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Rent-to-own project proposal from Thomas Wong, Crazy Thomas. Another great project for >20% ROI per year. Contact Thomas at 416-806-9568 for further information.
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Joint Venture OpportunitySemi-detached House in Brampton
4 Bedroom, 2 Bath 18 Sharon Court, Brampton, Ontario
Thomas Wongwww.happinessinspiration.com416-806-9568thomaswong@rogers.com
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
The Project• The property is a semi-detached house in a convenient location in
Southern part of Brampton.• The house is originally listed for $249K. The décor is a bit dated
and needs upgrade.• We got the offer accepted to buy the property for $225K. The
current closing house is set for October 12, 2009.• We are planning to spend about $10,000 to improve the property.
The after repair is between $255K-$260K• We have a confirmed rent-to-own tenant, signed a Lease Option
agreement. The tenant already paid $4,000 toward the purchase deposit. The tenant is planning to move into the property by November 1, 2009.
• Using Lease Option program as the exit strategy, potential profit in 4 year will be around $72K
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
The Opportunity
• Project Finder/ Real Estate experts invest
– 5% of cash investment ($3,224)– Over 50 hours of time and expertise
• Cash partners invest:– 95% of the cash investment ($61,251)
• Split profit 33-68 ($23K - $49K)
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Key Features of the Property
• 4 bedrooms, 2 full baths semi-detached house with large pie shaped lot
• Convenient location in Southern Brampton• Attached storage shack• Separate entrance to basement• 2 Kitchens• Newer roof (2007)• Long driveway for 3-4 car parking
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Renovation plan for the Property
• Upgrade the main floor kitchen
• Upgrade the flooring on the main floor (ceramic and laminate flooring)
• Painting at required area
• Upgrade the fuse panel to circuit breaker panel.
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Profile of the tenant
• A family of 2 (mother and young adult son) • The lady works for Rogers for over 10 years and the son
works for TD Bank.• Their combined income is about $55,000• The mother credit score is about 650. • They only need to save a bit more down payment to get
a good mortgage.• They already signed a lease with option to purchase
agreement and got $4000 from them to confirm their participation in the rent-to-own program. The total initial deposit from the tenant will be $7,000.
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Financial AssumptionsDescription of the property:Type of Property: Free Hold
Current Purchase Price: $225,000 Monthly Market Rent: $1,500
Land transfer tax Other Ont. City $1,975
Rehab cost/setup cost: $10,000
Closing legal fee $2,500
Avg. Annual Appreciation 5%
Assignment fee $5,000
Adjusted Cost base: $244,475
Annual property tax: $2,900
After Repair Market Value: $254,000
Annual Insurance: $600
Financing:
1st MortgageInitial Cash Investment $64,475
1st Mortgage Amount 80% $180,000 DCR(Free Hold) 1.31Interest rate 4.5%
# of Amortization Years 35
2nd Mortgage RRSP 2nd Mortgage Amount2nd Mortgage Interest rate 14%
Total Mortgage $180,000
18 sharon -
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Benefit to Lessee
Lessee's Point of View:4 Year Lease Opt.
Down Payment $7,000Monthly Rent $1,440
Monthly Option Premium $255Monthly Condo Fee $270
Total Monthly Payment $1,695
Addition Monthly Option Bonus $200Purchase price
at the end of lease term 302,900$ Down payment credit at
purchase $28,840% Down available at the end of
Lease 10%
Additional money credited to Leasee's downpayment at purchase
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Joint Venture Profit -1
Investor's Point of View:
Option Exercised: 4 Year Lease Opt.
Total Gross Income during Lease Term: $ 362,420
Profit before Mortgage Payment: $ 103,945
Net Profit after Mortgage Interest: $72,338
Average Annual Net Profit: $18,084
profit before mortgage payment - interest portion of mortgage payment
selling price + 36*(monthly rent - monthly option bonus)
gross income - adjusted cost base - 3*(property tax + insurance)
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Joint Venture Profit - 2
Option NOT Exercised:4 Year Lease Opt.
Total Gross Income during Lease Term: $88,360
Profit before Mortgage Payment: $74,360
Net Profit after Mortgage Interest: $42,753
Average Annual Net Profit: $10,688
(Note: Profit does not included the increase in property value)
initial down payment + 36*(monthly rent + monthly option premium)
gross income - adjusted cost base - 3*(property tax + insurance)
profit before mortgage payment - interest portion of mortgage payment
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Joint Venture Return Analysis
Joint Venture Analysis: % contribution Investment % Profit
Partner #1 (deal finder) Thomas & Bob 5% $3,224 32%
Partner #2 Investors 95% $61,251 68%
Option Exercised: 4 Year Lease Opt.
Net Profit after Mortgage Interest: 72,338$
Partner #1 (deal finder) Profit 23,148$ ROI 718%Partner #2 Profit 49,190$ ROI 80%
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Map of the Area
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Questions & Answers
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
Sample Pictures of Projects
www.happinessinspiration.com Thomas Wong - 18 Sharon Court
We turn real estate opportunities into
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