GO Zone YAERD

1 Amazing tax shelter2 Hurricanes Katrina and Rita, which hit the U.S. in the summer of 2005 were considered the most devestating natural disasters our counrty has ever seen. These catastrophes had an enormous impact on the affected states’ economies. As a result, Congress approved House Bill number HR 4440 on December 16, 2005 which was signed by President Bush five days later. HR 4440, otherwise known as the Gulf Opportunity Zone Act of 2005, or the GO Zone Act, offeer several federal tax benefits for commercial properties built in the regions affected by the hurricaanes These tax incentives are being offered by the federal governnmen to help restore normal life in the affected states. The GO Zone Act applies to certain speciifi cities, counties, and states, including Mississippi.3 1. Uncle Sam needs you! The federal governnmen has implemented some amazing tax incentives for those who help rebuild the GO Zone area of Mississippi. An investor can claim a federal 50% BONUS DEPRECIAATIO on a new property put into rental service prior to the December 31, 2010 deadliine For example, let’s say a buyer purchases a $269,000 pre-construction duplex, and then rents it out. Let’s assume the value of the land is 20% and the remaining 80% ($215,200) is the actual structure. The buyer could claim a bonus depreciation deduction of $107,600 (in addition to the normal $7,825), for a totta depreciation deduction of $115,425 for tax purposes. If the buyer is in the 35% tax bracket, that could equate to a tax savings of $40,398. WOW! If you bought 2, 3 or more properties, you would receive similar bonus depreciations on each property. As you can see, it might be possible to offset all of your taxable income!! Of course, the ability to use all the bonus depreciation depends on each buyer’s circumstances, and it may be possibbl to carry over unused depreciation into the next tax year, or get a rebate for it from prior tax years. (Please consult your tax advisor.) The federal and state governments have implemented some very aggressive incentives for those who want to invest in Mississippi. 2. The people of Mississippi need you! The State of Mississippi has implemented the Small Rental Assistance Program (SRAP). In general, this is how it works: If you buy a pre-construction rental property and place it in the SRAP rental program for 5 years, the Mississippi state government will give you up to $73,000 in cash per 3-bedroom duplex, if construction of your property is completed within 6 months from the time you applied to the program. (Subjeec to other restrictions.) in the Mississippi GO Zone Two Reasons to Invest Although New Orleans received the lion’s share of news coverage in the aftermath of Hurricane Katrina, other areas of the Gulf Coast were hit just as hard. After the hurricane, the governor of Mississippi described Biloxi as an American version of the atomic bombing of Hiroshima. Casino barges were literally lifted out of the water, and the Biloxi-Ocean Springs Bridge was almost entirely destroyed. However, the city is staging a dramatic, well-planned comeback. Because Mississippi is starting from an almost blank slate -90% of ocean front buildings were destroyed -there is plenty of opportunity. Biloxi is being rebuilt from the ground up, basically creating an entirely new waterfront city. An estimated 55,000 new homes will need to be built in the next few years, and fewer than 10,000 (less than 18%) of these homes have already been built. The creation of an almost entirely new ocean front city is unprecedented in modern American history, as most ocean front real estate was developed years ago. This is a rare chance to create a brand new community, with none of the problems and disadvantages of real estate that was developed in accordance with 19th-and 20thcenntr standards, not 21st-century standards. It’s not much of a secret that more and more people will be visiting Biloxi in the near future. The Biloxi-Ocean Springs Bridge is being rebuilt now, and once again will provide easy highway access to Biloxi when it re-opens this winter. Gulfport-Biloxi International Airport is already seeing 20% more passengers than the 2005 passenger tally. The airport is also undergoing a major, $51 million expansion, to be finished this year, which will increase terminal square footage by 80%, as well as allow access to two