EFTA02708340.pdf

Adilil. MICHIGAN 03 ■■■ I- ■ ■■ PROPERTY 0 ■ ■■ Real Time PORTFOLIO N INVESTMENTS EFTA_R1_02109424 EFTA02708340  • ■ ■ ■ ■ ■ An opportunity to invest in tenanted, fully ■ ■ managed residential properties in the USA, ■ yielding a minimum 12% net rental income iii ■ per property with potential for capital growth. Rea Time i INVESTMENT ■ Key features of this proposal MICHIGAN ■ PROPERTY ■ • The opportunity to purchase a portfolio of homes PORTI ■ priced between $45,000 and $65,000 each ■ ■ • Detached single family homes ■ • Fully refurbished and newly tenanted ■ • Property net rental income averages 14% of purchase price ■ INDEX ■ • Guaranteed 12% net rental income per property ■ for 2 years - with monies held in Escrow 2 Proposal ■ • Full property management in place during the life of your investment 3 Michigan ■ ■ • Carefully chosen communities for potential capital growth 4 Pockets of opportunity • • Buy at approximately half the cost of building new 5 Optimum price ■ ■ • Structure set up - new company, US bank account and 6 Quality assurance tax registration (LLC formation, ITIN and UN) • 6 The investment process ■ • Transparent investment process 8 Our rental guarantee ■ 9 Financials • 10 Management 10 Collection of rent • • 11 Personal tax • 11 Escrow account • • 12 Property examples • 13 Access to information • 14 Real Time Investments • • 15 The next step • • • • • • 0 • EFTA_R1_02109425 EFTA02708341  • rb ■ U The Metro CC D Lj Detroit Area (-no 0 u_ etroit city is only one component of Metro Detroit (3,888 square miles), I- which is comprised of six counties- U WARREN Lapeer, Livingston, Macomb, Oakland, St. Clair p Macomb County and Wayne. Time was when the fortunes of Metro I Warren (pop. 134,000) lies on the Clinton River about 7 IMMIN•ME•MM••••••••MMEM•Mil••••••••••••••••MM••••• Detroit were tied to those of the city. This is no longer true; many of the satellite municipalities miles (10 km) from the Lake St Clair shores which provides A Buyer s Market have established independent economies and now represent a greater proportion of the Metro area's wealth than Detroit city. the mainly catholic population with parks, golf courses and water-borne leisure activities. The city is home to the he residential property market in Michigan presents a rare General Motors Technical This is expressed statistically in the graph below investment opportunity: high yields combined with excellent r Centre, Chrysler, Campbell prospects for capital growth. Each of our properties in Michigan rb Ewald (part of a worldwide group of marketing and offers a minimum 12% guaranteed net rental income for two years and • METRO DETROIT • WAYNE COUNTY advertising agencies) and exposure to a housing market that is starting to rise from post-crisis lows. • DETROIT on • the US army s arsenal We prioritise high income over longer-term capital growth because the • former is within our control, while macro-economic trends have been especially hard to predict in recent years. • Location is key: we only operate in prosperous, economically viable neighbourhoods. • 1970 1960 1990 2000 2010 ■ After targeting an area we then search on a street-by-street basis, before selecting Sawa: US Olefin Swim p the outstanding individual properties. This ensures our homes are desirable L to potential tenants, as well as representing great value for investors. While the population of Detroit city has declined, We make sure our districts are in relative proximity to the city of Detroit, this rate of decline does not correlate with that • benefiting from the city's job market and infrastructure links, without being of Greater Detroit as a whole. In fact, if we omit the population decline from Detroit city from the • economically dependent on the city's fortunes. results then Metro Detroit's population would have • The Auto industry is a major employer in the area, with Ford, GM and Chrysler actually increased by 24% over the given period. • headquartered in Greater Detroit. All three recently reported strong results, This increase is a combination of people moving gaining combined market share for the first time in 20 years. Federal and private from Detroit city to suburban districts and a • investment in Detroit has also helped re-generate the Downtown area, attracting significant number of people moving from • a number of smaller businesses. The Technology and Medical sectors are other parts of the country, attracted to job growing particularly quickly, as the city continues to diversify its economy. opportunities in Metro Detroit's emergent • From a cultural point of view, Michigan has abundant resources: communities. The census figures show that adults • between 18 and 64 account for a healthy 63% well-established universities, sports teams and museums. The University of Michigan at Ann Arbor ranks in the top 20 of universities worldwide, of the Oakland, Macomb and Wayne population • attracting young, educated people to live and work in the local area. (the suburban areas of Metro Detroit). • 2 • 3 • EFTA_R1_02109426 EFTA02708342  Pockets of MAP OF METRO DETROIT EASTPOINTE opportunity Warren Macomb County • St Clalr Southfield Eastpointe (pop. 32,442) is he statistics paint with a • Sherwood Eastpoi Shorn famous for its summer festivals T Forest • broad brush; some places Grosse and winter events, many have fared better than others; North Rosedale •=University City Point centred on the John F Kennedy Redford • Bagley Woods Memorial Park. It boasts the properties in some areas are on the • best fresh water boating in the way to recovery, others are not. We DETR Dearborn area. Its neighbours are the C Fashionable Grosse Pointe and have researched the areas where the 0 St Clair shores. Lake St Clair is pockets of opportunity still exist: Lincoln CANADA Detroit Park just 5 miles (8Km) to