raul sanchez de varona and his team at tsg

Real Estate Opportunity

Distressed Properties

The Premier Wholesaler of Distressed Properties

This is a confidential memorandum intended solely for your own limited use to determine whether you wish

to participate in the TSG Distressed Properties Purchase Program.

This document is not a public offering. It contains brief information regarding the business model prepared

by TSG Realty and The Solution Group Corp. It has been developed based on information developed by the

company. It does not purport to be all-inclusive nor does it contain all the information which a prospective

buyer may desire. Neither TSG, nor any of its members, directors, managers or employees make any

representation or warranty, expressed or implied, as to the accuracy or completeness of this memorandum

or any of its contents, and no legal liability is assumed or is to be implied by any of the aforementioned with

respect thereto.

The information in this memorandum has been gathered from sources that are deemed reliable, but neither

the promoter nor any of its members warrant or represent that the information is true and correct.

Prospective buyers are advised to verify the information independently. TSG reserves the right to change

any information in this memorandum or withdraw the properties from the market at any time, without notice.

This memorandum, is not be construed as an offer or as any part of a contract to invest in any properties or to

acquire any equity interest in the promoter thereof.

By you reading this presentation, you agree that it and the information contained herein is of a confidential

nature and that you will not disclose this memorandum or any part of the contents to any person, firm, entity

without the prior written authorization of the developer.

If you do not wish to pursue this matter, kindly return this confidential memorandum to The Solution Group

Corp.

Photocopying or other duplication is not authorized.

CONFIDENTIALITY AGREEMENT

www.thesolutiongroup.net

THE PREMIER WHOLESALER OF DISTRESSED PROPERTIES

INDEX

01

02

03

04

05

06

07

TSG Track Record

Market Trends Analysis

News

Business Process

Properties

Property Map

Portfolio Analysis



728Distressed properties acquiredby TSG by foreclosureprograms in Miami-Dade, Broward& Palm Beach Counties.

Debt amount acquired

by TSG in the last 16 months.

44.7%Average price of TSG properties

that last less than 60 days in the market.

38The average time that TSGproperties take before beingdelivered to the commercialdepartment.

All remodeled propertiesby TSG are delivered withthe best standards for rent.

382

The number of properties analyzedby TSG’s acquisition department during the last year.

U$110,340,180

52,220


THE PREMIER WHOLESALER OF DISTRESSED PROPERTIES01

TSG is a vertically integrated company which has identified a unique opportunity within the US housing market crisis and has developed a unique program to take advantage of it, particularly in South Florida. Through this Distressed Assets Program, TSG, after diligent inquiry and analysis, acquires "distressed" properties, defined as residential real estate which either have been acquired by foreclosing mortgage lenders, or are REO's and Short Sales. After acquisition, TSG rehabilitates the properties, rents and stabilizes them and then packages them for sale individually or in groups.

With a multidisciplinary team with over 50 years of collective experience, TSG identifies submarkets where to participate, taking into account the median household income, the demand of the market and its potential appreciation. Having identified the opportunity, TSG proceeds to the acquisition and stabilization of the property.

TSG's Construction Division administers and supervises the rehabilitation process, pursuant to established standards and upon completion delivers the properties to the Leasing Division which is responsible for renting them.

Once the properties are sold by TSG Realty, the company's Property Management Division provides property administration services to its customers.



São Paulo – De um lado, o estouro da bolha imobiliária na crise de 2008 provocou uma queda vertiginosa no preço dos imóveis em Miami. De outro, a valorização do real nos

A ideia é que o investidor vire proprietário de imóveis já alugados, conseguindo faturar por duas frentes. De imediato, será possível embolsar o valor do aluguel pago pelo inquilino norte-americano, um retorno anual líquido de 7% a 8% sobre o preço do imóvel, superior ao rendimento da poupança no Brasil. No longo prazo, a expectativa é que as casas também se recuperem do desconto sofrido com a crise de 2008, ficando até 45% mais caras.

Presidente do The Solution Group (TSG), incorporadora que atua na compra e venda de casas subavaliadas, Camilo Lopez afirma que cerca de 50 mil famílias em toda a Flórida passaram de donas a inquilinas desde a quebra do Lehman Brothers. Apertada a torneira do crédito, muita gente optou por entregar o imóvel ao banco, já que os preços derreteram, mas os financiamentos permaneceram caros, com as parcelas acordadas no auge da especulação imobiliária.

