Dear Partners,
Thank you for your continued trust. This first annual report covers our operations from the March 13, 2025 acquisition through December 31, 2025. What follows is a candid look at a year that did not go as planned and where the investment stands today.
Year 1 Operations
The first sixty days exceeded our underwriting. April and May delivered near-pro-forma NOI and strong occupancy, and we successfully completed our roof replacement $127K under budget. That trajectory was disrupted in June and July when our financial audits and on-site presence exposed systemic failures by our inherited property manager, Shelter Corporation, including inaccurate accounting, lack of cost controls, and severe staffing deficiencies causing budget overruns and poor leasing execution. We terminated Shelter in July and installed Valiant Residential on August 21st.
The operational turnaround was immediate. Since September, operating expenses have trended approximately 12.5% below pro forma, adjusted for actual taxes. Valiant has successfully trained and stabilized our on-site staff, and we've seen enhanced and consistent leasing performance and improved tenant retention. We solved the problem we could control. What we could not control was the broader Austin rental market, which deteriorated materially in the second half of 2025. Declining rental revenue and occupancy challenges overwhelmed our expense improvements, depleting operating cash reserves and compressing DSCR margins by year's end.
2025 Market Headwinds
When we acquired Wells Branch in March 2025, Austin had just absorbed a record 28,400 units in 2024, and Q4 2024 demand exceeded new supply for the first time in nearly two years. That trend carried into early 2025, with first-half absorption outpacing deliveries. What we underestimated was the vulnerability of older-vintage product to tenant filtering in a hypercompetitive market if demand failed to sustain its 2024 and early 2025 momentum. As recently delivered Class A product competed for tenants — offering eight weeks free or more — renters who would historically lease in our vintage moved up the stack. That filtering pressure was compounded by a summer leasing season that came in shorter and softer than expected, followed by a sharp drop-off in demand in Q4. By year-end, effective rents for 1980s-vintage product in our submarket were down 11.7% year-over-year. With renewal trade-outs roughly flat across the submarket, new lease trade-outs were likely down over 20%.
We do not expect a sharp rebound in 2026. The market still has excess product to work through, and pricing power for workforce housing will return only after margins expand in Class A and B product — our vintage is last in line on the way down and last in line on the way back up. Our base case is that H1 2026 remains challenging with gradual firming in H2 as the supply pipeline thins. The medium-term setup, however, is compelling. Construction starts have collapsed 74% from their 2022 peak, with the delivery pipeline dropping sharply through 2028. Affordability ratios in Austin are at record lows while wages are at record highs. As the market reaches equilibrium — and particularly as deliveries fall off dramatically in 2027 — those fundamentals support a strong recovery in rents. We are managing for a range of outcomes, not a single forecast.
Navigating 2026
The key near-term risks are negative DSCR margins and continued cash burn. We are managing these aggressively on the levers available to us. On expenses, Valiant continues to run well below pro forma and we are maintaining that discipline. On revenue, we are focused on maximizing occupancy and retention to drive top-line performance while pricing remains depressed — pushing rents where the market allows, particularly on renewals to offset pressure on new leases. Finding the right balance between occupancy and rate is the central operating challenge in this market, and our team is managing it actively. Our immediate priority is driving performance through Q2 and Q3 to maintain compliance with our loan covenants and avoid a cash management trigger. We believe we can navigate this, but we are not taking it for granted.
Conclusion
The market correction was deeper than we underwrote, and we are managing through it. Austin has proven to be a volatile and elastic market — but elasticity works both ways. We believe our basis is strong and that the remaining life of this investment will coincide with some of the best supply and demand conditions Austin has seen in a decade. Our job is to execute with discipline through the cycle and position this asset to capture that recovery. We take that responsibility seriously. Thank you for your patience and your partnership.
