The Cottages of Sun Valley are two new senior care facilities to be constructed and operated by The Cottages in Hailey, Idaho. An owner/operator management company with 15+ years experience, seeks $4.2MM for construction and $200K for operating capital during lease-up for a total of $4.4MM for the project.

2. Executive Summary – Mar 2014
The Cottages of Sun Valley LLC
Executive Summary -
The Cottages of Sun Valley are two new senior care facilities to be constructed and operated
by The Cottages LLC at 150 N. 1st
Ave (Lot 2, Block 1, Northridge VIII) in Hailey, Idaho. The
Cottages, an owner/operator management company with 15+ years experience, seeks
$4.2MM for construction and $200K for operating capital during lease-up for a total of $4.4MM
for the project.
The project consists of building two (2) separate 16-unit single-story home-like 11,400 sq. ft.
buildings -- each of the combined 32 units is intended for single occupancy (unit sizes range
from 312-425 sq. ft.). One building will be dedicated to assisted living residents, the other to
memory care.
The land at 150 N. 1st
Ave is owned and of significant value (~$1.25MM); and $125,000 has
been invested in soft costs (including site plans, drawings, engineering) to secure building
permits with the city. The demand for private pay senior resident care in Blaine County is
strong and competition exists only at the low-end of care facilities. The lease-up period (or time
to fill-up) is anticipated to take 8 months due to pent up demand and local community
enthusiasm. Market surveys and recent inquiries confirm our ability to charge premium rates at
our private pay senior care facilities ($3800) especially memory care services ($4500).
At stabilization we forecast The Cottages of Sun Valley to have an annual NOI of $525k. Long-
term demographics, the economics of senior care facilities prices rising faster than labor costs
and a strong focus on quality private pay senior care are all factors that should strengthen
those assumptions. Upon six months stabilized occupancy of the facilities The Cottages will
seek a refinance with FHA, HUD or other lender. Further opportunities exist for refinancing or
sale after 3 years of stabilized operations.
The Cottages and management team have 20+ years experience developing, operating and
managing senior care facilities. Garold Maxfield, the CEO and his team own and manage 16
facilities with 243 senior care beds in ID, TX and MO. In addition, The Cottages has
management contracts to provide administrative services to over 10 facilities and 157 senior
care beds in WA, MT and ID.
The Cottages seeks to mitigate risks in the construction in a number of ways: we utilize a
similar building footprint and facility plans; we refine building drawings for local specifications
and site planning requirements; we use the same General Contractor – Alta Construction –
past building experience with plans and currently have collaborative construction and oversight
project management. The lease-up risk is also reduced by the smaller facility sizes (faster to
breakeven) and by the inclusion of two local community members as shareholders and
advocates for the project.
The ownership consists of 4 individuals – Garold Maxfield 25% (operator & PG), Justin
Yarmark 12.5% (operator & cash investor), Anita Northwood 12.5% (cash investor & local
advocate), and Mark Caplow 50% (land owner).

3. Hailey ID Project -
# of homes = 2
Based on
Cost
Cost $5,656,672
Loan to Value 75.69%
Loan Amount $4,281,671
Hailey - Sources of
Funds
SOURCES TOTAL
Capital - Owner $125,000
Land - Owner $1,250,000
Permanent Financing $4,281,672
Total Sources $5,656,672
USES
Hard Costs $3,222,600
Soft Costs $359,025
FF&E $325,000
Working Capital $206,300
Total Uses $4,112,925
Equity Required $(1,543,747)
Land is valued at $1.25MM for 150 N. 1st
Ave, Hailey, ID
(Lot 2, Bock 1, Northridge VIII)

