2. OVERVIEW
Zitofsky capital management
owns and manages portfolio
of turnkey rental properties
located in “Blue Collar” class
B-C neighborhood in
Cleveland.
300~250Ksq. ft
~$15
Million
Properties under
management in
Cleveland
Total AreaFair Market Value
5. Dan Zitofsky
5
OUR INVESTMENT APPROACH
Identification of property
Assessment of neighborhood on
predefined parameters
Ready For sales
and rent
Rehabilitation of property
Acquisition of property
1
2
3
5
6
4
Section 8 and all other necessary
clearances
We acquire properties from Tax
Liens, Non performing
mortgages, Sellers direct, Short
sales and hedge funds
7. Dan Zitofsky
7
• 35-45 Miles distance to Fortune
500 companies
• 5-10 mile radius from Cleveland
Clinic
• 1-4 family homes located in Blue
Collar neighborhood
• Land area in the range of 900-
1600 Sq. ft.
• Fair value in between 70-90K
• Vacancy is never more than 7%
• Rents range from $900 - $1200 per month
• Section 8 Clearance
• Free from all property &
rent related legal disputes
01
02 03
04
OUR PROPERTY PROFILE
Type
Location Vacancy
Legal
8. Dan Zitofsky
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Initial Cash Invested $54,200
Income Analysis Monthly Annual
Net Operating Income $600 $7,200
Cash Flow $600 $7,200
Cap Rate (Purchase Price) 14.40%
Cash on Cash Return (Year 1) 13.30%
Internal Rate of Return (Year 10) 15.50%
Sale Price (Year 10) $67,196
Investment Snapshot
Cash Inflow
Key Financial Metrics
FEATURES
• Located in beautiful
class B-C
neighbourhood.
• 1176 square foot
• single family home
• 4 bedrooms and
• 1.0 bathrooms with
• Detached Garage
and Basement.
OUR CURRENT OFFERINGS
20900 Kenyon Dr
1
9. Dan Zitofsky
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CASH FLOW ANALYSIS
Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Gross Rent $12,000 $12,360 $12,731 $13,506 $15,657 $21,042
Vacancy Loss ($600) ($618) ($637) ($675) ($783) ($1,052)
Gross Income $11,400 $11,742 $12,094 $12,831 $14,874 $19,990
Operating Expenses
Cleaning & Maintenance ($400) ($412) ($424) ($450) ($522) ($701)
Insurance ($800) ($824) ($849) ($900) ($1,044) ($1,403)
Management Fees ($1,000) ($1,030) ($1,061) ($1,126) ($1,305) ($1,754)
Taxes ($2,000) ($2,060) ($2,122) ($2,251) ($2,610) ($3,507)
Total ($4,200) ($4,326) ($4,456) ($4,727) ($5,481) ($7,365)
Income Analysis
Net Operating Income $7,200 $7,416 $7,638 $8,104 $9,393 $12,625
Improvements $0 $0 $0 $0 $0 $0
Cash Flow from rent $7,200 $7,416 $7,638 $8,104 $9,393 $12,625
Hold Analysis
Market Value $51,500 $53,045 $54,636 $57,964 $67,196 $90,306
Loan Balance $0 $0 $0 $0 $0 $0
Equity $51,500 $53,045 $54,636 $57,964 $67,196 $90,306
Sale Analysis
Equity(Property Price) $51,500 $53,045 $54,636 $57,964 $67,196 $90,306
Selling Costs ($3,605) ($3,713) ($3,825) ($4,057) ($4,704) ($6,321)
Proceeds After Sale $47,895 $49,332 $50,811 $53,907 $62,492 $83,985
Cumulative Cash Flow $7,200 $14,616 $22,254 $38,226 $82,540 $193,467
Initial Cash Invested ($54,200) ($54,200) ($54,200) ($54,200) ($54,200) ($54,200)
Net Profit $895 $9,748 $18,865 $37,933 $90,832 $223,252
20900 Kenyon Dr, Maple Heights, OH 44137
14.00% 14.00% 14.00% 14.00% 14.00% 14.00%
YEAR 1 YEAR 2 YEAR 3 YEAR 5 YEAR 10 YEAR 20
PROFITIBALITY RATIOS
Return on Equity Internal Rate of Return
Cash on Cash Return
2% 18%
35%
70%
168%
412%
Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Return on Investment
10. Dan Zitofsky
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OUR CURRENT OFFERINGS2
Initial Cash Invested $53,795
Income Analysis Monthly Annual
Net Operating Income $615 $7,376
Cash Flow $615 $7,376
Investment Snapshot
Cash Inflow
Key Financial Metrics
FEATURES
• Located in beautiful
class B-C
neighbourhood.
