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23161 Mill Creek Rd. Ste. 335, Laguna Hills, CA 92653 – Ph. (949)305-5165 – Fax (949)259-0022

May 2015 Special Preliminary Announcement First Trust Deed Investment with Priority Rights to Future Purchase of Preferred Shares, Current 1st TD Funding Open Now

Three Arch Investors and Master Development, LLC jointly announce the development of the future 122-unit complex at SW 158th and SW Baseline Rd, in Beaverton, Oregon. The site is located in the area known as the Sunset Highway, or Highway 26, near the greater Portland area. Portland is the 13th fastest growing metropolitan area of over 500,000, with two of Oregon’s top 5 employers located within 7 miles of the proposed apartment site. Portland area rents have risen more than 20% over the last five years and have increased at the nation’s sixth fastest rate, while the U.S. Census Bureau reports Portland began Q1 2015 with the sixth lowest vacancy rate in the nation. The site itself is 2.3 acres, consisting of five parcels, and currently holds five old and vacant homes acquired by Masters Capital in 2014. Approvals for a conforming application are expected by late summer of 2015.

Location

The City of Beaverton occupies a central location within Washington County, and is considered now as the Silicon Forest Technology Corridor, with the largest concentration of population in the State of Oregon. The average household income is $47,863 in Beaverton, while Portland averages $40,146. The average salary at Nike alone is reported as $53,183. According to Forbes, job growth is up 2.9% for the first three quarters of 2014. Employment growth in Portland is expected to outpace the national average in 2015 as payroll expansion approaches a 15-year high. Other major employers in the surrounding area include Intel, Barcoview, Tektronix, Leupold & Stevens, Verier Software, Genesis Financial Solutions, Lanphere Enterprises, and Touchmark. The latest research from commercial real estate firm CBRE shows Portland is seriously boosting its technology credit. New generations of microprocessors are typically perfected first in Oregon, before mass production begins in fabrication around the world. The Portland market saw its tech talent pool grow 28% between 2010 and 2013, higher than Austin, TX, at 26.5%, Silicon Valley, CA, at 20.8%, or Los Angeles, at 13.6%, according to the report. “Tech talent growth rates are the best

THREE ARCH INVESTORS

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indicator of labor pool momentum, and it is easily quantifiable to identify markets where demand for tech workers has surged,” said Colin Yasukochi, CBRE Director of Research and Analysis.

The Nike World Headquarters Campus sits directly across the street from the site, Oregon’s

number 4 employer, with plans a $150 million expansion yet again in 2015 (see Exhibit 1). “The company has been hiring at a furious pace, so many that Nike and Intel employees are making it hard to find housing in Washington County” says Pat Dooris of KGW Portland. Oregon’s number 3 employer, Intel Corporation, will complete construction at its Ronler Acres campus this year after five years of development, located 6.7 miles from the site in Hillsboro. Though Intel's headquarters is in California, the company has 17,500 employees in Oregon. That is more than anywhere else the company operates. Its Oregon employment is at an all-time high. Last year, Intel won an unprecedented 30-year deal to exempt up to $100 billion in its manufacturing equipment from the local property taxes other businesses pay. The deal will save Intel $2 billion or more if Intel invests the full $100 billion, and the value of the deal will grow over time because key elements of the agreement were not indexed to inflation.

Together, Nike and Intel alone employ over 22,000 people. Currently, local apartments are

enjoying a 3.7% vacancy factor, the lowest in more than a decade. Beaverton, as a result, has seen its affordable housing stock deplete, creating a demand for rental units in the area. Rents in 2014 have seen exceptional growth of 12%, which while not sustainable, is a direct result of the region’s strong economics.

The sponsor believes that the location of this project is exceptional for many reasons. Aside from the previously mentioned strength of the area’s employment, the site enjoys a location only two blocks from the main TriMax Metro system, providing convenient access to downtown, the airport, Lloyd Center, and entertainment areas like Pearl District. Also benefitting the site is a Costco, Fred Meyers, and Tualatin Aquatic Center and Nature Park (see Exhibit 2), which offers tennis, aquatics, baseball, soccer, as well as other activities and recreational classes. Other shopping centers and freeway systems are also conveniently located within 1.5 miles (see Exhibit 3).

Partnership

For more than 30 years, Three Arch Investors has been providing capital to competent developers in the US, and has additionally done development and building of residential housing with Gary Emsiek for both single family and multifamily projects throughout the West Coast. Mr. Emsiek was the former President of Polygon Communities. Additionally, he was the President of PHD Homes, where with Mr. Michelson as Executive Vice President, built 440 luxury homes from 1994-2002. Mr. Emsiek formerly held a California AIA license (not currently active) and has been involved with residential housing for more than 25 years. Together the joint team has exceeded $1 billion in residential construction.