4. HAILEY PROJECT ASSUMPTIONS
The Cottages of Sun Valley Equity Investment
Land $1,250,000
Cash $125,000
Total $1,375,000
% of Total Cost 24%
Hailey Facility Costs
Description Amount ($)
Land Cost $1,250,000
Hard Costs $3,316,347
Soft Costs $565,325
FF&E $325,000
Contingency $200,000
Total Project Costs $5,656,672
Project Assumptions
# of Beds 32
# of Units 32
Building Square Footage 22,800
Land Acreage 2
Construction Period (months) 12
Lease-up Period (months) 8
Total RentS
Unit Type
#
Units
Beds/unit
Total
Capacity
(Beds)
SF
Total
SF
Rent
per Bed
(Private)
Rent per
Unit
(Private)
Rent/SF
Monthly
Rent
Annual Rent
AL-Private 1 1 1 425 425 $3,600 $3,600 $8.47 $3,600 $43,200
AL-Private 2 1 2 395 790 $3,600 $3,600 $9.11 $7,200 $86,400
AL-Private 1 1 1 354 354 $3,600 $3,600 $10.17 $3,600 $43,200
AL-Private 5 1 5 338 1,690 $3,600 $3,600 $10.65 $18,000 $216,000
AL-Private 7 1 7 312 2,184 $3,600 $3,600 $11.54 $25,200 $302,400
MC-Private 1 1 1 425 425 $4,800 $4,800 $11.29 $4,800 $57,600
MC-Private 2 1 2 395 790 $4,800 $4,800 $12.15 $9,600 $115,200
MC-Private 1 1 1 354 354 $4,800 $4,800 $13.56 $4,800 $57,600
MC-Private 5 1 5 338 1,690 $4,800 $4,800 $14.20 $24,000 $288,000
MC-Private 7 1 7 312 2,184 $4,800 $4,800 $15.38 $33,600 $403,200
Totals 32 32 10,886 $134,400 $1,612,800
Averages 340 $4,200 $4,200 $12.35

5. Cottages Sun Valley ID - Operating Statement
Year
Const. 2 3 4 5
2014 2015 2016 2017 2018
Income
Total Revenue $0 $761,760 $1,568,160 $1,614,125 $1,661,469
Total COGS $87,060 $569,553 $772,308 $795,466 $819,320
Gross Profit ($87,060) $192,207 $795,852 $818,659 $842,149
Total Operating Expenses $45,900 $223,613 $270,750 $278,873 $287,239
Total COGS $87,060 $569,553 $772,308 $795,466 $819,320
Residence Operating Expenses $132,960 $793,166 $1,043,058 $1,074,339 $1,106,558
Operating Expense Ratio % 95% 62% 62% 62%
Net Operating Income ($132,960) ($31,406) $525,102 $539,786 $554,911
Operating Margin % 5% 38% 38% 38%
JY#03&18&14#
!

