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Project proposal on rent-to-own investment opportunity with Crazy Thomas. We provide 20% return on investment per year. This project is a nice detached house in Brampton.
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Joint Venture OpportunityDetached House in Brampton
4+1 Bedroom, 4 Bathroms52 Four Seasons Circle, Brampton, Ontario
Thomas Wongwww.happinessinspiration.com416-806-9568thomaswong@rogers.com
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
The Project• The property is a newer Detached house in a convenient location
in western part of Brampton.• The house is originally listed for $349,900. The house is in good
conditions.• We got the offer accepted to buy the property for $337,500. The
current closing house is set for January 29, 2009.• The market value around the planned improvement is around
$360,000• We have a confirmed rent-to-own tenant, signed a Lease Option
agreement. The tenant already paid $5,000 toward the purchase deposit and paid another $7000 deposit in January 2010. The tenant is planning to move into the property by February 15, 2010.
• Using Lease Option program as the exit strategy, potential profit in 3 year will be around $64K
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
The Opportunity
• Project Finder/ Real Estate experts invest
– 5% of cash investment ($3,627)– Over 50 hours of time and expertise
• Cash partners invest:– 95% of the cash investment ($68,911)
• RRSP 2nd mortgage of $11,000
• Split profit 35-65 ($22K - $42K)
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Pictures of the property
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Key Features of the Property
• 4+1 bedrooms, 4 bathrooms detached house• Convenient location in Western part of
Brampton• Single attached garage• Finished basement• Many upgraded features: stainless steel
appliances, pot lights, California shutters• Poured concrete patio and water fountain in
backyard
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Planned upgrade to the property
• Replace the boardloom on the second level with laminated flooring.
• The tenant is planning to paint the house at their own expenses.
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Profile of the tenant• A family of 5 (Husband and wife and 3 children) • The lady is working as a hair dresser.• The husband is helping his brother to run a landscaping company.
They specialized in luxury landscaping job at million dollar houses in Toronto area.
• Their combined income is about $90,000• The lady’s credit score is about 588 and the husband’s credit score
is about 608. • They need a few years to improve their credit scores to get a good
mortgage.• They are signed the lease with option to purchase agreement and
put a deposit of $5.000 to confirm their participation in the rent-to-own program. The total initial deposit from the tenant will be $12,000, the balance $7,000 to be collected In January 2010 before they move into the property.
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Financial AssumptionsDescription of the property:Type of Property: Free Hold
Current Purchase Price: $337,500
Monthly Market Rent: $1,600
Land transfer tax Other Ont. City $3,538
Rehab cost/setup cost: $5,000
Closing legal fee $2,500
Avg. Annual Appreciation 5%
Assignment fee $5,000
Adjusted Cost base: $353,538
Annual property tax: $3,600
After Repair Market Value: $360,000 Annual Insurance: $600
Financing:
1st MortgageInitial Cash Investment $72,538
1st Mortgage Amount 80% $270,000 DCR(Free Hold) 1.15Interest rate 4.5%
# of Amortization Years 35
2nd Mortgage RRSP 2nd Mortgage Amount $11,000
2nd Mortgage Interest rate 14%
Total Mortgage $281,000
Four Season Circle
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Benefit to Lessee
Lessee's Point of View:3 Year Lease Opt.
Down Payment $12,000Monthly Rent $1,712
Monthly Option Premium $688Monthly Condo Fee $270
Total Monthly Payment $2,400
Addition Monthly Option Bonus $200Purchase price
at the end of lease term 416,745$ Down payment credit at
purchase $43,968% Down available at the end of
Lease 11%
Additional money credited to Leasee's downpayment at purchase
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Joint Venture Profit -1
Investor's Point of View:
Option Exercised: 3 Year Lease Opt.
Total Gross Income during Lease Term: $ 471,177
Profit before Mortgage Payment: $ 105,040
Net Profit after Mortgage Interest: $64,624
Average Annual Net Profit: $21,541
selling price + 36*(monthly rent - monthly option bonus)
gross income - adjusted cost base - 3*(property tax + insurance)
profit before mortgage payment - interest portion of mortgage payment
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Joint Venture Profit - 2
Option NOT Exercised:3 Year Lease Opt.
Total Gross Income during Lease Term: $98,400
Profit before Mortgage Payment: $85,800
Net Profit after Mortgage Interest: $45,384
Average Annual Net Profit: $15,128
(Note: Profit does not included the increase in property value)
initial down payment + 36*(monthly rent + monthly option premium)
gross income - adjusted cost base - 3*(property tax + insurance)
profit before mortgage payment - interest portion of mortgage payment
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Joint Venture Return Analysis
Joint Venture Analysis: % contribution Investment % Profit
Partner #1 (deal finder) Thomas & Bob 5% $3,627 35%
Partner #2 Investors 95% $68,911 65%
Option Exercised: 3 Year Lease Opt.
Net Profit after Mortgage Interest: 64,624$
Partner #1 (deal finder) Profit 22,618$ ROI 624%Partner #2 Profit 42,005$ ROI 61%
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Map of the Area
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Questions & Answers
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
Sample Pictures of Projects
www.happinessinspiration.com Thomas Wong - 52 Four Seasons Circle
We turn real estate opportunities into
Happiness Inspirations