Downtown and

South Congress have the least amount of new units in the pipeline, indicating a

potential opportunity for in-fill development or new development. Riverside has

also seen the most effective rent gains percentage-wise, with a positive net change

of 4.8% up to $1,213, slightly below the average market rent of Austin at $1,273,

indicating a potential opportunity for continued rent growth along with

development.

The main customer group that LGM Development LLC looks to capitalize on

is young professionals and middle class renters, as the range of assets in the

portfolio are well positioned along major pipelines into the urban core where a

large percentage of job growth is occurring. Current pricing of comparable units

comes in at about $1257 per unit, with a per square foot ratio of $3.49/RSF. Our

company aims to provide competitive rents, with an annual escalation of 5% to

account for inflation and the hot marketplace of Austin. This will yield a effective

gross income margin target of $1,810,000 annually. Since our products will be

renovations and not rebuilds, we will not face many regulatory restrictions outside

of current zoning restrictions, which the company’s properties will fall in line with.

This will keep overhead low and only require building certificates once the

properties are eligible for repositioning as the submarkets are rezoned.

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BUSINESS MODEL

The current Austin marketplace is steadily looking to add more multifamily

stock, with a high absorption rate and high amount of demand for the stock. Single

family residential has been relatively limited, indicating that the multifamily stock is

going to continue to be steady. Average Gross Rent in Austin is more than $1,223

(2017) while the US Median Gross Rent is $1,012 (2017). The three year change for

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Austin area rents was a 12.4% increase, while the US rent increased at 5.8% over

three years preceding 2017. Regarding rental market share in Austin, residents are

comprised of 42% renters (2017) while the US average market contains only 36%

renters (2017).

The larger Austin metro is home to virtually every type of consumer

imaginable. However, within our urban core submarket, the majority of residents

are young professionals and baby boomers, escaping their suburban mini-mansions

in search of a low maintenance, high travel lifestyle. Within the downtown

submarket, statistics show that this area tends to holds higher rents compared to

suburban markets, when a downshift occurs in the local rental demand.

Increasingly, garden apartment buildings are experiencing success by

providing renters with a more reasonable rent amount, due to a lack of overhead

and maintenance on costly amenities. Instead, these buildings - located in desirable

neighborhoods - offer the walkable experience of their surroundings as their

primary amenity.

Additional space is an imminent projection for the entire state of Texas, but

particularly the Central Texas region. Because of several basic employers, Austin

continues to attract some of the world’s most sophisticated companies and

entrepreneurs. In addition, Californians are experiencing increasing tax burdens,

shortages of water and a reduction in the purchasing power of their salaries.

According to the Austin Chamber of Commerce, the population next year (2020) will

surpass 2.3 M residents. Because of its draw as a destination for migrating talent,

metro Austin's population surpassed 2.0 million in 2015. The decade ending 2017

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saw a 34.1% increase in population, and growth was 2.7% for the year ending July

2017. Census Bureau estimates show that Austin remains one of the top

destinations for migrating talent. Austin ranked first among the 50 largest U.S.

metros based on net migration as a percent of total population in 2015. In addition,

6.9% of Austin residents in 2017 lived elsewhere one year earlier. That is the largest

rate among the top 50 U.S. metros.

OPERATION STRATEGY

a. Portfolio Manager: Colin McCreary

b. Asset manager: Josh Giles

i. Operate, 10-15 year asset hold. Operate assets until

point of renovation becomes imminent. Then, assess

market - ideally, sell to a developer who will build new,

increase density and therefore afford a substantially

high price for the land. If not, self development or major

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renovation will be considered, along with construction

costs and market demand.

Supporting Evidence:

We're ready for more housing': Council gets an earful on new land use rewrite

When it comes to a new code there is a lot to consider: Parking requirements, compatibility & affordable housing just scratch the surface

By Daniel Salazar | Austin Business Journal

Ready or not, the next great land use debate in Austin is underway.

Residents addressed Austin City Council on the night of April 11 about the new effort to

update the land development code, which determines what can be built where

throughout the city.

An hour and a half of public testimony was the first public feedback Council has gotten

on comprehensive land use reform in a formal setting since City Manager Spencer

Cronk restarted the process last month, following the 2018 collapse of the last effort

called CodeNext.

Pro-density urbanists outnumbered development skeptics at City Hall, with the majority

of speakers arguing for dramatic boosts in the housing stock and availability of missing

middle housing as well as rollbacks of parking and compatibility regulations.

Public comments largely reinforced the direction Council appears to be leaning —

pursuing a comprehensive rewrite this year that goes further than the final draft of

CodeNext in addressing affordability issues and aiding transit-supportive development.