6. Version 1 - more conservative Revenue (no resident service revenue)
Const. 2 3 4 5
2014 2015 2016 2017 2018
Income
$0 $1,612,800 $1,612,800 $1,661,184 $1,711,020
$0 $0 $0 $0 $0
$0 $1,612,800 $1,612,800 $1,661,184 $1,711,020
$0 ($887,040) ($80,640) ($83,059) ($85,551)
55% 5% 5% 5%
$0 $725,760 $1,532,160 $1,578,125 $1,625,469
$0 $36,000 $36,000 $36,000 $36,000
$0 $36,000 $36,000 $36,000 $36,000
$0 $761,760 $1,568,160 $1,614,125 $1,661,469
$52,500 $70,000 $72,100 $74,263
$18,000 $9,000 $9,270 $9,548
$41,928 $83,808 $86,311 $88,890
$72,000 $360,000 $480,000 $494,400 $509,232
$14,160 $70,800 $94,400 $97,232 $100,149
$900 $4,500 $6,000 $6,180 $6,365
$6,750 $9,000 $9,270 $9,548
$5,250 $7,000 $7,210 $7,426
$600 $800 $824 $849
$1,350 $1,800 $1,854 $1,910
$4,500 $6,000 $6,180 $6,365
$3,375 $4,500 $4,635 $4,774
$87,060 $569,553 $772,308 $795,466 $819,320
($87,060) $192,207 $795,852 $818,659 $842,149
$10,500 $14,000 $14,420 $14,853
$5,250 $7,000 $7,210 $7,426
$2,100 $2,800 $2,884 $2,971
$30,000 $30,000 $15,000 $15,450 $15,914
$1,875 $2,500 $2,575 $2,652
$11,250 $15,000 $15,450 $15,914
$600 $800 $824 $849
$3,000 $4,000 $4,120 $4,244
$113 $150 $155 $159
$1,050 $1,400 $1,442 $1,485
$225 $300 $309 $318
$12,000 $16,000 $16,480 $16,974
$900 $1,200 $1,236 $1,273
$7,200 $7,200 $7,200 $7,416 $7,638
$6,750 $9,000 $9,270 $9,548
$5,100 $5,100 $6,800 $7,004 $7,214
$600 $800 $824 $849
$3,000 $4,000 $4,120 $4,244
$51,000 $68,000 $70,040 $72,141
$8,250 $11,000 $11,330 $11,670
$1,500 $2,000 $2,060 $2,122
$12,750 $17,000 $17,510 $18,035
$1,500 $1,500 $2,000 $2,060 $2,122
$2,100 $2,100 $2,800 $2,884 $2,971
$45,000 $60,000 $61,800 $63,654
$45,900 $223,613 $270,750 $278,873 $287,239
$87,060 $569,553 $772,308 $795,466 $819,320
$132,960 $793,166 $1,043,058 $1,074,339 $1,106,558
95% 62% 62% 62%
($132,960) ($31,406) $525,102 $539,786 $554,911
5% 38% 38% 38%
JY#03&18&14
Net Operating Income
Operating Margin %
Utilities Expense
Total Operating Expenses
Total COGS
Residence Operating Expenses
Operating Expense Ratio %
Property Taxes Expense
Repairs & Maintenance
Yard Maintenance
Telephone Expenses
Training Fees
Travel & Entertainment
Insurance (key man) Expense
Licensing Expense
Legal Fees Expense
Marketing Wages &
Miscellaneous Expense
Office Supplies Expense
Quality Assurance Expense
Contract Labor Dietician
Copies & Postage Expense
Dues & Subscriptions
Industry Meetings Expense
Insurance Building & Contents
Accounting Expense
Activities & Entertainment
Van - Gas and Maintenance
Advertising Expense
Computer & Software Expense
Contract Labor Nurse
Supplies-Nursing-Expense
Supplies-Household-Expense
Total COGS
Gross Profit
Operating Expenses
Payroll Burden Expense
Insurance & Benefits Expense
Marketing-Lease up
Placement Fee
Admin-Quality Assurance
Supplies-Cleaning-Expense
Cost of Goods Sold
Food Expense
New Move-In Expense
Management Fee
Payroll Salaries & Wages
Total Revenue
Operating Expenses
Less Vacancy
Vacancy %
Total Rent & Service Income
Community Fees
Total Other Income
Operating Statement
Year
Room & Board
Resident Services
Potential Gross Income

