1. M Y REIT S Andy Prophet AAII Silicon Valley Chapter September 8, 2012

2. 5 – 7 % Yield5 – 7 % Yield 1 3 – 5 % Yield Growth3 – 5 % Yield Growth 2 Each equity is 2.5 % or less of entire portfolioEach equity is 2.5 % or less of entire portfolio 3 REITs: Income Portfolio Harvest Criteria

3. REITs Currently Owned Health Care REIT (HCN) – Purchased: May 2011 – Yield on cost: 6.25% – IRR: 22.44% – Valuation: $59.01 – Current Price: $58.44 – Dividend Growth (5-yr): 4.4% – Cash flow growth and returns consistently strong – 20-year average annual total returns 14% – Credit rating: BBB+ – Acquiring publicly traded Sunrise Senior Living – Risks: Broad health care legislation Genesis Health Care is HCN’s largest tenant… 17% of gross investments

4. REITs Currently Owned (continued) Realty Income (O) – Mission is to provide its shareholders dependable monthly dividend that increases over time – Purchased: Sept. 2011 – Yield on cost: About 7% – IRR: 28.66% – Valuation: $41.00 – Current Price: $42.00 – Dividend Growth (5-yr): 2.2% In August O boosted its rate 4.4% – Credit Rating: A – Increased its dividend throughout the 2008 downturn

5. REITs Currently Owned (continued) Realty Income (O) – Mission is to provide its shareholders dependable monthly dividend that increases over time – 2010 Roughly $700 million in cash-flow in acquisitions. 2011 another $1 billion, and more than $500 million already in 2012. – Recently the dividend is up 4.3% yr.-over- yr. – Risks: Realty Income's long-term leases can be canceled if a tenant files for bankruptcy Concentration is high, top 15 customers providing nearly 50% of revenue.