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Senior Housing Investment
Opportunity
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 2
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Property Information Package
Table of Contents
Contents
Regarding This Property Information Packet .........................3
Executive Summary ..........................................................4
Senior Living Trends..........................................................5
Occupancy Rates ..............................................................5
Rental Rates.....................................................................6
Assisted Living Care ..........................................................6
Resident Profile.................................................................7
Senior Housing Care Outlook..............................................8
Demographics ..................................................................9
Financials.......................................................................10
Pro Forma Cash Flow Analysis ..........................................10
Comparable Sales ...........................................................11
Property Strategy ...........................................................12
Pro Forma Investor Return...............................................12
Solidus Team .................................................................14
Contact Information ........................................................16
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 3
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Regarding This Property Information Packet
This is not a public offering or offer or invitation to sell securities or make an investment. Securities may
only be offered or sold in the state or states where they are registered or under an exempt offering.
This information is provided to the best of our knowledge. We make no warranties or representations of
the information contained herein. Each individual shall conduct their own due diligence and independent
investigation.
Any estimates of market rents and/or projected rents that may be provided do not necessarily mean that
rents can be established at or increased to that level.
Legal and tax questions should be discussed with the appropriate professionals.
Questions or inquiries can be directed to:
Solidus Capital Management, LLC
c/o Ginger Macias
Cell: (714) 585-2185
Office: (213) 330-2722 x 700
Email: ginger@solidusteam.com
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 4
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Executive Summary
The property is not currently being operated in
its best and highest use. The zoning already
allows for a senior convalescent facility. Our
plan would be two-fold:
• Renovate the current, existing buildings
to accommodate seniors in a non-
medical Assisted Living Facility (ALF)
• Operate an Adult Care Center (Phase 2)
The owner has agreed to carry a loan, thereby
reducing our total required costs.
The renovation will take approximately 12
months and will be completed in phases to
maximize current rent collection. Tenants will
be moving out as we start renovations on their
building unit.
After 12 months, the renovations will be
completed along with a community garden,
landscape, walking path, and central common
area.
The total beds for the AFL would be 46,
generating an average of $2,000 per bed on a
monthly basis.
Property Description
692 E Phillips is comprised of 4 buildings and
21 units/rooms that are 50% vacant. There is
a total of 5,294 SF of building space and the
lot size is 33,793 square feet.
The owner is currently renting out the rooms
for an average of $475/month.
As you look at the neighboring properties, you
will notice the PUD with 9 brand new homes on
one side and a well kept SFR with pride of
ownership on the other side. In fact, this
entire block is made up of updated well kept
structures. That is the future we see in our
subject property.
The Opportunity
Purchase Price: $750,000 ($16,304/bed)
Seller Carry Loan: $337,500 @ 5.5% for 3 years
Closing Costs: $9,375
Carrying Costs: $64,060
Rehab Costs: $218,270
Interest/Contingency Reserve: $75,781
Acquisition Fee: $40,000
Administration Costs: $100,000
Tenant Relocation Costs: $15,000
Total Capital Required: $934,986
After Stabilization:
Gross Income: 46 Beds x $2,000/bed =
$92,000/month = $1,104,000/year
Expenses (55%): $607,200 + $300/bed for Reserves
Vacancy: (7.5%) $82,800
Net Operating Income (NOI): $400,200/year
Value: (NOI/Cap Rate – 7%) $5.72M
*Note: Income does not include fees for care
Quick Analysis
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 5
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Senior Living Trends
Current marketing reports show a high demand for senior housing. In the United States Baby Boomers
are in need of specialized housing to meet their income, social, and health care needs. Everyday there
are more than 10,000 people turning 65 years old. Those in the age group 65+ are expected to increase
2.93% annually in the next five years.1
Occupancy Rates
The senior housing market had a strong performance in 2013 and is expected to continue to have strong
growth, with occupancy and rental rates increasing as demand increases. On average the occupancy rate
for assisted living facilities was 90.3% in the top 100 metro areas.1
1
IRR Viewpoint 2014 www.iir.com
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 6
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Rental Rates
As demand has increased for senior housing, rental rates have also increased and are expected to
continue this trend.