"We need major changes to the land development code to make it simpler and more

predictable; we need major changes to conflicting and outdated criteria manuals; and we

need major changes to a planning process that historically isn't equitable or effective,"

said Scott Turner, founder of Turner Residential LLC. "I believe we're ready for the

change [and] I believe we're ready for more housing."

Ready to 'take significant steps'?

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Geoffrey Tahuahua, the Real Estate Council of Austin's vice president of policy and

government affairs, said he appreciates Cronk's approach to gather a consensus from

Council "before pen is put to paper" in the form of a drafted code.

"[A rewrite] should take significant steps to address Austin's high cost of living and our

mobility challenges while acknowledging the fact that we will continue to grow," he said.

"The new land development code should also encourage additional, strategically located

housing supply across product type and price point."

Tahuahua said the rewrite's text and zoning maps should take effect concurrently.

"Unless our policy makers and the community understand how the code and map work

together, there can be no comprehensive understanding of the impacts," he said.

Tahuahua also called current compatibility standards "the most significant single barrier"

to meeting the city's affordability goals.

"This is a long-standing and complicated policy issue that needs to be carefully

addressed," he said.

Curtis Rogers, a resident of Southeast Austin's District 3, said minimum parking

requirements should be axed across the city like they were in downtown Austin earlier

this decade.

"Abundant parking leads to more car ownership and more miles driven per person,"

Rogers said. "[And] forcing a builder to add unnecessary parking not only adds to the

construction costs, which will later be passed to the tenant, but it also tells the builder to

only create housing for people who can afford cars."

'Context-specific decision making'

Residents on the other side of the debate warned that the next rewrite should not

substantially increase entitlements without significant concessions from developers in

the form of community benefits like affordable housing.

They were uneasy about the effects of relaxing parking and compatibility requirements,

asking Council to consider properties' contexts with their surroundings.

Eleanor McKinney, a landscape architect and former Design Commissioner, said she

supported criteria "that recognizes unique circumstances in the texts and mapping" of a

rewrite.

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She pointed to her residential lot that abuts commercial property along South Lamar

Boulevard — and how her property could be dwarfed by a next-door development if

compatibility standards were eased.

"All sites are not the same in all districts across town," McKinney said. "There are

nuanced conditions which can be more thoughtfully approached ... [at] a small area

planning level with Council members who understand their district."

"We need to be mindful of how much height we are giving away as an increased

entitlement for how much affordable housing," she added.

Austin resident Chip Harris said the city shouldn't view this rewrite as the last opportunity

to extend entitlements to boost housing capacity.

"We don't want housing capacity decision making that ignores the risk that development

will displace residents, especially low-income families," Harris said. "We want a code

that allows for context-specific decision making that involves the local community."

But urbanists defended expanding entitlements and railed against preserving zoning

designations such as neighborhood conservation combining districts, or NCCDs, that

allow neighborhoods to follow different development regulations due to their age.

"We need to make housing that we want easier and not get caught up in this argument

of giving something away for free without exacting a price," said David Whitworth, an

infill builder and the vice president of the Austin Infill Coalition.

"Any notion that ... areas are untouchable in a code rewrite is antithetical to our city's

goal of viewing each of our actions through a lens of equity," added Danielle Skidmore,

a transportation engineer who last fall lost the election to represent Central Austin's

District 9 to Council Member Kathie Tovo.

A timeline— and a plea for unity

Council members plan to further discuss their responses to Cronk's policy prompts over

the next week and a half on their online message board.

Mayor Steve Adler said the next time they will discuss the land development code

rewrite in person will be at Council's workshop meeting on April 23. Adler said Council

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could approve a resolution outlining their official responses to Cronk's memo at their

April 25 meeting "should we wish to do so."

In the meantime, Council members urged for this year's debate over land use to remain

respectful — unlike the toxic rhetoric that helped doom CodeNext last summer.

"It's just so unfortunate how this often becomes so divisive," Mayor Pro Tem Delia Garza

said. "I hope as we move forward in this, regardless of what side we think we're on here,

that we all know that we're just really wanting the best for our community."

c. Property manager: James Looney

ORGANIZATION AND MANAGEMENT

LGM Development LLC is formed in such a way that each partner is required

to contribute equal equity, and thusly is afforded equal share of control. Amongst

the three members of the member-managed LLC, a 66% agreement must be met to

continue with a decision, so two members must be consulted and in agreement

prior to precession of action. This applies to the acquisition of debt service or equity

as well for projects. These three partners, Josh Giles, James Looney, and Colin

McCreary are in charge of their own respective division; Asset Management,

Property Management, and Portfolio Management respectively.

