1. real estate

Why Multifamily Investing?
Multifamily investments may be an effective inflation hedge due to the shorter-term nature of apartment
leases. With over $30 billion worth of multifamily loans in distress, there is a significant market opportunity.
Over $30 BN of Distressed Multifamily CRE in the Marketplace
$45 BN
$40 BN
Outstanding Distress
$35 BN
$30 BN
$25 BN
$20 BN
$15 BN
$10 BN
$5 BN
$0 BN
Office
Multifamily
Retail
Land
Hotel
Industrial
Other
Distressed real estate includes assets in foreclosures, bankruptcy, in the process of restructuring or modification, delinquent or defaulted, funding
stopped, maturing or past due loan, abandoned, stalled or fraudulent. Source: Real Capital Analytics - Review & Lender Composition, October 2012.
How Is the Resource Real Estate Opportunity REIT Unique?
The Resource Real Estate Opportunity REIT, Inc. (the “Opportunity REIT”) seeks to take advantage of the current
distressed commercial real estate environment by purchasing distressed properties at deeply discounted prices. The
Opportunity REIT will then invest necessary capital and apply its expertise to realize maximum value. Resource Real Estate’s
affiliate property management company possesses specialized capabilities for turning around distressed properties.
Resource Real Estate Average Purchase Price: 33% of Replacement Cost (2007-2012)
Purchase Price as % of Estimated
Replacement Cost
80%
70%
60%
50%
40%
30%
33%
20%
10%
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Replacement cost is the estimated cost to rebuild a property. Appraisals typically use replacement cost as a method of valuation of a property.
The graph shows the purchase price of each property compared to how much it would cost to build it at the time. Properties are displayed in
order of purchase from left to right with The Redford Apartments the most recent and Wyandotte the least recent. Replacement cost estimates
are provided by Marshall & Swift/Boeckh, LLC. utilizing all readily available data. These estimates do not include escrow fees, legal fees, property
taxes, costs of land planning, improvements including landscaping, paving, pools, lighting, recreation facilities, offsite costs including road,
utilities, park fees, assessments, furnishings and fixtures, or marketing costs to create first occupancy. *Note: The Opportunity REIT Acquisitions
Why Resource Real Estate?
Resource Real Estate, Inc. is an experienced sponsor with a 20+ year track record of investing in distressed real estate.
Resource Real Estate Performance (2002-2012)
$20M
$100M
Acquisition
Cost
Loans < $10M
Loans > $10M
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$60M
$40M
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Some of our sponsor’s prior programs have experienced adverse business developments. For example, several programs have experienced lower
than originally expected cash flows from operations and have had to utilize cash from reserves to supplement cash flow. In addition, several
programs have had to fund distributions with combinations of operating cash flow, sale proceeds and reserves and advances from our sponsor
or its affiliates. Finally, operating cash flow available after distributions has been adversely affected by timing issues with rent collection and the
payment of expenses such as real estate taxes under appeal, causing either excess or deficit cash flows after distributions for a given period.
Acquisition cost includes costs related to original purchase of 1st mortgage investment and costs incurred to maintain investment, including
CAPX. Net cash is excess or deficient cash receipts, including sale proceeds, over cash expenditures. There may be post-close transactions that
may impact the net cash flow and internal rate of return (“IRR”). Data is based on the table in the prospectus on pages 112 and 113 under
“Investment Objectives and Policies” section. Note: The Opportunity REIT does not own any of the properties referenced herein.
Why a Growth REIT with a Focus on Distressed Multifamily?
Adding a growth REIT may provide a higher total return for a REIT portfolio. It may also lower volatility and provide
additional downside protection from economic and real estate markets risks due to its strategy of buying deeply
discounted assets primarily without leverage. The Opportunity REIT may also complement an existing portfolio of
income REITs and may provide further diversification with its focus on growth and total return.
RESOURCE REAL ESTATE, INC.
One Commerce Square
2005 Market Street, 15th Floor
Philadelphia, PA 19103
For information, call (866) 773-4120
or email [email protected]
www.ResourceREIT.com
Diversification does not guarantee a profit or ensure against a loss.
Assuming all else is equal, REITs investing in distressed real estate generally have a higher level of risk associated with them compared to those
investing in core and value-add properties. This is based on the premise that distressed investing is designed to generate returns through capital
appreciation rather than income.
This is neither an offer to sell nor a solicitation of an offer to buy the Resource Real Estate Opportunity REIT, Inc.; offering is only made by
prospectus. This information must be preceded or accompanied by a prospectus in order to understand fully all of the implications and risks of
the offering. Investing in the Opportunity REIT includes significant risks. These risks include, but are not limited to, lack of a public market,
arbitrary offering price, limited operating history, reliance on the advisor to select and manage assets, payment of substantial fees to our advisor
and its affiliates, conflicts of interest facing our officers and directors, lack of diversification, limited liquidity and transferability, and distributions
may be paid from any source including offering proceeds. Shares of the Opportunity REIT are not suitable for all investors. Neither the Attorney
General of the State of New York nor any other state regulators have passed on or endorsed the merits of this offering. Any representation to
the contrary is unlawful. Past performance does not guarantee future results. Shares of Resource Real Estate, Inc. are not being offered.
The shares of the REIT are offered through Resource Securities, Inc., an affiliate of the advisor and member – FINRA, SIPC. OS-REIT1-E 012113