Confidential: Investment Overview - csahinvestments.com · By accepting this CIO, the recipient agrees to keep confidential the information contained herein. This CIO and the content

Investment opportunity reserved for Accredited Investors only. U.S. Securities and Exchange Commission defines an Accredited Investor as an individual that has a net worth of at least one million US dollars, not including the value of

one's primary residence or has made at least $200,000 each year for the last two years (or $300,000 together with his or her spouse if married) and has the expectation to make the same amount this year. Interested qualifying investors

should email [email protected] for full business plan and disclosures.

Confidential: Investment Overview

© 2012 CSAH Investments. All rights reserved. www.csahinvestments.com

R I D E R C - 1

Important Disclosures Regarding this Confidential Investment Overview

This Confidential Investment Overview (“CIO”) regarding CSAH Investments [Limited Partnership] (the “Company”) is being delivered by the Company to select parties who may be interested in making a possible investment in the Company (an “Investment”). The sole purpose of this CIO is to assist the recipient in deciding whether to further investigate the Company in connection with a potential Investment. This CIO does not purport to contain the information that a recipient should review in its evaluation of the Company. The CIO and its content are proprietary and confidential information of the Company.

All historical financials, projections, and operating results contained in this CIO or delivered hereafter are based upon estimates made by the Company and there can be no assurance that such results will be realized. The Company does not make any express or implied representation or warranty as to the accuracy or completeness of the information contained herein or made available in connection with any further investigation of the Company. The Company expressly disclaim any and all liability that may result from a reliance on such information or errors therein or omissions there from. Any representations or warranties about the Company will only be made in a definitive subscription agreement relating to an Investment.

In addition, this CIO and the projections contain forward-looking statements that are based on the Company’s current expectations, estimates and projections about its industry, as well as Company-management's beliefs and assumptions. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," "Pro-Forma" and variations of these words or similar expressions are intended to identify forward-looking statements. These statements speak only as of the date hereof and are based upon the information available to the Company at the time. Such information is subject to change and the Company will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore the Company’s actual results could differ materially and adversely from those expressed in any forward-looking statements contained in this CIO.

By accepting this CIO, the recipient agrees to keep confidential the information contained herein. This CIO and the content therein remains the property of the Company and may not be photocopied, reproduced, or distributed to others at any time without the prior written consent of the Company. Upon request, the recipient will promptly return this CIO to the Company and any and all other material received from the Company without retaining any copies thereof.

The Company reserves the right to terminate communication with the recipient of this CIO, to request return of any and all information related to the Company from the recipient and to reject any or all proposals relating to an Investment. The delivery of the CIO shall not constitute an indication that there has not been any material change in the business or affairs of the Company since the date hereof. All communications with the Company shall be through the representatives of the Company.


C O M P A N Y O V E R V I E W

CSAH Investments is a Limited Partnership that allows accredited investors to potentially receive a projected 9% average ROI with the opportunity to increase to 11% with limited downside risk. The capital is to be backed by arguably the most consistent performing investments of all time, real estate. CSAH intends to purchase distressed properties cash, renovates the properties, then rents the properties generating a substantial cash flow.

M A R K E T O V E R V I E W

In 2008, the United States suffered one of the greatest economic downturns in modern history. Many of the world’s largest names in the banking industry were casualties, such as: Washington Mutual, Lehman Brothers, and Countrywide Mortgage, just to name a few.

While there were many factors that contributed to this debacle it was due largely to toxic mortgages and home loans. As a result, the federal government has over compensated in an attempt to avert future losses as a result of toxic home loans. This over compensation has reduced the amount of available home buyers by some estimates up to 60% through restricting lending guidelines. These restrictions prohibit myriads of people in the U. S. from qualifying for a home loan, as the credit, income, and down payment requirements are too high, which results in a prime market condition for real estate property owners looking to lease properties.

Secondly, there are countless Americans that are simply letting their homes go into foreclosure, due to being upside down on their mortgages, which creates even more renters. This has created a phenomenal buyers’ market where homes in many cases are being sold for pennies on the dollar. This is the current real estate market that we live in and it is not anticipated to change in the foreseeable future.

I N V E S T M E N T S T R A T E G Y

The CSAH investment strategy adheres to fundamental guidelines that minimize risk. CSAH intends to only purchases properties that are 40% or more below market value and is projected to yield an estimated 20% or more annually. Thus, upon purchase and repair a 40% equity stake is immediately generated which further hedges investment.


S A M P L E C S A H P R O PE R T Y :

6617 Kassarine Pass

Purchase Price: $10,000 Repairs: $20,000 Taxes: $2,500 Cash Investment: $32,500 Resale Value: $60,000 Equity: $27,500

Annual ROI: $10,800 or 33.5%

Front View Before Front View After

Master Bedroom Before

Master Bedroom After


G R O W T H P L A N

CSAH growth plan will be broken out into 3 phases. Phase I we intend to raise $350,000 in capital which will allow us to acquire an estimated 10 additional properties creating $302,500 in equity yielding an estimated $108,000 annual cash flow. Numbers are projected based upon sample property above. Phase II we intend to raise an additional $350,000 and acquire an estimated additional 13 properties, increasing equity to $632,500. Lastly, in Phase III we intend to raise an additional $350,000 and acquire an additional 30 properties more than doubling the potential equity to more than an estimated $1.4 million.

