The following is our criteria used to identify undervalued multifamily properties for acquisition, value optimizations, management and disposition.

Market Segments:

• Targeting the 18-35 year old market segment, which comprises 22% of the U.S. population.

• Focusing on renters earning $40,000 or more annually.

• Seeking properties where rent is 30% or less of the median income.

• Attracting retiring Baby Boomers looking for maintenance-free multifamily living.

Property Criteria:

• Prioritizing multi-family residential apartments.

• Preferring pitched roof construction.

• Seeking properties with occupancy above 80%, except for those requiring renovation that offer well-located and value-add opportunities.

Target Values:

• Looking for properties with 20+ units in the $1MM - $50MM price range.

• Aiming for returns of 7-10% Cash on Cash, with a minimum Debt Service Coverage ratio of 1.25.

• Focusing on C- to B+ properties in C- to A areas.

• Targeting properties built in 1975 or later.

• Seeking emerging market areas showing indicators of strong near and long-term economic growth.

Selecting the optimal multi-family apartment complex is a crucial element of Black Bridge Capital Partners, LLC's investment strategy. We approach this process with utmost diligence, emphasizing opportunities in emerging markets that showcase vibrant job markets and growing local economies. Our focus lies in identifying and capitalizing on these emerging markets to drive successful investments.

Emerging Markets Are Categorized By The Following Factors:

• Influx of people moving into the area, rather than leaving

• Job growth and relocation, rather than job losses

• Rising rents and property values

• Proactive efforts by local governments to attract jobs

• Markets gradually absorbing oversupply

Identifying an emerging market in the US involves extensive research and consideration of numerous indicators. At the outset, we conduct comprehensive market research encompassing the following areas:

• Job Growth Report

• Population Growth

• Path of Progress Reports

• Local Economic Reports & Trends

• Chamber of Commerce Reports

Black Bridge Capital Partners, LLC prides itself on cultivating strong relationships with local listing brokers, enabling us to access exclusive "pocket listings" and Bank Owned Properties (REO). Rather than solely relying on properties that come to market, we actively engage in direct outreach to property owners.

To ensure viable investment strategies, each asset undergoes a meticulous due diligence process that verifies both the physical and legal aspects of the property, as well as validates valuations. During the initial evaluation phase, we develop a tailored debt and equity financing strategy, taking into account factors such as property type, renovation scope, projected holding period, and investor objectives. Typically, our investment horizon for each asset ranges from 5 to 10 years, aligning with the specific business plan in place.

Investment Discipline

Our asset selection process entails a systematic and regular evaluation aimed at identifying demand-driven attributes that are advantageous, including job and population growth, demographic shifts, supply absorption rates, and positive local legislation.

We prioritize markets with limited supply when it comes to underwriting, as they are considered the most favorable. Conversely, we steer clear of markets exhibiting signs of oversupply, such as surplus land, zoning changes, and an increase in building permits. By adhering to this approach, we ensure prudent decision-making and avoid areas where market conditions may be less favorable.

The value of any given apartment complex is directly linked to its income generation. When we acquire an apartment complex, we actively seek out specific opportunities to enhance cash flow in various aspects. These opportunities are commonly referred to as "Value Plays" or "Value Adding Components." By identifying and implementing these value-adding strategies, we aim to maximize the overall value and profitability of the investment.

Value plays that we leverage include:

• Addressing mismanagement resulting from owner self-management.

• Remedying inadequate supervision of management companies.

• Resolving deferred maintenance issues.

• Addressing high vacancy rates.

• Adjusting below-market rents.

By identifying and capitalizing on these value plays, we strive to unlock the full potential of properties and optimize their value, ultimately maximizing returns on investment.

Here are some examples of value-add strategies we employ at Black Bridge Capital Partners, LLC:

• Enhancing curb appeal by improving landscaping, incorporating amenities like dog parks and carports. Improved property conditions and added amenities attract residents willing to pay higher rents.

• Acquiring properties with rents that are 10% or more below the current market rates. This allows us to increase rents and promptly boost the property's value.

• Implementing a water and sewage bill-back system to charge residents based on their actual usage. By offsetting expenses and increasing cash flow, this system encourages residents to be more mindful of their water usage, reducing overall operating expenses.

• Upgrading unit interiors with fresh paint, new appliances, countertops, and flooring.

• Adding a coin laundry facility to the complex.

• Adding on-site vending machines for residents and visitors.

• Addressing below-market rents to align with prevailing market rates.

By implementing these value-add plays, we aim to enhance property attractiveness, optimize rental income, and increase overall property value.