february 2012 magazine

Q Private Residences

Vancouver CANADA

Q

Into Downtown Vancouver

QQ Private Residences:

2012 / 13 Investment Intentions A discussion about what we have done and where we are going

I H

Q Q QING QING

INVESTMENT

HOLDINGS

REIN™ Canada member

Into Downtown Vancouver QQ PR’s 2012 / 2013 Investment Intentions

Contents

© Qing Qing Investment Holding Inc. 2012

NOTES * Past performance is not indicative of future performance.

* This discussion paper is not intended to be a sales document. Rather it is a vehicle for us to

i. profile the investment processes we have followed over the past 8 years, and ii. Express

our plans / intentions for the following few years.

* Every effort has been made to ensure the accuracy of the information we have presented

and we are pleased to share the source material with anyone that requests to see it.

* All amounts presented are Canadian dollars.

INTRODUCTION Consistent, reliable, repeatable…real estate investment….financial freedom

CEO’S LETTER TO YOU INVESTMENT STRATEGY 2012 / 2013 INVESTMENT INTENTIONS INSIDE STORY A detailed account of a Pool #1 apartment purchase NO VACANCY – REALLY? YES SNAP SHOT THE QQ PRIVATE RESIDENCES BRAND THE IMPORTANCE OF A GREAT TEAM QUESTIONS & ANSWERS CONCLUSION Appendix: i PHOTOGRAPHS A selection from Pool #1

ii DIRECTORY


Introduction

Consistent, reliable, repeatable….real estate investment…. financial freedom

Qing Qing Investment Holdings Inc., was founded

five years ago by its President and CEO, Angela

Peng, to formalize her investing in downtown

Vancouver real estate . She made her first

purchase in 2004.

After completing an MBA (with Honors), in eastern

Canada, she moved to Vancouver and began

researching the real estate market investment

opportunities.

Anxious to use her MBA she worked for a US

venture capital firm managing its Asia Pacific

operations in the Greater China area. Despite the

exciting nature of the job she was searching for

financial freedom so she returned to Canada in

2002 and began educating herself about real

estate investment.

Entrepreneurship is a deeply engrained in her,

evidenced by her passion for real estate investing,

the Entrepreneur Scholarship she was awarded

while studying for her MBA and her nomination

for BC Entrepreneur of the year in 2004.

Unlike some investors she did not start the

process with a large cash balance so her journey

has been one of persistence, hard work and

calculated action.

The results have been spectacular and it is her

intention to use the knowledge gained to expand

the business and acquire additional properties

during 2012 / 2013, in conjunction with

likeminded partners.

To gain a deeper understanding of the local

market, and the associated rules & regulations,

she completed both the Realtor Licensing and

Mortgage Broker Licensing courses at the

University of British Columbia.

In addition to undertaking the study at UBC, and

gaining a deep insight into the property

investment mortgage market, she followed very

closely Canada’s premier property investment

training institution – the Real Estate Investment

Network “REIN” - formally becoming a Member of

this premier organization in 2011.

The in-depth investment knowledge and support

provided by REIN, and its members, is an

invaluable tool for any committed Canadian real

estate investor.

THIS DISCUSSION PAPER

Over the past 5 years much has been learnt and

excellent money made, and the first portfolio

(Pool #1) is maturing very nicely!

This paper has been assembled with the intention

of providing readers with an insight into the

assembly of portfolio Pool #1, lessons learnt,

interesting ‘real world’ stories gathered and

details of the investment returns that Pool #1 is

providing.

NEVER STOP GROWING

Having proven the investment model, refined a

deep niche market knowledge and established a

repeatable approach the business is ready to

grow.

Assembling this document is the first step on the

path to expansion.

Please enjoy the photographs of some of the

properties in Pool #1 at the rear of this document.


Real Estate Investment

INVESTOR ASSET MANAGER

I arrived in Canada 10 years ago knowing nothing about the local

markets, now I have a real estate portfolio that supports itself, my

family and allows me to keep investing.

“

” ANGELA PENG

FOUNDER, PRESIDENT & CEO QING QING INVESTMENT HOLDINGS Inc.

QQ Private Residences

I H

Q Q QING QING INVESTMENT HOLDINGS

REAL ESTATE INVESTMENT QUOTES THAT ARE WORTH REPRODUCING:

“It’s tangible; it’s solid; it’s beautiful; it’s artistic. I just love real estate.”

