Monarch Investment and Management Group

Annual Investor Meeting

Brown Palace HotelMarch 8th, 2018

1997 - 2010Foxhill Apartments, LLCMeadowlark Apartments Associates, LLCThe Tower Apartments Associates, LLCCanon Inn Associates, LLCCountry Green Apartments, LLCMesa Ridge Apartments, LLCLa Vida Buena Associates, LLCApache Trace Associates, LLC3958 Montgomery Associates, LLCCanyon Point Associates, LLCCanyon Ridge Associates, LLCMountaineer Village Associates, LLCMission Hill Associates, LLCWyoming Place Associates, LLCMesa Gardens Associates, LLC

Willowpark Associates, LLCRamblewood Apartments Associates, LLCMIMG XIV Associates, LLCVictoria Square Associates, LLCMIMG XVI Associates, LLCMIMG XVII, LLCMIMG XVIII, LLCMIMG XIX Associates, LLCMIMG XX Associates, LLCMIMG XXI Sioux Master LLC

2011MIMG XXII Eagles Pointe LLCMIMG XXIII DBA McMillen Woods, LLCMIMG XXIV Commodore Perry, LLCMIMG XXVI Chelsea Park LLCMIMG XXV Executive Towers, LLCMIMG XXXI Camelot Place, LLCMIMG XXIX Block 2 LLCMIMG XXXII Eden Park, LLCMIMG XXX Gateway Townhomes, LLC

2,039 Units

5,055 Units

2012MIMG XXXIII Three Rivers, LLCMIMG XXXV Knollwood, LLCMIMG XXXVI West Tech Lofts, LLCMIMGXXXVII CE Master, LLCMIMG XXXIV Village Green LLCMIMG XXVII Suson Pines LLCMIMG XL Harbor Pointe LLCMIMG XXXVIII Stone Grove LLCMIMG XXXIX Concorde Club LLCMIMG XXVIII HS Master LLCMIMG XLI Country Estates LLCMIMG XLI Sherwood Forest LLCMIMG XLIII Warren Club LLCMIMG XLIV Walnut Creek LLC

3,940 Units

2013MIMG XLII Tiffany Woods, LLCMIMG XLV Town & Country LLCMIMG XLVII Breckenridge, LLCMIMG XLVI Knolls LLCMIMG XLVIII City Limits, LLCMIMG LI The Oaks, LLCMIMG L Wake Robin LLCMIMG XLIX Timber Ridge LLCMIMG LII Arbors at Eastland LLCMIMG LIV Gray's LakeMIMG LV Greenmar, LLC

2014MIMG LVI Walnut CreekMIMG LVII HR Master LLCMimg LIX Palo Duro Place LLCMIMG LVIII Camelot LLCMIMG LX Cedar Trace LLCMIMG LXI Stephenville Master, LLCMIMG LXII LaSalle, LLCMIMG LXIII Prairie Walk, LLCMIMG LXV Central Square LLCMIMGLXVI Drakes Pond, LLCMIMG LXVII Omaha Five, LLCMIMG LXIV mi6llc Master, LLC

2015MIMG LXVIII Woodland Ridge, LLCMIMG LXXI Vantage Point, LLCMIMG LXX LeClaire, LLCMIMG LXIX Country Club Villas, LLCMIMG LXXII Woodman Park, LLCMIMG LXXIII Central Pointe LLCMIMG LXXIV Colonial LLCMIMG LXXV Brookeville LLCMIMG LXXVI Sedona Ridge, LLCMIMG LXXVII Golfview Village LLCMonarch River Oaks, LLCMIMG LXXXII The Hills, LLC

MIMG XCIII Seven Trails LLCMIMG XCII Fairlane East LLCMIMG XCVI Hunters Master LLCMIMG SCVI EMAX Sub LLCMIMG XCV Bronco Club LLCMIMG XCVII 300 At The Circle LLCMIMG XCIX The Heights LLCMIMG XCVIII Sugar Pines Sub LLCMIMG XCVIII Westchester Sub LLCMIMG XCVIII Westport Station Sub, LLCMIMG C Somerset Sub LLCMIMG C Woodridge Sub LLC

