1. Refinance Valuation Analysis
Prepared for: Pennix & Penix Trusts
May 25, 2016
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Morning Star Real Estate Services
Brokerage, Asset Mgmt.,
Land Use Planning & Development
P.O. Box 60506
San Diego, CA 92166
Suhail Khalil, CCIM, GRI
(619) 224-1527
over 25 years experience
"working for you to build a better future"
MorningStar.RESVC@cox.net

2. Property Summary
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Operating Statement
Gross Scheduled Income $129,982.70
- Vacancy Loss $649.91
= Gross Effective Income $129,332.79
+ Other Income $1,200.00
= Gross Operating Income $130,532.79
- Total Operating Expenses $16,985.70
= Net Operating Income (NOI) $113,547.09
Financial Statistics
Occupancy Percent 99.5%
Vacancy Percent 0.5%
Monthly Income Per Unit $10,831.89
Monthly Income Per Sq Ft $1.72
Annual Expenses Per Unit $16,985.70
Annual Expenses per Sq Ft $2.70
Gross Rent Multiplier 16.93
Cap Rate 5.16%
Existing Owner's Property Data
Current Value $2,200,000.00
Number of Units 1
Number Occupied 1
Number Vacant
Price Per Unit $2,200,000.00
Rentable Sq Ft 6,283
Price Per Sq Ft $350.15
Taxes $11,375.04
Insurance $1,500.00
Year Built 1968
Land Area 29,620
Buildings 1
Stories 1
Electric Meters 1
Gas Meters 1
Parking Spaces 16
Roof Flat Slurry
Zoning M / IL-3-1
Amenities and Features
$650 Loan Scenario = $540,000 Chase loan pay-off + $105,000+ cash out net proceeds after close of escrow
Wells Fargo Bank rates without "cash-out"
5/25: 3.45%
7/25: 3.85%
10/25: 4.10%
Closing Costs: All programs
Loan Fee $0
Misc. Lender Fees $200
Appraisal Fee $3,000 +/- (by bid)
Title Market ($1,000 est.)
Escrow Market ($500 est.)
Recording Fees Normal, usually less than $200
After Close of Escrow we will rebate .50% of the appraisal cost
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

3. Amortization Schedule
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
1st MTG - Fxd, Fully Amortized
Loan Amount $560,000.00
Loan to Value (LTV) 0.00%
Interest Rate 4.100%
Term (Due Date) 0.0 Years
Points 0.0%
Extra Monthly Payment 0.0%
Amortization Table with Annual Values
Year Payment Principal Interest Total Paid Loan Balance
1 $2,986.89 $1,093.97 $1,892.92 $35,842.68 $546,872.40
2 $2,986.89 $1,139.67 $1,847.22 $71,685.36 $533,196.34
3 $2,986.89 $1,187.29 $1,799.60 $107,528.04 $518,948.90
4 $2,986.89 $1,236.89 $1,750.00 $143,370.72 $504,106.21
5 $2,986.89 $1,288.57 $1,698.32 $179,213.40 $488,643.41
6 $2,986.89 $1,342.40 $1,644.49 $215,056.08 $472,534.58
7 $2,986.89 $1,398.49 $1,588.40 $250,898.76 $455,752.74
8 $2,986.89 $1,456.91 $1,529.98 $286,741.44 $438,269.76
9 $2,986.89 $1,517.78 $1,469.11 $322,584.12 $420,056.36
10 $36,410.39 $35,004.70 $1,405.69 $759,508.81 $0.00
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

