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Affordable Housing Investment: High Demand and Growing Returns Last Updated: October 16, 2o24 Steve Nabity October 16, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Affordable Housing Investment: High Demand and Growing Returns Affordable housing is a sub-segment of residential real estate that has been attracting a lot of attention in recent years. By attention, we aren’t talking about political attention or media attention, but investor attention. Yes, it’s possible to make a decent return while keeping rents within limits.  Sounds counterintuitive? Let us dedicate this blog to discussing why the demand for affordable housing is growing, how affordable housing can generate not just returns, but also social impact, what sort of government incentives are on offer, and how Skyline Point Capital can be a platform through which you can invest in affordable housing. The Demand for Affordable Housing A shortage in affordable housing has been a core issue for many cities across the US. As per the State of the Nation’s Housing 2024 Report compiled by Harvard’s Joint Center for Housing Studies, rents and home prices that surged during the pandemic era continue to remain elevated. As per the same report cited above, the number of cost-burdened homeowners and renters is also rising. Cost-burdened owners and renters are those who spend more than 30% of their income on housing and utilities. The number of severely burdened renters, those spending more than 50% of their income on housing and utilities, also hit a new high. Thus, there is a strong demand for affordable housing, especially in urban centers where economic opportunities are in relatively larger numbers. By the way, we encourage you to check out our post on the Best Cities to Invest in Real Estate in 2024. It covers the metro areas that Skyline Point Capital believes are among the most promising in the US. Such strong demand for affordable housing presents an interesting opportunity for investors and asset owners. They can potentially gain from stable cash flow, low turnovers, and vacancy rates. There is also a social impact element that we will talk about next. High Returns and Social Responsibility For many investors, simply investing to generate a return isn’t enough. The investment philosophy also has to be in sync with their own personal philosophies. Investors who are looking to generate strong returns while also creating social impact within specific communities may find affordable housing properties an interesting option. Affordable housing properties are real assets. They appreciate in value just like other real estate and generate cash flow just like other rented properties do. Demand for housing has always existed and will, in all likelihood, exist in the future. As urban centers evolve and grow, the demand for affordable housing is poised to remain consistent. So, affordable housing does make a return, which is what any investor would like to see. However, affordable housing provides investors with an opportunity to create a positive impact on communities through their investments. By providing safe and stable living conditions to those who need it, investors can uplift neighborhoods and help reduce homelessness. They can cultivate a sense of social commitment and purpose while enabling families to grow and succeed. Affordable housing investments can be a potent combination of purpose and profits, allowing investors to achieve their financial goals while helping those in need. SPC’s Role in Affordable Housing Investing in affordable housing can be a complex task. It is recommended that you work with someone with experience in real estate investing. More importantly, that person or entity should be adept at identifying and leveraging high-demand sectors to maximize returns for themselves and their investors. Skyline Point Capital has decades of experience in real estate investing. We have made affordable housing one of our focus areas. We strategically view the affordable housing segment as an important element of our overall portfolio. It has the potential to provide stable and consistent cash flows and the segment aligns with our financial objectives. We believe that affordable housing not only meets the housing demand in the country, but also allows us to play a role in revitalizing a neighborhood, increasing footfalls for small businesses in the vicinity, and helping sustain a community. Investing in multifamily properties and affordable housing helps us achieve dual goals of social responsibility and financial performance. Skyline Point Capital recently invested in Cortland Medical Center, a 344-unit multifamily property located in Houston’s Medical Center neighborhood. This property will receive an 85% tax exemption benefit from the Houston Housing Authority for restricting rents on a certain portion of the property to AMI-based rent ceilings. Prior to this investment, Skyline Point Capital also invested in Empire Apartments, a 24-unit property in Fremont, NE. Empire Apartments has a HUD loan insured by the FHA. (Cortland Medical Center) You can view our investment portfolio here. We also encourage you to check out our free learning resources to learn more about real estate investing and our philosophy for investing. Get More Content Like This Right to Your Inbox Government Programs and Incentives The government offers various programs and incentives to support rental affordable housing. There are a dozen different programs providing tax incentives, rental payment assistance, loan guarantees, and grants. The Department of Housing and Urban Development (HUD) provides vouchers to residents who cannot afford market rents. Government authorities offer various tax benefits to investors and developers who build and invest in affordable housing projects. These tax benefits are generally long-term, generally over 10 years. One popular tax incentive program is LIHTC i.e. low-income housing tax credits. The idea behind tax benefits for affordable and low-income housing is to make it financially attractive for developers and investors to invest in projects with rent restrictions. Some investors also look for affordable and low-income housing properties that are due to end their rent restriction tenure and become market rate. There are grants available for affordable housing projects. Certain investors also offer equity investments at relatively favorable terms if the property is

Top 5 Benefits of Owning Investment Properties for Business Owners and Entrepreneurs Last Updated: October 16, 2o24 Steve Nabity October 16, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Top 5 Benefits of Owning Investment Properties for Business Owners and Entrepreneurs You may have heard of business owners and entrepreneurs investing in high-rise condos. They might have done so with the intent of elevating their wealth to “lofty” levels. Some business owners invest in real estate to ensure that their portfolios have a “solid foundation”. Some adventurous entrepreneurs might even buy a haunted house for investment because they probably heard of a “spooky” good deal with “ghost” income potential. We won’t advocate buying haunted houses, but what we will highlight in this article are the top benefits for business owners and entrepreneurs of investing in real estate. More specifically, we will look at tax benefits, the role of real estate in portfolio diversification, the cash flow generating ability, the potential for capital appreciation, and some more aspects of the real estate asset class. 