we create value in multi-family assets...portfolio diversification: adding investment real estate to...

WE CREATE VALUE

IN MULTI-FAMILY ASSETS

IDENTIFYING, ACQUIRING, IMPROVING AND MONETIZING

Confidential and Proprietary. Copyright (c) by Clear Capital, LLC. All Rights Reserved.

COMPANY OVERVIEW

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Clear Capital is solely focused on utilizing its wealth of experience and advanced repositioning strategies to create higher values

▪ Our Principals have over 100 years of combined experience in real estate investing and 25 years of working together

▪ Clear Capital and its affiliates control more than $500 million in real estate investments

▪ Successfully invested, renovated and managed over 50 properties with a total of over 3,000 apartment units at an average occupancy rate of 95%

EXPERIENCED MANAGEMENT TEAM

• Oversees capital, equity, and debt departments as well as strategic planning functions

• Over 20 years of multi-faceted real estate experience (Amber Capital and Sequoia Real Estate Partners)

• Adjunct Professor with UCLA’s Anderson Graduate School of Management since 1995

• BA in Economics (Summa Cum Laude) from UCLA / MBA (ArjayMiller Scholar) from Stanford Graduate School of Business

• Licensed CPA and Real Estate Broker (inactive)

• Responsible for overseeing the day-to day operational activities and implementation of the vision, goals, and strategic plan of the company

• Over 25 years of real estate experience (AIMCO, Charles Dunn Company, Advanced Management, J.D. Property Management)

• BA in Business Administration from Cal State Fullerton

• Licensed Real Estate Broker

Eric Sussman Partner

Greg WorchellPartner

Dan Hardy Partner

• Oversees acquisition and long-range planning functions

• More than 22 years of real estate experience (Sequoia Equities, Fountain Management, LLC, Pinnacle Realty Management, Charles Dunn Company)

• BA in Accounting from Cal State University, Northridge

• Licensed Real Estate Broker (inactive)

• Oversees accounting and finance functions

• More than 30 years of real estate experience (Shearson American Express, The Hammond Company)

• BA in Economics from UCLA

• Licensed Real Estate Broker

Paul PellizzonPartner

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MANAGEMENT TEAM

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THE CLEAR STRATEGY

Market Identification

Identify early opportunities in the emerging markets with untapped potential for rental growth and property appreciation. Clear Capital has applied this approach to investing across the Sunbelt markets, initially in Southern California, and more recently Texas (Dallas/Ft. Worth).

Property Acquisition

Improve Asset

Leverage clearly defined acquisition criteria and operating platform to acquire properties where value can be created. Strong Partnerships with lenders and financial sponsors that provide financing. As well as relationships with developers, property owners, brokers and other real estate professionals to provide access to proprietary deal flow.

Longstanding partnerships with renovation and repositioning professionals with local market knowledge and expertise to complete the high-quality, high-amenity property renovations that command higher rents. As well as relationships with third-party property management companies to improve tenant profile.

Monetize Asset

Monetize assets at favorable IRR’s with a proven track record of generating superior returns while never having lost any investment capital.

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THE CLEAR DIFFERENCE

Attractive Returns:

▪ By investing with Clear Capital, Investors can earn a six percent (6%) annual preferred return (paid quarterly)

▪ With significant upside resulting in IRRs of 12% to 15%, or more

▪ Since inception, Clear Capital’s annualized return on investment on properties sold, net of cash distributions, has been 18.13%

Strong Shareholder Alignment:

▪ “Investor first” approach and commitment to transparency in all aspects of operations

▪ Management invests alongside institutional partners, family offices and accredited Investors

▪ 1031 Exchange capability creates “accumulator effect”, Investors stay in the deal after Return of Capital and continue to receive gains

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TIMELINE

20051996 2013 2017

Formation LA Neighborhoods So Cal Markets Texas

The four partners started working together in 1996 taking advantage in emerging micro markets in Los Angeles

CC was investing in overlooked and emerging infill markets that evolved into gentrified locations

Early entry into the developing Inland Empire Market

Clear Capital has expanded its Investments into Texas to follow employment migrations and favorable living costs

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INVESTMENT LIFECYCLE

Clear Capital, LLC endeavors to provide Investors opportunities that deliver superior rates of return in a straightforward, ethical, and transparent manner leading to long lasting relationships

