STEP 1 -
IDENTIFY THE OPPORTUNITY
BILOXI AND THE MISSISSIPPI GULF COAST ...This is America’s new hot housing area...here’s why. HURRICANE KATRINA devastated the entire Mississippi Gulf Coast...destroying over 64,000 homes and 47,000 rental properties. The need for new construction is critical. Affordable Houses Address Gulf Needs January 16, 2006 — Since Katrina’s surge... wiped out whole neighborhoods in...Gulfport and Biloxi...the charette participants recognized two urgent needs...fast, affordable replacement shelter... and a way to reconnect with their town’s distinct character.” - Mississippi Renewal Forum FEMA PROGRAMS ARE ENDING...evicting over 30,000 families from temporary trailers where they have been living since the hurricane disaster. GROWTH AT STENNIS SPACE CENTER. This major NASA facility now employs 4,500 people, and is expected to double by the year 2010. It is located right next to Bayside Park. MORE THAN 101,000 Mississippians still live in government trailers, and over 40,000 families live in temporary housing with family or friends. POWER COMPANY ESTIMATES that the Mississippi Gulf Coast area will need 80,000 new affordable housing units in the next three years. “Yet amid primitive living conditions, promising signs of Mississippi’s comeback are emerging. Federal money to help homeowners rebuild is pouring in, bridges are being replaced and hotel casinos reopened. Schools are ready for children to return.” -USA TODAY, June 25, 2006 FEDERAL “GULF OPPORTUNITY ZONE” INCENTIVES...can give you accelerated d e p r e c i a t i o n and s u b s t a n t i a l t a x advantages on your investment in new home construction. In fact, you may be able to deduct 50% of the cost of the building from your tax liability in the first year! YOU HAVE SEVERAL EXCELLENT OPPORTUNITIES to invest in the growth of this region. Affordable housing may be a prudent, well-considered way to capitalize on the recovery of this important area...and help people who are desperate to rebuild their lives. The area is even more attractive when you consider the enormous investment now being made by the resort and entertainment industry. Please consult with your tax advisor to understand if this type of program meets your investment needs.
THE CASINO INDUSTRY
It’s the key to new growth and prosperity along the Mississippi Gulf Coast. 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 instead of barges. Currently 11 casinos are open and operating in Biloxi, Gulfport, and along the Gulf Coast, with 7 more either under construction or proposed. The casinos employ thousands of people who will need affordable housing. Currently the shortage of such housing is acute. This translates into a great opportunity for those who understand the future housing and property market of the Biloxi area.
“Biloxi’s casinos reported March 19, $86.2 million in gross gaming revenue in February, the largest February in city’s gaming history, according to figures released by the mayor’s office.” -Gulf Coast News - May 19, 2007 “Harrah’s Entertainment and world-renowned singer-songwriter Jimmy Buffett unveil plans for Margaritaville Casino & Resort, a $700-million-plus investment that represents the single largest investment in Mississippi since Hurricane Katrina.” - Gulf Coast News - May 19, 2007
Casino locations
Present and future
Existing Casinos Planned Casinos
D’Iberville
10
49
Gulfport
Long Beach St Louis Bay
12
Biloxi
14
10
18 6 9 8 13 7 1 5 11 15 17
15
90
White Harbor Pass Christian
3
16
43 90
4
Bay St Louis
Henderson Point
Gulf of Mexico
2
Bayside Park
(For more information on the revival of the post-Katrina casino industry, visit www.gulfcoastnews.com and click on “Current Casino Plans”) 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 - opened summer 2007 11 HARD ROCK HOTEL AND CASINO opened 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 under design including casino, golf course, 3,375 condominiums, 1,900 hotel rooms 15 HARRAH’S - acquisition of old Casino Magic Resort 16 COPA CASINO - Owners have purchased site and remaining assets of Grand Casino Gulfport and intend to build a new, larger facility 17 MARGARITAVILLE CASINO & RESORT Singer Jimmy Buffet will make a $700 million investment in a new resort on Casino Row, now under construction next to the Hard Rock. 18 BAYVIEW CASINO RESORT - Under design, to be located next to Boomtown on the Back Bay. Resort to include 55,000 square feet of gaming space and a 500-room hotel. 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!
