MACK INVESTMENTS a division of MACK Companies A GUIDE TO SINGLE-FAMILY REAL ESTATE INVESTMENTS MACK Investments rentMACK MACK Estates MACK Developers MACK Commercial MACK Landscape MACK INVESTMENTS MACKrent ESTATES MACK MACK DEVELOPERS COMMERCIAL Cm MACK MACK LANDSCAPE Turn-Key Residential Real Estate Investments Residential Leasing Property Management New Construction Redeveloped Homes General Contracting Management DesignBuild Services Industrial Office Retail Commercial Spaces Year Round Full-Service Design Maintenance MACK COMPANIES MACK Companies a full service real estate company HISTORY01 RAISING THE QUALITY OF LIFE MACK C O M P A N I E S HISTORY At the time MACK Companies was founded in 1998 our core focus was placed on the single-family home redevelopment and rental process. With nearly two decades of proven success under their belt the father-son duo Jim MACK McClelland and James MACK McClelland founders entrepreneurs and real estate developers couldnt have imagined that a small Ma Pa operation consisting of a little over twenty employees would become pioneers in the real estate industry and grow into the innovative full family of real estate divisions that it is today. These independently run divisions cover all major aspects of real estate and are comprised of residential commercial new construction landscape and real estate investments. Situated in a Chicago-land suburb just about twenty minutes south of downtown MACK Companies is one of the most sought after real estate firms in the United States. We are comprised of smart talented industry professionals who share one common goal Raising the Quality of Life. This simple principle of leaving people and things in better condition than as originally found has paved the foundation and made way for MACK Companies to grow to an organization that continually proves to be a leader in the industry. The MACK Companies brand culture and values express what the company is as a whole. It is a culmination of what people see feel and hear with each business transaction. The company exercises the following five core values B R A N D C U L T U R E V A L U E S Knowledgeable Dynamic Caring Dedicated Humble COMPANY VALUES02 Cloud Gate Millennium Park Chicago IL. THE MACK EXPERIENCE03 MACK Investments is an integral division of MACK Companies that provides turn-key residential real estate investments to individual and institutional clients worldwide. MACK INVESTMENTS At MACK Investments we are dedicated to building value through the development investment management and financing of real estate assets. Our investment experts are dedicated to providing secure hands-free investing in fully managed single-family rental properties. When you are ready to buy our experts will take care of the entire acquisition process. We will successfully guide you through the process of residential real estate investing and provide an opportunity for you to own redeveloped tenanted assets. MACK Companies offers world-class ongoing management of your property by recognized industry experts. We will also provide you with market intelligence for buy hold or sell decisions. Our goals are to maximize your returns protect your assets and provide you with 100 transparency in the process. I N V ES T I N G SMART Real estate is the perfect investment to round out a diverse portfolio. It offers advantages many traditional investments cannot and includes several qualities that can enhance the return of a stronger portfolio. Every investor knows the value of having a solid portfolio and single-family rentals provide a long- term investment for people who want to expand their holdings. Whether you want to increase the number of assets you currently own or are wondering if an SFR is the right investment for you consider these four factors An investment you can leverage your way into An investment that appreciates with time An investment that provides monthly cash flow They fit into any investment strategy Your principal is safe Rental properties provide tax breaks SFR investing can be a simple process BENEFITS04 Choosing to partner with a turn-key provider grants our clients the opportunity to invest in real estate passively and to do so with experts who can advise and provide the best industry services. Whether its a portfolio of 10 or 100 homes real estate managed by professionals saves investors countless hours in the acquisition redevelopment and daily maintenance required to sustain quality investment properties. Understanding Your Goals Two major factors contribute to earning returns on a rental property Cash Flow and Appreciation. Investing for cash flow is built on solid fundamentals and represents the income you collect each month from the property over a short period of time. Investing for appreciation can pay significantly higher