EMR Name
Legal DisclaimerThis document is an interest seeking document only. IT IS NOT ADVICE. IT IS AN OPINION BY THE AUTHORS AND/OR PRESENTERS. No information, forward looking statements, or estimations represent any final determination. While every effort has been made to ensure accuracy in this presentation, numbers are subject to change and are not guaranteed. This document is for general information purposes only and is not to be construed as selling securities or real estate. While the information presented in this investor document has been researched and thought to be reasonable, in general, real estate investment is highly speculative, real estate values can go up but they can also go down, and thus PRESTIGIOUS PROPERTIES, THOMAS BEYER , SCOTTY GRUBB, EMD, EMR, MIKE HAMMERLINDL, RICK LINKLATER, KEITH MCMULLEN, ITS PARTNERS AND/OR ITS AGENTS CANNOT AND DO NOT GUARANTEE ANY RATE OF RETURN OR INVESTED AMOUNT OR INVESTMENT TIMELINE.
The reader acknowledges and agrees that Prestigious Properties, Thomas Beyer, its partners and/or its agents do not assume and hereby disclaim any liability to any party for any loss or damage caused by the use of the information contained herein or errors or omissions in the information contained in this investor document to make any investment decision in the venture referred to herein, whether such errors or omissions result from negligence, accident or any other cause.
Investors are required to conduct their own investigations, analysis, due diligence, draw their own conclusions, and make their own decisions. Any areas concerning taxes or specific legal or technical situations should be referred to lawyers, accountants, consultants, realtors, or other professionals licensed, qualified or authorized to render such advice. IN NO EVENT SHALL PRESTIGIOUS PROPERTIES THOMAS BEYER, SCOTTY GRUBB, EMD, EMR, MIKE HAMMERLINDL, RICK LINKLATER, KEITH MCMULLEN AND/OR ITS AGENTS BE LIABLE TO ANY PARTY FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER ARISING OUT OF THE USE OF THE INFORMATION CONTAINED HEREIN EVEN IF PRESTIGIOUS PROPERTIES, THOMAS BEYER AND/OR ITS AGENTS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. PRESTIGIOUS PROPERTIES, THOMAS BEYER, SCOTTY GRUBB, MIKE HAMMERLINDL, RICK LINKLATER, KEITH MCMULLEN, ITS PARTNERS AND/OR ITS AGENTS (INCL EMR and EMD) SPECIFICALLY DISCLAIM ANY GUARANTEES, INCLUDING, BUT NOT LIMITED TO, STATED OR IMPLIED POTENTIAL PROFITS OR RATES OF RETURN OR INVESTMENT TIMELINES.
This is not a solicitation for investments. Investments are sold via offering memorandum or LP agreement only. Please read disclosure and/or due diligence documents carefully. This offering is void where prohibited. Not every potentially interested party is eligible to invest. Minimum investment amounts and hold periods apply. E & OE.
30% Medium Risk
10%High Risk
3
Asset Allocation – A Proven Model !(Stocks, Bonds and Private Equity)
60% Low Risk
Land Development (with no mortgages)
Second Mortgages (non-construction)
Most large CAP stocks
Euro Bonds
Gold, Diamonds
Commercial Real Estate
Construction Projects(with low mortgages orIn very high demand locations)
Land Development (with mortgages)
Second Mortgages (construction)
Most penny Stocks
Construction Projects (with mortgages)
Greek Bonds
Private Software Firms
Restaurants
Apartment Buildings (with modest mortgages)
First mortgages (non-construction)
Quality Corp. Bonds
Many Municipal Bonds
Government Bonds Note: RISKY (according to the security commission rules) is an exempt market offering with any of these even if some asset classes are less risky than others !
Location
Mission Statement:
“We build wealth for investors by offering well selected real estate investments in W - Canadian
growth markets that provide positive cash flow and/or, tax free equity growth, and hassle free management for the
benefit of tenants, communities and investors.”
