Cameron Run Investor Summary - ARC Multifamily

Metro-Atlanta

“Good process drives good results”

Executive Summary

Investment Overview

Cameron Run (“Property”) is a 284-unit, garden-style apartment complex, built in 1972, consisting of 1-, 2- & 3-bedroom units, and located in East Point, Georgia. The Property is 93.6% occupied (98% pre-leased) and represents an excellent opportunity to acquire a Low-Income Housing Tax Credit (“LIHTC”) property at the end of its 15-year compliance period, with immediate upside, and attractive fixed rate debt (2.99%), in the South Atlanta submarket of Atlanta.

The Property is currently operating under the LIHTC program which means there are tenant income and rent restrictions on the Property during the 15-year compliance period. The Property has reached the end of its 15-year compliance period and is eligible to enter the Qualified Contract period (“QC”). Once the Property enters the QC period, the Property must maintain operations as a LIHTC property for 12 additional months. During this period, the management team will be increasing the current rents to the maximum rents under the LIHTC guidelines. As of today, blended in-place rents are currently approximately $160/unit below 2022 max rents, still providing immediate upside even during this period. Then, as units become available, they can be leased at market rate terms.

The Property is just a 5-7 minute drive to Hartsfield Jackson International Airport, the largest employer in the state of Georgia (60,000+ employees), and Camp Creek Marketplace, the primary retail hub in South Fulton. The 1.2M SF retail power center was developed in the early 2000s and has been the economic engine of South Fulton’s renaissance, providing more than 2,000 jobs. The surrounding developments have been built to complement, including restaurants, hotels, office and industrial parks, luxury apartments, and single-family subdivisions. South Atlanta continues to attract major industrial users – it is one of the largest and most active industrial submarkets in the United States. Strong industrial demand in the southern part of Atlanta helps contribute to demand for workforce housing. Firms like Amazon, Mondelez International, and Georgia Pacific have signed on for large blocks of distribution space in recent years.

ARC Multifamily Group will fund the acquisition by a combination of assuming the existing Fannie Mae loan (50% LTV at 2.99% with 3.8 years of interest-only payments remaining), $10,250,000 in preferred equity, and $12,200,000 in common equity (“Members”). The transaction is structured so that the preferred equity group receives priority payment and sits behind the senior loan in the capital stack, but in exchange for this position, has limited upside potential.

Members will receive a 6, 7, or 8% cumulative, non-compounding preferred return (similar to past offerings)*. If there is excess distributable cash from operations above prefereed rates, that cash flow is split per the waterfall. Upon a capital event, the preferred equity group will receive their return of capital and any accrued unpaid preferred return, then each Member’s initial investment is returned along with any unpaid preferred return, then distributable profit from the sale will be split per the waterfall.

* 6% for $100,000+ / 7% for $250,000+ / 8% for $500,000+

PROJECTED MEMBER RETURNS - 4 YEAR HOLD PERIOD

Market Outlook

• The diversity of Atlanta’s economy not only helped it recover all jobs lost during the pandemic, but also put the market back into expansion mode, and the multifamily market is reaping the benefits.

• Atlanta’s unemployment rate stood at 2.6% in May 2022, better than the national rate (3.6%).

• Atlanta has a deep pool of renters by necessity, a cohort buoyed by the market’s extensive blue-collar industries, particularly the industrial sector. These jobs help support demand for workforce housing properties, particularly in submarkets like South Atlanta.

• Due to the lack of new workforce housing supply and a stable and growing base of industrial jobs, occupancies in these submarkets have generally outperformed the metro average in recent years, and occupancies in most of the region’s blue-collar suburban submarkets are at or near record highs.

• The metro is adding thousands of jobs from firms like Amazon, Home Depot, Freshly, and HelloFresh, which will boost workforce housing demand in the near term.

• Higher interest rates and rising home prices have made owning a home more unaffordable, leaving many potential buyers in the renter pool for longer.

Acquisition Rationale

• Below market rents – ~$200/unit/month in immediate rental upside simply by increasing rents to the 2022 max rents. Seller has already started signing leases at the new max allowable rents, so the “loss to lease” is now ~$155/unit/month.

• Eligible for QC, and the DCA’s first inspection is complete – the seller will cure all deferred maintenance items from the DCA inspection prior to closing.