According to SeniorHomes.com2
the national average assisted living base rate in 2012 was $3,550/month.
In California the median rate was $3,710/month.
Comparable Rental Rates near Pomona
Name Address Rates
Claremont Place 120 W San Jose Ave, Claremont $2900 studio
Pacifica Hillsborough 11918 Central Ave, Chino $1995 studio
Regency Grand 150 S Grand Ave, West Covina $2700 studio
Emeritus Villa Colima 19850 E Colima Rd, Walnut $1995 studio
Nohl Ranch 380 S Anaheim Hills Rd, Anaheim $2575 studio
Emeritus Casa Whittier 10615 Jordan Rd, Whittier $1750 studio
Whittier Place 12315 Burgess Ave, Whittier $2500 studio
Assisted Living Care
Residents living at our facility will often require additional help on Activities of Daily Living (ADLs) such as
meal preparation, grooming, bathing, toileting, and medication reminders. This will be a non-medical
facility. Each activity service can be charged separately on a monthly basis and will vary by resident. The
average resident has 2 to 3 ADLs.3
The facility will have full and part-time caregivers on staff 24 hours a day. Below is a chart of common
ADLs and the percent of residents who require each service:
All caregivers will be employees and we will have liability insurance, worker's compensation insurance, and
will be bonded. We will conduct background checks for all staff and check their driving record. All staff
will be required to take a screening drug test at hire and randomized drug testing.
2
www.seniorhomes.com/p/assisted-living-cost/
3
National Center for Assisted Living www.ahcancal.org
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 7
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Proposed Amenities
Companion Care
• 24 hour assistant program
• Light Housekeeping & Laundry
• Cooking & Meal Planning
• Exercise, Activities
• Escort to medical appointments
• Escort to beauty salon or spa
• Hospital stay companion/ care
giving
Personal Care
• Bathing Assistance
• Walking Assistance
• Personal Hygiene
• Eating Assistance
• Medication Reminders
• Grocery shopping
• Incontinence Care
Specialized services:
• Short and Long Term Disability
Assistance
Property Features:
• 24 Hour Security
• Emergency call system in every room
• Community garden with raised gardening beds
• Walking trails, Courtyards, Semi-private patios
• Central Dining area & recreation room
• Small convenience store
Resident Profile4
4
National Center for Assisted Living www.ahcancal.org
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 8
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Senior Housing Care Outlook
Quote5
:
5
IRR Viewpoint 2014
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 9
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Demographics
Pomona, CA
Source: Quickfacts.census.gov
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 10
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Financials
Pro Forma Cash Flow Analysis
Unit Type No. of Beds Rate per Bed Total ProForma Rent
Shared Unit 40 $2,000 $80,000
Private Unit 6 $2,750 $16,500
TOTALS 46 $96,500
Year 1 Year 2 Year 3 Year 4 Year 5
INCOME
Rents $113,400 $1,158,000 $1,201,320 $1,252,493 $1,302,593
Auxillary 0 $5,520 $5,741 $5,970 $6,209
Vacancy ($79,380) ($139,622) ($102,855) ($106,969) ($111,248)
Gross Operating Income $34,020 $1,023,898 $1,107,206 $1,151,494 $1,197,554
EXPENSES
55% expenses $17,010 $636,900 $656,007 $675,687 $695,958
Reserves: $300/unit 0 $13,800 $14,214 $14,640 $15,080
Total Expense $17,010 $650,700 $670,221 $690,323 711,037
Net Operating Income $17,010 $373,198 $436,985 $461,166 $486,516
Debt Service $37,890 $37,889 $37,890 $320,465 $320,465
CASH FLOW ($20,880) $335,307 $399,094 $140,702 $166,052
Cumulative Cash Flow ($20,880) $314,427 $713,521 $854,223 $1,020,275
Cash Flow Assumptions
1) Year 1: $425/unit (16 units) | Year 2+: $2,000/bed
2) Vacancy: 70% (Year 1-2); 12% (Year 2); 8.5% (Year 3+)
3) Expense Increase: 3% per year
4) Income increase: 4% per year
5) Debt Service: (Year 1-3) $3,157/month for private investor