Respectfully,
Zach Rosenberg
Chelsea Partners
| Address | 1915 Wells Branch Pkwy, Austin, TX 78728 |
| # of Units | 304 |
| Year Built | 1987 |
| Acquisition Date | 3/13/2025 |
| Purchase Price | $33,750,000 |
| Price per Unit | $111,020 |
| Price per SF | $168 |
| Debt | $24,500,000 (62.9%) |
| Total Equity Invested | $14,476,873 (37.1%) |
| Purchase Price | $33,750,000 |
| Acquisition Costs | $299,233 |
| Acquisition Fees | $540,000 |
| Capital Improvements | $2,666,538 |
| Reserves | $395,597 |
| Financing Costs | $1,000,147 |
| Total Cost Basis | $38,651,514 |
| Cost Basis per Unit | $127,143 |
| Cost Basis per SF | $192 |
| Escrows & Prepayments | $595,285 |
| Seller Pro Rations | ($269,925) |
| Total Closing Uses | $38,976,873 |
| Member | Contribution | Capital Share | Profit Share |
|---|---|---|---|
| Appian-Austin I LLC | $13,029,432 | 90.63% | 90.00% |
| SAF Indigo LLC | $720,028 | 5.01% | 4.97% |
| Alan Ware | $577,687 | 4.02% | 3.99% |
| Chelsea-Austin I, LLC | $50,000 | 0.35% | 0.35% |
| Chelsea Partners, LLCProfits Interest | $100,000 | 0.00% | 0.69% |
| Total | $14,477,146 | 100.00% | 100.00% |
- Strong April–May: near pro forma, 92% occupancy, roof completed $127K under budget
- Summer leasing demand below expectations; newer product concessions filtered tenants from 1980s vintage
- June financial audit exposed $60K in controllable expense budget bust, leading to discovery of widespread cost control failure
- Manager terminated effective Aug 25; interim controls enacted
- July NOI collapsed to $83K (51% below pro forma) — supply theft, falsified work orders, outsourced turnovers
- Shelter terminated July 18th; Valiant assumed management Aug 21st with new maintenance staff, strict budgets, enhanced marketing
- September NOI recovered to $139K (1.14x DSCR); expenses 15.5% below pro forma; qualified leads more than doubled
- 1980s vintage new lease rates down ~14% YOY; property tracked in-line with comps, confirming market-driven headwinds
- Occupancy slid from 87–88% to 84%-85% as market conditions deteriorated, hitting cycle low point
- 1980s vintage rents at multi-year troughs despite aggressive concessions (up to 8 weeks free)
- Valiant cleared 100+ deferred work orders and held controllable expenses consistently below budget
- Loan amendment executed — lowered rent thresholds and extended renovation milestones
- Revenue continued to trend negatively through the quarter as occupancy and rents declined; controllable expenses, however, remained stable and below pro forma
| New Prospects | 380 |
| Shows / Tours | 30 |
| Applications | 53 |
| Approvals | 38 |
| Move-Ins | 39 |
| Move-Outs | 53 |
| Net Absorption | −14 |
| Floorplan | Type | Units | Avg SF | Occ % | Market Rent | Eff. Rent | Avail | Avail % |
|---|---|---|---|---|---|---|---|---|
| A1 | 1 BR / 1 BA | 46 | 502 | 96% | $775 | $918 | 1 | 2% |
| A1P | 1 BR / 1 BA (P) | 10 | 502 | 100% | $915 | $941 | 0 | — |
| A2 | 1 BR / 1 BA | 103 | 600 | 83% | $810 | $954 | 13 | 13% |
| A2P | 1 BR / 1 BA (P) | 25 | 600 | 64% | $860 | $1,047 | 6 | 24% |
| A3 | 1 BR / 1 BA | 43 | 707 | 79% | $925 | $1,015 | 12 | 28% |
| A3P | 1 BR / 1 BA (P) | 13 | 707 | 85% | $965 | $1,030 | 2 | 15% |
| B1 | 2 BR / 2 BA | 33 | 861 | 88% | $1,045 | $1,279 | 0 | — |
| B1P | 2 BR / 2 BA (P) | 15 | 861 | 87% | $1,195 | $1,350 | 1 | 7% |
| B2 | 2 BR / 2 BA | 10 | 967 | 90% | $1,245 | $1,353 | 0 | — |
| B2P | 2 BR / 2 BA (P) | 6 | 967 | 50% | $1,325 | $1,477 | 3 | 50% |
| Total | 304 | 662 | 84% | $904 | $1,042 | 38 | 13% | |
| Project | Budget | Spent to Date | Status | Projected Cost | Savings (+/−) | |
|---|---|---|---|---|---|---|
| Completed | ||||||
| Roof Replacement | $650,000 | $522,590 | Completed | $522,590 | $127,411 | |
| Washer/Dryer Installations | $532,000 | $394,811 | Completed | $394,811 | $137,189 | |
| Architectural / Design | $15,000 | $15,000 | Completed | $15,000 | — | |
| In Progress | ||||||
| Clubhouse Remodel & FFE | $150,000 | $21,108 | In Progress | $150,000 | — | |
| Entryway Monument Upgrade | $50,000 | — | In Progress | — | — | |
| Landscaping Upgrades | $250,000 | $10,609 | In Progress | $250,000 | — | |
