OVERFLOW CHARTS

2 Investment Choices: Where to Invest TODAY in 2013? Liquidity - causes volatility - comes at a price - is not required for entire portfolio Hard to beat 4%/year !! Well oiled marketing machine Private Equity an option ! Did your RRSP grow 50% in 10 years ? Liquid –Stocks –Mutual Funds –ETFs –Bonds –Return-free risk

3 Investment Choices: Where to Invest TODAY in 2013 ? Consider proven Alternatives !! Illiquid / REAL Assets / Private Equity.. So called Alternative Investments –Gold, Diamonds, Oil, Coins –Franchise, Joint Ventures / Private Shares –Income Producing Real Estate, MICs, Land held for development, new construction in demand locations

4 Many Classes of Real Estate Income Producing –Commercial –Vacation –Hotel / Campgrounds / Trailer Parks –Small Residential (house, condo, TH, 4-plex.) –Residential –Small Residential (house, condo, TH, 4-plex.) –Multi-Family / Apartment Buildings Non-income producing –Raw land –Vacant / abandoned properties –Flipping condos / houses –Vacation / 2 nd homes –Your own home –Construction –Land Development

5 What do we do?

What is special about this Cold Lake land 290 acres.. 25% with view best part of town, close to lake and city center $2M invested so far: $1M from PRISM A preferred equity in new land LP $1M from Kings Castle preferred equity in new land LP Excellent price and terms: $2M payable at 0% by May Lots of time $4M payable from lot sales.. Low risk.. No timeline $14,000/acre + portion when land is sold: unique offering with low price ! $50,000,000 to $60,000,000 retail value loads of research.. See binder or password protected website ASP approved + sub-division approved for 33 ½ acre lots

New option: LAND Development Why Land ? Higher Return Potential Wealth Creation (development) vs. Wealth Preservation (buy-and-hold) lower risk in demand locations attractive pricing due to lack of financing Ahead of the curve play: Cold Lake, AB Diversified economy today and new oilsands projects (SAGD) High average income Demand from move-up buyers Average new home around $400,000.. Higher than Edmonton

Subject Land Hills of Cold Lake

300 Lots ½ acre Current ASP

Views from about 25% of lots

Aerial and Site View

12 Typical land lording hassles we take care of for you! Investigate Macro Locations.. then investigate micro-location Analyse Asset (building condition, structural issues, 5 year upgrade plan, exit options, appraisals, environmental assessments..) Negotiate with financial institution to obtain, initially and/or later, re-finance using 1st, 2nd and/or CMHC or FannieMae insured mortgages Sign Personal Guarantees for Commercial Mortgages Manage all relationships with banks, realtors and/or 3rd parties Sets up reporting mechanism to INVESTOR Send $ regularly Act as the primary interface to / manager of property manager Adjust rents in accordance with market realities Suggest capital improvements in building (good enough is the critical issue here.. The Goldilock approach) May invest personally into the venture May sub-divide property into condominiums or if condo project has done: –Reserve fund study, condo sub-division, survey, individual appraisals, website, offer-to-purchase, condo-by-laws, condo corporation Sign all necessary legal documents File annual or quarterly statements / documents that may be required by various jurisdictions Suggest exit timing and exit options Yes, you can do it all yourself, and if you dont make a mistake you may (and should, of course) make more money, or you can co-invest with others.. Your choice ! Become a Landlord – Without the Hassles

13 Investing in Real Estate

14 The Property Acquisition Funnel Identify Western Canada Apartment Buildings (10,000s) Identify Properties in Growth Cities/Towns (1,000s) Class C Buildings in Class A or B Locations (100s) Identify Buildings 30+ Units in Size (100s) Review Potential Acquisition Candidates (50-100) Analyze Potential Acquisition Candidates (25-50) Write Offers to Purchase Properties (~10) Conduct Detailed Property Due Diligence (~3) Take Possession of Property (1)

15 Selecting a Building & Acquisition Considerations Building Characteristics Suite Layouts Suite Sizes Balconies Interior/Exterior Condition Views Suite Mix Curb Appeal Feel of Suite Condo Conversion Potential Financing Interest Rate Loan to Value (LTV) Availability of 1 st and 2 nd Mortgages Conventional or CMHC Insured Cash to Mortgage Required Location Macro Location Micro Location In-Migration Job Growth Transportation Operating Expenses Utilities Opportunity to Decrease Utilities Potential Tax Increase or Decrease More Efficient Management Revenue Potential Current Rents Immediate Upside Long Term Upside