6) Debt Service: (Year 4+) 6% fixed interest on $4.867M
7) Auxiliary Income: utility reimbursements, late charges, application fees
Value at Year 3:
NOI/Cap Rate (7%) = $436,985 / 7% = $6,242,643 ($135,710/bed)
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 11
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Comparable Sales
Sales Date Address # Beds Sales Price Price/Bed
2/18/14 655 W Naomi Ave, Arcadia 101 $13,010,000 $128,812
12/31/13 3601 E Holt Ave, W. Covina 109 $20,906,000 $191,798
9/30/13 6729 Hermosa Ave, Rancho Cuc. 116 $12,900,000 $111,207
4/5/13 3468 Vineland Ave, Baldwin Park 26 $1,900,000 $73,077
Average $126,223
Low $73,077
High $191,798
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 12
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Property Strategy
We plan to stabilize the property and refinance it in Year 3. Given the pro-forma NOI by the end of year
3, we estimate the value of the property at $6.2M (at a 7% CAP). With the refinancing money, we plan to
pay the seller's note, return capital to the investor and hold the property for cash flow.
Pro Forma Investor Return
Our goal is to finance the purchase and reposition with private investor funds without obtaining a loan.
This will give us more flexibility and higher profit for the project as a whole.
Required Capital: $934,986
Uses:
• Cash to Seller (Purchase Price – Seller Carry Loan) = $412,500
• Closing Costs = $9,375
• Acquisition Fee = $40,000
• Rehab Costs = $218,270
• Interest Reserve = $75,781
• Admin Fees (accounting, LLC fees, staff) = $100,000
• Tenant Relocation Costs = $15,000
• Carrying Costs = $64,060
Refinance & Hold Strategy
The refinance loan will be used to pay the seller's note and interest, return capital and interest to the
investors, and pay a dividend to all the owners (Managers and investors). The investor will still remain as
an owner of the property and enjoy passive cash flow.
New Loan = $4,867,693 (Value: $135,710/bed) 75% LTV, 6% interest, 30 year fixed
Uses:
• Create Interest Reserve = $320,465
• Return Investor Capital = $934,986
• Investor Interest Payment Balance = $110,745
• Seller Carry Note + Interest for 3 years = $393,188
• Syndication Partner Loan fee (5%) = $243,385
Balance = $2,864,926
• Solidus Dividend Payment (70%) = $2,005,448
• Investor Dividend Payment (30%) = $859,478
Investor Total Returns: (8% interest + 30% Equity) by Year 3
• Investor Dividend Payment (30%) = $859,478
• Investor Monthly Interest Payment ($3,157/month x 36 months) = $113,652
• Share of Cumulative Cash Flow (30%) = $214,056
• Investor Interest Balance paid at refi = $110,745
• Total Investor Profit = $1,297,931
• Cash on Cash Return = 138.8%
• Annualized Return = $46.3%
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 13
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Sell Exit Strategy
If we decide to sell it will be after Year 3 after the property has been stabilized, before obtaining a
refinanced loan.
Sell Price = $6,867,693 (Assumes 7% Cap Rate & $135,710/bed)
Uses:
• Return Investor Capital = $934,986
• Investor Interest Payment Balance = $110,745
• Seller Carry Note + Interest for 3 years = $393,188
• Disposition Fee (Commission for Sale) = $312,132
• Closing Costs = $78,033
Net Profit = $4,413,555
• Solidus (70%) = $3,089,489
• Investors (30%) = $1,324,067
Investor Total Returns: (8% interest + 30% Equity) by Year 3
• Investor Profit (30%) = $1,347,067
• Investor Monthly Interest Payment ($3,157/month x 36 months) = $113,652
• Share of Cumulative Cash Flow (30%) = $214,056
• Investor Interest Balance paid at sale = $110,745
• Total Investor Profit = $1,785,929
• Cash on Cash Return = 191%
• Annualized Return = 63.7%
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 14
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Solidus Team
Dan Carrillo
Operations / Administration
Mr. Carrillo is a principal in Solidus and manages the day to day operations. He also takes a role in the
development and construction activities of all our ongoing projects.