| HVAC Full Replacements | $192,000 | $36,342 | In Progress | $192,000 | — | |
| Water Heater Replacements | $140,600 | $7,111 | In Progress | $140,600 | — | |
| Plumbing Repairs | $40,000 | $13,786 | In Progress | $40,000 | — | |
| Not Started | ||||||
| Clubhouse Windows & Doors | $36,400 | — | Not Started | — | — | |
| Clubhouse Patio — Pergola, Grill & Lighting | $50,000 | — | Not Started | — | — | |
| Pool Area Upgrades | $40,000 | — | Not Started | — | — | |
| Secondary Common Area Upgrade | $30,000 | — | Not Started | — | — | |
| Exterior Power Washing | $54,000 | — | Not Started | — | — | |
| Gym Upgrades | $30,000 | — | Not Started | — | — | |
| Asphalt Repairs & Trash Enclosures | $75,000 | — | Not Started | — | — | |
| Maintenance Shop Upgrade | $15,000 | — | Not Started | — | — | |
| Website / Marketing Redevelopment | $15,000 | — | Not Started | — | — | |
| Total Hard Costs | $2,365,000 | $1,021,356 | — | $264,600 | ||
| Contingency (10%) | $236,500 | — | In Progress | $118,300 | $118,200 | |
| Project Management Fee | $65,038 | $25,159 | In Progress | $65,038 | — | |
| Total Budget | $2,666,538 | $1,046,515 | — | $382,800 | ||
| Draw | Date | Amount |
|---|---|---|
| Draw 1 | May 2025 | $535,654 |
| Draw 2 | Jul 2025 | $208,078 |
| Draw 3 | Oct 2025 | $287,783 |
| Total Reimbursed | $1,031,515 |
Beyond the budgeted business plan projects, the property has incurred below-the-line capital expenditures that have exceeded initial expectations. These costs are driven primarily by unit turnover, particularly tub and tile resurfacing and flooring replacements across a higher volume of units than anticipated.
Our pro forma budgeted $19,000/mo for above-the-line repairs and maintenance reserves, with an additional below-the-line capital reserve bringing the total R&M + CapEx budget to $25,333/mo. Combined Q4 actual spend on R&M and net CapEx averaged $26,007/mo — roughly in line with the total budgeted amount. However, we did not anticipate the below-the-line reserve being consumed primarily by interior unit turnover costs. This elevated turnover-driven CapEx may persist as the property continues to cycle through older units.
| Tranche A1 | Tranche A2 | Total | |
|---|---|---|---|
| Loan ID | 6606066A1 | 6606066A2 | |
| Original Funding (Mar 2025) | $11,884,392 | $10,099,070 | $21,983,462 |
| Holdback Draws | $557,643 | $473,872 | $1,031,515 |
| Current Balance (Dec 2025) | $12,286,458 | $10,572,941 | $22,859,400 |
| Mar Partial | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1st Mortgage Interest | (142,471) | — | (104,835) | (121,789) | (117,882) | (74,430) | (72,082) | (71,838) | (68,702) | (69,951) | (843,980) |
| 2nd Mortgage Interest | — | — | — | — | — | (64,651) | (58,591) | (61,046) | (58,381) | (59,443) | (302,112) |
| Total Gross Interest | (142,471) | — | (104,835) | (121,789) | (117,882) | (139,081) | (130,673) | (132,884) | (127,083) | (129,394) | (1,146,092) |
| Rate Cap Proceeds | — | — | — | — | — | 13,080 | 8,371 | 4,629 | 4,288 | 211 | 30,579 |
| Net Interest | (142,471) | — | (104,835) | (121,789) | (117,882) | (126,001) | (122,302) | (128,255) | (122,795) | (129,183) | (1,115,513) |
| Loan Fees | — | — | (1,400) | (3,900) | (1,400) | (3,901) | (2,900) | (1,520) | (1,400) | (1,400) | (17,821) |
| TOTAL DEBT SERVICE | (142,471) | — | (106,235) | (125,689) | (119,282) | (129,902) | (125,202) | (129,776) | (124,195) | (130,583) | (1,133,335) |
Austin's multifamily market experienced the most severe supply cycle in its history over 2024-25. A record 30,522 units delivered in 2024 alone, followed by 16,821 in 2025 — roughly 47,300 units across the two-year period, far exceeding the market's typical absorption capacity. Demand proved resilient through the first half of 2025, with 12,158 units absorbed against just 9,337 delivered. Full-year absorption totaled approximately 14,300 units — strong by historical standards, though still short of the 16,821 units delivered. Metro occupancy held at approximately 92%, buoyed by Austin's continued population growth of 1.8% annually (#1 among major U.S. metros) and a median household income of $105K that sustains deep renter demand.