3,309 Units 5,572 Units

8,461 Units

MIMG CVI Rosewood Sub LLCMIMG CVII Hunters Ridge Sub LLCMIMG CVII Southpointe Sub LLCMIMG CIX Burwick Farms LLCMIMG CVIII Mill Creek Sub, LLCMIMG CVIII Woodridge Sub, LLCMIMG CVIII Woodlands Sub, LLCMIMG CX Brookwood LLCCMC 2 The New Fountains, LLC

MIMG LXXVIII Summit LLCMIMG LXXX San Angelo LLCKR Spring Mill Apartments, LLCMIMG LXXXIII Little Rock Master, LLCMIMG LXXXIV Waukegan Master, LLCMIMG LXXXV Mill Creek LLCMIMG LXXXVII Castle Bluff LLCMIMG LXXXIX Van Buren Village LLCMIMG LXXXVI River Chase LLCMIMG XC Villages At Symmes LLCMIMG LXXXVIII Old Farm Shores LLC

2016

7,312 Units

MIMG CI MT Carmel Sub, LLCMIMG CI Hearth Hollow Sub LLCMIMG CII Les Chateaux LLCMIMG CIV Lakeside Sub LLCMIMG CIV Hampton Sub LLCMIMG CIV San Mateo Sub LLCMIMG CIV Solano Sub LLCMIMG CIV Highland Sub LLCCMC 1 Meadows of Coon Rapids, LLCMIMG CIII Timber Cove, LLCMIMG CV Hamilton Trace LLCMIMG CVI Pecan Grove LLC

MIMG CXI Waterford West, LLCMIMG CXIII Woodhollow, LLCMIMG CXIV Toledo 5, LLCMIMG CXIV Toledo 5, LLCLC Country Club B, LLCFairways at Lowry Aurora, LLCMIMG CXV Master, LLCMIMG CXVI Alexandra, LLCMIMG CXVII Creekside Taylor Square, LLCMIMG CXIX Abilene CCV, LLCAbilene Timber Ridge Apartments, LLCMIMG CXXI Genesee Master, LLCMIMG CXX Madison Master, LLCMIMG CXXII Wichita RR Master, LLCMIMG Grand Rapids, LLC

2017

5899 Units

MIMG CXXIV Arlington Village, LLCMIMG CXXVI Grandridge LLCMIMG CXXIII Lakeshore Portfolio Master LLCMIMG CXXV 756 OP LLCCMC 4 Seasons on Chelsea, LLC

2018

2583 Units

Ande Yahr

General Counsel ofReal Estate

PROPOSED OPERATING AGREEMENT AMENDMENTS

AMENDMENT ONE

• Issue: Eminent Domain

• Proposed Solution: Authorize the manager to transfer Company property in connection with a threatened or pending exercise of eminent domain

AMENDMENT TWO

• Issue: Admission of assignees to membership

• Proposed Solution: Authorize the manager to admit an assignee of a membership interest to all of the rights of membership

AMENDMENT THREE

• Issue: Counting operating and financing distributions toward return of capital

• Proposed Solution: Clarify that quarterly distributions and financing distributions are counted toward return of capital for purposes of calculating distribution of sale proceeds

AMENDMENT FOUR

• Issue: Sale distribution waterfall payments to equity profits interest holders

• Proposed Solution: Replace older disbursement of sale proceeds provisions with current-form waterfall payment provision

AMENDMENT FIVE

• Issue: Onerous requirements for estate-planning, divorce, death, and charitable transfers

• Proposed Solution: Amend the operating agreement to allow the following membership interest transfers without an opinion of counsel regarding securities compliance or evidence that the transferee is an accredited investor:

• to immediate family,

• to an ex-spouse,

• through a will,

• to the member’s trust, or

• to a charity.

