Joint Venture OpportunityDetached House in Brampton

4+1 Bedroom, 4 Bathroms52 Four Seasons Circle, Brampton, Ontario

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

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The Project• The property is a newer Detached house in a convenient location

in western part of Brampton.• The house is originally listed for $349,900. The house is in good

conditions.• We got the offer accepted to buy the property for $337,500. The

current closing house is set for January 29, 2009.• The market value around the planned improvement is around

$360,000• We have a confirmed rent-to-own tenant, signed a Lease Option

agreement. The tenant already paid $5,000 toward the purchase deposit and paid another $7000 deposit in January 2010. The tenant is planning to move into the property by February 15, 2010.

• Using Lease Option program as the exit strategy, potential profit in 3 year will be around $64K

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The Opportunity

• Project Finder/ Real Estate experts invest

– 5% of cash investment ($3,627)– Over 50 hours of time and expertise

• Cash partners invest:– 95% of the cash investment ($68,911)

• RRSP 2nd mortgage of $11,000

• Split profit 35-65 ($22K - $42K)

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Pictures of the property

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Key Features of the Property

• 4+1 bedrooms, 4 bathrooms detached house• Convenient location in Western part of

Brampton• Single attached garage• Finished basement• Many upgraded features: stainless steel

appliances, pot lights, California shutters• Poured concrete patio and water fountain in

backyard

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Planned upgrade to the property

• Replace the boardloom on the second level with laminated flooring.

• The tenant is planning to paint the house at their own expenses.

www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle

Profile of the tenant• A family of 5 (Husband and wife and 3 children) • The lady is working as a hair dresser.• The husband is helping his brother to run a landscaping company.

They specialized in luxury landscaping job at million dollar houses in Toronto area.

• Their combined income is about $90,000• The lady’s credit score is about 588 and the husband’s credit score

is about 608. • They need a few years to improve their credit scores to get a good

mortgage.• They are signed the lease with option to purchase agreement and

put a deposit of $5.000 to confirm their participation in the rent-to-own program. The total initial deposit from the tenant will be $12,000, the balance $7,000 to be collected In January 2010 before they move into the property.

www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle

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

Current Purchase Price: $337,500

Monthly Market Rent: $1,600

Land transfer tax Other Ont. City $3,538

Rehab cost/setup cost: $5,000

Closing legal fee $2,500

Avg. Annual Appreciation 5%

Assignment fee $5,000

Adjusted Cost base: $353,538

Annual property tax: $3,600

After Repair Market Value: $360,000 Annual Insurance: $600

Financing:

1st MortgageInitial Cash Investment $72,538

1st Mortgage Amount 80% $270,000 DCR(Free Hold) 1.15Interest rate 4.5%

# of Amortization Years 35

2nd Mortgage RRSP 2nd Mortgage Amount $11,000

2nd Mortgage Interest rate 14%

Total Mortgage $281,000

Four Season Circle

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Benefit to Lessee

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

Down Payment $12,000Monthly Rent $1,712

Monthly Option Premium $688Monthly Condo Fee $270

Total Monthly Payment $2,400

Addition Monthly Option Bonus $200Purchase price

at the end of lease term 416,745$ Down payment credit at

purchase $43,968% Down available at the end of

Lease 11%

Additional money credited to Leasee's downpayment at purchase

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Joint Venture Profit -1

Investor's Point of View:

Option Exercised: 3 Year Lease Opt.

Total Gross Income during Lease Term: $ 471,177

Profit before Mortgage Payment: $ 105,040

Net Profit after Mortgage Interest: $64,624

Average Annual Net Profit: $21,541

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

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Joint Venture Profit - 2

Option NOT Exercised:3 Year Lease Opt.

Total Gross Income during Lease Term: $98,400

Profit before Mortgage Payment: $85,800

Net Profit after Mortgage Interest: $45,384

Average Annual Net Profit: $15,128

(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

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Joint Venture Return Analysis

Joint Venture Analysis: % contribution Investment % Profit

Partner #1 (deal finder) Thomas & Bob 5% $3,627 35%

Partner #2 Investors 95% $68,911 65%

Option Exercised: 3 Year Lease Opt.

Net Profit after Mortgage Interest: 64,624$

Partner #1 (deal finder) Profit 22,618$ ROI 624%Partner #2 Profit 42,005$ ROI 61%

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Map of the Area

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Questions & Answers

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Sample Pictures of Projects

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