• Seller invested over $1 million in the Property. A new gym, playground, artificial sports field, and dog park were all added within the past few months.

• Very attractive loan assumption – 2.99% interest rate with 3.8 years of interest-only payments remaining.

• Modern architecture and layout – 1970s asset, but significant capital spent every 15 years as part of the LIHTC program to include new windows, cabinetry and hardy plank siding.

• CBG’s familiarity with LIHTC properties (and South Atlanta submarket) – CBG already operates a 294-unit LIHTC property in South Atlanta. Acquired at 88% occupancy, CBG quickly stabilized the asset and it is now operating at 97% (and a waiting list) with rent increases to the 2022 max rents.

• Off-market opportunity at an attractive basis.

Business Plan

Increase in-place rents up to 2022 max allowable rents

PHASE ONE PHASE TWO

Increase rents up to “market” (as units come available) which not modeled in the “Base Case”

> max restricted rents, see slide modeled in the Better and Best

Submit Property into QC after final inspection

PHASE

THREE Improve Crown Bay property

“market” after the QC period ends which creates additional upside Case” scenario (market rents slide 16). The rental upside is Best Cases

Replace roofs and other deferred maintenance items noted during CBG’s physical inspection

PHASE FOUR PHASE SIX

and stabilize operations via Bay Management, CBG’s in-house property management company

PHASE FIVE

Sell Property as “market rate” (or soon-to-be) in 3-5 years

PREVIOUSLY

Market & Submarket

Metro-Atlanta Economic Highlights

• #1 Busiest Airport in the World (since 1998)

• 31 Fortune 500/1000 HQs

• #2 Business Climate (GA)

• #4 in Population Growth 2010-2019

• #5 in Projected Population Growth (next 10 years)

• Regained all jobs since the onset of COVID-19 pandemic

• Transportation & Distribution Hub

• Highly Educated Workforce

•

Metro Atlanta Multifamily Fundamentals

The following table summarizes historical and projected future performance of the overall metropolitan market, as defined by Axiometrics.

SOUTH ATLANTA APARTMENT SUBMARKET

Year Ending Inventory (Units) Completions (Units)

Occupied Stock (Units) Occupancy Rate Effective Rent ($/Unit/Mo)

2017 493,321 12,806 463,228 93.9% $1,133 2018 502,215 9,076 475,146 94.6% $1,209

2019 511,171 9,658 484,795 94.8% $1,272 2020 524,448 13,277 501,058 95.5% $1,303

Q1 2021 527,822 3,374 503,331 95.4% $1,329

Q2 2021 530,412 2,590 509,779 96.1% $1,406

Q3 2021 531,801 1,389 516,219 97.1% $1,527

Q4 2021 533,310 1,509 517,364 97.0% $1,600 2021 533,310 8,862 517,364 97.0% $1,600

Q1 2022* 535,328 2,018 518,733 96.9% $1,627

Q2 2022* 537,356 2,028 522,310 97.2% $1,688

Q3 2022* 540,338 2,982 526,289 97.4% $1,812

Q4 2022* 545,393 5,055 526,304 96.5% $1,885 2022* 545,393 12,083 526,304 96.5% $1,885 2023* 561,735 16,342 538,142 95.8% $2,030 2024* 570,241 8,506 544,580 95.5% $2,090 2025* 580,032 9,791 549,870 94.8% $2,140 2026* 588,879 8,847 557,668 94.7% $2,192

*Future Projected Data according to Axiometrics. Source: Axiometrics, 2nd Quarter 2022.

• The metro Atlanta occupancy rate ended 2Q 2022 at 97.2%.

• 21% rent growth in 2021 – highest rent growth in decades.

• Strong rent growth projected to close out 2022, decelerating in 2023, but still 7.7%, above historical

• There is a large Class A development pipeline in the intown submarkets of Buckhead, Downtown, which will likely slow rent growth in the luxury segment in the coming quarters.

• 12%+ rent growth since August 2021 in the “renter-by-necessity” (non-luxury/workforce housing)

Fundamentals

metropolitan Atlanta apartment historical levels. Downtown, and Midtown, housing) category.

