FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. Full Service Mortgage Brokerage Firm “Knowing one lender is good, knowing all the lenders is invaluable.” Over 25 years experience Over 6000 fundings, including over 1000 Multi-family & Commercial loans Lowest Rates & Greater Leverage Aggressive Pricing for Tier 2 & “C” Area Properties Tough and Complex Deals are our Specialty Fast, Personalized, and Efficient Service FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

Specifically tailored Multi-family & Commercial Financing Solutions We provide our clients with customized financing programs and the most competitive pricing available. Example: Funded April 2014 - 24 units, Downey, CA $2.5 million Cash-Out Refinance - 1.75% over the 11th District COFI Index Client Objectives: Solution: 1. Principal Pay Down Strategy 2. Minimum Volatility 3. Maximize Cash Flow 1. No limit on Principal Pay Down (PPD) 11th District COFI Index – historically the least volatile & slowest moving Index in an uptrend interest rate market PPD = Payment Reamortization = Increased Cash Flow FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

Example: $17 million South East LA Portfolio - Cash-out Refinance “C” Quality Tier 2 Apartments Client Objectives: Solution: Maximizing Cash-Out Maximize Cash Flow Active Investor seeking to add new acquisitions to existing portfolio 75% Loan to Value financing obtained 5 Year Interest Only Payment used to determine debt service for greater loan amounts Result: Investor increased cash flow and obtained significantly more cash-out available for new investments. FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. Example: 15 Units South East LA property Sales Price of $1,450,000 Issues: Potential: Deferred Maintenance (DM) Rent Stabilization required Mitigating DM provides for tremendous upside with Market Rents and double digit return. Client Objectives: Solution: Maximum Leverage to allow for greater allocation of funds towards DM 2. Competitive 5 year Fixed Loan 75% Loan to Value Financing obtained 5 Year Fixed @ 4.00% Client opted to buy down rate after Cost/Benefit analysis* FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

15 Unit South East LA Cost/Benefit Analysis Sales Price $1,450,000 for Tier 2,”C” Quality No Points Option 1 Point Option 70% LTV Maximum 4.55% 5 Year Fixed Loan Amount: $1,015,000 Payment: $5, 173.05 Cash on cash return: 3% 75% LTV Maximum 4.00% 5 Year Fixed Loan Amount: $1,087,500 Payment: $5,191.84 Cash on cash return: 4% FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. 15 Unit South East LA - $1,450,000 - Cost Benefit Analysis Cont. Net Cash On Hand Difference at the Close of Escrow = $61,625 NET CASH DIFFERENCE ALLOCATED FOR REHAB OF 8 UNITS $7,703 x 8 = $61,625.00 Rehab per Unit Kitchen Cabinets $1,600 New Tile $2,400 Bathroom Cabinets $703 Labor $3,000 Total $7,703.00 3 MONTHS LATER = RENT STABILIZATION & INCREASED RETURN Outcome $150/mo. Rent Increase x 8 Units $14,400 Annually New Cash on Cash Return 8% (formerly 4%) FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment lending”

9 Units Huntington Park - $800,o00 Sales Price Challenge: Massive Rehabilitation Project Solution: Temporary Bridge Financing @ 8.99% Interest Only - No Prepay Closed in 8 days!! 12 months later - Refinance Bridge loan - with Lender that allows for 1 year seasoning at new appraised value of $1,250,000. New Loan: Cash-out Loan Amount of $937,500 5 year fixed @ 3.95% FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. Utilizing a Pay Down Strategy A pay down strategy makes sense when an asset does not require any rehab, the rents are at market, and the asset is already producing a sufficient income. Such an asset allows you to maximize leverage and obtain the best terms. By comparison When unknown factors such as significant rehab is required, uncertainty of when rents can be increased (rent control, etc.) the asset no longer fits the model above and should be viewed as a speculative fixer acquisition. FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. Example: $3,475,000 Apartment Building Current income: $280,321.00 Stabilized: $309,000.00 Expenses: $91,000-$98,000/year. New Mortgage: $2.5 million Monthly payments: $11,935 at a rate of 4%. Net cash flow Est.: $3800(conservative $3000.00) Cash/cash return: 3.6% (without any principal pay down & based on $1M DOWNPAYMENT and $3000/month in potential cash flow Current cap rate: 4.8% FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. Analysis: Monthly principal pay down of $2000 Factors: Applying a 3% increase in rents allowed by rent control (please note this is a conservative approach) due to fact stabilized rents provide for $309,000.00 in gross rental income). Value appreciation: 3% based on history (also a very conservative approach due to pent up inflation looming in the current marketplace). Also, up and coming locations bring an influx of foreign funds buying American assets. FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

FIRST COMMERCIAL CAPITAL, INC. 7 YEAR MODEL After 7 years using the 3% factors above and $2,000 in monthly principal pay-down provides for the following: Principal balance: $1,950,569.00 Annual Gross Income: $344,760.00 Estimated Appreciated Value: $4,149,331.00 Original $1,000,000 investment would provide a return of $1,200,000, a 120% return over a 7 year holding period or a 17% annually return. FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

7 YEAR ANALYSIS CONTINUED Factoring an approx. annual depreciation between $65-$69K , this asset will likely not produce taxable income but rather more than likely show losses, allowing for a potential reduction in taxable income and a taxable return equivalent of 24% (based on a 40% tax bracket). SUMMARY At the end of year 7 you can opt for either: A) Sell and use the now $2.2M in equity for another investment or B) Cash refinance, allowing for all $1M originally invested to be returned with property to continue cash flowing FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”

“Give us an opportunity and we’ll make you a client for life.” Gil Figueroa, CEO First Commercial Capital, Inc. Gil@FirstCommercialCapital.com 562-754-LOAN FIRST COMMERCIAL CAPITAL, INC. “Your first selection in apartment/commercial lending”