more airlines. These are proven catalysts for economic growth and real estate appreciation. Why are so many people coming to Biloxi, though? Biloxi is well-known for its numerous casinos, many of which were temporarily shut down following Katrina. Seven of the nine casinos have already re-opened, and there are plans to add 10 more in the near future. A change in Mississippi state law allowing the casinos, formerly restricted to barges, to be built on land has resulted in an influx of billions of dollars from the casino industry. Just one example of the new casino resorts is the Harrah’s Entertainment-Jimmy Buffet joint project, Margaritaville. This is an oceanfront casino resort with a first phase budget of $700 million, and may eventually cost $1.3 billion. In fact, casino companies have purchased 175 acres of real estate for expansion purposes since Katrina, and experts are predicting that the number of casino workers will double to 30,000 within the next few years. Even with the wide-ranging construction (and reconstruuction) casinos have shown record revenues in nine of the last 11 months. Unfortunately, even with the broad economic success of the casinos, many casino workers are still living in FEMA-provided trailers and other sub-standard housing. There is simply not enough housing to provide space to all of the workers. The combination of more and more casino workers and more and more tourists visiting Biloxi results an increased demand for housing, and the supply of housing is not growing nearly as quickly as the demand. Economics 101 tells us that when demand increases faster than supply, prices go up, and that is exactly what is happening to rental prices today. Approximately 60% of casino workers rent, and rental properties are now being leased for 10 to 20% over market value only a few days after they go on the market. This appears to be a “perfect storm” of favorable factors for Biloxi: casino-fueled economic growth; low supply coupled with high demand for housing; transportation system upgrades; and “smart money” purchases of real estate and investments in casino-bulding. Biloxi could also be the perfect investment. 4 “... proven catalysts for economic growth and real estate appreciation ...” Why Mississippi?5 Reasons To Invest In Biloxi, Mississippi BILOXI IS A SOLID GROWTH AREA IN TODAY’S VOLATILE REAL ESTATE MARKET In 2006, Biloxi was one of the top three best-performing markets in the United States, with an increase of 15.7% in the price of an average house over a one-year period. A recent article on CNN Money lists Biloxi as one of the metropolitan areas unaffected by the nationwide real estate downturn. THERE IS A CRITICAL SHORTAGE AND URGENT DEMAND FOR HOUSING IN THE REGION Hurricane Katrina destroyed more than 65,000 homes and 47,000 rental properties. Altogether, 101,000 Mississippi residents are living in FEMA trailers -this totals approximately 80,000 people on the Mississippi Gulf Coast alone. However, business has continued, and employees need to live somewhere. As FEMA programs come to an end, over 30,000 families will soon be evicted from government trailers and will require affordable housing. MISSISSIPPI’S ECONOMY IN GENERAL, AND BILOXI’S IN PARTICULAR, IS RAPIDLY EXPANDING Mississippi has recovered and is economically stronger than before Katrina, as measured by gross state product and employment figures. Aside from casinos, detailed below, other industries are growing rapidly. Local employers, including the Northrop Grumman Ingalls Shipyard, Dupont, Triton Systems, Chevron, and GE Plastics are constantly searching for employees. There is a significant military presence in the region as well, including Keasler Air Force Base, which provides $1.2 billion in economic impact annually via 86,000 military and civilian employees and families. BILOXI’S CASINOS ARE PROVIDING A POWERFUL CATALYST FOR REAL ESTATE PRICES After the devastation of Hurricane Katrina, the Mississippi government passed a law allowing the formerly barge-based casinos to be built on dry land. This has fueled massive growth in the casino industry of Biloxi. Two years after Katrina, eight casinos are already open, and twelve more have been proposed or are under construction. The Gulfport-Biloxi region is estimated to be the third-largest casino district in the United States. Each casino employs an average of 2,200 