• 1200 square foot
• single family home
• 3 bedrooms and
• 1.0 bath with New
Carpet throughout
973 Whitby Rd
Cap Rate (Purchase Price) 13.9%
Cash on Cash Return (Year 1) 13.7%
Internal Rate of Return (Year 10) 16.2%
Sale Price (Year 10) $71,228
11. 11
Dan Zitofsky
Income Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Gross Rent $12,000 $12,360 $12,371 $13,560 $13,567 $21,042
Vacancy Loss ($600) ($618) ($637) ($675) ($783) ($1,052)
Operting Income $11,400 $11,742 $12,094 $12,831 $14,874 $19,900
Expenses Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Cleaning & Maintenance ($424) ($437) ($450) ($477) ($553) ($743)
Insurance ($700) ($721) ($743) ($788) ($913) ($1,227)
Management Fees ($1,000) ($1,030) ($1,061) ($1,126) ($1,305) ($1,754)
Taxes ($1,900) ($1,957) ($2,016) ($2,138) ($2,479) ($3,332)
Operating Expenses ($4,024) ($4,145) ($4,269) ($4,529) ($5,250) ($7,056)
Income Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Net Operating Income $7,376 $7,597 $7,825 $8,302 $9,624 $12,934
- Improvements $0 $0 $0 $0 $0 $0
= Cash Flow $7,376 $7,597 $7,825 $8,302 $9,624 $12,934
Cap Rate (Purchase Price) 13.90% 14.30% 14.80% 15.70% 18.20% 24.40%
Cap Rate (Market Value) 13.50% 13.50% 13.50% 13.50% 13.50% 13.50%
Cash on Cash Return 13.70% 14.10% 14.50% 15.40% 17.90% 24.00%
Return on Equity 13.50% 13.50% 13.50% 13.50% 13.50% 13.50%
Loan Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Market Value $54,590 $56,228 $57,915 $61,442 $71,228 $95,724
- Loan Balance $0 $0 $0 $0 $0 $0
= Equity $54,590 $56,228 $57,915 $61,442 $71,228 $95,724
Potential Cash-Out Ref $38,213 $39,359 $40,540 $43,009 $49,859 $67,007
Sale Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Equity $54,590 $56,228 $57,915 $61,442 $71,228 $95,724
- Selling Costs ($3,821) ($3,936) ($4,054) ($4,054) ($4,986) ($6,701)
= Proceeds After Sale $50,769 $52,292 $53,861 $57,141 $66,242 $89,023
+ Cumulative Cash Flow $7,376 $14,973 $22,798 $39,160 $84,558 $198,196
- Initial Cash Invested ($53,795) ($53,795) ($53,795) ($53,795) ($53,795) ($53,795)
= Net Profit $4,350 $13,470 $22,864 $42,506 $97,004 $233,424
Internal Rate of Return 8.10% 12.60% 14.10% 15.40% 16.20% 16.60%
Return on Investment 8% 25% 43% 79% 180% 434%
CASH FLOW ANALYSIS
13.50% 13.50% 13.50% 13.50% 13.50% 13.50%
Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
PROFITIBILITY RATIOS
Return on Equity Cash on Cash Return Internal Rate of Return
8%
25%
43%
79%
180%
434%
Year 1 Year 2 Year 3 Year 5 Year 10 Year 20
Return on Investment
12. Dan Zitofsky
FEATURES
• Fireplace
• Parking:
• Garage
• 2 spaces,
• 324 sq. ft.
garage
FACTS
• Lot: 9,147 sq. ft.