1.Maximize Your Tax Benefits The more wealth you create, the more significant the tax outgo. If the annual income is in the millions, taxes might also be north of a million dollars. Thus, tax planning can lead to substantial savings. Investing wealth in asset classes that offer tax benefits is one way not just to manage a portfolio, but also save on tax expenses and enhance net returns. The tax benefits of investment in real estate are multifold. One can deduct certain expenses related to investment properties from the income generated by such properties. These include interest expenses if there is a mortgage, depreciation expenses, and certain operating expenses. Real estate investing also allows you to defer paying capital gain tax. Under the 1031 exchange provision, one can defer paying capital gains tax arising from the sale of a property provided that the proceeds from such a sale are reinvested in a “like-kind” property within 45 days. Skyline Point Capital has invested in properties financed with a mortgage and has also made use of depreciation as well as other operating expenses to optimize tax expenses. Our investments include multifamily properties in Nebraska, Texas, and Nashville, TN. All of our investors in these deals enjoy the tax benefits that we have discussed. Skyline Point Capital also offers 1031 exchange opportunities to qualified investors. 2.Build Your Diversified Real Estate Portfolio Diversification in investment is done to spread out risk across various asset classes rather than build a large exposure to a single or few asset classes. Having concentrated exposure to a single asset class can leave your portfolio vulnerable to unexpected events.  For example, if you invested a large chunk of your wealth in something like Silicon Valley Bank stock then you would have seen a massive drawdown when things went south. However, if you had some investments in gold, some in multifamily real estate, etc. then the impact of that event would have been limited on your overall portfolio. Sure, your investment in Silicon Valley Bank (or bank stocks at that time) might have still suffered, but the risk to the portfolio would have been better managed. You can earn better risk-adjusted returns by investing in various asset classes and subclasses. For example, if you invest in real estate, it may be a good idea to diversify geographically and invest in industrial, medical, and retail properties. That way, if the retail segment gets hit due to an economic downturn, you still have multifamily working for you. The idea is to create a portfolio of assets that have low correlation to one another. In investing, it is said that managing risk is more important than focusing only on returns. If you learn how to manage the risk, then the returns will take care of themselves. Positioning a portfolio to have enough of a buffer against market volatility is what diversification is all about. 3.Generate Steady Cash Flow Real estate can provide returns through regular rental income as well as through capital appreciation. The most direct source of cash flow from a property is rental income. As long as tenants pay their rent on time (at least most of them), then a property owner will receive regular cash flow. If the owner of the property is an entrepreneur or a business owner, then he/she can use that cash flow for his/her business needs. Such needs could be regular working capital or capital expenditures to grow the business. The great thing about well-performing cash flow properties is that their income levels tend to keep up with inflation. As the cost of living rises, so does the rent. Properties are valued based on the capitalization rate (net operating income divided by the value of the property). So, if the net income generated by the property goes up, so does its value. Over time, this can lead to capital appreciation. If the property investment is financed with a mortgage, then by making regular mortgage payments, the investor progressively increases his/her equity in the property. So, over time, there are two benefits for the property investor – capital appreciation and equity. (Southport Center, LaVista NE) 4.Great Appreciation Potential We touched upon capital appreciation when investing in real estate. Let us explore the topic in more detail. Real estate tends to grow in value over time. Some say that it is because nobody is making any more land while the population keeps growing. Some believe that real estate is a hedge against inflation and keeps increasing in value to keep up with inflation. Whatever the reason, there is no doubt that the real estate asset class offers the benefit of capital appreciation provided that the investment is done right. Certain properties may appreciate more than others. Locations that are highly desirable among the working population and where the supply is limited can potentially experience strong capital appreciation. The increasing value of real estate makes it a good investment

New Real Estate Investment: Cortland Med Center in Houston Last Updated: October 16, 2o24 Steve Nabity October 16, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Our New Real Estate Investment: Cortland Med Center in Houston, Texas Houston real estate investment – the fourth-largest city in the US, a city with the second-highest population influx, and a large and diverse market. That’s not it, add prime location in Houston, tax benefits, strong cash flows, and investment in an area with limited supply potential. How does that sound for an investment opportunity? That was Cortland Med Center, our latest investment in Houston, Texas where everything is big. Cortland Center Med Center is a 2003-built property with 344 units. A property with over 300 units offers the benefit of scale economies. But that was not the only thing we liked about this property. In this article, we will talk about the factors that made us invest in Cortland Med Center. We will also touch upon how those who missed out can participate in our next opportunity. Why Cortland Med Center? Real estate is a lot about location and we like where Cortland Med Center is – near the largest medical complex in the world, the Texas Medical Center. We also like that most of the area is developed and the land is occupied by various medical institutions. So, there is limited scope for new development and supply coming into this submarket. It is estimated that there are 326,000 jobs within a 5-mile radius and 983,000 jobs within a 10-mile radius of the property. Close to 106,000 employees work in the Texas Medical Center. Cortland Med Center is a well-run property with high resident satisfaction. The property received the 2023 Kingsley Excellence Award for resident satisfaction. The Medical Center submarket has averaged 94% occupancy over the past 24 months. We also liked that there was no major deferred maintenance on the property and the existing ownership had spent substantial amounts on renovations. Despite the amenities offered, some of the existing rents were below market and there was potential to burn-off some of the loss-to-lease (gap between market rents and in-place rents). What made the deal attractive was a partnership with the Houston Housing Authority which led to a major tax exemption – more on this in the next section. But first, we want to mention some things about the Houston market. It has been very stable with rising rents and a high average occupancy. Houston will also see strong demand as its population is projected to gain the most in the next few years among major cities. (source: Greater Houston Partnership, Moody’s Analytics, US Census, BLS) The Tax Benefits and Strong Cash Flow The general partners and sponsors for the Cortland Med Center have partnered with the Houston Housing Authority to provide certain units at restricted rents. This is part of Houston’s goal of making housing more affordable. So, the