Presentation english 2011

T eP e e Wh ls lr f it s e P o et s
h rmir oe ae o D sr s d rp re
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R a E tt Op otnt
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D srs e P o et s
it s d rp re
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THE PREMIER WHOLESALER OF DISTRESSED PROPERTIES

CONFIDENTIALITY AGREEMENT

This is a confidential memorandum intended solely for your own limited use to determine whether you wish
to participate in the TSG Distressed Properties Purchase Program.

This document is not a public offering. It contains brief information regarding the business model prepared
by TSG Realty and The Solution Group Corp. It has been developed based on information developed by the
company. It does not purport to be all-inclusive nor does it contain all the information which a prospective
buyer may desire. Neither TSG, nor any of its members, directors, managers or employees make any
representation or warranty, expressed or implied, as to the accuracy or completeness of this memorandum
or any of its contents, and no legal liability is assumed or is to be implied by any of the aforementioned with
respect thereto.

The information in this memorandum has been gathered from sources that are deemed reliable, but neither
the promoter nor any of its members warrant or represent that the information is true and correct.

Prospective buyers are advised to verify the information independently. TSG reserves the right to change
any information in this memorandum or withdraw the properties from the market at any time, without notice.
This memorandum, is not be construed as an offer or as any part of a contract to invest in any properties or to
acquire any equity interest in the promoter thereof.

By you reading this presentation, you agree that it and the information contained herein is of a confidential
nature and that you will not disclose this memorandum or any part of the contents to any person, firm, entity
without the prior written authorization of the developer.

If you do not wish to pursue this matter, kindly return this confidential memorandum to The Solution Group
Corp.

Photocopying or other duplication is not authorized.

www.thesolutiongroup.net


INDEX

01 TSG Track Record

02 Market Trends Analysis

03 News

04 Business Process

05 Properties

06 Property Map

07 Portfolio Analysis


01 THE PREMIER WHOLESALER OF DISTRESSED PROPERTIES

TSG is a vertically integrated company which has identified a unique opportunity within the US housing
market crisis and has developed a unique program to take advantage of it, particularly in South Florida.
Through this Distressed Assets Program, TSG, after diligent inquiry and analysis, acquires "distressed"
properties, defined as residential real estate which either have been acquired by foreclosing mortgage
lenders, or are REO's and Short Sales. After acquisition, TSG rehabilitates the properties, rents and
stabilizes them and then packages them for sale individually or in groups.

With a multidisciplinary team with over 50 years of collective experience, TSG identifies submarkets where
to participate, taking into account the median household income, the demand of the market and its potential
appreciation. Having identified the opportunity, TSG proceeds to the acquisition and stabilization of the
property.

TSG's Construction Division administers and supervises the rehabilitation process, pursuant to established
standards and upon completion delivers the properties to the Leasing Division which is responsible for
renting them.

Once the properties are sold by TSG Realty, the company's Property Management Division provides
property administration services to its customers.

44.7%
Average price of TSG properties
that last less than 60 days in the market.

U$110,340,180 Distressed properties acquired

Debt amount acquired
by TSG in the last 16 months.
728 by TSG by foreclosure
programs in Miami-Dade, Broward
& Palm Beach Counties.

382
All remodeled properties
by TSG are delivered with
the best standards for rent.

38
The average time that TSG
properties take before being
delivered to the commercial
52,220
The number of properties analyzed
department. by TSG’s acquisition department during the last year.



É possível comprar imóvel em Miami por 65
mil dólares

São Paulo – De um lado, o
estouro da bolha imobiliária
na crise de 2008 provocou
uma queda vertiginosa no
preço dos imóveis em
Miami. De outro, a
valorização do real nos
Piscina em condomínio em Miami: preço das casas parte de 65 mil dólares

A ideia é que o investidor vire proprietário de imóveis já alugados,
conseguindo faturar por duas frentes. De imediato, será possível embolsar o
valor do aluguel pago pelo inquilino norte-americano, um retorno anual
líquido de 7% a 8% sobre o preço do imóvel, superior ao rendimento da
poupança no Brasil. No longo prazo, a expectativa é que as casas também
se recuperem do desconto sofrido com a crise de 2008, ficando até 45%
mais caras.

Presidente do The Solution Group (TSG), incorporadora que atua na compra
e venda de casas subavaliadas, Camilo Lopez afirma que cerca de 50 mil
famílias em toda a Flórida passaram de donas a inquilinas desde a quebra
do Lehman Brothers. Apertada a torneira do crédito, muita gente optou por
entregar o imóvel ao banco, já que os preços derreteram, mas os
financiamentos permaneceram caros, com as parcelas acordadas no auge
da especulação imobiliária.