Our Gulf Coast Target Area: Bayside Park in Hancock County
Bayside Park is a ready - for development area meeting all our carefully researched standards for growth and creation of value. • 30-minute drive from the main casino area of Biloxi, and near four of the new or proposed casinos • 45-minute drive from rapidly-rebuilding New Orleans • Perfect area for service personnel working in the tourist/casino industry...I-10 creates an easy commute • Excellent housing opportunities for families who don’t want to live in the center of the casino activity. • River Walk project approved in nearby Bay St. Louis - 1,650 riverfront residential units and commercial shopping area... investor confidence is high. • Casinos and nearby military base form a strong economic base for growth and expansion. • Keesler Air Force Base provides over $1.2 billion in economic impact per year in our area ...9,000 military retirees live within 50 miles ...7,900 military and civilian personnel live off the base ...almost 86,000 military/civilian employees and families live in the surrounding areas “Officials have approved ambitious plans for a live-work complex along the Jourdan River, signaling continued recovery from Hurricane Katrina and the largest multistory residential development in city history.” -Bay St. Louis SunHerald, April 10, 2007 • In the works: a casino, hotel, and marina complex on the west side of St. Louis Bay, a short way from Bayside Park • Government-approved architectural patterns available for the construction of affordable new homes in the area
STEP 2 -
Build What the Market Demands
HOW DO WE KNOW
what type of housing this devastated area needs and wants? We’re following the guidelines of the Mississippi Renewal Forum.Their “Pattern Book for Gulf Coast Neighborhoods” specifies the exact architectural styles, sizes, and character of all new housing in the area. More importantly, as your home will be built in a GO Zone, you will qualify for significant tax advantages and possible other government subsidies. The Jasmine is one of several styles we will develop in Hancock County’s Bayside Park. A short drive from the casinos and hotels of Biloxi and Gulfport, this county is likely to become a major center of affordable housing for workers in the tourist industry.
Square Footage Living Space 1,320 sq. ft. Porch 137 Total Under Roof 1,457 sq. ft.
Blue Oak Construction, LLC
Bayside Park Jasmine Home Features @ $125,900
Updated 12/19/07
General Construction • Permitting and Impact Fees* • Monolithic slab on grade** • Builder’s Risk insurance Surveys and Lot Preparation • Boundary stakes • Foundation and final
Structural and Construction Features and Materials • Concrete footings • Steel reinforcement for footings as per engineering • • Site Clear, Hauling, and Fill Allowance up to $4,500*** • • Termite treatment • Wood framing • • Tie-down straps (wind load) per engineered drawings • • Pre-engineered roof trusses • Ridge vent for roof • • Oversized galvanized metal flashing • Framing lumber culled • and crowned for straightness • R-30 blown insulation in ceiling • R-13 insulation on exterior framed walls • • R-19 insulation in knee walls • 1/2”” drywall on all ceilings and walls (screwed) • • Stucco and/or cement board exterior walls with decorative • shutters and/or brick facing • Vented white aluminum or vinyl soffit and fascia • Culvert pipe and installation as required
OUR DEVELOPER’S HOME IS A BETTER HOME. HERE’S WHY!
30 year mildew resistant dimensional roof shingles 15 Seer high efficiency air conditioning unit All ceilings and walls knock down drywall finish Up to 450 sq. ft. allowance for concrete driveway and walk*** All appliances are manufactured by General Electric and are Energy Star rated Wood grain kitchen/bathroom cabinets with solid surface countertops from Builder supplied choices High grade paint in flat finish, high grade 35 year silicone caulk, interior trim in semi-gloss enamel 4,000 sq. ft. of sod with initial fertilization*** Window coverings by Builder
Electrical Items • 200 AMP service at meter • Electric as per code • Pre-wired for 2 phone jacks and 2 cable outlets per plan • Smoke detectors by code • Exterior receptacles per plan • Bathroom exhaust fans vented to outside • All recessed can fixtures as per plan • Ceiling fan prewire per plan • Light fixtures by Builder Plumbing • Schedule 40 PVC drain, waste & vents • 40 gallon quick recovery water heater • Exterior hose bib(s) per plan • Elongated water closets in all bathrooms (white) by Builder • Fiberglass tub and/or shower units per plan by Builder • Moen Chateau fixtures in chrome throughout by Builder • 50/50 kitchen sink with Moen faucet Bathroom Features • Decorator type vanities with full sized mirrors • Mirrored medicine cabinets Floor Coverings • All living areas to be tiled from choices supplied by Builder • Bedrooms and closets to be carpeted from choices supplied by Builder
Water System • Complete well water system and connection to sewer Kitchen Components and Cabinetry • 21 cubic ft. refrigerator with icemaker, range, dishwasher, garbage disposal, and range hood
• • • • • • • • • •
Additional Features of Your Home • Metal Insulated Entry doors Deadbolt locks on all exterior doors White single hung aluminum or vinyl windows throughout 2-1/4” colonial casing and 3-1/4” colonial base, mitered cut base trim 6-panel 6’8” interior doors Landscaping package by Builder Attic access Front porch under truss with concrete floor Ventilated closet shelving by Builder Mailbox and house numbers by Builder Storage Shed
Blue Oak Construction, LLC reserves the right to substitute materials of similar value. Features are subject to change without notice.
