Presentation from the Webinar held by Scott Picken on the 3rd of May 2016

1. How to buy a home?

2. Introduction
WHY

3. 1. Wealth
 Wealthy 1%
 Financially independent 5%
 Still working 16%
 Dependent on the Government 52%
 Dead 26%
2. Who wants to be wealthy?
3. Ignorance
 Difference between truth & perception

4. 4. Knowledge
“The right information at the right time
is nine tenths of any battle!” Napoleon
“Knowledge is Power!”
“Informed Knowledge is Power!”

6. Who is involved?
 Seller – individual or developer
 Buyer – individual, company or trust
 Estate Agent/ Developer
 Banks
• Buyers
• Sellers
 Mortgage Originators
 Lawyers
 Bond Attorney
 Transfer Attorney
 SARS / Tax Offices
 Deeds office
 Municipality
 Body Corporate

7. 6 Steps to Purchasing Property
Strategy
Find
FinancePurchase
Manage
Decision

8. Decide
 Biggest inhibitors
• Time
• Lack of understanding
• Fear
• Knowledge
• Money
 Law one ”Invest in yourself!”
 Get involved

9. Strategy
 Very few people have a strategy – it is adhoc purchases and based
on friends advice!
 Most people buy houses they want to live in, not the best
investments.
• Do you buy shares in a company you would like to work in?
 UK Market – early 1990’s is a very good example

10. Strategy

11. Strategy
 It is all about the financial numbers
 What is the worst case scenario?
 Property has increased by 12% in SA and 9% in the UK & USA over
the last 30 years with inflation being 9% and 3%
 LONG TERM INVESTMENT
 REAP example

12. REAP
 It is all about the financial numbers
 What is the worst case scenario?
 Property has increased by 12% in SA and 9% in the UK over the last
30 years with inflation being 9% and 7%
 LONG TERM INVESTMENT
 Property Pro example

13. Multi Tiered Strategy
Top
+R2 million
($200+)
Middle
R1 mil – R2 mil
($1m to $2m)
Lower
R500k – R1m
($50k - $100k)

14. Key highlights
1. First project when I was 13

15. Key highlights
2. First property when 22

16. 3. First London property when 24
Key highlights

17. 4. Thousands of South African Investments
Key highlights

18. 4. Hundreds of London / UK Investments
Key highlights

19. Key highlights
5. Hundreds of Australian Investments

20. 6. Hundreds of American Investments
Key highlights

21. 7. Not just residential, both commercial & industrial
Key highlights

22. 8. Commercial with $10k
Key highlights

23. Off plan vs Bricks and Mortar
 Transfer Fees
 Cost of Capital – see example
 Speculation
 Time to save
 Cost per square metre
 Buy at today’s prices
 Start paying it today

24. Find
 Know what you are looking for!
 Key decision:
a) Buying as a house to live in
 Emotional purchase
 Location Location Location
 Schools, offices, shops, entertainment, hospitals, security, transport, etc.
b) Buying as an investment property
 Does it fit with your investment strategy
 Are you trying to achieve capital appreciation or passive income form
rental?
 100 Point System

25. Global Investment Due Diligence
System (Big Data Analysis System)
-International currency movements & impact analysis
-Macro country based scenario planning
-Financial structure optimization system
-Country development partner trust assurance system
-Micro city based scenario planning (scores the best
suburbs to invest in)
-REAP - Property investment yield forecasting tool
(cash flow, tax, IRR)
-Pre-Purchase Due Diligence (Fraud prevention,
Property condition, Appraisal)
-REMS - Maximize your investment through ongoing
management
-Wealth Assist Solution - Live & online customer
assistance call center, 1to1 support.
-Customer Experience - Secure apps, secure
investment platform.
1
2
3
4
5
6
7
8
9
10
Our Secret Sauce:

26. Where to invest?

27. 5 continents, 9 office locations, truly global, on-the-ground teams.
THE GLOBAL SOLUTION – Wealth Migrate

28. Clem Sunter
Endorsed by 40 Global Leaders
and Property Experts!

29. Global Scenarios
Clem’s scenarios

30. Facts

31. 4 Dimensional Model

32. Global Property System (GPS)

33. Facts

34. Find
 Dolf De Roos - To find a deal one needs to:
• View 100 properties,
• Make a offer on 10
• Be accepted for 3
• Buy one!
 Law Two – “Always buy property with a twist”
 Law Three – “ Always buy from a motivated seller!”

35. Some things to consider
 New developments in growing markets
Buy a property tomorrow at today’s prices
Phase 1 = usually best value
 Worst property in the best street
Redevelopment / Refurbishment
 Older areas undergoing redevelopment
Urban regeneration: Johannesburg & Cape Town CBD, Kelvin,
Woodstock
London, Zone 1, 2, 3
 Added infrastructure
E.g. New tube stations, shopping centres, GauTrain

36. Finance
 Can you get a mortgage?
 How much?
 Law Four – “Always do the financial analysis before one buys!”
• Know what you can afford
• Do preliminary financing
• Do financial modelling on all perspective property purchases
• Understand all the costs
 Law Five – “Look at cash flow first, then capital appreciation!”