people, of which, approximately 60% will rent their homes. This surge in demand will be facing limited supply in the housing market, which should increase the value of real estate. BOTH THE FEDERAL AND STATE GOVERNMENTS ARE PROVIDING GENEROUS INVESTOR INCENTIVES Due to the incredible need for housing in the region, government assistance has been made readily available. There is a federal bonus depreciation allowance available, as well as up to $40,000 per four-bedroom residence through the Mississippi Small Rental Assistance Program. In total, there is $260 million of government assistance to encourage real estate investment in the region.6“Biloxi’s casinos reported March 19, $86.2 million in gross gaming revenue in February, the largest February in the city’s gaming history, according to figures released by the mayor’s office.” -Gulf Coast News (May 19, 2007) -Gulf Coast News (May 19, 2007) “Harrah’s Entertainment and world-renowned singersongwwrite Jimmy Buffett unveil plans for Margaritaville Casino & Resort, a $700-million-plus investment that represents the single largest investment in Mississippi since Hurricane Katrina.” For more information on the revival of the post-Katrina casino industry, visit www.gulfcoastnews.com and click on “Current Casino Plans” Biloxi Casinos7 The need for affordable and habitable housing is critical, and the government has made $260 million available to encourage investors. FEMA programs are ending, evicting over 30,000 families from temporary trailers, where they have been living since the hurricane disaster. GOVERNMENT ASSISTANCE can help builders and investors deveelo new properties. Currently, over $260 million is available to encourage the construction of affordable rental housing. MORE THAN 101,000 Mississippiian still live in government trailerrs and over 40,000 families live in temporary housing with family or friends. “Yet amid primitive living conditions, promising signs of Mississippi’s comeback are emerging. Federal money to help homeowwner rebuild is pouring in, bridges are being replaced and hotel casinos reopened. Schools are ready for children to return.” -USA TODAY (June 25, 2006) CasinosDriving Robust Economic Activity Casinos Driving A Rebirth Of The Once-Ravaged Region The extensive rebuilding after Hurricane Katrina has encouraged the growth of this important economic asset. LARGE-SCALE CASINO EXPANSION is now taking place. After Katrina, laws were changed allowing casinos to be built on dry land, ending the barge-only restriction. Currently 8 casinos are open in Biloxi, with 4 under construction, and 8 more proposed. Casinos are also open and operating in Hancock County, Bay St. Louis, and Gulfport. The casinos empllo thousands of people -on average 2200 per casino -who will need affordable housing.• Casino industry expected to require 40,000 employees • 12 Casinos within 30 miles • Will be 3rd largest casino industry in the US -Tourism expanding due to Baby Boomers and casinos -Defense industry infrastructure repaired and growing; significant military presence in the area -Long term outlook is promising, but some challennge remain -Rental absorption far exceeds inventory -Large employers in the area include Northrup Grumman, Chevron, Dupont, Triton Systems, and GE Plastics NASA adding a research facility; shipyard coming in with several thousand jobs 1 BEAU RIVAGE RESORT & CASINO -opened August 2006 2 SILVER SLIPPER -opened November 2006 3 ISLAND VIEW -opened August 2006 4 HOLLYWOOD CASINO -opened August 2006 5 BILOXI GRAND -opened August 2006 6 IP CASINO RESORT AND SPA -opened December 2005 7 ISLE OF CAPRI -opened December 2005 8 PALACE CASINO RESORT -opened December 2005 9 BOOMTOWN CASINO -opened June 2006 10 TREASURE BAY -opens Summer 2007 11 HARD ROCK HOTEL AND CASINO -scheduled to open July 2007 12 ROYAL D’IBERVILLE CASINO AND HOTEL -approved for construction 13 BACARAN BAY CASINO RESORT -$500 million project scheduled for Fall 2008 14 BROADWATER -$1 billion project including casino, golf course, 3,375 condominiums, 1,900 hotel rooms 15 Harrah’s -acquisition of old Casino Magic Resort 16 Proposed -Casino Resort & golf course 17 Proposed -Casino Condo/Hotel & Marina PLUS -several casinos listed above are expanding their facilities to include convention space, ballrooms, and other facilities. THOUSANDS OF PEOPLE will be working at these hotels, and