Ranch Operating Plan

a. Lease income derived from cattle grazing or partnership owned livestock

b. Lease income derived from day ‘for fee’ archery hunting (optional)

c. Owners construct modest dwellings per guidelines and at owners discretion and personal expense

Under these plans, each of the nine (9) limited partner owners would contribute $40,000 at closing to fund the 10% down payment and closing costs of the loan, and $2,000 per year for the initial five years to fund identified capital improvements. No additional contributions for capital improvements are yet identified beyond Year 5. Additional monies are outlined below for the debt service and funding of the annual operating costs of the ranch.

The use of the capital improvement proceeds is shown below followed by an explanation of debt service and annual operating expenses:
- Capital Contribution at Closing: $360,000
- Additional Capital Contribution (4 Years): $90,000
- Total of Capital Contributions: $450,000
- 10% Down Payment & Closing Costs: ($315,000) paid from above at contract signing and at closing
- Capital Improvements (Year 1 & 2): ($45,000) per annual capital plan
- Capital Improvements (Year 3 to 5): ($90,000) per annual capital plan

Mortgage financing with an LTV of 90% is proposed and available via rural ranch financing sources (Capital Farm Credit, First Ag Credit, Farm Bureau, etc). A 20-year amortization with 7.5% APR is proposed. Each of the nine (9) limited partner owners would contribute $25,000 per year for 20-years to service debt financing.

With the above operating plan, the ranch would not require a full-time manager / employee. In Year 1 through Year 5 (during years of significant capital improvements), the ranch manager would be compensated $6,000 annually and also derive income from work performed on the capital improvement projects per the annual operating plan presented by the General Partner and approved by the limited partner owners. Management of the ranch would be under direction of the limited partnership, and under the management of the General Partner. The General Partner would be responsible for the annual and quarterly operating plans, debt and tax service administration, IRS and limited partner reporting, banking administration, and oversight of the ranch manager. The ranch manager would be responsible for the ranch maintenance and upkeep, project and site contractor oversight, county agricultural exemption management, cattle grazing and any hunting on the property, and general oversight of the ranch security and access. The General Partner would be compensated $9,000 per year. Operating expenses for payment of taxes, insurance, ranch utilities, ranch maintenance and upkeep, and other miscellaneous expenses would average $9,000 annually. The total operating plan budget in Year 1 to Year 5 would then be $24,000 annually.

Beginning in Year 6, the ranch manager would be compensated $2,500 per month for ranch management and oversight per the annual operating plan presented by the General Partner and approved by the limited partner owners. The General Partner would be compensated $9,000 per year.

The summary of each limited partner owner contribution for capital improvements, debt service, and to fund the annual operating costs of the ranch follow:

Ranch Sale or Disposition

The General Partner will establish annually the ‘fair market value’ of the property and present this to the limited partner owners for ratification. At anytime during the ownership of the property, a limited partner may indicate their desire to sell their ownership interest. The General Partner will manage all aspects of the sell of the limited partner ownership interest. The limited partner group, by invitation, will pro-rata have first right to purchase any ownership interest(s) offered for sell by the General Partner, followed by an offering to each limited partner individually. Should the existing limited partner(s) choose to not purchase an ownership interest for sell, the ownership interest would then be offered to a list of ‘pre-qualified partners’ from a waiting list. The General Partner will maintain the waiting list of pre-qualified buyers. In the event that an ownership interest(s) is not sold via this process, the General Partner will advise the limited partners and the ownership interest may be offered for sale to the public. The sell of the undivided interest would be per the existing terms and by-laws as established by the limited and general partner(s).

At anytime during the ownership of the property, the limited partners may via an 80% or greater vote choose to sell all or part of the property and all improvements to the property. The General Partner will manage all aspects of the sell as so directed by the limited partner owners.

Trestle Bridge Ranch is a beautiful Texas Hill Country ranch with awesome water, including over 4000’ of Colorado River frontage. The ranch and the area are full of character and charm, and history. The old grain mill sits high atop a hill across the river from the ranch. And, the trestle bridge creates ‘postcard’ like settings for this beautiful ranch. Fishing and hunting are top notch. The river flows wide and shallow, ideal for a hammock at the waters edge.

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