EX-99 4 exhibitg2.txt EXHIBIT (G) (2) EXHIBIT (g)(2) -------------- Power Point Presentation NOTE TO EDGAR USERS: THE FOLLOWING DOES NOT CONSTITUTE AN OFFER TO PURCHASE ANY SECURITIES OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, PURSUANT TO THE EXCHANGE OFFERS OR OTHERWISE. THE OFFERS TO EXCHANGE PREFERRED SHARES FOR INTERESTS ARE MADE SOLELY BY THE PROSPECTUS AND LETTERS OF TRANSMITTAL RELATING TO THE OFFERS, WHICH CONTAIN THE FULL TERMS AND CONDITIONS OF THE OFFERS, INCLUDING DETAILS OF HOW THE OFFERS MAY BE ACCEPTED. BERKSHIRE INCOME REALTY HAS FILED TENDER OFFER STATEMENTS CONTAINING THE PROSPECTUS AND OTHER RELATED DOCUMENTATION. FREE COPIES OF THE TENDER OFFER STATEMENTS ARE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV. INTEREST HOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENTS AND THE PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Berkshire Income Realty, Inc. 9% Series A Cumulative Redeemable Preferred Stock 1 Berkshire Income Realty, Inc. The Company A newly formed REIT 2 Berkshire Income Realty, Inc. o An affiliate of Krupp Funds Group o Goal to acquire, own and operate multi-family residential properties o A new REIT o Controlled by Douglas Krupp and George Krupp o Contributing 5 multi-residential properties 3 Berkshire Income Realty, Inc. What are we doing? 4 Exchange Offering Highlights o We are offering an opportunity to investors to exchange all or part of their interests in the 6 mortgage funds for shares of a 9% Series A Cumulative Preferred Stock in a new REIT o Higher yield o Greater Liquidity listed on the American Stock Exchange under the symbol BIR o No commission or transaction fees 5 Exchange Offering Highlights o Non callable until February 15, 2010 (provides call protection for 7 years) o Offer expires on February 20, 2003 unless extended o No minimum number of Interests required to exchange o Able to exchange part of Interests o Not able to purchase additional shares for cash at the time of offering. 6 Dividends o Cash Dividends paid at an annual rate of 9% on the $25.00 liquidation preference o $2.25 annualized, $0.5625 payable quarterly o Senior position dividends must be paid to preferred stock before any dividends paid on the Company's common stock o Paid February 15, May 15, August 15, and November 15 of each year. o Cumulative dividends will accrue whether or not they are authorized or declared by us. 7 Berkshire Income Realty, Inc. o Why Preferred Shares? - Predictable, fixed payment of dividends - Fewer risks than common stock and limited partnership interests because the 9% must be paid before any dividends to common stock holders 8 Berkshire Income Realty, Inc. Mortgage Fund Information 9 Names of the Mortgage Funds o 6 Current Krupp Mortgage Funds - Krupp Government Income Trust - Krupp Government Income Trust II - Krupp Insured Plus Limited Partnership - Krupp Insured Mortgage Limited Partnership - Krupp Insured Plus III Limited Partnership - Krupp Insured Plus II Limited Partnership 10 Abbreviations o BIR - Berkshire Income Realty, Inc. o REIT - Real Estate Investment Trust o GIT - Krupp Government Income Trust o GIT2 - Krupp Government Income Trust II o KIP - Krupp Insured Plus Limited Partnership also called K1 o KIM - Krupp Insured Mortgage Limited Partnership o KIP3 - Krupp Insured Plus III Limited Partnership also called K3 o KIP2 - Krupp Insured Plus II Limited Partnership also called K2 11 VALUATIONS o Net Asset Valuations o BIR Purchase Price GIT $3.96 per share GIT $3.71 per share GIT2 $6.86 per share GIT2 $6.25 per share KIM $1.96 per unit KIM $1.88 per unit KIP $3.00 per unit KIP $2.80 per unit KIP3 $1.91 per unit KIP3 $1.79 per unit KIP2 $1.05 per unit KIP2 $1.05 per unit 12 Berkshire Income Realty, Inc. Conversion Rate Calc. Conversion Rate GIT $3.71/$25.00 = 0.1481 GIT2 $6.25/$25.00 = 0.2500 KIM $1.88/$25.00 = 0.0750 KIP $2.80/$25.00 = 0.1120 KIP3 $1.79/$25.00 = 0.0717 KIP2 $1.05/$25.00 = 0.0420 13 Berkshire Income Realty, Inc. What have the current mortgage funds paid? 14 KRUPP GOVERNMENT INCOME TRUST