obligation is to restrict rents on 20% of the units to 60% AMI (area median income) and on 30% of the units to 80% AMI. The remaining 50% of the units can be rented out at market rates. In return for keeping rents restricted, the Houston Housing Authority has offered an 85% tax exemption. While pro forma rents will decrease due to rent restrictions on half the property, it will lead to significant tax savings. This will have a direct impact on the annual cash flows and boost investment returns. We expect average cash-on-cash returns to be close to 6.6%. Higher cash flows boost the overall IRR on the investment. It also helps limited partners who invest with us get their capital back quicker and meet their hurdle rates. The fact that the previous ownership has pumped in $7 million for renovations and maintenance also impacts our investment positively. It gives us a rent-paying turnkey community, providing relatively stable cash flows from Day 1. A Fully Subscribed Opportunity We have seen tremendous demand for this particular investment opportunity. Given the location of the property, its condition, the high levels of resident satisfaction, the submarket of the Medical Center, and the strong demographics in that area, it is not surprising. Multifamily real estate is no doubt a popular segment of real estate among investors. However, prime multifamily real estate like the Cortland Med Center attracts high demand. We were fully subscribed for this opportunity in under 24 hours. It is a testament not just to the quality of the opportunity, but also the trust that our investors place in the team here at Skyline Point Capital. Get More Content Like This Right to Your Inbox Top-Tier Amenities and Resident Satisfaction We have mentioned resident satisfaction a couple of times. While the quality of property management plays a big role in keeping residents happy, there are other factors at play as well. One of them is the amenities that a property offers. Let’s face it, if the property provides top-of-the-line facilities, then residents will want to continue living there. Cortland Med Center has plenty of spaces, indoor and outdoor, to lounge. There is a cyber cafe, a play area with a billiards table, and a state-of-the-art fitness center. A pool with sundeck and scenic nature trails give the property a resort-like feel. There are storage units available for rent on the property. Speaking about the interiors, there is wood-style flooring, granite countertops, and stainless steel appliances in all units. Digital programmable thermostats, designer tile backsplashes, washer-dryer appliances are included in all the units. The apartments are also equipped with gooseneck faucets, walk-in closets, and USB-integrated outlets. Some units have a den/study area and double-sink vanities. The windows have 2-inch faux wood blinds. The living areas and bedrooms have ceiling fans. The cabinets have underlighting while the bedroom floors have carpet flooring. Overall, the amenities are on the premium side. Thank You to Our Investors + Our Upcoming Opportunities Cortland Med Center is an example of real estate investing

Why Entrepreneurs Should Consider Joining a Real Estate Investment Group Last Updated: September 30, 2o24 Steve Nabity September 30, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Why Entrepreneurs Should Consider Joining a Real Estate Investment Group As an entrepreneur, it would be an interesting challenge to leverage your skills and risk capital in a new arena. If you can also achieve your financial goals while doing so, that would be an added benefit. We are talking about real estate. It is an asset class that offers growth, diversification, cash flows, and some inflation protection. Some entrepreneurs and business owners may have already invested in real estate while others might not have any experience. If you are wondering whether you have the necessary knowledge or the experience to dedicate hard-earned capital to real estate, then we have an answer for you. Real Estate Investment Groups. Entrepreneurs are excellent at delegating tasks and recognizing how to leverage from others the skills that they don’t have. As natural risk-takers and visionaries, entrepreneurs and business owners know how to overcome hurdles by working with people, pooling resources and expertise, and teaming up to achieve success. Real estate investment groups have the same underlying philosophy. In this article, we will discuss the benefits, for entrepreneurs and business owners, of joining a real estate investment group. We will understand what exactly a real estate investment group is, how resources can be pooled together to achieve an investment goal, how real estate investment groups offer business growth and networking opportunities, and why being part of such a group gives you exposure to practices and insights that you otherwise would not have had. Luxe Apartments – Nashville TN What is a Real Estate Investment Group? A Real Estate Investment Group is a collaborative model that Skyline Point exemplifies. The group is made up of like-minded investors and professionals who pool their capital to invest in a portfolio of properties across geographies. By pooling capital, investors can access larger institutional-grade real estate deals that provide strong risk-adjusted returns. By constructing a portfolio of such strong properties, investors can benefit from diversification. As an individual investor, it may be difficult to access and execute such transactions. Real Estate Investment Groups expand the horizons of business owners and entrepreneurs and allow them to build portfolios designed to achieve specific financial goals. Skyline Point Capital ensures that it brings only a pipeline of well-researched investment opportunities for its investors. Our idea of a real estate investment group is not an advertising forum where any and every investment opportunity is circulated. We are only focused on deals that our team has analyzed and that we are looking to co-invest in as a partner. Being part of a real estate investment group also connects you to other like-minded investors with interesting professional journeys and skill sets. A real estate investment group is as much a horizon-broadening platform as an investment platform. Benefit #1: Pooled Resources The most prominent benefit of joining top real estate investment groups is the pooled resources of such groups. One individual investor may have a few hundred thousand or a million-plus dollars to invest. But, a few can bring in funds in the tens of millions. Suddenly, individual investors can go from looking at single units to investing in multifamily and commercial properties spread across acres of land. Larger properties with multiple tenants offer benefits of scale. They also help reduce the risk of a tenant not paying rent. With a single-tenant property, one tenant defaulting on rent leads to zero income for the entire property. With a multi-tenant property, one default does not stop the cash flow. Larger properties can also attract large tenants with an appetite for long-term leases. It also becomes feasible to hire a property management service to achieve high operational efficiency. Institutional-grade properties offer strong returns that are stable and robust. Pooling in resources makes it feasible to execute high-quality renovations and participate in value-add deals that can enhance returns. Incurring such expenditures may be cost-prohibitive for an individual investor. Thus, real estate investment groups, like Skyline Point Capital’s Founders Investor Club, allow its members to leverage collective expertise to maximize their investment returns. Benefit #2: Diversified Investments Diversification is closely