Dan Carrillo's 32-year career in the real estate and housing industry is filled with a broad range of
experiences and leadership roles. In the residential and commercial brokerage community, Dan's
experience with successful real estate firms as an executive, sales manager, trainer, business
development expert and director of relocation and corporate services bring a unique mixture of talent and
expertise to his current work as a consultant and principle owner of a residential and commercial
brokerage here in Los Angeles.
Dan lives in the foothills of Pasadena California with his wife Christine.
Ginger Macias, MPH, MS
Investor Relations
Miss Macias is a principal at Solidus and is responsible investor relations. She handles all inquires and
manages all communications and meetings with investors. Ginger also handles all SEC regulation
compliance requirements. Some of her other responsibilities include acquisitions and marketing.
Ginger is an active wholesaler, rehabber, landlord, and educator. She founded
OCWholesalers.com in 2008 which has been supplying investment properties at a discount
to rehabbers, landlords, and end-users. Ginger also is a popular mentor and speaker at local investment
clubs where she teaches others how to get started in real estate. She owns www.RealEstateInsiders.co an
online membership site dedicated to teaching real estate investment strategies online.
Ginger also is an owner of a non-medical caregiving business, www.AboveHealthHomeCare.com. They
have been in business since 2012 and have extensive experience with caregiver and elderly care
regulations.
Ginger has two Master degrees from the University of Southern California in Epidemiology
and Biostatistics.
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 15
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Al Penaranda
Development and Construction
Mr. Penaranda is a principal at Solidus and oversees all the development and construction. This includes
conducting all the due diligence/feasibility reports, entitlement processes, and complying with green
building standards.
Al Penaranda has been involved in real estate for 25 years. His background is in appraisal of
commercial property. He received the MAI designation from the Appraisal Institute, which
is considered the highest designation in the appraisal field. His training in appraisal is from
the litigation side and for 10 years served as an expert witness in court. Appraisal work and
experience include analysis of virtually every product type, both existing and proposed.
Property types include: commercial, industrial hotel/hospitality, recreational, residential care
facilities, mixed use, golf courses, and special purpose properties and developments for a
diversified client base. Mr. Penaranda was CEO and owner of North by Northwest
Commercial, a commercial appraisal firm located in Old Pasadena.
Mr. Penaranda attended California State Long Beach and Los Angeles. He received a
Bachelor of Science degree, majoring in Real Estate.
Alain Romero
Asset Acquisition and Sales
Mr. Romero is principal at Solidus and oversees the acquisition and deposition of assets. This includes
deal evaluation, contract negotiations, and business development. He also supports investor relations
within the company.
Alain Romero is also the broker of record and a managing partner at North By Northwest Capital, a
boutique commercial real estate firm and has been practicing real estate for close to 10 years both on the
transaction as well as the financing ends of the business.
In addition, his core expertise is in the area of valuation and viability assessment, and financial modeling.
He holds a master’s degree in applied economics & finance, a bachelor’s
degree in economics from University of California, and is a graduate of the Pepperdine
University, The Graziadio School of Business with Executive Business Management
Certificate. Mr. Romero is a former board member of NHREP-LA and a Founder/President of
The Society Of Latino Professionals.
Offices: 555 W. 5
th
St, 31
st
Floor | Los Angeles, CA 90015 P a g e | 16
www.SolidusTeam.com
Pomona Assisted Living Facility
692 E Phillips Blvd, Pomona, CA 91766
Contact Information
If you are interested in learning about this or other opportunities feel free to contact us.
