Dear Friends
of TwinRock,

Now midway through the Third Quarter, we are continuing to have success liquidating our single-family rental funds. In addition, our Oklahoma multifamily assets are showing signs of improvement after the TwinRock property management company took full control of operations. Additionally, we are closing on our third student housing project, adding our fourth student housing project to our acquisition pipeline, and successfully continuing our HOA acquisitions and our hedge fund.

Both TRP Funds I and II, which acquired homes in 2010 through 2012, should be fully liquidated by year-end netting a 20% IRR to the investors and doubling their investment. TRP Fund III, which acquired homes in 2012 is forecasted to be fully liquidated by 2018 with a 16% IRR to the investor. We have also successfully sold 5% of our Lake Las Vegas portfolio (a portfolio of new homes in Lake Las Vegas acquired directly in 2012 from a national homebuilder post bankruptcy) at nearly double the acquisition cost.

During the Second Quarter, we closed on Log Hill Run, a 328 bed student housing complex located in Columbia, home to the University of Missouri, similar to the 320-bed Rupple Row Cottages in Fayetteville, Arkansas purchased last year. Log Hill was first identified 10 months ago. We recently launched our next investment, Gateway at Columbia, a true purposebuilt student housing complex, 1.5 miles away from Log Hill Run, in a location central to retail and restaurants. It was identified 6 months ago and approximately half of available investments are committed with closing planned for late September.

Gateway is currently at 84.7% occupancy for the 2016/17 school year. Our purchase agreement requires any shortfall between 80.0% and 90.0% occupancy to be credited at closing, providing a high level of support in our Year-1 revenue forecast. With the national cap rate for an asset of this quality at 6.0%, we believe we are acquiring Gateway at a ~10.0% discount, as our acquisition cap is at a 6.7%. Though lender appraisals are generally conservative and not supportive, our lender appraiser valued the property $800,000 more than our acquisition price, the highest variance we have received in recent years. We received lender approval on a fixed 12 year loan with 6 years being interest only.

We remain focused on acquiring in the student housing sector, due to its stability and resiliency. “During the recession, prices for apartment properties overall fell by about 20%, but average prices per bed for student housing properties stayed strong,” CBRE reports. While investors have piled in, resulting in higher prices, volume and lower cap rates, we believe deals can still be found, providing we maintain patience to identify assets.

An update on our pre-existing opportunities: TRP Fund VI, a continuation of our HOA strategy, has closed on a portion of the portfolio with additional purchases in the pipeline. Fund VI is still open to new investors, but is closing in the coming weeks. Our hedge fund, TwinRock Value Opportunity Fund, has yielded a 20% return since February, outperforming the S&P 500.

We hope to bring you even more positive news in our next quarterly report. In the meantime, should you have any questions, we look forward to hearing from you.

Very truly yours,

Alexander Philips

Chief Executive and Investment Officer