- Real estate can provide recurring monthly income like dividends from stocks once did. Rental properties treat rents like "golden eggs" or recurring returns. - Property managers handle day-to-day landlord responsibilities so owners don't have to, collecting rents and paying owners monthly. - Leveraging financing allows buying more properties to increase returns. Loans are secured by the properties only, not the owners personally, allowing retirement funds to be used.

1. Real Estate Packages

2. MAAP “Core Four” Pillars

3. Asset Class Summary

4. PROT ECT
PRI N CI PAL
WH I L E
I N CREASI N G
R ET U RN S
Gol den Geese Cr ea t e Gol d Eggs
In the past, the wealthy maintained their lifestyle
on the “golden eggs” known as dividends from
their stock portfolios. As a rule in today’s market,
stocks and mutual funds no longer pay dividends.
Today, rental real estate is the closest thing to a
golden goose. Monthly rents work like golden
eggs. And when the rents recur, you have a Pr oper t y Ma na gement
dividend-quality of life.
In each of the markets where we have an
Also, because stocks aren’t paying dividends, the inventory of high cash flow homes, we also
only way to collect returns is to sell. That wipes provide the best property managers available.
out the opportunity to enjoy recurring gains! The objective is NOT to turn you into a
landlord, so the managers do the day-to-day
Real estate pays monthly dividends without
work with the renters.
selling your principal. Every month, you can
count on another rent check as return on The property managers screen and place
investment. tenants. Our professional managers are only
paid when there a tenant in the property. Their
We like to think of rental properties as a “cash
maintenance staff can do minor repairs to save
faucet.” How many “faucets” do you want in
you money.
your portfolio?
Of course, you don’t have to use our preferred
managers, but it is wise to tap in to the
leverage of our combined business with the
preferred management staff.
R EAL E ST AT E
PACK AGES
www.mainstreetplanners.com

6. Bought at Auction
• Saves SO much time
• Not shotgunning low-
ball offers
• Short-sales take 2-3
times as long
• Don’t have to get
money to the
courthouse in 24 hours

7. Rehabbed
• Financing fix up
• Not keeping crews on
budget
• Try to get a contractor
to finish the job
• Don’t over-improve
• Don’t have to supervise

8. Tenants in Place
• Cash flow now
• Most important tenant
is the first one
• 12-24 month leases
• Managers screen for
quality

9. Property Managers
• Find the best in the area
• Does the heavy lifting
• Day-to-day tenant
interface
• On staff maintenance
• Only paid when tenant
occupied

10. Melbourne Street, SLC
• Purchased in 1992 for $87,500
– Rents $1,300
– Net $1,000
• Cash on cash $12,000/$87,500 = 13.7%
• 1996 appraised for $240,00
• 2008 appraised for $390,000
• 2012 worth $230,000

11. The Power of Leverage
• Increases returns 3-4%
• Allows buyer to secure double the properties
• “Non-Recourse” lending
• Based on the property only
– No application
– No collecting from the borrower
– Required financing if using retirement dollars
• Banks don’t like it
– 1 national bank says they do it
– Minimum loan sizes, deny deals for whatever reason
• Our vendors have it

12. How to value properties
• Property Tax notice
• Values estimated by neighborhood area
• Every 2-3 years
• Online Data
• Zillow is common
– Pulls data from public records like property tax, or sales in
area, not accurate, includes short sales and foreclosures
• Appraisal-best and closest

13. How to value properties
• AppraisersAppraisal report
– Comparable Sales
– Income Approach
– Replacement cost

14. How to value properties-Comparable Sales
Comparable Sales-subjective
• 3 “like” properties sold in last 6 months
• Distance within a mile
• Adjustments for differences
– No garage vs 2 car
– Covered patio vs no pation
– Lot size
– Number of bathrooms
– Number of bedrooms

15. How to value properties-Income Approach
Value based on the income-commercial properties
– Income approach-Melbourne Street, SLC
• Net income $10,000
• Divide by a common rate of return (cap rate)
• At 8%
– $10,000.08 = $125,000 value
• At 6%
– $10,000.06 = $166,666 value

16. How to value properties-Replacement Cost
• Replacement cost
• How homeowners insurance looks at a property
• $80 per square foot x square footage
• Deduct depreciation
• Value of lot added on
Melbourne Street SLC
• 1600 sq ft upstairs x $80 = $128,000
• 1600 sq ft downstairs x $40 = $64,000 totals $192,000
– Add the land
• Significant remodel creates “effective age” estimate

17. How do our vendors value properties?
• Cost to build comparison
• Florida condos, what would I pay down the street
• Instant equity
• Replacement cost-cuts out non-market type sales
• How homeowners insurance looks at a property @ $80ft
• Replacement cost is a watermark for value over time.
• If we can get a property in the $40-50ft, it is a good price
Significant remodel creates “effective age” estimate
Change out plumbing, HVAC, electrical, windows, kitchen in a 100 yr
old property, how old is the property?

19. Newer properties 10-14%
14.2% return Doubles every 5 yrs
Year 0 $60,000
Year 5 $120,000
Year 10 $240,000
Year 15 $480,000
Year 20 $960,000
Year 25 $1,920,000

20. ASSET TYPE: SFR 801-352-4055
YEAR BUILT:
SIZE-SQ FOOTAGE:
1966
1,114
3780 Rangeline
BEDS: 3
BATHS: 1
PURCHASE PRICE: $51,900
PRICE PER SQFT: $46.59
TAX (YEAR): $995
INSURANCE: $550 (estimate)
MANAGEMENT FEE: $720
TOTAL ANNUAL EXPENSES: $2,265
RENT (MONTHLY): $750 (*typical rent)
ESTIMATED ANNUAL RENT: $9,000
EST. ANNUAL NET INCOME: $6,735
ESTIMATED NET YIELD: 12.98%
Non-Recourse Financing
PURCHASE PRICE: $51,900
FINANCED $23,000
CASH DOWN $28,900
INTEREST @ 6.99% $1,608
PRINCIPAL
ADJ. NET INCOME: $5,127
ADJ. CASH ON CASH RETURN 17.74%
*This is based off of current market conditions and Silver Stream does not guarantee
specific returns.

21. Real Estate Returns Hope
Can start with less money, same result 18% return Money doubles every 4 years
Returns safely secured Year 0 $30,000
Year 4 $60,000
People understand the risks
Year 8 $120,000
Loans are repaid in 4-5 years Year 12 $240,000
Year 16 $480,000
To compound, we need to reinvest the
rents Year 20 $960,000
Gives people returns high enough to
Year 24 $1,920,000
get back on track
People understand the risks

22. Cornerstone of a portfolio

23. Ideal Portfolio Contents