4. Existing Owner's Annual Property Operating DataYear 1
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Annual Income
Gross Scheduled Income $129,982.70
- Vacancy $649.91
= Effective Rental Income $129,332.79
+ Other Income $1,200.00
= Gross Operating Income $130,532.79
Annual Operating Expenses
Taxes $11,375.04
+ Insurance $1,500.00
+ Property Management $2,610.66
+ Maintenance & Repair $600.00
+ Utilities $0.00
+ Services $0.00
+ Other Expenses $900.00
= Annual Operating Expenses $16,985.70
Net Operating Income
Gross Operating Income $130,532.79
- Annual Operating Expenses $16,985.70
= Net Operating Income $113,547.09
Annual Debt Service
1st Mortgage Debt Service $35,842.68
Annual Cash Flow Before Tax
Net Operating Income $113,547.09
- Annual Debt Service $35,842.68
- Capital Additions $0.00
= Cash Flow Before Tax $77,704.41
Original Investment
Current Value $2,200,000.00
Purchase Price $580,000.00
Down Payment $290,000.00
+ Closing Costs $11,600.00
+ Loan Points $1,450.00
+ Other Costs $0.00
= Total Investment $303,050.00
Existing Financing
1st Mortgage Loan Balance $560,000.00
Monthly Payment (P&&I) $2,986.90
Interest Rate 4.10%
Remaining Amortization Period 25.0 years
Equity Before Tax
Current Value $2,200,000.00
- 1st Mortgage Loan Balance $560,000.00
+ Replacement Reserve Balance $0.00
= Gross Equity Before Tax $1,640,000.00
- 6.00 % Cost of Sale $136,840.00
= Net Equity Before Tax $1,503,160.00
Indicators
Cap Rate 5.16%
Gross Rent Multiplier 16.93
Cash on Original Cash 25.64%
Debt Coverage Ratio 3.17
Modified DCR 3.17
Default Ratio (Break Even) 40.47
Return on Gross Equity 4.74%
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

5. Property Details
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Future Value Escalator
Year 1 Year 2 Year 3 Year 4
Appreciation 4.00% 4.00% 5.00% 5.00%
Vacancy Percent -- C:Calculate or U:Use data until next month
Description Month 1
Vacant 0.5% U
Other Income -- Future years use year 5 data with a % annual escalator
Year 1 Year 2 Year 3 Year 4 Year 5
Tax reimbursement $1,200.00 $1,200.00 $1,200.00 $1,200.00 $1,200.00
Income Escalators
Gross Scheduled Income
Other Income
Expenses: Utilities -- Future years use year 5 data with a % annual escalator
Year 1 Year 2 Year 3 Year 4 Year 5
Expenses: Services -- Future years use year 5 data with a % annual escalator
Year 1 Year 2 Year 3 Year 4 Year 5
Expenses: Other -- Future years use year 5 data with a % annual escalator
Year 1 Year 2 Year 3 Year 4 Year 5
Legal fees $600.00 $600.00 $600.00 $600.00 $600.00
Consulting fees $300.00 $300.00 $300.00 $300.00 $300.00
Expense Escalators
Expenses
Cost Recovery Period
Improvements Years 27.5
Personal Property Years 5.0
Other Assumptions
Tax Bracket 28.00%
Cost to Sell Property 6.00%
NPV Discount Rate 7.00%
Investment Comparisons
Bank CD Rate 2.00%
Mutual Fund 4.00%
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

6. Rent Roll at Month 1 Showing Monthly Numbers
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Rent Roll Summary
Total Units 1
Vacant Units
Occupied Units 1
Possible Rent $129,982.70
- Vacancy Rent $649.91
= Occupied Rent $129,332.79
Occupied 99.5%
Vacant 0.5%
Row Tenant SqFt Rent/SqFt CAMS Rent Income
0 CRAM-KM 6,283 $1.724 $0.00 $10,831.89 $10,831.89
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