• Single Family
• Built in 1927
SOLD AT
$52,000
FEATURES
•350 sq. ft.
basement
•Attic
•Cable Ready
•Ceiling Fan
•Storm Windows
FACTS
• Lot: 7,560 sq. ft.
• Single Family
• Built in 1928
SOLD AT
$76,000
12
OUR SOLD
UNITS
1
13. Dan Zitofsky
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Dan Zitofsky
FEATURES
• 345 sq. ft.
basement
• Finished
basement
• Fireplace
• Parking
• More
FACTS
• Lot: 0.29 acres
• Single Family
• Baths: 2 full, 1
half
SOLD AT
$86,000
FEATURES
•Parking: Garage -
Detached,
•2 spaces,
•450 sq. ft. garage
•Porch
FACTS
• Lot: 6,146 sq. ft.
• Single Family
• Built in 1920
SOLD AT
$76,000
13
OUR SOLD UNITS2
14. OUR
MARKET
14
Dan Zitofsky
Nearly $20 billion
of real estate and
infrastructure
development has
recently been
completed or is
underway in Greater
Cleveland
15. 15
Dan Zitofsky
Driving Factors
WHY INVEST IN CLEVELAND?
Burgeoning
Neighbourhoods
Diverse
Population
Redevelopment &
Renovation
Improving
education
70% of Fortune
500 companies
have a presence.
Low cost of doing
business
Skilled workforce
Corporate-
friendly tax
structure
Strategically
located
Low Cost of living
Best price/rent
ratios in the
nation
$229 billion
economy
Fastest growing
healthcare
economy in the
U.S.
ECONOMIC FACTORS
BUSINESS
FACTORS
LIVING
FACTORS
16. HOUSING MARKET TREND IN
CLEVELAND
13,350
15,887
18,750 18,400 19,200
-
5,000
10,000
15,000
20,000
25,000
2012 2013 2014 2015 2016
No. of existing home sales
$113,550
$117,600
$121,600
$113,000
$126,200
$105,000
$110,000
$115,000
$120,000
$125,000
$130,000
2012 2013 2014 2015 2016
INCREASE IN SALES PRICE OF HOME
Dan Zitofsky
16
The housing sales market in the HMA is soft but improving, with a vacancy rate currently estimated at 2.2% down
from 2.5% in April 2010. The recovery is mainly due to increase in number of millennials populations since 2008 in
the Cleveland area.
SALES MARKET
17. Dan Zitofsky
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$775
$727
$817
$954 $984
$0
$200
$400
$600
$800
$1,000
$1,200
2012 2013 2014 2015 2016
Rental price trend
6.90%
5%
6.10%
6%
4.00%
4.40%
4.80%
5.20%
5.60%
6.00%
6.40%
6.80%
7.20%
7.60%
8.00%
2013 2014 2015(F) 2016(P)
Vacancy Rate
The current rental housing market in the
Cleveland market is slightly soft but
improving, with a 6% percent vacancy rate
and significant increase in rent. The
current overall vacancy rate is down as
compared to 2010, resulting in part from
population growth in Downtown
Cleveland. About 51 percent of renter
households lived in a single-family home
or in a building with two, three, or four
units.
HOUSING MARKET TREND IN CLEVELAND
RENTAL MARKET
18. Dan Zitofsky
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FUTURE MARKET FORECAST
6,300
3,825
6,300
3,825
6,300
3,825
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Sales unit Rental Unit Sales unit Rental Unit Sales unit Rental Unit
Cleveland-Elyria HMA Cuyahoga County Suburban Market
TOTAL DEMAND
2017 2018 2019
According to a report by U.S.
Department of Housing and
Urban development an
estimated 10,000 units are
required by 2017 to cope up
with current demand of
housing units.
19. KEY ECONOMIC DRIVERS
Dan Zitofsky
19
What’s making them confident
Increasing househo
95% of Cleveland executives &
80% of their national peers have
expressed confidence in local
economy of Cleveland in the
aftermath of 2013 tax increase.
1
2
3
4
5
Increase in Median household income
Improvement in employment rate
Growth in revenue of middle market firms
Decrease in inflation growth rate
Increase in number of graduates
Growth Drivers
21. If I had a way of
buying a couple
hundred thousand
single-family homes I
would load up on
them.
