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Simcoe Green Homes Investment Prospectus

Simcoe Green Homes Investment Prospectus

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Published by Jim Simcoe
The investment plan for Simcoe Green Homes
The investment plan for Simcoe Green Homes

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Published by: Jim Simcoe on Jan 31, 2012
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Simcoe Ventures

Investment Prospectus
Page 2
TABLE OF CONTENTS
.............................................................................. 1. EXECUTIVE SUMMARY 3
...................................................................................................... 2. TEAM 4
........................................................................... 1. Jim Simcoe-principal 4
....................................................................... 2. Kevin Gaynor-principal 4
................................................................................. 3. THE GREEN VISION 5
........................................................................ 1. Positive Green Impacts 5
.......................................................... 4. GREEN MULTIFAMILY OPPORTUNITY 7
............................................................................. 1. Green Opportunity 7
............................................................................. 2. Multifamily Benefits 9
..................................................................................... 1. Cash Flow 9
...................................................................................... 2. Demand 10
..................................................................................... 3. Leverage 10
.............................................................................. 5. MARKET SELECTION 11
...................................................................... 1. Rental Market Strength 11
..................................................................................... 2. Competition 12
......................................................... 6. CONSULTING CHANNEL REVENUE 13
....................................................................... 7. INVESTOR OPPORTUNITY 14
.................................................................................. 1. Debt Investors 14
.................................................................................. 2. Equity Investor 14
........................................................................... 3. Investment Strategy 14
....................................................................... 8. INSPIRED PHILANTHROPY 15
.................................................................... 1. Benefit to the Non-profit 15
...................................................................... 2. Benefit to our Investors 15
....................................................................... 9. INVESTMENT SNAPSHOT 16
............................................................................. 1. Property Specifics 16
........................................................................... 2. Property Overview 16
............................................................................... 3. Housing Market 16
........................................................ 4. Economic and Market Overview 16
............................................... 10. FINANCIAL SUMMARY - Multi Family Unit 17
...................................................................... 11. PROPERTY PROJECTIONS 18
......................................................................... 12. INVESTMENT GRAPHS 19
......................................................... 1. NOI (Net Operating Investment 19
.......................................................................... 2. Cash Flow (Pre-Tax) 19
................................................................ 3. ROI (Return on Investment) 20
.............................................................. 4. COC (Cash on Cash Return) 18
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
EXECUTIVE SUMMARY
We offer an investment in green multifamily properties. Our team has been
active in the green multifamily industry for the several years and is now
positioned to capitalize on it with a select group of investors.
Green multifamily represents the single highest performing real estate investment
in the next ten years. Green multifamily investments offer the following:
1. Opportunity to substantially increase profitability through green retrofits.
2. Risk mitigation – Green multifamily excels in any economic climate.
3. Demand far exceeds supply for green multifamily.
4. Rebate and Incentive funds offered to offset any green retrofit expenses.
5. Accelerated appraisal value.
Currently there is a wealth of opportunity for green multifamily created by
three disparate, yet related factors:
1. As consumers grow increasingly more educated about green living they are
demanding more from their prospective landlords. As this consumer education
continues to increase, the demand for green apartments will only continue to rise.
2. Demand for green multifamily continues to outpace supply. There are very
few green multifamily properties in the US. Our properties will have little,
if any, competition.
3. Current market prices for multifamily projects is at an all-time low. We are able
to purchase properties through a variety of sources (banks, REO companies,
bulk sales, etc.) and gain very favorable lending terms. These favorable market
conditions are forecasted to last another 12-18 months.
We work with investors in two ways: as debt investors (guaranteed return)
or equity investment partners (projected return, equity position in the
project). We are looking for a small, select group of investors who are
interested in being involved in our green real estate projects.
Page 3
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
TEAM
JIM SIMCOE
Jim Simcoe is green real estate investment consultant, sustainability
speaker and author. He develops green multifamily strategies for
real estate investment companies throughout North America. Jim
has been featured on NBC, Fox, SmartMoney.com, San Diego
Insider TV, etc.
Jim writes for Personal Real Estate Investor Magazine,
BiggerPockets.com (the #1 real estate investing website in the US),
EcoHome, San Diego Business Journal,
GreenRealEstateInvestingsNews.com, RIS Media, etc. He is the co-
author of the “Go Green, Bank Green” study published by
Personal Real Estate Investor Magazine in March 2010.