As famílias passaram a alugar e as incorporadoras entraram em cena, garimpando achados no mercado e suprindo a nova demanda. Nos últimos 16 meses, a TSG adquiriu 628 propriedades, uma compra estimada em 90

Piscina em condomínio em Miami: preço das casas parte de 65 mil dólares

É possível comprar imóvel em Miami por 65 mil dólares

01

02 Análisis de tendencias del mercado



S&P/Case-Shiller U.S. National Home Price Index


The chart shows the index levels for the 10-City and 20-City Composite Indices. As of July 2011, average home prices across the United States are back to the levels where they were in the summer of 2003.

200

180

160

140

120

100

80

60

20%

15%

5%

0%

-5%

-10%

-15%

-20%

-25%

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

10%

US National, index level (left)

US National, %chya (right)

Nationally, home prices are backto their 2003 levels

Record low decline of 18.9% in2009 Q1 (solid line)



Real Estate Cycle


Optimism

Sales Rate Increase

Speculation2006

Sales Rate Decrease

Uncertainty

Recession Sales Rate Increase

Optimism

Recovery2011

Real Estate Cycle

MINIMUM OPPRORTUNITYMAXIMUM RISK

MINIMUM OPPRORTUNITYMAXIMUM RISK

As shown in the graph, the real estate market is now at its moment of most certainty and the risk-opportunity rate is at its optimum peak.


Apartment Rent and Vacancy Trends

Ave

rage

Eff

ect

ive R

ent

Vacancy Rate

Effective Rent

Vacancy Rate

$700

$800

$900

$1,000

$1,100

11**10*090807060504030201

2%

4%

6%

8%

10%

Employment Growth Chart

-7%

-5%

-3%

1%

3%

2008

Miami Fort Lauderdale West Palm Beach

-1%

2009 2010 2011

Asking Rent

$1,000

$1,060

$1,080

$1,120

$1,140

2008

Miami Fort Lauderdale West Palm Beach

$1,100

2009 2010 2011

$1,040

$1,020

$85,500

$14,000$7,373 $6,627

$-

$50,000

$100,000

$150,000

$200,000

$250,000

Annual Net Rent

2010 - 2011 Properties Portfolio Example

$220,000

$8,300 $3,340

$-

$50,000

$100,000

$150,000

$200,000

$250,000

Property Value Annual Gross RentAnnual Maintenance Costs

Annual Net Rent

2003 - 2006 Properties Portfolio Example

2006 –2007 ANNUAL RETURN

2,50%

7.75%

2010 –2011 ANNUAL RETURN

Property Price Decline

Rent Increases

Property Value Annual Gross Rent

Annual Maintenance Costs

$11,640


Graph information acquired by the “2011 National Apartment Report” by Marcus & Millichap

Income producing properties' price drops and rent increases have improved substantially net returns. In the case of the preselected income producing portfolio rent has been multiplied by a factor of 3 increasing from 2.5% to a very attractive 7.75%.



The crisis of 2008 led developers to having to sell their inventory below replacement costs. However, we are starting to see signs later this year that the market begins to recover.



South Florida is the default capital of the country. Here in Miami-Dade County, one out of five households with mortgages is in foreclosure. Home sales in the metropolitan area during the first half of the year rose 16 percent from 2010 for the best spring since 2007, according to the research firm DataQuick, far outpacing the negligible growth in the rest of the country. Two-thirds of the sales were all cash.

As a result, the balance between supply and demand in South Florida is shifting. In late 2008, as the financial crisis was peaking, there were 108,000 properties for sale and hardly any buyers. The region became a symbol of excess. Buyers abandoned their deposits and reneged on deals, buildings went bankrupt and squatters moved in. Now there are fewer than 48,000 properties for sale, Condo Vultures said. And with supply diminished, homes have value again.

Prices, after a brutal drop, are firming up or even increasing. During the first six months of the year, there were 439 sales for at least $2 million, up 13 percent from last year. Experts say people thought it would take at least a decade to get back to this point.



EQUITY RESIDENTIAL

Apartment landlord enjoys 3.3 percent rise in funds

-Bloomberg News By Oshrat Carmiel

Equity Residential, the largest publicity traded U.S. Apartment landlord, said second-quarter funds from operations rose 3.3 percent as the nations rents climbed and vacancies declined.

FFO, which gauges a property company’s ability to generate cash, rose to $180.7 million from $174.9 million a year earlier. On a per share basis, FFO was unchanged at 58 cents, the Chicago based real estate investment trust said Thursday in a statement.

The compnay was expected to have FFS of 60 cents a share, the average estimate of 21 analysts in a Bloomberg survey.

U.S. apartment rents climbed 5.2 percent in the 12 months through June, as a weak homebuying market fuled demand for leasing, according to Axiometrics, a Dallas’based research company. REIT landlords are benfiting from a limited supply of apartments and better job propects for recnet college graduates, according to Anthony Paolone, an analyst with JPMorgan Chase in New York.