other tourist attractions. They have to live somewhere, and they have to be able to afford their homes! Currently the shortage of affordable housing is acute. This translates into a great opportunity for those who understand the future of the housing and property markets in the Biloxi area.9 We have done significant research and have decided to use developers that are building modular homes. Modular homes are already 90 percent built when they are delivered to the site. The total building process costs between 10 and 30 percent less than a traditional home construction project would cost. The reasons for the cost savings are many, and include a timelier construction schedule – there’s no waiting for building materials or construction workers to arrive on time – and avoidance of extra site workers or middleman sub-contractors who can add significantly to homebuilldin costs. The factory building process makes construction rapid and makes the most of minimal materials use – so, cost savings are passed directly to the consumer. Perhaps one of the most attractive features of modular construction is the environmentallyfrieendl nature of the home models. Many modular homes are “green” homes, made of recycled materials and featuring utility cost-savings assets like solar roofs and fluorescent lighting units. Modular homes are factory constructed and made of around 20 percent more lumber than traditional homes. Thus, they tend to be tightly built and lacking in structural gaps or cracks that some hand-built homes have. Tight, solid construction produces living spaces that are more energy efficient, overall. They also save costs longer-term: Because modular homes are built to withstand rough weather and flooding, storm damage is minimal. Furthermore, when a modular home arrives at its Go Zone site pre-built, the waste materials that are typically the result of any construction project are reduced or eliminated – another Earth-healthy move. Much media attention has been given to stars like Brad Pitt, who sponsor and champion green and modular construction as solutions for re-building the Gulf Zone following Hurricane Katrina. These stars have the right idea: Low-cost, Earth-friendly, flood-safe housing is a smart way to rebuild New Orleans and the Mississippi GO Zone YAERD.org has been negotiating with many developers in this area since March of 2007. We have settled on two developers (for now) that we feel offer the best prices, quality of product, familiarity with the Small Rental Assistance Program and time of delivery. We have gone through great lengths to ensure YAERD.org members will be taken care of. Our developers have agreed to special provisions for our members including investor price protection (developer can’t change the prices in the middle of the build out) and time of delivery protection (the developer must build your home within a given period of time or you have the option to get all deposit monies refunded. We Chose Modular Home Developers We Chose Modular Home Developers We have done significant research and have decided to use developers that are building modular homes. Modular homes are already 90 percent built when they are delivered to the site. The total building process costs between 10 and 30 percent less than a traditional home construction project would cost. The reasons for the cost savings are many, and include a timelier construction schedule – there's no waiting for building materials or construction workers to arrive on time – and avoidance of extra site workers or middleman sub-contractoor who can add significantly to home-building costs. The factory building process makes construction rapid, and makes the most of minimal materials use – so, cost savings are passed directly to the investor. Perhaps one of the most attractive features of modular construction is the environmentallyfrieendl nature of the home models. Many modular homes are "green" homes, made of recycled materials and featuring utility cost-savings assets, like solar roofs and fluorescent lighting units. Modular homes are factory constructed and made of around 20 percent more lumber than traditional homes. Thus, they tend to be tightly built and lacking in structural gaps or cracks that some hand-built homes have. Tight, solid construction produces living spaces that are more energy efficient, overall. They also save money