WHY WE LIKE APARTMENT BUILDINGS4 REASONS YOU SHOULD TOO
#1 The Power of Leverage
• Cheap Money Available from the Banks• Multiplies your earning power
#2 Cash Flow• Revenue – Expenses = Cash-Flow• Sources of Revenue:
- Rents from Tenants- Vending, Cell Towers- Parking
• Expenses- Mortgage (Principal and Interest)- Maintenance and Repairs- Taxes and Insurance- Utilities - Property Manager
• The larger and safer the revenue stream…
• …The more it is worth
#3 No New Build• We Buy for $80K - $150K per
door• Cost to build new from $150K –
$220K per door (not including land)
#4 Rental Real Estate – Demand Increase
Profit Centers in Real EstateA Three Course Meal !
• Appetizer: Positive Cash-Flow• Main Course: Mortgage Pay-
down• Dessert: Value Growth
– Improvements – Re-positioning– Reduced expenses / higher rents– Time
Total Return: 11.3% AvgIncome Return: 7.4% AvgCapital Growth: 3.6% Avg
Investment in Multi Family Buildings
vs. Stock market
After MER of a typical mutual Fund
10 year average2% per year
Average TSX10 year average4% per year
• TSX Index Performance over 10 Years Raw Index and after 2% MER / year
Macro-Location + Micro-Location
+ Timing + Upgrades
+ Hard Work + Impeccable Management
=SUCCESS
Alberta = OIL & Gas
• “2011, per capita investment in Alberta was $23,461, more than double the national average of $10,758.” - albertacanada.com
• “In 2011, Alberta had the highest GDP per capita of any state or province in North America.” – albertacanada.com
• “Cumulative investment in Canada’s oil sands in the past decade has surpassed $100 billion, and $364 billion in price-adjusted investment is expected to take place over the next 25 years.” – CBOC, Fuel For Thought
Jobs Jobs Jobs
• 50% of all new Jobs created in Canada in 2011 were created in Alberta
• Average of 44,000 new jobs generated per year in Oil and Gas alone between 2012 and 2025
Source: Conference Board of Canada – Fuel for thought
• 367 people per day moved to Alberta in 2012
• 80% of newcomers to the Province rent for the first 2 years
• More people drive up the demand for rental property
• Vacancies Decrease and Rents Increase
Migration
Prestigious Properties
Who is Prestigious Properties• Founded in 2000
• Transacted 35 buildings to date valued over $166M (or 1/6th of a billion $s)
• Currently own 900 units across 16 buildings under the Prestigious Properties Brand worth over $85M
• 600+ investors have invested over $45M so far
• Proven, Rock Solid Track Record over 10+ years
Assets Under Management• $11.22M per year in revenue• 2012 Mortgage Paydown: approximately $1M
Our TEAMTogether Everyone Achieves More
• 7+ decades of experience• Executives of each LP have no
salaries • An expert for each individual
business unit• Executives personally invest
alongside investors
• Apartment Buildings – high demand and recession proof
• Growth Markets
• Cash Flow (year 2 & forward) and Equity Growth
• Conservative leverage
• Proven & Repeatable
• Experienced Management
A Proven Business Model
Our Track Record
Case Study - Yorkton, SK PortfolioFour Existing Apartment Buildings•126 Units Total•Acquisition Overview
• Date: May 2007 to September 2009• Total Purchase Price: Approximately $4.5M
• Date: September 2011• Total Sale Price: $7,771,000
Return on Investment:• Increase of ~85% in building values• 140%+ on the cash invested• 75%+ ROI for investors• 15%+ per year ROI
Case Study 2 – 39 Suites Edmonton
Purchase Price: $1,900,000 – Dec 2004•Total Cash Investment - $450,000
Sold: $3,900,000 August 2008•Investor ROI 50%+ per annum
Case Study 3 – 101 Suites Edmonton
Purchase Price: $4.16M – Fall 2005•Capital Improvements - $300,000•Total Cash Investment - $1,000,000
Sold: $9,929000 July 2007•Investor ROI: 25% per annum LP1•LP1 Late comers 12.5% per annum
