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OFFERING MEMORANDUM

ELM STREETA 24-Unit Apartment Community in Sweetwater, TX

The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be

reviewed only by the party receiving it from Rowan Properties and should not be made available to any other person or entity

without the written consent of Rowan Properties. This Offering Memorandum has been prepared to provide a summary, un-

verified 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. Rowan Properties 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 in this Offering Memorandum

has been obtained from sources we believe to be reliable; however, Rowan Properties has not verified, and will not verify, any of

the information contained herein, nor has Rowan Properties conducted completeness of the information provided. All potential

buyers must take appropriate measures to verify all of the information set forth herein.

Rowan Properties is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this mar-

keting package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsor-

ship or endorsement by, said corporation of Rowan Properties, its affiliates or subsidiaries, or any agent, product, service, or

commercial listing of Rowan Properties, and is solely included for the purpose of providing tenant lessee information about this

listing to prospective customers.

All property showings are by appointment only. Please consult Rowan Properties for more details.

CONFIDENTIALITY AGREEMENT

TABLE OFCONTENTS05 09 11 14

Executive Summary

Rent Comparables

Financial Analysis

Market Overview

Prospective investors wishing to make an offer are requested

to submit: • Letter of Intent

• Resume and/or List of Real Estate Owned

• Transaction References

• Lending References

• Proof of Funds / Source of Equity for Acquisition

Interest Offered100 percent fee simple interest in the Elm Street Apartments.

TermsThe Elm Street Apartments are offered on an all-cash basis, free and clear of any existing debt.

Property ToursProspective investors are encouraged to visit the subject property prior to submitting an offer.

Please do not contact the on-site management or staff without prior approval. All property

showings are by appointment only, and must be scheduled 24 hours in advance. Please con-

tact Rowan Properties to schedule all property visits.

Sale ConditionsInterested prospective investors should be aware that the owner of the property is selling the

property in “as is, where is” condition with all faults, if any, and without representations or

warranties of any kind of nature, expressed or implied, written or oral.

Call for Offers DateThe owner of Elm Street has requested that all offers be submitted. The call for offers date

has yet to be determined. Unless notified otherwise, offers will be submitted in the order they

are received.

Submitting OffersPlease submit any and all offers electronically, via email to a Rowan Properties agent.

Elm Street | Offering Memorandum 4

Mike BurchPrincipal(469) [email protected]

Pete HartnettManaging Director(469) [email protected]

Coleton BurchManaging Director (469) [email protected]

Rowan BurchSenior Investment Advisor(469) [email protected]

Bradley BurchSenior Investment Advisor(469) [email protected]

Matt WaskowInvestment Advisor(469) [email protected]

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Exclusive Advisors

INVESTMENT OVERVIEWElm Street • 24 Units • Sweetwater, TX

Elm Street | Offering Memorandum 6501 Elm St. Sweetwater, TX 79556

ELM STREET

$1,100,000 Price

24 Units

1978/1983 Year Built

100% Occupancy

$623 Current Market Rent

490 SF Avg. Unit Size

11,760 SF Net Rentable SF

$1.27 Avg. Rent per SF

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Investment Highlights Rowan Properties is pleased to announce the exclusive listing of the Elm Street Apartment Homes in Sweetwater, Texas. Elm Street consists of 24

one-bedroom units with an average unit size of 490 square feet. The offering provides a unique investment opportunity to acquire a quality, cash flow-

ing asset with upside through the billing back of utilities and minor interior upgrades. The asset is in Sweetwater, which is situated 40 miles west of

Abilene, and home to more than 10,000 residents.