returns on your income but over a longer period of time. Investors can choose either situation based on their goals. We offer a hybrid model allowing our clients an opportunity to invest either way a formula that is not made possible by everyone. UNLIKE COMMERCIAL PROPERTY INVESTMENTS In an emerging digital world people remain in homes telecommuting Monthly income relies on occupancy not business success Turn-key models allow entry for first time investors UNLIKE MULTI-FAMILY INVESTMENTS A large pool of buyers exists for single-family homes Single-family is easier to finance Single-family residents stay 2.7 times longer than multi-family UNLIKE PURCHASING SHARES OF A REIT Decisions and control of the assets are yours alone 100 cash purchase is not mandatory Leveraged financing enables higher returns A downtown view of the Chicago River from the Michigan Avenue Bridge. EXPERIENCE TIME MANAGEMENT Investors that lack experience in strategic acquisitions new construction standard renovations and property management can easily find themselves saddled with investment properties that under perform and lose money. Investors that choose to renovate and manage their own investment homes must dedicate substantial amounts of time for due diligence and working with contractors as well as leasing and managing their rental properties. The key to the success of any investment is property management. In order to ensure the asset is consistently generating income and being properly maintained significant experience and time dedicated to property management is required. MACK Investments has been purchasing renovating and managing investment homes throughout the Chicago-land area for nearly twenty years. MACK Investments provides a turn-key investment method to our clients so that they can spend time doing what they love while yielding a return on their assets. rentMACK provides leasing and management services to all MACK Investments clients. The rentMACK team handles all resident issues and concerns including daily maintenance monthly inspections and the rent collection process. THE MACK PROCESS We have spent years perfecting a real estate investment model that allows individual and institutional investors to benefit from a turn-key investment experience that grants substantial returns. In August of 2012 MACK Investments leaders structured the largest single-family performing asset deal in U.S. history and in March of 2014 we were named among the fastest growing companies in Chicago. Our experience working with large investment groups as well as our long-standing relationships with individual investors worldwide demonstrates our buying lending and management advantages in this billion-dollar asset class. Armed with a team of industry experts we buy redevelop lease and manage all investments from the start and throughout the many years of the assets performance. GUARANTEES The two active guarantees are - Maintenance Guarantee No cost for first year - Rental Guarantee Dollar amount in performance CONTRACTS The two active contracts are - Purchase Contract - Property Management Agreement MANAGEMENT FEES Our flat 95 per month fee ensures that we are providing you with highly skilled teams and resources to efficiently manage your assets. LEASINGREFRESH The standard turnaround from vacancy to re-occupancy is approximately 45 days. This includes move out refresh marketing leasing and move-in. The rentMACK and MACK Investments partnership offers investors the opportunity to work with experienced professionals in both real estate investment and asset management. As a member of the MACK Companies family rentMACK focuses on providing investors with the best investment management relationship. In addition to monthly updates your assigned investor relations manager will keep you educated not only on your portfolio management but also with market trends. PERFORMANCE05 OUR STRATEGY06 The AAA Strategy The MACK Companies AAA business strategy is built around acquiring the quality residents an investment property needs to yield a substantial return. A Locations Acquiring an investment property that is ideal for quality residents in a market with high rental demand starts with locating the right neighborhoods. MACK Investments has been buying and selling homes successfully throughout the Chicago-land area for nearly two decades. A Properties The MACK Investments process of identifying A properties starts with the strategic purchase of homes that are ideal for quality residents. We buy homes with 3 bedrooms that have multiple living spaces large yards full basements and spacious garages. Once we have located the perfect home we spend the time needed to redevelop and renovate to new and approved constructions standards. A Residents By running detailed credit and criminal background checks