Effective Rent Change Net Absorption (Units)

3.03% 11,149 4.69% 11,954 3.29% 9,610 2.17% 16,302 1.97% 2,243 5.52% 6,484 8.31% 6,403 3.81% 1,181 21.21% 16,311 1.31% 1,361 3.75% 3,577 7.35% 3,979 4.03% 15 17.80% 8,994 7.70% 11,838 3.00% 6,438 2.40% 5,291 2.40% 7,798

0% YEAR-OVER-YEAR

11.3%

South Atlanta Multifamily Fundamentals

The Property is located within the South Atlanta submarket. The following table shows performance submarket over the past decade, as well as projections for the next five-year period.

SOUTH ATLANTA APARTMENT SUBMARKET

Year Ending Inventory (Units) Completions (Units) Occupied Stock (Units) Occupancy Rate Effective

2017 18,751 73 17,223 91.9% 2018 18,751 0 17,542 93.6% 2019 18,603 0 17,615 94.7% 2020 18,603 0 17,976 96.6%

Q1 2021 18,603 0 17,829 95.8%

Q2 2021 18,603 0 17,939 96.4% Q3 2021 18,603 0 18,043 97.0% Q4 2021 18,603 0 18,177 97.7% 2021 18,603 0 18,177 97.7%

Q1 2022* 18,603 0 18,112 97.4% Q2 2022* 18,603 0 18,157 97.6% Q3 2022* 18,603 0 18,194 97.8% Q4 2022* 18,603 0 18,175 97.7% 2022* 18,603 0 18,175 97.7% 2023* 18,928 325 18,398 97.2% 2024* 18,953 25 18,384 97.0% 2025* 18,978 25 18,276 96.3% 2026* 19,003 25 18,281 96.2%

*Future Projected Data according to Axiometrics. Source: Axiometrics, 2nd Quarter 2022.

• 2Q 2022 occupancy rate of 97.6%, slightly above the metro Atlanta occupancy rate of 97.2%.

• South Atlanta has seen stronger rent growth since 2017 than metro Atlanta overall – 37.5% vs.

• Market rent growth in South Atlanta is projected to be strong over the next five years.

• No meaningful supply is projected to be added.

Fundamentals

performance within the South Atlanta

Effective Rent ($/Unit/Mo)

Effective Rent Change Net Absorption (Units)

$812 5.26% -117

$858 5.01% 318

$934 7.88% 75 $1,031 7.57% 361 $1,052 2.04% -149

$1,076 2.08% 110 $1,118 3.94% 105 $1,164 3.39% 134

$1,164 11.79% 200 $1,192 1.80% -65

$1,234 3.52% 37

$1,298 5.19% 37 $1,369 5.47% -19 $1,369 17.60% 0

$1,469 7.30% 221 $1,509 2.70% -15 $1,541 2.10% -112 $1,589 3.10% 5

vs. 34.4%

Property Overview

3 BEDROOM, 2.5 BATH | 1,176 SF SF

Capital Improvement Budget

Interior Unit Upgrades on Turns $923,000

Leasing Office Decor $25,000

Replace Roofs $743,325

Tree Trimming $25,000

Asphalt Repairs $40,000

Removal of Dead Trees $10,000

Erosion Repairs $40,000

Replace Screens Missing on Buildings $12,500

Gutter/Downspout Repairs $12,000

Trip Hazard Repairs $12,500

Pool/Recreational Area Fence Repairs $7,500

Siding/Trim Repairs $50,000

Entrance Gate Repairs $30,000

Total $1,930,825

Local Area Rental Comps

1X1A $986 76 742 $1.33 $1,193 34 682 $1.75

1X1B $1,213 57 783 $1.55

2X1 $1,343 63 1051 $1.28 $1,167 195 2X1.5 $1,153 157 1222 $0.94

Park at Galaway 33Ninety

Elite at City View

Seven Oaks Lane 3390 Fairburn Road 4001 Lakemont Drive Point, GA 30344 Atlanta, GA 30331 College Park, GA 30337

1970 1976 1976 486 330 372 88% 88% 85% 0.8 Miles 2.5 Miles 1 Miles Wood Style, Fl, Formica Superior - Wood Style, Fl, Formica Superior Superior Superior Superior