The cost of absorbing this supply, however, was steep — particularly for older product. With the vast majority of new deliveries concentrated in 4 & 5 Star product, aggressive lease-up concessions (offered by more than 40% of properties metro-wide) triggered a filtering effect: renters who might have leased older units moved into newer buildings at similar effective rents. Our 1980s vintage took the deepest hit among all cohorts. Metro-wide, 1980s-vintage effective rents have fallen 23% from their 2022 peak of $1,348 to $1,042 as of Q4 2025 (YoY: -10.5%). In our Pflugerville/Wells Branch submarket, the damage is more severe: 1980s-vintage rents declined 25% from a mid-2022 peak of $1,300 to $976 (YoY: -11.7%). Submarket 1980s occupancy has fallen to 88.9%, well below the metro 1980s average of 91.8%.
The supply picture, however, is shifting decisively. Construction starts have collapsed 74% — from 25,200 (2022) to just 6,600 (2025), the lowest figure since 2011. Only 16,600 units remain under construction, down from a peak of 51,700 in Q1 2023. Projected deliveries: 30.5K → 16.8K → 10.2K (2024-2026), with 2026 on track for the fewest completions since 2012. The one-year demand forecast of 19,400 units against just 10,200 units of supply implies significant occupancy recovery — RealPage projects metro occupancy reaching 95.2% by Q4 2026, with Pflugerville/Wells Branch forecast to be among the top recovery submarkets, gaining 4.3 points to 95.5%.
Capital markets are cautiously re-engaging. Investment sales volume rose 18% YoY, and notably, public REITs (Camden, AvalonBay) made 4 acquisitions in 2025 — surpassing the combined total across 2023-2024. Cap rates are stabilizing around 5%, and rent growth is forecast to turn positive by mid-2026. The recovery sequence is underway: concessions burn off on newer product first, Class A rents stabilize, then filtering pressure on older vintages eases. Early signals — stronger renewal trade-outs, rising leasing traffic at our property, and moderating YoY declines in newer vintages — suggest the trough is behind us.
• Supply peaked in 2024 with 30.5K deliveries — 2x historical demand.
• Demand held well: 90% absorption over 2024-25. 42.8K units leased.
• Starts collapsed 74% from 25.2K (2022) to 6.6K (2025).
• Pipeline: 10.2K → 5.1K → 1.3K (2026-28). Below demand threshold.
1980s hardest hit: -23% from peak metro-wide, -25% in Pflugerville/WB
Newer vintages holding better: 2020+ down only -14.5% from peak
Occupancy stabilizing: 92% metro threshold holding across most vintages
Recovery sequence: Newer product stabilizes first, then filtering eases
| Product | Location |
|---|
| Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | |
|---|---|---|---|---|---|---|---|---|---|---|
| Eff. Gross Income | 343,323 | 326,237 | 318,778 | 318,262 | 297,357 | 294,178 | 295,109 | 286,330 | 286,870 | 2,766,443 |
| Operating Expenses | (188,945) | (158,325) | (196,591) | (234,559) | (165,197) | (155,200) | (171,389) | (162,241) | (177,109) | (1,609,556) |
| Net Operating Income | 154,378 | 167,913 | 122,187 | 83,703 | 132,159 | 138,977 | 123,720 | 124,088 | 109,761 | 1,156,887 |
| Mar Partial | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| REVENUE | |||||||||||