looking for stable employment records and performing our due diligence to inspect a prospective residents current rental home the rentMACK and MACK Investments teams have developed a screening system that identifies the best quality residents to purchase and occupy investor homes. Returns The MACK Investments AAA strategy provides investor clients not only with the highest quality residents but also with quality redeveloped homes in areas where home values are appreciating. With successful experience in acquisitions redevelopment and management MACK Investments AAA strategy has proven that A residents in A properties positioned in A locations will yield positive returns. S O U R C I N G Q U A L I T Y R E S I D E N T S 07 THE CHECKLIST Locate and renovate homes that attract stable residents Advertise rental homes within the most visited digital search spaces Run a detailed credit criminal background and eviction check Collect pay stubs W-2s and perform employment verification Require income to rent ratio to be 3 to 1 Collect security deposit equal to one months rent 300 Perform an in-house inspection with the prospect in their current residence Offer a rent-to-own program to ensure the highest quality property upkeep higher than the average mortgage standards RENTMACK RESIDENT REQUIREMENTS What is needed to apply for a available rentMACK property Documentation Two most recent pay stubs Prior years W-2 form and a Government-issued ID for each applicant over 18 years old Payment 60 application fee non-refundable if application is not approved 500 initial fee 100 refundable if application is not approved How long is the application process Once all of the applicants information has been gathered and submitted to a rentMACK agent an application can take up to 72 hours to approve. What lease terms does rentMACK offer rentMACK offers one and two year lease options. RESIDENTS08 Does rentMACK screen applicants based on credit score and criminal record rentMACK does not screen applicants strictly based on these two criteria. There is more to an applicant than just a number everyone is considered when screening for a rentMACK property If an applicant has an eviction over the last 10 years If an applicant is a registered sex offender If an applicant has more than two misdemeanor charges in the past 10 years If an applicant has been charged with a felony If an applicants net income does not meet the three to one requirement must be equal to three months rent We comply with the Federal Fair Housing Act which prohibits any preference limitation or discrimination because of race color religion sex handicap familial status or national origin. LEASING P R O P E R T Y MANAGEMENT The residential leasing and management division of MACK Companies rentMACK stays true to our mission of Raising the Quality of Life. This is accomplished by revitalizing neighborhoods with fully affordable redeveloped homes which in turn attracts even more quality residents. With a portfolio of over 1800 homes and growing rentMACK serves nearly 3600 rental occupants all of whom are granted ownership options for the homes they reside in. rentMACK provides residents with 247 on-call maintenance services online payment options and an open line of communication with leasing and management. rentMACK is managed and brokered by Oak Park Avenue Realty LTD. Service and Maintenance MACK Companies has a dedicated and experienced service and maintenance team ready 247 for residents in case of emergency. If residents prefer an online experience we offer the Tenant Portal a state-of-the-art software that boasts a comprehensive and convenient homeowners guide with a variety of options. If there is a problem with a property the website has a Service Request portion which will dispatch the service and maintenance team to respond quickly. The Tenant Portal also gives detailed access to billing and photos of the home taken during and after construction. rentMACK thrives on superior customer service and puts the safety and satisfaction of all residents first. Communication In order to give investors a positive experience MACK Investments has created a One-Stop Shop environment for every transaction. If an investor has questions or concerns following the closing on their property they are able to communicate with an Investor Relations Manager every step of the way. 247 MANAGEMENT09 REDEVELOPMENT PROCESS10 No two homes are alike especially when it comes to a redevelopment many of these items are left to the judgment of industry professionals. MACK Investments deliver a very systematic approach when redeveloping each property. Special care is placed on using experienced professionals purchasing quality materials and employing the necessary manpower to produce superior results to investors in a timely and consistent