linked with the concept of risk management. Whether it is a business or an investment, risk cannot be avoided. Every opportunity has a risk associated with it. Entrepreneurs and business owners are good at gauging that risk, taking a calculated bet, and then managing the risk. Real estate is no different. There are certain key risks associated with real estate investing. They include tenant risk, location risk, interest rate risk, regulatory risk, and overall market risk. By joining a real estate investment group and pooling resources, some of these risks can be managed. Investing in multiple properties, for example, can mitigate location risk. Investing in properties with multiple tenants mitigates the risk of one or a few tenants defaulting on rents. Investing in several real estate asset classes like multifamily, industrial, retail, etc. can mitigate the risk associated with a particular segment. For example, while the commercial segment goes through a severe downturn, multifamily and industrial segments have performed quite well. An individual investor may not have the capital to acquire a multifamily, industrial, and retail property. But, a group of investors with pooled resources can build a portfolio with such assets. Diversification helps investors ride the downturn as the impact is not as severe. To diversify a real estate portfolio, it is recommended that you work with someone who has experience in building a diversified real estate portfolio. Skyline Point Capital has had decades of experience in investing across geographies and sub-segments. Our market knowledge and experience have allowed us to achieve strong returns by building a portfolio that is resilient to market volatility. Feel free to contact us and find out more about the Founders Investor Club at Skyline Point Capital. Get More Content

How Multifamily Real Estate Investing Can Strengthen Your Business Portfolio Last Updated: September 30, 2o24 Steve Nabity September 30, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing How Multifamily Real Estate Investing Can Strengthen Your Business Portfolio Entrepreneurs and business owners who have built businesses from the ground up tend to have a significant portion of their wealth invested in their businesses. After all, these businesses have enabled entrepreneurs to generate wealth. However, diversification is recommended to unlock the next phase of growth and strengthen the overall portfolio. In order to preserve and grow wealth further, a few things need to happen. Firstly, the wealth created needs to be invested prudently across a range of asset classes to manage risk. Secondly, the existing business should be nurtured to grow steadily and deliver increasing cash flows which can sustain the wealth creation process. Lastly, taxes should also be optimized so that the maximum amount of hard-earned wealth stays in the hands of the business creators. Multifamily investing can achieve all of these goals. In this article, we will discuss how multifamily real estate investment can generate steady cash flow, build significant wealth over the long term through appreciation, and help achieve some degree of portfolio diversification. We will also touch upon how to invest in multifamily real estate by leveraging professional expertise. Lastly, we will summarize what steps you can take to get started on your real estate investing journey. Generating Steady Cash Flow Revenue is vanity, profit is sanity, and cash is reality. Whether its business owners, entrepreneurs, investors, or Robert Kiyosaki, everyone is looking for cash flow. Therefore, investments that can sustain regular cash flows year-after-year are perceived to be desirable. Bonds and fixed-income investments are often made with the goal of receiving regular cash (coupon) payouts. Real estate offers a good option for anyone looking for regular and steady cash flows. Multifamily real estate, in our opinion, is the best sub-segment within real estate because you have multiple rent-paying tenants. If one does not pay, you still have the others. With single-family real estate, that is not the case. Multifamily provides some level of diversification and hence, risk management. Regular cash flow also means more options on what to do with those cash flows. They can cover property operations expenses like repairs, maintenance, or utilities. They can be used to pay down debt and increase equity. They can also be reinvested in the property to upgrade the units or set up value-add services like covered parking or package locker facilities. These investments can then bring in additional income, further bolstering the cash flows generated from the property. Higher net operating income of a property also pushes up its value leading to capital appreciation. Building Long-Term Wealth Generational long-term wealth gets built over a long period. The process is gradual and cumulative. However, building long-term wealth requires some careful planning and decision-making. To build generational wealth, there needs to be a source of regular uninterrupted cash flow and a significant capital appreciation event (or maybe a few events). Multifamily real estate can be that source of yield and capital appreciation. It can provide relatively inflation-protected income. When we say planning, we mean not just investment planning, but also tax planning. Real estate offers several tax benefits including depreciation, accelerated depreciation, interest payment deductions, and capital gain tax deferral using the 1031 exchange. Building generational wealth also requires investing in themes that are long-term in nature. Urbanization and housing are such long-term megatrends. The demand for housing remains robust while rental housing is also expected to perform strongly in the future. Ongoing urbanization will involve people migrating and looking for affordable housing options. This will likely be a key driver of the demand for multifamily housing. Preserving and growing long-term wealth requires risk management. Risk can come from various sources. Systemic risk can come from markets and macro factors. Credit risk can come from tenants not paying their rent. Concentration risk can come from skewed asset management where too much is invested in one or a few asset classes. Real estate provides diversification and can be a relatively low-correlation asset class compared to stocks. Multifamily properties provide tenant diversification and lower the risk of not receiving rental income. Below is a picture of Luxe Apartments, a 94-unit property in Nashville that Skyline Point Capital invested in. This property has delivered regular cash flows to our investors post its acquisition in 2021. We plan to hold this property for about 5 years and then realize capital gains from its sale. Our investors will likely get regular cash flow and a capital appreciation at the end which will help them build long-term wealth while enjoying tax benefits and other benefits that multifamily real estate offers. The Power of Diversification Why did the investor start gardening? Because he heard that diversification was all about planting seeds in different areas. We don’t expect you to plant different trees or plant them in different areas. But, we would like to demonstrate why it makes sense to “plant” your investments in different asset classes. Every asset class has its own risk characteristics. You don’t want to be in a situation where you invested heavily in something specific and that something experiences a major negative event. Such concentration in exposure can lead to large drawdowns which might be psychologically difficult to accept. Ideally, you want a portfolio where other asset classes don’t move in the same direction as the one going through a downturn. That way, the downmove gets balanced out. Asset classes with low correlation are necessary to build a diversified portfolio. Imagine you have a portfolio of investments where stocks make up 30-odd percent of the total value, gold makes up 5-10%, bonds make up another 20-30%, and real estate makes up the rest. Within real estate too, the investments are spread out across industrial assets, some multifamily, and some retail. Now if Silicon Valley Bank goes bust

