Green

Multi-Family
Investment
Prospectus

Inspired
VENTURES
 Page 1

TABLE OF CONTENTS
1. EXECUTIVE SUMMARY............................................................................................ 2
2. TEAM .................................................................................................................. 4
1. Jim Simcoe-principal......................................................................................... 3
2. Kevin Gaynor-principal..................................................................................... 3
3. GREEN MULTIFAMILY OPPORTUNITY........................................................................ 4
1. Green Opportunity.......................................................................................... 4
2. Multifamily Benefits.......................................................................................... 6
1. Cash Flow................................................................................................ 7 ..
2. Demand................................................................................................... 7
3. Leverage.................................................................................................. 7
4. MARKET SELECTION.............................................................................................. 8
1. Rental Market Strength..................................................................................... 8
2. Competition................................................................................................... 9
5. INVESTOR OPPORTUNITY..................................................................................... 10
1. Debt Investors............................................................................................... 10
2. Equity Investor............................................................................................... 10
3. Investment Strategy........................................................................................ 10
6. INSPIRED PHILANTHROPY..................................................................................... 11
1. Benefit to the Non-profit.................................................................................. 11
2. Benefit to our Investors.................................................................................... 11
7. INVESTMENT SNAPSHOT.................................................................................... 12
1. Property Specifics.......................................................................................... 12
2. Property Overview......................................................................................... 12
3. Housing Market............................................................................................ 12
4. Economic and Market Overview...................................................................... 12
8. FINANCIAL SUMMARY - Multi Family Unit................................................................ 13
9. PROPERTY PROJECTIONS...................................................................................... 14
10. INVESTMENT GRAPHS....................................................................................... 15
1. NOI (Net Operating Investment....................................................................... 15
2. Cash Flow (Pre-Tax)....................................................................................... 15
3. ROI (Return on Investment) .............................................................................. 16
4. COC (Cash on Cash Return)........................................................................... 16

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 2

EXECUTIVE SUMMARY
We offer an investment in green multifamily properties. Our team has been active
in the green multifamily industry for the past 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 perfect storm 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 taking advantage
of this opportunity.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 3

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 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 effective Storm 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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 4

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 perfect storm 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 55% of renters

would prefer a are willing to
green home spend more

86%
to live in one

55%
Data from Rent.Com’s Feb 2010 survey

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 5

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 healthy.
All multifamily investments are designed to realize profits through three core
methods:
1. Increase occupancies
2. Increase rents
3. Decrease 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 so they can afford to pay more in rent.

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 are more likely to spend an additional $50 per month in rent
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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 6

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. Additionally, the power to
increase cash flows (profit) and property values rests largely with us. In short, we
drive the results, not the market.
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

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 7

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.
80% of households 65% of households
of under 25 year of 25 – 29 year
olds are renters olds are renters

80% 65%

LEVERAGE
Multifamily investments offer the ability to utilize leverage to dramatically enhance the value of
our investments. Typically we put down no more than 20-40% 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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 8

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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 9

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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 10

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:

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.
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.

The loan is secured by the property. A balloon payment (initial investment + profit)
will be returned within 2-4 years.

Debt investors do not hold any equity in the property. Equity investors hold equity in the property.

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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 11

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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 12

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.

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 13

FINANCIAL SUMMARY– Multi Family Unit

Phoenix, AZ
Mountain View Acres Apts (20 Units)