DONALD TRUMP

“Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.”

MARSHALL FIELD, founder Marshall Field department store

“Landlords grow rich in their sleep.”

JOHN STUART MILL, Philosopher & Writer

“It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.”

ANTHONY TROLLOPE, Author

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent: real estate is the basis of wealth.”

THEODORE ROOSEVELT, former American President


“The driving force behind QQ Private Residences”



Our CEO’s Letter to you

I arrived in Canada about 10 years ago knowing

nothing about the local markets, and now - 8 years

after I started investing - my company (Qing Qing

Investment Holdings Inc.) has a real estate portfolio

that supports itself, my family and allows me to

keep investing.

I have a passion for real estate investing and a well

deserved fondness for investing in downtown

Vancouver (you will see why when you read

paragraph 4). I love my tenants and my real estate

investment team – without them it would not have

been possible.

There are many market segments in which one can

invest but I have chosen downtown Vancouver as

my niche. The insatiable demand for well presented

rental property from a wide mix of tenants, the

historically steady increase in property values and

the reliable employment market are just three of

the reasons it appeals to me.

I have carefully, and deliberately (because I had to

since I didn’t start with large pile of cash) , used

credit to leverage my returns. Over the past 5 years

my passion and careful approach has been

rewarded and now we have a healthy equity

position in the properties, contingency cash and

sweet positive cash-flow.

MY SECRETS TO REAL ESTATE INVESTMENT

SUCCESS

There are no secrets, I work very hard to:

- source suitable property that I will only buy if the

price is acceptable to me (no impulse buys allowed),

- renovate to create boutique (wide appeal) living

spaces,

- furnish with style and flair to provide clients with

price competitive accommodation that far exceeds

the competition in terms of livability,

- watch every penny, and

- filter clients carefully before allowing them to “join

the QQ Private Residences family”,

- do it again.

OUR CAPITAL IS VERY PATIENT, BUT NOT LAZY

I have a long-term HOLD mentality (in fact in our

business plan the section addressing “Selling” is

blank – I can’t think of anything sensible to put in

there :).

Combining all of the elements above means that the

portfolio is self supporting so there is nothing to

gain and a lot to lose by selling.

My capital is very patient and with it growing every

year why wouldn’t it be? (and the positive cash-flow

is icing on the cake!)

ME / US

I pride myself in being very stable, consistent,

reliable, honest, ethical and with integrity, and I

have no intention to change – these traits have

served me very well! These are the principals that

permeate the QQ Private Residences business at all

levels.

JOINT VENTURING MULTI-FAMILY POOL #1 and

BUILDING INVESTMENT POOLS #2, #3 AND #4…..

My next challenge is to expand the portfolio over

2012 - 2013 and this will involve sharing with

likeminded friends and partners.

I have decided we will raise funds (during 2012) by

Joint Venturing Pool #1 and then partnering in the

assembly of additional Pools. As with Pool #1 each

Pool will contain 6 properties. 6 because I have a

comprehensive data set on Pool #1, assembled over

the past 5 years, and this allows me to transparently

demonstrate our outstanding track record showing

why I will do it again and again!

Yours faithfully,

Angela Peng

Founder, President & CEO

Qing Qing Investment Holdings Inc.

QQ Private Residences


Into Downtown Vancouver

SAFE, SECURE, REPEATABLE,

OUTSTANDING INVESTMENT

RETURNS

2.4+

MILLION

Value (C$) of Pool #1 as at December 31, 2011

6 Number of properties in Pool 1

We love our tenants



Our Investment Strategy

Having a strategy matters and it needs to be more

than just “buying property” and going along for the

ride.

Adherence to the strategy, and execution, is what

produces results. We create value when we buy,

when we strategically structure the financing,

through careful renovation, by creatively marketing,

by focusing on careful tenant selection and actively

managing every aspect of our investment in the

portfolio. (Please read the detailed account of the

apartment on the following pages to gain a better

understanding of how this works in practice)

This is our strategy:

I LOCATION LOCATION LOCATION

Concentrate on “B” Class apartments in “A”

Class downtown Vancouver, a location that

historically demonstrates value strength and

a craving demand from a diverse tenant

pool. There is an extensive inventory of

quality buildings. Core downtown

apartments with extremely high ‘walkability’

scores.

II ADD VALUE, IMPROVE RENTABILITY

Acquire properties that are operating below

their peak. Acquire properties below

market. Renovate to improve appraised

value and rental appeal.