Eqity Residential sold more than $1 billion of apartment properties in the second quarter, according to Real Capital Analytics, taking advantage of investor demand amid the promise of rent growth.

FFO, used by REITs, doesn’t conform to generally accepted accounting principals.

Equity Residential reported so called normalized FFO of 60 cents a share, compared with 58 cents a year earlier. Normalized FFO excludes items that are not comparable from perido to period, such as asset impairments of penalties for early payment of debt the company said

03

U.S. apartment rents climbed 5.2 percent in the 12 months through June, as a weak homebuying market fueled demand for leasing, according to Axiometrics Inc., a Dallas-based research company. REIT landlords are benefiting from a limited supply of apartments and better job prospects for recent college graduates, according to Anthony Paolone, an analyst with JPMorgan Chase & Co. in New York.



TSG

TSG selects the best propertiesafter an extensive analysis

Property yields

between an estimated

return of 7% to 8%

Property ready

for sale

CleanTitle

TSG Leasing Team

TSG Leasesthe property

TSG MANAGEMENT TEAM

Renovated Propertywith clean title

TSG ACQUIRES THE PROPERTY

TSG Construction Team

TSG’s Financial Analyst Team

Property 1

Property 2

Property 3

Property 4

Property 5

Property 6

Property 7

Property 8

Property 9

TSG Financial Analyst Team

TSG assembles a diversified portfolio

Properties

Foreclosed, REO and Short Sale Properties

COURT / BANK

TSG Ensures:Ÿ Take possesion of property

Ÿ Change of locks

Ÿ Removal of any illegal tenant

Ÿ Remodeling

Ÿ Secure the property

TSG is responsible for:Ÿ Rent Collection

Ÿ Expense Payments

Ÿ Supervise potential repairs

Ÿ Prepare annual reports



Properties



TSG REF: TDP 5

La Hacienda18308 NW 68 AVE No. J Miami Lakes, FL 330151 Bed / 1 Bath

$ 81,620

Sq. Ft. 715

$

$

$

$

$

950

95

176

75

604

8.89%

$200,000

$150,000

$100,000

$50,000

$25,000

$0

$165,000

$81,620

$155,135

$117,975

$89,500

05

to the documents required by section 718.503, Florida Statutes, to be furnished by the developer to a buyer or leasee. Not an offer where prohibited by state statutes. Equal Housing Opportunity. Oral representations cannot be relied upon as correctly stating representations of the developer. For correct representations, reference should be made

TYPE: CONDO

Sales Price:

Completely Renovated

Prop. Man:

Estimated Monthly Rent:

Estimated R/P Taxes / Mth:

HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: TBB 1

Lakeview South Condo5275 NW 10th Court #307 Plantation, FL 333131 Bed / 1 Bath

$ 67,500

Sq. Ft. 957

$

$

$

$

$

799

50

230

75

444

7.89%

$200,000

$150,000

$100,000

$50,000

$25,000

$0

$160,000

$67,500

$157,905 $155,991

$75,000

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: SCP 1

Waterways Taheri1211 Imperial Lake RD West Palm Beach, FL 334132 Bed / 2 Bath

$ 125,000

Sq. Ft. 1,384

$

$

$

$

$

1,200

147

100

75

878

8.43%

$300,000

$250,000

$200,000

$150,000

$100,000

$0

$260,000

$125,000

$256,052

$228,360

$130,000

05


TYPE: Townhome

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: SCD 6

Venetia Gardens2911 SE 13 Ave #102-49 Homestead FL 330352 Bed / 2 Bath

$ 65,000

Sq. Ft. 822

$

$

$

$

$

755

64

229

75

407

7.51%

$200,000

$150,000

$100,000

$50,000

$25,000

$0

$165,000

$65,000

$140,944 $135,630

$77,500

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: SCD 3

Bluewaters24386 SW 109 CT #24386 Homestead FL 330323 Bed / 2 Bath

$ 115,000

Sq. Ft. 1,447

$

$

$

$

$

1,200

308

105

75

712

7.43%

$300,000

$250,000

$200,000

$150,000

$100,000

$0

$305,000

$115,000

$289,122

$238,755

$125,000

05


TYPE: Townhome

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: SCB 1

Verano8002 SW 21st CT Miami, FL 330252 Bed / 2 Bath

$ 105,000

Sq. Ft. 1,000

$

$

$

$

$

1,100

76

218

75

731

8.35%

$250,000

$200,000

$150,000

$100,000

$50,000

$0

$225,000

$105,000

$184,808

$165,000

$109,000

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: NGP 1

Kensington of Royal Palm Place350 Crestwood Cir #105 Royal Palm Beach FL 334112 Bed / 2 Bath