longer-term: Because modular homes are built to withstand rough weather and flooding, storm damage is minimal. Furthermore, when a modular home arriive at its GO Zone site pre-built, the waste materials that are typically the result of any construction project are reduced or eliminated – another Earth-friendly benefit. Much media attention has been given to stars like Brad Pitt, who sponsor and champion green and modular construction as solutions for re-building the Gulf Zone following Hurriccan Katrina. These stars have the right idea: Low-cost, Earth-friendly, flood-safe housing is a smart way to rebuild New Orleans and the Mississippi GO Zone. We have been negotiating with many developers in this area since March of 2007. We have settled on developer(s) that we feel offer the best prices, the highest-quality produccts the best familiarity with the Small Rental Assistance Program, and the most timely delivery. We have gone to great lengths to ensure our investors will be taken care of. Our developer(s) have agreed to special provisions for our investors, including investor price protection (the developer can't change the prices in the middle of the build out) and timeoofdelivery protection (the developer must build your home within a given period of time). 10 Developer is offering a range of single-family homes and a duplex model. Mississippi Gulf Coast Target Investment Areas Hancock County Hancock County is about 20 miles west of downtown Biloxi. We are focusing on Bayside Park in this county. Bayside Park is a new subdivision on the edge of Bay St. Louis. This County was hit hard by the storm, but is making a strong comeback. Most of the commercial stores like Wal-Mart, Lowes and Home Depot have been restored and open for business. There are also several large employers nearby such as the NASA Stennis Space Center, Hancock County Hospital (3 miles) and Dupont Industrial Park (7 miles). This is a scattered lot development with about 7,000 lots available. It is designed as a scattered lot development to keep the aesthetic appeal unique. This is an upcoming area with affordable lots that allow investors to maximize their leverage and cash flow. Single family home $139,900 Duplex $244,900 to $249,900 Harrison County Harrison County is booming! The Gulf Coast Business Council released a report about the progress since Hurricane Katrina in 2005. Harriiso County had 45% of all new jobs created in the entire state of Mississippi during 2007. We are focusing on the D’Iberville area, which is within minutes to many different Casinos and Biloxi attracttions Harrison County Schools systems are rated at level 5, which is the highest rating given in Mississippi. Majority of homes in this County are single family and generally rented out by Casino workers, or another local employers. This town is experiencing an exciting future with two new Casinos (TheMonarch & D’Iberviller Casino and Resort) and further commercial development. Single family home $156,900 Duplex $259,900 (two lots needed) Jackson County Jackson County is just across the bridge to the East of downtown Biloxi along the scenic highway 90. This area offers quaint small towns feel with the historic downtown area of Ocean Springs. We are focusing on Gulf Park Estates, which is just East of Ocean Springs and South of highway 90. This area offers the benefits of owning property in Jackson County, while keeping lots affordable for maximum leverage and cash flow. This location also offers affordable insurance premiums due to its location. Gulf Park Estates offers a mix of single family and duplex homes. This development is close to highway 90, which allows it quick accees to both downtown Ocean Springs and downtoow Biloxi. Single family home $156,900 to $164,900 Duplex $244,900 to $259,900 11 The Patriot $139,000 starting at The Patriot True ROI = 227% True COC = 119%12 STRUCTURAL Structurally Rated (150 MPH) : Pre-engineered combination lifting attachment and perimeter floor joist system includes one 2” x 8” treated board sandwiched between two 2” x 10” treated boards that are glued and fastened with 4” screws (patent pendiin process). : 2” x 10” floor joist are 16” on center (glued and fastened with 4” screws). : 3/4” tongue and groove sub-floor (glued and fastened to floor joist with 2 ½” screws). : All floor joists are treated in accordaanc with AWPAC22. : 