financial modelling

Modeling

The assumption is a deal where Rainier provides a mezzanine loan with an equity participation.

There is a first mortgage in front of Rainier.

Model the cash flows so we can see how the dollars flow to all parties. The end result should

be a summary that shows the return results to everyone involved.

Returns

Capital

IRR In Out Profit Multiple

Unlevered Deal

First Mortgage

Rainier

Borrower / JV Partner

Cash Flows

Month 1 01/31/15 -$ Month 13 01/31/16 (100,000)$

Month 2 02/28/15 - Month 14 02/28/16 200,000

Month 3 03/31/15 300,000 Month 15 03/27/16 200,000

Month 4 04/30/15 5,000 Month 16 04/24/16 250,000

Month 5 05/31/15 (50,000) Month 17 05/22/16 200,000

Month 6 06/30/15 250,000 Month 18 06/19/16 250,000

Month 7 07/31/15 250,000 Month 19 07/17/16 200,000

Month 8 08/31/15 200,000 Month 20 08/14/16 250,000

Month 9 09/30/15 (100,000) Month 21 09/11/16 200,000

Month 10 10/31/15 400,000 Month 22 10/09/16 400,000

Month 11 11/30/15 250,000 Month 23 11/06/16 200,000

Month 12 12/31/15 400,000 Month 24 12/04/16 300,000

Assumptions

Deal Size 2,500,000$

First Mortgage Loan 60.0% of deal size

Rainier Mezzanine Loan 30.0% of deal size

Rainier Equity 90.0% of remaining and all future fundings

Borrower / JV Partner Equity 10.0% of remaining and all future fundings

First Mortgage Rainier Mezzaninie Loan

- cash flow sweep until paid in full - cash flow sweep after first mortgage

- 8.0% annual interest rate - 18.0% monthly compounded interest rate

- accrued interest added to loan balance - accrued interest added to loan balance

- paid according to following schedule: - $500,000 exit fee

- 1st - current interest - paid according to following schedule:

- 2nd - accrued interest - 1st - current interest

- 3rd - principal - 2nd - accrued interest

- 3rd - principal

Rainier and JV Equity - 4th - exit fee

- distributed according to the following schedule:

- 8.0% annual pari passu preference to all equity

- return of all equity

- 70.0% to Rainier

- 30.0% to JV Partner