The following exhibit drafts are ready for John and Kent's review before attaching to the JV Agreement.
Per Mayfair JV Agreement §4.3: "carried interest or promote distributions (waterfall and percentages to be attached as Exhibit A and subject to final negotiation with third-party investors)"
Exhibit A will be finalized once the institutional equity partner is selected and their distribution requirements are known. The waterfall structure must accommodate institutional equity alongside Novak's land contribution and JAK's development equity.
The $400K F&F raise has its own waterfall (8% pref → 80/20 above pref per BTR Investment Memo v3). That is a separate agreement between JAK and F&F investors — it is NOT Exhibit A of the Mayfair JV Agreement.
This Exhibit B establishes the fees payable to JAK Development Group, LLC ("Developer") for development, construction management, asset management, and disposition services related to the Mayfair project.
| Fee | Rate | Basis | Payable |
|---|---|---|---|
| Acquisition / Development Fee | 2% | Total Project Cost | At Construction Closing |
| Construction Management Fee | 4% | Hard Construction Costs | During construction, monthly |
| Asset Management Fee | 1% | Gross Revenue | Annually, quarterly in arrears |
| Disposition Fee | 1% | Gross Sale Price | At sale / disposition |
| Loan Guarantee Fee | 1% | Loan amount guaranteed | At closing, if personal guarantee required |
This Exhibit C details the pre-development budget covering all activities from the Effective Date of the JV Agreement through Construction Closing.
| Category | Description | Budget |
|---|---|---|
| Legal | JV Agreement, entity formation, title review | $75,000 |
| Architecture / Engineering | Schematic design, engineering studies | $200,000 |
| Market Study | Updated feasibility study (Courty or comparable) | $25,000 |
| Civil / Survey | Site survey, civil engineering | $50,000 |
| Entitlements | City permits, variance applications | $30,000 |
| Environmental | Phase I / II if required | $15,000 |
| Developer Overhead | Project management, travel, admin | $50,000 |
| Contingency (10%) | Per JV Agreement Section 1.5 | $44,500 |
| TOTAL | $489,500 |
| Line Item | Amount | Notes |
|---|---|---|
| Land (Novak contribution @ agreed value) | $3,150,000 | ✓ Confirmed per JV Agreement §3.1 |
| Predevelopment (JAK prior spend) | $1,000,000 | ✓ Credited to JAK capital account |
| Horizontal development (site work, utilities, roads) | $6,000,000 | Est. — MPC lot delivery |
| Vertical construction (140 homes @ $200K) | $28,000,000 | ✓ Confirmed Andy Heard Apr 14 2026 ($190-200K range) |
| A&E / Soft costs | $2,100,000 | Based on existing Novak contracts (Andy to confirm) |
| Permits & entitlements | $500,000 | Estimate |
| Developer overhead | $400,000 | Estimate |
| Legal & closing | $150,000 | Estimate |
| Contingency (5% hard costs) | $1,750,000 | 5% of $35M hard costs |
| Construction loan interest reserve | $3,200,000 | 65% LTC @ 7.5%, 18-month draw |
| Loan origination (1.5%) | $490,000 | Estimate |
| Total Project Cost (est.) | $46,740,000 | $333,857/unit |
This Pro Forma is preliminary based on confirmed inputs (construction $200K/unit) and estimates for remaining items. Subject to revision pending final construction budgets, Andy's operating model, and lender requirements. Certified final pro forma to be delivered at Construction Closing per JV §1.5.