Website: www.SolidusTeam.com
Email: support@SolidusTeam.com
Phone: (213) 330-2722
Mailing Address:
3579 E Foothill Blvd, #237
Pasadena, CA 91107
Offices:
555 West 5th Street, 31st Floor
Los Angeles, CA 90013

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Assisted Living JV Proposal

  • 2. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 2 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Property Information Package Table of Contents Contents Regarding This Property Information Packet .........................3 Executive Summary ..........................................................4 Senior Living Trends..........................................................5 Occupancy Rates ..............................................................5 Rental Rates.....................................................................6 Assisted Living Care ..........................................................6 Resident Profile.................................................................7 Senior Housing Care Outlook..............................................8 Demographics ..................................................................9 Financials.......................................................................10 Pro Forma Cash Flow Analysis ..........................................10 Comparable Sales ...........................................................11 Property Strategy ...........................................................12 Pro Forma Investor Return...............................................12 Solidus Team .................................................................14 Contact Information ........................................................16
  • 3. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 3 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Regarding This Property Information Packet This is not a public offering or offer or invitation to sell securities or make an investment. Securities may only be offered or sold in the state or states where they are registered or under an exempt offering. This information is provided to the best of our knowledge. We make no warranties or representations of the information contained herein. Each individual shall conduct their own due diligence and independent investigation. Any estimates of market rents and/or projected rents that may be provided do not necessarily mean that rents can be established at or increased to that level. Legal and tax questions should be discussed with the appropriate professionals. Questions or inquiries can be directed to: Solidus Capital Management, LLC c/o Ginger Macias Cell: (714) 585-2185 Office: (213) 330-2722 x 700 Email: ginger@solidusteam.com
  • 4. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 4 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Executive Summary The property is not currently being operated in its best and highest use. The zoning already allows for a senior convalescent facility. Our plan would be two-fold: • Renovate the current, existing buildings to accommodate seniors in a non- medical Assisted Living Facility (ALF) • Operate an Adult Care Center (Phase 2) The owner has agreed to carry a loan, thereby reducing our total required costs. The renovation will take approximately 12 months and will be completed in phases to maximize current rent collection. Tenants will be moving out as we start renovations on their building unit. After 12 months, the renovations will be completed along with a community garden, landscape, walking path, and central common area. The total beds for the AFL would be 46, generating an average of $2,000 per bed on a monthly basis. Property Description 692 E Phillips is comprised of 4 buildings and 21 units/rooms that are 50% vacant. There is a total of 5,294 SF of building space and the lot size is 33,793 square feet. The owner is currently renting out the rooms for an average of $475/month. As you look at the neighboring properties, you will notice the PUD with 9 brand new homes on one side and a well kept SFR with pride of ownership on the other side. In fact, this entire block is made up of updated well kept structures. That is the future we see in our subject property. The Opportunity Purchase Price: $750,000 ($16,304/bed) Seller Carry Loan: $337,500 @ 5.5% for 3 years Closing Costs: $9,375 Carrying Costs: $64,060 Rehab Costs: $218,270 Interest/Contingency Reserve: $75,781 Acquisition Fee: $40,000 Administration Costs: $100,000 Tenant Relocation Costs: $15,000 Total Capital Required: $934,986 After Stabilization: Gross Income: 46 Beds x $2,000/bed = $92,000/month = $1,104,000/year Expenses (55%): $607,200 + $300/bed for Reserves Vacancy: (7.5%) $82,800 Net Operating Income (NOI): $400,200/year Value: (NOI/Cap Rate – 7%) $5.72M *Note: Income does not include fees for care Quick Analysis