the east. Warren, Southfield, Eastpointe, Redford, Metropolitan f •!awaimai It is proud of its educational Airport MILD facilities that stretch from North Rosedale, Bagley, Sherwood and • RTI Ares pre-school through to adult University City (see map). We are also colleges. Commercially, it is watching other promising communities. more of a resort than a city. Our search for suitable property OPTIMUM YIELD is guided by the following: • The houses are brick built, detached and in good condition • The properties have potential for capital growth • The ratio of rental income to purchase price is unusually high • There is a sustained demand for rental property • There is a good and improving infrastructure of educational, social, health and transport facilities • There is an expanding commercial/ This graph indicates the way typical net rentals rise fastest on industrial environment properties worth up to $65,000 and then flatten out. Below offering well-paid jobs. 540,000, the properties are expensive in relation to the cost of refurbishment and stability of tenancy. The average This map shows areas where optimum yield on properties worth between $45,000 to these criteria can be met. 565.000 is between 14-15% sometimes more. EFTA_R1_02109427 EFTA02708343  Quality Assurance PRE-PURCHASE POST-PURCHASE hen we find a suitable We sell the house tenanted, in PROPOSAL: We suggest a portfolio of CONTRACT: Once the funds have cleared, we property, we seize the good condition and fully refurbished properties that approximate in value will assign ownership of the properties to w opportunity to buy, make at a price that provides the buyer your intended investment. We encourage you. The attorney will record the deeds with whatever reparations are necessary with a first class investment. you to consider this carefully. the city's administrative offices and a copy and let it to people of good standing. of the deeds sent to you for safekeeping. We will also continue to look RESERVATION: If you are satisfied, This is your assurance of value and after your interests during the you complete a Reservation Form APPOINTMENTS: After purchase, Real Time our commitment. whole period of ownership and (see pocket inside the back page). Investments will, on your behalf, undertake: will even help you with an exit AGREEMENT: Within a few days of • Instruction of a Property strategy when required. your reservation, you will be sent a Management company standard US Purchase Agreement form. • The appointment of a Portfolio Manager SCHEDULE AND TRANSFER OF FUNDS: The appointment of Power of Attorney for building insurance purposes The Investment Process Your US attorney or Title Company will send you a scheduled date for the completion of each property in Accountancy services as required. your portfolio known as Closing Dates. Your post-purchase pack will contain larity and transparency are full details of the above and other C the hallmarks of our business. We will answer your questions These documents must be signed and returned to the attorney or the essential information. with candour and make arrangements Title Company in the USA as soon as COLLECTION OF RENT: The rent will for you to visit the properties if you wish. possible. The total amount of your be collected on a monthly basis funds must clear before the earliest and the net amount (see page 10) The investment process is divided as follows: closing date. Note that penalty charges distributed monthly or quarterly. may be incurred for late clearance. INE•••••••••••••••••••••••••••••••MIPIPIEM•O•Ernll•EM•01•ME•E••••••••••••••••••••1 NORTH ROSEDALE Wayne County North Rosedale (pop. 3,380) is part of the Rosedale Park Historic District, a tree-laden neighbourhood of great charm. It is noted for the Englishness of its architectural styles and street names. The quality of house building together with its strong community spirit made it impervious to the troubled times experienced by some of Detroit s southern suburbs. Apart from good shops and local offices, North Rosedale is a mature, safe, residential area. EFTA_R1_02109428 EFTA02708344  Our rental Purchase example guarantee based on ten properties ur rental guarantee covers the net PURCHASES (one time costs) $ rent obtained from each property SOUTHFIELD in your portfolio and for two years Purchase price of ten portfolio properties 500,000 Oakland County Southfield (pop. 71,739) is from purchase. If your net rental income Legal fees 4,500 per property exceeds our guaranteed Company formation, ITIN" registration and associated costs 600 principally an upmarket business area whose daytime population 12%, you will keep the surplus. That is, the Title insurance 4.000 soars to 175,000. It is visually Other costs 2,500 rental guarantee does not limit the actual expressed by the Golden Triangle", a cluster of five yield on any property in your portfolio. TOTAL 511,600 contemporary golden skyscrapers Property taxes for the portfolio are paid in advance and hence an allowance providing over 2 million sq ft of Net rental income is what remains after to pay the prorated amount will need be added on the closing statement offices. It is also one of the most property management fees, property tax 1 ITIN - Individual Taxpayer Identification Number required by the IRS desirable residential communities with a nationally recognised and buildings insurance has been deducted education system, a byword for from the gross rent (see table opposite). cosmopolitan entertainment Any costs of maintenance for a property in and 770 acres of parkland. your portfolio (labour, parts and materials) REVENUE Monthly ($) Annually ($) are not included. The net rental income The NET rent is equal to the CROSS rent less: Property management fees, building insurance and property ca.,' is adjusted annually to take account