Jim is the President of the Board of Directors of the New World Leadership School, the first
sustainable pre-school in San Diego County. Jim is a Certified Green Building Professional,
EcoBroker and Real Estate Broker.
He lives with his wife, two daughters and two very spoiled dogs in Cardiff-By-The-Sea, California.
KEVIN GAYNOR
Kevin Gaynor is a Building Performance Institute (BPI) Certified
Building Analyst, Envelope and Multifamily Building Analyst
and Civil/Environmental Engineer specializing in the areas of
Land Development and Site Design. He has managed projects
including single family homes, commercial properties, 200+
multi-unit developments, hundred acre residential subdivisions
and numerous condo conversions.
Kevin’s environmental consulting work consisted primarily of
preparing environmental studies, waste management design,
and overseeing construction projects. He has developed multi-million dollar cost and quantity
estimates for client projects. He has designed strategies for effectiveStorm Water
Management, Storm Water Prevention & Pollution and Low-Impact Development.
Kevin graduated from University of Massachusetts-Amherst with a degree in Civil and
Environmental Engineering in 1999. He lives in San Diego, California with his wife, Karin.
Page 4
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
THE GREEN VISION
POSITIVE GREEN IMPACTS
We are in business to not only generate revenue but to also fundamentally change how
the real estate market operates. We’re creating homes that are healthy, thriving
environments that cost less to operate. In doing so our business will create positive
‘green’ impacts in eight areas.
They are:
Investors
1. Higher returns through higher cash flow, decreased expenses, reduced
vacancy expenses
2. Reduction in capital expenses as rehab expenses can be funded through a
variety of energy efficiency grants/incentives/rebates.
3. Increased appraisal values.
4. Safer investment as properties enjoy greater demand and stability.
5. Pride of ‘Action’.  Investors are directly to contributing to improving our
environment, creating jobs and improving the lives of the residents.
Community
1. Healthier residents resulting in decreased public health-care expenses.
2. Economic growth through job creation, tax revenue, etc.
3. Increased home values.  Green properties appraise higher and thus raise
median home prices in their neighborhoods.
4. Neighborhood beautification potentially contributing to lower crime rates.
Residents
1. Lower monthly utility bills, more disposable income.
2. Healthier lives (potentially lower health-care expenses, etc).
3. Healthier children (potentially lower incidences of childhood asthma, etc).
Page 5
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
GREEN VISION con’t
Workforce
1. New ‘green’ jobs are created throughout the US.
2. Unemployment is reduced as laid off workers are re-trained.
3. Green companies can leverage ‘green’ employment grant subsidies to
increase employee size.
Housing Industry
1. Improve home values nationally.
2. Homes are more affordable for more people to own and operate.
3. Take bank-owned properties off the market.
4. Reduce vacancies potentially resulting in crime rate declines.
Environmental
1. Lower CO2 emissions.
2. Less energy consumed.
3. Reduction in landfill waste.
4. Recycle materials that were targeted for waste stream.
Non-Profits
1. They can focus on their core mission, not fund-raising.
2. Increased cash flow on a regular basis.
3. Opportunity to increase fundraising dollars through real estate offerings.
Green Suppliers
4. More suppliers in marketplace.
5. New products enter the market faster.
6. Larger selection of products more readily available.
Page 6
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
GREEN MULTIFAMILY OPPORTUNITY
GREEN OPPORTUNITY
High-performance ‘green’ multifamily properties represent the single
greatest opportunity for real estate investors nationwide. They offer higher
profits, greater appreciation, more favorable lending parameters, rebates
and incentive money, etc.
For our business a multifamily property must conform to the following
criteria to be considered ‘green’:
1. Create a healthier (re: non-toxic) living environment for residents.
2. Offer significant utility expense savings to all residents.
3. Cost less (than comparable properties) for us to operate.
4. Create a smaller environmental footprint.
Our business model is geared to capitalize on the wealth of opportunity for
green multifamily properties. Currently three trends work in our favor:
• Renters are increasingly demanding green features in prospective apartments.
• Green retrofits result in lower short and long term expenses for multifamily owners.
• Rebate and incentive money offered to multifamily owners is at an all-time high.
