OFFERING MEMORANDUMHILLCREST APARTMENTS | 44 UNIT MULTI FAMILY PROPERTY

WHO WE ARE

Red Rock Realty Group is a full-service commercial and residential sales, leasing, development, and investment company based in Birmingham, Alabama. Our real estate professionals are experts in nearly every type of property, with a focus on multi-family management, development, and brokerage. Our professionals work throughout the state of Alabama, and, in some cases, out of state.

BROKERAGE TEAM

Jack LittleRed Rock Realty GroupSVP Brokeragejlittle@redrockrg.com

cell: 205.908.3256office: 205.930.1799

Trish RushingRed Rock Realty GroupBrokertrushing@redrockrg.com

cell: 813.309.2875office: 205.930.1785*Property tours by appointment only.

HEADSHOTHERE

HEADSHOTHERE

04Executive Summary

05Location Overview

06About theProperty

07Completed Work

08Employers

09Jeff StateCommunity College

11Rental Comps

12StabilizedPro Forma

13Sales Comps

The information contained in the following Investment Offering is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Red Rock Realty Group and should not be made available to any other person or entity without the written consent of Red Rock Realty Group. This Investment Offering has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Red Rock Realty Group has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal Regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained win this Investment Offering has been obtained from sources we believe to be reliable; however, Red Rock Realty Group has not verified, and will not verify, any of the information contained herein, nor has Red Rock Realty Group conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

CONFIDENTIALITY AND DISCLAIMER

TABLE OF CONTENTS

EXECUTIVE SUMMARY

Red Rock Realty Group is pleased to present the exclusive listing of the 44 unit, 88 bed multi family housing community located in Tarrant, Alabama. The asset’s location, newly renovated units and unrealized rental potential make this a unique opportunity.

4| OFFERING MEMORANDUM | HILLCREST APARTMENTS | EXECUTIVE SUMMARY

LOCATION

Hillcrest Apartments are located within walking distance of the Jefferson State Community College main campus and a short drive from many large manufacturers and employers. Hillcrest offers a private setting with convenient access to downtown Birmingham.

FULL EXTERIOR RENOVATIONS, 80% INTERIORS

Hillcrest’s recent renovations include 34 of the 44 units being fully renovated 10 partially renovated. Renovations include all new HVAC units and thermostats, water heaters, refrigerators, washer, dryers, stoves, dishwashers, flooring, countertops and paint. All buildings have new roofs.

UNIQUE VALUE-ADD OPPORTUNITY

The current Owner has renovated nearly all of the property, but has nearly 100% vacancy due to the owner housing crews working a specific project which is now completed. The new Owner has the opportunity to re-tenant the property at Market Rates with rent-ready renovated units at Closing.

PRICING: $1,900,000

PRICE PER UNIT: $43,181

STABILIZED CAP RATE: 11%

LOCATION OVERVIEW

HILLWOOD APARTMENTS

5| OFFERING MEMORANDUM | HILLWOOD APARTMENTS | LOCATION OVERVIEW

1 | Birmingham 11.8 miles

2 | UAB University and Hospital

3 | Children’s of Alabama

4 | Jefferson State Community College

5 | Birmingham Shuttlesworth International Airport 11 miles

6 | ABC Coke

7 | Vulcan Materials

8 | Barber Motor Speedway

9 | Ruffner Mountain

10 | Army National Guard

4

5

7

2

8

10

1 | BIRMINGHAM11.8 MILES SW

6

3

UNITS: 44 units, 2 - 3 BR/1BA40 - 2 BR/1BA2 - 1BR/1BA +/- 733 SFYEAR BUILT: 1977YEAR RENOVATED: 2018-2019TOTAL SF: 32,190SITE ACREAGE: +/- 5 AcresPARCEL #: 1300142002001.000

1300141000016.000EXTERIOR: Brick/Vinyl walls with concrete deck and metal stairs

FRAMING: Wood FrameFOUNDATION: Concrete PadROOFS: Pitched ShingleROOF CONDITION: NewRENTS: $725OFFICE UNIT ON SITE

HVAC: Electric heat pumpWATER: ElectricFull Size Washer & Dryer in each unit.

ABOUT THE PROPERTY

6| OFFERING MEMORANDUM | HILLCREST APARTMENTS | ABOUT THE PROPERTY

RENOVATION WORKCOMPLETED (2019)

7| OFFERING MEMORANDUM | HILLCREST APARTMENTS | UPGRADES

BUILDING EXTERIORS

● New Doors where needed● Pressure Washing

STAIRWAYS AND LANDINGS

● Some repairs where needed

LAUNDRY

● New full size Washer and Dryers in all newly renovated units (34 units). All units have W/D

HEALTH AND SAFETY

● All new fire extinguishers in front of every unit.

GROUNDS

● Trees Trimmed● New exterior lights installed

RAILING

● Some new guard rails, and support posts

ROOFING

● New roof decking● New shingle roofs 2019

ELECTRICAL

● New exterior light installed● Some new meters/interior

work.

HVAC

● 34 new ground units, Units with older HVAC have Smart Thermostats.

