SIGNATURE/DRS FUND I PRIVATE EQUITY FUND IREAL ESTATE SIGNATURE/DRS FUND I PRIVATE EQUITY FUND IREAL ESTATE Real Estate Multifamily Rental Investment Opportunity Fund Presented by: Ward Katz & Jerry Miller Co- Managing Members Signature/DRS Fund I 7171 W. 95th St. Suite 220 Overland Park, KS 66212 Phone: 913-563-4500 Email: info@signaturedrsfunds.com www.signaturedrsfunds.com Ward Katz Phone: 913-955-2904 Email: ward@signaturedrs.com Jerry Miller Phone: 913-563-4518 Email: jerry@signaturedrs.com SIGNATURE / DRS FUND I COMPANY OVERVIEW SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE Signature/DRS Fund I is a joint venture between two experienced and successful real estate firms, DRS Management & Signature Property Management, to develop and manage Signature/DRS FUND I. The Fund will focus on acquiring, repositioning, managing and selling multifamily properties in Kansas City, Dallas, Denver, St. Louis & Phoenix. Management has over 60 years of Real Estate Investment and Management Experience. DRS Management & Signature Property Management have developed, acquired and syndicated over $175 Million in more than 25 separate real estate transactions DRS Management & Signature Property Management have overseen the management of 65 apartment communities and over 9,000 units, and currently manage 15 property communities and over 3,000 units The existing combined portfolio of DRS Management & Signature Property Management consists of apartment communities, condominiums and home associations in three states SIGNATURE / DRS FUND I FUND OBJECTIVE SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE 1) Signature/DRS Fund I was formed to: Offer accredited investors the opportunity to participate with the sponsor of the Fund by combining resources for the acquisition, management and sale of a portfolio of a diverse apartment properties. 2) The offering’s goal is to provide: An investment structure with low font-end costs where the sponsor is compensated only after a preferred return is distributed to investors. 3) To add value to the investment: Sponsors will utilize their professional management staffs to reposition the properties through refinancing, better marketing and management or cost– effective physical upgrades. SIGNATURE / DRS FUND I FUND BUSINESS MODEL IDENTIFY • Identify multi-family properties where there is a value-added opportunity, a distressed asset or otherwise performing property where the management has an existing presence, market knowledge and experience. SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE IMPROVE • Improve and reposition properties through financing, cost-effective physical upgrades and improvements in marketing and leasing. SELL • Increase value, stabilize property and sell the property for an anticipated profit while providing current income along the way. The Fund will invest 100% of the equity required in a project to own a 100% interest in the project. The Fund will deploy a percentage of its capital in joint ventures where the Fund can control a disproportionately larger ownership interest than the percentage share of equity invested in a particular project. Utilizing a combination of these two investment platforms, the Fund believes that it will be able to greatly leverage its investments and acquire between $35MM and $45MM in assets, thus providing diversification, reducing risk and enhancing overall returns to the Fund. SIGNATURE / DRS FUND I INVESTMENT PARAMETERS SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE Company Philosophy To Provide Real Estate Investors with a quality, proven real estate investment & management company with a compelling vision. Asset Type Apartment Buildings Class B & C Properties Company Objective To Acquire 3 properties over the next 2 years. Asset Size in Units 100 – 250 Units per property Asset Size in Dollars $7.5MM - $15MM Leverage Per Asset 70%-75% Fund Target Return 30% IRR Assets Location (before fund expenses and splits) Kansas City, Denver, Dallas, St. Louis, Phoenix SIGNATURE / DRS FUND