III SELECT QUALITY TENANTS

Creatively market the property and apply a

disciplined tenant selection process to

maximize income and reduce ongoing

management demands.

IV ACTIVELY MANAGE, MARKET VIGILENCE

Pay close attention to tenants needs in an

attempt to have them respect the property

and thereby minimize the need for repairs on

turn-over. Conduct regular market research

to ensure the properties are presented such

that they are suitable to the widest possible

audience.

V FINANCIAL RESPONSIBILITY

Maintain a financially responsible Balance

Sheet with appropriate insurance coverage

and contingencies that match the long-term

outlook of the portfolio.

VI REPEAT AND GROW

Having demonstrated we have developed a

repeatable model we continue to grow

the property investment business.


2012 / 2013 Investment Intentions



2012 / 2013 Investment Intentions

2012 / 2013 INVESTMENT INTENTIONS

I JOINT VENTURING of

POOL #1

Having demonstrated an ability to acquire,

renovate and rent properties, we have a

strong desire to grow. To achieve this we

are going to introduce a Partner (or

multiple Partners), early in 2012, into Pool

#1 and then a.s.a.p. during 2012 and 2013

deploy the funds (with partners) in the

assembly of additional Pools.

II WORKING WITH PARTNERS TO

ASSEMBLE ADDITIONAL

INVESTMENT POOLS

Building on the extensive knowledge and

experience gained over the past 8 years we

are actively working on assembling 3

additional pools during 2012 / 2013.

(We have a desire to own apartment

buildings in downtown Vancouver but

satisfying this hunger will have to wait a

while longer! We are realists and we

recognize that growing steadily is more

important than growing quickly.

The real estate investment business looks

easy but as any experienced investor

knows there are a multitude of ‘correct’

decisions required at every step – and

making the correct decision is based on

having experience i.e. having confronted

the issue previously and successfully

resolving it.)

NUMBER OF PROPERTIES PER POOL

Each Pool will contain 6 downtown

Vancouver apartments, similar in form to

those that comprise Pool #1.

LEVERAGE

The Loan to Value ratio will be restricted to

65% to ensure each Pool is conservatively

financed and comfortably self sustaining

from the rental cash-flow for the duration

of the Pool’s existence.

PARTNERING

We are looking forward to working with a

number of partners to build these Pools.

We are investors, asset managers and we

manage professional team members to

execute the business plan.



2012 / 2013 Investment Intentions The execution steps

Pool #1 (6 existing cash-

flowing properties) Introduce Joint Venture partner/s

STEP 1

Pool #2 (6 cash-flowing

properties, to be acquired in 2012)

Assemble Pool #2 with Joint Venture partner/s

STEP 2

Pool #3 (6 cash-flowing properties, to be acquired in 2012 / 13

+ acquire Pool #1 and 2)

Form Limited Partnership to assemble Pool #3 properties and acquire Pool #1 and #2

STEP 3


0 vacancy days in 5 years *

IS IT REALLY POSSIBLE? WARNING: There is no certainty that we can maintain this perfect record. While we will try to

maximize days rented events beyond our control may prevent us from achieving this in the future.

Yes it is !

We are proud of our 100% rental record.

6 properties, 5 years, 0 days lost rental*. Yes really!

Our tenancy management controls are well developed and very effective.

We go to great lengths to make our tenants ‘feel at home’ but if they must leave we

work very hard to replace them immediately.

So far we have a perfect record of being ”on time every time”.

It’s another example of how lucky you get when you work hard.


Vancouver CANADA

Q

* Past performance is not indicative of future performance



Inside story

A detailed account of a Pool #1 apartment purchase “A cool place to call home…..”

Last year this time (i.e. mid-Feb., 2011), when my team and I were putting the final touches on a downtown property we had closed on in Jan., 2011 one of my realtors called to let me know she had just identified a suitable acquisition that was on MLS but not open to the public just yet. As it happened the unit was in a building where we already owned a number of rental suites so our due diligence would be easy and speedy. We briefly suspended the final cleaning and furnishing work in the soon to be marketed Jan 2011 suite and walked across the road to view the potential acquisition – one of the advantages of investing in the niche downtown market! My realtor, my partner and I met the seller’s agent at the property and were shown around the apartment. During the ensuing discussions we learnt that the sale was a bank foreclosure. The first rental property I purchased in Vancouver was a foreclosure so I was familiar with the process ahead. Since we knew the building very well, the focus was on the inside of the unit and the cost of upgrading it to the standard of a QQ Private Residence. It was a perfectly preserved 80’s style residence – everything original, including kitchen appliances and the pink bathroom tiles. The obvious beauty was the spaciousness, floor plan and light pouring in on 3 sides (remember it was mid-winter in Vancouver so to be able to point to light as a feature is quite something.) We immediately recognized the potential to adjust the floor plan slightly and