| Potential Market Rents | 217,624 | 347,855 | 341,780 | 341,473 | 341,473 | 334,075 | 304,614 | 301,650 | 298,230 | 274,860 | 3,103,634 |
| Loss to Lease | (14,628) | (8,117) | (12,066) | (12,800) | (11,993) | (8,606) | 15,515 | 15,293 | 14,797 | 35,809 | 33,204 |
| Total Rental Revenue | 202,996 | 339,738 | 329,713 | 328,673 | 329,480 | 325,469 | 320,129 | 316,943 | 313,027 | 310,669 | 3,116,838 |
| RUBS Income | 12,347 | 10,407 | 13,543 | 11,937 | 19,092 | 10,034 | 13,449 | 10,626 | 15,601 | 5,838 | 122,873 |
| Other Income | 6,059 | 22,909 | 20,963 | 23,950 | 25,297 | 17,580 | 11,337 | 18,345 | 18,413 | 24,277 | 189,131 |
| Total Other Income | 18,407 | 33,316 | 34,506 | 35,887 | 44,389 | 27,615 | 24,786 | 28,971 | 34,014 | 30,115 | 312,005 |
| LOST REVENUE | |||||||||||
| General Vacancy | (7,353) | (28,684) | (30,323) | (29,833) | (38,759) | (36,661) | (26,916) | (39,871) | (39,608) | (40,900) | (318,908) |
| Concessions | — | — | (4,472) | (10,432) | (10,912) | (9,206) | (13,234) | (578) | (13,871) | (11,756) | (74,461) |
| Bad Debt | (39) | — | (1,832) | (4,470) | (3,287) | (8,640) | (9,452) | (9,020) | (5,896) | — | (42,636) |
| Non-Revenue Units | — | (1,048) | (1,355) | (1,048) | (2,649) | (1,220) | (1,135) | (1,367) | (1,337) | (1,257) | (12,416) |
| Total Lost Revenue | (7,392) | (29,732) | (37,982) | (45,783) | (55,607) | (55,727) | (50,737) | (50,835) | (60,712) | (53,913) | (448,421) |
| EFFECTIVE GROSS INCOME | 214,011 | 343,323 | 326,237 | 318,778 | 318,262 | 297,357 | 294,178 | 295,109 | 286,330 | 286,870 | 2,980,453 |
| OPERATING EXPENSES | |||||||||||
| Repairs & Maintenance | (5,571) | (31,683) | (10,681) | (36,531) | (44,429) | (9,185) | (8,492) | (19,548) | (10,381) | (11,140) | (182,070) |
| Administrative | (5,693) | (6,702) | (9,262) | (9,592) | (10,864) | (10,366) | (5,649) | (6,518) | (15,375) | (9,457) | (89,480) |
| Marketing & Advertising | (1,297) | (2,060) | (1,528) | (2,370) | (1,692) | (3,558) | (3,558) | (6,489) | (6,394) | (6,553) | (34,202) |
| Insurance | (11,634) | (19,363) | (19,363) | (19,915) | (19,915) | (19,915) | (12,765) | (12,765) | (14,172) | (13,469) | (151,643) |
| Payroll | (9,247) | (29,749) | (29,003) | (32,787) | (36,233) | (46,765) | (34,428) | (35,590) | (29,994) | (33,324) | (317,121) |
| Service Contracts | (1,296) | (13,997) | (11,520) | (10,207) | (15,681) | (13,226) | (9,613) | (9,484) | (12,064) | (24,097) | (119,890) |
| Utilities | (14,385) | (22,516) | (14,819) | (22,962) | (43,932) | (7,889) | (17,393) | (17,500) | (12,098) | 6,348 | (152,760) |
| Property Tax | (35,297) | (53,018) | (53,018) | (53,018) | (53,020) | (53,108) | (53,018) | (53,722) | (52,315) | (79,570) | (503,807) |
| Franchise Tax | — | — | — | — | — | — | (993) | (1,003) | (1,016) | (1,052) | (4,065) |
| Management Fee | (602) | (9,856) | (9,131) | (9,209) | (8,793) | (1,185) | (9,289) | (8,962) | (8,432) | (8,859) | (73,716) |
| Total Operating Expenses | (85,024) | (188,945) | (158,325) | (196,591) | (234,559) | (165,197) | (155,200) | (171,389) | (162,241) | (177,109) | (1,694,579) |
| NET OPERATING INCOME | 128,987 | 154,378 | 167,913 | 122,187 | 83,703 | 132,159 | 138,977 | 123,720 | 124,088 | 109,761 | 1,285,874 |