37. Power of leveraging
Bought July 2008 R750,000 Market
Transfer Costs R12,500
TOTAL COST: R762,500
Value in July 2009 R840,000 (12% growth)
Profit R77,500
Growth (ROI) 10.16% = Profit / Cost
Excludes agent fees etc

38. Power of leveraging
Excludes agent fees etc
Bought July 2008 R750,000 Market
10% deposit R75,000 90% Leverage!
Bond & Transfer Costs R19,000
TOTAL COST TO YOU: R94,000
Value in July 2009 R840,000 (12% growth)
Profit R71,000
Growth (ROI) 75.53% = Profit / Cost

39. Power of leveraging
Excludes agent fees etc
Bought July 2008 R750,000 Market
10% deposit R75,000
Bond & Transfer Costs R0 Off Plan
TOTAL COST TO YOU: R75,000 No Costs!
Value in July 2009 R840,000 (12% growth)
Profit R90,000
Growth (ROI) 120% = Profit / Cost

40. What does this mean for you?
Check the numbers!

41. Banks consideration for a mortgage
 The property itself: value, area (risk)
 Insolvent / Criminal Record / Judgments
 Credit Rating (www.credithealth.co.za)
 Income Statement: Income & Expenses
 Balance Sheet: Assets & Liabilities
 Suretyship
 Qualification, Job Industry & Position
• Earning power in SA?
 Other property in South Africa
 All this affects offer of loan amount + interest rate granted
 Income vs Asset Based Lending

42. Schedule of how much you can borrow
Calculated at 11% over 20 years
Purchase Price
Bond Amount
(10% deposit)
Gross Income Needed Monthly Repayment
R200,000 R180,000 R6,500 R1,950
R300,000 R270,000 R9,500 R2,850
R400,000 R360,000 R12,500 R3,750
R500,000 R450,000 R15,500 R4,650
R600,000 R540,000 R18,500 R5,550
R700,000 R630,000 R21,500 R6,450
R800,000 R720,000 R24,500 R7,350
R900,000 R810,000 R27,500 R8,250
R1,000,000 R900,000 R30,500 R9,150

43. Types of products
 Variable rate
 Fixed rate
 Access bond facility (Standard Bank), Flexi
Bond (Absa)
 Accelerator Bond (Absa)
 First time buyers mortgage (used to be able to
get 108%)
 Interest only mortgage (not yet in SA)

44. Purchase
Some manage to persevere
Our first example
 Law Six – “Property is secured in law, but it is
relationships which bring in the money!”
• Negotiating
• Sourcing
• Managing the process
• Management
 Law Seven – “Be in control, manage risk!”

45. Purchase Process
1. Signing Offer to Purchase (OTP)
• Subject to finance
• Use sellers bond agent
2. OTP accepted by seller
• 7-14 days for deposit
• Up to 30 days for mortgage approval
3. Complete bond application with supporting documents
4. Accepted OTP is returned
5. Send FICA to both attorneys
6. Sign bond & transfer Docs

46. Costs
 Transfer Duty (Individuals)
 Deeds Office search fee
 Deeds office fee
 Bond Attorney Fee | Can be included in price on new builds
 Transfer Attorney Fee | Can be included in price on new builds
 Post & Petties
​Value of the property (R) ​Rate
0 – 750 000 0%
750 001 – 1 250 000 3% of the value above R750 000
1 250 001 – 1 750 000 R15 000 + 6% of the value above R 1 250 000
1 750 001 – 2 250 000 ​R45 000 + 8% of the value above R 1 750 000
2 250 001 – 10 000 000 ​R85 000 +11% of the value exceeding R2 250 000
​10 000 001 and above ​R937 500 +13% of the value exceeding R10 000 000

47.  Bond Initiation Fee (± R5,700)
 Valuation Fee (± R3,000)
 Rates & Taxes (possibly upfront)
 Levy Clearance Certificate (± R450)
 FICA Fee (± R250)
 Other incidentals (± R5,000)
 Notary fee
Costs

48. Tax
Own Name Partnership CC Company SA Trust Offshore Trust
Transfer Duty 0-8% sliding scale 0-8% sliding scale 10% 10% 10% 10%
Income Tax 0-40% sliding scale 0-40% sliding scale 30% 30% 30% 30%
Tax on Distributions 0% 0% 12.5% 12.5% 0% 0%
Effective Tax 0-40% sliding scale 0-40% sliding scale 38% 38% 40% 40%
Primary ResidencePrimary Residence
Capital Gains Tax
i) Income
generating
property
investment
portfolios,
shares held by
a trust ii)
Property
clubs,
syndicates
Primarily Used For
15% 15%25% of gain at your
marginal rate -
effectively 10%
25% of gain at your
marginal rate -
effectively 10%
20% 20%
i) Primary
residence ii)
Non-income
generating
properties iii)
holding
vehicle
Law Seven – “Optimise your tax and financial strategies!”
Tax implications on rental income (SA=source based tax system)
SA tax number essential (IT77 from www.sars.gov.za)