Current Property Profile Assumptions & Savings For Calculations

Purchase Information Projected Green Savings

Property Type Multi-Family Electric Bill 35%

Appraisal Value $ 650,000 Gas Bill 35%
Purchase Price $ 425,000 Water Bill 50%
Down Payment $ 170,000 Appraisal Increase 0%
Buyer Credits / Rebates $ - Rental Increase 10%
Proposed Rehab Budget $ 75,000 Vacancy Rate 5%
Total Cost $ 245,000 Operation Costs 15%
Rehab Material Costs 5%
Income Summary Current (Annual) Green (1st Year) 5th Year Rebates 10%
Gross Rental Income $ 114,000 $ 131,957 $ 160,395
Other Income $ 5,702 $ 6,557 $ 7,970 Assumptions
Vacancy & Credit Allowance $ 17,100 $ 6,270 $ 7,621 Gross Potential Income $ 114,000
Gross Operating Income $ 102,602 $ 132,245 $ 160,744 Additional Monthly Income (if any) $ 5,702
1st Mortgage Long Term (Fixed) 30 yr
Expense Summary 1st Mortgage Interest Rate 5.5%
Utility Information Current (Annual) Green (1st Year) 5th Year 1st Mortgage Principal Amount $ 255,000
Electricity Bill $ 2,551 $ 1,658 $ 1,546 Private Mortgage Insurance $ -
Gas Bill $ 4,251 $ 2,763 $ 2,577 Percent Down 40%
Water Bill $ 10,202 $ 5,101 $ 6,184
Total Utility Costs $ 17,004 $ 9,522 $ 10,307 Property taxes $ 10,669
Insurance $ 3,500
Operation Information Current (Annual) Green (1st Year) 5th Year Electric $ 2,551
Property Management Fee $ 4,845 $ 6,284 $ 8,037 Gas $ 4,251
Accounting/Legal $ - $ - $ - Water $ 10,202
Repairs/Mantainance/Supplies $ 10,000 $ 8,500 $ 9,201 Maintenance $ 10,000
Property Taxes $ 10,669 $ 10,669 $ 11,102
Insurance $ 3,500 $ 2,975 $ 3,096 Appreciation Rate 6%
On-site Payroll $ 6,000 $ 5,100 $ 5,360 Property Mgmt Fee 5%
Contract Services $ 3,000 $ 2,550 $ 2,680 Rental Income Increase 5%
Marketing $ 1,000 $ 850 $ 893 Property Tax Incease 1%
General & Admin $ 2,777 $ 2,360 $ 2,555 Insurance Increase 1%
Reserves & replacement $ 4,000 $ 3,400 $ 3,680 Utilities Increase 2%
Total Operations Costs $ 62,795 $ 52,211 $ 56,911 General Ops Increase 2%
Property Tax Rate 1%
Cash Flow Assumptions Current (Annual) Green (1st Year) 5th Year Percent Land Value 20%
Net Operating Income $ 39,807 $ 80,034 $ 103,833 Closing Costs (Purchase) 3%
Mortgage Payment $ (17,374) $ (17,374) $ (17,374) Closing Costs (Sell) 5%
Cash Flow Before-Tax (CFBT) $ 22,433 $ 62,659 $ 86,459
* - Based on a 30-yr Fixed Mortgage
Financial Performance Green (1st Year) 5th Year NOTE: The values and data are to be used for
Cap Rate 9.4% 10.4% 10.7% estimation purposes and should be verified.
Gross Rent Multiplier (GRM) 5.70 5.83 6.05
Cash on Cash Return (COC) 25.6% 35.3%
Internal Rate of Return (IRR) 250.1% 51.9%
Return on Investment (ROI) 26.4% 156.0%
Equity (Wealth) % 63.5% 75.7%
Equity (Wealth) $ $ 517,314 $ 734,918

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 14

PROPERTY PROJECTIONS
Phoenix, AZ
Mountain View Acres Apts (20 Units)
Current After Green Projected Year 1 Year 2 Year 3 Year 4 Year 5 Year 10
CASH-FLOW Upgrades Savings 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
Other Income $ 5,702 $ 6,557.30 $ 855 $ 6,557 $ 6,885 $ 7,229 $ 7,591 $ 7,970 $ 10,173
Vacancy Allowance $ 17,100 $ 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/Legal $ - $ - $ - $ - $ - $ - $ - $ - $ -
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)

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
Depreciation $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364 $ 12,364
Mortgage Interest Paid $ 13,939 $ 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
Taxable Income $ 13,504 $ 53,731 $ 53,731 $ 58,902 $ 64,788 $ 70,992 $ 77,530 $ 115,861
Tax Bracket Impact $ 3,376 $ 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 Value $ 650,000 $ 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
EQUITY $ 398,435 $ 517,314 $ 118,879 $ 517,314 $ 567,076 $ 619,810 $ 675,695 $ 734,918 $ 1,088,526

Cash On Cash Return (COC) 25.6% 25.6% 27.7% 30.1% 32.6% 35.3% 50.9%
Internal Rate of Return (IRR) 250.1% 250.1% 106.4% 73.7% 59.6% 51.9% 38.7%
Return on Investment (ROI) 26.4% 26.4% 54.9% 86.0% 119.6% 156.0% 931.7%

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 15

NOI and CASH FLOW PROJECTIONS

NOI (Net Operating Income)
$103,833
$100,000 $97,295
$91,091
$85,205
$80,034 $80,034
$80,000

$60,000

$40,227
$39,807
$40,000

$20,000

$0
Current After Green PROJECTED Year 1 Year 2 Year 3 Year 4 Year 5
Upgrades SAVINGS

CashFlow (Pre-Tax)
$124,790
120,000

100,000
$86,459
$79,921
80,000 $73,717
$67,831
$62,659 $62,659
60,000

$40,277
40,000

$22,433
20,000

0
Current After Green PROJECTED Year 1 Year 2 Year 3 Year 4 Year 5 Year 10
Upgrades SAVINGS

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com
 Page 16

ROI and COC

ROI(Return on Investment)
931.7%
1000%

800%

600%

400%

200% 156.0%
119.6%
86.0%
54.9%
26.4%
0.0%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

COC(Cash on Cash Return) 50.9%

50%

40%
35.3%
32.6%
30.1%
30% 27.7%
25.6%

20%

10%

0.0%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

Inspired
VENTURES
Inspired Ventures, 491 Second Street, Suite 104
Encinitas, CA 92024 Copyright 2011 Simcoe Ventures
For further information call 760 -271-7128
Jim@jimsimcoe.com