improve the flow and functionality of the suite and in the process improve the value and cash-flow. Decision made – let’s see if we can move to Step 2 and buy it Right! NEGOTIATION, FINANCING & CLOSING The property was listed at $335,000 (presumably based on the sales history of similar properties in the neighborhood) - we offered $310,000, but the bank did not accept. I walked away and waited to see whether they will get another offer higher than mine. One month later, the property was still on the market. I knew that the chances were even better for us because the bank wanted a quick sale and there had been no action. By chatting with the seller’s agent, I also learnt that I was the only one who had made an offer. I quickly made another offer but this time I offered $300,000 - they accepted and we got the deal! Patience saved us $10,000! (My mortgage broker training

equipped me with the knowledge that the bank would be highly motivated to dispose of the asset in the absence of offers.) The next step was arranging the closing and as part of this I had to personally go to the court - and if there are no other competing (better) offers presented on the day then the property would finally be ours. Luckily, there were no other people competing with me and on April 17th 2011 we closed the deal and got the key. RENOVATION, INTERIOR DESIGN AND FURNISHING – more value adding Before final closing, I arranged with the selling agent for my partner and our contractor to have extended access to the unit so we could design the re-model, come up with a budget and get all the preparation work ready in advance of the final closing. This step was important because it meant that on the second day after getting the key the contractor and crew started work – time is money and we had set a very strict deadline to have the work completed and tenants in. I don’t like spending money for nothing but I do like receiving it!


Having renovated each of the properties in our Pool #1, I pretty much know the budget and timeline but each suite is unique and there are always unexpected issues to factor in. As a guide the budget is generally around 5 – 8% of the purchase price, and this includes all renovation, furnishing, lighting and artwork, and the timeline is a maximum of 4 weeks. Because we know our client audience very well, we lean towards creating a contemporary, stylish, artsy and clean look that currently suits an unban resident’s taste and lifestyle. We totally renovated the bathroom (you can’t rent out pink for above average prices these days!) installed a new tub, vanity, lighting, and ritzy grey tiles all around. (inspired by a visit to a lux café in downtown Vancouver – thanks) In the kitchen we installed new appliances, upgraded the vent hood, lighting, and a granite countertop (we have been working with the same stone supplier on all our projects and thanks to them we install high-end granite for less than other less attractive products and the boys always install in less than 3 days). We didn’t change the cabinets, instead, we repainted them white with a black backsplash to create a modern and sleek look. Unfortunately we had to install new blinds throughout but with the addition of the new lights and flooring in the master bedroom and office area

we once again created a warm and cozy living space. Of the total budget we spent 25% on the furnishings and artwork. The end result is a modern stylish condo that is perfectly located and very comfortable. By managing the work diligently we restricted the total renovation expenses to $22K or 12% under budget, and the renovation was completed right on time. REFINANCE AND MARKETING A day before the renovation and furnishing was completed I called the bank introduced appraisal firm and made an appointment for 2 days time. Within 24 hours of the visit the appraiser informed me that his appraisal value was $365,000, that’s 21.67% above the purchase price. Needless to say I refinanced immediately and banked a big pay check equaling $48,000. The next step, and the reason for doing all of the above, is to market the finished result and get the cash-

flowing. Photographs were taken and the advertisement went online immediately. Let’s spend a moment looking at the difference between pre-reno monthly rental number and after-reno monthly rental number. My market research indicated if we did nothing with this property, and simply rented it out as it is (unfurnished), we would probably get something around $1,400 per month. However, following the renovation and stylish furnishing, I knew that we could demand more than that. I listed it at $1,950 per month not including parking and utilities. The result - within one week, we rented the suite to 3 international students at $2,240 per month, 15% over the listing price, and my phone rang for weeks to follow before I removed the advertisement. (By the way, the parking was rented out separately for $120 per month within days).