86% of renters
would prefer a
green home
55% of renters
are willing to
spend more
to live in one
Data from Rent.Com’s Feb 2010 survey
86%
55%
Page 7
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
GREEN MULTIFAMILY OPPORTUNITY con’t
Renters are driven to green apartments because green apartments offer cost
savings and a healthier living environment. The environmental benefits are
largely a fringe benefit for renters and NOT the main reason they chose to
rent green apartments.
Regardless of economic conditions, a majority of renters are interested in
saving money and living in a safer, less toxic apartment. Our properties offer
prospective renters a unique opportunity to both save money and live healthier.
All multifamily investments are designed to realize profits through three core
methods:
1. Increased occupancies
2. Increased rents
3. Decreased expenses
Our green apartments will maximize profits in all three areas. Occupancies
and rents increase because we offer a highly desired product that isn’t
available anywhere else. Renters save money on utility bills and enjoy
healthier living environments.
For example, assume rents are $1000 and utility bills are $200 a month for a
typical apartment in Phoenix, AZ. If our utility bills are only $100/month, then
prospective renters who spend an additional $50 per month in rent actually save
money because their TOTAL monthly expense is lower with our property.
Typical multifamily operational expenses (utilities, water, sewer, etc.) will be
dramatically reduced through our green retrofit strategies. Further, we’ll pursue
grants, rebates, incentives and Stimulus money to offset the cost of these retrofits.
We will only pursue retrofits that have an aggressive return on investment. We will
not pursue green methods unless they have a definite payback period.
Page 8
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
GREEN MULTIFAMILY OPPORTUNITY con’t
Another key benefit of our green multifamily properties is that we’re able to
accelerate the appreciation in appraisal values much faster than comparable
properties. Multifamily appraisals are largely based on the net operating
income (NOI) generated by the property. Our NOI will be higher due to
increased rents and decreased expenses. That is the first step in increasing our
properties appraisal values.
The second step involves using the Energy Star Guidelines which state that the
increased annual savings in utility expense in a commercial property will
increase the appraised value of that property. The formula is as follows:
Net Annual Energy Savings / Capitalization Rate = Increased appraisal value (in dollars)
For example, on a $1,500,000 property assume you save $30,000/year
in a market where cap rates are 6%. Using the formula:
$30,000 / .06 = $500,000. Your $1.5M property is now worth $2M.
MULTIFAMILY BENEFITS
We’ve chosen multifamily as the asset class to pursue for several reasons.
Multifamily offers the greatest return coupled with the lowest risk. Multi-
family investments also allow us to positively impact the greatest number of
families through healthier living and lower expenses.
The three key benefits of green multifamily investments are: Cash Flow,
Demand, and Leverage.
CASH FLOW
Cash flow is defined as the Net Operating Income - Mortgage. Net
Operating Income is the total income from the property minus the
expenses. In essence, when you increase income and/or lower expenses,
cash flow increases. We consistently increase cash flow by executing a
sound property management plan that maximizes rents and decreases
Page 9
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
GREEN MULTIFAMILY OPPORTUNITY con’t
expenses. Additionally, our expertise in multifamily rebates and incentives will
further reduce our expenses and thus increase our cash flows.
Net Operating Income (income - expenses) – Mortgage = Cash Flow
DEMAND
The demand for rental housing in the US continues to increase due to population
growth, housing affordability, etc. For example, the Echo Boomer generation
(children of the Baby Boomers) are 80 million strong, represent 1/3 of total US
population and comprise a huge percentage of the next decade’s rental
population. According to a study done by Harvard University Joint Center for
Housing Studies, 80% of households where people are under 25 years old are
renters. 65% of households where people are 25-29 are renters. That offers
tremendous potential for our investors.
LEVERAGE
Multifamily investments offer the ability to utilize leverage to dramatically enhance
the value of our investments. Typically we put down no more than 30-40% for any
property we purchase. Upon closing we own/control an asset that is worth
considerably more than our investment in it. At the same time, cash flows,
appraised value and appreciation rates are based on the property’s total value,
NOT just the money we have in the deal. Real estate represents one of the only
investments where what you purchase is immediately worth more than you
invested. If you invest $400,000 in mutual funds, you’d have $400,000 worth of
mutual funds. If you invest $400,000 in a multifamily deal, you’ll own an asset
worth approximately $1,000,000.