Count SF PSF Price Count SF PSF Price Count SF PSF $1,100 104 750 $1.47 $1,125 49 730 $1.54 195 986 $1.18 $1,300 136 900 $1.44 $1,250 99 1119 $1.12 45 972 $1.23 $1,250 50 1250 $1.00 $1,310 124 1122 $1.17 56 1345 $0.96 $1,500 90 1200 $1.25 $1,550 50 1600 $0.97 190 1397 $0.96

Financial Analysis

Pro Forma (Unlevered) Cash Flow Projections

Year 1 Year 2

OPERATING REVENUE

Potential Market Rent $3,957,600 $4,195,056

(Loss to Lease) ($316,608) ($167,802)

Gross Potential Revenue $3,640,992 $4,027,254

Vacancy ($197,880) ($209,753)

Collection Loss / Bad Debt ($201,422) ($204,236)

Base Rental Revenue $3,241,690 $3,613,265

Other Income $233,796 $240,810

Exp. Reimb. (Water, Pest) $178,224 $183,571

Effective Gross Income $3,653,710 $4,037,646

OPERATING EXPENSES

Repair & Maintenance / Turnover ($157,160) ($161,875)

Contract Services ($61,956) ($63,815)

Payroll ($353,959) ($364,578)

Marketing & Advertising ($7,350) ($7,571)

Administrative ($145,517) ($149,883)

Utilities ($300,996) ($310,026)

Insurance ($146,260) ($150,648)

Real Estate Taxes ($365,426) ($389,909)

Property Management Fee ($127,880) ($139,528)

Compliance Expenses ($3,650)

Total Operating Expenses ($1,670,154) ($1,737,831)

Net Operating Income $1,983,556  $2,299,815

Capital Reserves ($85,200) ($85,200)

Cash Flow Before Debt Service $1,898,356  $2,214,615

Projections

Year 3 Year 4 Year 5

$4,383,834 $4,581,106 $4,775,803 ($87,677) ($45,811) ($23,879) $4,297,157 $4,535,295 $4,751,924 ($219,192) ($229,055) ($238,790) ($101,924) ($107,656) ($112,828) $3,976,042 $4,198,584 $4,400,305

$248,034 $255,475 $263,139 $189,078 $194,750 $200,593 $4,413,154 $4,648,809 $4,864,037

($166,731) ($171,733) ($176,885)

($65,729) ($67,701) ($69,732) ($375,515) ($386,781) ($398,384)

($7,798) ($8,032) ($8,272) ($154,379) ($159,010) ($163,781) ($319,327) ($328,906) ($338,774) ($155,167) ($159,822) ($164,617) ($389,909) ($401,607) ($413,655)

($151,800) ($159,246) ($166,252)

($1,786,355) ($1,842,838) ($1,900,351) $2,626,799  $2,805,971  $2,963,686  ($85,200) ($85,200) ($85,200) $2,541,599  $2,720,771  $2,878,486

*These are projections and not guarantees. Actual returns may vary widely, due to many economic and marketplace factors beyond our control.

Pro Forma (Leveraged) Cash Flow Projections

IRR At Close Year 1 Year 2 Year

ACQUISITION COST

Purchase Price ($35,500,000)

Closing Costs (excl. Financing) ($588,359)

Upfront Funding of Capital Exp. ($1,930,825)

TOTAL ($38,019,184)

CF BEFORE DEBT SERVICE $1,898,356 $2,214,615 $2,541,599

DISPOSITION PROCEEDS

Gross Sales Proceeds - 5.75%

Selling Costs

NET SALES PROCEEDS

UNLEVERAGED CASH FLOW 13% ($38,019,184) $1,898,356 $2,214,615 $2,541,599

FINANCING CASH FLOW

Loan Drawdowns $ 17,840,000

Loan Closing Costs and Fees ($229,080)

Debt Service ($533,416) ($533,416) ($533,416)

Loan Repayment

CASH FLOW FROM LOAN PROCEEDS $17,610,920  ($533,416) ($533,416) ($533,416)

RESERVES

Reserves Funded ($1,328,429)

Release of Unused Reserves $225,000  $225,000

CASH FLOW FROM RESERVES ($1,328,429) $225,000  $225,000

LEVERAGED CASH FLOW 18.7% ($21,736,693) $1,589,940  $1,906,199  $2,008,183

Acquisition Fee, AM Fee, Misc Costs ($710,000) ($46,537) ($49,865) ($53,372)

NET LEVERAGED CASH FLOW 17.4% ($22,446,693) $1,543,403  $1,856,334  $1,954,811

Projections

$2,541,599 $2,720,771 $51,542,373.68  ($1,365,436) $50,176,937.68

This table provides a snapshot of cash flow projections after factoring in debt service, loan repayment and management of reserves to operate the property.