manner. REDEVELOPMENT ADDS VALUE Its important to bring your passion your knowledge and your care for details so that the people who live in the area can feel comfortable and realize they too can benefit from an improved neighborhood. - Jim MACK McClelland KITCHEN Existing cabinetry are replaced with maple cabinets from Home Depot andor Lowes. Existing cabinetry are kept only if it is equal or better to the company standard upon inspection. Existing countertops are replaced with granite unless countertops of any material were recently replaced. Ceramic tile is installed unless existing floor material is the same or better quality. New refrigerator and stove plus range hoods is installed if existing appliances were not recently replaced and they are the same or better quantity colors will vary. New fixtures shower head toilets sinks vanities are installed as necessary. Existing fixtures that are functional and similar to company standard are kept. BATHROOM Existing hardwood floors if salvageable are resurfaced and re-stained to like new condition. If existing hardwood floors cannot be redone laminate hardwood flooring is installed throughout main living areas. Berber carpeting is installed in bedrooms. VCT is installed in basements. Ceramic tile is installed in kitchens and bathrooms. All interior doors are replaced if necessary. All trim is replacedpainted white as necessary. All windows are Thermopane replacement windows either existing or are replaced as new exceptions can be made for operable windows that have a functional storm window in addition to the main window. FLOORING DOORS WINDOWS TRIM Basements are finished and bedrooms are added where applicable. These upgrades include drywall trim and vinyl flooring. Sherwin Williams flat finish paint is used throughout the interior walls and semi-gloss finish is used on the trim. BASEMENTS PAINT MECHANICALS All mechanicals are brought up to local municipality code requirements in order to obtain occupancy to legally place a resident in the home. Furnaces water heatersand air conditioner condensers are replaced as necessary. Furnaces are kept if they have 15 years useful life hot water tanks are kept if they have five years useful life and air conditioner condensers are kept if they have 10 years useful life. All plumbing is brought to current code and all existing galvanized material is replaced with copper. All hot water tanks are replaced with new and include expansion tanks. All electrical panels are upgraded to a minimum 100 amp 20 space panels. Hardwired smoke detectors are installed throughout home. All existing Romex cabling is removed throughout home. All light switches outlets and fixtures are replaced or installed throughout home as necessary. A roofing contractor inspects the condition of all roofing and provide a roof certification on all existing roofs. If a roof has less then seven years useful life it is replaced with 25-year dimensional shingles. All siding is repaired where applicable. Gutters and downspouts are repaired as necessary. Tuck-pointing is done where applicable. Landscaping is updated around home where applicable. Concrete and asphalt repair is addressed where applicable. Overhead doors are replaced and automatic openers are provided unless they have been recently replaced. EXTERIOR GARAGES CAPE COD11 4 BED 2 BATH 1676 sq ft PRICE 130000 IRR RETURN 21.1 CASH FLOW 503 SPLIT-LEVEL12 3 BED 2 BATH 1566 sq ft PRICE 140000 IRR RETURN 23 CASH FLOW 590 BUNGALOW13 3 BED 2 BATH 1572 sq ft PRICE 125000 IRR RETURN 23.1 CASH FLOW 528 CHICAGO MARKET14 Besides being the third largest city in the United States Chicago falls within the top 10 GDPs of our global economy. With nearly 10 million people in the Chicago- land area 42 of those who rent a workforce of over 4.2 million employees and 30 Fortune 500 headquarters Chicago-lands economic stability and population make the market among the premiere locations for investors worldwide. Investors have recently been acquiring buildings and office space throughout Chicago. This activity is just one example of the huge confidence in the economic climateofthecity.Notonlydoesthismean that investors are moving some of their resources here it also means that more jobs and career opportunities are coming into Chicago. An increase in employment opportunities means that more people will move to the area which in turn translates into an increased demand for additional residential housing. STABLE ECONOMY HIGH RENTAL DEMAND IDEALLY PRICED Key Factors in Chicago Real Estate Low acquisition costs High market rents with consistent demand Greater number of owners to renters Elevated HPAs Pre-2000 construction homes built with superior materials which when brought up to modern conveniences increase property value Easily financed immediate and impressive cash flow