Best Cities to Invest In Real Estate in 2024 Last Updated: September 02, 2o24 Steve Nabity August 21, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Best Cities to Invest In Real Estate in 2024 Why did the entrepreneur move his business to a bakery? Because he had heard that it was probably the best place to make dough. Elon Musk has been in the news lately for choosing to move his SpaceX business to Texas. Entrepreneurs in the past and present have placed a lot of importance on getting the location right for their business. Jeff Bezos picked Seattle for specific reasons, Warren Buffet chose to be based out of Omaha, and Bill Gates picked Bellevue for growing Microsoft. Think of any other famous names and you will see how carefully they select a location for their businesses to thrive. Investing should also be no different from a business. Where you choose to invest is very important, especially when the investment is real estate. It goes without saying that in real estate, the location matters a lot. Through this blog, we aim to give you some insights into selecting the most promising locations for real estate investments. We will also feature a few upcoming markets and explore the trends in those locations. Nashville, Tennessee The Music City is best known for being the birthplace of country music. It does have a thriving music scene even today and a strong economy to go along with it. The population in the Nashville MSA has been growing at over 20% every decade for the past 3 decades. This number is far higher than the national average. Advanced manufacturing and automotive manufacturing are among the largest employment-providing sectors in the area. Educational institutions like Vanderbilt University provide the STEM talent needed to fuel the growth of the technology and healthcare-related industries. The unemployment rate is also around 3% as per data from FRED, much below the national average of 4%. Home prices, as per the Zillow Home Index, have shot up from around $225,000 in 2016 to well over $440,000 in 2024. There is an influx of new residents seeking a vibrant lifestyle and new construction to support the growth. Demand for housing has also led to an increase in rents. Nashville has lately been ranking among the top cities for the highest year-on-year rent increases. ( source: https://www.statista.com/statistics/1365729/apartment-rent-and-rental-growth-nashville/ ) As new supply begins to hit the market, the vacancy levels have begun rising. However, Nashville’s population is projected to grow over the medium-to-long term and this new supply is expected to get absorbed. source: Matthews Multifamily Report ( https://www.matthews.com/multifamily-market-report-nashville-tn-q1-2024/ ) This presents an interesting opportunity to find the right deals to buy and hold or add value and improve low occupancy properties while pushing up rents. Skyline Point Capital invested in Keystone Farms, a luxury 90-unit apartment complex located 20 minutes from downtown Nashville and in close proximity to golf courses and beautiful lakes. Dallas, Texas Dallas-Fort Worth is the fifth-largest metro area in the US. It is home to several Fortune 500 companies and has a diversified economy. No one sector is dominant which provides a certain degree of stability during downturns. Among the key industries are technology, healthcare, manufacturing, telecommunications, and retail. The growth in the metro area’s economy has translated into a growth in the population. During the past couple of decades, the population grew by close to 20% every 10 years. The number of employed persons, as per data from FRED, grew from close to 3.5 million in 2016 to over 4.2 million as of 2024. One of the benefits that Dallas offers to incoming residents is a relatively lower cost of living. The median price of a home as per the Zillow Home Index is $315,154 while the median price per unit for a multifamily property is also below the US average. source: Colliers 2024 Q1 Multifamily Report ( https://www.colliers.com/en/research/dallas/q1-2024-dallas-fort-worth-multifamily-report ) Texas has a business-friendly environment with reasonable tax policies. The Dallas-Fort Worth area is so large that there are multiple suburbs to choose from when evaluating investment opportunities. Thus, there are several reasons that make the Dallas-Fort Worth area an interesting choice for real estate investments, be it residential, industrial, or commercial properties. Skyline Point Capital has invested in properties ranging from 110 units to 310 units across various neighborhoods of the Dallas metro area. Austin, Texas Austin has, perhaps, been the hottest real estate market for the past 3 years. It is like the Silicon Valley of the southwest region. There are several high-tech firms with operations in Austin. While Tesla might be the most well-known company headquartered in Austin, other firms like Dell, Apple, Amazon, Nvidia, Blizzard Entertainment, and Applied Materials have offices in Austin. Austin has a few educational institutions that attract students and young people to the city. The University of Texas at Austin is the best-known and is among the largest employers in Austin. Besides young professionals, people from the creative industries are attracted to Austin due to its vibrant cultural scene and festivals like South by Southwest. The warm and sunny climate also works in favor of Austin over other cities up north. Austin’s population grew over 35% every 10 years from 1970 to 2000. The growth rate has moderated to 20% since then and even that, for a 10-year period, is still impressive. From about 250,000 in 1970, Austin’s population is now close to 1 million. The number of employed persons in the Austin-Round Rock MSA has tripled from around 450,000 in 1990 to over 1.4 million as per the latest data available with FRED. The age group of 25-34 constitutes the largest segment of Austin’s residents. They are a key demographic for rental housing. The high demand for rental housing from a growing population led to strong increases in rents. However, that also attracted a lot of new construction as the supply has risen significantly. This has led to a drop