7. Portfolio Financing Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
PRICE Year 1 Year 2 Year 3 Year 4 Year 5
Current Value $2,200,000.00 $2,200,000.00 $2,200,000.00 $2,200,000.00 $2,200,000.00
Escalated Price $2,200,000.00 $2,288,000.00 $2,379,520.00 $2,498,496.00 $2,623,420.80
Price Escalator: Appreciation 4.00 % 4.00 % 5.00 % 5.00 % 5.00 %
INITIAL INVEST. AT ACQUISITION
Down Payment $290,000.00 $290,000.00 $290,000.00 $290,000.00 $290,000.00
+ Closing Costs +$11,600.00 +$11,600.00 +$11,600.00 +$11,600.00 +$11,600.00
+ Loan Points +$1,450.00 +$1,450.00 +$1,450.00 +$1,450.00 +$1,450.00
+ Other Costs +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Total Investment =$303,050.00 =$303,050.00 =$303,050.00 =$303,050.00 =$303,050.00
1st MTG - Fxd, Fully Amortized
Remaining Amort. Period 25.0 24.0 23.0 22.0 21.0
Annual Principal $13,127.61 $13,676.06 $14,247.44 $14,842.70 $15,462.81
+ Annual Interest +$22,715.07 +$22,166.62 +$21,595.24 +$20,999.98 +$20,379.87
= Annual Debt Service =$35,842.68 =$35,842.68 =$35,842.68 =$35,842.68 =$35,842.68
Loan Balance (BOY) $560,000.00 $546,872.40 $533,196.34 $518,948.90 $504,106.21
= Annual Principal =$13,127.61 =$13,676.06 =$14,247.44 =$14,842.70 =$15,462.81
= Loan Balance (EOY) =$546,872.40 =$533,196.34 =$518,948.90 =$504,106.21 =$488,643.41
1st MTG - Fxd, Fully Amortized LOAN HISTORY
Date Loan Obtained Jun 30, 2016 Jun 30, 2016 Jun 30, 2016 Jun 30, 2016 Jun 30, 2016
Loan Amount $560,000.00 $560,000.00 $560,000.00 $560,000.00 $560,000.00
Term (Due Date) 10.0 Yrs 10.0 Yrs 10.0 Yrs 10.0 Yrs 10.0 Yrs
Points Paid $3,500.00 $3,500.00 $3,500.00 $3,500.00 $3,500.00
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

8. Portfolio Before-Tax Cash Flow Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
ANNUAL INCOME Year 1 Year 2 Year 3 Year 4 Year 5
Gross Scheduled Income $129,982.70 $129,982.70 $129,982.70 $129,982.70 $129,982.70
- Vacancy -$649.91 -$649.91 -$649.91 -$649.91 -$649.91
= Effective Rental Income =$129,332.79 =$129,332.79 =$129,332.79 =$129,332.79 =$129,332.79
+ Other Income +$1,200.00 +$1,200.00 +$1,200.00 +$1,200.00 +$1,200.00
= Gross Operating Income =$130,532.79 =$130,532.79 =$130,532.79 =$130,532.79 =$130,532.79
ANNUAL OPERATING EXPENSES
Taxes $11,375.04 $11,375.04 $11,375.04 $11,375.04 $11,375.04
+ Insurance +$1,500.00 +$1,500.00 +$1,500.00 +$1,500.00 +$1,500.00
+ Property Management +$2,610.66 +$2,610.66 +$2,610.66 +$2,610.66 +$2,610.66
+ Maintenance & Repair +$600.00 +$600.00 +$600.00 +$600.00 +$600.00
+ Utilities +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ Services +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ Other Expenses +$900.00 +$900.00 +$900.00 +$900.00 +$900.00
= Annual Operating Expenses =$16,985.70 =$16,985.70 =$16,985.70 =$16,985.70 =$16,985.70
NET OPERATING INCOME
Gross Operating Income $130,532.79 $130,532.79 $130,532.79 $130,532.79 $130,532.79
- Annual Operating Expenses -$16,985.70 -$16,985.70 -$16,985.70 -$16,985.70 -$16,985.70
= Net Operating Income =$113,547.09 =$113,547.09 =$113,547.09 =$113,547.09 =$113,547.09
ANNUAL DEBT SERVICE
1st Mortgage $35,842.68 $35,842.68 $35,842.68 $35,842.68 $35,842.68
+ 2nd Mortgage +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ 3rd Mortgage +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Annual Debt Service =$35,842.68 =$35,842.68 =$35,842.68 =$35,842.68 =$35,842.68
ANNUAL CASH FLOW BEFORE TAX
Net Operating Income $113,547.09 $113,547.09 $113,547.09 $113,547.09 $113,547.09
- Annual Debt Service -$35,842.68 -$35,842.68 -$35,842.68 -$35,842.68 -$35,842.68
- Capital Additions -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= Annual Cash Flow Before Tax =$77,704.41 =$77,704.41 =$77,704.41 =$77,704.41 =$77,704.41
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

