Mill Creek Run DST

Mill Creek Run DST

6687 Skipper Road, Macon, GA 31216

Beneficial Interests: $2,325,000

Offering Price: $6,425,000

Hamilton Point Property Management LLC (“HPPM”) manages multifamily apartment properties owned by HPI affiliates. HPPM was founded by David Kelsey and Matt Sharp to manage the day-to-day activities at the properties.

224-Unit Class A Apartment Property

224-unit Class A garden-style apartment community built in 2005,situated on 22.56 acres offering 1, 2 and 3 bedroom units in 14 buildings, as well as 60 garage spaces in 10 garage buildings.

INVESTMENT HIGHLIGHTS

Business Strategy
Hamilton Point Property Management, LLC (“HPPM”) will take over property management upon acquisition. Self-management is a key tenet of the sponsor’s investment strategy and is a crucial element to maintaining institutional quality property oversight that includes revenue enhancement,cost control and tenant credit quality. The property is currently managed by a third party property manager and this is the only property in the market managed by that company.

Revenue Enhancement
• Increase occupancy to market average for comparable properties of 93.7% (Per REISReports, April 2014). Although our goal is to achieve this market occupancy, we underwrote 91.0% occupancy in year 1,increasing to 93.0% by year 4. Overall 1Q14 market occupancy, which includes older properties, was 93.3%.
• Initiate premium unit rental rates by charging $10 to $15 extra for units overlooking the lake and the swimming pool.
• Create renter’s insurance referral program with licensed insurance company.
• Market directly and aggressively to growing area businesses, including use of security deposit concessions and waiving of administration fee for area employees whose employers are within our outreach program.
• Set rental rates and concessions weekly based on current exposure by unit type to increase occupancy and revenue.
• Enhance fee income through enforcement of late fees, pet fees and administrative fees.
• Convert minimally used sand volleyball court to fenced pet walk area.

Expense Control

• Most third-party multifamily management companies include significant “upcharges” in their fees. For example, when they buy capital related items such as appliances, flooring and fixtures, they charge a premium above what they pay, increasing the overall expenses of a property.Some also create upcharges on labor, accounting, and other payroll or service related items. HPPM creates no upcharges for any items.

• During acquisition due diligence, HPPM will complete a review of each expense line item and discuss with current management. Unneeded expenses will eliminated and all significant expense line items will be competitively re-bid at acquisition and then re-bid once per year.

• Leverage economy of scale pricing on items purchased through national supply companies and service companies, including insurance, which we have through a Lloyd’s led portfolio policy at approximately $210 per unit.

HPI-M 5

Investment Summary
• Class A apartment community built in 2005 to high-quality construction standards
• Well located in Macon, Georgia and less than eight miles from Warner Robbins
• Total capitalization of $86,607 per unit ($74.64 psf), which is at or below current replacement cost
• Sponsor market knowledge and experience; owns five other apartment properties in Georgia
• 7-year hold period offering 6.5% yield in years 1-3, increasing by 0.25% per year thereafter
• 30-year amortization with 2-year interest only period reduces debt by over $1 million during the 7-year hold period
• $519,500 upfront escrow reserve plus $67,200 per year ongoing capital reserve escrow

HPI-M 3

PROPERTY OVERVIEW

224-Unit Class A  Apartment Property

• 224-unit Class A garden-style apartment community built in 2005,situated on 22.56 acres offering 1, 2 and 3 bedroom units in 14 buildings, as well as 60 garage spaces in 10 garage buildings.
• Interiors include designer kitchens with black appliances, nine foot ceilings, washer-dryer connections, large walk-in closets, ceiling fans in living rooms and bedrooms, sunrooms or private porches, prewired for high speed internet access, vaulted ceilings on top floors and modern lighting packages.
• Property amenities include a swimming pool with cabana and outdoor kitchen, fitness center, resident business center, volleyball court and a stocked lake with walking trails.
• Good location immediately adjacent to Interstate 75, the primary north-south highway in Georgia.
• Located within six miles of three new employment centers.
• Tractor Supply Company recently opened a 690,000 square foot southeast distribution facility 2.6 miles from Mill Creek Run employing 200 people.
• Kumho Tire Company is building a $225 million, 1 million square foot manufacturing plant 4.8 miles from Mill Creek Run that will employ 300 people.
• Aspen Products is constructing a 200,000 square foot paper products facility 6 miles from Mill Creek Run that will employ 200 people.
• Top 15 Middle Georgia employers located within 18 miles of the property, employing over 44,000 people.

HPI-M 7
HPI-M 6

ABOUT Inland Real Estate Group of Companies, Inc.

The Inland Real Estate Group of Companies, Inc. (Inland) is one of the nation’s largest commercial real estate and finance groups, representing nearly 50 years of expertise and integrity in the industry. As a business incubator, Inland specializes in creating, developing and supporting member companies that provide real estaterelated investment funds – including limited partnerships, institutional funds and nonlisted real estate investment trusts (REITs) – and real estate services for both third parties and Inland-member companies.

In March 2001, Inland Private Capital Corporation was formed to provide replacement properties for investors wishing to complete a tax-deferred exchange under Section 1031 of the Internal Revenue Code of 1986, as amended, as well as investors seeking a quality, multiple-owner real estate investment. The programs sponsored by IPC offer securities to accredited investors on a private placement basis.

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