4. Inflation
• Fiat currencies around the world are increasing money
supplies
• An inevitable outcome is inflation
• Currency wars are heating up—watch the Yen
5. Sovereign Debt
• No longer a safe haven
• Low yields and high risk, even in US Treasuries
• Greece, Cyprus, +40% haircut—stay tuned, more coming
6. Back to 1991 Real Estate Costs
• Our actual costs tracked against Case Shiller
• Historic opportunities for real estate investors
7. Real estate is smart, but tough
• Private equity firms are buying up foreclosure inventory
• Managing real estate successfully only comes with
experience
• Sound strategies will prevail
8. Cash flow guarantees Appreciation
• Cash flow is guaranteed by Section 8 rentals
• Appreciation is guaranteed by inflation and recovery
• Solid cash flow guarantees time to build value
9. Affordable housing is a win win
• High demand for good low income housing
• Government grants are available
• Section 8 vouchers range in value from $800-$1,500
10. Ft. Pierce low income housing project
• 57 lots shovel ready
• Duplex rehabs ready
• Canal frontage under contract
• Amazing community
11. Successful infill builders
• Purchased duplex for $15,000 in 1998
• This was a demolition project
• Risky endeavor in a risky neighborhood
12. New duplex, new neighborhood
• Experts at sizing for lot
• Pushing the envelope, not breaking it
• Creates housing envy
13. Credited with turn around
• Recognized town heroes
• Build properties that change lives
• Financial success for all stake holders
14. Everybody made money
• Sold in 1998 for $175,000 in a $50,000 neighborhood
• A few years later sold for $450,000
• “Homes like this sell for a lot more money”
15. Duplex rehab, again
• Double size with a simple addition
• Sport bathrooms for elderly
• Tile floors and granite counters
16. Canal Frontage
• Canal beautification with parks along development area
• Over 18 acres under contract
• Perfect for elderly and retirement cluster housing
• Flood gate removal may open canal to ocean
17. Unbelievable values
• Built this property in Broward County
• Appraised for $2.4 million in 2004
• Assessed for $505,000 today
• Similar luxury homes available for $500-600,000.
18. US domicile for families
• Low income real estate investment bundled with
waterfront home
• Purchase $600,000 or custom build starting at $250. sq/ft
19. Easy living, South Florida style
• Distinctive affordable homes
• Boating, fishing, scuba and sailing
• Even ride your horse on the beach
20. Community poised for growth
• Deep water port
• International airport with customs and immigration on site
• Sugar sand Atlantic beaches
21. What Investors Can Expect
• Surround the development area to ensure maximum return
• Zoning and infrastructure enhancements
• Mix of high density 80:1; patio; duplex; and single family homes
• General Partners with proven track record
22. Deal Structure Limited Partners
• Buy in $1,000,000* $10 Million dollar raise
• Lock up five (5) years
• Split profits 50/50 with general partner
• 8% per annum simple interest, accrued
23. Deal Structure General Partner
• Purchase, rehab, design and construct dwellings
• Rent, sell and manage property
• Provide reports and ongoing status updates
24. Pro forma snapshot
• Duplex acquisition & rehab $70,000
• Annual rental income $28,800
• Annual Expenses $12,710
• Annual Deferred Cost of Capital at 8% = $5,600
• EBITDA $10,330
25. The Deal
• Own managed Florida real estate at historic lows in St. Lucie County
• Government supported low income housing
• Reasonable expectation of equity appreciation while earning 8%
• Transparency—clear title to collateral
26. Immigration
• EB5 Visa program available/Regional Center
• Investor Visa program available
• Experienced immigration counsel provided
. And you never know when the fed will come knocking again
The fed can’t print money forever and push 16 trillion in “rescue” dollars into the economy without creating inflation. It is the nature of cause and effect.
US Treasuries were the bench mark for a safe conservative investment—not true anymore, and can’t provide a reasonable return. Before the crash $10MM in 2 year treasuries generates $450k/annum, now closer to $23k/annum---high risk AND no return!
General Partner’s actual Property values tracking with Case Shiller—Pretty close to 1991 Prices; Maybe not the bottom, but pretty close. The time to move is NOW!
Jeff Pintar had buyer's remorse as he purchased 12 foreclosed homes in five Southern California counties on a single day. His regret: that he didn't buy more homes a year earlier.*
Cash Flow: the rental market for single-family homes is fertile turf because home prices are relatively low and rental rates are healthy. They expect the number of families locked out of homeownership—because they don't have strong enough credit or savings to qualify for a mortgage—will continue to grow.* Capital Appreciation: "Right now, it just seems like real estate is a good place to put cash," said this new real estate investor, 40-year-old software engineer Srini Nallapareddy to the Wall Street Journal. * Blackstone Group and Colony Capital
Section 8 Vouchers Range in Value from $800-$1,500 There is a Shortage of Good Low Income Homes Available The demand for housing assistance often exceeds the resources available. Long waiting periods (i.e., two (2) or more years) are common and closing the list is required when there are more families on the list than can be assisted in the near future* Only Provide Housing to the Best Tenants
57 low income housing lots under contract Blend of commercial/residential--older subdivision Abuts 80 to 1 Property Opportunity to “surround” investment territory Ride infrastructure and neighborhood improvements HUD/county/city support We make the market
Deferred Maintenance Catch Up Install 24/7 video security monitoring State-of-the-art HVAC All tile floors Impact glass windows Hurricane Roofs
Flood gate removed—navigable to the Ocean. Ft. Pierce canal beautification with parks along development area.
Proximity to airport Deep water port, beaches, public transportation and shopping
