OVERVIEW

We propose a partnership structure in which Terabon Real Estate acts as the General Partner. It takes all of the risks and receives back-end profits of 20% upon sale, refinances, or at every 5-year monitoring period.

The following structure is proposed for the General Partner duties and fees:

FUNCTIONS 

1. Finds property for acquisition

2. Performs all due diligence

  • Lease audit

  • 3rd party service agreements

  • Market analysis

3. Financial analysis

  • Budgets for 1st five year

  • IRR analysis by year for 5 years

  • Cash flow analysis by year

4. Creates a Capital Expenditure budget

  • Identifies improvement items

  • Gets pricing and timing

5. Executes contracts and reviews findings of all 3rd party contracts

  • Seismic

  • Property Conditions

  • Environmental

  • Parking and Zoning

 6. Enters into Purchase and Sale Agreement with Seller

7. Evaluates alternative loan structures, applies for and obtains a loan

8. Provides all legal and other support for loan documents

9. Reads and evaluates loan documents

10. Hires property manager and oversees functions

11. Sets up proper bank accounts and takes care of loan and partnership returns

12. Executes business plan, including all capital expenditure improvements

13. Accounting sends out monthly financial reports and quarterly investment checks or wires

FEES 

1. Acquisition fee of 2% of purchase price

2. Annual Asset Management fee of .2% of the market value of property

3. Performance Fee of 20% of the profit

4. Refinance fee of 1% of the loan amount

5. Property management fee at market rate

GENERAL PARTNER EQUITY

1. Between 2% to 5% depending on the size of the property and the equity required.

2. Pari Passu earnest money participation

INVESTMENT SCHEDULE

1. $100 million of property purchased Year 1

2. $150 million of property purchased Year 2

3. $300 million of property purchased Year 3