7. 3/18/14 Page 11
Total Number of ALZ Units 16 16 # of Homes 1 1 2
Rent Per Month ALZ Units (memory care) $4,500.00 Land Cost $1,250,000
Total Number of ALF Units 16 16 Bldg.Cost (for dep.) $3,100,000
Rent Per Month ALF Units (assisted living) $3,800.00 Economic Life - Building 35
Move-In Fee $1,500 Capitalization Rate 9.25%
New Move-Ins per month 1 Reversion Sales Cost 4.0%
Vacancy 10.0% Rent Increase 3.0%
All Expenses Monthly $78,754 Holding Period (Yrs.) 10
Building Cost $3,900,000 Balance of Loan (10th Yr.) $3,672,626
Loan Amount 110% $4,281,671 Tax Rate 0.00%
Cash Partners Invested (Net) $125,000
Annual Payment $288,000
Rate 5.25%
1st TD Term (years) 25 Calculated Value (Stabilized) $5,677,751
DSC 1.82
STABILIZED OCCUPANCY Cnstrctn Lease Up Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
GROSS RENT POTENTIAL STABILIZED Sale
Rental Income $1,593,600 $1,641,408 $1,690,650 $1,741,370 $1,793,611 $1,847,419 $1,902,842 $1,959,927 $2,018,725
Other Income $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000
________ ________ ________ ________ ________ ________ ________ ________ ________
TOTAL GROSS INCOME $1,629,600 $1,677,408 $1,726,650 $1,777,370 $1,829,611 $1,883,419 $1,938,842 $1,995,927 $2,054,725
VACANCY (159,360) (164,141) (169,065) (174,137) (179,361) (184,742) (190,284) (195,993) (201,872)
________ ________ ________ ________ ________ ________ ________ ________ ________
EFFECTIVE GROSS INCOME $1,470,240 $1,513,267 $1,557,585 $1,603,233 $1,650,250 $1,698,677 $1,748,558 $1,799,934 $1,852,852
EXPENSES (945,048) (973,399) (1,002,601) (1,032,679) (1,063,660) (1,095,570) (1,128,437) (1,162,290) (1,197,159)
________ ________ ________ ________ ________ ________ ________ ________ ________
NET OPERATING INCOME $525,192 $539,868 $554,984 $570,553 $586,590 $603,108 $620,121 $637,644 $655,694
Interest (TD) (224,788) (221,469) (217,976) (214,300) (210,431) (206,358) (202,072) (197,561) (192,813)
Depreciation (88,571) (88,571) (88,571) (88,571) (88,571) (88,571) (88,571) (88,571) (88,571)
________ ________ ________ ________ ________ ________ ________ ________ ________
Sub-total 211,833 229,827 248,436 267,682 287,588 308,178 329,477 351,512 374,309
GAIN FROM SALE
________ ________ ________ ________ ________ ________ ________ ________ ________
TOTAL TAXABLE INCOME 211,833 229,827 248,436 267,682 287,588 308,178 329,477 351,512 374,309
AFTER TAX CASH FLOW
YEAR 1 2 3 4 5 6 7 8 9 10 11
NET INCOME $525,192 $539,868 $554,984 $570,553 $586,590 $603,108 $620,121 $637,644 $655,694
DEBT SERVICE (TD) (288,000) (288,000) (288,000) (288,000) (288,000) (288,000) (288,000) (288,000) (288,000)
Preferred Return 0 0 0 0 0 0 0 0 0
REVERSION
Capitalized Value 11th year NOI/OAR $7,088,582
Less 1st TD Balance (3,672,626)
Less Sales Costs (283,543)
$125,000 0 ________ ________ ________ ________ ________ ________ ________ ________ ________
Before tax cash flow $237,192 $251,868 $266,984 $282,553 $298,590 $315,108 $332,121 $3,482,057 $367,694
TAX SAVINGS/(LIABILITY) 0 0 0 0 0 0 0 0 0
________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________
CASH FLOW $125,000 $0 $237,192 $251,868 $266,984 $282,553 $298,590 $315,108 $332,121 $3,482,057 $367,694
IRR Calculation -$125,000 $0 $0 $35,579 $37,780 $40,048 $113,407 $44,788 $47,266 $49,818 $522,308
Loan Balance 1st TD 4,218,459 4,151,928 4,081,904 4,008,204 3,930,635 3,848,993 3,763,065 3,672,626
Depreciated Value for the Building 3,011,429 2,922,857 2,834,286 2,745,714 2,657,143 2,568,571 2,480,000 2,391,429
JY#03&18&14
ASSUMPTIONS

8. MARKET & COMPETITIVE ANALYSIS
While the coming demand for state-of-the-art senior housing is abundantly clear, the
development and operations team has drawn on its years of experience and knowledge
to focus on best locations to maximize return on investment. Through past experience,
thoughtful planning and careful development, The Cottages LLC has developed a
formula to ensure that facilities are constructed in areas where demand for the product
is greatest, we face limited competition and the median household income can support
the rates we prefer to charge. This formula includes identifying areas with close
proximities to hospitals, the median household incomes of those areas that are aged
45-65 (the children of these seniors in the area that will be financially supporting their
parents), and studying local demographics to understand the potential demand for
senior housing, including combining Memory Care in every Assisted Living facility.
Once an area has been identified as a potential building site, we perform an in depth
market analysis to not only verify its viability, but to also determine the number of senior
units the area can support, the occupancy rate of competitive facilities, and the ability of
area residents to meet the financial requirements of housing their parents in high-end
senior housing. Included in the analysis is a calculation for the cost of the employees
required to staff the facility. The Cottages sets aside reserves to accommodate these
jobs while the facility is being leased up and stabilized. This usually takes a maximum
of 8-12 months for construction and another 8-12 months to reach occupancy
depending upon the market and competition.
The Cottages has identified Blaine County and Hailey, ID more specifically as a
desirable market to enter. The Cottages has surveyed a 10-mile radius as the most
appropriate distance, given the rural nature of the market, senior residents would move
to one of our facilities.
!
!
!

