nd oil boom_-_housing-55_a-_don

Disclaimer

The purpose of the information provided in this presentation is educational in nature only. Any financial information presented here is for example purposes only.

The ideas and opinions expressed are those of the presenter only. The presenter is not an attorney, tax expert, or investment advisor. If you have any legal or tax questions about this information you should consult an attorney, tax expert, or your investment advisor.

Every attempt has been made to present factual information obtained from reliable sources but there is no guarantee as to its accuracy or completeness. There is risk associated with any investment and you are advised to do your own due diligence and seek appropriate council. There are no guarantees of returns expressed or implied.

Presenting . . .

The Biggest Housing Shortage in the U.S.

Creates Huge Opportunity for Investors.

We are going to show you how you can position yourself for Financial Gain and Wealth Building in the fastest growing area in the U.S.

Real Estate

A lot of wealth has been created in real estate by those that put themselves in the path of high growth early on in a market with explosive potential.

Where?

Williston is 20 miles from Montana and 50 miles from Canada.

Many jobs cannot be filled do to a shortage of workers.

Bureau of Labor Statistics: North Dakota is #1 with the lowest unemployment in the country . . . 2.6% as of Dec. 2013 compared to U.S. unemployment of 6.7%.

Help-wanted signs are everywhere!

SHORT TERM FIX – Modular Housing, Mobile Homes, Campers, and Man Camps.

There are more jobs than there are homes in the rapidly expanding Bakken region.

A temporary solution to a huge problem

WILLISTON, N.D. (AP) — Officials in a northwest North Dakota county have extended a moratorium on "man camps" in the area. The Williams County Commission voted 3-2 on Friday to extend the moratorium indefinitely on new applications for temporary housing.

ND county extends ban of 'man camps' March 03, 2012

The Williams County Commission extended the moratorium on man camps in the county.

Feb 13, 2014 Man camp moratorium extended

North Dakota wants you: Seeks to fill 20,000 jobs

Thanks to the oil boom, North Dakota has thousands of jobs to fill. NEW YORK (CNNMoney) by Blake Ellis March 18, 2014

Looking for a job? North Dakota wants you. In a new recruiting campaign to be rolled out in May, the North Dakota Economic Development Foundation is aiming to fill more than 20,000 jobs -- ranging from truck drivers and oilfield workers to receptionists and food servers.

North Dakota's huge oil boom has spurred thousands of job seekers to flock to the state for years now. In some cities, the population has quadrupled.

Yet, the growth continues and companies are still so desperate for workers that the state is teaming up with oil giant Hess Corp. (HES, Fortune 500) to launch an $800,000 campaign to attract new talent.

"It is being developed to target people in states with chronic unemployment, and people in industries that are high-demand in North Dakota, including: engineering, healthcare, energy, skilled trades, transportation and information technology," the foundation said in a statement. The push will include a website, marketing efforts and recruiting events.

The state is also trying to convince potential employees that North Dakota is not only a good place to get a job, but a great place to live, dubbing it the "Find the Good Life in North Dakota" campaign.

12

“Federal Housing Secretary Shaun Donovan is visiting Williston today to get a firsthand look at western North Dakota's housing shortage.” “Gov. John Hoeven, Senator Kent Conrad and Representative Earl Pomeroy are accompanying Donovan on his tour late Monday. Conrad said most of the new housing is going to have to come from private developers.”

By The Associated Press Aug 23, 2010

Federal & State Officials Assess Housing Shortage

Largest Home Shortage in the U.S.

The highest migration in the U.S. has caused an unprecedented massive shortage of housing in this area of North Dakota. Many workers and their families have nowhere to live!

Investors have the opportunity to help provide housing and profit handsomely for doing it. People are living in Wal-Mart Parking Lots.

Hotels have no vacancies, apartment complexes are full, and RV parks are popping up.

Most of the RV spots around here run $1,000 to $1,200. That's $1,000 a month, just for a parking space!

A new black gold rush is under way, this time in North Dakota. The potential payoff is huge -- up to 100 billion barrels of oil. That’s twice the size of Alaska’s reserves. The Kiplinger Letter - March 17, 2008

The Energy Information Administration (EIA) estimates that there is 503 billion barrels of oil in the Bakken Basin.

