1. GSLA 2016 Conference & Trade Show How to Make Your Financials Rock ‘N Roll October 25-26, David Johnston, CEO Beacon Communities, Inc.

4. Profit & Loss Financial Statement
Total Revenues
Operating Expenses
Net Operating Income
Debt Service
Net Cash Flow

5. Profit & Loss Financial Statement
Total Revenues
Operating Expenses
Net Operating Income (EBITDA)
Gross Profit Margin % = NOI/Total Revenues
Cap Rates

6. Gross Profit Margins Total Revenues $3M $3M
Operating Expenses 2.1M 2,250,000
NOI $900, $750,000
G. P. % % %

7. Cap Rates NOI (EBITDA) $1M $1M Cap Rate 7% 9%
Value (NOI/Cap) $14.3M $11.1M

8. Cap Rates NOI (EBITDA) $1M $1,100,000 $100k Cap Rate 7% 7%
Value $14.3M $15.7M $1.4M

9. Total Revenues Pre-Leasing Resident Turnover Stabilized Occupancy
Rent Roll Management

12. Pre-Leasing Pre-Leasing Deposits 20% 30%
(Assume 100 units)
Pre-Leasing Deposits % %
Lease-up Deficit – Yr. 1 ($900,000) ($550,000)

13. Resident Turnover Resident Turnover % 40%
(Assume 100 units)
Resident Turnover % 40%
# of Units required to lease 140
Est. Marketing Cost per Unit $5,000

14. Stabilized Occupancy Average 90% 95% Revenues from 5 extra units
(Assume 100 units)
Average 90% 95%
Revenues from 5 extra units
- $3,500 rent per mo. = $17,500
- 75% gross profit margin = $13,125
- annualized revenues = $157,500
- value created (7% cap) = $2,250,000

16. Operating Expenses Controlling Labor Cost
Group Purchasing Organizations
Professional Employer Organization (“PEO”)
Employee Health Insurance

18. Debt Service Capital Structure Debt vs. Equity Debt Source
Primary/Senior Note
Mezzanine Note
Replacement Reserves
Financial Covenants

20. Questions & Answers
David Johnston CEO