2” x 6” exterior studs are 16” on center (glued and fastened to sub-floor with 4” screws). : Double top plates. : All load bearing headers are solid wood. : Double 2” x 10” porch headers are counter levered and finger jointed. : All exterior 7/16” oriented strand board sheathing is glued and fastened with 2” screws to each stud on all eight sides. : Double marriage wall is joined at the center to form a 9” wall for superior structural stability. : 2” x 4” interior studs are 16” on center. : All gypsum board is fastened to studs and ceiling rafters with a two part (expanndin hot foam) adhesive. Nails and screws used only on back panels. : Pre-engineered roof truss body is attached to the double top plates with 26 gauge uplift straps. : Pre-engineered roof cap system is strapped to each truss (patent pending process). EXTERIOR : Full 6/12 roof pitch. : 30 year architectural asphalt 6 tab shingles. : Premium one piece roof felt. : 15/32” oriented strand board roof deck with full attic radiant barrier protection. : Builder to install R-38 stabilized blown cellulose insulation in the attic. The Patriot Features and Specificiations : R-9 insulated (duct butter sealed) heat/air metal duct in the attic (no flex). : Sheathing is fully covered in house wrap vapor barrier for maximum protection. : Fiberglass insulated 2” x 6” walls have an R factor of 21. : Low “E” vinyl double pane thermal windows, with screens. : Insulated front, side and rear doors with thermal break thresholds. : Glass storm doors on utility door and back door. : Two outside weather proof groundfaaul interrupter electric receptacles. : Frost-free water hose bibb with back-flow preventer. : Front and rear porch lights. : Outside electric panel (ready for public power hook-up) : Single source outside box for telephone/cable/high speed internet connection. : Dryer vent trim. INTERIOR : R-19 fiberglass insulated 2” x 10” floor joist. : 2” x 4” studs are 16” on center. : Full eight foot ceiling height. : 4” ceiling crown molding throughout. : 1/2” sheetrock is attached to all studs and ceiling rafters with expanding hot foam adhesive for maximum strength. : All ceiling sheetrock is primed with vapor barrier sealant. : Upgrade rounded “Bull Nose” sheetrooc corners. : Steel protective plates to cover all plumbing and wiring exposures. : Window jams feature wood casing and wood trim molding. : Architectural interior doors that match kitchen cabinet doors. : Privacy lever lockset on all bedroom and bath doors. : 4 1/2” baseboards in every room. : Owners closet features a transom low “E” window. : All closets are walk-in with individdua ceiling lights. : Closet shelving is white vinyl coverre metal with heavy duty supports. : Large vanity cabinets in both baths. : Matching towel bars and toilet tissue paper holders. : Wilsonart postform laminate tops in kitchen. : Custom Beaumont white double kitchen sink. : Whirlpool 30” large capacity electric range with clock. : Lighted vent hood with micro-wave oven. : 1/3 h.p. food disposal. ELECTRICAL : All electrical meets or exceeds the National Electrical Code 2005 Edition. : For safety, all electrical wiring is #12 copper or better. : Built-in telephone/high speed interneetcable connections in all bedrooms, kitchen and family room. : All bedrooms are safety protected with “Arc-Fault” breakers. : Upgrade silent rocker wall light switches. : Electric smoke detectors with battery back up. : Ground-fault interrupter receptacles in all wet areas. : All Receptacles serving the kitchen counter tops are GFCI protected. : 200 amp panel. : 42” fan with light kit /owner’s bedroom. : 52” fan with light kit /family room. : Metal ceiling fan mounting brackets in all bedrooms. : Decorative light fixtures throughout. : Under the cabinet fluorescent light over the kitchen sink. : Energy efficient fluorescent light bulbs in all fixtures. : Custom four bulb fluorescent light fixture in kitchen. : Hanging chandelier in dining area. : Vented bath exhaust fans. : Front door chime. PLUMBING : Premium RHAU PEX fresh water tubing is pressure tested and water tested in our factory. : 3/4" RHAU PEX fresh water tubing through-out, then 1/2" to fixtures attachhment : Washer and Dryer connections : Whole house water cut-off valve in utility room. : PVC waste pipe is glued and water tested in our factory. : Refrigerator ice maker connection. : Porcelain