They come here from all over the

country. Many cannot find work in

their home state, but here there is a

job for everyone here who is willing to

work with starting salaries topping

$100,000 per year in the oil fields.

Williston, North Dakota

Western North Dakota and Eastern Montana

Billions of Barrels of Oil trapped in Bakken Shale Rock for millions of years can now be freed up and brought to the surface as a result of recently developed technology.

Bakken Shale Formation – Williston Basin

The Bakken Formation covers parts of Montana, North Dakota, and Saskatchewan.

Bakken oil production started over 50 years ago with a few vertical wells until the 1980's when horizontal technology became available.

Production really took off in 2008 when horizontal wells were combined with hydraulic fracturing technology.

Williston, North Dakota

The Bakken is a shale oil play. It is conventional light-sweet crude oil trapped within shale rock 10,000 feet below the surface of the earth.

Core oil economic activity

Bakken oil producing area

Rough extent of the Bakken Formation, a layer of oil-bearing shale more than a mile below the surface

Oil producing area outside the Bakken Formation

Named after North Dakota farmer Henry Bakken, who owned the land where the formation was initially discovered.

The formation is huge, spanning 200,000 square miles of subsurface in Western North Dakota, Eastern Montana, and Southeastern Saskatchewan.

North Dakota was 2nd to Texas in terms of oil production in 2012.

To put that into perspective, the state of Texas is 262,000 square miles in size.

How Bakken Oil is Produced

Bakken Shale Formation is 8,000 to 11,000 feet underground. ~ 2 miles.

5,280 ft. = 1 mile

Bakken is a layer cake, with 5 oil-bearing layers amongst 9 total layers. The top 2 oily layers, the Middle Bakken and Three Forks 1, currently account for most of the Bakken's oil production.

Bakken Formation Zones

Upper Bakken (Shale)

Middle Bakken (Sandstone/Dolomite)

Lower Bakken (Shale)

Three Forks 1 (Sand)

Goldman Sachs sees production rising as producers tap into deeper oil-bearing shale formations, known as Three Forks 2, 3, and 4. So far wells drilled into these deeper layers have been mostly exploratory, but there have been some successes, especially from Three Forks 2. This bodes well for at least some deeper Bakken production.

“U.S. to Be Top Oil Producer by 2015 on Shale”

By Grant Smith Nov 12, 2013

The U.S. will overtake Russia, currently the biggest oil producer, in 2015 as it taps rock and shale layers in North Dakota and Texas with the use of horizontal drilling and hydraulic fracturing.

The U.S. will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy self-sufficiency in the next two decades, amid booming output from shale formations, the IEA (International Energy Agency) said.

Crude prices will advance to $128 a barrel by 2035 with a 16 percent increase in consumption.

U.S. oil production will rise to 11.6 million barrels a day in 2020, from 9.2 million in 2012, as it taps rock and shale layers in North Dakota and Texas with the use of horizontal drilling and hydraulic fracturing, according to the IEA, a Paris-based adviser to 28 energy-consuming nations.

“Places like Williston, ND are the reason why.”

http://www.bloomberg.com/photo/u-s-to-become-top-oil-producer-by-2015-on-shale-boom-iea-says-/-i7V0MZsGO7U8.html

Who’s in the Bakken?

These companies have excellent locations in productive oil fields and they will be producing oil profits for years.

Continental Resources is the largest producer of oil and one of the region's most active and experienced explorers.

7 Strong Companies in the Bakken Oil Play

Oil wildcatter Harold Hamm built Continental Resources into the most powerful company in North Dakota’s Bakken Shale.

Who Else is in the Bakken?

American Oil & Gas Inc.

Anschutz

Apache

Arsenal Energy Inc.

Concho

Credo

Denbury (Sold Bakken To Exxon)

Earthstone Energy

Enerplus

EOG Resources

1st NRG Corp (Non-op)

Geo Resources

Halcon Resources

MDU Resources Group, Inc. (fidelity)

Newfield

Norstra Energy

Northern Oil & Gas Inc.