65%
65% of households
of 25 – 29 year
olds are renters
80%
80% of households
of under 25 year
olds are renters
Page 10
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
MARKET SELECTION
Although we are market agnostic there are two key components a market must
meet for us to pursue investing in that market. We define ‘market’ as the metro
area of a city. For example, the San Diego market would encompass any city
within the San Diego County area. The two key components we consider are:
1. Rental Market Strength
2. Competition
RENTAL MARKET STRENGTH
We determine rental market strength using three core benchmarks: job growth,
affordable housing, and supply. These three indicators have shown to most accurately
forecast the success rate of multifamily investments throughout the US.
Job growth in a market is calculated by the percentage increase in jobs per capita over a
given period of time. We look for markets that have a strong employer base and a
pro-business political environment. Markets that have a significantly higher percentage of
blue collar workers are very attractive to us as those workers are our target renters.
Our approach to affordable housing is contrarian, meaning that we look for markets
where there is a lack of affordable single family homes. In markets where home sales
prices are above the national average more people rent. In essence, the higher the
average home sales price, the higher percentage of renters.
Supply is based on both the current multifamily inventory in a market and the amount of
new multifamily construction. We look for markets where inventory is low and new
construction is slight. With fewer available properties, rental demand increases for those
properties in place. Thus, vacancy rates decrease while cash flow and profit increase.
There is a plethora of data we could consider in determining the viability of a market.
We’ve chosen to stick with the three factors that have the strongest track record of
success. An increasing job market, higher home sale prices and a lack of supply all
indicate a strong market for our investments.
Page 11
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
MARKET SELECTION con’t
COMPETITION
Our profit is driven by offering our target renters a compelling advantage
that they cannot get anywhere else. Offering high performance apartments
that create healthier (re: non-toxic) living while substantially reducing monthly
utility bills, results in:
1. Higher occupancies
2. Higher rents
3. Longer tenant rental periods
4. Fewer rental concessions
5. Less maintenance
All of these factors contribute to higher profits, higher appraised values,
lower expenses, etc. all of which contribute to our bottom line. Put simply,
we offer an opportunity to renters that is uncommon and highly desired.
From a competitive standpoint we chose markets where we will be the only
player in town. We seek markets where ‘green’ living is not en vogue and
where there are few (if any) green multifamily projects.
This gives us first-to-market advantage. This advantage gives us:
1. Greater share of available rebates and incentive funds
2. Free, favorable PR
3. Better integration in the local community
Contrary to presumed logic, we actively seek markets that are not green
focused. These markets give us the greatest opportunity to be a major
player and set the standard for that market. All of which works to increase
our profits dramatically.
Page 12
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
CONSULTING CHANNEL REVENUE
A key aspect of the plan is the ability to earn complementary revenue via
consulting with multi-family property owners. The team, and Jim Simcoe
specifically, has a demonstrated track record in this arena. Since 2006 Jim has:
1. Worked with multi-family owners, property managers, real estate investors
throughout the US and Canada.
2. Provided green strategies for commercial owners, multi-family owners,
businesses, non-profits, schools, etc.
3. Worked on multi-family projects as large as 480 units on 20+ acres of land.
As we are already the “brand” in the green retrofit apartment space,
consulting revenue is a natural offshoot of our core business. To leverage
our brand and time wisely we will hire 10 sustainability consulting
franchisees to work as independent contractors for us nationwide. This will
allow us to minimize costs, our time commitment and still gain revenue
share in the consulting space.
Our 12-month revenue projections from this channel are as follows:
Q1 Q2 Q3 Q4 TOTALS
MFU Consulting $25,000 $45,000 $65,000 $75,000 $210,000
Real Estate Investor
Coaching $10,000 $25,000 $25,000 $25,000 $85,000
TOTALS $35,000 $70,000 $90,000 $100,000 $295,000
Page 13
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
INVESTOR OPPORTUNITY
Prospective investors are invited to participate in this opportunity in either of two ways:
as debt investors or equity investors. For our purposes they are defined as follows:
INVESTMENT STRATEGY
Our strategy for each project is as follows:
1. Once purchased, transform property into a high-performance green property.
2. Capture all available rebate/incentive money, stimulus and grant funds to
offset the cost of the green retrofit.
3. Optimize all internal/external systems to reduce capital and operational
expenses.
4. Launch marketing strategy positioning property as a ‘green’ property. Leverage
lower utility bills and healthier living in all marketing materials, sales presentations.
