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www.TomWilsonProperties.com

Wilson Investment Properties

Tom WilsonPresident / Founder


Saratoga, Ca408-867-1867

[email protected]

Highest Cash Flow Quality Turnkey Investments in the USA

The Door to Understanding Real Estate Investing

Wilson Investment PropertiesPresentation Agenda

� RE Investing Fundamentals� Tom’s Top Tips � State of the Real Estate Union� Investment Choices Methodology

www.tomwilsonproperties.com

Wilson Investment PropertiesDisclaimer

� I’m an Investor� Not an accountant� Not an attorney� Not an agent or broker� Everything I share is a reflection of my own

experience and education� Seek professional assistance before

making any investment decisionwww.tomwilsonproperties.com

Path of One Investor - Tom Wilson� BSEE University of Delaware 1969� Silicon Valley 1969; 30 years Hi Tech�2 Start Ups, 7 Companies, 2 VP positions� 1st Prop 1971; 1st Rental 1975� 1998 Retirement Plan Wake up call�Year Business Plan Research� 1999 – Began 1031 Exchanges to DFW � 1999-2010; >$100M & >1600 units , 7 multifams,

3 condo conversions, 3 syndications� In 3yrs Cash Flow replaced W2; 3x Net Worth� Founded Wilson Investment Properties 2006�260 Props Rehabbed & Leased Props for Investors



Wilson Investment Properties Team

Home Office

SaratogaCa

Jody Knauf

Operations Manager

Tom Wilson

President & Founder

Weegi Wilson

VP & CFO

Joe Hernandez

Acquisitions & Sales Manager

Tom Wilson


This is what

I looked like….

Before the crash !


Fasten Your Seatbelts

RE InvestingFundamentals

Review


Some Key RE Investment Terms�CAP (Capitalization Rate)�ConC (Cash on Cash Return)�IRR (Internal Rate of Return)�ROI (Return on Investment)�Depreciation Tax Credits�GRM (Gross Rent Multiplier)�Rent Ratio (Rent/mo / Prop $)


Types of Real Estate Investing�Buy and Hold� Income/Cash Flow� Appreciation

�1-4 Residential, Multifam, Commercial�Flips� Preconstruction speculation� Assignments� Added Value

�Land Banking�Development�Paper


Real Estate Returns Outperforming Stocks Which Remain Volatile

9%19% 20%

13% 17%

63%

50% 54%

83%

96%

126% 127% 125% 128%

16%

0%

50%

100%

150%

S&P 500 Apartment Office Industrial Retail

1-year 5-year 10-year

Real EstateStill the BestLeveraged, sheltered & controlled vehicle for

cash flow & the accumulation of wealth

Tom’s Top Tips


Tom’s Top Tips�Buy in Top Metros�High Returns�Low Risk�Buy in Best Submarkets &

Neighborhoods�Buy Good Products�Let time be your friend�Most of my purchases were near

market value & 20% down & have done very well thank you!


Tom’s Top TipsBuy Simply for Best Reward/Risk Ratio

�Not emotion�Not fancy�Not live in�Not next door�Stock market analogy


Tom’s Top TipsDon’t be a Landlord

Be an Investor

Always Think About Opportunity Costs


Tom’s Top Tips

�Secure an Experienced Team�Don’t try to do it all�Delegate to experts you trust�Follow Success


Use, & Don’t Underestimate Your Generalist Skills

� Market Analysis� Supervision� Communications� Marketing� Financial� Project Management� Management by Objectives� Delegate Responsibility &

Accountability


Focus; Don’t Get Too Much on Your Plate at One Time


Analyze & Compare Local and Economic Trends

�Different regions have different cycles�Submarkets can vary a lot from the averages!!

Leveraged Return on Down Payment

More Important than Appreciation


Asset ProtectionHolding Title & Insurance

Entities vs. Insurance� Entities really protect?� Economics� Entity Cost vs. Insurance� Gates prior to entity

protection� Event� Unresolved� Lawsuit� Lose or Unresolved� Insufficient Insurance


� Joint Tenancy� Living Trust� LLC� LP� Corp S & C

Real Acquisition Cost Items� Rehab� Trash out� Flooring� Landscape� Paint� Kitchen & baths� Roof� Fixtures plumb &

elec� Appliances & HVAC� Windows� Staging� Garage door� Rehab surprises


� Closing costs� Taxes� Debt service� Insurance� Utilities� Property mgmt� Advertising� Lease up fee

Often the Tortoise Beats the Hare!

Don’t be in too big of a hurry

Doing it right is better than doing it fast

Learn From Your MistakesDon’t Run &

Forget


Be Careful What Persons with Influence Tell You

“We’ve never had a decline of housing prices on a nationwide basis. What I think is more likely is that house prices will slow, maybe stabilize. I don’t think it’s going to drive the economy too far from its full-employment path, though.”