”
“
-Warren Buffet,
2012 interview on CNBC
THE INVESTORS TAKE
Buffett’s recent investment in real estate:
In 2015, Warren Buffett acquired Allie Beth Allman & Associates
to synergize operations of HomeServices of America Inc., a
Berkshire Hathaway affiliate
In addition to this, Buffett personally bought 2 million shares of a
company called Seritage Growth Properties(SRG). That works out
to an 8% stake and makes him Seritage's second-largest
shareholder, reflecting his confidence in real estate market.
22. Dan Zitofsky
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REAL ESTATE HEDGES
INFLATION
0.94
0.96
0.98
1
1.02
1.04
1.06
1.08
1.1
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Case-Shiller HPI and CPI
HPI CPI
Note: Courtesy of Case-Shiller
A comparative study of Cleveland
Consumer Price index & House
price index in the period 2013-16
tells that HPI increases by 8% in
the recorded period whereas
inflation has increased by only 3%,
implying a risk free inflation
adjusted return of 5%.
In addition to this real estate
comes with an inherit characteristic
of safe asset .i.e. It’s price increases
with decrease in interest rate.
24. Dan Zitofsky
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OUR CREDENTIALS
OUR CREDENTIALS
Our Expertise
Experienced founding member with 26 years of experience in
wealth management.
Reliable team with combined experience of 100+ years
Extended internal & external team of 14 members
Experts in using the “velocity of money” to create true wealth
passively for investors
25. Dan Zitofsky
25
OUR CREDENTIALS
PUBLICATIONS
Dan speaks and is published in
different periodicals around the
World
Our Media Presence
EVENTS
Dan has been an eminent speaker at:
• IMN Events
• Wealth Advisory Events
• Non performing Mortgage events
• SFR Events
• Multi Family Events &
• Private money raising events
• Scott Carson NPN Mastermind
26. Dan Zitofsky
26
OUR INVESTORS ROI
Year 1 Year 2 Year 3 Year 5
Revenue $14,400 $14,832 $15,277 $16,207
Appreciation $77,250 $79,568 $81,955 $86,946
Net Profit $290 $9,602 $19,193 $39,247
ROI 0% 12% 24% 50%
Note: An investment of $78,500 is considered
What the same investment
would have fetched you through
equity
Year 1 Year 2 Year 3 Year 5
Share Price $27.21 $24.2 $27.91 $32.46
Appreciation $78500 $69816.2 $80519.47 $96346.1
Dividend $3210.65 $2855.484 $3293.247 $3830.125
ROI 0.00% -7.42% 6.77% 27.61%
Note: Investment in Washington real investment trust is considered
0.00%
-7.42%
6.77%
27.61%
0%
12%
24%
50%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
YEAR 1 YEAR 2 YEAR 3 YEAR 5
ROI ANALYSIS
ROI(WRE) ROI(Real Estate)
27. Dan Zitofsky
27
Rental income being passive in nature not
subject to self-employment tax.
Tax deduction on component depreciation.
TAX BENEFIT
22
Dan Zitofsky
TAX BENEFIT
28. Dan Zitofsky
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TERMS OF INVESTMENT
• Rental properties are fully approved, violation free with initial investment.
• In house team for handling all facets of acquisition, rehab and property management
• Expert guidance in all phases of retirement accounts deferring tax gains (SD IRA’s, Solo 401K’s, HSA’s, Coverdale Accounts, etc.
We are not attorneys or accounts and don’t represent ourselves to be-Please consult with an attorneys or accountant)
• Cash for property and rehab are wired at closing. We will keep our money in escrow
until property passes inspection by the city at which time deed will be signed over to the investor.
• Rent is guaranteed to start 90 days after closing and guaranteed for at least 6 months
from Property management company.
• Maintenance Guarantee on all work completed from Property Management company for 6 months
29. THANK YOU
Dan Zitofsky Corporate Office:
Middletown, DE, US
718-541-0877 Dan@ZitofskyCapitalM
anagement.com
ZITOFSKY
CAPITAL MANAGEMENT