5. Increase occupancy and rents resulting in NOI increases and higher appraisal
value(utilizing Energy Star Guidelines to maximize appraisal value).
6. Refinance property within 2-4 years.
7. Upon re-finance, investors will have the option to be cashed out.
DEBT INVESTORS EQUITY INVESTORS
Debt investors provide capital in exchange for
guaranteed return on their money.
Payments are made quarterly or annually.
A balloon payment (initial investment + preferred
return) will be returned within 2-4 years.
The loan is secured by the property.
Debt investors do not hold any equity in the property.
Equity investors provide capital in exchange
for a projected return on their money.
Payments are made from the net profits from
the project.
Payments are made quarterly or annually.
A balloon payment (initial investment +
profit) will be returned within 2-4 years.
Equity investors hold equity in the property.
Page 14
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
INSPIRED PHILANTHROPY
A core component of our business is supporting non-profit organizations. We offer a
revolutionary way for targeted non-profits to receive donations from us. Rather than just
receive an occasional donation check, each selected non-profit will receive a quarterly
dispersement payment based on a percentage of the selected property’s net profits.
This quarterly payment will continue for as long as we own the property. As net profits
increase over time, so will the quarterly payments. If and when we sell the property, the
non-profit will be given a percentage of the net profits of the sale in a lump sum payment.
For example:
Year Annual Net Profits
Non-Profit Annual Non-Profit
Donation% Donation
Year 1 $140,000 5% $7,000
Year 2 $180,000 5% $9,000
Year 3 $230,000 5% $11,500
Year 4 $260,000 5% $13,000
Year 5 $305,000 5% $15,250
TOTAL $1,115,000 5% $55,750
BENEFITS TO THE NON-PROFIT
1. Compounded interest- donation amounts continue to increase over time.
2. Regular donations received on a quarterly basis.
BENEFITS TO OUR INVESTORS
1. Opportunity to select the non-profit(s) to be supported.
2. Take advantage of all applicable tax write offs.
Page 15
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
INVESTMENT SNAPSHOT
PROPERTY SPECIFICS
Location: Phoenix, AZ
Property Type: 20 unit Multi-Family
Market Value: $650,000
Purchase Price: $425,000
Estimated Equity: 63%
Cash Flow: $62,000
Current Cap Rate: 9.4%
Return On Investment: 26.4%
Cash On Cash: 25.6%
PROPERTY OVERVIEW
• Stabilized property with strong occupancy history.
• 1986 construction with 100% two-bedroom floor plans.
• Close proximity to major highways, retail centers and jobs.
• Individually metered for electricity, swimming pool and on-site laundry facilities.
HOUSING MARKET
• Phoenix is now rated the 5th largest city in the United Sates.
• One bedroom apartments in Phoenix rent for $624 a month on average and
two bedroom apartment rents average $816.
• Multi-family properties have come down in price, even as occupancies have gone up.
ECONOMIC AND MARKET OVERVIEW
• Phoenix is currently home to seven Fortune 1000 Companies.
• Employment/Job Growth is up 28.8% over the last year.  
• With an average age of 34, greater Phoenix is the fifth youngest metro region in
the country with a diverse, well-educated labor force of over 2 million people.
• Greater Phoenix has consistently outpaced the U.S. population growth over the
last 18 years. Projections show the region is expected to grow by nearly 60
percent by 2030, bringing the population to more than 6 million people.