  • 5. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 5 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Senior Living Trends Current marketing reports show a high demand for senior housing. In the United States Baby Boomers are in need of specialized housing to meet their income, social, and health care needs. Everyday there are more than 10,000 people turning 65 years old. Those in the age group 65+ are expected to increase 2.93% annually in the next five years.1 Occupancy Rates The senior housing market had a strong performance in 2013 and is expected to continue to have strong growth, with occupancy and rental rates increasing as demand increases. On average the occupancy rate for assisted living facilities was 90.3% in the top 100 metro areas.1 1 IRR Viewpoint 2014 www.iir.com
  • 6. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 6 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Rental Rates As demand has increased for senior housing, rental rates have also increased and are expected to continue this trend. According to SeniorHomes.com2 the national average assisted living base rate in 2012 was $3,550/month. In California the median rate was $3,710/month. Comparable Rental Rates near Pomona Name Address Rates Claremont Place 120 W San Jose Ave, Claremont $2900 studio Pacifica Hillsborough 11918 Central Ave, Chino $1995 studio Regency Grand 150 S Grand Ave, West Covina $2700 studio Emeritus Villa Colima 19850 E Colima Rd, Walnut $1995 studio Nohl Ranch 380 S Anaheim Hills Rd, Anaheim $2575 studio Emeritus Casa Whittier 10615 Jordan Rd, Whittier $1750 studio Whittier Place 12315 Burgess Ave, Whittier $2500 studio Assisted Living Care Residents living at our facility will often require additional help on Activities of Daily Living (ADLs) such as meal preparation, grooming, bathing, toileting, and medication reminders. This will be a non-medical facility. Each activity service can be charged separately on a monthly basis and will vary by resident. The average resident has 2 to 3 ADLs.3 The facility will have full and part-time caregivers on staff 24 hours a day. Below is a chart of common ADLs and the percent of residents who require each service: All caregivers will be employees and we will have liability insurance, worker's compensation insurance, and will be bonded. We will conduct background checks for all staff and check their driving record. All staff will be required to take a screening drug test at hire and randomized drug testing. 2 www.seniorhomes.com/p/assisted-living-cost/ 3 National Center for Assisted Living www.ahcancal.org
  • 7. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 7 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Proposed Amenities Companion Care • 24 hour assistant program • Light Housekeeping & Laundry • Cooking & Meal Planning • Exercise, Activities • Escort to medical appointments • Escort to beauty salon or spa • Hospital stay companion/ care giving Personal Care • Bathing Assistance • Walking Assistance • Personal Hygiene • Eating Assistance • Medication Reminders • Grocery shopping • Incontinence Care Specialized services: • Short and Long Term Disability Assistance Property Features: • 24 Hour Security • Emergency call system in every room • Community garden with raised gardening beds • Walking trails, Courtyards, Semi-private patios • Central Dining area & recreation room • Small convenience store Resident Profile4 4 National Center for Assisted Living www.ahcancal.org
  • 8. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 8 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Senior Housing Care Outlook Quote5 : 5 IRR Viewpoint 2014
  • 9. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 9 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Demographics Pomona, CA Source: Quickfacts.census.gov