* 6 % annual preferred return paid quarterly, subject to management discretion** Still in the deal, and continue to receive distributions after receiving 100% of capital return

Property Acquisition

▪ Analyze the Deal

▪ Fund the Deal

▪ Closing

Rebrand and Reposition

▪ Start improvements

Increase Occupancy and Rents

Quarterly Distributions*

Hold Asset

▪ 3 -7 year

Capital Event

▪ Refinance or

▪ Sell Property

Return of Capital

▪ Receive 100% of initial investment back

1031 Exchange**

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▪ Equity Upside: Equity appreciation upon refinance or sale boosts overall return

▪ Attractive Returns: Apartments remain stable during recessions, as well as during stable and rising interest rate environments

▪ Cash Flow: Receive Steady cash flow through annualized distributions, paid out quarterly

▪ Pass-Thru Depreciation: A tax benefit tool which allows the Investor to utilize a passive “loss” from depreciating improvements to offset other passive income. Investors are strongly encouraged to consult a tax advisor.

WHY MULTI-FAMILY REAL ESTATE

▪ Portfolio Diversification: Adding investment real estate to your portfolio will help offset the volatility of other high-risk investments, such as stocks and bonds, leading to increased stability in your investment portfolio

▪ Own Real Estate Without Management Headache: Clear Capital outsources property management to well-known property management companies to ensure tenant satisfaction

WHY MULTI-FAMILY REAL ESTATE

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The “Affordability Index”, the percentage of

homebuyers who can afford to purchase homes

continues to decline. Here in Los Angeles, for example, only 26% of households can

afford a home, the 21st consecutive quarter that

this index has been below 40%, after hitting a peak of 56% in the second quarter of 2012. While Southern

California is a unique market, of course, similar trends prevail throughout

the country.

The Housing Market Is Stable, but Rising Mortgage Rates, Continued High Prices, and a Lack of Supply Present Significant Headwinds for Single-Family Assets. Apartments should continue to benefit.

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MARKET OPPORTUNITY

*Sources: Marcus & Millichap Research Services; MPF Research

4THLARGEST REGION

IN THE USA

7.2M2017 POPULATION

12COUNTIES

150+CITIES

9000SQUARE MILES

636,000+RESIDENTS WERE ADDED

FROM 2010-2016

North Texas

The Dallas metro area economy continues to expand at a rapid rate, with more than 116,000 jobs added since August 2017, resulting in multifamily demand that easily exceeds new supply

ACQUISITION CRITERIA

▪ Property Size: 100 units and above

▪ Vintage: 1970 and newer

▪ Markets: Sunbelt Regions

▪ Location Grade: A+ to B-

▪ Property Grade: A- to C-

▪ Hold Period: 3 to 10 years

▪ Price: $5 million to $100 million

▪ Purchase Terms: All-cash or cash plus debt from lenders and financial sponsors

▪ Due Diligence: Ability to purchase with an aggressive due-diligence window and fast close

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Acquire underperforming, undervalued multi-family assets and reposition with high quality amenities to increase occupancy and rental rate

Acquisition Criteria

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TESTIMONIALS

Family Office

We have worked with Clear Capital, LLC since 2007 and they have been an amazing team of promoters and

property managers. We purchased our first multi-family building with them

back in 2007 and with their guidance and foresight we were able to double

our money in 4 years. On another multi-family building we were able to

pull all of our capital out in the first year and by year 2 we more than doubled

our initial investment. We are still enjoying working with them on another property in Cary, North Carolina and so

far, sky’s the limit.

Marcello C.

Frank H.Accredited Investor

Clear Capital has a well-thought out strategy, and they execute efficiently on

their plans. The company has a systematic approach to sourcing good

deals that have provided excellent returns to us investors. The quarterly

newsletters are excellent reads. For the last 15 years, we have been in over 12 investments and have recommended

Clear Capital to other friends and family. We are very pleased!

Bernice and Richard C.Accredited Investors

We are seniors who are not especially astute when it comes to investing our

savings. At Clear Capital, the team selects tailor-made properties to meet

our needs. The staff – and in particular, Paul and Kristen – are always there for

us answering our E-mails and telephone calls. Like clockwork 4X a year our

dividends arrive and it is like Christmas all year. Clear Capital has raised our standard of living and met our needs

beyond our expectations.