AMENDMENT SIX

• Issue: Rights of first refusal and first offer

• Proposed Solution: Remove any provision that grants members a right of first refusal or right of first offer to a membership interest

AMENDMENT SEVEN

• Issue: Treatment of profits interests with respect to Section 1031 like-kind exchange

• Proposed Solution: Provide that, in the event the Company elects to do a like-kind exchange, (a) contingent profits interest and equity profits interest holders may either redeem their interests or convert their interests to capital interests, and (b) the Company may grant new contingent profits interests and equity profits interests.

AMENDMENT EIGHT

• Issue: Transfer of profits interests

• Proposed Solution: Amend the operating agreement to allow transfers of profits interests to be made (a) to another member, if consented to by the manager, in its discretion, (b) upon a Member’s death by his or her estate, (c) for estate-planning or divorce purposes, or (d) to a charity.

AMENDMENT NINE

• Issue: Bipartisan Budget Act of 2015, Tax Cuts and Jobs Act of 2017, and other tax law updates

• Proposed Solution: Update the operating agreement, as needed, to comply with the BBA and TCJA, and potentially other tax-related updates – TBD

Bob Nicolls – Opening Remarks

Andy Newell

CEO/CFO

PORTFOLIO UPDATE

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2013 2014 2015 2016 2017

Admin Insurance Real Estate Taxes PayrollUtilities Maintenance/SP Mortgage Interest

Monarch Expenses as a portion of Income 2013 - 2017

Monarch Expenses from 2013 - 2017 (in millions)

$-

$50

$100

$150

$200

$250

$300

$350

$400

2013 2014 2015 2016 2017

Admin / Insurance Real Estate Taxes PayrollUtilities Maintenance/SP Mortgage Interest

Historical Trends

Expenses as a Percentage of Income

2013 2014 2015 2016 2017

% Admin/Insurance/Marketing/Management Fee 10.6% 10.0% 9.9% 9.8% 10.2%

% RE Taxes 8.0% 8.1% 8.0% 8.0% 8.3%

% Payroll 13.1% 13.0% 13.3% 12.9% 13.3%

%Utilities 10.5% 10.5% 9.7% 9.1% 8.9%

% Maintenance + Special Projects 13.3% 13.2% 11.5% 12.1% 12.0%

Total 55.43% 54.74% 52.43% 51.91% 52.65%

REFINANCE AND SUPPLEMENTAL LOANS

Refinance Loans

Property NameExpected Distribution

Meadow Lark Apartments 5,936,000

Granite Valley Apartments 814,170

Hampton at Coral Ridge 997,956 Mission Hill Apartments 3,245,000 Country Green Apartments 2,996,250 Michigan 6 Portfolio 18,000,000 Camelot Apartments 2,280,000 Madison Grove Townhomes 3,700,000 Country Estates Townhomes 4,463,090

Total: 42,432,466

Supplemental Loans

Property NameExpected

Distribution

Fox Hill Apartments 3,915,000

Ramblewood Apartments 2,584,000

Village Green Apartments 2,740,000

Prairie Walk Apartment Homes 1,015,000

Central Square Apartments 3,465,000

Central Pointe Apartment Homes 1,870,000

Total: 15,589,000

WHAT’S UP WITH PREPAYMENT PENALTIES

• Long-Term Commercial Debt isn’t like Residential Debt

• Penalties Range from 2%-7% of the new loan proceeds

• So Why?

2.00%

2.10%

2.20%

2.30%

2.40%

2.50%

2.60%

2.70%

2.80%

2.90%

3.00%9/

7/20

17

9/14

/201

7

9/21

/201

7

9/28

/201

7

10/5

/201

7

10/1

2/20

17

10/1

9/20

17

10/2

6/20

17

11/2

/201

7

11/9

/201

7

11/1

6/20

17

11/2

3/20

17

11/3

0/20

17

12/7

/201

7

12/1

4/20

17

12/2

1/20

17

12/2

8/20

17

1/4/

2018

1/11

/201

8

1/18

/201

8

1/25

/201

8

2/1/

2018

2/8/

2018

2/15

/201

8

2/22

/201

8

3/1/

2018

10 Year Treasury

10 Yr Trendline

HISTORICAL INTEREST RATE NORMS (BASIS POINTS)