  • 10. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 10 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Financials Pro Forma Cash Flow Analysis Unit Type No. of Beds Rate per Bed Total ProForma Rent Shared Unit 40 $2,000 $80,000 Private Unit 6 $2,750 $16,500 TOTALS 46 $96,500 Year 1 Year 2 Year 3 Year 4 Year 5 INCOME Rents $113,400 $1,158,000 $1,201,320 $1,252,493 $1,302,593 Auxillary 0 $5,520 $5,741 $5,970 $6,209 Vacancy ($79,380) ($139,622) ($102,855) ($106,969) ($111,248) Gross Operating Income $34,020 $1,023,898 $1,107,206 $1,151,494 $1,197,554 EXPENSES 55% expenses $17,010 $636,900 $656,007 $675,687 $695,958 Reserves: $300/unit 0 $13,800 $14,214 $14,640 $15,080 Total Expense $17,010 $650,700 $670,221 $690,323 711,037 Net Operating Income $17,010 $373,198 $436,985 $461,166 $486,516 Debt Service $37,890 $37,889 $37,890 $320,465 $320,465 CASH FLOW ($20,880) $335,307 $399,094 $140,702 $166,052 Cumulative Cash Flow ($20,880) $314,427 $713,521 $854,223 $1,020,275 Cash Flow Assumptions 1) Year 1: $425/unit (16 units) | Year 2+: $2,000/bed 2) Vacancy: 70% (Year 1-2); 12% (Year 2); 8.5% (Year 3+) 3) Expense Increase: 3% per year 4) Income increase: 4% per year 5) Debt Service: (Year 1-3) $3,157/month for private investor 6) Debt Service: (Year 4+) 6% fixed interest on $4.867M 7) Auxiliary Income: utility reimbursements, late charges, application fees Value at Year 3: NOI/Cap Rate (7%) = $436,985 / 7% = $6,242,643 ($135,710/bed)
  • 11. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 11 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Comparable Sales Sales Date Address # Beds Sales Price Price/Bed 2/18/14 655 W Naomi Ave, Arcadia 101 $13,010,000 $128,812 12/31/13 3601 E Holt Ave, W. Covina 109 $20,906,000 $191,798 9/30/13 6729 Hermosa Ave, Rancho Cuc. 116 $12,900,000 $111,207 4/5/13 3468 Vineland Ave, Baldwin Park 26 $1,900,000 $73,077 Average $126,223 Low $73,077 High $191,798
  • 12. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 12 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Property Strategy We plan to stabilize the property and refinance it in Year 3. Given the pro-forma NOI by the end of year 3, we estimate the value of the property at $6.2M (at a 7% CAP). With the refinancing money, we plan to pay the seller's note, return capital to the investor and hold the property for cash flow. Pro Forma Investor Return Our goal is to finance the purchase and reposition with private investor funds without obtaining a loan. This will give us more flexibility and higher profit for the project as a whole. Required Capital: $934,986 Uses: • Cash to Seller (Purchase Price – Seller Carry Loan) = $412,500 • Closing Costs = $9,375 • Acquisition Fee = $40,000 • Rehab Costs = $218,270 • Interest Reserve = $75,781 • Admin Fees (accounting, LLC fees, staff) = $100,000 • Tenant Relocation Costs = $15,000 • Carrying Costs = $64,060 Refinance & Hold Strategy The refinance loan will be used to pay the seller's note and interest, return capital and interest to the investors, and pay a dividend to all the owners (Managers and investors). The investor will still remain as an owner of the property and enjoy passive cash flow. New Loan = $4,867,693 (Value: $135,710/bed) 75% LTV, 6% interest, 30 year fixed Uses: • Create Interest Reserve = $320,465 • Return Investor Capital = $934,986 • Investor Interest Payment Balance = $110,745 • Seller Carry Note + Interest for 3 years = $393,188 • Syndication Partner Loan fee (5%) = $243,385 Balance = $2,864,926 • Solidus Dividend Payment (70%) = $2,005,448 • Investor Dividend Payment (30%) = $859,478 Investor Total Returns: (8% interest + 30% Equity) by Year 3 • Investor Dividend Payment (30%) = $859,478 • Investor Monthly Interest Payment ($3,157/month x 36 months) = $113,652 • Share of Cumulative Cash Flow (30%) = $214,056 • Investor Interest Balance paid at refi = $110,745 • Total Investor Profit = $1,297,931 • Cash on Cash Return = 138.8% • Annualized Return = $46.3%
  • 13. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 13 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Sell Exit Strategy If we decide to sell it will be after Year 3 after the property has been stabilized, before obtaining a refinanced loan. Sell Price = $6,867,693 (Assumes 7% Cap Rate & $135,710/bed) Uses: • Return Investor Capital = $934,986 • Investor Interest Payment Balance = $110,745 • Seller Carry Note + Interest for 3 years = $393,188 • Disposition Fee (Commission for Sale) = $312,132 • Closing Costs = $78,033 Net Profit = $4,413,555 • Solidus (70%) = $3,089,489 • Investors (30%) = $1,324,067 Investor Total Returns: (8% interest + 30% Equity) by Year 3 • Investor Profit (30%) = $1,347,067 • Investor Monthly Interest Payment ($3,157/month x 36 months) = $113,652 • Share of Cumulative Cash Flow (30%) = $214,056 • Investor Interest Balance paid at sale = $110,745 • Total Investor Profit = $1,785,929 • Cash on Cash Return = 191% • Annualized Return = 63.7%