As famílias passaram a alugar e as incorporadoras entraram em cena,
garimpando achados no mercado e suprindo a nova demanda. Nos últimos
16 meses, a TSG adquiriu 628 propriedades, uma compra estimada em 90


01
02 Análisis de
tendencias del mercado



S&P/Case-Shiller U.S. National Home Price Index

200 20%

US National, index level (left)
US National, %chya (right) 15%
180

10%

160
5%

140
0%

Nationally, home prices are back -5%
120 to their 2003 levels

-10%
100

-15%

80
Record low decline of 18.9% in -20%
2009 Q1 (solid line)

60 -25%
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

The chart shows the index levels for the 10-City and 20-City Composite Indices. As of July 2011,
average home prices across the United States are back to the levels where they were in the
summer of 2003.



Real Estate Cycle

MINIMUM
OPPRORTUNITY
MAXIMUM RISK

2006
Speculation

Sales Rate Increase Sales Rate Decrease

Optimism Uncertainty Optimism

Recession Sales Rate Increase

Recovery
2011

MINIMUM
OPPRORTUNITY
MAXIMUM RISK

Real Estate Cycle

As shown in the graph, the real estate market is now at its moment of most certainty and
the risk-opportunity rate is at its optimum peak.



Income producing properties' price drops and rent increases have improved substantially
net returns. In the case of the preselected income producing portfolio rent has been
multiplied by a factor of 3 increasing from 2.5% to a very attractive 7.75%.

2003 - 2006 Properties Portfolio Example 2010 - 2011 Properties Portfolio Example
$250,000 $250,000
$220,000
Property Price Decline
$200,000 $200,000

$150,000 $150,000

$100,000 $100,000 $85,500

$50,000 $50,000
Rent Increases
$11,640 $14,000
$8,300 $3,340 $7,373 $6,627
$- $-
Property Value Annual Gross Rent
Annual Maintenance
Annual Net Rent Property Value Annual Annual Annual Net Rent
Costs Gross Rent Maintenance Costs
7.75%

2,50%

2006–2007 ANNUAL RETURN 2010–2011 ANNUAL RETURN

Asking Rent Apartment Rent and Vacancy Trends Employment Growth Chart
Miami Fort Lauderdale West Palm Beach Effective Rent Miami Fort Lauderdale West Palm Beach
$1,140 Vacancy Rate 3%
$1,100 10%
$1,120 1%
Average Effective Rent

$1,100 $1,000 8%
-1%
Vacancy Rate

$1,080
$1,060 $900 6% -3%
$1,040 -5%
$1,020 $800 4%
-7%
$1,000
$700 2%
2008 2009 2010 2011 01 02 03 04 05 06 07 08 09 10* 11** 2008 2009 2010 2011

Graph information acquired by the “2011 National Apartment Report” by Marcus & Millichap



The crisis of 2008 led developers to having to sell their inventory
below replacement costs. However, we are starting to see signs later
this year that the market begins to recover.



South Florida is the default capital of the country. Here in Miami-Dade
County, one out of five households with mortgages is in foreclosure.
Home sales in the metropolitan area during the first half of the year
rose 16 percent from 2010 for the best spring since 2007, according to
the research firm DataQuick, far outpacing the negligible growth in the
rest of the country. Two-thirds of the sales were all cash.

Prices, after a brutal drop, are firming up or even increasing. During
the first six months of the year, there were 439 sales for at least $2
million, up 13 percent from last year. Experts say people thought it
would take at least a decade to get back to this point.

As a result, the balance between supply and demand in South Florida is
shifting. In late 2008, as the financial crisis was peaking, there were
108,000 properties for sale and hardly any buyers. The region became a
symbol of excess. Buyers abandoned their deposits and reneged on
deals, buildings went bankrupt and squatters moved in. Now there are
fewer than 48,000 properties for sale, Condo Vultures said. And with
supply diminished, homes have value again.



EQUITY RESIDENTIAL

Apartment landlord enjoys 3.3 percent rise in funds
Equity Residential, the largest publicity traded U.S. Apartment landlord, said
second-quarter funds from operations rose 3.3 percent as the nations rents climbed
and vacancies declined.

FFO, which gauges a property company’s ability to generate cash, rose to $180.7
million from $174.9 million a year earlier. On a per share basis, FFO was
unchanged at 58 cents, the Chicago based real estate investment trust said
Thursday inapartment rents climbed 5.2 percent in the 12 months through June, as a weak
U.S. a statement.
homebuying market fueled demand for leasing, according to Axiometrics Inc., a
The compnay was expected to have FFS of 60 cents a share, the average estimate of
Dallas-based research company. REIT landlords are benefiting from a limited supply
21 analysts in a Bloomberg survey.
of apartments and better job prospects for recent college graduates, according to
U.S. apartment rents climbed analyst with the 12 months through June, as York.
Anthony Paolone, an5.2 percent in JPMorgan Chase & Co. in Newa weak
homebuying market fuled demand for leasing, according to Axiometrics, a
Dallas’based research company. REIT landlords are benfiting from a limited
supply of apartments and better job propects for recnet college graduates,
according to Anthony Paolone, an analyst with JPMorgan Chase in New York.