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• Nothing herein shall be construed as offering literature or a prospectus. No representation or warranties of any kind

are intended to be made herein or should be inferred with respect to the economic returns or tax consequences

associated with an investment with Clear Capital, LLC.

• This presentation may contain forward-looking statements relating to future events or the future performance of

prior investment or the joint venture. In some cases, forward looking statements may be identified by the use of

terminology such as “may”, “will”, “should”, “plan”, “intend” “anticipate”, “believe”, “estimate”, “predict”, “potential”

or ”continue”, or other comparable terminology. These statements are only predictions. Actual events or results may

differ materially.

• Certain of the factual statements made in the enclosed materials are based upon information from various sources.

While such information is believed to be reliable, neither Clear Capital, LLC, nor any of its affiliates has

independently verified any of such information.

The enclosed materials and their contents are strictly confidential. By acceptance of these materials, each recipient agrees to

keep the materials and their contents confidential and not to disclose them to anyone except such recipients legal and

financial advisors, which advisors such recipient will instruct to maintain these materials in confidence.

DISCLAIMER

If what we do at Clear Capital is interesting to you, please contact us at

(949) 273-5405

[email protected]

Clearcapllc.com

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INVESTING WITH CLEAR CAPITAL, LLC

Los Angeles Office10866 Wilshire Blvd., Suite 670

Los Angeles, CA 90024(310) 470-8500

Irvine Office101 Pacifica, Suite 250

Irvine, CA 92618(949) 273-5405

THANK YOU

mailto:[email protected]

APPENDIXTHANK YOU

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CASE STUDY: THE ASHBY

The Ashby 808 South Hobart BlvdLos Angeles, CA 90005

Type: Mid RiseUnits: 49Year Built: 1925Date Purchased: March 2002Date Sold: November 2005

Property MetricsMultiple on EquityLoan to ValueTotal Renovation CostIRR

3.670%$600,00042.6%

Strategic Approach

The Ashby was owned by a local multi-family operator who had little experience in this submarket and with this product type. This brick building located in the Korea Town was not showcasing its intrinsic art-deco value. Current management was missing the target tenant demographic which would pay a premium to live in this asset type. This was a value-add repositioning proposition.

Value-Add Plan

The plan began with a complete rebranding and remarketing of the property. There was a segment of the market that would pay premium rents for stylish apartment homes that offered parking in the Korea Town market. The formerly unnamed community became “The Ashby”. The property was given a vibrant new color palate in hallways and the interior lobby was remodeled. The vacant lot adjacent to the property was purchased and hardscaped and turned into resident parking. The unit interiors were scrapped of carpet and plaster walls exposing hardwood floors and cool brick interior walls respectively. Designer trim finishes and hardware were added to the units to create unique living environment.

Disclaimer: The Performance of this project is an example of the type of projects in which the principal parties have been successful. This prior project is not indicative of future performance or a prediction of future profits.

CASE STUDY: MIRACLE TERRACE

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Strategic Approach

Miracle Terrace offered significant upside potential with a 24-month repositioning strategy consisting of a comprehensive rebranding of the asset, aggressive asset and property management and an infusion of approximately $400,000 in capital expenditures. As underwritten, Clear Capital planned to sell or refinance the property within 36 months or less.

Value-Add Plan

The plan began with a comprehensive rebranding of the asset. The repositioning of the asset included interior and exterior enhancements. The exterior of the building was painted to give the complex a fresher look. The office and clubhouse were renovated, along with a percentage of the units. HUD contracted 67% of the units.

Special Note

The property was refinanced within 24 months returning all of Investor capital and then sold at 34 months of ownership. Through a 1031 tax-deferred exchange, a portion of proceeds were reinvested into two new properties – Sixty25 at Ridglea Hills, and Monterey Station.

Miracle Terrace225 S. Western AveAnaheim, CA 92804

Type: Low RiseUnits: 179Year Built: 1972Date Purchased: March 2014Date Sold: January 2017


Property MetricsMultiple on EquityLoan to ValueTotal Renovation CostIRR

2.0887.65%$400,00044.94%

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CASE STUDY: VISTA PROMENADE

Vista Promenade29605 Solana WayTemecula, CA 92591

Strategic Approach

Vista Promenade, previously known as Acacia Park was underwritten with a 24-month repositioning strategy consisting of a comprehensive upgrade of the building exterior and common area amenities and a minor upgrade of the unit interiors.

