Pepper Club The Hottest Address in Cape Town. The Investment Consists of: An apartment (Sectional...

Pepper ClubThe Hottest Address in Cape Town

The InvestmentConsists of:• An apartment (Sectional Title Ownership)• A furniture pack by a leading hotel designer, • A rental pool operated by experienced hotel

operators

Payment terms

• Apartment & Parking Bay– 20% deposit : 7 days from signature– Balance of purchase price on Transfer

• Note: Investors also purchase a standard furniture pack (not financed by the banks) priced from R180 000

Projected Revenue

• 8.5% for the first year of operation (Mar 2010 to Mar 2011) increasing by 10% pa

Or

• guaranteed 7% pa - for 2 years

Taxation - Allowances • UDZ Allowance – 55% of unit cost – 11% in the first year – then 4.4% for 10 years

• Depreciation Allowance– 20% pa on the cost of the Furniture pack

• Tax Deductable Interest– Interest payable on all funds borrowed to finance the

investment is tax deductable

• Assessed Tax Losses– Tax Losses may be set off against any other taxable income

or may be carried forward to following tax periods

Taxation – Based on R1,4m Investment plus R180 000 Furniture Pack

80% Mortgage

Projected Interest Total Tax Net Rental UDZ Dep. @ 9.5% Allowances

• Year 1 134,300 (154,000) (36,000) (106,400) (296,400)• Year 2 147,730 ( 61,600) (36,000) (103,750) (201,350)• Year 3 162,503 (61,600) (36,000) (99,571) (197,171)• Year 4 178,753 (61,600) (36,000) (93,593) (191,193)• Year 5 196,628 (61,600) (36,000) (85,503) (183,103)

• Total 819,914 (400,400) (180,000) (488,816) (1,069,217)

Total Return – 80% Mortgage Net Capital Total Return on Income Appreciation Return Investment AfterMortgage Interest R R R

• Year 1 27,900 158,000 185,900 40.413% p.a.• Year 2 43,980 173,800 217,780 47.343% p.a.• Year 3 62,932 191,180 254,112 55.242% p.a.• Year 4 85,160 210,298 295,458 64.230% p.a.• Year 5 111,125 231,328 342,453 74.446% p.a.

Average 56.335% p.a.Total 331,097 964,606 1,295,703

INVESTOR – 80% LOAN

• Projected Income, Tax Free to Year 8

• Projected period to repay loan only out of projected income In year 10

30 Days Free Usage

• An Investor may occupy his apartment for 30 days each year, free of rental.

Pepper Club

The Hottest Address in Cape Town

Only the contents of Agreements signed by the parties may be relied upon. All other representations, written or verbal, are not warranted