Oasis

Occidental Petroleum (Oxy)

PDC

Peak North Dakota LLC (PND)

Penn Virginia Corporation

Petro-Hunt

Petro-quest

Prima Exploration

Questar

Red Arrow Energy LLC

Resolute Energy

Sandridge

Samson

Slawson Exploration

SM Energy (St. Mary Land & Exploration)

Statoil (Brigham)

Stetson

Triangle Petroleum

US Energy

Voyager

WPX Energy

XTO

Yuma

Other active companies in the Bakken Shale play:

503 Billion Barrels of Oil in the Bakken Basin. “A resource base worth more than $5.3 trillion.”

The Bakken is considered to be one of the largest (possibly the largest) continuous hydrocarbon accumulations in the world.

Capital is coming from all around the world, even Europe and Asia.

Took off in 2008. ~ 150,000 Barrels of Oil Per Day (BOPD) was being produced back then.

By 2011, North Dakota was pumping 618,000 BOPD from approximately 3,000 producing wells.

Do the math: Oil production increased 412% in about three to four years.

Fadel Gheit, an energy analyst at Oppenheimer, calls Bakken's crude "one of the purest oil plays“ because it is comprised of 90 percent oil and 10 percent natural gas.

Total # of North Dakota producing wells:

2005 – 219 2011 – 3,275 2013 – 6,824

Goldman Sachs expects the Bakken to peak at 2 million Barrels of Oil per Day (BOPD) but not until 2023. To get there, they figure the annual production growth will average 130,000-210,000 BOPD.

Analysts expect some 33,000 wells will be drilled over the next 20 years, with more than 5,000 coming by 2015.

Total new wells 2005 to 2011 = 2,797

This is the beginning of a major growth cycle for cities strategically located in the Bakken.

North Dakota towns are benefiting from Bakken shale oil. Billions of $’s are flowing into them bringing rapid growth: Tens of thousands of newcomers Thousands of new jobs New tax revenues Soaring real-estate prices

Newly constructed housing rents quickly.

Housing is so scarce that one-bedroom apartments rent for $2,394 per month. As a result, many workers arrive with their own housing, parking their campers and RVs on empty lots.

Business Insider - Feb. 13, 2014

These 10 cities topped the list, with average monthly rents for entry-level apartments:

1. Williston, ND ($2,394) 2. San Jose-Sunnyvale-Santa Clara, CA ($1,881) 3. San Francisco-Oakland-Fremont, CA ($1,776) 4. Dickinson, ND ($1,733) 5. Key West, FL ($1,640) 6. Boston-Cambridge-Quincy, MA-NH ($1,537) 7. New York-Northern New Jersey-Long Island, NY-NJ-PA ($1,504) 8. Los Angeles-Long Beach-Santa Ana, CA ($1,411) 9. Oxnard-Thousand Oaks-Ventura, CA ($1,387) 10. Santa Barbara-Santa Maria-Goleta, CA ($1,346)

A 700 ft2, 1 bedroom apartment in Williston rents for an average of $2,394 a month!

The Associated Press

July 7, 2012

MANDAN, N.D. — “The economy is so good in North Dakota, it’s almost like being in another country. Although Friday’s lackluster national jobs report lackluster may have intensified the already deep anxiety among voters about the sluggish state of the economy, here in the nation’s northern reaches, the concerns are exactly the opposite: how to build roads and schools and houses fast enough to keep up with an astounding population boom that has sprung up alongside the country’s most roaring state-level economy.” “Good years for North Dakota farming, a new technology sector and — most significant — a dramatic oil rush in the state’s west and north have combined to produce an economic explosion that is the envy of the rest of the country — a 2.6% unemployment rate and rising household incomes and state revenue.”

Bakken Shale is making millionaires out of land, mineral owners, and investors.

“How long will it last?” - The world’s leading oil industry firms are here to stay, given estimates there’s at least a 30-year window of prosperity.

A Bakken oil well has an average life of 29 years and generates $22 million in net profit over its lifetime.

Major Oil Companies are Investing Billions of $’s Into Bakken Shale.

