the investors guide to detroit real estate

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Tel: +66 (0) 86 266 7032

Web: www.ovginvest.com

Email: rebecca.smith@ovginvest.com

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It's no secret that Detroit was hit hard by the recession.

Massive job losses meant people could not pay their mortgages and

foreclosures were at a record high.

As a result house prices have fallen to their lowest since 1993.

Today, even when people can afford a mortgage, banks are too scared

to lend.

So these people are forced to rent.

This means there is a huge demand for high quality rental homes in

good areas.

Now is the me to take advantage...

Detroit is starng to recover.

Unemployment rates are falling.

House prices are rising.

But prices are sll at their lowest since 1993.

And because they are so low, you can achieve rental yields of 16% and

oen more.

Big business is now invesng millions of dollars in Detroit.

Once banks start to lend again - prices will rise quickly and this

opportunity will be gone.

Investment opportunity

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What is on offer?

Today you can buy 3-bedroom homes in middle-class areas of Detroit fora fracon of what they sold for just a few years ago.

These are completely refurbished, tenanted properes. With rental

yields in excess of 16% ne.

This is an easy to manage, hassle free investment.

As an experienced management company looks aer everything for you.

Key Points:

Homes from US$ 31,000

Already tenanted

Yields of 16% plus

Prices at their lowest since 1993

High capital gains

Newly refurbished

High quality, 3-bedroom, brick built homes meeng government

standards

Turn-key, hassle free investment

Experienced management team take care of everything for you

Investment opportunity

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Investment opportunity (cont.)

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High Rental Yields

The high number of foreclosures and lack of mortgage financing has

resulted in a large demand for rental properes.

The average rent for a 3 bedroom home in a middle-class area of Detroit

is US$ 900 a month.

With house prices as low as US$ 31,000 - yields are around 16%, oen

more.

That is net - aer management fees, property taxes and insurance.

All properes have tenants in place.

You earn an income from day one.

Strong Capital Growth

House prices are already rising.

According to the Naonal Associaon of Realtors, in the last 12 months

the average price of property in Metro Detroit has risen by 7.7% to US$

70,000.

This is sll far below the 2005 average of US$ 172,000 - so it leaves you

plenty of room for capital growth.

In November 2011 mulple lisng service Realcomp II Ltd. reported

property sales in Metro Detroit rose for the fourth month in a row:

"Aer four months of consecuve gains in the local housing market, we

can probably say it's the start of a recovery," said Realcomp CEO Karen

Kage.

In September, sales increased by 8.2% over 2010.

And in October 4,176 homes were sold compared to 3,983 in 2010. A

rise of 4.8%.

As the economy improves and banks start to lend again, demand will

increase considerably.

This means you will benefit from high capital appreciaon and have a

large target market to sell your property to when you are ready.

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Easy to manage, hassle free investment

These properes have been completely refurbished oen with new

roofs, re-wiring and plumbing.

They are cerfied to meet current Government health and safety

regulaons.

This means you dont need to worry about any costly repairs or

maintenance bills in the next few years.

How can you be sure your investment is being looked aer?

A top Detroit management company with many years of experience

looks aer everything for you.

They will find you new tenants if you need them.

Theyll make sure your house is well maintained.

They will even collect your rent and pay your money into your bank

account.

On top of that, you get access to a 24 hour help line - so you can call

anyme.

You also get your own website login where you can access your monthly

account statements, signed contracts with tenants, your property tax

receipts, maintenance quotaons and bills, a copy of your management

agreement and inspecon reports for your property.

Your rent is paid directly into your nominated bank account. This can be

in the US or anywhere in the world.

Locaon, Locaon, Locaon...

As with any city there are good and bad areas.

The properes we offer are all in middle-class suburbs of Detroit.

They are close to major highways, good schools and amenies in

desirable areas where respectable families want to live.

We can provide the address for every property we offer so you can see

the locaon for yourself, thanks to Google Street View.

Investment opportunity (cont.)

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This 3 bedroom, 1 bathroom property is typical of the type of house you

can buy.

It has recently been refurbished, including a new roof, new plumbing,

re-wiring, interior painng and re-finishing.

What type of property can you buy?

Ohio Street, Bagley, North West Detroit - Price US$ 49,500

Previous sale price US$ 87,955

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The Locaon

The house is in Bagley - a middle-class area of Detroit.

It has access to major roads including McNichols Road and

Lodge Freeway.

And its within walking distance of Mumford High School and

Marygrove College.

The Detroit Public Library is a short drive away.

Previous Price

The house was last sold on 2nd January 2007 for US$ 87,955

(Source: Detroit Department of Public Records).

Today you can buy it for just US$ 49,500 - saving you US$

38,455.

Rental Yield

The house has tenants paying US$ 950 per month. The rental

yield is 16,1% net - aer all management fees and taxes.

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The Boom Line...

Your Rental Yield

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Ohio Street, Detroit Purchase Price US$ 49,500

Annual Rental Income US$ 11,400

Management Fee US$ 1,140

Net Annual Income US$ 7,960

Net Return 16.1%

Annual Property Tax and Insurance US$ 2,300

Average rental yields are 16% and above.

That is net - aer management fees, property tax and insurance.

All properes are sold with tenants in place.

How is your income paid?

Your rental income is paid into your nominated bank account every month.

This can be a bank account anywhere in the world.

We would recommend a US Dollar account to avoid currency fluctuaons.

But the choice is yours.

Experienced Management

Your property will be looked aer by an experienced Detroit management

company.

They will:

Collect and manage rental payments

Pay your rent into your chosen bank account Adverse for and screen new tenants

Provide maintenance and call out services

Supply online property management accounts, so you can track your

investment at all mes

Carry out regular property inspecons and produce reports based on

these

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The Boom Line (cont.)

Ownership

Ownership is freehold.

Payment Terms

A reservaon fee of US$ 5,000 secures your property.

The balance is payable on transfer of tle deeds - usually within 21 days.

Finance

Finance is not currently available.

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Its a sellers market.

Well not quite - but it wont be long before it gets that way.

According to data from Real Estate One - Michigans largest real estate

company - at the end of June 2011 there was a 5 month supply of homes

in the Detroit Metropolitan area.

That compares with an 18.9 month supply at the end of 2007 when the

area was awash with foreclosures.

To give you an idea - in good mes the US housing market usually has

between 3 and 6 months supply.

More than 6 months supply and it is a buyers market.

Less than 3 months is considered a sellers market.

So you could say Detroit is close becoming a sellers market.

Houses are being snapped up faster than the naonal average and

property is typically on the market only 67 days before it is sold.

When the US banks start lending again house prices will rise fast.

That is when you should be looking to sell.

And remember, you will get a 16% rental yield on average - oen more.

So you stand to get ALL your money back in rental returns in just over 6

years.

And you will sll own the property.

How do we have access to these properes?

We work with a major Detroit company who has been invesng in

foreclosures fo