Inside story

A detailed account of a Pool #1 apartment purchase (cont’d)


The best part is the tenants paid 12 months cash upfront. Being international students I couldn’t conduct my usual strict background and credit checks so I asked for the full amount upfront. I spoke to each of their parents (all overseas) and they expressed their gratitude for us assisting their “little darlings” and were more than happy to transfer the full amount immediately. I conduct regular inspections and can report that the tenants are treating the property with the respect it deserves. CONCLUSION Therefore, the end result is … We bought for $300,000 (plus closing costs of $7,300), renovated and furnished for $22,000, it was immediately re-valued at $365,000, and we took $48,000 out from the re-financing. This financing result, and the positive cash-flow we have generated from this transaction, is proving to be typical for us and it demonstrates that specialization in a niche when combined with attention to detail is very rewarding. As at December 31, 2011 the Pool #1 cash-on-equity return (i.e. positive cash flow and mortgage pay down – not including capital appreciation), ranges between 10% and 21.8% p.a. per property. We are in this for the long-term!


Inside story

A detailed account of a Pool #1 apartment purchase (cont’d)



SNAPSHOT

BUYING RIGHT Careful market studies and negotiation allow us to buy properties under market value. Our investment strategy is to buy, renovate, rent and hold! We allocate a large proportion of our resources to the buying process. A lot of effort is given to intimately knowing the market conditions in the Vancouver downtown area so when a suitable property comes on the market we are quickly able to make an accurate assessment of its suitability. When we spot a suitable property we engage with the selling realtor and gain as much insight into the seller as possible. Obviously it is our goal to buy the property on the most favorable terms possible and to do this the more we know about the seller the better. If the seller isn’t motivated we generally pass on the opportunity. However if they are then we do all we can to assist them to sell the property to us. On several occasions we have assisted sellers who were experiencing financial tightness to close a sale quickly (for a final price substantially below what they originally asked) – a win win! The last property we purchased was being sold by a gentleman who had accepted a job in Europe. In addition to his travel deadline he was also experiencing financial pressure owing to an ill-conceived property investment strategy. The result was we acquired the property for well below asking and well below the prevailing market value. Following a thoughtful renovation it was quickly rented and as of today adds $998 per month to our net cash-flow, and this is in addition to the equity bonus we received as a result of the bank commissioned Appraisal conducted before closing. There is always a deal to be done and having a detailed knowledge of your market niche helps enormously. Be patient; get to know the sellers circumstances and motivations; and build a relationship with the selling agent - they are motivated by the prospect of receiving a commission on the sale - it’s amazing how much they will tell you if you ask the right question. Don’t be frightened to negotiate – you owe it to yourself and your shareholders/JV partners to make the acquisition on the most favorable terms possible.

SNAPSHOT

SMART RENO’s Smart (prudent) renovation increases property value and rents We have been consistently increasing values and rents over the years by conducting prudent and carefully planned renovations to ensure the suites have features that appeal to the tenants – after all it is going to be their home! We work with the same skilled trades people and furnishing suppliers so we get the job done at a wholesale price. Our design team has a sharp eye and create contemporary and artsy living environments that attract potential tenants from all over the world. Our experience has been that we are able to increase property values by 15-20%, and increase the rent by 50-80% within a short period of time (2-4 weeks of closing), and we carefully control the spending to between 5-8% of the purchase price.


i. The

QQ Private Residences Brand

ii.

The importance of a great team

iii.

Questions & Answers



i. The QQ Private Residences Brand


Vancouver CANADA

Q

Late in 2011, we undertook a

comprehensive review of our

growing business (something we like

to do on a quarterly basis).

From the very beginning we have

been striving to provide suites with a

contemporary (a little artsy), livable,

welcoming and comfortable feel.

(I don’t think I have mentioned it

before but we only provide furnished

accommodation)

Without exception prospective

tenants comment on the ‘visual

appeal’ of a suite when they respond

to the advertisements and these

comments are only amplified

following their occupancy. Our

design team are onto something and

it has great appeal!

We love our tenants and they love

their home – a very powerful mixture

from an investment perspective!

We are always looking to improve

what we do and provide a better

experience (because we have proved

this leads to better quality

candidates, more interesting and

caring tenants, and a lower turn-over

rate) .

We strive to make the suites their

‘home’ and enhancing the emotional

attachment is part of this effort.

In the spirit of ‘enhancing the

emotional attachment’ we have

taken the decision to brand our

properties and QQ Private

Residences is the name that won the

contest.