Dr. Mark J. Perry is a full professor of economics at the Flint campus of The University of Michigan.

“Bakken oil boom in North Dakota might last for 100 years”, according to the AEI (American Enterprise Institute) in 2013.

The Heart & Soul of Bakken Oil Production is Williston, ND.

Welcome to Williston, N.D. Home of an oil boom and the nation's highest rents.

Renowned for two things:

1. Legendary NBA Coach Phil Jackson grew up there, where he played basketball for Williston High School and led the team to two state titles.

2. It's ground zero for America's energy renaissance, home of the Bakken Shale Formation.

The Oil Industry Drives this Town.

This truck is filled with potassium carbonate for fracking.

Williston Mayor E. Ward Koeser Displays Jar Containing Bakken Crude Oil. Williston, ND

Williston has skipped the recession entirely. As of Dec. 2013 unemployment was 0.6%. U.S. was 6.7%.

"We actually have probably between 2,000 and 3,000 job openings in Williston right now," Koeser says.

San Francisco was built during the Gold Rush, as was Sacramento, CA.

Williston: Small Town to Large City

Williston is braced to expand from 12,000 residents to an estimated 90,000 in 15 years.

2010 Population = 14,700

2013 Population = 26,700 This almost doubling of the population in 3 years has caused serious housing problems.

“We’re growing as fast as you can grow,” according to Lee Lusht, president of the Williston Chamber of Commerce. “We’ve built 2,500 units of housing this year.“ Nearly $350 million in building permits was issued in 2013 in Williston, on everything from businesses to apartment buildings to single family homes.

Oil Industry Pays High Wages

U.S. Census Bureau

Medium Household Income

Williston: $69,559

2012

“In Williston home prices have more than tripled and rent there is currently the highest in the nation. Even though many employees are now raking in six-figure salaries, they are essentially homeless, living in their cars in parking lots, in other peoples' basements, in RVs or even in churches.” CNNMoney 3/18/14

Williston: Population Explosion

New Building Permits

New Housing Permits

City of Williston Data

85% of these are Apartment Units and 15% are Single Family Homes (11% are manufactured homes and only 4% are stick built.

It was a quiet community of 12,500, founded by German and Norwegian immigrant farmers.

It had 7 Lutheran churches, a grain elevator, and aging brick buildings downtown.

Now, Williston tops lists of the nation’s fastest- growing small cities. Its population has nearly doubled in the past three and a half years.

More than 1,000 multi-family/apartment units are under construction.

To alleviate congestion (traffic on Williston’s main thoroughfare has tripled) a bypass is being built to route heavy trucks around the city.

New Restaurants Opened in Williston

• McDonalds

• Subway

• Pizza Hut

• Domino’s Pizza

• Taco John’s

• Hardee’s

Williston Fast Food Eateries

A 200 acre retail lifestyle shopping district featuring big box stores, and a 17 screen movie theatre, as well as other retail, restaurant and motel ventures.

Hwy 2 & 32nd Street, Williston, ND

The hardware giant officially signed its contract for the Sand Creek Town Centre.

A large master planned community with retail shopping and single/multifamily homes.

Coming: a nail salon, women’s clothing boutique, large jewelry store, high-end clothing store for teens and young adults, and a coffee shop or deli with a drive up window. Many other retailers will be opening soon.

Stores are just beginning to open.

This all adds up to a timely OPPORTUNITY!

For those that understand what is going on in this area of the country.

How Can You Participate & Profit?

Windsong Country Estates is a premier housing development of quality “stick built” homes located just 6 minutes north of downtown Williston; close enough for shopping and schools, yet far enough to enjoy a quiet, peaceful neighborhood.

By purchasing a POSITIVE CASH FLOWING asset in Williston, ND that will put money in your pocket every month and create wealth over time.

Wednesday, Feb. 26, 2014

Wealth Triple-Play: Stocks, Gold & Oil

Investors need both real assets like gold, oil, and real estate, as well as financial assets like stocks. Each has its own purpose. • Real assets protect the purchasing power of your money, while

• Solid stocks help create wealth.