9. Portfolio After-Tax Cash Flow Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
ANNUAL CASH FLOW BEFORE TAX Year 1 Year 2 Year 3 Year 4 Year 5
Gross Scheduled Income $129,982.70 $129,982.70 $129,982.70 $129,982.70 $129,982.70
- Vacancy -$649.91 -$649.91 -$649.91 -$649.91 -$649.91
= Effective Rental Income =$129,332.79 =$129,332.79 =$129,332.79 =$129,332.79 =$129,332.79
+ Other Income +$1,200.00 +$1,200.00 +$1,200.00 +$1,200.00 +$1,200.00
= Gross Operating Income =$130,532.79 =$130,532.79 =$130,532.79 =$130,532.79 =$130,532.79
- Annual Operating Expenses -$16,985.70 -$16,985.70 -$16,985.70 -$16,985.70 -$16,985.70
= Net Operating Income =$113,547.09 =$113,547.09 =$113,547.09 =$113,547.09 =$113,547.09
- Annual Debt Service -$35,842.68 -$35,842.68 -$35,842.68 -$35,842.68 -$35,842.68
- Capital Additions -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= Annual Cash Flow Before Tax =$77,704.41 =$77,704.41 =$77,704.41 =$77,704.41 =$77,704.41
REAL ESTATE TAXABLE INCOME
Net Operating Income $113,547.09 $113,547.09 $113,547.09 $113,547.09 $113,547.09
- Interest 1st Mortgage -$22,715.07 -$22,166.62 -$21,595.24 -$20,999.98 -$20,379.87
- Interest 2nd Mortgage -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- Interest 3rd Mortgage -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- Points Amortization -$350.00 -$350.00 -$350.00 -$350.00 -$350.00
- Cost Recovery (Improvements) -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- Cost Recovery (Personal) -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- Cost Recovery (Cap. Add.) -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- Historical CR (Cap. Add.) -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= R.E. Taxable Income (Loss) =$90,482.02 =$91,030.47 =$91,601.85 =$92,197.11 =$92,817.22
PASSIVE LOSS EXEMPTION
Passive Loss Exemption Available $0.00 $0.00 $0.00 $0.00 $0.00
Passive Losses Allowed $0.00 $0.00 $0.00 $0.00 $0.00
ANNUAL SUSPENDED LOSSES
R.E. Taxable Income (Loss) $90,482.02 $91,030.47 $91,601.85 $92,197.11 $92,817.22
Passive Losses Allowed $0.00 $0.00 $0.00 $0.00 $0.00
Annual Suspended Losses $0.00 $0.00 $0.00 $0.00 $0.00
TAX LIABILITY (SAVINGS)
R.E. Taxable Income (Min 0) $90,482.02 $91,030.47 $91,601.85 $92,197.11 $92,817.22
- Suspended Losses Allowed -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= Adjusted R.E. Taxable Income =$90,482.02 =$91,030.47 =$91,601.85 =$92,197.11 =$92,817.22
Tax Liability (Savings) @ 28.00% $25,334.97 $25,488.53 $25,648.52 $25,815.19 $25,988.82
ANNUAL CASH FLOW AFTER TAX
Annual Cash Flow Before Tax $77,704.41 $77,704.41 $77,704.41 $77,704.41 $77,704.41
- Tax Liability (Savings) @ 28 % -$25,334.97 -$25,488.53 -$25,648.52 -$25,815.19 -$25,988.82
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

10. Portfolio After-Tax Cash Flow Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Continued Year 1 Year 2 Year 3 Year 4 Year 5
ANNUAL CASH FLOW AFTER TAX
= Cash Flow After Tax =$52,369.44 =$52,215.88 =$52,055.89 =$51,889.22 =$51,715.59
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