Masters Development is based primarily in Portland and Eugene, OR, citing over 20 real

estate deals worth $100 million in gross value since 1994, focusing mainly on luxury apartments and

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student housing. Their most recent project, The Orbit, is a modern style student housing project on the University of Oregon campus. The Orbit has been 100% leased since its completion. Additional examples of this focus in Eugene are the completed MW2 project which is 100% leased, and the Portland MW8 which was completed spring of 2014.

Together Master Development LLC and Three Arch Investors will make up the sponsorship

of this future apartment project. Initial submittals for the project are being reviewed by the City of Beaverton’s planning department. The joint sponsorship will together provide 50% of the required equity for the project ($2 million each), named The Brooklyn Apartments, which is anticipated to be $4 million out of a required $8 million of equity. The sponsorship shall also arrange for and guarantee a construction loan for $16 million to cover the remaining costs of the projects, which are budgeted for a total of $24 million.

Business Plan

The investors whom will join us in the purchase of preferred shares shall have a priority right to income from the operation of the building. However, the preferred shares shall also have a condition that allows the sponsors to redeem the shares within 36 months if they desire. The preferred shares have a stated 8% cumulative rate of return, but in the event the sponsors exercise the right to redeem, the preferred shareholders shall receive 1% per month, with a minimum earned of 24%, in the event of an early redemption. In the event the sponsors do not redeem upon the 36 months, in addition to the priority rights contained within, this class of shareholder shall accrue additional benefits which will be described in the offering. We are seeking only accredited investors (see Page 4) whom will be invited to fund a minimum of 3 shares, and a maximum of 20 shares of the preferred stated value of $50,000 per shares. Such shares will be yielding 8%, but in the first three years shall be tolled until the project is operational. It is unlikely any actual distributions will be made prior to the option to purchase is exercised. When any distributions are actually made, the preferred shareholders will have the first right to distributions at the rate of 8% annualized on their original capital. The sponsors will next get an equal amount of declared distribution with any amount greater to be divided 25% to the preferred shares and 75% to the sponsors. Intended holding period is greater than 5 years because the sponsors believe the project location will warrant long term ownership. This belief is reflected in the substantial commitment by the sponsor to providing 50% of the required equity. We anticipate that less than 10 non-sponsors will be able to join us on this future apartment project and while no offerings are being made by this announcement, and no securities are hereby offered, we wanted you to be advised of our future objective.

TD Funding We are now seeking participants in a $1M loan that will be secured by a First Trust Deed of the property, recently acquired for $1,650,000, which will help fund the predevelopment costs prior to the closing of the construction loan. Funds for both the land and entitlement costs as of 4/27/15

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equal $1,820,432. This loan will be secured by a first trust deed on the subject property, and will earn 8% simple interest. Any participant in the first TD shall have a priority right to the preferred shares when offered. The interest and note terms for the first TD will be for 12 months, and will have no early prepayment, as we anticipate the closing of the construction loan for the project to be the source of the payoff of this first trust deed in the fourth quarter of 2015.

You will find maps, projected budgets, initial drawings, and cost incurred to date, mostly of a preliminary nature and will be modified once the planning departments, sponsor and our consultants review the conditions of the planning and building departments. All material contained herein will be superseded by the offering in late summer of 2015. Only accredited investors may participate in either the funding of the first TD, or the subsequent offering of preferred shares. We intentionally have kept this announcement short so you can call us to indicate your interest and ask additional questions. We wish to mostly have participants that have experience in and have made private investments in real estate ventures, and also have an interest in preferred yield based holdings. Please contact us before June 1st, 2015 if you have an interest. To conclude, the preferred shares shall represent 50% of the equity requirement of a total $8 million. The sponsors are putting up the balance of the funds and shall subordinate their distributions until the preferred shareholders receive 8% yield, beginning in the stabilized year 2017. Prior to the beginning of distributions from operational cash flow, the preferred shareholders shall accumulate an 8% annualized compounded return from the date of their investment until paid. The combination of the deferred amount together with the current amount must be paid prior to any distributions to sponsors. Participants in the first TD funding shall have first rights to subscribe to the preferred shares once formally offered.

Please contact: David Michelson

david@threearchinvestors.com 949-322-6983 cell

For information about past and current projects, please visit:

www.mastercapitalmanagement.com www.threearchinvestors.com

Requirements of an Accredited Investor: - You, as an individual, have income of more than $200,000 per year, or joint income of $300,000

in each of the last two years, and expect to reasonably maintain the same level of income. - Have a net worth exceeding $1 million, either individually or jointly with your spouse, excluding

the value of the family home. - The Sponsor additionally requires a minimum of $150,000 or the purchase of three shares as a

minimum to participate in this offering.

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Exhibit 1

Source: OregonLive (modified)

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Exhibit 2

Source: Tualatin Hills Park & Rec District

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Exhibit 3

Source: Google Maps

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Exhibit 4

Source: MPF Research

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Exhibit 5 Third Party Market Studies

Source: HFO

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Exhibit 5 (cont’d)

Source: Norris, Beggs, & Simpson