Page 16
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
FINANCIAL SUMMARY– Multi Family Unit
Mountain View Acres Apts (20 Units)
Current Property Profile Assumptions & Savings For Calculations
Multi-Family ElectricBill 35%
650,000 $ GasBill 35%
425,000 $ WaterBill 50%
170,000 $ AppraisalIncrease 0%
- $ RentalIncrease 10%
75,000 $ VacancyRate 5%
245,000 $ CƉĞƌĂƟŽŶCŽƐƚƐ 15%
RehabMaterialCŽƐƚƐ 5%
Income Summary Current(Annual) Green(1stYear) 5thYear Rebates 10%
CƌŽƐƐRentallŶĐŽŵĞ 114,000 $ 131,957 $ 160,395 $
OtherlŶĐŽŵĞ 5,702 $ 6,557 $ 7,970 $ Assumptions
Vacancy&CreditAůůŽǁĂŶĐĞ 17,100 $ 6,270 $ 7,621 $ CƌŽƐƐÞŽƚĞŶƟĂůlŶĐŽŵĞ 114,000 $
CƌŽƐƐCƉĞƌĂƟŶŐlŶĐŽŵe 102,602 $ 132,245 $ 160,744 $ AĚĚŝƟŽŶĂůMŽŶƚŚůLJlŶĐŽŵĞ(ifany) 5,702 $
1stMŽƌƚŐĂŐĞLŽŶŐ1Ğƌŵ(Fixed) 30yr
Expense Summary 1stMŽƌƚŐĂŐĞInterestRate 5.5%
Utility Information Current(Annual) Green(1stYear) 5thYear 1stMŽƌƚŐĂŐĞPrincipalAŵŽƵŶƚ 255,000 $
ElectricityBill 2,551 $ 1,658 $ 1,546 $ PrivateMŽƌƚŐĂŐĞInsurance - $
GasBill 4,251 $ 2,763 $ 2,577 $ PercentuŽǁŶ 40%
WaterBill 10,202 $ 5,101 $ 6,184 $
1ŽƚĂůuƟůŝƚLJCŽƐƚs 17,004 $ 9,522 $ 10,307 $ ÞƌŽƉĞƌƚLJtaxes 10,669 $
Insurance 3,500 $
Operation Information Current(Annual) Green(1stYear) 5thYear Electric 2,551 $
ÞƌŽƉĞƌƚLJMĂŶĂŐĞŵĞŶƚFee 4,845 $ 6,284 $ 8,037 $ Gas 4,251 $
AĐĐŽƵŶƟŶŐͬLĞŐĂů - $ - $ - $ Water 10,202 $
8ĞƉĂŝƌƐͬMĂŶƚĂŝŶĂŶĐĞͬSƵƉƉůŝĞƐ 10,000 $ 8,500 $ 9,201 $ Maintenance 10,000 $
ÞƌŽƉĞƌƚLJTaxes 10,669 $ 10,669 $ 11,102 $
Insurance 3,500 $ 2,975 $ 3,096 $ AƉƉƌĞĐŝĂƟŽŶRate 6%
On-siteÞĂLJƌŽůů 6,000 $ 5,100 $ 5,360 $ ÞƌŽƉĞƌƚLJMŐŵƚFee 5%
CŽŶƚƌĂĐƚSĞƌǀŝĐĞƐ 3,000 $ 2,550 $ 2,680 $ RentallŶĐŽŵĞIncrease 5%
MĂƌŬĞƟŶŐ 1,000 $ 850 $ 893 $ ÞƌŽƉĞƌƚLJTaxIncease 1%
General&AĚŵŝŶ 2,777 $ 2,360 $ 2,555 $ InsuranceIncrease 1%
Reserves&ƌĞƉůĂĐĞŵĞŶƚ 4,000 $ 3,400 $ 3,680 $ uƟůŝƟĞƐIncrease 2%
1ŽƚĂůCƉĞƌĂƟŽŶƐCŽƐƚs 62,795 $ 52,211 $ 56,911 $ GeneralOpsIncrease 2%
ÞƌŽƉĞƌƚLJTaxRate 1%
Cash Flow Assumptions Current(Annual) Green(1stYear) 5thYear PercentLandValue 20%
NetCƉĞƌĂƟŶŐlŶĐŽŵĞ 39,807 $ 80,034 $ 103,833 $ CůŽƐŝŶŐCŽƐƚƐ(Purchase) 3%
MŽƌƚŐĂŐĞÞĂLJŵĞŶƚ (17,374) $ (17,374) $ (17,374) $ CůŽƐŝŶŐCŽƐƚƐ;SĞůůͿ 5%
CashlůŽǁ8ĞĨŽƌĞ-Tax(CFBT) 22,433 $ 62,659 $ 86,459 $
Financial Performance Green(1stYear) 5thYear
* - Based on a 30-yr Fixed Mortgage
CapRate 9.4% 10.4% 10.7%
CƌŽƐƐRentMƵůƟƉůŝĞƌ(GRM) 5.70 5.83 6.05
CashŽŶCashReturn(COC) 25.6% 35.3%
InternalRateŽĨReturn(IRR) 250.1% 51.9%
ReturnŽŶlŶǀĞƐƚŵĞŶƚ(ROI) 26.4% 156.0%
Equity(Wealth)% 63.5% 75.7%
Equity(Wealth)$ 517,314 $ 734,918 $
NOTE: The values and data are to be used for
estimation purposes and should be verified.