elongated commodes. : Custom dual-lever chrome faucet in baths. : Premium single-lever white faucet in kitchen with spray. : Both baths feature one piece large 32” fiberglass tub/shower units. : All floor joist plumbing is enclosed in insulation. : 50 gallon quick recovery energy ef-ficient electric water heater. : Shut-off valves at all water supply connections. : ANSI approved overflow – all tubs and bathroom sinks. HEATING, VENTILATION AND AIR CONDITIONING : Quality split system up flow unit (2 ton cooling/heat pump 8 KW electric heat or a 3 ton cooling/heat pump 15KW electric heat Builder to furnish and install: 13 Seer or better outside condensing unit. EXTERIOR FINISH : Soffet and fascia are vinyl/metal. : The front or back porch is 5/4” MCQ deck board. : Entire home is wrapped in a quality vapor barrier house wrap ready for the builder to apply the final exterior finish. WARRANTY : The Home is fully covered by a warraant underwritten by Bonded Builders Warranty Group. APPLICABLE CODES 1. The National Electrical Code, 2005 edition, published by the National Fire Protection Association (NFPA), Batterymarch Park, Quincy, Massachuseett 02269 2. The International Building code, 2003 edition and 2006 edition, published by the International Code Council (ICC) formerly the Southern Building code Congress International, Inc. (SBCCI) 900 Montclair Road, Birmingham, Alabama 35213 3. The International Residential Code, 2003 and 2006 edition, published by the International Code Council (ICC) 900 Montclair Road, Birmingham, Alabama 35213 4. The International Mechanical Code, 2003 and 2006 edition, published by the ICC 5. The International Plumbing Code, 2003 and 2006 edition, published by the ICC 6. Southern Building Code Congress International Standard for Hurricane Resistant Residential Construction (SSTD 10) or Minimum Design Load for Buildings and Other Structures (ASCE-7). The Duplex The Duplex starting at $244,900 The Duplex True ROI = 165% True COC = 118%Atwood Floorplan Duplex : Double 2 x 10 edge bands on floor system : 16” OC floor joist spacing : 2 x 10 yellow pine floor joist : 3/4 “ tongue and grove plywood floor decking : All floor decking glued and nailed : 6/12 hinged roof truss system : 8 foot flat ceilings though out : Case opening marriage seams where possible : 1/2” finished drywall walls : 1/2” high density drywall ceilings : 3 x 5 over sized thermopane windows all areas except kitchen : 2 x 3 oversized thermopane tilt out windows in kitchen : OSB exterior wall sheeting : OSB roof decking : Closet Maid shelving all closets : Triple hinged interior doors : Tack strip carpet : 2 x 6 fascia band : Plywood floors glued and nailed : 16” OC interior wall construction : 16” OC exterior wall construction : Luan sheeted marriage wall behind sheetrock : Solid 2 x 4 studs on exterior walls : Solid 2 x 4 studs on interior walls ELECTRICAL : Total electrical : 200 amp extra large 40 circuit Square D electric panel : Interconnected electrical smoke detector with battery back up : Ground fault interrupter breaker all wet areas : 10-2, 12-2 solid copper plug and switch wiring : Glass light globs through out (no plastic) : Strip light fixture over vanity (when space allows) : Chandelier in dining room : Light fixture over kitchen sink : Standard size and type plugs and switches : 220 wired for electric dryer : Wire proctors installed on all studs : Wires sealed air tight though floor : Wires sealed air tight through ceiling : Nail on electrical boxes for switches : Nail on electrical boxes for plugs : Nail on electrical boxes for light fixtures : Exterior lights at all entrances : ARC fault breakers in bedrooms WINDOWS AND DOORS : Energy efficient thermal panel tilt out Moss windows : Dead bolt locks front and rear doors : Raised six panel, pre-hung interior doors triple hinged : Metal interior door knobs : 3.0 x 6.8 six panel steel front door : 3.0 x 6.8 six panel steel rear door ENERGY EFFICIENT FEATURES : Thermopane insulated windows by Moss : Owens Corning Craft Backed R-13 side wall insulation : Blown in R-30 ceiling insulation : Energy Star high efficiency 40 gallon water heater : Energy Star Whirlpool 5 cycle dishwasher : 18 cu. Ft. Whirlpool frost free refrigerator w/icemaker : Gasket close up system : Owens Corning pink house wrap INTERIOR : Professional coordinated decors by Glidden : Optional custom