$ 99,500

Sq. Ft. 1,177

$

$

$

$

$

1,150

118

339

75

618

7.45%

$250,000

$200,000

$150,000

$100,000

$50,000

$0

$245,000

$99,500

$236,678

$194,205

$110,000

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: NGD 1

Caribbean Isles Villas2733 NE 3rd Court #106 Homestead, FL 330333 Bed / 2 Bath

$ 87,000

Sq. Ft. 1,194

$

$

$

$

$

979

161

249

75

494

6.82%

$300,000

$250,000

$200,000

$150,000

$100,000

$0

$257,000

$87,000

$209,884 $197,010

$89,900

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: NGB 2

Courtyards at Cimarron850 E Commercial Blvd. 243 E, Oakland Park FL 333342 Bed /1 Bath

$ 79,000

Sq. Ft. 830

$

$

$

$

$

900

57

229

75

539

8.18%

$200,000

$150,000

$100,000

$50,000

$25,000

$0

$189,000

$79,000

$180,136

$136,950

$85,000

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: HFD 2

Biscayne Beach Club10500 SW 155 CT #1026 Miami FL 331961 Bed /1 Bath

$ 77,300

Sq. Ft. 747

$

$

$

$

$

925

115

236

75

499

7.75%

$250,000

$200,000

$150,000

$100,000

$50,000

$0

$235,000

$77,300

$231,414

$123,255

$85,000

05


TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice


TSG REF: HCB 2

Villas at Lakeview5200 NW 31st Ave #174 Fort Lauderdale, FL 333271 Bed / 1 Bath

$ 67,000

Sq. Ft. 702

$

$

$

$

$

795

64

202

75

454

8.13%

$200,000

$150,000

$100,000

$50,000

$25,000

$0

$155,000

$67,000

$141,527

$115,830

$78,000



TYPE: CONDO

Sales Price:


Prop. Man:



HOA’s:

NOI:

CAP:

HistoricValue

Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



TSG REF: HCB 1

Lakewood at Emerald Hills3700 N 56 Ave #1013 Hollywood, FL 33021

TYPE: CONDO1.5 Bed / 1 Bath

$ 79,900Sales Price:

Sq. Ft. 749


$

$

$

$

$

950

93

234

75

548

8.23%

Prop. Man:



HOA’s:

NOI:

CAP:

$200,000

$150,000

$100,000

$50,000

$25,000

$0HistoricValue

$165,000

$79,900

$144,224

$123,585

$83,000


Judgement Amount

ReplacementValue

Fair Market Value

TSG SalesPrice



Palm Beach County

Miami Dade County

Broward County

$

$

$

$

$

$

$

$

$

$

$

$

$

$



$$$$$

$$$$$

140,676 (16,171) (30,563) (10,800)

83,141

7.93%

11,723(1,348) (2,547)

(900) 6,928

Rental Income (Annual)Total

Rental IncomeTaxesHOA’sProperty ManagementTotal

CAP / (Ratio)

Per Unit

Number of Units

Area (Sq Ft)

Historic High

Sq Ft Value

Fair Market Value

Sq Ft Value

TSG Sales Price

Sq Ft Value

Discount over Historic Value

Sq Ft Value

Percentage

Discount over Fair Market Value

Sq Ft Value

Percentage

11,724

Total Per Unit

977

12

2,526,000

1,136,900

1,048,820

1,477,180

88,080

210,500

215.46

94,742

96.97

87,402

89.46

123,098

126.00

7.75%

7,340

7.51

58.48%


$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

Price Behavior Analysis

$0Valor

HistóricoDeuda

BancariaValor de

ReposiciónValor

del MercadoPrecio

de Venta

$2,526,000

$1,048,820

$2,327,879

$1,932,546

$1,136,900

100%

80%

60%

40%

20%

10%

Percentage Behavior Analysis

$0Valor

HistóricoDeuda

BancariaValor de

ReposiciónValor

del MercadoPrecio

de Venta

100%

42%

92%

77%

45%

$250

Sq. Ft. Behavior Analysis

ValorHistórico

DeudaBancaria

Valor deReposición

Valordel Mercado

Preciode Venta

$215.46

$89.46

$198.56

$164.84

$96.97

$200$175$150$125$100

$75$50$25

$0

07


The Premier Wholesaler of Distressed Properties

Two NE 40th StreetSuite 204

Miami, FL 33137305.438.1259


raul sanchez de varona and his team at tsg

Documents

tsg distressed properties

tsg realty

confidential memorandum

brief information

distressed assets program

remodeled propertiesby

unique program

average time