Phoenix Realty Group LLC

Item 5     Fees and Compensation

Multifamily Equity Funds

         Management Fee.

       The Firm charges management fees (“Management Fees”) to its Firm Clients for its fund
management and investment advisory services provided to the Firm’s Value-Added Multifamily Funds.
Typically, the Management Fees are paid to the Fund’s General Partner or other subsidiary of the Firm.

       Management Fees are charged to a Fund in two distinct stages. Generally, while the Fund is in
an investment stage, that is, after initial capitalization, continuing through the full capitalization of the
Fund, and while the Fund is actively seeking to identify potential investments (the “Investment
Period”), the Management Fee is charged as a percentage of a Fund’s aggregate Capital Commitments.
Following the Investment Period, or in some cases, a predefined period of time has elapsed since the
Fund’s final closing, the basis for the Management Fee changes to be based, generally, on Capital
Contributions not yet returned to unrelated Fund Investors.

        Management Fees generally range from one percent (1.00%) to two percent (2.00%) per annum
of (A) the aggregate Capital Commitments made to the Fund during the initial agreed upon time period
and (B) the Capital Contributions thereafter. Management Fees are generally paid on a quarterly basis
in advance.

        Third Party Fund Investors should refer to the appropriate Fund’s Organizational Documents
for detailed information regarding all matters concerning a Fund, including but not limited to fees and
fee offsets; any new Fund sponsored by the Firm may have similar or materially different terms than
those described herein.

         Asset Management Fee

        The Firm charges asset management fees for its implementation of the value-added business
plan of the property and general oversight of the operations of the property. These asset management
fees are typically charged to properties owned by all private funds managed by the Firm, including the
Value-Added Multifamily Funds, Low Income Housing Tax Credit Funds, and Other Real Estate
Investments. The asset management fees generally range from one half of one percent (0.50%) to two
percent (2.00%) of the net revenues of the property or a fixed fee generally between $5,000 and
$100,000 per property per year.

         Developer Fee

        Generally, fees approximating five percent (5%) to fifteen percent (15%) of the total acquisition
and development cost are paid to the developer of an affordable housing property as a developer fee.
In certain affordable housing properties, a subsidiary of the Firm will serve as the developer, or co-
developer, of the affordable housing property. In such circumstances, a portion or all of the developer

fees are then paid to an affiliate of the Firm. Developer fees vary from state to state, and are generally
paid from cash flow from the affordable housing property, or a capital event (such as a sale or
refinancing).

       Acquisition Fee

        The Firm charges acquisition fees for its identification, underwriting, due diligence, and
guaranties related to the acquisition of the property. The acquisition fees generally range from one
quarter of one percent (0.25%) to one percent (1.0%) of the purchase price of a property.

       Construction Management Fee

       The Firm charges construction management fees for construction costs as part of the value-
added business plan of the property. These construction management fees are typically charged to
properties owned by all private funds managed by the Firm, including the Value-Added Multifamily
Funds, Low Income Housing Tax Credit Funds, and Other Real Estate Investments. The construction
management fees generally range from one percent (1.00%) to six percent (6.00%) of the construction
costs. The construction management fee is generally paid to a property management or construction
management firm, with any excess retained by the Firm or its affiliates.

       Property Management Fee

        All properties owned by private funds managed by the Firm contract with a property
management company to provide property management services. The property manager is usually
either an unrelated entity or a former affiliate of the Firm (ConAm Management). These property
management fees generally range from 2% - 7% of the net revenues of the property. The property
management fees are negotiated for each property based on its size, complexity, rents, and other
relevant factors. See item 10 below.

Tax Credit Funds

        Syndication Fees. The Firm generally charges acquisition fees, organization fees, and offering
fees to the Tax Credit Fund in connection with the closing of the investment of investors into the Tax
Credit Fund. Such fees are generally between four percent (4%) and eight percent (8%) of the capital
commitment of the Tax Credit Fund Limited Partner. Generally, the fees are paid upon the closing of
the investment of the Tax Credit Fund Limited Partner into the Tax Credit Fund.

        Asset Management Fee. Generally, the subsidiary of the Firm that serves as the Fund General
Partner of the Tax Credit Fund will receive an asset management fee during the life of the Tax Credit
Fund. The asset management fee varies from Fund to Fund (i.e., either a fixed amount of a percentage
of cash flow or capital transaction) as it is negotiated amongst the partners of the Tax Credit Fund.

        Third Party Fund Investors should refer to the appropriate Fund’s Organizational Documents
for detailed information regarding all matters concerning a Fund, including but not limited to fees and
fee offsets; any new Fund sponsored by the Firm may have similar or materially different terms than
those described herein.

Expenses

Generally, pursuant to a Fund’s Organizational Documents, each Fund is responsible for expenses
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