| BELOW THE LINE | |||||||||||
| Capital Expenditures (Net) | — | — | — | (13,886) | (13,966) | (3,427) | (8,286) | (14,784) | (13,508) | (8,660) | (76,517) |
| Professional Fees / AM Fee | — | — | (4,928) | (5,565) | (4,604) | (4,396) | (11,036) | (3,266) | (3,043) | 889 | (35,951) |
| Unlevered Cash Flow | 128,987 | 154,378 | 162,985 | 102,736 | 65,133 | 124,336 | 119,655 | 105,670 | 107,537 | 101,990 | 1,173,406 |
| Gross Interest Payment | (142,471) | — | (104,835) | (121,789) | (117,882) | (139,081) | (130,673) | (132,884) | (127,083) | (129,394) | (1,146,092) |
| Rate Cap Proceeds | — | — | — | — | — | 13,080 | 8,371 | 4,629 | 4,288 | 211 | 30,579 |
| Total Debt Service | (142,471) | — | (104,835) | (121,789) | (117,882) | (126,001) | (122,302) | (128,255) | (122,795) | (129,183) | (1,115,513) |
| Financing Fees | — | — | (1,400) | (3,900) | (1,400) | (3,901) | (2,900) | (1,520) | (1,400) | (1,400) | (17,821) |
| NET LEVERED CASH FLOW | (13,484) | 154,378 | 56,750 | (22,953) | (54,149) | (5,566) | (5,547) | (24,105) | (16,658) | (28,593) | 40,072 |
| DSCR (Current) | — | — | 1.60x | 1.00x | 0.71x | 1.05x | 1.14x | 0.96x | 1.01x | 0.85x | — |
| Balance | |
|---|---|
| ASSETS | |
| Current Assets | |
| Cash | |
| Petty Cash | 250 |
| Cash-DACA | (10,129) |
| Operating Cash | 44,527 |
| Security Deposit Cash | 90,124 |
| Capital Reserve Cash | 392,784 |
| Total Cash | 517,557 |
| Cash in Reserve / Escrow | |
| Tax Escrow | 636,219 |
| Insurance Escrow | 60,845 |
| Reserve Replacement | 131,499 |
| Capital Improvements | 150,000 |
| Total Cash in Reserve | 978,563 |
| Accounts Receivable | |
| Rent Receivable | 10,742 |
| Allowance for Doubtful Accounts | 9,718 |
| Due to/from Buyer-Seller | (5,741) |
| Other Receivables | 2,373 |
| Total Accounts Receivable | 17,093 |
| Prepaid Expenses | |
| Prepaid Insurance | 121,727 |
| Prepaid Payroll | 47,237 |
| Prepaid MIP | 6,331 |
| Miscellaneous Prepaid | 19,752 |
| Total Prepaid Expenses | 195,048 |
| Total Current Assets | 1,708,261 |
| Fixed Assets | |
| Land | 2,815,831 |
| Buildings | 32,382,060 |
| Roofing Improvements | 535,654 |
| HVAC | 709 |
| Loan Fees | 298,073 |
| Total Fixed Assets | 36,032,328 |
| Other Long-Term Assets | |
| Deposits (Water) | 22,857 |
| Total Other LT Assets | 22,857 |
| TOTAL ASSETS | 37,763,446 |
| LIABILITIES & OWNER'S EQUITY | |
| Current Liabilities | |
| Accounts Payable | 51,694 |
| Accrued Mortgage Interest | 4,530 |
| Misc Accrued Expenses | 9,967 |
| Unclaimed Property | 663 |
| Prepaid Tenant Rent | 14,533 |
| Security Deposits | 75,287 |
| Pet Deposits | (450) |
| Total Current Liabilities | 156,225 |
| Tax Liabilities | |
| Property Tax Payable | 662,861 |
| Texas Margin Tax Payable | 4,065 |
| Total Tax Liabilities | 666,926 |
| Long-Term Liabilities | |
| Mortgage Payable (A1) | 12,500,000 |
| Mortgage Holdback (A1) | (57,965) |
| Mortgage Payable (A2) | 12,000,000 |
| Mortgage Holdback (A2) | (1,427,059) |
| Total Long-Term Liabilities | 23,014,977 |
| TOTAL LIABILITIES | 23,838,128 |
| Owner's Equity | |
| Capital Contributions | 14,468,009 |
| Current Year Distributions | (85,938) |
| Retained Earnings (Current) | (456,754) |