StyleFoundationFramingExteriorRoofs Number of Buildings

GardenConcrete SlabWood FrameWood Siding Flat Three 2-Story Buildings

HVAC ElectricityHot Water Fire Protection

Individual HVAC - Wall Mounted Individually Metered Two Buildings: Central - Boiler System One Building: Individual Smoke Detectors

Utilities ElectricityWater and Sewer Trash Pest

Paid by Paid by Resident Paid by Owner Paid by Owner Case by Case

District Elementary Middle High College

Sweetwater ISD East Ridge (1.4 mi)Sweetwater (0.4 mi)Sweetwater (0.6 mi) Texas State Technical (4.6 mi)

Application Fee Deposit Pet Deposit

$25 $150 $250

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Assessor's Parcel Number 2019 Assessed ValueTax RateParcel SizeDensity

30781 $163,110 2.642079%0.657 Acres36.52 Units Per Acre

Laundry FacilitiesW/D Connections

No Yes - in 12 units

Parking Spaces Parking Lot Surface

112 Gravel

Fees & Deposits

Schools

Property Overview

MechanicalTax Information

Utilities

Parking

Laundry


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RENT COMPARABLESElm Street • 24 Units • Sweetwater, TX


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NT

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5

Applecreek

Spanish Arms

El Presidente

Mustang Heights

1601 Grand Ave

1729 Hailey St

1715 Hailey St

801 E 14th St

1984

1976

1978

2012

124

80

40

80

777 SF

960 SF

809 SF

980 SF

$596

$730

$610

$637

Sweetwater, TX

Sweetwater, TX

Sweetwater, TX

Sweetwater, TX

1

2

3

4

$0.77

$0.76

$0.75

$0.65

# PROPERTY ADDRESS YEARBUILT

# OF UNITS

AVG. UNITSIZE

AVG. RENT

AVG. RENTPER SF

Averages

Elm Street 501 Elm St Sweetwater, TX

1988

1978

324

24

876 SF

490 SF

$641

$623

$0.73

$1.27

12

3

4

DISTANCE

1.4 mi

1.3 mi

1.2 mi

2.1 mi

1.5 mi

FINANCIAL ANALYSISElm Street • 24 Units • Sweetwater, TX


Units Type Unit Size Total SFMarketRent

Pro FormaRent

MonthlyCurrent Rent

MonthlyPro Forma

Rent

Annual Current Rent

Annual Pro Forma

Rent

CurrentRent SF

Pro FormaRent SF

5 Classic 490 2,450 $575 $592 $2,875 $2,961 $34,500 $35,535 $1.17 $1.21

17 Rehabbed 490 8,330 $625 $644 $10,625 $10,944 $127,500 $131,325 $1.28 $1.31

2 Rehabbed & Furnished 490 980 $725 $747 $1,450 $1,494 $17,400 $17,922 $1.48 $1.52

24 490 11,760 $623 $642 $14,950 $15,399 $179,400 $184,782 $1.27 $1.31

Unit MixElm Street | Sweetwater, TX

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1B/1B Rehabbed

71%

1B/1B Classic

21%

1B/1B Rehabbed & Furnished

8%


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Historical Expenses:1. Trailing 12 expenses were used for this analysis

Pro Forma Trailing 1May 2019

Trailing 3May 2019

INCOMESCHEDULED MARKET RENT $184,782 $150,430 $127,847Loss to Lease 1.00% ($1,848) $0 $0Vacancy 5.00% ($9,239) $0 $0Concessions/EE Units/Deferred Rent 1.00% ($1,848) $0 $0Bad Debt 2.00% ($3,696) $0 $0TOTAL RENTAL INCOME $168,152 $150,430 $127,847Fee Income $0 $36 $1,201Utility Income $9,959 $0 $2,605Other Income $1,000 $0 $0EFFECTIVE GROSS INCOME $179,110 $150,466 $131,654

Per Unit Pro Forma Expenses Trailing 12 Expenses Trailing 12 Expenses

EXPENSESAdministrative $150 $3,600 $923 $923Repairs & Maintenance $400 $9,600 $2,745 $2,745Management Fees 5.00% $350 $8,408 $10,951 $10,951Contracted Services/Cleaning $400 $9,600 $2,181 $2,181Utilities $830 $19,918 $19,337 $19,337Real Estate Taxes $605 $14,531 $14,531 $8,060Insurance $394 $9,448 $9,173 $9,173Capital Reserves $300 $7,200 $0 $0Total Operating Expenses $82,305 $59,841 $53,370Expenses Per Unit $3,429 $2,493 $2,224