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ORGANIZATIONAL LEADERSHIP CHART

LGM DEVELOPMENT LLC

Property Manager Asset Manager Portfolio Manager

JAMES LOONEY JOSH GILES COLIN MCCREARY

LOONEY PROPERTY TEAM GILES DEVELOPMENT MCCREARY INVESTMENTS

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SERVICE AND PRODUCT LINE

Our company, LGM Development LLC, looks to offer investors the

opportunity to invest in the hot Austin real estate market, with a higher return than

other forms of risk-assessed investment. The properties in this portfolio are all

looking to be repositioned after a 5 year holding with minor renovations, and offer

more competitive pricing standards than competition in their respective

submarkets.

Our products are all roughly 25-30 years old, and are approaching the end of

their current lifecycle. By extending their life cycle through renovating the

properties with aesthetic changes to build on the boutique character of each

product’s nature, the portfolio looks to continue building on the existing value of

these properties as they are held. This holding period will benefit investors as the

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properties are lobbied to be repositioned as Austin institutes their new land use

map and increased density.

FUNDING REQUEST

a. current funding requirement (Price of purchase for operations

and cost of renovations)

b. 80/20 loans with 5% contributed from general partners

c. cost of acquisition:

2,000,000+1,600,000+1,000,000+1,000,000+1,500,000

=7,100,000

d. cost of renovation=800,000

e. total partner equity contribution=355,000

f. total private equity requirement=1,065,000

g. total institutional=5,680,000 (5% interest, amortized for 30

years, 10 year re-fi balloon note)

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h. how you intend to use the funds you receive; is the funding

request for capital expenditures? working capital? debt

retirement? Acquisitions? (Acquisitions and renovations)

i. Strategic financial plans for the future, such as a buyout, being

acquired, debt repayment plan, or selling our business.

(Restructuring and repositioning assets, acquiring future

assets for portfolio growth)

FINANCIAL PROJECTIONS

The assumptions the LGM Development LLC team are working with for the assets

are as follows by property:

a. Richland Studio

Rent (+5% escalation): $894

i. Stabilization percentage: 92%

ii. Parking costs: $25.00

iii. Storage Units: 0

iv. Vacancy: 8%

v. Operating Expenses: $73,000

vi. NOI: $104,599

b. Casa 39

i. Rent (+5% escalation): $1,074

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ii. Stabilization percentage: 92%

iii. Parking costs:$25.00

iv. Storage Units:0

v. Vacancy: 8%

vi. Operating Expenses: $139,802

vii. NOI: $184,597

c. Sunset

i. Rent (+5% escalation):


iii. Parking costs:$25.00

iv. Storage Units: 0

v. Vacancy: 6%


vii. NOI: $279,938

d. Hampton Park Terrace

i. Rent (+5% escalation)


iii. Parking costs: $25.00


v. Vacancy: 6%

vi. Operating Expenses: $121178

vii. NOI: $198,574

e. Studio 34

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i. Rent (+5% escalation)


iii. Parking costs: $25


v. Vacancy: 8%


vii. NOI: $128,645

ASSET DEVELOPMENT PLAN

LGM Development LLC’s sponsor and Portfolio Manager, Colin McCreary, will

oversee the acquisition of Class B garden apartments, recently renovated, between

10 and 30 units, in the boundaries marked by I35, MoPac Expy, 183 and 290. This

boundaries create a rough rectangle that defines communities within a 30 min drive

of Downtown Austin - and access to premium neighborhood grocers, retailers,

restaurants and public transportation.

The company’s Asset Manager, Josh Giles, will manage the portfolio of garden

apartment complexes. His role will include a monthly revenue of income, expenses,

and working with an accounting consultant to optimize cash flow performance. In

addition, his role encompasses investor relations, which includes generating

quarterly reports, calculating IRR, individual return statements, and K1 income

reports. Mr. Giles will work with Mr. McCreary regarding market impacts on

potential sales and acquisitions and will work with Mr. Looney on optimizing

returns through a strategic property management plan.

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No substantial building will occur within our property sites. We plan to

operate each building and generate a steady stream of positive revenue until the

properties can be repositioned and additionally capitalized on with zoning and

regulatory alterations to Austin’s land use map and comprehensive plan. This is

expected, as the properties are positioned in the growth corridor of Austin.