of GROSS RENT 9,000 108,000 changes in property tax and insurance rates. Less: Property Management 720 8,640 The rental guarantee period provides a Property Taxes' 1,667 20,000 level of reassurance that your income is safe Buildings Insurance 563 6,750 while you get to know the characteristics NET INCOME 6,050 72,610 of the US property market. It covers both NOTE: All utility bills are paid by the tenants foreseen and unforeseen eventualities the 2 Although Property Taxes are paid in advance, we Include it to most common of which is the dead period arrive at a valid net rental figure for the relevant tax year. and costs incurred of a change in tenancy. After two years, we will continue to look after your investment with due diligence HOW DOES THE GUARANTEE WORK? $ S and always keep you informed by email Suppose: net annual rental income is Unlikely' (11% ) Guaranteed (12%) Expected (14%) and through your secure on-line portal. Equivalent to 55,000 60,000 72,620 Guaranteed supplement 5,000 Total rental income retained 60,000 60,000 72,610 3 For example, in the event of one property being vacant for a short period. 9 EFTA_R1_02109429 EFTA02708345  • • ■ • • r • • I- • U • r • • • Management Personal tax • • • ood management of the property is essential and he personal tax position will vary rb • • • pi we have a first class team who keep you updated on a daily basis. Its remit is as follows: depending on your status and country of residence. For example, if you are investing as an individual or as a corporate • • V REDFORD Wayne County • Make regular external inspections to ensure the property Redford (pop. 51,622) is the ■ entity. The US has reciprocal tax agreements L arguably the prettiest suburb and its grounds are in good condition with most countries so that the tax taken • of Metro Detroit. The Rouge • • Ensure that the tenants are still in residence and report by the US is credited against your personal • River meanders through • any irregularities tax liability in your country of residence. p it fringed by parkland, a • • Make regular internal inspections to ensure the fabric stunning display of colour in the fall. It is said Redford • of the buildings remain in good condition As a foreign investor you only get taxed on your reflects the face of America: • income earned and assets held in the USA. It does a population of all ages, races • • Respond to emergency call outs from the tenants not apply to any income earned or assets held and religious backgrounds. It is a residential area • • Attend to any repairs and/or replacements necessary. outside the USA unless you are a US citizen. providing a workforce for • the surrounding commercial • If there is a change in tenant, an immediate search for a new We can provide general advice and introduce and industrial enterprises. • tenant will be initiated. The loss of rent and the costs of finding you to specialists who can help. • a new tenant are protected by our guarantee. The cost of repairs L • and dilapidations are, as specified earlier, not covered. • • • • • • Escrow account • • • • Collection of rent • • • hen we create a portfolio for a • • • • ur administrative team will be responsible for the ka client an Escrow account is opened for that portfolio in the name of • • • LI0 monthly rent collection and the bookkeeping. Your secure on-line portal will keep you up to date. the investor and a sum deposited by Real Time Investments to the value of 12% of • • • Changes of tenancy, defaulting tenants and other problems will the purchase price of each property. Your • • be dealt with immediately to ensure that any income disruption account is reviewed after 12 months and any • • is minimized. The 12% guarantee protects you from these shortfall in the actual net rental income is r • eventualities for the first two years. US law is also firmly on the made up to 12% from the Escrow account. I • side of the owner in the case of tenants defaulting on payments. L • • • • • • • 10 • • ■ • EFTA_R1_02109430 EFTA02708346 Portfolio examples Access to Information nvestors will have their own secure on-line portal. Your Portfolio Manager will keep you up to date with I information about your investment on a regular basis. This will include: • Monthly accounts showing income and outgoings • Cash flow reports • Reports on tenancies, dilapidations, emergency call outs, repairs and other costs • A two-way messaging service • Archived documents (e.g. management and tenancy agreements) Of course you are always welcome to phone the UK or USA teams. Details are on the back page. Clockwise from top left: Bagley, 3 bedrooms. North Rosedale Park 3 bed rooms. Redford, 3 bedrooms. Eastpointe, 4 bedrooms. Redford 3 bedrooms. Southfield 3 bedrooms. SHERWOOD FOREST UNIVERSITY DISTRICT Wayne County Wayne County Sherwood Forest (pop. 1,100) has been a part of Wayne University District (pop. 71, 739) lies next to the Detroit County s heritage since 1917. The neighbourhood is Mercy University and the prestigious 36-hole Detroit known for its architecturally distinctive homes, its Golf Club. Although most of the houses are Tudor quiet, winding streets, Sunday jazz in Sherwood Park, in style, they range from Italianate and Queen Anne its convenient city location and its talented residents. to Spanish Mission and Art Moderne, all part of the The quality of the village is strictly monitored golden age of housing when craftsmen worked with by the Sherwood Forest Association resulting in the best materials. Turkel House (right), just inside the being named a Detroit Historic District in 2002. University District, is a Frank Lloyd Wright showpiece. EFTA_R1_02109431 EFTA02708347  • • ■ • • r • U • • • r • • • Real Time Investments The next step • • eal Time Investments is a property investment roperty prices have bottomed • • R company focus