NET OPERATING INCOME $96,806 $90,626 $78,284

Cash-on-Cash Return (Strike Price) 15.41% 13.23% 8.88%

CAP RATE ANALYSIS Price $/Unit $/Sq.Ft. Cap Rate Cap Rate Cap Rate

Strike Price $1,100,000 $45,833 $93.54 8.80% 8.24% 7.12%

Current/Pro Forma Income & Expenses

Elm Street | Sweetwater, TX

Pro Forma Expenses:1. Expenses reflect Market Standards2. Management Fee was adjusted to 5%3. Utilities were increased by 3%4. Taxes were adjusted to 50% of the Mid Value5. Insurance Expenses were grown by 3% 6. Capital reserves of $300/unit were taken

NOTES:

Pro Forma Income:1. Rents were increased by 3%2. Economic Vacancy of 9% was added 3. Utility income was adjusted to reflect 50% of the T12 Utility Bill

MARKET OVERVIEWElm Street • 24 Units • Sweetwater, TX


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IEW Sweetwater, Texas

Sweetwater is the county seat and largest population center of Nolan County located on I-20 virtually halfway between El Paso and Shreveport.

The city is located 40 miles west of Abilene, 75 miles north of San Angelo, 125 miles southeast of Lubbock, 130 miles northeast of Odessa and

190 miles west of Ft. Worth.

Odessa/Midland (100 miles)

280,419 Population

$63,690 Avg. HH Income

Abilene (45 miles)

Dow Chemical

Salisbury Companies

Halliburton

Keane Group

Odessa Regional Medical Center

Midland Public Schools

Walmart

Weatherford

Veterans Administration Hospital

Chemical Bank

HEB

8,000-6,000

6,000-2,500

6,000-2,500

2,499-1,000

2,499-1,000

999-600

999-600

999-600

999-600

599-400

599-400

MAJOR EMPLOYERS # OF EMPLOYEES

122,999 Population

$57,891 Avg. HH Income

Dyess Air Force Base

Hendrick Health System

Abilene ISD

Abilene St Supported Living Center

Texas Dep. of Criminal Justice

City of Abilene

Abilene Christian University

Abilene Regional Medical Center

Teleperformance USA

Taylor County

Sears Methodist Retirement

6,000-2,500

6,000-2,500

6,000-2,500

2,499-1,000

2,499-1,000

2,499-1,000

999-600

999-600

999-600

599-400

599-400

MAJOR EMPLOYERS # OF EMPLOYEES

Odessa

Midland

AbileneSweetwater

Information About Brokerage ServicesApproved by the Texas Real Estate Commission for Voluntary Use Texas law requires all real estate licensees to give the following information

about brokerage services to prospective buyers, tenants, sellers and landlords.

Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.

IF THE BROKER REPRESENTS THE OWNER:The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written - listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent.

IF THE BROKER REPRESENTS THE BUYER:The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.

IF THE BROKER ACTS AS AN INTERMEDIARY:A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written

consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:

1. shall treat all parties honestly;2. may not disclose that the owner will accept a price less that the asking price unless authorized in writing to do so by the owner;3. may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and4. may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property.

With the parties’ consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.

If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.

Exclusively Presented By:

Mike BurchPrincipal(469) [email protected]

Pete HartnettManaging Director(469) [email protected]

Coleton BurchManaging Director (469) [email protected]

Rowan BurchSenior Investment Advisor(469) [email protected]

Bradley BurchSenior Investment Advisor(469) [email protected]

Matt WaskowInvestment Advisor(469) [email protected]

Offering Memorandum

ELM STREET

For more information, please contact:

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