Here we have a real estate asset (house) in a market that is in a booming economy as a result of the Bakken Shale Oil that is fueling the fastest growing economy in the U.S. This asset has the ability to preserve the purchasing power of your money and create wealth while it is generating a nice positive monthly cash flow for you.

http://www.gliq.com/cgi-bin/[email protected]+++1+11179720+Wanda+Sanders

Think Tank Demand Institute: Uneven Housing Recovery to Linger 5 Years Wednesday, 26 Feb 2014

“The U.S. housing sector is likely to experience an uneven recovery over the next five years, with some local markets bouncing back faster than others, according to a study released on Wednesday. By 2018, the median price of single-family homes will be close to the peak reached in 2006 before the national market cratered, according to the study from the Demand Institute, a nonprofit think tank operated by The Conference Board and Nielsen. Among the 50 largest metropolitan areas where housing prices are expected to appreciate between 2012 and 2018, the top five will see rises on average of 32 percent, while the bottom five will average gains of only 11 percent.”

Turnkey Investment

This is a turnkey investment with property management and financing

in place for you.

Windsong Country Estates

Satellite View of Williston

Warren Buffett's Berkshire Hathaway is rumored to be buying up land and making a substantial investment in the area around Epping.

Major Growth Area


Williston

Satellite View of Windsong Country Estates



This is how things looked in the Summer of 2013.

Highway 2 (main artery in and out of Williston)



Shop

Construction Office


The Development covers 162 acres.


Shop

Construction Office

Mike created an operational “BASE” for construction of the 112 homes. He can house 40 workers onsite + he installed hookups for 12 campers.

The Construction Office is a 5,500 ft2 7 bedroom and 4 bathroom ranch style house that Mike built. It is a 2 level home with 2,000 ft2 on each level + a 1,500 ft2 garage.

Mike and Project Managers stay here.

Workers stay here.


Mike Dolbec lives onsite at the Development.

The Shop is 40’ x 80’ and has living quarters, showers, washer & dryer, bathrooms +++.

When the Development is completed everything here will be gone except the Construction Office.

Temporary housing for workers: Campers, Job Trailers, etc.

The Windsong Development – Ready to Build 112 Homes

This is how things look now. All the infrastructure is in place.

162 acres

The Developer / Builder

The attention to detail and quality of construction sets WCE apart from any other home builder in the area.

Mike Dolbec

Windsong Country Estates LLC

Windsong Country Estates LLC (WCE) partners have vast global construction experience.

Mike is the Business and Operations Manager of the WCE partnership.

He developed and built thousands of multi and single family housing projects in the U.S. and Internationally.

He developed and built many commercial projects in the Northeast and Northwest parts of the U.S.

He has 28 years of experience in manufacturing management and process development domestically and internationally with a focus on ISO 9000 manufacturing certification and Six Sigma accreditation.

His focus and passion is in developing, implementing, and managing processes that streamline construction and makes all stages of building a home efficient and on time.

WCE’s Construction Project Management and General Contractor team have been building homes in the New England, Carolinas and Northwest part of the U.S. for decades.

WCE’s on site construction team has built thousands of homes over the past 22 years and are part of the “Finnish Construction Trade Group”.

Exceptional Talent in all aspects of New Housing Construction

Finnish Construction Trade Group

This is a close knit group of workers whose family roots go back to Finland. There are many brethren/direct family members that work together on large scale projects like WCE. This family group has done the construction work on tens of thousands of single family homes and many commercial projects throughout the U.S. This group of highly skilled craftsman all work under the same umbrella for each stage of construction, which ensures efficient high quality work and loyalty, as well as a commitment to finishing the WCE homes on time and within budget.

Mike has an EXCLUSIVE with them for the state of North Dakota for any construction project.

Mike’s Home Bismarck North Dakota

Mike lives here with his wife and 3 children. He built this house.

Windsong Country Estates currently may be the only stick built rural housing development under way in Williams

County.

