1. Recommending a Strategy
101 5th St NE
Washington, DC

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

3. 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

5. 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

6. 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

7. 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

8. Add Value: Land Improvements
101 5th St NE, Washington, D.C
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

9. Add Value: Building Improvement
101 5th St NE, Washington, D.C
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

10. Add Value: Furniture & Fixtures
101 5th St NE, Washington, D.C
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

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

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

13. 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
Accounts Payable

14. 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

15. Balance Sheet
Cash
369,000
Land
320,960
Building
1,426,000.00
Less Accum Depre
62,166.06
Improvements
$ ,153.40
$ ,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