$2,541,599 $52,897,702.32

($533,416) ($594,749) ($17,778,590)

($533,416) ($18,373,339)

$878,429 $878,429

$2,008,183  $35,402,798

($53,372) ($55,499)

$1,954,811  $35,347,299

*These are projections and not guarantees. Actual returns may vary widely, due to many economic and marketplace factors beyond our control.

Investment Structure Details

The focus of this investment is on capital preservation and risk managemement, while still having tax-advantaged and inflation-protected upside potential.

The fund has two groups of partners:

1. The General Partners (GP) who are not only investors but also the key managers of the fund.

2. The Limited Partners (LP) who are the majority of the investors in the fund.

The fund provides a two-tier return structure for the limited partners as outlined on this page.

Each Class varies based on the following components:

· Coupon (adjusted interest) rate

· Priority of principal repayment

· Equity participation

Additionally, most of our investors are interested in the tax advantages related to the accounting of depreciation on each asset acquired.

All classes receive depreciation allocation based on the principal amount invested and the cost segregation analysis performed upon acquisition by our tax advisors.

Please note that this is a high-level illustration of the investement opportunity. All the details regarding the limited partner interests are outlined in detail in the Fund’s Subscription Agreement.

Class

•

• Investor first receives preferred return

• GP then has catch-up to 35% of amounts distributed

•

• to 11% IRR 65% (LP) and 35% (GP)

• to 14% IRR 50% (LP) and 50% (GP)

• Thereafter, 35% (LP) and 65% (GP)

Pro Forma Financial Analysis Sources & Uses

SOURCE OF FUNDS

SOURCE $ AMOUNT % OF TOTAL

Preferred Equity 10,250,000 25.44%

Members (Common Equity) 12,196,693 30.27%

Debt 17,840,000 44.29%

Total Sources 40,286,693 100.00%

USE OF FUNDS

USE $ AMOUNT $ / UNIT % OF TOTAL

Purchase Price 35,500,000 125,000 88.12%

Closing Costs (excl. Financing) 588,359 2,072 1.46%

Capital Expenditures 1,930,825 6,799 4.79%

Financing Costs 229,080 807 0.57%

Lender Escrows + Insurance 1Y

Advance + Reserves + Utility Deposits 1,328,429 4,678 3.30%

Acquisition Fee 710,000 2,500 1.76%

Total Uses 40,286,693 141,854 100.00%

Key Real Estate Terms & Definitions

Capitalization Rate (cap Rate) - A rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor’s potential return on his or her investment. This is done by dividing the income the property will generate (after fixed costs and variable costs) by the total value of the property.

• When acquiring income property, the higher the capitalization rate (“Cap Rate”), the better.

• When selling income property, the lower the Cap Rate the better.

• A higher cap rate implies a lower price, a lower cap rate implies a higher price.

Cash Flow - Cash generated from the operations of a company, generally defined as revenues less all operating expenses.

Cash-on-Cash - A rate of return often used in real estate transactions. The calculation determines the cash income on the cash invested.

• Calculated: Annual Dollar Income Return/ Total Equity Invested= Cash-on-Cash

Investor Average Annual Return, excluding disposition - The average return per year during the investment hold. This calculation does not include the return of invested capital.

Investor Average Annual Return, including disposition - The average return per year including profits from disposition.

Internal Rate of Return (IRR)- The rate of return that would make the present value of future cash flows plus the final market value of an investment opportunity equal the current market price of the investment or opportunity. The higher a project’s internal rate of return, the more desirable it is to undertake the project.

Return on Equity (ROE)- The amount of net income returned as a percentage of shareholders equity.