9. Hailey ID
Phase I - (10) Mile Radius
Site Information
County
Cities nearby
CDFI / NMTC
CON
ESRI Data for Primary Market Households 2010 2012 2017
Total Population - (10) Mile Radius 6,683 7,035 7,429
50-54 yr 1,695 1,720 1,595
55-64 yr 2,866 3,045 3,197
65-74 yr 1,438 1,565 1,891
75+ yr 684 705 746
$357,807 $375,760
$107,342 $112,728
$250,465 $263,032
($22,981) ($24,134)
44,302$ 49,192$
52.05% 59.35%
Owner Occupied (65+ yr) 20.50% 435 465 541
Renter Occupied (65+ yr) 5.80% 123 132 153
242 321
68 91
311 412
Independent Living Analysis 2012 2017
IL Competition - (10) Mile Radius Total Beds Miles Census Rates
None
Total Beds 0
IL Target Annual Rent 1,800$ (Month) 21,600$ 21,600$
Estimated Additional Income Required $ 36,000 (60% Annual Income) 13,019$ 11,866$
Total IL Units Demanded 25 33
IL Supply on Market 0 0
Total IL Demand Available 25 33
Assisted Living Analysis 2012 2017
AL Competition - (10) Mile Radius Total Beds Miles Census Rates
Safe Haven Homes 12 4.9
Total Beds 12
AL Target Annual Rent 4,035$ (Month) 48,420$ 48,420$
Estimated Additional Income Required $ 60,525 (80% Annual Income) 37,544$ 36,391$
99 132
32 42
19 25
25 34
12 12
13 22
Memory Care Analysis 2012 2017
MC Competition - (10) Mile Radius Total Beds Miles Census Rates
None
Total Beds 0
AL Target Annual Rent 4,293$ (Month) 51,519$ 51,519$
Estimated Additional Income Required $ 64,399 (80% Annual Income) 41,417$ 40,264$
99 132
32 42
19 25
25 34
0 0
25 34
Blaine
Bellevue, Ketchum
Median Home Value (50+ yr)
30% Mortgage, Closing Costs
Net Investment
Annuity 5% / 15 Year
Average Median Household Income (65+ yr)
Average Percentage $25,000 - 99,999 (65+ yr)
Affordability Index Owners (65+ yr)
Affordability Index Renters (65+ yr)
Total Affordability Persons (65+ yr)
No
No
Total AL Demand Available
Total MC Demand Available
ADL / IADL Limitations
Potential Capture Rate
Outside Market
Total MC Units Demanded
MC Supply on Market
AL Supply on Market
Total AL Units Demanded
Outside Market
Potential Capture Rate
ADL / IADL Limitations
Reporting 1 Race
Population Total 38,042
White 90.4%
Black 1.4%
Asian 1.5%
Hispanic 10.3%
9/18/2013

10. The Hailey location is 150 N. 1st
Ave, with the southwestern border of the site on Main Street.
"
"
"
"

11. SITE PLAN
820 S. Main, Hailey, Idaho
PDF created with pdfFactory trial version www.pdffactory.com
For a detailed site plan submitted and approved by the
Hailey, ID city and planning department visit:
http://bit.ly/1hyTQxz - Hailey Site Plan 2 facilities
To get a full business plan and further information about the
services provided by The Cottages and our approach managing
senior care facilities please contact:
Justin Yarmark
801-694-1967
justin@thecottages.biz
http://bit.ly/1ihOb0P - Complete Cottages Sun Valley package