Recommending a Strategy 101 5th St NE Washington, DC 20002-5935

Vision Purchase 101 5th St NE Transform 10 rooms into 10 units Rent property for 5 years Sell building or individual units

Today’s Situation 101 5th St NE: VACANT List Price: $1,795,000 Property Type: Hotel & Motel Property Sub-type: Economy/ Limited ServiceProperty Use Type: Investment Lot Size: 0.03 AC Zoning Description: R4

Development Plans: Convert 10 hotel rooms into 10 individual apartment units Add 9 top of the line kitchens Update one existing kitchen Update 8 bathrooms Add 2 full bathrooms Convert 10 bedrooms into 10 individual apartment units

Revenue & Expenses Year 1 Year 2 Revenues: Rental Income (Monthly) Unit 1 $1,650 $1,683.00 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Unit 8 Unit 9 Unit 10 Total: $16,500 $16,830.00 Annual Revenue: $198,000 $201,960.00 Expenses: Advertising $850 Maintenance: $8,000 Property Insurance: 10,000 Legal and Professional Fees: $1,000 Management Fee: $15,000 Property Taxes: $6,815.77 $41,666 Annual Expenses: $41,665.77

Net Income Year 1: Year 2: Annual Revenue: $198,000 $201,960.00 Annual Expenses: $41,665.77 Net Income: $156,334.23 $160,294.23

Add Value: Land Improvements 101 5th St NE, Washington, D.C. 20007   QUANTITY DESCRIPTION UNIT PRICE AMOUNT 1 Landscaping Materials $2,000.00 2 Exterior Lighting $100.00 $200.00 SUBTOTAL $2,200.00 TAX RATE 6.00% SALES TAX $132.00 OTHER   TOTAL $2,332.00

Add Value: Building Improvement 101 5th St NE, Washington, D.C. 20007   QUANTITY DESCRIPTION UNIT PRICE AMOUNT 75 2 x 4 boards $2.75 $206.25 30 Drywall (light) $10.43 $312.90 4 x 4 boards $5.50 $412.50 35 Drywall Fasteners $2.25 $78.75 1 Contractor Completion of trim, doors, hardware $32,000.00 Completion of prime paint coat $15,000.00 SUBTOTAL $48,010.40 TAX RATE 6.00% SALES TAX $2,880.62 OTHER   TOTAL $50,891.02

Add Value: Furniture & Fixtures 101 5th St NE, Washington, D.C. 20007   QUANTITY DESCRIPTION UNIT PRICE AMOUNT 10 Stainless Steel Dishwashers $399.00 $3,990.00 24 Inch Stainless Steel Refrigerator $499.00 $4,990.00 Stainless Steel Gas Range $429.00 $4,290.00 Elkay 22-Gauge Double-Basin Drop-In Stainless Steel Kitchen Sink with Faucet $109.00 $1,090.00 Kitchen Cabinets $500.00 $5,000.00 Granite Countertops $300.00 $3,000.00 Bathroom Vanities Bathroom Mirrors $100.00 $1,000.00 3 Washer/Dryer Stackable $1,197.00 SUBTOTAL $28,547.00 TAX RATE 6.00% SALES TAX $1,712.82 OTHER   TOTAL $30,259.82

Equipment 2 Computers ($2,000 each) = $4,000 1 Printer ($200) = $200 Office Supplies = $500 Total: $4,700

Accounting Categorization Year 1 Year 2 Land 320,960 - Building 1,474,040 - Improvements (to building) $53,223.02 - Equipment (including computers) $4,700 - Furniture & Fixtures $30,259.82 - Office (for the company’s office costs) $12,000 12,000 Vehicles $35,000 - Other Assets (if any) - -

Cash 369,000.00 Cost of Land Common Stock Cash: $369,000 Note: $1,426,000 Legal Fees: $1,000 Building Item Cost Taxes: $6,815.77 Land 1,802,815.77 Total: $1,802,815.77 Mortgage 1,426,000.00 0.00 Improvements 120,153.40 Loan Equipment 4,700.00 Depreciation - Bldg 62,166.06 Accum Depreciation Depreciation-Improve 4,143.22 Depreciation -Equipment 940.00 Accum Depre Mortgage Expense Interest Expense 198000 Rent Revenue Lease Buyout Expense Operating Expenses 41965.77 Accounts Payable

Depreciation Expenses (?) Interest Expense $85,560.00 Total Expenses Income Statement Debt & Equity Revenues $198,000.00 Revenues-Anc $0.00 Acquistion cost 1,802,816 Expenses Value Add 120,153 Lease Buyout Expense Total Acquistion Cost 1,922,969 Operating Expenses $41,965.77 Depreciation Expenses (?) Interest Expense $85,560.00 Total Expenses $127,525.77 Net Income $70,474.23 Senior Mortgage loan 1,426,000 6% interest rate, payable interest only 15 year term Debt = 80% 1,576,000 (+ $150,000 construction loan) Equity =20% 369,000 Total Acquisition Costs 1,945,000 Partner's Capital - Equity Raise 300,000 Equity raise Maximum aggregate amount Minimum investment 30,000 up to 10 Investors

Balance Sheet Cash 369,000 Land 320,960 Building 1,426,000.00 Less Accum Depre 62,166.06 Improvements $ 120,153.40 $ 120,153.40 4,143.22 Equipment 4,700 Total Assets 1,805,504 Accounts Payable Mortgage Loan Construction Loan 150,000 Total Liabilities 1,576,000.00 Total Equity Total Liabilities + Equity 1,945,000.00