11. Portfolio After-Tax Proceeds from Sale Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
SALES PROCEEDS BEFORE TAX Year 1 Year 2 Year 3 Year 4 Year 5
Sale Price (EOY) $2,288,000.00 $2,379,520.00 $2,498,496.00 $2,623,420.80 $2,754,591.84
- Cost of Sale @ 6.00% -$137,280.00 -$142,771.20 -$149,909.76 -$157,405.25 -$165,275.51
- 1st Mortgage Loan Balance -$546,872.40 -$533,196.34 -$518,948.90 -$504,106.21 -$488,643.41
- 2nd Mortgage Loan Balance -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- 3rd Mortgage Loan Balance -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= Sale Proceeds before Tax =$1,603,847.60 =$1,703,552.46 =$1,829,637.34 =$1,961,909.34 =$2,100,672.92
BASIS AT ACQUISITION
Current Value $580,000.00 $580,000.00 $580,000.00 $580,000.00 $580,000.00
+ Capitalized Closing Costs +$11,600.00 +$11,600.00 +$11,600.00 +$11,600.00 +$11,600.00
+ Basis Adjustments +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Basis at Acquisition =$591,600.00 =$591,600.00 =$591,600.00 =$591,600.00 =$591,600.00
HISTORICAL COST RECOVERY (CR)
Historical CR (Improvements) $353,929.18 $0.00 $0.00 $0.00 $0.00
+ Historical CR (Personal) +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ Historical CR (Cap. Add.) +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Historical Cost Recovery Taken =$353,929.18 =$0.00 =$0.00 =$0.00 =$0.00
COST RECOVERY (CR)
Annual CR (Improvements) $0.00 $0.00 $0.00 $0.00 $0.00
+ Annual CR (Personal) +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ Annual CR (Cap. Add.) +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Annual Cost Recovery Taken =$0.00 =$0.00 =$0.00 =$0.00 =$0.00
Total Cost Recovery Taken $0.00 $0.00 $0.00 $0.00 $0.00
ADJUSTED BASIS AT SALE
Basis at Beginning of Year $591,600.00 $237,670.82 $237,670.82 $237,670.82 $237,670.82
+ Historical Capital Additions +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ Annual Capital Additions +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
- Historical Cost Recovery Taken -$353,929.18 -$0.00 -$0.00 -$0.00 -$0.00
- Annual Cost Recovery Taken -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= Adjusted Basis at Sale =$237,670.82 =$237,670.82 =$237,670.82 =$237,670.82 =$237,670.82
GAIN (LOSS) ON SALE
Sale Price (EOY) $2,288,000.00 $2,379,520.00 $2,498,496.00 $2,623,420.80 $2,754,591.84
- Cost of Sale @ 6.00% -$137,280.00 -$142,771.20 -$149,909.76 -$157,405.25 -$165,275.51
- Adjusted Basis at Sale -$237,670.82 -$237,670.82 -$237,670.82 -$237,670.82 -$237,670.82
= Total Gain (Loss) =$1,913,049.18 =$1,999,077.98 =$2,110,915.42 =$2,228,344.73 =$2,351,645.51
- Total Cost Recovery Taken (LTG) -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

12. Portfolio After-Tax Proceeds from Sale Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
Continued Year 1 Year 2 Year 3 Year 4 Year 5
GAIN (LOSS) ON SALE
= Capital Gain from Apprec. (Min 0) =$1,913,049.18 =$1,999,077.98 =$2,110,915.42 =$2,228,344.73 =$2,351,645.51
TAXED AS ORDINARY INCOME
Unamortized Loan Points ($1,100.00) ($750.00) ($400.00) ($50.00) $300.00
+ Suspended Losses (from ATCF) +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
+ Loss at Disposition +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Taxed as Ordinary Income =($1,100.00) =($750.00) =($400.00) =($50.00) =$300.00
SALES PROCEEDS AFTER TAX
Sale Proceeds before Tax $1,603,847.60 $1,703,552.46 $1,829,637.34 $1,961,909.34 $2,100,672.92
- Tax (Savings) Ord. Inc. @ 28.00% -($308.00) -($210.00) -($112.00) -($14.00) -$84.00
- Cost Recovery Recapture @ 25.00% -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- Federal Tax on Gain @ 15.00% -$286,957.38 -$299,861.70 -$316,637.31 -$334,251.71 -$352,746.83
- State Tax on Gain @ 12.00% -$229,565.90 -$239,889.36 -$253,309.85 -$267,401.37 -$282,197.46
= Sale Proceeds after Tax =$1,087,632.32 =$1,164,011.41 =$1,259,802.18 =$1,360,270.26 =$1,465,644.63
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