The company’s Property Manager, James Looney, will manage a lead an

efficient team of engineers, maintenance supervisors and leasing consultants to

manage all 5 acquisitions. Property management team members will have the

option to lease a unit within our development at a 25% discount on market prices,

to encourage our team members to live on-site and decrease response times,

improving customer experience and subsequent retention and investment return

rates.

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PROPERTY MANAGEMENT PLAN

The property management plan is essential to profitability only if the

properties are well managed. The primary function of the property manager is

overseeing the daily operations and maintenance of apartment complexes.

The several responsibilities that the property manager will handle daily are rent,

tenant marketing, leases, maintenance and repairs, landlord and tenant laws,

supervising, and managing the budget.

Dealing with rent issues by setting the right rent levels to ensure to attract

tenants to our properties. Collecting rent to ensure cash flow by setting a date to

receive each month and strictly enforcing late fees. Also adjusting rent by escalating

the rent each year to offset property tax increases.

Leases are the engines that drive property value, the marketing plan is to

attract as many prospects as possible from the pool of tenants. The most efficient

ways to do this are by internet, sign, brochures, direct email, and phone calls. The

onsite property manager will show vacant units and also screen potential tenants

for creditworthiness and by criminal background checks.

The property manager will also keep the property safe and maintain the value of the

property. The property manager hires maintenance staff to keep the property

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functioning in top condition. Maintaining a safe place for the residents to live will

be accomplished by courtesy officer, which is an active duty officer living in each

apartment complex at a reduced rent. Since Austin has high transiency and

homeless population with a propensity for property and personal crime, this will be

as a deterrent to create a safer environment for residents. In addition to building

maintenance to maintain property value but also ensure to keep liability low, this

will be accomplished by diligently inspecting the maintenance staff work orders are

completed.

The property manager needs to be compliant with landlord- tenant laws and

the plan is to have continued education in the knowledge of state, national law and

city ordinances for handling security deposits, evicting tenants, terminate leases,

and staying compliant with property safety standards. The manager will also keep

written list of rules and regulations for the property that the tenant will sign in

acknowledgment. The lease will be used to enforce the provisions of the property,

up to and including eviction. Timely response and firm enforcement of rules are

vital for maintaining good tenant relations.

Maintaining the budget and maintain records for the building are the essential

task of the property manager. The building must operate within the set budget for

the building. The budget will include funds for advertising, repairs, payroll for

employees, and maintaining records for the properties for tax purposes. This will

consist of all income and expenses and dates of inspections by the city, signed

leases, maintenance request, complaints.

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PORTFOLIO PLAN

As Portfolio Manager, Colin McCreary aims to manage the five properties in a

way that allows for the most consistent cash flow. This plan is contingent on

repositioning assets as they are rezoned, and acquiring properties that best suit the

investment criterion for mitigating risk and long term high return potential. The

primary goal of the portfolio is to acquire multifamily class B garden style

apartments ranging from 10-20 units, renovate them, hold the product while the

Austin market continues to provide aggressive rents, and redevelop the asset after

the asset reaches its critical age and rezoning is established. This will ultimately

allow LGM Development to maximize the strength of the portfolio and stay adaptive

to the ever changing needs of the Austin market.

The five properties currently included in the portfolio

a. Richstreet Studio 2412 Richcreek Rd, Austin, Texas

i. Description: Garden Style Apartment located in North Austin,

Texas

ii. Number of Units: 18 Units

iii. Gross Rentable Square Feet: 5940 sf

iv. Land: 11,753 sf

v. Number of Stories: 2 stories

b. Casa 39 301 w 29th, Austin, Texas

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i. Description: Garden Style Apartment located in the central

Austin area.

ii. Number of Units: 29

iii. Gross Rentable Square Feet: 11,629 sf

iv. Land: 19,000 SF


c. Sunwest 404 W 35th Austin, Texas

i. Description: Garden Style Apartment located in the North

University submarket of Austin, Texas


iii. Gross Rentable Square Feet: 9,460 RSF

iv. Land:


d. Hampton Park Terrace 3604 Clawson Rd Austin, Texas

i. Description: Garden Style Apartment located in the South

Lamar submarket of Austin, Texas



iv. Land:


e. Studio 34 302 34th street, Austin, Texas

i. Description: Garden Style Apartment located in the North

University submarket of Austin, Texas

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ii. Number of Units: 12


iv. Land:


3. Portfolio Goal for investors

f. Acquiring Garden Style types of properties within Austin Submarket

g. Full returns after 10 years with an optional 5 year buyout period,

annual payments

h. Exit Strategy of 10 year re-fi and redevelopment with a 5 year

optional buyout to improve investor holdings and potential equity

increase

i. Holdings & Repositioning

RENT ROLLS AND COMPARISONS

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DISCOUNTED CASH FLOWS

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EXECUTIVE TEAM PROFILES

Josh Giles

- Role: The purpose of asset management, whether with real estate or any

other asset, is to cultivate market value so ownership can increase its

returns. Real estate asset managers focus on maximizing a property's value

for investment purposes – not to be confused with real estate property

managers, who handle the day-to-day activities related to a property's

operations and physical structure.

