Proposal Presentation 111 Lougheed Road

Joint Venture OpportunityBarrie Detached House

3 Bedroom Detached Bungalow, 111 Lougheed RoadBarrie, Ontario

Thomas Wongwww.happinessinspiration.com416-806-9568thomaswong@rogers.com

www.happinessinspiration.com Thomas Wong - 111 Lougheed Road

The Project• The property was originally listed for $219,900. We are planning

to buy it for $200,000. The house is less about 8 years old.• The house is in good conditions. No real renovation is required.

We set a renovation budget for $3,000 as contingency funds.• The house was sold couple months ago to a builder for $235,000.

The builder is the current owner. They build a custom built home to the previous owner. They made money from that sales. The house has been vacant for the last two months. Hence, there are still room for negotiation on this sales.

• Based on the comparables, we expected the value to be around $215,000.

• We have a confirmed rent-to-own tenant.• Using Lease Option program as the exit strategy, potential

profit in 3 year will be around $37K


The Opportunity

• Project Finder/ Real Estate experts invest

– 5% of cash investment ($2,111)– Over 50 hours of time and expertise

• Cash partners invest:– 95% of the cash investment ($40,114)

• RRSP 2nd mortgage of $10K (12% interest)

• Split profit 35-65 ($13K - $24K)


Key Features of the Property

• 3 bedrooms, 2 baths detached bungalow• House painted in neutral color• Laminated floor on the main floor• Right next to school• Convenient South Barrie location• Walkout to fully fenced good size backyard• House about 8 years old• Nicely finished basement with full bath• Attached Single garage• House inspection to be completed


Current Pictures of Property

KITCHEN


Profile of the tenant

• A family of 4 (husband, wife and two young children)• The lady works for Home Essential as Sales Manager• The gentleman owns his clothing retail store in

downtown Barrie.• Their credit scores are in low 500 and hence need a little

time to rebuild credit. • They just sold their house (co-signed with her parents).

They have been in that house since 2004.• They do not want to have her parents to co-sign

anymore. Hence, they choose our rent-to-own program.


Current Pictures of Tenant’s Store


Financial AssumptionsDescription of the property:Type of Property: Free Hold

Current Purchase Price: $200,000 Monthly Market Rent: $1,400

Land transfer tax Other Ont. City $1,725

Rehab cost/setup cost: $3,000

Closing legal fee $2,500

Avg. Annual Appreciation 4%

Assignment fee $5,000

Adjusted Cost base: $212,225

Annual property tax: $2,625

After Repair Market Value: $215,000

Annual Insurance: $600

Financing:

1st MortgageInitial Cash Investment $42,225

1st Mortgage Amount 80% $160,000 DCR(Free Hold) 1.23Interest rate 4.5%

# of Amortization Years 35

2nd Mortgage RRSP 2nd Mortgage Amount $10,000

2nd Mortgage Interest rate 12%

Total Mortgage $170,000

111 Lougheed Road


Benefit to Lessee

Lessee's Point of View:3 Year Lease Opt.

Down Payment $6,000Monthly Rent $1,386

Monthly Option Premium $210Monthly Condo Fee $270

Total Monthly Payment $1,596

Addition Monthly Option Bonus $200Purchase price

at the end of lease term 241,846$ Down payment credit at

purchase $20,760% Down available at the end of

Lease 9%

Additional money credited to Leasee's downpayment at purchase


Joint Venture Profit -1

Investor's Point of View:

Option Exercised: 3 Year Lease Opt.

Total Gross Income during Lease Term: $ 284,542

Profit before Mortgage Payment: $ 62,642

Net Profit after Mortgage Interest: $37,829

Average Annual Net Profit: $12,610

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)


Joint Venture Profit - 2

Option NOT Exercised:3 Year Lease Opt.

Total Gross Income during Lease Term: $63,456

Profit before Mortgage Payment: $53,781

Net Profit after Mortgage Interest: $28,969

Average Annual Net Profit: $9,656

(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


Joint Venture Return Analysis

Joint Venture Analysis: % contribution Investment % Profit

Partner #1 (deal finder) Thomas & Bob 5% $2,111 35%

Partner #2 Investors 95% $40,114 65%

Option Exercised: 3 Year Lease Opt.

Net Profit after Mortgage Interest: 37,829$

Partner #1 (deal finder) Profit 13,240$ ROI 627%Partner #2 Profit 24,589$ ROI 61%


Map of the Area


Questions & Answers


Sample Pictures of Projects


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