Pro Forma — Mayfair SFR — JAK Development Group

⚠️ Permit not yet obtained — 1st round comments received, resolution in progress. Project is fully designed.

Total Project Cost

$37M

Confirmed — Novak Feb 2026

Units

140

Single-Family Rentals

Location

New Braunfels, TX

800-Acre Mayfair MPC

Yield on Cost

6.5%

Confirmed — Novak

Exit Cap Rate

5.0%

Confirmed — Novak

Dev Spread

150 bps

6.5% YOC − 5.0% exit

Exit Value

$52M

Confirmed — Novak

LP IRR

19.1%

EM: 1.9x | Confirmed

Adjusted IRR

38.32%

EM: 2.38x (with promote)

Deal Summary

Mayfair is a 140-unit SFR build-to-rent development within the 800-acre Mayfair Master Planned Community in New Braunfels, TX. Land contributed by Novak at $3M value. Construction by Black Cat. JAK F&F equity of $800K — extremely capital efficient. 8% preferred return with LP receiving 15% of GP promote.

Status: Fully designed, permit comments received (not yet resolved). Existing $1.75M loan extended through Aug 2026, no debt service until Sept 2026. Near-term capital need: $800K.

✅ Atlas vs. Novak: High agreement on core metrics. TPC, unit count, LP IRR, exit cap all match. Only minor differences in Year 3 vs. stabilized exit value. See Assumptions tab.

Development Budget — $37,000,000

Item	Amount	Notes
Land (Novak contribution)	$3,000,000	In-kind — Novak Brothers
Construction (140 SFRs)	$21,700,000	~$155K/unit — Black Cat
Site work / infrastructure	$2,500,000	MPC infrastructure
Soft costs	$3,500,000	~15% of hard costs
Plan update + permitting	$800,000	Confirmed use of funds
FF&E / appliances	$1,400,000	$10K/unit
Pre-opening / marketing	$400,000
Developer fee	$1,850,000	~5% of TPC
Financing costs	$1,300,000
Contingency	$550,000	~2%
Total Project Cost	$37,000,000	Confirmed — Novak Feb 2026

✅ Budget verification: $3.0M + $21.7M + $2.5M + $3.5M + $0.8M + $1.4M + $0.4M + $1.85M + $1.3M + $0.55M = $37.0M ✓

Capital Stack — $37,000,000

Source	Amount	% of TPC	Notes
Construction Loan	$22,200,000	60.0%	~60% LTC
Existing Loan Payoff	$1,750,000	4.7%	Novak's current debt — ext. through Aug 2026
JAK / F&F Equity	$800,000	2.2%	Friends & Family
Novak Land Equity	$3,000,000	8.1%	In-kind land contribution
Institutional LP	$9,250,000	25.0%	Pari passu w/ F&F after CL close
Total Sources	$37,000,000	100%

✅ Sources verification: $22.2M + $1.75M + $0.8M + $3.0M + $9.25M = $37.0M ✓

Note: Institutional LP amount is the balancing figure to reach $37M TPC. Actual LP sizing may vary based on construction loan terms and Novak's existing debt handling.

Stabilized Operating Pro Forma — Q3 2028

Unit Mix (140 SFRs)

Type	Units	%	Rent/Mo	Annual Rent
3BR/2BA Standard	98	70%	$1,800	$2,116,800
3BR/2BA Premium	28	20%	$2,050	$688,800
4BR/2BA	14	10%	$2,300	$386,400
Total / Blended	140	100%	$1,930	$3,242,400

Revenue

Item	Amount	Notes
Gross Potential Rent	$3,242,400	140 × $1,930 × 12
Less: Vacancy (5%)	−$162,120	SFR BTR — low vacancy
Effective Gross Revenue	$3,080,280
Other Income	$70,000	Pet fees, late fees, etc.
Total Revenue	$3,150,280

Operating Expenses (~22% of Revenue)

Item	Amount	Notes
Property Management (8%)	$252,022	8% of Total Revenue
Maintenance / Repairs	$168,000	$1,200/unit/yr
Insurance	$84,000	$600/unit/yr
Property Taxes	$140,000	NB lower rates
Marketing / Leasing	$56,000
Total OpEx	$700,022	~22% of revenue

Net Operating Income

NOI (Stabilized)

$2,450,258

Total Revenue − Total OpEx

✅ YOC check: $2,450,258 ÷ $37,000,000 = 6.62% — confirms Novak's 6.5% (Atlas is slightly higher due to conservative expense assumptions)

Return Analysis

Yield on Cost

6.62%

Novak says 6.5% — close ✅

Exit Value (5.0% Cap)

$52M

Novak confirmed figure

LP IRR

19.1%

Confirmed — Novak Feb 2026

Equity Multiple

1.9x

On F&F equity

Adjusted IRR

38.32%

With 15% of GP promote

Adjusted EM

2.38x

With promote

Exit Waterfall

Item	Amount	Notes
NOI at Stabilization	$2,450,258	Atlas model (Year 3)
Atlas Exit Value (Year 3 NOI ÷ 5.0%)	$49,005,160	Before rent growth
Novak Exit Value (stabilized)	$52,000,000	Implies ~$2.6M NOI or rent growth
Loan Payoff at Exit	−$20,000,000	Estimated
Net Proceeds	$32,000,000	Using Novak's $52M exit
Total Equity Invested	$14,800,000	All non-debt sources
Portfolio Equity Multiple	~2.16x	Novak says 1.9x (conservative)

📊 Exit value reconciliation: Atlas Year 3 NOI ($2.45M) at 5.0% cap = $49.0M. To hit Novak's $52M, need ~$2.6M NOI — achievable with 2–3% annual rent growth by Year 4–5. Both figures are reasonable.