What Are Some Common Mistakes To Avoid As A New Real Estate Investor? Last Updated: September 02, 2o24 Steve Nabity September 02, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Introduction Why did the real estate investor get locked out of his own property? Probably because he made so many mistakes that he couldn’t find the right “key” to success. Maybe that wasn’t a good joke, but the message is important. You wouldn’t want to be the real estate investor that makes common mistakes. Such mistakes can be easily identified and avoided. So, in order to help new investors save a lot of stress and money, we have decided to write about some common real estate investment mistakes that new investors can avoid. We hope that real estate investments can be more about stable returns and long-term growth rather than painful experiences of getting caught on the wrong end. Lack of Research and Due Diligence One of the classic mistakes in any investing, not just real estate investing, is the lack of research and thorough due diligence. Real estate market research is more than just a macroeconomic study. It involves understanding the trends and conditions of the local submarket where a prospective property is located. At Skyline Point Capital, we closely analyze not just the population and employment trends, but also competitor properties, micromarket dynamics, local laws and tenant regulations, and the overall market cycle before going forward on any deal. There is significant due diligence even after a property goes under contract. The goal of in-depth research and due diligence is to avoid nasty surprises in the future, minimize risks, and make informed decisions. Underestimating Costs Sometimes, to make a deal work or due to a lack of experience, investors may underestimate the cost needed to run and maintain a property. This is a classic mistake that can hit hard a few months down the line. Underestimating costs isn’t just about underplaying the known operational expenses. A problem can also arise when there is a need for unexpected capital expenditure like fixing the roof or carrying out structural repairs. Inaccurate budgeting and financial planning are the culprits if no provisions for such unforeseen events are made. Vacancy is also like an invisible expense. It results in the loss of income. Plus, when a tenant moves out, there are certain turnover expenses that a property owner has to incur. This could involve cleaning and minor repair work on the unit that has been vacated. One has to have a nuanced understanding of costs and their impact on cash flow before investing in a property. Over-Leveraging Another common investing mistake, not just limited to real estate, is over-leveraging. It means taking on too much debt. It results in interest payments being too high to be covered by cash flows generated by the property. Plus, think about all the known and unknown maintenance and capex that you need to take care of while making those mortgage payments every month. Another potential headache can be a hike in interest rates and floating rate loans. A thin debt service coverage ratio can lead to a difficult situation if the Fed suddenly decides to hike rates. Positive leverage can enhance returns, and there may be a temptation to borrow more. However, seasoned investors tend to finance their deals conservatively. There is a fine balance between boosting returns through leverage and over-leveraging. Another strategy is to build an interest reserve or an emergency fund reserve that can bail you out in difficult moments. Neglecting Property Management We often come across properties that are earning incomes far below their potential. They have high vacancies, substantial bad debt, significant deferred capex items, and people don’t get excited about living there. These properties are under-managed. It results in unhappy tenants and a disgruntled property owner who has to foot the bill for serious repair work. Sometimes, owners believe that they can self-manage a property. This works if the owner has the skills and expertise to professionally manage the property. More importantly, the owner should have the time to manage as property management can be a full-time job for many. The other option is to hire a professional service to get the job done. Sure, it may cost more than self-managing. But, the benefits derived from happy tenants and an efficient operation can certainly cover the cost of a property management service. Ignoring Market Cycles Real estate, like many other asset classes, is cyclical. It operates in a discernable cycle – expansion, peak, contraction, and recovery. The trick is to have the insight and expertise to discern to become a successful real estate investor. New investors can sometimes overpay for a property at the peak of the cycle and experience negative equity when values collapse. Let’s consider a case study. If an investor bought a property in 2007 during the peak cycle, he probably over-leveraged and paid a massive price. When 2008 happened, there was serious pain. But, if the situation is flipped, and if the investor purchases the property in late 2008 or early 2009 at an attractive price, he would be sitting on a decent profit a few years later. It is all about aligning your investment decisions with the market cycles. That is one way returns can be maximized. Failing to Diversify This saying is very cliche. But, it still needs to be repeated, so here we go: Do not put all your eggs in one basket. Failing to diversify is a common investment mistake. Getting the asset allocation right makes a huge difference in the final returns delivered by a portfolio. You certainly don’t want to put most (or worse, all) of your money in one asset class. What if that asset class gets hit by some black swan event? You would ideally want to have investments in other low-correlation asset classes to balance out the volatility. Even within real estate, you don’t want to have all your investments

Key Benefits Of Investing In Multifamily Real Estate Last Updated: August 21, 2o24 Steve Nabity August 21, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Introduction Multifamily real estate is a sub-segment of residential real estate involving multiple separate housing units or apartments. The reasons why multifamily real estate has been a favorite among investors are multifold. Firstly, you are not dependent on a single tenant for timely rent collection. You have tens or hundreds of them which provides some diversification. Secondly, there are economies of scale at play as operating expenses get spread out over a large number of units. Lastly, there is increasing demand for rental housing due to demographic shifts and urbanization. In this article, we will explore why multifamily real estate has the potential to provide stable income and long-term growth. We will look at how certain key risks of real estate investing are mitigated through multifamily investing. We will also touch upon tax advantages investors can expect by investing in multifamily properties. Lastly, we will suggest some steps that potential investors can take right away to begin harvesting the benefits of multifamily real estate. Consistent Cash Flow Investing in an asset class like real estate often comes with the expectation of a regular income stream. Real estate is something of a mix between equity and debt. There is capital appreciation over the longer term, but there is also consistent cash flow through rental income and other income generated from a property or a portfolio of properties. Compared to single-family real estate, multifamily is more stable in terms of cash flow. If a few units are vacant, the occupied ones can still generate income. If some tenants are late paying their rents, the income stream is still sustained by those who pay on time. Collecting rent from multiple tenants at a single point/location is also more efficient than driving around town to multiple properties. Consistency and stability are why investors prefer multifamily real estate. Economies of Scale Imagine that you owned several single-family units across a city or a state. How much work would you have to put in to get the maintenance done, collect rent, manage each property, and fix basic issues? What if you had, say, 150 units in 1 location? You could bulk purchase materials, hire a property manager at the location 24X7, and enjoy several other scale benefits. As a property owner or an investor, it is more efficient to manage real estate when it is consolidated than when it is scattered. Per unit expenses and the cost of ownership are much lower in the case of multifamily real estate. Plus, the incremental cost to manage additional units is also lower, allowing investors to scale up. Reduced Vacancy Risk One of the risks in letting out