uŽǁŶÞĂLJŵĞŶƚ
BuyerCreditsͬRebates
ÞƌŽƉŽƐĞĚRehab8ƵĚŐĞƚ
1ŽƚĂůCŽƐƚ
PurchasePrice
Projected Green Savings Purchase Information
ÞƌŽƉĞƌƚLJType
AppraisalValue
Page 17
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
PROPERTY PROJECTIONS
Mountain View Acres Apts (20 Units)
r a e Y 2 r a e Y 1 r a e Y t n e r r u C 3 Year 4 Year 5 Year 10
CASH-FLOW 1 2 3 4 5 10
Gross Scheduled Income 114,000 $ 131,957 $ 17,957 $ 131,957 $ 138,555 $ 145,483 $ 152,757 $ 160,395 $ 204,709 $
2 0 7 , 5 e m o c n I r e h t O $ 6,557.30 $ 855 $ 6,557 $ 6,885 $ 7,229 $ 7,591 $ 7,970 $ 10,173 $
Vacancy 0 0 1 , 7 1 e c n a w o l l A $ 6,270 $ 10,830 $ 6,270 $ 6,583 $ 6,913 $ 7,258 $ 7,621 $ 9,727 $
Gross Operating Income (GOI) 102,602 $ 132,245 $ 29,643 $ 132,245 $ 138,857 $ 145,800 $ 153,090 $ 160,744 $ 205,155 $
Operational Expenses
Utility Expenses (17,004) $ (9,522) $ 7,482 $ (9,522) $ (9,713) $ (9,907) $ (10,105) $ (10,307) $ (11,380) $
Property Management Fee (4,845) $ (6,284) $ (1,439) $ (6,284) $ (6,943) $ (7,290) $ (7,654) $ (8,037) $ (10,258) $
Accounting/Leg - l a $ - $ - $ - $ - $ - $ - $ - $ - $
Repairs/Mantainance/Supplies (10,000) $ (8,500) $ 1,500 $ (8,500) $ (8,670) $ (8,843) $ (9,020) $ (9,201) $ (10,158) $
Property Taxes (10,669) $ (10,669) $ - $ (10,669) $ (10,776) $ (10,883) $ (10,992) $ (11,102) $ (11,669) $
Insurance (3,500) $ (2,975) $ 525 $ (2,975) $ (3,005) $ (3,035) $ (3,065) $ (3,096) $ (3,254) $
On-site Payroll (6,000) $ (5,100) $ 900 $ (5,100) $ (5,202) $ (5,254) $ (5,307) $ (5,360) $ (5,633) $
Contract Services (3,000) $ (2,550) $ 450 $ (2,550) $ (2,601) $ (2,627) $ (2,653) $ (2,680) $ (2,817) $
Marketing (1,000) $ (850) $ 150 $ (850) $ (867) $ (876) $ (884) $ (893) $ (939) $
General & Admin (2,777) $ (2,360) $ 417 $ (2,360) $ (2,408) $ (2,456) $ (2,505) $ (2,555) $ (2,821) $
Reserves & replacement (4,000) $ (3,400) $ 600 $ (3,400) $ (3,468) $ (3,537) $ (3,608) $ (3,680) $ (4,063) $
Total Operating Expenses (62,795) $ (52,211) $ 10,584 $ (52,211) $ (53,652) $ (54,708) $ (55,795) $ (56,911) $ (62,991) $
NET OPERATING INCOME (NOI) 39,807 $ 80,034 $ 40,227 $ 80,034 $ 85,205 $ 91,091 $ 97,295 $ 103,833 $ 142,164 $
Mortgage Expenses
Mortgage Payment (17,374) $ (17,374) $ - $ (17,374) $ (17,374) $ (17,374) $ (17,374) $ (17,374) $ (17,374) $
Total Debt Service (17,374) $ (17,374) $ - $ (17,374) $ (17,374) $ (17,374) $ (17,374) $ (17,374) $ (17,374) $
Projected
Savings
After Green
Upgrades
CASH-FLOW(Before-Tax) (CFBT) 22,433 $ 62,659 $ 40,227 $ 62,659 $ 67,831 $ 73,717 $ 79,921 $ 86,459 $ 124,790 $