I SIGNATURE /DRS FUND I SAMPLE INVESTMENT SCENERIO PRIVATE EQUITY FUND I REAL ESTATE 5 Year Analysis Investment Amount Percentage Equity Interest $ 100,000 1.43% Cash Flow Category Capital Contribution Preferred Return Return of Capital LP/Sponsor Split Capital Event Distribution $ $ $ $ $ 1/1/2015 (100,000) - Total Cumulative Cash Returned $ $ (100,000) (100,000) $ IRR Annual Return(Capital & Income) Multiple 12/31/2015 12/31/2016 12/31/2017 $ $ $ $ $ $ $ $ $ $ $ $ 8,000 $ - $ 9,259 $ - 15,236 15,236 $ 16,227 $ 31,463 $ 17,259 $ 48,723 $ 18,336 67,059 $ 196,639 $ 263,697 15.2% 16.2% 17.3% 18.3% 14.4% 8,000 7,236 - 8,000 8,227 - 254% * Past performance is not indicative of future results. ** This is a sample return and actual results may vary. See PPM for risks of Investment. 12/31/2018 12/31/2019 TOTALS 8,000 $ 8,000 $ 40,000 - $ 100,000 $ 100,000 10,336 $ 6,398 $ 41,4568 $ 82,241 $ 82,241 $ 263,697 $ 263,697 26.0% APARTMENT CYCLES AND FUND STRATEGYSIGNATURE /DRS FUND I THE FUND TARGET PRIVATE EQUITY FUND I REAL ESTATE APARTMENT CYCLES AND FUND STRATEGY CONTINUED DEMAND and OVERSUPPLY SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE Much has been written and spoken about the upswing in renters who no longer view home ownership as an investment, who want the flexibility of renting and/or cannot obtain financing for a home purchase. It is commonly believed that rental demand for mid-market apartment product will not keep pace with supply. With rental demand for apartments continuing to firm up, institutional investors are purchasing and developers are building Class A apartments at a record pace. Management believes that the apartment cycle is rapidly approaching hyper supply and that the time to purchase well located Class B/C apartments at a reasonable price is on the horizon. Our criteria are those Class B/C properties that are ripe for repositioning through management, financing and/ or rehabilitation The financing of many transactions, particularly 5-7-10 year deals will be facing maturity resulting in buying opportunities. Sellers and commercial brokers are looking to buyers who have ample funds and borrowing capacity to move quickly and close. The motivation for raising funds for purchase of undesignated projects but meeting specific investment criteria is to demonstrate to the sellers and brokers that the fund can move rapidly to contract and close and thus assure an early look at all opportunities. U.S. Construction of New Apartments • • • • • • 2001-2007 2009 2012 2013 2014 2015 (projected) SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE average 301,000 units/year 163,000 units 104,500 units 195,000 units 300,000 units 413,000 units Kansas City Construction of New Apartments • • • • Existing inventory Under construction and pipeline Average annual absorption Projected years supply SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE 132,500 units 8,000 units 1,500 units 5.3 years SIGNATURE / DRS FUND I SIGNATURE /DRS FUND I SAMPLE INVESTMENT SCENERIO PRIVATE EQUITY FUND I REAL ESTATE 5 Year Analysis Investment Amount Percentage Equity Interest $ 100,000 1.43% Cash Flow Category Capital Contribution Preferred Return Return of Capital LP/Sponsor Split Capital Event Distribution $ $ $ $ $ 1/1/2015 (100,000) - Total Cumulative Cash Returned $ $ (100,000) (100,000) $ IRR Annual Return(Capital & Income) Multiple 12/31/2015 12/31/2016 12/31/2017 $ $ $ $ $ $ $ $ $ $ $ $ 8,000 $ - $ 9,259 $ - 15,236 15,236 $ 16,227 $ 31,463 $ 17,259 $ 48,723 $ 18,336 67,059 $ 196,639 $ 263,697 15.2% 16.2% 17.3% 18.3% 14.4% 8,000 7,236 - 8,000 8,227 - 254% * Past performance is not indicative of future results. ** This is a sample return and actual results may vary. See PPM for risks of Investment. 12/31/2018 12/31/2019 TOTALS 8,000 $ 8,000 $ 40,000 - $ 100,000 $ 100,000 10,336 $ 6,398 $ 41,4568 $ 82,241 $ 82,241 $ 263,697 $ 263,697 26.0% Questions SIGNATURE /DRS FUND I PRIVATE EQUITY FUND I REAL ESTATE ? SIGNATURE/DRS FUND I PRIVATE EQUITY FUND IREAL ESTATE Thank You For Coming!