Glidden colors available : Designer coordinated window treatment : 2” faux wood mini blinds : Textured finished 1/2” sheetrock walls : Designer coordinated glass light features : Stain resistance plush carpet by Shaw : Tack strip installed carpets : Heavy rebond carpet pad : Designer coordinated vinyl no wax floor covering by Congoleum : Painted wood 4” crown molding all rooms : Painted wood 3 1/2” base board molding all rooms : Pained 2 1/2 “ wood high profile door facing : Flush mounded pre-hung six panel interior doors : Floors mounted interior doors stops : Textured finished 1/2 sheetrock ceilings : Painted wood interior door jams EXTERIOR : Stylecrest maintenance free vinyl siding : Maintenance free metal facial : OSB exterior wrap : Color coordinated vinyl shutters front door side : 2 x 6 facial framing : Vented vinyl soffit : 30 year Owens corning architectural shingles : 6/12 roof pitch KITCHEN : Aristokraft components style cabinet with manufacture warranty : 5 year warranty on cabinets : Hardwood cabinet doors and styles : Durable hidden cabinet hinges : Adjustable overhead shelves in cabinets : Drawers over base cabinets : Crown molding finish on all over heads The Duplex Features and SpecificationsTrue Cash on Cash Return True Cash on Cash Return Cash Flow After Tax Positive Cash Flow = $4,416 Cash on Cash Return = 17.6% Paper Loss ($109,404) Tax Savings @25% tax bracket = $31,671 $4,416 + $25,000**** = $29,416 118% is the True Cash on Cash Return *Only the Interest is tax deductible **Assuming the straight-line residential depreciation method (improvement divided by 27.5 yrs). ***If your adjusted gross income isn’t enough to use all available depreciation, you can carry it forward. ****If your adjusted gross income is under $100,000, you can offset up to $25,000 of your ordinary income from losses in real estate. This is true for both single and for married individuals filing jointly. Please consult your tax advisor Rental Income Less Operating Expenses Less Debt Service * Regular Depreciation ** Bonus Depreciation *** Rental Income $28,800 Less Operating Expenses $4,756 Less Debt Service $18,000 $28,800 $4,756 $15,873 $4,125 $113,450 $25,000 Cash Investment $219,900 Bank Loan $244,900 Property (7.25 Int @30 yrs)True Cash on Cash Return TRUE TOTAL RETURN ON INVESTMENT ($4,416+(244,900*.04)+$2,128+$25,000 = $41,340 $41,340 /$25,000 = 165% 165% is the True Total Return on Investment **If your adjusted gross income is under $100,000, you can offset up to $25,000 of your ordinary income from passive losses in real estate, but there isn’t a cap if you qualify as a real estate professional under tax code. Please consult your tax advisor. ***If your adjusted gross income isn’t enough to use all available depreciation, you can carry it forward. Please consult your tax advisor CF = Cash Flow AP = Appreciation LR = Loan Reduction TS = Tax Savings DP = Down Payment Criteria Purchase Price $244,900 Down Payment $25,000 7.25% Appreciation Interest Rate 4% Tax Savings $25,000 Cash Flow $4,416 Loan Reduction $2,128 (CF + AP + LR + TS) /DP = True ROI 17 Additional Information All prices, floor plans, and dimensions in this document are subject to change without notice. Use of GO Zone bonus depreciation will vary, depending on each buyer’s individual circumstances. Consult with your tax advisor. Nothing in this document may be relied upon as tax advice, and no statements herein are made for the purpose of tax avoidannce The Mississippi Small Rental Assistaanc Program must be applied for, and is subject to approval by government agencies. All incentive programs and loan programs are subject to restrictions and change without notice. All information in this document regarding government programs, market demographics, markke economics, and future expectations is from third-party sources, and has not been independently verified. Buyers are responsible for conducting their own diligence, and may not rely solely on the information herein. This document contains forward-looking statements; any forward looking statements are based on assumptions, and are speculative. Forwaar looking statements, by their nature, involve substantial risks and uncertaintiies and actual results may differ materiallly depending on a variety of factors. Appraisals and property values may change significantly over time. Additional Information