| Total Owner's Equity | 13,925,318 |
| TOTAL LIABILITIES & EQUITY | 37,763,446 |
| Reforecast | Pro Forma | Variance | Var % | |
|---|---|---|---|---|
| Total Rental Revenue | $3,879,223 | $4,087,764 | ($208,541) | −5.1% |
| Other Income | $431,496 | $441,053 | ($9,557) | −2.2% |
| Lost Revenue | ($536,138) | ($375,892) | ($160,246) | −42.6% |
| Effective Gross Income | $3,774,581 | $4,152,925 | ($378,345) | −9.1% |
| Total Operating Expenses | ($2,145,849) | ($2,205,581) | $59,732 | +2.7% |
| Net Operating Income | $1,628,732 | $1,947,345 | ($318,613) | −16.4% |
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Rental Revenue | 317,505 | 316,563 | 316,304 | 316,012 | 316,219 | 319,200 | 319,200 | 320,610 | 318,851 | 320,558 | 318,307 | 318,299 | 3,817,628 |
| Other Income | 38,630 | 40,998 | 40,753 | 42,799 | 39,607 | 41,383 | 44,951 | 46,744 | 44,083 | 46,376 | 47,387 | 45,586 | 519,297 |
| Lost Revenue | (61,609) | (58,209) | (51,401) | (48,021) | (37,411) | (34,275) | (34,569) | (34,848) | (30,836) | (31,143) | (27,374) | (27,261) | (476,958) |
| Effective Gross Income | 294,526 | 299,352 | 305,657 | 310,789 | 318,414 | 326,308 | 329,582 | 332,506 | 332,098 | 335,791 | 338,320 | 336,624 | 3,859,967 |
| Repairs & Maintenance | 18,065 | 16,618 | 15,080 | 24,032 | 14,391 | 16,712 | 23,149 | 17,801 | 15,363 | 17,374 | 17,731 | 16,500 | 212,816 |
| Payroll | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 36,180 | 434,164 |
| Property Tax | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 53,005 | 636,064 |
| Utilities | 20,470 | 22,808 | 23,360 | 19,086 | 19,604 | 19,208 | 21,804 | 21,881 | 22,915 | 23,066 | 20,981 | 19,742 | 254,927 |
| Insurance | 13,531 | 13,531 | 13,531 | 13,705 | 15,987 | 14,208 | 14,208 | 14,208 | 14,208 | 14,208 | 14,208 | 14,208 | 169,738 |
| All Other OpEx | 34,846 | 34,603 | 33,600 | 36,604 | 35,410 | 35,485 | 35,844 | 36,518 | 37,854 | 34,896 | 36,169 | 37,511 | 429,338 |
| Total Operating Expenses | (176,098) | (176,746) | (174,756) | (182,612) | (174,577) | (174,798) | (184,190) | (179,593) | (179,525) | (178,730) | (178,274) | (177,147) | (2,137,047) |
| Net Operating Income | 118,428 | 122,606 | 130,901 | 128,177 | 143,837 | 151,510 | 145,392 | 152,913 | 152,573 | 157,061 | 160,045 | 159,478 | 1,722,921 |
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| New Lease Rate | $925 | $950 | $975 | $975 | $1,000 | $1,050 | $1,050 | $1,050 | $1,025 | $1,025 | $1,000 | $1,000 |
| Renewal Rate | $1,008 | $1,019 | $1,029 | $1,040 | $1,040 | $1,050 | $1,050 | $1,061 | $1,061 | $1,071 | $1,071 | $1,071 |
| Blended In-Place Rate | $1,044 | $1,041 | $1,040 | $1,040 | $1,040 | $1,050 | $1,050 | $1,055 | $1,049 | $1,054 | $1,047 | $1,047 |
| Occupancy | 87% | 88% | 89% | 90% | 91% | 92% | 93% | 93% | 93% | 93% | 93% | 93% |
| Concessions Rate | 3% | 3% | 2% | 2% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% |
| Renewal Trade-Out | −4% | −3% | −2% | −1% | −1% | 0% | 0% | +1% | +1% | +2% | +2% | +2% |
| Retention Rate | 70% | 70% | 65% | 65% | 65% | 65% | 65% | 65% | 65% | 65% | 65% | 70% |
| Economic Vacancy | 17.3% | 16.3% | 14.4% | 13.4% | 10.5% | 9.5% | 9.5% | 9.5% | 8.5% | 8.5% | 7.5% | 7.5% |