Eqity Residential sold more than $1 billion of apartment properties in the second
quarter, according to Real Capital Analytics, taking advantage of investor demand
amid the promise of rent growth.

FFO, used by REITs, doesn’t conform to generally accepted accounting principals.

Equity Residential reported so called normalized FFO of 60 cents a share,
compared with 58 cents a year earlier. Normalized FFO excludes items that are not
comparable from perido to period, such as asset impairments of penalties for early
payment of debt the company said

-Bloomberg News
By Oshrat Carmiel



Property yields
Foreclosed, REO and Short Sale
between an estimated
Properties
return of 7% to 8%

TSG MANAGEMENT TEAM

TSG is responsible for:
Ÿ Rent Collection
TSG Leases Ÿ Expense Payments
the property Ÿ Supervise potential repairs
Ÿ Prepare annual reports

TSG selects the best properties
after an extensive analysis
TSG Leasing Team Property ready
for sale

Clean Renovated Property
Title with clean title

TSG’s Financial
Analyst Team
TSG Financial Analyst Team

TSG assembles a
diversified portfolio

TSG Ensures:
Ÿ Take possesion of property
Ÿ Change of locks Properties
Ÿ Removal of any illegal tenant
Ÿ Remodeling
Ÿ Secure the property
Property 1
COURT / BANK

Property 2 Property 6

T SG


TSG ACQUIRES THE PROPERTY

TSG Construction Team



Properties



Completely Renovated

TYPE: CONDO La Hacienda
1 Bed / 1 Bath 18308 NW 68 AVE No. J Miami Lakes, FL 33015

Sq. Ft. 715
Sales Price:
$ 81,620

$200,000
$165,000
$150,000 $155,135 Estimated Monthly Rent: $ 950
Estimated R/P Taxes / Mth: $ 95
$117,975
$100,000 HOA’s: $ 176
$89,500 $81,620 Prop. Man: $ 75
$50,000 NOI: $ 604

$25,000 CAP: 8.89%

$0 Historic Judgement Replacement Fair Market TSG Sales
Value Amount Value Value Price

Equal Housing Opportunity. Oral representations cannot be relied upon as correctly stating representations of the developer. For correct representations, reference should be made
to the documents required by section 718.503, Florida Statutes, to be furnished by the developer to a buyer or leasee. Not an offer where prohibited by state statutes.
TSG REF: TDP 5




TYPE: CONDO Lakeview South Condo
1 Bed / 1 Bath 5275 NW 10th Court #307 Plantation, FL 33313

Sq. Ft. 957
Sales Price:
$ 67,500

$200,000
$160,000
$150,000 $157,905 $155,991 Estimated Monthly Rent: $ 799
$100,000 HOA’s: $ 230
$75,000 Prop. Man: $ 75
$67,500
$50,000 NOI: $ 444

$25,000 CAP: 7.89%


TSG REF: TBB 1




TYPE: Townhome Waterways Taheri
2 Bed / 2 Bath 1211 Imperial Lake RD West Palm Beach, FL 33413

Sq. Ft. 1,384
Sales Price:
$ 125,000

$300,000

$250,000 $260,000 $256,052 Estimated Monthly Rent: $ 1,200
$228,360 Estimated R/P Taxes / Mth: $ 147
$200,000 HOA’s: $ 100
Prop. Man: $ 75
$150,000 NOI: $ 878
$130,000
$125,000
$100,000 CAP: 8.43%


TSG REF: SCP 1




TYPE: CONDO Venetia Gardens
2 Bed / 2 Bath 2911 SE 13 Ave #102-49 Homestead FL 33035

Sq. Ft. 822
Sales Price:
$ 65,000

$200,000

$150,000 $165,000
Estimated Monthly Rent: $ 755
$140,944 Estimated R/P Taxes / Mth:
$135,630 $ 64
$100,000 HOA’s: $ 229
$77,500 Prop. Man: $ 75
$65,000
$50,000 NOI: $ 407

$25,000 CAP: 7.51%


TSG REF: SCD 6




TYPE: Townhome Bluewaters
3 Bed / 2 Bath 24386 SW 109 CT #24386 Homestead FL 33032

Sq. Ft. 1,447
Sales Price:
$ 115,000

$300,000 $305,000
$289,122
$250,000 Estimated Monthly Rent: $ 1,200
$200,000 HOA’s: $ 105
Prop. Man: $ 75
$150,000 NOI: $ 712
$125,000
$100,000 $115,000 CAP: 7.43%


