INVESTMENT OPPORTUNITY

4 Bedroom Semi-Detached

23 Ashdale Court Barrie, Ontario

Closing Date: April 29, 2011

Contact Information

Andrew Brennan Mailing Address: 70 Fairway Crescent, Wasaga Beach, ON, L9Z 1B8 Res. Phone: 705-429-6446 Cell Phone: 705-220-5166 Fax: 705-429-4827 Email: brennanproperty@rogers.com

Table of Contents

A. Objectives and Summary B. Property Numbers Summary

C. Property Proforma

D. Pictures

A. Objectives and Summary

1) To purchase a cash flowing Real Estate Investment property, in the

growing Barrie, Ontario market. Use the fix and re-finance strategy to force appreciation on the property and return a large portion of the investor’s original investment to improve the annual return on investment. Property is re-financed 2 or 3 months after closing.

2) Original investment of $49,210. The estimated funds returned to the

investor after repairing and re-financing is $28,000. Resulting in an ongoing investment of approximately $22,000. Will pay the interest on the investor’s leveraged funds.

3) Fixer upper, 4 bedroom, 1 1/2 bath, semi-detached 4 level back split,

MLS# price $189,900 accepted purchase price is $175,000. The expected rent of $15,900 per year. Represents a yield of 9.08%

4) The current estimated market values of these properties (based on

market comparables from sales in the area) are estimated at $210,000 The property will have approximately $35,000 in equity after repairs.

5) Currently property is owner occupied and will be moving out upon

possession. Market rental comparables in the area are $1,250 - $1,400. We will rent this unit for $1,325.

6) The market rental of the property will provide a positive cash flow

position for the property (based on a conservative proforma) • Estimated positive cash flow based on attached profroma –

additional reserve funds have been budgeted (3 extra months rent).

• $357/ month (see attached details)

7) Total estimated investment is $49,210. This will cover all down payments, closing costs, repair materials, and reserve funds. There is no charge for labour for the repairs.

8) Based on a estimated 5% per year appreciation the estimated return for

the on going investment of $22,000 would be 364% or $80,193

B. Property Numbers Summary

A. Summary B. Property Summary Information & Strategy

23 Ashdale Barrie, Ontario

Semi-Detached - Property Executive Summary

The Numbers

Purchase Price $175,000 Appraised Value (after repairs) $210,000 Down Payment $35,000 Estimated Renovations $5,000 Mortgage After Repairs ( variable rate 2.3% 35 yr Amort.) $168,000 Second Financing $0 Investment After Re-financing $22,000 (including all renovations, down payment, and closing costs) Year 1 Annual Cash Flow $4,284 Year 1 Mortgage Reduction $3,470 Year 1 Profit $7,754 Year 1 Cash on Cash Return 19.5% Year 1 Return on Investment 35.2% Estimated 5 Year Value (5% growth/year) $268,019 Estimated 5 Year Mortgage Balance $165,826 Estimated 5 Year Profit (5% growth/year) $80,193 (Estimated 5 Year Value - Mortgage Balance – Down Payment) Estimated 5 Year Return on Investment 364%

Property Summary: The Property

Year Constructed 1970 Sq Ft 1,001 (approximately 1,600 total finished) Room 7 rooms, 4 bedroom, 1 1/2 bathrooms Parking Attached garage and driveway for 2 cars Appliances Included Fridge, stove, washer, dryer Taxes $2,318 (2010) Foundation Concrete Construction Frame Roof Asphalt Shingles

The Benefits Key Features:

• Low investment funds required, initial investment of $49,210 but only $22,000 as an on going investment is required to own an arm-chair investment opportunity. Included in initial investment all funds required (down payment, reserve funds, renovation fund, and closing costs)

• Purchased significantly below market levels (estimated $35,000 in equity with the fix and re-finance strategy).

• Desirable neighbourhood for market appreciation. Barrie is rated in the top 10 cities in Canada for real estate in investment

Tenants, Property Management and Exit Strategy

Tenants: Similar units are renting between $1,250 - $1,400.

Currently owner occupied. Rents will start at $1,325. Property Management: Brennan & Associate Inc. will provide full service

Property Management services Renovation Strategy: Brennan & Associate Inc. Property will be renovated

before the tenant moves in and should not require repairs after rented resulting in lower maintenance costs

Exit Strategy: Buy/Hold (4 – 6 years), keep property in good shape renting to equity building tenants. Attempt to sell property to tenant after holding period.

C. Property Proforma’s

A. Cash Flow Summary B. Total Investment Projection

23 Ashdale Court Barrie, Ontario

Purchase Price $175,000 After Repairs Appraised Value $210,000 (market Comparables) Financial Breakdown Sale Price $175,000 Down Payment $35,000 First Mortgage $140,000 (new financing, variable rate @ 2.3%, 35 yr Amort.) Second Mortgage $0 Income Monthly Annual Market Rent $1,325 $15,900 Expenses Property Taxes $-193 $-2,318 Insurance $-75 $-900 Repairs and Maintenance Factor $-50 $-600 Property Management $-0 $-0 Total Expenses $-318 $-3,816 Cash Flow Before Debt Payment $1,007 $12,084 First Mortgage Payment (interest + principle) $-586 $-7,032 Interest on investor’s investment $-64 $-770

Cash Flow $357 $4,284 Mortgage Principle Reduction $261 $3,470 TOTAL CASH FLOW $618 $7,754 PRE-TAX CASH ON CASH RETURN 19.5% RETURN ON EQUITY 35.2%

23 Ashdale Court Barrie, Ontario

ESTIMATE INVESTMENT PROJECTION

Down Payment $35,000 Renovations $5,000 Approximate Closing Costs Inspection $350 Value Appraisal $0 Up Front Property Taxes $1,100 Legal Costs and Land Transfer $3,785 Tenant Acquisition Costs $0 Staying Power Fund (3 months rent) $3,975 Total Required Cash Investment $49,210 Estimated Funds available after re-financing $28,000 On going investment $22,000

D. Pictures

23 Ashdale Barrie, Ontario

Separate dining room Living room has large front window

Large eat in kitchen, requires new flooring and painting

Newer carpet in all 4 bedrooms

Basement rec room needs flooring, Bathrooms need updating and paint Ceiling and touch ups

Windows were replaced in 1998, deep back yard, furnace installed 2000, side and rear

entrance