- Responsibilities: The broad objective of asset management is to maximize

property value and investment returns. This means reducing expenditures

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when possible, finding the most consistent and highest sources of revenue,

and mitigating liability and risk, among other things. In a sense, asset

managers are entrepreneurial. Many of the decisions made in real estate

asset management, such as negotiations, approvals and lease analysis,

require risks be assumed and forecasts made. The managers who make the

best entrepreneurial decisions with financial capital tend to be rewarded

with higher profits and larger portfolios.

- Education: BA, University of North Texas ‘16 and Master’s of Land and

Property Development from Texas A&M University ‘19.

- Experience and skills: Portfolio management at Greystar, a global leader in

multi-family development and operations. Worked with investor specialists,

finance committees and operations departments to maximize cash flows

from assets and communicate with investment entities.

- prior employment: Greystar

- Past track record: 27 quarters on consistent expectations met or exceeded at

Greystar. Team lead/trainer and published author of several major articles

on asset management, distributed worldwide.

- Salary: $95,000 with bonuses set on hurdle rates for outstanding portfolio

performance

James Looney

- Role: Property Manager, establishes rental rate by surveying local rental

rates; calculating overhead costs, depreciation, taxes, and profit goals.

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Attracts tenants by advertising vacancies; obtaining referrals from current

tenants; explaining advantages of location and services; showing units.

- Responsibilities: to ensure that the properties under their care operate

smoothly, maintain their appearance, and either preserve or increase in

value

- Education: Bachelor Degree, Criminal Justice, History and 21 hours

completed Master’s in Border Security. Master’s of Land and Property

Development from Texas A&M University

- Experience and Skills: 7 years experience in criminal justice. 10 years

experience in property management.

- Background includes working for Texas Department of Criminal Justice,

Looney properties and Aaron Looney Farms.

- Salary: Starting compensation would be $60,000/year with contention rate

on IRR.

Colin McCreary

- Role: The Portfolio manager has oversight and control of the company’s

overall balance of funds and implements those holdings into an investment

strategy

- Responsibilities: investor relations, developing investment criterion,

identifying investment opportunities and mitigating risks, approving asset

repositioning and redevelopment strategies, evaluating markets and

determining acquisition/disposition timeframes, ultimately responsible for

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investment and portfolio performance, investment reporting and capital

management.

- Education: Undergraduate in Urban and Regional Planning from Texas A&M

University, Master’s of Land and Property Development from Texas A&M

University

- Experience and skills: Place. Land Development working on Multifamily Class

A and B projects, Trendmaker Land Development working on Mixed Use and

Land development projects for multifamily and single family

- prior employment: Trendmaker Development & Homes, Place. Land

Development

- Past track record: Experience in the Dallas, Austin, San Antonio, and Houston

Development business working on Class A and B assets. Includes affordable

housing choices and premium assets, as well as acquisitions and

repositioning assets

- Salary: $60,000 with compensation from adequate performance of fund

management

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RESOURCE APPENDIX

Demographics:https://assets.recenter.tamu.edu/documents/mktresearch/

Austin_demographicmap_zipcode2014.pdf

Demographic Job projections:

https://assets.recenter.tamu.edu/documents/mktresearch/Austin_Demographics_

DTIForecast_2040.pdf

MF Q2 2018 w/ historial:

https://assets.recenter.tamu.edu/Documents/MktResearch/Austin_Multifamily_Ber

kadia.pdf

Building permit projections:https://data.austintexas.gov/stories/s/New-

Residential-Development-in-Austin/wq6n-itt3/

2018 MF

recap

:https://assets.recenter.tamu.edu/Documents/MktResearch/Austin_Investment_Fo

recast_MarcusMillichap.pdf

Avg Rent comps: https://www.rentjungle.com/average-rent-in-austin-rent-trends/

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Market Stats: https://www.deptofnumbers.com/rent/texas/austin/

Population Trends

https://www.austinchamber.com/economic-development/austin-profile/

population

Austin Rents https://www.realpage.com/analytics/austin-apartment-rents-flatten/

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