NJ Multifamily Investment

1. NJ Multifamily Investment Club Kevin Dowling & Jason Yarusi Oak Capital Partners & PiliYarusi eXp Realty

2. Agenda • Introduction – who’s here and what are trying to get out of the Meetup • Success stories in 2018? • Preston Lee – we finally closed!! • Dive into due diligence • How we got the deal across the finish line • Mistakes • 12 steps to crush it in 2019 • Q&A

3. Preston Commons • We engaged the seller originally approximately 18 months ago • The building has been self-managed for over 15 years now and the current owner is looking to liquidate due to family medical issues. • We originally placed this asset under contract in 2017, but due to some family issues and delays in repairs the seller needed to do, our deal was reinstated earlier this year. • During the 10-month time period, the seller has been able to achieve a 10% rent bump, which has improved the NOI. • Despite the improvement in NOI and value, we were able to maintain the same purchase price. • Asset offered value-add opportunity with significant upside that can be captured through: • Rent bumps • Interior renovations • Improvements to operations • Effective revenue management. www.oakcappartners.cominfo@oakcappartners.com

4. Preston Commons Investment Highlights • Below Market Rents: In place rents are currently, at minimum $75-150 below the market rents that comparable properties are achieving. • Rent Bumps: of 10% have already been achieved by the seller while under contract, with NO adjustment to the purchase price. A letter has been sent to tenants notifying them of an additional $25 rent bump in September • Exterior Improvements: The asset has already undergone improvements to the exterior, to include new roofs • Day 1: the office can be converted to an additional unit, making the building 48 total units • Significant Value-Add Remaining: 100% of the interior of the asset is unrenovated. • Operational Upside: There is currently no third-party, professional management company in place, which creates a huge operational upside. Our management company’s office is 0.5 miles away. • Strong Submarket: Vacancy rate for the Submarket is forecasted to remain under 3% for the next 5 years and there is no new inventory expected to be completed over the next 5 years. • Rebrand: will rebrand the name of the complex for marketing and advertising purposes www.oakcappartners.cominfo@oakcappartners.com

5. Preston Commons • Raised $675,000 for the down payment, closing costs, and repairs and reserves. • The minimum investment was $25,000 • Payout structure: • Investor partners can expect a quarterly return • 8% preferred return • 70% split to the investors above the 8% pref • Once a 15% IRR is achieved on this investment, the split will be 50/50. • Financing: Partnered with Arbor • Fannie Mae fixed rate loan with an 80% LTC (loan-to-cost – purchase price + CapEx) • 30-year amortization • 10-year loan, which aligned with our holding period and projections www.oakcappartners.cominfo@oakcappartners.com

6. Preston Commons Projections: • ~2x equity multiple • Average annual return of 19.91% • IRR of 15.03 • Cash of cash return of 11.94% www.oakcappartners.cominfo@oakcappartners.com

7. Preston Commons Projections: • Even though Preston Lee was currently fully occupied, we modeled the projections at 5% vacancy and without the additional unit in place that is currently being used as an office • The additional unit will render an additional $532 per month day one, equating to $6,384 per year. • Expenses are also being underwritten at $3,800 per door, which is significantly higher than the current in-place expenses that the seller is showing. • Preston Lee is being purchased at a 7.34% cap rate and $31,250 per door. www.oakcappartners.cominfo@oakcappartners.com

8. Preston Commons • Closed at the end of November • Since closing: • Third-party management takeover - changeover packages handed out • Implementation of formal application and screening process • Implementation of water-savings strategy plan • Marketing plan deployed • Weekly call with management company set up • Exterior, cosmetic, and common area items addressed asap • Mandatory lender repairs - tackled asap • Prioritized CapEx items - tackled asap • Formalizing formal collection and accounting processes • Property re-branding www.oakcappartners.cominfo@oakcappartners.com

9. Preston Commons • Closed at the end of November!! • Since closing: • Third-party management takeover - changeover packages handed out • Implementation of formal application and screening process • Implementation of water-savings strategy plan • Marketing plan deployed • Weekly call with management company set up • Exterior, cosmetic, and common area items addressed asap • Mandatory lender repairs - tackled asap • Prioritized CapEx items - tackled asap • Formalizing formal collection and accounting processes • Property re-branding – Preston Commons!! www.oakcappartners.cominfo@oakcappartners.com

10. 12 Steps to a Multifamily Christmas! • 1. Know your goal • 2. Find your why? • 3. Learn the terms and Understand Multifamily • 4. Know the roles and responsibilities • 5. Choose a market • 6. What to look for in a property • 7. How to structure a deal • 8. Create your investor network • 9. How to underwrite a deal • 10. Where to source deals • 11. Negotiate and close a deal • 12. Day 1 takeover - CLOSING DAY www.oakcappartners.cominfo@oakcappartners.com