Providing a feeling of luxury and

exclusivity, but at market rates, has

proven to be very rewarding.


Vancouver CANADA

Q



ii. Team

The importance of a great team

Our carefully assembled, strong and

professional team forms the heart of our

real estate investment business.

Over the years, we have built up a very

professional and solid group, in-house

and as contractors.

We have:

Realtors who constantly send deals to our

system; financing brokers who help to put

the funding together; lawyers who

specialize in real estate transactions; a

first class accountant and tax planner;

contractors and suppliers who

understand our style demands and can

complete the job on time and on budget

every single time; insurance brokers who

manage the asset protection; and bank

appraisers with vast knowledge of our

niche market.

With this great team and a standardized

and repeatable system in place, we

execute on our acquisition / upgrade

process again and again, and have

generated excellent returns by do it!

Real estate investment is a team game. We have set in place the ‘rules of the game’ and it’s our job to manage the team and ensure they execute against this plan.



iii. Questions & Answers

Question:

WHY DOWNTOWN VANCOUVER?

Answer:

Vancouver has been voted one of the

top 3 most desirable cities in the world

for consecutive years. We invest in

downtown market for a number of

solid fundamental reasons:

Supply and demand: due to the

geological restrictions, downtown

Vancouver is very compact, from

North end to South end, only 30

minutes walking distance, west side is

the ocean and only way to stretch is to

the east side.

Population growth: According to

Canada Statistics, there are 45,000

people immigrating to Vancouver

every single year on average, 87% of

them settle into Vancouver, which is

about 20,000 household. Most of them

will rent for a couple of years before

they consider buying their first home.

The number of International visitors

coming to Vancouver either work or

study increase at very steady pace

every year.

Economic Growth: Vancouver has a

diverse economy with employment

sectors such as resources (mining,

lumber, oil and gas), education,

tourism and technology (Vancouver is

famous for high-tech industry

particularly in the area of software

programming, filming, graphic design,

gaming) driving the economy.

Based on the above statistics and

fundamental analysis, we conclude

that investing in downtown Vancouver

is the strategy with least risk and

maximum rental income and capital

growth.

Q:

WHAT IS YOUR INVESTMENT

PHILOSOPHY?

A:

Our mission is to work with investors

to buy under-rented condos in

downtown Vancouver and increase the

value by renovating/remodeling and

furnishing them with style and comfort

and provide affordable homes for

tenants who desire to live in

downtown core and care for their new

homes, as well as minimize the risks by

in-depth due diligence, conservative

management operation (financing

structure, contingency reserve and

etc.) and maximize the return for

investors (provide premium properties

with competitive rental price to high

quality tenants locally and

internationally.

Q:

WHY APARTMENTS?

A:

There are a number of reasons to

select apartments as an asset class.

Low entry level: The investment size of

the apartment is generally between

$300K to $400K, with conservative 35%

down payment, closing cost,

renovation budget, and reserve fund,

the initial investment will be around

$120K, easy for investors to invest into

this projects either as debt financing or

equity financing.

Low maintenance: In Canada, the

building strata corporation will hire a

strata management company to look

after the common property. Each

individual owner pays a monthly strata

fee and as a result the owner /

investors do not need to worry about

too much maintenance if the building

is well selected.

Q:

HOW DO YOU SELECT AN

APARTMENT?

A:

First of all, location. We are very

specific about the location. It has to be

in the core downtown region.

Secondly, the building, which shall be

solid and well-maintained apartment

building with major items already

upgraded to the market standard.

(plumbing, electricity, roof and etc.).

Lastly, the unit itself: It has to be a

project requiring upgrades with good

floor plan so that we can design the

room to enhance its usage such as

creating a study or a single bedroom.

Fourth, the purchase price has to

either at market value or under market

value.



iii. Questions & Answers

Q:

WHAT HAS BEEN YOUR VACANCY

RATE?

A:

We have no vacancy so far since we

took over the management ourselves.

However, to be conservative, we still

budget 3% vacancy rate in our cash

flow management. According to the

Canada Mortgage and Housing Corp.

(CMHC) the official statistic 0.3%.

Q:

WHAT RENOVATION/UPGRADES DO

YOU DO?

A:

It is all about cost/benefit analysis. We

spent money on the items that tenant

value and benefit from. Normally,

standard renovation for us includes

new paint, new lightings, granite

countertop in the kitchen, dish washer

and laundry machine installation.