Ben Bernanke

July 29, 2005

State of the Real Estate

Union



Easy Money Last Two Decades


It was Really a CREDIT BubbleTightened Credit Caused Price Declines


Natural Cycles Return to Mean


Does Real Estate Really Appreciate?

Delinquencies vs. Foreclosures Trustee Sale Progression

Source: LP

S, F

oreclosureRadar.com

, and The N

orris Group.

1.3%

1.7%

2.4%

3.4%

4.2%

5.1%

5.9%

7.3%

9.0%

9.7%

10.0%

11.3%

11.0%

10.50%

0.2%

0.3%

0.4%

0.6%

0.8%

1.1%

1.2%

0.7%

0.7%

0.8%

0.8%

0.8%

0.8%

0.8%

1.2%

1.5%

1.8%

2.1%

2.6%

3.2%

3.4%

3.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0

%

12.0

%

Q1-2007

Q2-2007

Q3-2007

Q4-2007

Q1-2008

Q2-2008

Q3-2008

Q4-2008

Q1-2009

Q2-2009

Q3-2009

Q4-2009

Q1-2010

Q2-2010

Delinquent %

(LP

S)

Foreclosures S

old %

Trustee

Sa

le Progression


Shadow Inventory

40% of Delinquent Loans Have Not Made Payment in 2+ Years

Source: LPS, April 2011.


Percent of Owners Intending to Repurchase


Unemployment Recovery after Recession

Federal Debt % GDP



>2030!

Get a Grip: The Appreciation / Speculation Game

is Over!So What Do You Do?

1.Wait until everybody knows everything is going back up ?

2.Invest in a location that soared and crashed, hope it doesn’t go down much more & hope to catch the next wave ?



Buy Assets That Produce Income Now

Invest for Cash FlowSingle Family Homes

Cash Flow & IRR Sensitivity


0

20

40

60

80

100

120

Rep Ins Occ PropMgmt

Tax Int Rate RentRatio

CoC

IRR

% Bottom Line Change for 20% Changein Income & Expenses

3Br/2Ba $125,000 home, $1250 Rent, DFW

So You’re Looking for Cash Flow?Look no further……..

High Rent Ratio

=High Cash Flow

Monthly Rent $Market Value of Investment

Monthly Rent $Or Total Invested $$

$1000/mo rent = 1% $100,000


Selecting

A Region

Major Metro Rent Ratio Avgs


SFR Rental San Jose vs. DFWSan Jose$600,000

$2000 Rent(.33% Ratio)


DFW

6 X $100,000 = $600,000

6 X $1000 Rent

$6000 Rent

(1% Ratio, X300%!)

Future Performance & Risk Indicators

�Historical & Projected Home Prices �Employment Growth & Diversity�Population Growth�Historical & Projected Rents &

Occupancy�Negative Equity & Foreclosures�Government Stability & Intervention

PricesSingle Family Homes

For All Types of InvestingShort Term or Long Term:

What Direction Will Prices Go in the Region I’m Considering Investing In?


Bruce Norris – Market Timing Expert

Market Direction Indicators•Historical Trends•Affordability Index•Inward Migration•Negative Equity



CA / FL / TX / USA Appreciation


Case Shiller : MSA DeclinesL.VegasWorst Dallas

Best


Delinquency By State


Negative Equity 25% US, 35% CA


Texas vs US Foreclosure Rate

JobsEconomy

Dallas Job Growth Leader



Texas vs USA Employment Growth

Dallas 24 / San Jose 13



State Government Financial Stability


Cost of Living

PopulationGrowth


Population Growth by MSA


Migration Paterns


Vacancy and Rent

Selecting a Property



Lower Risk, More Predictable ROI


Quality PropertiesPrice : $123,000

Rent : $1295 4/2.5/2Sq Ft : 2400

Year Built : 2005


Aaahhh – The Future…….


Dr. Doug DuncanVP & Chief Economist Fannie Mae

“If anyone tells you that they know how this

market is going to play out, run like heck!”

WIP Investment ConclusionsThe Good News………!

Shadow Inventory & Government Intervention

Are Giving the Well Educated & Careful Investor

Great Opportunitieswww.tomwilsonproperties.com

WIP 2012 RE Investing Conclusions�Cash Flow Now is King�Best Cash Flow is Still Out of State�Speculation for Appreciation is Risky –

Expect Long 5-20yr Recovery�Be Honest About True Cost of

Acquisition�Get an experienced team or Provider



“A crisis is a terrible thing to waste.”

Paul Romer, Senior Fellow at Stanford University


Investor Education Resourcestomwilsonproperties.com

1.WIP Website Investor Info2.WIP Weekly Newsletter3.Report: How to Select the Best

Investment Region & Property4.Real Estate 360 Wed 3pm - KDOW 1220am


the door to understanding real estate investing tom...

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