Quality Stick Built Homes

Stick Built Homes Modular Homes

Plat Map of Subdivision

Lots for 112 Homes

162 acres

3 Models 1. Buchanan (Ranch) 2896 ft2 Living Area on 2 Levels + 896 ft2 Garage

2. Jewel (Split Foyer) 2610 ft2 Living Area on 2 Levels + 896 ft2 Garage

3. Johnson (2 Story) 2880 ft2 Living Area on 3 levels + 896 ft2 Garage

Main Floor, Basement, and 3 Car Garage

Main Floor, 2nd Floor, Basement, and 3 Car Garage

6 Bedrooms + 3 Baths


Price = $438,952

Main Floor, Basement, and 3 Car Garage


Price = $422,428

Price = $438,553

Note: The developer chooses the elevation and the home color to make the subdivision look as good as possible.

EXTERIOR:

2x6 Exterior Construction Living Area

Insulation R21 Walls R49 Ceilings

Fiberglass Front Door

30 year Architectural Roofing

Low-E Argon Filled Vinyl Windows Grids in Front

Seamless Gutters with Down Spouts

20’ Concrete Apron in front of Garage

INTERIOR: Stainless Steel Appliances with Refrigerator Vaulted Ceilings In Living Room & Kitchen Self Cleaning Smooth Top Range & Dishwasher Built in Microwave Hood fan Stainless Steel Kitchen Sink Tile Backsplash in Kitchen Laminate Counter Tops Walk in Pantry with 5 Shelves (per plan) Nickel / Oil Rubbed Bronze Door Knobs Nickel / Oil Rubbed Bronze Lighting Fixtures Brushed Nickel Plumbing Fixtures Ceiling fan in Living Room Upper Cabinets with Crown Molding Laminate Kitchen and Dining Flooring 6 # Carpet Pad Tub/Shower Combo Elongated Toilets (all baths) Garage Door Openers Insulated Overhead Garage Door Built in Wood Stack Shelving in all Closets Full Wood Wrap Windows & Doors in Living Area White Painted Woodwork with Accented Wall Color Central Air Conditioning and Forced Air High Efficient Heating

Standard Features in Each Home

Quality homes with all the features you would expect in them.

Investor Configured Quality Homes

3 Models include:

6 Bedroom 3 or 4 Bath Home

3 Car Garage

3 Car Extra Parking Pad (Gravel 36’ x 24‘)

Central Air Conditioning and Forced Air High Efficient Heating

Back Patio Cement (10’x12’) or Synthetic Deck (10’x12’) on Jewel

Oversized Infiltrator type Septic System with Grinder Pump

ICF Concrete Forms, Added Insulation in Lower level

Vinyl Siding (.44 thick) with 50 Year Color Warranty

Washer and Dryer

Grass Seeded on Excavated Areas

Membership to Williams Rural Water District

4 Years worth of Membership Dues Paid to Windsong Country Estates HOA for Road Snow Removal and Road Maintenance

Upgraded Extras for Investor Home:

Separate Garage Entry Steps to Basement

(Garage expands from 24' deep to 28' deep)

Rear or Side entry door out of Garage with Cement Pad

Separate Electrical Plug for 3 Vehicles

Wet Bar, full size Refrigerator and Microwave in Basement

Time to Build Home: 90 Days

Buchanan

Main Floor Full 8’ Basement 3 Car Garage 6 Bedrooms 3 Baths

Price: $ 438,952 Size: 2896 ft2 + 896 ft2 Garage

Ranch Design with 2 Levels

1 Acre Lot

Buchanan: Main Floor

Buchanan: Basement

With steps from the garage + wet bar

Cash Flow Analysis - Buchanan Buchanan

Purchase Price $438,952 Comments Down Payment 65,843 15% Finance Amount 373,109 85% LTV

Closing Costs* 3% - 2% 4,390 Less 2% for using preferred lender

Rental Income* (Monthly) 5,000 Estimated rent range: $5K to $6K

Mortgage Payment 2,089 5.375% @ 30 Years - 5.48% APR Property Management Fee 350 7% Property Taxes* 310 PMI* 212 .68% Factor Insurance* 75 Maintenance* 28 Vacancy Allowance 250 Assumed to be 5% Monthly Positive Cash Flow 1,686