PLUMBING

● Repaired where needed● Various new supply lines,

p-traps, and sink drains● 34 Water Heaters/Pans● New Sinks

UNIT INTERIORS

● New Paint● New Countertops in Kitchen and

Baths (34 Units)● New Carpet & Vinyl Floors (34

Units)● New Stove, Dishwasher,

Refrigerator, Washer, and Dryer (34 Units)

● New Thermostats (Smart/Standard)

NEARBY EMPLOYERS

8| OFFERING MEMORANDUM | HILLCREST APARTMENTS | EMPLOYERS

EMPLOYER LOCAL EMPLOYMENT

1 | UAB Systems l 18,750 Employees2 | Children’s of Alabama 2,232 Employees3 | Jeff St Community College 8,840 Students4 | Kamtek 1,000 Employees5 | Sterlite Corp 100-250 Employees6 | BHM International Airport 7,000 Workers (Various)7 | ABC Coke 50-100 Employees8 | ERP Coke 225 Employees9 | Vulcan Materials Private10 | United Pipe & Steel Private11 | Autocar Truck Private12 | Ventura Foods Private13 | Associated Grocers 370 Employees14 | CEMEX Private15 | Capital Materials 50 Employees16 | Birmingham Coca Cola 500-999 Employees17 | CSX Private18 | Cowin Equipment 250-499 Employees19 | Thompson Tractor Co Private20 | Royal Cup 848 Employees21 | Homeland Vinyl Products 350 Employees

JEFFERSON STATE COMMUNITY COLLEGE— JSCC Jefferson Campus sits on a 274 acres with 13 buildings.

— JSCC has 3 other Campuses in Alabama. Shelby-Hoover Campus, Chilton-Clanton Campus, St Clair-Pell City Campus and

— Jefferson State is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools to award the associate degree. Individual academic programs are nationally accredited by 10 different professional evaluating organizations.

9| OFFERING MEMORANDUM | HILLCREST APARTMENTS | JEFFERSON STATE COMMUNITY COLLEGE

— Total Enrollment for Fall 2017 was 8,840 Full & Part Time Students

— There is no available onsite Student Housing at JSCC.

— Limited other Multi Family Housing options in the immediate area.

JEFFERSON STATECOMMUNITY COLLEGE

Hillcrest Apartments are ideally located just outside the JSCC Jefferson campus boundaries.

10| OFFERING MEMORANDUM | HILLCREST APARTMENTS | JACKSONVILLE STATE UNIVERSITY

1 | Hillcrest Apartments - 1 mile from Campus

1 HILLWOOD

11| OFFERING MEMORANDUM | HILLCREST APARTMENTS | PRO FORMA

ASSUMPTIONS:

RENTAL INCOME: Rent includes water for each unit. Based on current asking rent for the property.

VACANCY: Based on market average.

UTILITIES: Based on 2019 actuals annualized for months when property was near full capacity.

MANAGEMENT FEES: Management fee based on 6.5% of gross rental income.

TAXES AND INSURANCE: Based on 2019 actuals.

YEAR 1 STABILIZED PRO FORMA

INCOME TOTAL PER UNIT PER MONTH TOTAL

Rental Income @ $725/unit $382,800 $8,700 $31,900 $382,800

Vacancy/Bad Debt (9% of Collected Rent) $34,452 $783 $2,871 $34,452

TOTAL INCOME $348,348 $7,917 $29,029 $348,348

PROPERTY EXPENSES

Grounds & Site $16,000 $364 $1,333 $16,000

Management $20,000 $455 $1,667 $20,000

Repairs and Maintenance $22,000 $500 $1,833 $22,000

Utilities $42,500 $966 $3,542 $42,500

Turn Expenses $11,000 $250 $917 $11,000

TOTAL PROPERTY EXPENSES $111,500 $2,534 $9,292 $111,500

ADMINISTRATIVE EXPENSES

Property Taxes $10,000 $227 $833 $10,000

Property Insurance $15,000 $341 $1,250 $15,000

Legal/Accounting $3,000 $68 $250 $3,000

TOTAL ADMINISTRATIVE EXPENSES $28,000 $636 $2,333 $28,000

TOTAL OPERATING EXPENSES $139,500 $3,170 $11,625 $139,500

NOI $208,848 $4,747 $17,404 $208,848

CAP RATE @ $1,900,000 10.99% 10.99%

12| OFFERING MEMORANDUM | HILLCREST APARTMENTS | RENTAL COMPS

HILLCREST CURRENT RENTSPROPERTY UNIT TYPE AVG SQ FT AVG MKT RENT

ONE BEDROOMS

Hillcrest 1/1 575 $575

TWO BEDROOMS

Hillcrest 2/1 930 $725

THREE BEDROOMS

Hillcrest 3/1 704 $900

13| OFFERING MEMORANDUM | HILLCREST APARTMENTS | SALES COMPS

SALES COMPARABLESPROPERTY SALE DATE YEAR BUILT SALE PRICE PRICE/UNIT # UNITS CAP RATE

1 - The Onyx at 600600 Earline Cir, , Birmingham, AL

January 2020 1972 $9,400,000 $41,778 225 NA%

2 - Highland Park Townhomes344 20th Ave NE, Birmingham, AL

May 2018 1973 $2,100,000 $37,500 56 7.8%

5 - Summit Ridge149 Haversham Dr, , Birmingham, AL

June 2017 1975 $9,000,000 $45,000 200 12.35%

6 - Park at Sunderland600 Valley Crest Dr,, Birmingham, AL

September 2019 1983 $20,100,000 $75,000 268 5.77%