Diverse employment family status and income which ensures occupancy on investment homes EventuallyIthinkChicagowillbethemostbeautiful great city left in the world. - Frank Lloyd Wright CHICAGO FACTS STATISTICS 237 square miles of land An estimated 2695598 residents Dozens of cultural institutions historical sites and museums More than 200 theaters Nearly 200 art galleries More than 7300 restaurants 77 community areas containing more than 100 neighborhoods 26 miles of lakefront 15 miles of beaches 36 annual parades 19 miles of lakefront bicycle paths 552 parks Navy Pier was designed by architect Charles Sumner Frost and opened to the public in 1916 as Municipal Pier. It was the only pier to combine a shipping dock with public entertainment. The iconic Chicago Theater marquee on State Street. 7 professional sports teams Chicago Bears Chicago Blackhawks Chicago Bulls Chicago White Sox Chicago Cubs Chicago Fire Chicago Sky CHICAGO15 Chicago is fortunate to have two baseball teams the north side Chicago Cubs and the south side Chicago White Sox. Located on Chicagos lakefront Navy Pier is one of many entertainment destinations. OUR COMMUNITIES16 Chicago is home to the second largest public transportation system in the United States. Bolingbrook Lockport Homer Glen Mokena Frankfort Lansing Burbank Evergreen ParkOak Lawn Oak Forest Blue Island Dolton Calumet City Homewood Flossmoor Richton Park Midlothian Berwyn Cicero Alsip Crestwood Matteson Country Club Hills Tinley Park Lynwood South Holland Thorton Park Forest Olympia Field Glenwood Hazel Crest Summit Evergreen Park University Park Our REALTOR Relations Coordinators C H I C A G O S U B U R B S AREA MAP On any weekday 1.7 million passengers take Chicago Transit Authority CTA buses and elevated L trains. There are 1865 buses 127 routes and 11104 posted bus stops. Average weekday ridership was 957033 in 2013. There are 1356 L cars eight different routes and 146 train stations. Average weekday ridership was 726459 in 2013. The rapid transit system provides transportation to both of Chicagos major airports OHare and Midway. The subwayunderground system services downtown only. The elevated trains service both downtown and connecting neighborhoods. INVESTOR TESTIMONIALS Because their track record speaks for itself... - Michael W. 8 MACK Investments properties I drive by my properties every once and a while when I want to but I never have to do a full scope or pick out paint colors. MACK Investments is just the right fit for me. - Steve R. 25 MACK Investments properties MACK Investments gave me the opportunity to diversify my investment portfolio utilizing leverage to build an asset base. - Alberto F. 6 MACK Investments properties Over the past two decades MACK Investments has established quality relationships with investors across the United States and seven different countries globally. From China to Australia and back to the Chicago-land metropolitan area the ability to provide institutional and individual clients worldwide with access to Chicagos highest quality single-family rentals is endless. By keeping true to the AAA strategy and providing clients with a hands-off approach to investing MACK Investments serves investors in every time zone around the globe. Australia Canada China England Mexico New Zealand USA MACK INVESTORS17 GET FINANCED TODAY 1 10 Mortgages Joe McBreen Guaranteed Rate Senior Vice President of Mortgage Lending O 773.435.0665 C 773.203.4843 joe.mcbreenguaranteedrate.com guaranteedrate.comjoemcbreen Jason Brown Wintrust Mortgage Senior Residential Lender O 630.321.2177 C 708.705.2027 jason.brownwintrustmortgage.com wintrustmortgage.com 11 Mortgages Raymond Bravo Angel Oak Home Loans Licensed Branch Manager O 708.231.4858 C 815.405.8198 raymond.bravoangeloakhomeloans.com angeloakhomeloans.com OUR PARTNERS18 The Chicago Board of Trade in downtowns financial district. MACK INVESTMENTS 6820 Centennial Drive Tinley Park IL 60477 855.423.6225 www.mackinvestments.com facebook.commackcompanies linkedin.comcompanymack-companies twitter.commackcompanies MACK Investments releases newly acquired single-family properties for sale to all institutional and individual investors on the mailing list via e-mail every Friday morning 10 AM CST. All homes for sale have been obtained by adherence to the MACK Investments AAA acquisitions guidelines will be renovated to new construction standards and will come tenanted with rentMACKs highest quality residents. Due to overwhelming property demand all homes are sold on a first come-first served basis via phone and e-mail. To acquire a MACK Investments property an investor must belong to the Friday Inventory Mailing List. To join please e-mail investmentsalesibuymack.com MACK INVESTMENTS Chicagos BP Pedestrian Bridge connects Millennium Park with Maggie Daley Park.