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.74 $ 0.57 $ 0.23 $ 5.35 9.54% 3.88% 2001 $ 0.68 $ 0.59 $ 0.09 $ 8.54 6.91% 4.73% 2000 $ 0.68 $ 0.59 $ 0.09 $ 8.94 6.60% 5.89% 1999 $ 1.15 $ 0.68 $ 0.47 $ 9.94 6.79% 5.88% 1998 $ 1.30 $ 0.94 $ 0.37 $ 12.74 7.34% 5.20% AVERAGE 7.44% 5.12%
15 KRUPP GOVERNMENT INCOME TRUST II
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.76 $ 0.60 $ 0.30 $ 7.31 8.21% 3.88% 2001 $ 0.96 $ 0.81 $ 0.15 $ 10.33 7.84% 4.73% 2000 $ 0.96 $ 0.84 $ 0.12 $ 11.16 7.53% 5.80% 1999 $ 1.25 $ 0.82 $ 0.43 $ 13.42 6.11% 5.88% 1998 $ 1.25 $ 1.00 $ 0.25 $ 14.45 6.92% 5.20% AVERAGE 7.33% 5.12%
16 KRUPP INSURED PLUS
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.40 $ 0.22 $ 0.18 $ 3.27 6.73% 3.88% 2001 $ 0.40 $ 0.35 $ 0.05 $ 4.87 7.19% 4.73% 2000 $ 0.76 $ 0.41 $ 0.35 $ 5.53 7.41% 5.89% 1999 $ 0.76 $ 0.48 $ 0.28 $ 7.28 6.59% 5.88% 1998 $ 0.76 $ 0.59 $ 0.17 $ 7.89 7.48% 5.20% AVERAGE 7.08% 5.12%
17 KRUPP INSURED MORTGAGE
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.30 $ 0.18 $ 0.12 $ 2.33 6.02% 3.88% 2001 $ 0.24 $ 0.17 $ 0.07 $ 2.78 6.13% 4.73% 2000 $ 0.39 $ 0.29 $ 0.10 $ 3.34 8.70% 5.80% 1999 $ 0.84 $ 0.57 $ 0.27 $ 7.15 7.97% 5.88% 1998 $ 0.93 $ 0.67 $ 0.26 $ 9.02 7.43% 5.20% AVERAGE 7.25% 5.12%
18 KRUPP INSURED PLUS III
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.32 $ 0.17 $ 0.15 $ 2.29 7.44% 3.88% 2001 $ 0.32 $ 0.25 $ 0.07 $ 3.49 7.16% 4.73% 2000 $ 0.54 $ 0.27 $ 0.27 $ 3.83 7.05% 5.89% 1999 $ 0.76 $ 0.45 $ 0.31 $ 5.91 7.62% 5.88% 1998 $ 0.87 $ 0.78 $ 0.09 $ 9.30 8.39% 5.20% AVERAGE 7.68% 5.12%
19 KRUPP INSURED PLUS II
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.20 $ 0.12 $ 0.08 $ 1.69 7.11% 3.88% 2001 $ 0.40 $ 0.17 $ 0.23 $ 2.57 6.63% 4.73% 2000 $ 0.40 $ 0.21 $ 0.19 $ 3.04 6.91% 5.89% 1999 $ 0.76 $ 0.47 $ 0.29 $ 5.15 9.14% 5.88% 1998 $ 1.12 $ 0.87 $ 0.25 $ 10.65 8.17% 5.20% AVERAGE 7.59% 5.12%
20 Berkshire Income Realty, Inc. o 5 Year Average Yield GIT 7.44% GIT2 7.33% KIP 7.08% KIM 7.25% KIP3 7.68% KIP2 7.59% o 10 Year Average Treasury Yield 5.12% 21 Berkshire Income Realty, Inc. Original Investment $20.00 per share/unit Distributions received to date: o GIT $25.00 per share o GIT2 $20.20 per share o KIP $27.66 per unit o KIM $26.57 per unit o KIP3 $27.71 per unit o KIP2 $30.19 per unit This includes all regular and special distributions 22 Berkshire Income Realty, Inc. o Internal Rate of Return - o Internal Rate of Return - All Cash DRP o GIT = 5.42% o GIT = 6.57% o GIT2 = 4.57% o GIT2 = 6.01% o KIM = 5.38% o KIM = 5.38% o KIP = 5.13% o KIP = 5.98% o KIP3 = 5.82% o KIP3 = 6.07% o KIP2 = 5.72% o KIP2 = 6.05% 23 Mortgage Fund Distributions for 2003 o Distributions Annualized as of February 14, 2003 o GIT = $0.24 per share o GIT2 = $0.56 per share o KIP = $0.20 per unit o KIM = $0.24 per unit*will be reduced to $0.16 per unit effective 5/14/03 o KIP3 = $0.16 per unit o KIP2 = $0.20 per unit *fund ending by 3/31/03 24 Berkshire Income Realty, Inc. Why Should I Participate????? 