silver falls presentation 2012
DESCRIPTION
Possession point is a dramatic West Coast peninsula on the extreme southwestern tip of Vancouver Island. It is within the Silver Spray lands, between Moonlight Bay and Emerald Beach, and features 2,800 feet of sunrise, surf and sunset oceanfront with panoramic views to the east, south and west. It is difficult to overstate the natural beauty of this real estate. As the appraiser attests, Possession Point offers ‘an incomparable oceanfront setting and views’. The rugged rock foreshore rises 65 feet above the sea, amplifying the soothing sound of rolling waves and tidal surge. From this lofty vantage point, the lush shoreline of the adjoining Wilderness Park extends as far as the eye can see, preserving 10 km of south‑facing virgin oceanfront, pristine pocket beaches, abundant tidal pools, a large pelagic cormorant roost, big raptor nests, ancient native petroglyphs and 50 km of mystic nature trails. Investment Partners may acquire ‘Class A’ shares in Silver Falls Development Inc. Funds will be used to purchase Possession Point and construct up to three Oceanfront Villa show-homes from which to generate pre-sales. Management will hold ‘Class B’ shares, which are not entitled to participate in profit sharing until after Class A shareholders have realized a profit. Profits from land will be shared 80:20 in favour of investors and profits from construction will be shared 50:50. As profit sharing provides strong positive motivation, management will share up to half its profit entitlement with Exempt Market Dealers, architects, builders and others who prove instrumental in the success of the project. The minimum subscription is $10,000. Pre-approved 75% financing at 5.95% is available to all shareholders who sign a promissory note, to invest over time with regular monthly payments. A $2,500 downpayment may come from an RRSP. Unlike a bank demand loan, shareholders who finance cannot be called to accelerate payout, nor can their interest rate be increased. Shares may be paid off at any time, and rolled into an RRSP for that year’s tax-deductible contribution. Up to $5,000 a year may also be acquired inside a Tax Free Savings Account. The project will be managed by Home Equity Development Inc., a B.C. company that has managed more than 300 properties and two-dozen profit‑sharing partnership and RRSP funds since 1988, and managed the TSX publicly traded HLD Land Development Limited Partnership until it sold all its real estate assets in 2006. Although a top project-marketing firm predicts faster absorption, management assumes it may take 3 to 5 years to design, pre-sell and build the 35 Oceanfront Villas. Since there can be cyclical markets, management recommends that qualified investors read the Offering Memorandum and only consider subscribing with ‘patient money’, being 8% or less of a well‑diversified portfolio.TRANSCRIPT
Silver Falls Share Offering Possession Point, British Columbia
•!Oceanfront property near Victoria B.C.
•!RRSP-eligible
•!TFSA-eligible
•!Pre-approved investor financing
•!2,800 feet of spectacular waterfront
•!Priority Villa selection
Canada’s South Pacific
Canada’s South Pacific An investment offering within Silver Spray Ocean Estates www.silverspray.com
•!Possession Point, Vancouver Island
•!3,500-acre CRD Wilderness Park – 3 times the size of Stanley Park
•!42 km from Victoria •!~1 hr from International
Airport and BC Ferries to Vancouver
Possession Point
Possession Point
Property Features
•! Comprehensive zoning
•! 7 km+ municipal water line
•! 180,000 gallon water reservoir
•! Sewage approved
•! Paved roads
Overall Market Trends •! Trends show increasing purchases
of recreational and second home purchase in British Columbia
•! Mortgage rates expected to remain low
•! International buyers view the Canadian real estate market as a safe investment
•! Employment expected to improve with the economy in 2012 and 2013
•! Immigration expected to rise over the next two years due to improving economic and employment environment.
Local Market Trends !!3.7 million Canadians approaching
retirement –expected to double to 7 million Canadians within 20 years
•! Luxury condominiums, golf and adult communities, secondary residences and smaller homes in better areas attractive
•! Rapid continued growth projected for southern Vancouver Island
•! Fastest growth in BC occurring in Langford (19.2%), View Royal (20.6%) and Sooke (11.1%), immediately adjacent to Silver Falls
Investment Overview !!Investment partners acquire
Class A shares in Silver Falls Development Inc.
!!Purchase Possession Point and construct up to three Oceanfront Villa show-homes
!!Management own Class B shares, not entitled to profit sharing until after Class A shareholders have realized a profit
Investment Overview
•! Tax-free compounding until property sale
•! Pre-approved investor financing of up to 75%
•! Priority Villa selection •! Property discount of
up to $50,000 for investors purchasing a villa
•! RRSP-, TFSA-eligible
Profit Picture
•! Possession point secured at $9 million, $2.3 million below November 2010 appraisal, $6,150,000 below June 2007 appraisal
•! 80/20 profit distribution for investors on sale of land
•! 50/50 profit distribution for investors on construction
Pre-approved Investor Financing
•!25% Down-payment
•!5.95% per annum
•!Standard 10-year Amortization
•!Tax-deductible
•!No Credit Score or Credit Application
•!Secured Promissory Note
Pre-approved Investor Financing
RRSP TFSA CASH Down-payment = $5,000*
Shares Secured Promissory Note = $15,000
P-Note
Pre-authorized Debit Form = $166.15/mo. + Monthly Payments
*Example only, please refer to your Dealing Representative for recommended participation.
Pre-Approved Investor Financing
2012 2015 2018 2021
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Amortization Schedule
Principal Paid Down
How Pre-approved Investor Financing Works
•!Annual share valuation
•!Issuance of paid-up shares
•!Contribution to RRSP & tax deduction
•!Contribution to TFSA
Expected Returns
•!5-year exit
•!Average lot sale of $399,000
•!Average construction profit of $100/s.f.
•!Lodge site sale $2,400,000
•!IRR = 10.97%
Expected Returns
•!4-year exit
•!Average lot sale of $478,000
•!Average construction profit of $120/s.f.
•!Lodge site sale $2,880,000
•!IRR = 17.12%
Track Record •! Michael Thornton,
President, Home Equity Development Inc.
•! 28 Offerings over 23 years, including a public partnership
•! Management of diverse property types
•! Over 280 properties •! Profit-sharing plan
Exit Strategy
•! Sale of lots and lodge site •! Sale of villa units, using multiple sales channels •! Professional real estate marketing estimated 21 of 35 units could be
sold in a one-year period
Why Invest in Silver Falls
•! 84.6% efficiency •! Immediate pay down of
property & construction •! Take advantage of low
property values secured by this offering
•! Professional management •! Historical success in past
offerings by Home Equity Development Inc.
For more information…
www.silverfalls.ca
www.youtube.com/silverfallsdev
www.twitter.com/silverfallsdev
www.facebook.com
Peter Jarman Telephone: 1-403-999-6888 Email: [email protected]
Michael Thornton Telephone: 1-604-921-5957 Email: [email protected]
Legal Disclaimer This presentation contains certain forward looking statements regarding Silver Falls Development Inc.’s strategies, market plans, future operating performance or financial performance, that are based upon the current expectations of the Company's management. As with any projection or forecast, these statements are subject to risks and uncertainties. Silver Falls Development Inc. (Silver Falls) operates in a competitive environment and its business results are dependent on numerous factors and risks, including, but not limited to, relationships with suppliers, regulatory requirements, ability to attract and retain key personnel and the economic, political and social conditions in which it operates. Silver Falls’ actual results could differ materially from management's expectations because of changes in these and other such factors.
Although the Company believes the expectations expressed in its forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.
This presentation does not constitute an offer to sell or a solicitation to buy a security. Such an offer may only be made by Offering Memorandum to eligible investors where qualified by applicable laws.