1 Annual Positive Cash Flow 20,232

Annual Debt Service 25,072 Less: Interest 19,929

2 Principal Reduction (Annual) 5,142

Net Operating Income 45,300 Less: Interest 19,929 Less: Total Depreciation 14,366 Total Taxable Income 11,005 Tax Bracket 33% Assumed to be 33%

3 Total Tax Paid (Annual) 3,632

Appreciation* 4% 4 Appreciation Amount 17,558

* Estimated

Return On Investment (ROI) Analysis - Buchanan

Buchanan

Rates of Return Analysis

Return On Investment (ROI) with Appreciation 56%

Cash Flow Before Taxes + Principle Reduction - Tax Paid + Appreciation 39,300

Cash Invested 70,233

Return On Investment (ROI) without Appreciation 31%

Cash Flow Before Taxes + Principle Reduction - Tax Paid 21,742


Cash on Cash ROI 29%

Cap Rate 10%

Note that the resale value of the Buchanan Ranch model will usually run 3 to 5% higher than the Jewel model.

Disclaimer: There were a number of assumptions made in this ROI Analysis and the previous Cash Flow Analysis. These numbers were believed to be accurate at the time they were calculated based on the assumptions made but are not guaranteed. Market factors can change, such as interest rates, rents, and appreciation causing these rates of return to vary from what is shown here. They could be higher or lower.

Jewel

Main Floor Basement 3 Car Garage 6 Bedrooms 3 Baths

Split Foyer Design with 2 Levels

1 Acre Lot


Jewel: Main Floor

With steps from the garage + wet bar Jewel: Basement

Cash Flow Analysis - Jewel Jewel











* Estimated

Return On Investment (ROI) Analysis - Jewel

Jewel



Cash Flow Before Taxes + Principle Reduction + Tax Paid + Appreciation 39,482



Cash Flow Before Taxes + Principle Reduction + Tax Paid 22,584



Cap Rate 11%


Johnson

Main Floor 2nd Floor Basement 3 Car Garage 6 Bedrooms 4 Baths

2 Story Design with 3 Levels

1 Acre Lot


Johnson : Main Floor

Johnson 2nd Floor

Johnson: Basement

With steps from the garage + wet bar

Cash Flow Analysis - Johnson Johnson











* Estimated

Return On Investment (ROI) Analysis - Johnson

Johnson



Cash Flow Before Taxes + Principle Reduction + Tax Paid + Appreciation 39,844



Cash Flow Before Taxes + Principle Reduction + Tax Paid 22,302



Cap Rate 10%

Note that the resale value of the Johnson 2 Story model will usually run 3 to 5% higher than the Jewel model.


Optional 3 Car Garage

Size: 1,008 ft2 (28’ x 36’) Price: $59,000

You can use Your Self Directed IRA

and Greatly Increase Your Retirement

Funds.

Some financial planners recommend withdrawing 5% of your retirement portfolio each month. This way a retiree is less likely to outlive their income. For example:

$400K in an IRA x.05% = $20K/year or $1,667/month

Why not buy 2 Windsong Country Estates (WCE) homes at $450K each with a portion of your SD-IRA. For example:

Based on a monthly gross rent of $5K minus taxes, debt service, insurance, and property management fees you end up with $2,300 net monthly passive income per property. That’s $4,600 net monthly income with 2 WCE homes. That sounds a lot better than $1,667 monthly!

But Wait!

2. If you have $400K in your SD-IRA, you can buy 2 WCE homes utilizing a Non- Recourse loan to your SD-IRA. Use the monthly net cash flow to accelerate and pay off the Non-Recourse Loans of $270K in slightly over 7 years. When it’s time to retire at age 59.5 or older, the $450K WCE SD-IRA homes are fully paid for!

Using the $5K monthly rent in this example, you can withdrawal about $9K of monthly income for retirement! $4,600 x 2 = $9.2K

Current value of 2 WCE homes is $900K ($450Kx2). Assuming a 4% appreciation rate, in 10 years this transaction would add $1.3 million to your SD-IRA plus $9K/month Positive Cash Flow!

A number of assumptions have been made in this example. Results may vary from what is presented. All figures are approximates. Consult a CPA or tax advisor regarding your particular circumstances.