LP Returns (F&F — $800K Invested)

Component	Amount	Notes
LP Equity Return	$1,500,000	Confirmed — Novak
LP Promote (15% of GP)	$400,000	Confirmed — Novak
Total LP Return	$1,900,000	On $800K invested

Projected Cash Flow (Annual)

Year	NOI	Debt Service	Cash Flow	Notes
Year 1 (2027)	$612,500	−$1,332,000	−$719,500	25% avg occupancy — lease-up
Year 2 (2028)	$2,082,000	−$1,332,000	$750,000	85% avg occupancy — stabilizing
Year 3 (2029)	$2,450,258	−$1,332,000	$1,118,258	95% — stabilized NOI
Year 4 (2030)	$2,523,766	−$1,332,000	$1,191,766	3% rent growth
Year 5 (2031)	$2,599,479	−$1,332,000	$1,267,479	3% rent growth — exit year

Debt service estimated at 6.0% on ~$22.2M construction loan. Year 1 assumes partial draw during construction.

Sensitivity Analysis

Exit Cap Rate Scenarios

Exit Cap	Exit Value	Δ from Base	Notes
4.5% (Bull)	$54,450,000	+$2,450,000	Institutional SFR portfolios trading at premium
5.0% (Base)	$52,000,000	—	Novak confirmed exit value
5.5% (Bear)	$44,550,000	−$7,450,000	Significant value reduction
6.0% (Stress)	$40,838,000	−$11,162,000	Still above TPC — no loss of capital

Absorption Scenarios

Scenario	Rate	Lease-Up	Impact
Base Case	10–12/mo	12–14 mo	Confirmed in Novak summary
Slow	7/mo	20 mo	Extends by 4–5 months, adds ~$200K carry
Very Slow	5/mo	28 mo	Extends by 14+ months — significant cost impact

Key Risk Metrics

Metric	Value	Notes
Break-even Occupancy	~78%	109 of 140 units
Permit Delay Cost	~$200K / 6 mo	Additional carry cost per 6-month delay
Construction Cost Overrun Buffer	$550K	~2% contingency — tight for 140 SFRs
Minimum Exit Value (Return Capital)	$37,000,000	Equal to TPC — 1.0x at 6.62% cap

Sources & Assumptions

Every assumption below is sourced and rated by confidence level. Confirmed = from Novak Summaries (Feb 2026). Medium = Atlas market research. Estimate = Atlas estimate, needs verification.

Deal Parameters

Assumption	Atlas Value	Source	Confidence
Location	New Braunfels, TX	Novak Summaries Feb 2026	Confirmed
Product Type	140 SFRs	Novak Summaries Feb 2026	Confirmed
Community	800-acre Mayfair MPC	Novak Summaries Feb 2026	Confirmed
Total Project Cost	$37,000,000	Novak Summaries Feb 2026	Confirmed
Land Value	$3,000,000	Novak Summaries Feb 2026	Confirmed
Loan Balance	$1,750,000	Novak Summaries Feb 2026	Confirmed
Exit Value	$52,000,000	Novak Summaries Feb 2026	Confirmed
LP IRR	19.1%	Novak Summaries Feb 2026	Confirmed
Equity Multiple	1.9x	Novak Summaries Feb 2026	Confirmed
Yield on Cost	6.5%	Novak Summaries Feb 2026	Confirmed
Exit Cap Rate	5.0%	Novak Summaries Feb 2026	Confirmed
Preferred Return	8% p.a.	Novak Summaries Feb 2026	Confirmed

Market Assumptions

Assumption	Atlas Value	Source	Confidence
Blended Rent/Unit/Mo	$1,930	NB SFR market comps 2025–26	Medium
Construction Cost/Unit	~$155K	NB area construction data	Medium
Vacancy Rate	5%	SFR BTR benchmark	Medium
OpEx Ratio	~22%	SFR benchmark (lower than MF)	Medium
Absorption	10–12/mo	Novak Summaries + NB market	Confirmed
Rent Growth	3% annual	NB market trend	Medium
MPC Rent Premium	10–15%	NB MPC comps	Medium
Construction Loan Rate	~6.0%	Market estimate 2026	Estimate

Timing (from Novak Summaries)

Milestone	Timeline	Source	Confidence
SDP Approval	8 months → Q4 2026	Novak Summaries	Confirmed
Break Ground	10 months → Q4 2026	Novak Summaries	Confirmed
Begin Lease-Up	12 months → Q4 2027	Novak Summaries	Confirmed
Complete Project	16 months → Q2 2028	Novak Summaries	Confirmed
Stabilization	Q3 2028 (32 months)	Novak Summaries	Confirmed