  • 14. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 14 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Solidus Team Dan Carrillo Operations / Administration Mr. Carrillo is a principal in Solidus and manages the day to day operations. He also takes a role in the development and construction activities of all our ongoing projects. Dan Carrillo's 32-year career in the real estate and housing industry is filled with a broad range of experiences and leadership roles. In the residential and commercial brokerage community, Dan's experience with successful real estate firms as an executive, sales manager, trainer, business development expert and director of relocation and corporate services bring a unique mixture of talent and expertise to his current work as a consultant and principle owner of a residential and commercial brokerage here in Los Angeles. Dan lives in the foothills of Pasadena California with his wife Christine. Ginger Macias, MPH, MS Investor Relations Miss Macias is a principal at Solidus and is responsible investor relations. She handles all inquires and manages all communications and meetings with investors. Ginger also handles all SEC regulation compliance requirements. Some of her other responsibilities include acquisitions and marketing. Ginger is an active wholesaler, rehabber, landlord, and educator. She founded OCWholesalers.com in 2008 which has been supplying investment properties at a discount to rehabbers, landlords, and end-users. Ginger also is a popular mentor and speaker at local investment clubs where she teaches others how to get started in real estate. She owns www.RealEstateInsiders.co an online membership site dedicated to teaching real estate investment strategies online. Ginger also is an owner of a non-medical caregiving business, www.AboveHealthHomeCare.com. They have been in business since 2012 and have extensive experience with caregiver and elderly care regulations. Ginger has two Master degrees from the University of Southern California in Epidemiology and Biostatistics.
  • 15. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 15 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Al Penaranda Development and Construction Mr. Penaranda is a principal at Solidus and oversees all the development and construction. This includes conducting all the due diligence/feasibility reports, entitlement processes, and complying with green building standards. Al Penaranda has been involved in real estate for 25 years. His background is in appraisal of commercial property. He received the MAI designation from the Appraisal Institute, which is considered the highest designation in the appraisal field. His training in appraisal is from the litigation side and for 10 years served as an expert witness in court. Appraisal work and experience include analysis of virtually every product type, both existing and proposed. Property types include: commercial, industrial hotel/hospitality, recreational, residential care facilities, mixed use, golf courses, and special purpose properties and developments for a diversified client base. Mr. Penaranda was CEO and owner of North by Northwest Commercial, a commercial appraisal firm located in Old Pasadena. Mr. Penaranda attended California State Long Beach and Los Angeles. He received a Bachelor of Science degree, majoring in Real Estate. Alain Romero Asset Acquisition and Sales Mr. Romero is principal at Solidus and oversees the acquisition and deposition of assets. This includes deal evaluation, contract negotiations, and business development. He also supports investor relations within the company. Alain Romero is also the broker of record and a managing partner at North By Northwest Capital, a boutique commercial real estate firm and has been practicing real estate for close to 10 years both on the transaction as well as the financing ends of the business. In addition, his core expertise is in the area of valuation and viability assessment, and financial modeling. He holds a master’s degree in applied economics & finance, a bachelor’s degree in economics from University of California, and is a graduate of the Pepperdine University, The Graziadio School of Business with Executive Business Management Certificate. Mr. Romero is a former board member of NHREP-LA and a Founder/President of The Society Of Latino Professionals.
  • 16. Offices: 555 W. 5 th St, 31 st Floor | Los Angeles, CA 90015 P a g e | 16 www.SolidusTeam.com Pomona Assisted Living Facility 692 E Phillips Blvd, Pomona, CA 91766 Contact Information If you are interested in learning about this or other opportunities feel free to contact us. Website: www.SolidusTeam.com Email: support@SolidusTeam.com Phone: (213) 330-2722 Mailing Address: 3579 E Foothill Blvd, #237 Pasadena, CA 91107 Offices: 555 West 5th Street, 31st Floor Los Angeles, CA 90013