By the end of Phase III with $1,050,000 in capital we anticipate having 53 properties yielding an estimated annual cash flow of $572,400.

Set forth below are various financial projections relating to various potential financial outcomes of the Company’s potential investments, containing the different material assumptions set forth in each:

FINANCIAL PROJECTIONS 2013 - 2015

CSAH Investments P&L Statement

Fiscal Year January - December 000’s

Actual Projected Phase I Phase II Phase

III

2012 % 2013 % 2014 % 2015 % Revenue: Rent $10,800 100 $108,000 100 $248,400 100 $572,400 100 Franchise Sales 0 0 0 0 Franchise Commission 0 0 0 0 Total Revenue $10,800 100 $108,000 100 $248,400 100 $572,400 100 Expense: Maintenance $600 5.5 $10,000 9.3 $25,000 10.1 $65,000 11.4 Insurance $386 3.5 $4,000 3.7 $9,200 3.7 $21,200 3.7 Office & Administration 0 $36,000 33.3 $66,000 26.5 $100,000 17.5 Marketing 0 0 $12,000 4.8 $30,000 5.2 Other 0 $5,000 4.6 $10,500 4.2 $17,000 2.9 Dividend 0 $31,500 29.2 $63,000 25.4 $94,500 16.5 Total Expense $986 9.1 $86,500 80.1 $185,700 74.8 $327,700 57.3 Operating Profit/ (Loss) $9,814 90.9 $21,500 19.9 $62,700 25.2 $244,700 43.3


Risk Analysis

With the understanding that risk is a part of investing in real estate, our focus is not to eliminate the risk but to minimize the risk. There are four primary risk factors that are present in the real estate rental business. These risk factors are: Improper Purchase / Overpayment, Maintenance / Property Damage, Rental Income Loss / Non-Payment, Force Majeure / Act of God. Below are financial projections for the worst case scenario for each.

Improper Purchase / Overpayment is not projected as it would not change profit and loss statement nor ROI, it would only reduce equity stake in the property.

Maintenance / Property Damage

FINANCIAL PROJECTIONS 2013 – 2015

(If 50% has $1,000 annual maintenance increase and $3,100 in additional damages)

CSAH Investments

P&L Statement Fiscal Year January - December

000’s


III


***Even in this very unlikely scenario the organization can sustain a 7% annual dividend and the investor’s investment is supported by the equity in the properties***


Rental Income Loss / Non-Payment


(If 30% of rental income is lost)




III


***In this highly unlikely scenario investors are still receiving a 5% ROI in Phase I & II, then 6% in Phase III and their investment is supported by the equity in the properties***


Force Majeure / Act of God


(If 100% of properties are not producing income due to a major storm and insurance premiums double as a result of the claims)




III


***While the chances of a storm knocking 100% of properties off line for 3 straight years is highly unlikely, this scenario still allows investors to receive 9% ROI each year as the insurance will cover rental income loss and damages. The initial investment is still supported by the equity in the properties***


H O U S T O N A R E A R E N T A L & S A L E S M A R K E T A N A L Y S I S

TARGET AREA HOME SALES

Over the course of the past two years home sales in the target areas have steadily increased decreasing the supply while

demand has increased resulting in the average days on market decreasing by 6 days.

HOUSTON AREA RENTAL MARKET

As the supply of available rental properties (active listings) has steadily decreased since quarter 1 of 2010 the demand (total leases & pending listings) have increased, resulting in a prime rental market where rental rates are on the rise.

0

50

100

150

200

250

300

350

400

450

Total Sales Active Listings Days On Market

2011

2012

0

1000

2000

3000

4000

5000

6000

Total Leases

New Listings

Active Listings


HOUSTON AREA RENTAL RATES

Over the course of the last year both the median rent and the price per 100 square feet have steadily risen.

1200

1250

1300

1350

1400

1450

Median Rent

Median Rent

66

68

70

72

74

76

78

80

Price Per 100 Sqft

Price Per 100 Sqft


I N V E S T O R P R O F I L E A N D T E R M S

Investment opportunity reserved for Accredited Investors only. U.S. Securities and Exchange Commission defines an Accredited Investor as an individual that has a net worth of at least one million US dollars, not including the value of one's primary residence or has made at least $200,000 each year for the last two years (or $300,000 together with his or her spouse if married) and has the expectation to make the same amount this year.

Minimum Investment: $10,000

Holding Period: 3 Years

Projected Annual ROI: 9% (Phase I and II Investors that reinvest in other phases will be eligible for 1% bonus bringing maximum projected ROI to 11%)


CSAH Investments 12401 S. Post Oak, Suite 218

Houston, TX 77045

For more detailed investment information contact: (888) 300-3039

[email protected]

Investment opportunity reserved for Accredited Investors only. U.S. Securities and Exchange Commission defines an Accredited Investor as an individual that has a net worth of at least one million US dollars, not including the value of one's primary residence or has made at least $200,000 each year for the last two years (or $300,000 together with

his or her spouse if married) and has the expectation to make the same amount this year. Interested qualifying investors should email [email protected] for full business plan and disclosures.

Documents

Confidential: Investment Overview - csahinvestments.com · By accepting this CIO, the recipient agrees to keep confidential the information contained herein. This CIO and the content