TSG REF: SCD 3




TYPE: CONDO Verano
2 Bed / 2 Bath 8002 SW 21st CT Miami, FL 33025

Sq. Ft. 1,000
Sales Price:
$ 105,000

$250,000
$225,000
$150,000 $165,000
HOA’s: $ 218
Prop. Man: $ 75
$100,000 $109,000 $105,000
NOI: $ 731

$50,000 CAP: 8.35%


TSG REF: SCB 1




TYPE: CONDO Kensington of Royal Palm Place
2 Bed / 2 Bath 350 Crestwood Cir #105 Royal Palm Beach FL 33411

Sq. Ft. 1,177
Sales Price:
$ 99,500

$250,000
$245,000
$236,678
$194,205
$150,000 HOA’s: $ 339
Prop. Man: $ 75
$100,000 $110,000
NOI:
$99,500 $ 618

$50,000 CAP: 7.45%


TSG REF: NGP 1




TYPE: CONDO Caribbean Isles Villas
3 Bed / 2 Bath 2733 NE 3rd Court #106 Homestead, FL 33033

Sq. Ft. 1,194
Sales Price:
$ 87,000

$300,000

$200,000 $209,884 HOA’s: $ 249
$197,010
Prop. Man: $ 75
$150,000 NOI: $ 494

$100,000 CAP: 6.82%
$89,900 $87,000

TSG REF: NGD 1




TYPE: CONDO Courtyards at Cimarron
2 Bed /1 Bath 850 E Commercial Blvd. 243 E, Oakland Park FL 33334

Sq. Ft. 830
Sales Price:
$ 79,000

$200,000
$189,000 $180,136
$150,000 Estimated Monthly Rent: $ 900
$100,000 HOA’s: $ 229
$85,000 Prop. Man: $ 75
$79,000
$50,000 NOI: $ 539

$25,000 CAP: 8.18%


TSG REF: NGB 2




TYPE: CONDO Biscayne Beach Club
1 Bed /1 Bath 10500 SW 155 CT #1026 Miami FL 33196

Sq. Ft. 747
Sales Price:
$ 77,300

$250,000
$235,000 $231,414
$150,000 HOA’s: $ 236
$123,255 Prop. Man: $ 75
$100,000 NOI: $ 499
$85,000 $77,300
$50,000 CAP: 7.75%


TSG REF: HFD 2




TYPE: CONDO Villas at Lakeview
1 Bed / 1 Bath 5200 NW 31st Ave #174 Fort Lauderdale, FL 33327

Sq. Ft. 702
Sales Price:
$ 67,000

$200,000

$100,000 $115,830
HOA’s: $ 202
$78,000 Prop. Man: $ 75
$67,000
$50,000 NOI: $ 454

$25,000 CAP: 8.13%


TSG REF: HCB 2




TYPE: CONDO Lakewood at Emerald Hills
1.5 Bed / 1 Bath 3700 N 56 Ave #1013 Hollywood, FL 33021

Sq. Ft. 749
Sales Price:
$ 79,900

$200,000
$165,000
$144,224
$123,585
$100,000 HOA’s: $ 234
$83,000 $79,900 Prop. Man: $ 75
$50,000 NOI: $ 548

$25,000 CAP: 8.23%


TSG REF: HCB 1



Palm Beach County

Broward County

Miami Dade County



Total Per Unit
Number of Units 12

Area (Sq Ft) 11,724 977

Historic High $ 2,526,000 $ 210,500

Sq Ft Value 215.46

Fair Market Value $ 1,136,900 $ 94,742

Sq Ft Value $ 96.97

TSG Sales Price $ 1,048,820 $ 87,402

Sq Ft Value $ 89.46

Discount over Historic Value $ 1,477,180 $ 123,098

Sq Ft Value $ 126.00

Percentage 58.48%

Discount over Fair Market Value $ 88,080 $ 7,340

Sq Ft Value $ 7.51

Percentage 7.75%

Rental Income (Annual)
Total Per Unit
Rental Income $ 140,676 $ 11,723
Taxes $ (16,171) $ (1,348)
HOA’s $ (30,563) $ (2,547)
Property Management $ (10,800) $ (900)
Total $ 83,141 $ 6,928

CAP / (Ratio) 7.93%



Price Behavior Analysis
$3,000,000
$2,526,000
$2,500,000
$2,327,879
$2,000,000
$1,932,546
$1,500,000
$1,000,000 $1,136,900
$1,048,820

$500,000

$0 Valor Deuda Valor de Valor Precio
Histórico Bancaria Reposición del Mercado de Venta

Percentage Behavior Analysis
100% 100%
92%
80%
77%
60%
40% 45% 42%

20%
10%


Sq. Ft. Behavior Analysis
$250
$200 $215.46
$198.56
$175
$150 $164.84

$125
$100
$96.97 $89.46
$75
$50
$25


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