a property is whether the tenant will pay rent, and pay it on time. If something happens to the tenant or if he/she gets laid off, then the ability to pay rent can become a challenge for the landlord. Another risk could be the tenant deciding to move out. The onus then falls on the landlord to find a new tenant who is creditworthy enough to assure timely rent payments. Multifamily properties mitigate these risks to quite an extent. Having multiple tenants means the landlord is not dependent on any one tenant. If one doesn’t pay, the others still do and there is some cash flow coming in. If a tenant decides to leave, the others are still around and a new tenant can be found. Having multiple sources of rental income from multiple tenants provides diversification. Having investments in multiple properties further mitigates the risk with investment diversification. Appreciation and Equity Growth Real estate prices, in the long run, tend to grow steadily. The value of a property can appreciate due to several other reasons. There could be improvements (renovations) on the property, the demand for rental housing might drive up rents and push up values, and the overall economic growth could drive price increases as well. Managing an under-managed property can also boost the net income generated and enhance the value of a property. Over time, as the mortgage on the property gets paid off, the equity portion builds up steadily. Eventually, the initial equity appreciates meaningfully. The income from a property can be reinvested to improve the property or pay down debt. Multifamily real estate can provide compelling opportunities for capital appreciation and equity growth. Tax Advantages Investing in real estate comes with some key tax advantages. Tax deductions help bring down the taxable income. Most real estate is purchased using debt. Interest payments on such debt are deducted from the income for calculating the taxable income. Similarly, the depreciation of a physical asset (like property) is also an accounting expense subtracted from the income to arrive at the taxable income. Capital gains tax earned on a real estate investment can be deferred if certain conditions are met. The Internal Revenue Code has a provision called the 1031 exchange that allows a real estate investor to defer paying capital gains taxes on the sale of a property provided that the proceeds from the sale are reinvested in a “like-kind” property within 45 days. Portfolio Diversification Portfolio diversification is closely linked to the correlation between different asset classes. Ideally, one would want to hold investments that have a low correlation to one another. That way, if one asset class gets into trouble, the others keep moving independently. Real estate tends to have a low correlation to the stock market. ( source: https://deutschedigitalassets.com/insights/news/correlations-in-portfolio-theory ) An asset class like multifamily real estate can also provide some stability during an economic downturn. Housing is, after all, one of the basic needs of a population, and rental units tend to remain relatively steady when the economy falters. By including multifamily real estate in an investment portfolio, investors can achieve investment diversification. Inflation Hedge Inflation eats away at wealth. It is like

The Ultimate Tax Benefits of Real Estate Investing Last Updated: August 21, 2o24 Steve Nabity August 21, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing The Ultimate Tax Benefits of Real Estate Investing Once there was a baker who included things like cat food, bird seed, and a dog bed as business expenses in his tax return. He reasoned that the cat food would keep mice away from the storage area, the bird seed would attract birds that eat the crumbs lying on the ground, and the dog would keep a watch at night. The baker claimed that taxes were like baking a cake – you need the right ingredients and a little creativity. While we don’t advocate being creative with taxes like the baker was trying to be, we certainly would want business owners and entrepreneurs to be smart with their taxes and investments. After all, growing your hard-earned wealth while saving on taxes would be like having your cake and eating it too. In this article, we will talk about unlocking wealth by maximizing tax benefits through real estate investment. We will touch upon the various benefits of real estate investing and taxes. Lastly, we will also cover how to defer capital gains tax to grow your portfolio continually. Real Estate Investing and Taxes Real estate is, in some ways, a unique asset class. It offers cash flow, capital appreciation, and tax benefits. These are some of the key reasons why investors prefer to invest in real estate. From a strategic point of view, business owners and entrepreneurs can reduce their tax burdens when the economic environment is challenging. Tax benefits of investing in real estate can help preserve valuable cash flow while strengthening financial resilience. Certain expenses associated with real estate can be claimed as deductions that reduce taxable income and lower the overall tax liability. Skyline Point Capital places great emphasis on taxes and real estate investing when identifying opportunities. We invested in a multifamily property in Nashville called Keystone Farms. It had 90 units and the plan was to add value to the existing property through upgrades. The deal was financed with a mortgage. So, there was an interest expense throughout the hold period which was tax deductible. Additionally, the property had a depreciation expense associated with it which was also tax deductible. These expenses reduced the taxable income and the overall tax liability. Some of our investors utilized the 1031 exchange to save on capital gains tax earned from a previous transaction. They used the proceeds from the sale of that previous investment to fund the Keystone Farms deal, deferring the payment of capital gains taxes. There were other deals too that allowed investors to take advantage of other such tax benefits. Sometimes, investing in an economically depressed area or “an opportunity zone” or investing in affordable housing that has some kind of associated tax benefit, can result in substantial tax savings for our investors. How you can save tax by investing in real estate? Wealthy individuals like entrepreneurs and business owners are among the most taxed in the country. Just have a look at the graphic below to see what we mean. ( source: https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/ ) Therefore, it becomes important, especially for such individuals and families, to understand how real estate can provide an advantage to a portfolio of investments from a tax perspective. At a broader strategic level, one has to think about the impact of an investment decision on the overall portfolio and the tax liability at a portfolio level Below are the major tax benefits that real estate investments can potentially offer: Mortgage Interest Deduction Any loan used to acquire, develop, or improve real estate properties tends to lead to interest expense. This expense is tax deductible and can be a substantial portion of the overall operating expenses. As it can be viewed as a business expense, interest deduction can bring down the taxable income materially. As the saying goes, “Leverage is not just about multiplying returns; it’s about harnessing the power of tax deductions to amplify your financial gains”. Property Tax Deduction Taxes are a large chunk of the fixed expenses for a property. Counties and cities with higher taxes make this statistic even more prominent. Depending on local laws, taxes paid on rental properties usually tend to be treated as