• ROE is expressed as a percentage and calculated as: Return on Equity= Net Income/ Shareholder’s Equity

Management Team

Investment Team

Robert Pereira – Chief Executive Officer

Robert founded ARC Multifamily Group and is a real estate industry veteran with over 2 decades of investing and operating experience. In addition to managing capital and structuring deals, Robert has personally managed over $120+ million of construction and over $400 million of value-add residential real estate projects since 2008. Robert has led ARC Multifamily Group to acquire over 1,500 apartment units in Georgia and Alabama. He earned an undergraduate degree in Engineering (2002) at the University of Waterloo, and an MBA in Real Estate & Finance (2008) from the Paul Merage School of Business at the University of California, Irvine. Robert and his family reside in Newport Beach, California.

Evan Ageloff – Chief Operating Officer

Evan is known for his metric-driven approach to financial management. Throughout his career, he developed and delivered roadmaps and KPI dashboards that executive stakeholders and departmental leaders could use to identify and act on key opportunities, eliminate waste, and maximize productivity. Evan holds a Masters in Applied Science from the University of Denver, an MBA from Pepperdine, and a B.A., Accounting from Queens College.

Sharran Srivatsaa – Chairman

Sharran is a serial entrepreneur, sought after keynote speaker, and a respected thought-leadership resource for publications such as the Wall Street Journal, SUCCESS magazine, Huffington Post and Forbes. Most recently, Sharran led Teles Properties’ unprecedented 10x growth over 5 years and a 4-year consecutive streak on the Inc. 500 fastest growing companies list resulting in its acquisition by national real estate powerhouse Douglas Elliman. Prior to Teles, Sharran worked at both Goldman Sachs and Credit Suisse, where he collaborated with management teams of fast-growing businesses around the country on investment advisory and corporate strategy. Sharran is a Principal at Srilo Ventures, a multi-factor private investment fund that focuses investing in and advising technology companies and operating businesses in the consumer space. Having successfully completed many acquisitions, joint-ventures, management buyouts, mergers, and capital raises.

Property Management

Launched in 2017, Crown Bay Management operates and maintains the multifamily communities acquired by Crown Bay Group. Under the leadership of Director Michelle Fischer, the subsidiary ensures that the properties are governed as efficiently and financially aggressively as possible in order to increase net operating income and force value appreciation. Crown Bay Management is an integral part of the lifecycle of each multifamily investment. Once the property is acquired, our leadership seamlessly executes the business plan overseeing all capital work, contractor negotiations, renovations and staff. The management team utilizes OneSite®, a web-based operating system, to monitor resident relations, service requests, leasing activity, turnover schedules and occupancy, and provides real-time financial reporting to investors.

ROBERT PEREIRA

949.439.3539 robert@arcmf.com

SHARRAN SRIVATSAA 424.254.8628 sharran@arcmf.com

This material does not constitute an offer to sell or a solicitation of an offer to purchase any securities in any jurisdiction. Any such offer shall be made only pursuant to a private placement memorandum which should be reviewed in its entirety, including the risk factors set forth therein, as the information in this summary is not complete. No investment in the Property will be accepted until a subscription agreement and other documentation in form acceptable to the Manager is completed. This information relates to scenarios of possible real estate opportunities for qualified accredited investors who have established an existing substantive relationship with us or our affiliates. Natural persons may qualify as accredited investors by virtue of such pre-existing relationships and by proof of business experience, income and net worth.

Information concerning the property described herein has been obtained from sources deemed reliable. However, it is subject to errors and omissions. Any information contained herein may include forward-looking statements, estimates, and projections with respect to anticipated future performance. Such forward-looking statements, estimates, and projections reflect various assumptions of management that may or may not prove to be correct and may involve various risks and uncertainties. No representation is made, and no assurance can be given, that the projected results can or will be attained. Actual results may vary, perhaps materially, from the projections. This information is made available as of the date set forth below and the Manager has no obligation to update this summary.

Projections are subject to change due to loan terms, new discovery, occupancy, additional capital investment, owner decisions, and various factors involved in property management, and there is no guarantee of the projected financials, and further there is no guarantee that the property will close on a specific date. Potential investors are advised to do their own due diligence and seek appropriate professional advice if needed.

4021 MacArthur Blvd Newport Beach, CA 92660

949.439.3539 robert@arcmf.com