Case Study 4 – Campbell River 65 Suiter• Discovery Village – Campbell River, BC• 65 units • Purchased for $4,387,500M (~$67,700/unit) in Sept. 2008• $687,500 cash to mortgage• Plus approx. $250,000 additional cash since then• $3.7M mortgage (plus 183,000 CMHC fee) – paid down to about $3.325M• Sold for $5.192M on Nov. 26, 2012 (approx. $79,000/unit)• $804,000 gain, plus• Approx. $375,000 mortgage paydown• Total equity gain over $1.1M in about 4 years• 65%+ ROI for investors after GP split and expenses• 16%+ per year ROI
How We Add ValueBefore
After
• Walls: vanilla / beige • Baseboards: 3 inches, white• Lights: pewter/nickel• Outlets/lights switches: white• Door handles: nickel or pewter• Closet door handles: nickel or pewter• Carpets: like new or new or laminate• Lino: like new or new• Ikea curtains or room dividers• Laminate flooring
In the Suite Value Add
Before After
After
• Paint closet doors white• New countertop if worn• New sink, or• New vanity • Single lever tap: chrome or nickel• Tubs / toilets / sink: white• One piece tub surround• Towel bar / TP holder: nickel• Check bathroom fans (white cover)
Bathroom
Cost:•1 BR (600 sq ft): $2000 to $4000 + appliances + flooring•2 BR (800 sq ft): $3000 to $5000 + appliances + flooring
Increased Rents:•$150 to $450 - depending on market/area•Value Increase of $10,000-$25,0000 on $2,000 to $8,000 investment•ROI: 50% to over 400%
The Numbers
BEFORE
AFTER
After
AFTER
Prestigious PrioritiesOur Priorities• Return OF your money• Return ON your money• Quarterly Cashflow
Other Important Issues•Ethical Management •Open Communication•Transparency with Financial Information•Low overhead, low soft costs, no initial uplift of assets•Win/Win: their profit only after your profit
Kings Castle LP• Target 10% + per annum ROI to investors
• Medium term 6-7 year hold with early exit options if needed
• LP Structure – LIRA/RRSP/TFSA eligible
• Volume Discounts
• 5% quarterly Cash Flow option or 6% Drip
• Minimum investment $20,000
Castleview Park Apartments NE Calgary, AB
• 120 units• 84 - 1BRs and 36 – 2 BRs• Purchased for $14.65M (~$122,000/unit) in December 2010• $10,065,000 first mortgage at 4.14% interest• Current rent roll - $120,000/month
• About 15% higher than on purchase• VALUE ANALYSIS
• Appraised at $19.3M in Feb. 2013 - our 5 year conservative value forecast• Offer received by a REIT for $19.8M – over our most optimistic 5 year forecast• With an NOI of $1,030,000 and a 5% CAP rate value today is: $21.5M
Hawkwood Manor, Red Deer AB• 18 units - all 2 BRs – condo converted @ $97,000/unit • Good condition outside – suites need some work to get rents up 20%• Purchase Price: $1,750,000 - November 2012• $75% first mortgage at prime + 1.5% for one year• Current rent roll - $14,200/month
• Rent increases of 20%+ on lease renewals from $750 to $900 to $995• Appraised February 2013: $2,100,000 - 50%+ cash-on-cash ROI with $550,000
invested all in.
Why Invest in ApartmentBuildings?
•Positive, regular cash-flow•Historically low vacancy rates•Mortgage paydown / leverage•Renting is the economic choice –a paradigm shift in W-Canada•Equity appreciation / value improvements•Real Asset
•Excellent return•Proven business model•Ethical stewardship by lead managers•Outstanding track record - references•No property management hassles•No inflated going-in values•No stock market volatility•Hard Asset – Lower Risk
Why Invest withPrestigious Properties ?
SUMMARY – WHY ? WHY NOW ?
JOIN US IN OUR MISSION !
Questions?
Talk to us !
Mission Statement: We build wealth for investors by offering well selected real estate investments in North American
growth markets that provide positive cash flow, tax free equity growth, and hassle free management for the benefit of tenants,
communities and investors.
Mission Statement: We build wealth for investors by offering well selected real estate investments in North American
growth markets that provide positive cash flow, tax free equity growth, and hassle free management for the benefit of tenants,
communities and investors.