HOW ARE INVESTMENTS ARE STRUCTURED

American Life Inc. purchases each property with its own funds and, if appropriate, interim mortgage finance that is personally guaranteed by the Company’s shareholders. Under normal circumstances each property is formed as a separate Limited Partnership with the Company acting as the managing General Partner.

Each property is assigned to a Limited Partnership, (made up of its US and immigrant investors,) and acts as their investment vehicle. American Life Inc. uses the investors’ proceeds to fund the acquisition, which includes paying-off any mortgage debt. When the balance of the mortgage reaches zero for a particular property and when the partnership for that property has adequate reserves for future repairs and renovations, the specific Limited Partnership is closed to additional investors.

Investors, as Limited Partners, have no obligation to fund future capital needs, although in the unlikely event that there were a capital call, a non-contributing partner could be diluted by bringing in an additional investor. If a need for funds occurs, American Life Inc. expects to provide or arrange for required financing and to fund negative cash flow when necessary.

A partnership’s investors, as a group, receive 70% of the monthly income and capital gain related to that partnership. Amounts are calculated on a partnership-by-partnership basis and paid monthly; there is no pooling of results from multiple partnerships. Unlike common industry practice, American Life Inc. charges no asset management fee to the partnerships. It does charge certain service fees to tenants.