13. Portfolio Equity Spreadsheet
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
SALES PROCEEDS BEFORE TAX Year 1 Year 2 Year 3 Year 4 Year 5
Sale Price (EOY) $2,288,000.00 $2,379,520.00 $2,498,496.00 $2,623,420.80 $2,754,591.84
- Cost of Sale @ 6.00% -$137,280.00 -$142,771.20 -$149,909.76 -$157,405.25 -$165,275.51
- 1st Mortgage Loan Balance -$546,872.40 -$533,196.34 -$518,948.90 -$504,106.21 -$488,643.41
- 2nd Mortgage Loan Balance -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
- 3rd Mortgage Loan Balance -$0.00 -$0.00 -$0.00 -$0.00 -$0.00
= Sale Proceeds before Tax =$1,603,847.60 =$1,703,552.46 =$1,829,637.34 =$1,961,909.34 =$2,100,672.92
GROSS EQUITY AT PURCHASE
Down Payment $290,000.00 $290,000.00 $290,000.00 $290,000.00 $290,000.00
= Gross Equity at Purchase =$290,000.00 =$290,000.00 =$290,000.00 =$290,000.00 =$290,000.00
GROSS EQUITY (EOY)
Gross Equity (BOY) $1,640,000.00 $1,741,127.61 $1,846,030.34 $1,976,965.78 $2,116,237.54
+ Appreciation Equity +$88,000.00 +$91,226.67 +$116,688.00 +$124,429.07 +$130,650.52
+ Principal Paydown Equity +$13,127.61 +$13,676.06 +$14,247.44 +$14,842.70 +$15,462.81
= Gross Equity (EOY) =$1,741,127.61 =$1,846,030.34 =$1,976,965.78 =$2,116,237.54 =$2,262,350.87
GROSS EQUITY PLUS RESERVES
Gross Equity (EOY) $1,741,127.61 $1,846,030.34 $1,976,965.78 $2,116,237.54 $2,262,350.87
+ Reserve Balance +$0.00 +$0.00 +$0.00 +$0.00 +$0.00
= Total Gross Equity =$1,741,127.61 =$1,846,030.34 =$1,976,965.78 =$2,116,237.54 =$2,262,350.87
RETURN ON GROSS EQUITY (EOY)
Annual Cash Flow Before Tax $77,704.41 $77,704.41 $77,704.41 $77,704.41 $77,704.41
div Gross Equity (EOY) $1,741,127.61 $1,846,030.34 $1,976,965.78 $2,116,237.54 $2,262,350.87
= Return on Gross Equity =4.46 % =4.21 % =3.93 % =3.67 % =3.43 %
NET EQUITY (EOY)
Gross Equity (EOY) $1,741,127.61 $1,846,030.34 $1,976,965.78 $2,116,237.54 $2,262,350.87
- Cost of Sale @ 6.00% -$137,280.00 -$142,771.20 -$149,909.76 -$157,405.25 -$165,275.51
= Net Equity (EOY) =$1,603,847.61 =$1,703,259.14 =$1,827,056.02 =$1,958,832.30 =$2,097,075.36
INDICATORS
Cap Rate 5.16 % 4.96 % 4.77 % 4.54 % 4.33 %
Gross Rent Multiplier 16.93 17.60 18.31 19.22 20.18
Cash on Original Cash 25.64 % 25.64 % 25.64 % 25.64 % 25.64 %
Debt Coverage Ratio 3.17 3.17 3.17 3.17 3.17
Modified DCR 3.17 3.17 3.17 3.17 3.17
Default Ratio (Break Even) 40.47 40.47 40.47 40.47 40.47
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

14. Annual Values Chart
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
This chart shows annual values on a $303,050 investment in the property at 7888 Othello Avenue
over a period of 5 years.
The lower chart axis is years.
Future assumptions have been factored in.
See the spreadsheet for raw data.
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.

15. Equity Values Chart
7888 Othello Avenue
San Diego CA 92111
Commercial / Industrial
This chart shows the Price, Net Equity, and Loan values for the property at 7888 Othello Avenue over
a period of 5 years.
The lower chart axis is years.
Future assumptions have been factored in.
See the spreadsheet for raw data.
Prepared By
Suhail Khalil, CCIM, GRI, Morning Star Real Estate Services, Brokerage, Asset Mgmt.
Land Use Planning & Development, P.O. Box 60506, San Diego, CA 92166, (619) 224-1527, over 25 years experience
"working for you to build a better future", MorningStar.RESVC@cox.net
This report has been prepared based on information furnished by sources deemed reliable, however no representation or
warranty, either express or implied, is made to its accuracy.