Occasionally, we will install the floor,

change vanity, tiles, sinks, doors and

other finishes. We have been

successfully create extra space for

additional office or separate single

bedroom which means additional

rental income. Our big plus is to

furnish all the rental units with style

and comfort. Tenants all over the

world enjoy living here.

Q:

WHY DO YOU FURNISH THE

APARTMENTS?

A:

First of all, the furnished rental is a

niche market, not for everyone. But,

we are very good at designing,

furnishing and accessorizing the unit.

Therefore, we have the skill sets to do

this within a couple of days.

Secondly, the demand, there are lots

of people coming to live in downtown

for working and studying, they prefer

to live in a unit with hotel setting, so

they do not have to worry about

shopping, which means they can focus

on their life, being study or work.

Lastly, majority rental apartments in

the market are not furnished, our

furnished one really makes our

products stand out from the

competition, meaning higher rental

and less vacancy. A combination of

skill sets, strong demand and scare

supply makes our investment generate

higher ROI for investors.

Q:

WHO MANAGES THE PORTFOLIO?

A:

We have been working with a property

manager before, but it is not very

satisfactory. We took over the

management 4 years ago, and

currently we manage our portfolio

ourselves, with the increase of the

portfolio, we will eventually hire our

own staff to manage it.

Q:

HOW DO YOU SELECT THE TENANTS?

A:

By market research and niche

investing, we clearly know the profile

of our tenants. We normally market

online via a number of free and fee-

based websites, and find we receive in

excess of 10 enquires for each listing in

the first days. Then, we qualify the

candidates by email and phone, and if

they fit and the property fits them, we

will show the property, fill out

application forms, conduct background

and credit checks and make a

selection. Following this we sign a

contract, collect the deposits (suite

and furniture) and proceed with the

moving in steps.

Q: WHAT IS THE IDEAL LENGTH OF TIME THE PROPERTIES SHOULD BE OWNED? A: Forever. However, every 5 years is our evaluation time. We might bring in JV partner to take some equity out for further investment. Q: DO YOU MAINTAIN A CONTINGENCY FUND FOR EMERGENCY REPAIRS? A: Yes, we always have 3 months expenses as a contingency fund.


Into Downtown Vancouver QQ Private Residences 2012 / 2013 Investment Intentions

Conclusion

Qing Qing Investment Holdings Inc., was

founded five years ago and today

comprises 6 positive cash-flowing

properties, 5 located in downtown

Vancouver and 1 in the University of

British Columbia campus. We refer to

this portfolio as Pool #1.

We have a passion for and commitment

to owning, improving and renting highly

sought after properties in downtown

Vancouver. Our niche knowledge has

resulted in us developing a repeatable

and highly rewarding investment formula.

The QQ Private Residences team are

committed to growing our business and

to achieve this during 2012 we intend to

introduce equity partners into Poll #1,

establish the framework and funding to

assemble Pool #2 (6 properties) and take

the growth step of forming a Limited

Partnership that will assemble and

finance Pool #3 (6 properties) and acquire

Pool #1 and #2.

I hope you have enjoyed reading our 2012

/ 2013 Investment Intentions discussion

paper and look forward to discussing our

plans with you in person.

Please call or email me right now!

Angela Peng

604 323 3469

[email protected]



Pool #1

A selection of Pool #1 photographs

APPENDIX



Directory

PRESIDENT & CEO

Angela Peng

Tel: 1 604 323 3469

Email: [email protected]

ACCOUNTANT:

Julia Ding and Associates

305-1130 West Pender Street

Vancouver

LEGAL COUNSEL:

Norman Chow

Norman Q. Chow Law Corporation

378 Smithe Street,

Vancouver BC V6B 1T7

BANKER:

CIBC Imperil Service

8450 Granville Street

Vancouver

PROFESSIONAL AFFILIATIONS

British Columbia Apartment Owners and Managers

Association (BCAOMA)

Canadian Association of Accredited Mortgage

Professionals (CAAMP)

Real Estate Investment Network (REIN)

APPENDIX



Vancouver CANADA

Q

Contact:

Angela Peng

Telephone: 1 604 323 3469

Email:

[email protected]

february 2012 magazine

Documents

investment strategy

investment processes

downtown vancouver real

real estate investing

downtown vancouver qq

plans intentions

qq private residences

eastern canada