Download - Proposal Presentation 111 Lougheed Road
Joint Venture OpportunityBarrie Detached House
3 Bedroom Detached Bungalow, 111 Lougheed RoadBarrie, Ontario
Thomas Wongwww.happinessinspiration.com416-806-9568thomaswong@rogers.com
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
The Project• The property was originally listed for $219,900. We are planning
to buy it for $200,000. The house is less about 8 years old.• The house is in good conditions. No real renovation is required.
We set a renovation budget for $3,000 as contingency funds.• The house was sold couple months ago to a builder for $235,000.
The builder is the current owner. They build a custom built home to the previous owner. They made money from that sales. The house has been vacant for the last two months. Hence, there are still room for negotiation on this sales.
• Based on the comparables, we expected the value to be around $215,000.
• We have a confirmed rent-to-own tenant.• Using Lease Option program as the exit strategy, potential
profit in 3 year will be around $37K
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
The Opportunity
• Project Finder/ Real Estate experts invest
– 5% of cash investment ($2,111)– Over 50 hours of time and expertise
• Cash partners invest:– 95% of the cash investment ($40,114)
• RRSP 2nd mortgage of $10K (12% interest)
• Split profit 35-65 ($13K - $24K)
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Key Features of the Property
• 3 bedrooms, 2 baths detached bungalow• House painted in neutral color• Laminated floor on the main floor• Right next to school• Convenient South Barrie location• Walkout to fully fenced good size backyard• House about 8 years old• Nicely finished basement with full bath• Attached Single garage• House inspection to be completed
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Current Pictures of Property
KITCHEN
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Profile of the tenant
• A family of 4 (husband, wife and two young children)• The lady works for Home Essential as Sales Manager• The gentleman owns his clothing retail store in
downtown Barrie.• Their credit scores are in low 500 and hence need a little
time to rebuild credit. • They just sold their house (co-signed with her parents).
They have been in that house since 2004.• They do not want to have her parents to co-sign
anymore. Hence, they choose our rent-to-own program.
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Current Pictures of Tenant’s Store
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Financial AssumptionsDescription of the property:Type of Property: Free Hold
Current Purchase Price: $200,000 Monthly Market Rent: $1,400
Land transfer tax Other Ont. City $1,725
Rehab cost/setup cost: $3,000
Closing legal fee $2,500
Avg. Annual Appreciation 4%
Assignment fee $5,000
Adjusted Cost base: $212,225
Annual property tax: $2,625
After Repair Market Value: $215,000
Annual Insurance: $600
Financing:
1st MortgageInitial Cash Investment $42,225
1st Mortgage Amount 80% $160,000 DCR(Free Hold) 1.23Interest rate 4.5%
# of Amortization Years 35
2nd Mortgage RRSP 2nd Mortgage Amount $10,000
2nd Mortgage Interest rate 12%
Total Mortgage $170,000
111 Lougheed Road
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Benefit to Lessee
Lessee's Point of View:3 Year Lease Opt.
Down Payment $6,000Monthly Rent $1,386
Monthly Option Premium $210Monthly Condo Fee $270
Total Monthly Payment $1,596
Addition Monthly Option Bonus $200Purchase price
at the end of lease term 241,846$ Down payment credit at
purchase $20,760% Down available at the end of
Lease 9%
Additional money credited to Leasee's downpayment at purchase
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Joint Venture Profit -1
Investor's Point of View:
Option Exercised: 3 Year Lease Opt.
Total Gross Income during Lease Term: $ 284,542
Profit before Mortgage Payment: $ 62,642
Net Profit after Mortgage Interest: $37,829
Average Annual Net Profit: $12,610
profit before mortgage payment - interest portion of mortgage payment
selling price + 36*(monthly rent - monthly option bonus)
gross income - adjusted cost base - 3*(property tax + insurance)
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Joint Venture Profit - 2
Option NOT Exercised:3 Year Lease Opt.
Total Gross Income during Lease Term: $63,456
Profit before Mortgage Payment: $53,781
Net Profit after Mortgage Interest: $28,969
Average Annual Net Profit: $9,656
(Note: Profit does not included the increase in property value)
initial down payment + 36*(monthly rent + monthly option premium)
gross income - adjusted cost base - 3*(property tax + insurance)
profit before mortgage payment - interest portion of mortgage payment
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Joint Venture Return Analysis
Joint Venture Analysis: % contribution Investment % Profit
Partner #1 (deal finder) Thomas & Bob 5% $2,111 35%
Partner #2 Investors 95% $40,114 65%
Option Exercised: 3 Year Lease Opt.
Net Profit after Mortgage Interest: 37,829$
Partner #1 (deal finder) Profit 13,240$ ROI 627%Partner #2 Profit 24,589$ ROI 61%
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Map of the Area
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Questions & Answers
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
Sample Pictures of Projects
www.happinessinspiration.com Thomas Wong - 111 Lougheed Road
We turn real estate opportunities into
Happiness Inspirations