Monthly net cash flow = $2,300

1. One $450K WCE home with a 40% down payment from your SD-IRA with a 60% Non-Recourse Loan = $180K + $5k Closing Costs = $185K.

Why Not Use a Lease-Option? This market is perfect for using a Lease Option strategy.

Why?

1. Because there are a lot of workers making over $100K annually who just moved into the area and can’t meet a bank’s requirement for a loan to purchase a home.

2. But they can easily put down $10K to $15K on a Lease- Option to purchase your Windsong Country Estates home.

3. You provide them a way to purchase a home when they have no other way because the banks won’t help them.

4. A Lease-Option strategy significantly increases your rate of return on the money you invest to purchase a home.

5. A Lease-Option Tenant/Buyer (TB) will take better care of your home because they view it as their home.

TB

1. Home Model: Jewell Purchase Price = $434,725

2. After closing you market the house "For Sale" to a Lease-Option Buyer (Tenant/Buyer) who signs a 1 or 2 year lease with an option to purchase agreement.

3. You sell the home at the end of the option period to the TB for the current home price plus appreciation of, lets say, 5% per year + $6,000 per year (see #5), which equals: at the end of Year 1: $462,461 (sales price to TB) at the end of Year 2: $491,284 (Sales price to TB)

4. Option Consideration: $10,000 to $15,000 The TB makes the Option Payment to you and signs a Lease-Option Agreement. The Option Payment is non-refundable and might qualify to be Tax Deferred (check with your tax advisor).

How Does a Lease-Option Work? Lease-Option Strategy Example

TB You

Locked in Profit

5. TB makes a $6,000 monthly lease payment and has the right to sublet. If the payment is made by the 5th of the month, $500 for that month will be credited towards the final sales price of the home in #3. Note that in #3 we added $6,000 ($500/month x 12 months) to the sales price of the home to the TB to cover this amount and so it is a “wash”.

6. It is stipulated that all repairs up to $500 are the responsibly of the TB.

7. Under this Lease-Option Agreement example you would receive approximately $22,000 to $27,000 in additional cash flow the first year.

8. A Lease-Option strategy significantly increases the rate of return on your money.

Lease-Option Strategy Example - Continued

Note: This is only an example for which a number of assumptions have been made. The results may vary and are not guaranteed.

1. Most TB’s have credit issues and a Lease-Option

Agreement gives them a chance to repair their credit while they are executing a plan to purchase a home.

2. In many cases it gives the TB time to get established in the area in their new job.

3. It gives the TB time to save up a down payment.

4. TB gets instant occupancy and doesn’t have to wait 30 days for a loan to close. They just exercise the option and buy the home. They already live there.

5. TB knows what the purchase price will be at the end of the option period.

6. TB will realize any appreciation over the stipulated purchase price.

Why would a Tenant Want a Lease Option?

What are the Steps to Purchase a Home(s)?

1. Complete Reservation Form: $6K fully refundable deposit placed in an escrow account and is refundable up until you accept the home appraisal report.

2. Sign Purchase/Construction documents.

3. Contact lender: Apply for construction and/or long term loan. Lender will order an appraisal (note: using one of the approved lenders will result in Windsong Country Estates contributing 2% of the purchase price towards closing costs).

4. Contractor (Windsong Country Estates) provides all the documents required for the loan.

5. Review/accept appraisal value: Deposit amount is released and applied to price of home.

6. Construction begins: County Building Inspectors periodically review/approve construction.

7. Progress payments for construction work are approved by you and made to the Contractor.

8. Property Manager: Selected by you or you can use one that we recommend. Property Manager is responsible for finding/screening a tenant for your home.

9. Construction of your home is completed and final building inspection made. Windsong Country Estates provides you with a Certificate of Occupancy issued by the City of Williston.

10. Escrow closes.

11. You take possession of your home.

12. A lease is signed. Your tenant moves in.

Do You Have Any Questions?

Contact:

Don Loyd 503-707-9195

[email protected]

Need More Information? Interested in Purchasing a

Windsong Country Estates Home

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