49. Capital Gains
% of gain Tax Rate Effective
CGT
Individual 25% 0-40% 0-10%
Company / CC 50% 30% 15%
SA Trust 50% 40% 20%
 Individual’s CGT Allowance
• Primary Residence
• R2 million allowance per family, i.e. not R4m per couple
• No other primary residence, temporarily outside the country

50. Manage
 Managing your tenant
• Ski slopes of Switzerland
• Friends and family?
 Be careful not to underestimate time, cost & frustration involved
 Avoid vacancies!
• Missed rent
• Management fees
• New tenant = advertising / finding fee
• House-cleaning costs
• Possible damage

51. OLD SYSTEM IS BROKEN
* 2015CF-RE Crowd Funding for real estate, Massolution.com
Don’t Trust the system
People are tired of being poor, with
76% of people in USA being
concerned about their future and
only ¼ believing in the financial
system.
Little to no
Transparency
Your money is put in structures
which are very complex and you
have no idea what property you
have invested in, have no control
and most importantly don’t have
access to the actual numbers.
Higher fees, lower
returns, no Alignment
The returns are low, due to the
excessive fees of middlemen, who dilute
the return and result in less than 1% of
people in the Western World being able
to retire wealthy. There are too many
people between you and the property,
with interests not aligned.

52. COMPETITORS
The two leading crowdfunding companies, Fundrise and Realty Mogul, have
42,936 and 12,000 active users respectively, and have recently raised $142m
and $82m. Neither operate outside the US.

53. THE PROBLEM - GLOBALLY
Middle-class Real estate investors are recognizing the power of real
estate crowdfunding, but do not yet have an easy & safe way to
invest in global real estate markets.
Limited to
“in-country”
deals only,
causing
currency and
diversification
risks.
Barriers very
high to buy
& manage
offshore.
Offering global
deals is extremely
difficult. (legal &
banking, trust, compliance;
deal quality, partners,
language)
1 2 3

54. 5 continents, 9 office locations, truly global, on-the-ground teams.
THE GLOBAL SOLUTION – Wealth
Migrate

55. OUR STRENGTHS
Striving to build a trusted, simple, and transparent marketplace for investors all
over the world, of all investment experience levels and of all financial calibers
 Geographic diversity
reducing systematic risk
 Onsite due diligence for
each property
 Only invest in unique
properties
 Monthly updates
 Automated ‘bad actor’
and security checks
 Investments start at
USD10,000 only
 Leverage on our
partners’ expertise
 Dedicated education
portal for existing and
future investors
 9 offices over 5
continents
 Focusing on USA, UK,
Australia and Africa
 Investment Committee
invested USD1.34bn in
more than 10,800
properties to date
 13% + rate of return
 Invest based on income-
based returns
 Investors see returns
first
 Reduced operational
costs
 Stable short and long
term income
Investors & Members Global Presence Risk Control Stable Return
Expanding user base through
strong international presence,
variety of interactive events,
and existing users’ word-of-
mouth advertising
INVESTORS & MEMBERS
Established and constantly
expanding relationship network with
world-class real estate players to
source investment opportunities of
the highest quality
REAL ESTATE PARTNERS

56. How we connect them
OUR PLATFORM – Web & Mobile
REGISTER AND VIEW
Provide a verified e-mail
address will gain
immediate access to
carefully vetted global
real estate investment
opportunities
SELECT AN INVESTMENT
Choose an investment
that is most suitable in
terms of type, location,
investment amount, risk
preference and return
targets
TRANSACT
ONLINE
Complete the entire
process including legal
document signing online
and funds transfer
MANAGE PORTFOLIO
Access personal
investment dashboard,
receive investment
updates, tax documents
and review return
distributions
21 3 4
Easy to use and simple to understand portal designed to maximize user
experience and satisfaction

57. How we connect them
OUR PLATFORM
GLOBAL PORTFOLIO DASHBOARD V.2

58. AFRICA & SOUTH AFRICA
SOUTH AFRICA
FSB
Timing

59. Conclusion
49% of the world’s wealth is in property!
"To become financially independent you must turn
part of your income into capital; turn capital into
enterprise; turn enterprise into profit; turn profit
into investment; and turn investment into financial
independence."
Jim Rohn

60. Strategy
Find
FinancePurchase
Manage
Decision
Client
Partners
Wealth
Migrate

61. “Whatever you do, or dream you can,
begin it. Boldness has genius, power
and magic in it. Begin it now!”
Johann Wolfgang von Goethe

62. VISION

63. VISION – “A Family office in
everyone’s pocket!”

64. “Dream big, people become what they
dream!”
Questions and Answers