Value-Add Plan

Exterior upgrades included new paint, landscape upgrades and fresh slurry seal. Interior upgrades included dual vanities in the master bath, new fireplace surrounds, upgraded flooring and new interior hardware. Common area upgrades included a renovated fitness center and cyber lounge, renovated pool and BBQ areas and the addition of a new dog park.

Special Note

Through a refinance, 100% of Investors’ capital was returned in 34 months. The Investors remain in the deal and will continue to receive Cash Flow.


Type: Garden Style Walk UpUnits: 320Year Built: 1985Date Purchased: January 2015Date Refinanced: October 2017

Property MetricsMultiple on EquityTotal Renovation CostIRR

2.89$5,484,42429.94%

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CASE STUDY: PACIFIC TRAILS

Pacific Trails18615 E Arrow HwyAzusa, CA 91722

Strategic Approach

Pacific Trails, previously known as Arrow Village was purchased with an average 90% occupancy. The asset approach was to renovate and reposition the asset to increase operating cash flow as well as the property’s value.

Value-Add Plan

Renovations to the property included painting the exterior, updating office and common areas and partial renovation on a select number of units. The property was permitted for 84 units but two units were being used for the leasing office and laundry room. Our renovation plan includes returning these two units to the market. Interior upgrades included; new cabinets, granite countertops, vinyl (faux wood) flooring.

Special Note

Through a 1031 Exchange the Investors’ capital was re-invested into a new property upon the sale of Pacific Trails in 2018. The Investors remain in the deal and will continue to receive Cash Flow.


Type: Garden Style Walk UpUnits: 84Year Built: 1977Date Purchased: August 2015Date Sold: September 2018

APPENDICES

14374 Borego Road, Victorville, CA

Purchase Date: February 2013

Purchase Price : $19,000,000

Units: 220

Year Built: 2008

Total Capital Raised: $3,242,000

341 N. Rockvale Avenue, Azusa, CA

Purchase Date: January 2013

Purchase Price: $9,725,000

Units: 120

Year Built: 1969


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ACTIVE PROPERTIES

29605 Solana Way, Temecula, CA

Purchase Date: January 2015


Units: 320

Year Built: 1989


Riverton of the High Desert Iris Garden Vista Promenade

APPENDICES

EncoreAvante Rancho Vista

1675 E. G Street, Ontario, CA



Units: 165

Year Built: 1984

1775 E. G Street, Ontario, CA



Units: 155

Year Built: 1984

1037 N. Archibald Avenue, Ontario, CA



Units: 125

Year Built: 1984

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Ontario PortfolioTotal Capital Raised: $28,910,000

ACTIVE PROPERTIES

APPENDICES

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Monterey Station

180 Monterey Avenue, Pomona, CA



Units: 349

Year Built: 2014


ACTIVE PROPERTIES

Las Brisas

2001 North Rancho Avenue, Colton, CA

Purchase Date: November 2011


Units: 208

Year Built: 1964


570 Knollview Court, Palmdale, CA

Purchase Date: June 2012


Units: 144

Year Built: 1987


The Arches at Regional Center West

APPENDICES

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Apex Design District

Turtle Creek, Dallas, TX


Purchase Price: Non-Disclosure State

Units: 309

Year Built: 2017

Total Capital Raised: Non-Disclosure State

ACTIVE PROPERTIES

The Lucas at Cedar SpringsSixty25 at Ridglea Hills

6025 Milburn Street, Fort Worth, TX

Purchase Date: June 2017


Units: 244

Year Built: 2004


2924 Lucas Drive, Dallas, TX

Purchase Date: December 2017


Units: 387

Year Built: 2016


If what we do at Clear Capital is interesting to you, please contact us at

(949) 273-5405

[email protected]

Clearcapllc.com

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INVESTING WITH CLEAR CAPITAL, LLC

Los Angeles Office10866 Wilshire Blvd., Suite 670

Los Angeles, CA 90024(310) 470-8500

Irvine Office101 Pacifica, Suite 250

Irvine, CA 92618(949) 273-5405

THANK YOU

mailto:[email protected]

we create value in multi-family assets...portfolio diversification: adding investment real estate to...

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