186 ellesmere

Joint Venture Opportunity3 Bedroom HouseToronto, Ontario

Michael [email protected]

Michael Lee -- Rent To Own

The Opportunity

• Project Finder/ Real Estate experts invest

– 5% of cash investment ($3,498)– Over 50 hours of time and expertise

• Cash partners invest:– 95% of the cash investment ($66,453)

• Split profit 35-65 ($22K - $41K)


Key Features of the Property• 3 bedrooms bungalow house

• Convenient location to shopping complex

• Bank sale

• It also has a bigger lot (45 ft x 132 ft)

• We are planning to upgrade the roof, kitchen, & basement


Current Pictures of Property


Previous Pictures of Property


Profile of the tenant

• A family of 3 (husband, wife, & son) • The lady works for Winner’s.• The gentleman works for Winner’s as a

Sales Supervisor.• Their combined income is over $70,000• They had credit issue (recovering from

2008 bankruptcy) and hence need a little time to rebuild credit.


Financial AssumptionsDescription of the property:Type of Property: Free HoldCurrent Purchase Price: $250,000 Monthly Market Rent: $1,500Land transfer tax Toronto $4,450Rehab cost/setup cost: $20,000

Closing legal fee $2,500Avg. Annual Appreciation 4%

Assignment fee $5,000Adjusted Cost base: $281,950

Annual property tax: $2,400

After Repair Market Value: $310,000 Annual Insurance: $600

Financing:

1st MortgageInitial Cash Investment $69,950

1st Mortgage Amount 80% $200,000 DCR(Free Hold) 1.28Interest rate 4.5%# of Amortization Years 352nd Mortgage RRSP 2nd Mortgage Amount $12,000 125002nd Mortgage Interest rate 14%Total Mortgage $212,000

186 Ellesmere Rd.


Benefit to Lessee

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

Down Payment $6,000Monthly Rent $1,395

Monthly Option Premium $600Monthly Condo Fee $270

Total Monthly Payment $1,995

Addition Monthly Option Bonus $200Purchase price

at the end of lease term 343,703$

Down payment credit at purchase $34,800% Down available at the end of

Lease 10%

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: $ 386,723

Profit before Mortgage Payment: $ 95,773

Net Profit after Mortgage Interest: $64,217Average Annual Net Profit: $21,406

selling price + 36*(monthly rent - monthly option bonus)

gross income - adjusted cost base - 3*(property tax + insurance)

profit before mortgage payment - interest portion of mortgage payment


Joint Venture Profit - 2

Option NOT Exercised:3 Year Lease Opt.

Total Gross Income during Lease Term: $77,820

Profit before Mortgage Payment: $68,820

Net Profit after Mortgage Interest: $37,265Average Annual Net Profit: $12,422

(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 % ProfitPartner #1 (deal finder) Mike & Bob 5% $3,498 35%

Partner #2 Investors 95% $66,453 65%

Option Exercised: 3 Year Lease Opt.

Net Profit after Mortgage Interest: 64,217$ Partner #1 (deal finder) Profit 22,476$ ROI 643%

Partner #2 Profit 41,741$ ROI 63%


Map of the Area


Questions & Answers