Monthly 1,869 $ 5,222 $ 3,352 $ 5,222 $ 5,653 $ 6,143 $ 6,660 $ 7,205 $ 10,399 $
Tax Benefits
Dep 4 6 3 , 2 1 n o i t a i c e r $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364 $
Mortgag 9 3 9 , 3 1 d i a P t s e r e t n I e $ 13,939 $ 13,939 $ 13,939 $ 13,939 $ 13,939 $ 13,939 $ 13,939 $
Subtotal 26,303 $ 26,303 $ 26,303 $ 26,303 $ 26,303 $ 26,303 $ 26,303 $ 26,303 $
4 0 5 , 3 1 e m o c n I e l b a x a T $ 53,731 $ 53,731 $ 58,902 $ 64,788 $ 70,992 $ 77,530 $ 115,861 $
Tax Bracket Imp 6 7 3 , 3 t c a $ 13,433 $ 13,433 $ 14,726 $ 16,197 $ 17,748 $ 19,383 $ 28,965 $
CASH-FLOW(After Tax) (CFAT) 19,057 $ 49,227 $ 30,170 $ 49,227 $ 53,105 $ 57,520 $ 62,173 $ 67,076 $ 95,824 $
Monthly 1,588 $ 4,102 $ 2,514 $ 4,102 $ 4,425 $ 4,793 $ 5,181 $ 5,590 $ 7,985 $
EQUITY ACCUMULATION
Property 0 0 0 , 0 5 6 e u l a V $ 768,879 $ 118,879 $ 768,879 $ 815,012 $ 863,913 $ 915,747 $ 970,692 $ 1,299,005 $
minus Mortgage Balance 251,565 $ 251,565 $ 251,565 $ 247,936 $ 244,103 $ 240,053 $ 235,775 $ 210,480 $
5 3 4 , 8 9 3 Y T I U Q E $ 517,314 $ 118,879 $ 517,314 $ 567,076 $ 619,810 $ 675,695 $ 734,918 $ 1,088,526 $
Cash On Cash Return (COC) % 9 . 0 5 % 3 . 5 3 % 6 . 2 3 % 1 . 0 3 % 7 . 7 2 % 6 . 5 2 % 6 . 5 2
Internal Rate of Return (IRR) 250.1% 250.1% 106.4% 73.7% 59.6% 51.9% 38.7%
Return on Investment (ROI) % 7 . 1 3 9 % 0 . 6 5 1 % 6 . 9 1 1 % 0 . 6 8 % 9 . 4 5 % 4 . 6 2 % 4 . 6 2
Page 18
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
NOI and CASH FLOW PROJECTIONS
NOI(Net Operating Income)
CashFlow
(Pre-Tax)
$0
$20,000
$40,000
$ó0,000
$80,000
$100,000
Currenl Aller Green
Üpgrodes
PRC)EClED
SAVlMGS
Yeor 1 Yeor 2 Yeor 3 Yeor 4 Yeor ó
$3P,80Z
$80,034
$40,22Z
$103,833
$8ó,20ó
$P1,0P1
$PZ,2Pó
$80,034
0
20,000
40,000
ó0,000
80,000
100,000
120,000
Currenl Aller Green
Üpgrodes
PRC)EClED
SAVlMGS
Yeor 1 Yeor 2 Yeor 3 Yeor 4 Yeor ó
$22,433
$ó2,óóP
$40,2ZZ
$óZ,831
$Z3,Z1Z
$ZP,P21
$8ó,4óP
$ó2,óóP
$124,ZP0
Yeor 10
Page 19
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc
ROI and COC
ROI(Return on Investment)
COC(Cash on Cash Return)
0.0°
200°
400°
ó00°
800°
1000°
Yeor 1 Yeor 2 Yeor 3 Yeor 4 Yeor ó
P31.Z°
1óó.0°
ó4.P°
8ó.0°
11P.ó°
2ó.4°
Yeor 10
0.0°
10°
20°
30°
40°
ó0°
Yeor 1 Yeor 2 Yeor 3 Yeor 4 Yeor ó
ó0.P°
3ó.3°
2Z.Z°
30.1°
32.ó°
2ó.ó°
Yeor 10
Page 20
Simcoe Green Homes Investment Agreement
187 Calle Magdalana, Ste105 Encinitas, CA 92024
For further information call 760-271-7128
Jim@jimsimcoe.com Copyright 2012 Simcoe Ventures, Inc

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