25 Berkshire Income Realty, Inc. o 9% Preferred Return o Greater Liquidity due to AMEX listing. o Current Mortgage Fund is not allowed to reinvest the proceeds from repayments of mortgage loans. o Resulted in ever-decreasing distributions. o Opportunity to exchange interests into a new REIT. o Quarterly cash dividends o Lower asset management fees o No sales commission or transaction fees for the investor o Simplified tax return preparation no K-1 26 Berkshire Income Realty, Inc. o What if I don't participate, what will happen????? NOTHING NOTHING NOTHING 27 Berkshire Income Realty, Inc. o Investors will still own interests in current mortgage fund 28 What the investor needs to do o Read the prospectus carefully o Refer to the Letter of Transmittal o Complete if information has changed since December 31, 2002. o Sign it o Return to us in the envelope provided o No stock certificate needs to be surrendered nor will a stock certificate be issued. 29 Letter of Transmittal- How to fill out form o Box 1- YOUR TENDER - Check one box only. If second box is checked they must insert number of shares to be exchanged. o Box 7-SIGNATURE TO TRANSMITTAL LETTER (INCLUDING INVESTOR CERTIFICATIONS AND SUBSTITUTE FORM W-9 IN SECTION 6). Just sign o All investor information updated as of December 31, 2002 not September 30, 2002 as stated on form o Any question you can't answer have them call us at 1-800-255-7877 30 Phone Scripts o Live contact phone script o Answering machine phone script 31 Phone Script - Live Version Hello, This is ___________, from Krupp Funds Group. I am calling to see if you have received the package concerning our new 9% preferred stock exchange offer. (Wait for Response) My main reason for calling today is to see if I may answer any questions you have regarding this offer. Do you have any questions that I can answer for you? (Answer any Questions) To accept the offer all you have to do after reading the prospectus is to sign the Letter of Transmittal and return it in the supplied envelope. If you have any later questions please call us at 1-866-335-7877. Thank you and have a nice day. 32 Phone Scripts Disclaimer o OPERATORS MUST NOT COMMENT ON THE MERITS OF THE OFFERS, MUST NOT ADVISE INTEREST HOLDERS WHETHER TO ACCEPT OR NOT ACCEPT THE OFFERS AND MUST NOT PUT INTEREST HOLDERS UNDER ANY PRESSURE. ALL INTEREST HOLDERS MUST BE ENCOURAGED TO CONSULT THEIR PROFESSIONAL ADVISORS. 33 Phone Script - Answering Machine Version Hello, This is __________, from Krupp Funds Group. I am calling to see if you have received the package concerning our new 9% preferred stock exchange offer. My main reason for calling today is to see if you have any questions regarding this offer. If you haven't received the package or have any questions please call us at 1-866-335-7877. To accept the offer all you have to do after reading the prospectus is sign the Letter of Transmittal and return it in the supplied envelope. Thank you and have a nice day. 34 Berkshire Income Realty, Inc. Questions o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ 35 Berkshire Income Realty, Inc. o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ 36 Summary o A new investment opportunity o Exchange interests in 6 mortgage funds for a 9% Preferred Stock in a newly formed Real Estate Investment Trust ("REIT") o Higher & more predictable return than current funds o Daily liquidity due to AMEX listing 37 Where to Get More Information o Review package that was mailed to investors Includes: - Prospectus - Brochure - Cover letter - Letter of Transmittal - Letter of Instructions - 14D-9 (Opinion of General Partner/Trustees) - Return postage paid self - addressed envelope o Georgeson employees call us at 1-800-255-7877. o Investors call 1-866-335-7877. o Direct investors to our website for further current fund info o www.kruppfunds.com 38