a deductible expense. In a world where so much is uncertain other than death and taxes, such deductions are valuable as they can bring down the taxable income Depreciation Depreciation allows you to deduct the cost of a property, spread out over some predefined period, from your income. It is an accounting expense without you having to actually spend any money. Depreciation accounts for the gradual wear and tear on the property. Typically, residential properties are considered to have a life of 27.5 years while commercial properties have a life of 39 years. So, investors can spread out the total cost of the property over that time as depreciation and treat every year’s depreciation as an expense. The net effect is a lower tax liability. There is something known as accelerated depreciation where a larger portion of the cost can be deducted in the initial years of an investment. This can also be helpful in certain situations. Consult a tax professional to find out more. Repairs and Maintenance Deductions Whether fixing broken windows or plugging leaky faucets, repairs and maintenance is an ongoing activity at any property. There can be different types of wear and tear over time. Therefore, real estate requires regular expenditure to ensure it is kept in good condition so that new tenants are attracted to the property. Such repairs and maintenance expenses are tax deductible. Do note that capital expenses that improve the property and add value are not repairs and maintenance. Rather, such expenses are capitalized and then depreciated. Operational Expenses In addition to depreciation and maintenance expenses, several other operational expenses can be deducted from

Everything You Need To Know As a Beginner in Real Estate Investing Last Updated: August 21, 2o24 Steve Nabity August 21, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Introduction: Real Estate Investing For Beginners Why did the math book look so wealthy? Because it had a lot of problems! Entrepreneurs and business owners are no strangers to problems. They solve them every single day and become wealthy in the process. However, once they have accumulated wealth, there is another problem to be solved: how to preserve and grow that hard-earned wealth? One could invest in stocks, buy ETFs, or invest via mutual funds. Some might invest in precious metals or cryptocurrencies. Business owners and entrepreneurs could also consider investing in real estate. Immediately after reading that sentence, some questions will surely pop up in your head. Is real estate a good investment? Does it offer decent returns? Don’t I need a lot of money upfront to invest in real estate? I am not an expert on real estate, how do I go about investing in it? Should I invest in residential, commercial, or industrial real estate? Is there any tax benefit? In this blog, we will touch upon a variety of questions that you might have about investing in real estate. We want to help you expand your portfolio and understand an underrated asset class. Why Real Estate is a Good Investment for Business Owners and Entrepreneurs What makes an investment a good one? Firstly, it has to enable you to achieve a life goal. After all, isn’t that why we invest? Whether it is commercial real estate investment or stocks, your investment has to grow to some pre-desired size in a reasonable timeframe so that you can actually enjoy the benefit of that investment in your lifetime. You also want an investment to be stress-free and not take up a majority of your mindshare. After all, you’ve got a business (or multiple businesses) to run. Investments that provide regular and consistent cash flow can also be desirable as you don’t have to lock away your money and wait for years to see real tangible cash returning to you. An investment also has to be evaluated in terms of how it fits in a portfolio or other existing investments. Diversification and low correlation among various investments are what we are talking about. Wealthy individuals are among the most taxed in the US. So, an investment that can deliver returns while offering tax benefits is like a bonus. source: https://deutschedigitalassets.com/insights/news/correlations-in-portfolio-theory Real estate investment potentially includes all of the above parameters. We say potentially because real estate investing has to be done the right way to see all of the above-mentioned qualities. No investment is risk-free and real estate is no different. Skyline Point Capital has a long track record of investing in multifamily properties.One such property was Empire Apartments, a 24-unit apartment complex in Fremont, NE. The idea with this investment was to generate regular cash flow from the rental income while also benefiting from a capital appreciation that arose due to certain value-adds that enhanced the rental income. A higher income at a similar or higher cap rate (a valuation metric used in real estate) led to a higher sale price. The hold period on this investment was 3 years and it ended up generating a 4.4x return on the equity initially invested with an IRR (a metric of annualized return) of 69%. Sure you can also make a 69% return on the next altcoin, but for the risk taken, the proportionate returns may be considered fairly strong. Additionally, interest paid on the mortgage when making this investment reduced the taxable income while depreciation also provided a tax benefit. Our investors never had to deal with the tenants or any day-to-day running of the property. Skyline Point Capital had a team to execute the deal, manage the property, and then complete the sale process. Stress-free passive real estate investing is what our investors got along with their returns. How Commercial Real Estate Investments Work If the example of Empire Apartments intrigued you, then you may also be interested in delving a bit deeper into how the entire investment process works. 1. Property Acquisition: There are plenty of real estate deals available in the market these days. The key is to identify the right opportunity that fits the purpose of investing. That purpose influences the choice of the market to invest in, the size of the property, the neighborhood, the target audience/tenant, the age of the property, the value-add potential, and the price. Skyline Point Capital has a thorough underwriting and due-diligence process which takes care of the questions “what to invest in” and “how much to pay for it”. 2.Investment Strategies: The value generated from a real estate investment can be derived either from the cash flows, upgrades made to the property which result in higher cash flows, or from a price appreciation. The investing strategy can be buy-and-hold, buy-for-value-add, low-income housing, or some combination of these factors. The choice of the investment strategy will depend on the investor’s core investment philosophy. Skyline Point Capital has experience in a few such strategies. 3.Financing: During the underwriting and due diligence process, there also has to be clarity on how the deal will be financed and how long the investment will be held. Skyline Point Capital has a track record of working with various financiers including lenders and can optimize the debt and equity structure to ensure the success of the overall deal. We also communicate to our lenders and investors what our business plan is post-acquisition and how long we plan to hold the investment before making an exit and returning capital to our investors. 4.Property Management: Property management is a specialized area within real estate. It involves the maintenance and upkeep of the property, preventing costly repair expenses in the future by being proactive, and ensuring that the property is in good condition to sustain high