Spread to Ten Year Spread to Mortgage

Inflation Low Average High Low Average High

376 162 241 320 190 222 254

Spread to Ten Year Spread to Mortgage

Inflation Low Average High Low Average High

311 134 213 292 190 222 254

ADJUSTING OUT 1978-1987

REFINANCES AND SUPPLEMENTALS

Projected Spread to Ten Year Spread to Mortgage

Year Inflation Low Average High Low Average High2018 238 162 241 320 190 222 254

2019 264 162 241 320 190 222 254

2020 232 162 241 320 190 222 254

2021 218 162 241 320 190 222 254

2022 227 162 241 320 190 222 254

REFINANCES AND SUPPLEMENTALS

Projected Estimated All In Rate (basis points)

Year Inflation Low Average High

2018 238 590 701 812

2019 264 616 727 838

2020 232 584 695 806

2021 218 570 681 792

2022 227 579 690 801

SO EITHER WAY IT’S A WIN-WIN

• If Rates Increase to Historic Norms we will recover prepayment penalties in the first year or so compared to waiting and refinancing at higher rates

• If rates don’t move as much…

$58,000,000Refinance Loans

Property NameExpected Distribution

Meadow Lark Apartments 5,936,000

Granite Valley Apartments 814,170

Hampton at Coral Ridge 997,956 Mission Hill Apartments 3,245,000 Country Green Apartments 2,996,250 Michigan 6 Portfolio 18,000,000 Camelot Apartments 2,280,000 Madison Grove Townhomes 3,700,000 Country Estates Townhomes 4,463,090

Total: 42,432,466

Supplemental Loans

Property NameExpected

Distribution

Fox Hill Apartments 3,915,000

Ramblewood Apartments 2,584,000

Village Green Apartments 2,740,000

Prairie Walk Apartment Homes 1,015,000

Central Square Apartments 3,465,000

Central Pointe Apartment Homes 1,870,000

Total: 15,589,000

And we have locked in great long-term rates

QuarterlyReporting

• Planning to debut new cover sheet to give a quick synopsis of performance

• Existing report narrative to remain unchanged

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20%

QT 12014

QT 22014

QT 32014

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QT 12015

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Distributions By Quarter

Quarterly Distribution Special Distribution

82%84%86%88%90%92%94%96%98%

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1,000,000

QT 1 2014 QT 2 2014 QT 3 2014 QT 4 2014 QT 1 2015 QT 2 2015 QT 3 2015 QT 4 2015 QT 1 2016 QT 2 2016 QT 3 2016 QT 4 2016 QT 1 2017 QT 2 2017 QT 3 2017 QT 4 2017

Occupancy and Financial Performance By Quarter

Occupancy Total Income NOI

Darryl Dischler

ddischler@convergencecpa.comConvergence CPA Grouphttps://convergencecpa.com/

TAX UPDATE

20% DEDUCTION ON PASS-THROUGH INCOME

• Subtract 20% from the income shown on your K-1

• Reduces top rate from 37% to 29.6% on RRE income (full 10% reduction from old rate of 39.6%)

• Notable – no distinction between passive or active investors

• Example: $10m building ($3m in land) could produce annual deduction up to $175k ($7m x 2.5%)

• Guidance and clarification coming in 2018

DEDUCTIBILITY OF INTEREST EXPENSE

• Lots of discussion and concern early on about whether interest expense would be limited

• Final result – generally limited to 30% to cash flow (NOI or EBITDA).

• Limitation can be avoided. If limited, carried forward indefinitely

• Trade-off is reduced benefits available for new depreciation changes

MODIFICATIONS TO 1031 LIKE KIND EXCHANGES

• Starting 2018, tax deferral is only available on real property assets – personal property no longer eligible

• Minimal impact, since personal property is small

INDIRECT BENEFITS TO MULTIFAMILY

• Doubling Standard Deduction

• Lower caps on mortgage interest and HELOC is eliminated

• Carried interest tax preference for Developers is reduced

• Bonus depreciation increased to 100% and now applies to used property.

QUESTIONS?