All pricing includes a 5,000 sq. ft. standard lot in Bayside Park.
* Permit and Impact Fees are calculated at rates provided as of 12/1/07. If any increase in fees occurs after this date, or if any new fees are put in place, Buyer will be responsible for any difference in additional fees. ** Increases in costs related to changes in specified construction materials or procedures, which are due to new codes and/or City/ County/FEMA requirements, will be the responsibility of the Buyer. *** Amounts over any allowance will be the responsibility of the Buyer.
STEP 3 -
PROVIDE OUR CLIENTS WITH “LESS STRESS” FINANCING
Well before we begin to develop an area of opportunity, we investigate all sources of financing for our investors. Interviewing and evaluating many mortgage companies, we compile a list of those lenders who offer the best rates and most attractive terms. Here is a sample of a typical funding formula. Of course, your numbers will be different, based on the price of your investment home, down payment, credit scores, and other factors.
Pre-Construction Home Pricing
Jasmine
Bayside Park, Mississippi
$125,900 FOR HOUSE/LOT TURN-KEY
Current Appraisal Price = $152,000 Total Cash Required $16,800 to $21,600
(depends on financing option chosen and credit score) $4,500 Initial builder and lot deposit $ 495 Loan application (approximate) The developer will contribute $3,750 toward closing costs.
Our developer’s homes are so well constructed that they qualify for a reduction in windstorm insurance premiums of up to 55%. This reduction in premium can amount to a yearly savings of up to $1,000.
Estimated Cash Flows
Jasmine
Bayside Park, Mississippi
“Go Z 1st yeaone” deduc r tax to $58,0i0 n of 0
$14,700 ($8,760) ($1,470) ($1,200) ($1,800) $1,470
Rental Income Mortgage Payment Property Management Fee Real Estate Taxes Insurance Projected Annual Cash Flow
The estimated GO Zone net cash benefit in Year 1 (50% special accelerated deprecation) assuming $116,000 home value, $58,000 in deprecation, and a 35% tax bracket is $20,300!!! To better understand all the special benefits available (and important restrictions that may apply) in this unique opportunity, we strongly suggest you consult with your professional tax or financial advisor. Our developer will contribute $3,750 toward closing costs. Our recommended strategy is that you hold the property for 3 - 5 years to best take advantage of appreciation. We are in a market with rapidly changing interest rates. A steady rise in interest rates could alter your cash flow to a larger negative cash flow. As with any large purchase, it is highly recommended that you perform your own due diligence. The above is not a guarantee of your results. Your returns could be higher, lower, or you could lose money. The length of time to build your house can vary depending on weather, city inspections, etc.
Insurance amounts will vary based on your credit score and other factors. To obtain an accurate insurance quote, please contact an insurance provider. Our research has found that the best rates can be obtained from Mattina Insurance Company (228-832-1100).
STEP 4 -
MONITOR THE PROCESS AND EXIT STRATEGY
As part of our commitment to you, we provide customer service, communication, and feedback throughout the real estate investment process. To further streamline this, we’ve custom designed a web site where you can check the progress of your property 24 hours a day. We want you to be able to have all the information you need when you need it. We will also provide you with a Customer Handbook outlining contact information, an explanation of the stages of construction, our exit strategy procedures, a guide to using our website, and FAQ’s. Our current recommendation for your real estate purchase in Mississippi is to hold the property for at least three years. We will facilitate this process for you by interviewing several property management companies in the Mississippi Gulf Coast area and provide you with some recommendations prior to the completion of your home. Please note, however, that you are free to choose any property management company you wish.
All houses in Mississippi will be built with wood frame construction, not concrete block.
Given that you will sell your property at some future date, we will also interview several real estate companies in the area and provide you with recommendations. As with the property management firms we will recommend, please note that you are free to choose any real estate office you wish.
To maximize the opportunity for a favorable outcome of your investment, we have conducted extensive research into the affordable housing market in the Biloxi and Mississippi Gulf Coast region. However, there is no substitute for doing your own due diligence. The more you know, the more wisely you will invest. We strongly urge you to verify the information we present by visiting independent third-party sources. Fortunately, the reconstruction efforts in this area are so extensive, and the investment environment so vast, that there is a wealth of information for you to access. We recommend that you visit some or all of the following web sites to acquire a better understanding of the opportunities we offer.
www.mississippi.gov www.mississippi.org www.gulfcoastnews.com www.sunherald.com www.mississippirenewal.com www.southmississippi.biz www.governorbarbour.com http://www.iht.com/articles/ 2007/01/24/business/insure.php www.governorscommission.com www.mscoast.org www.mswestcoast.org www.hancockcountyms.org www.hancockcountyms.gov www.hancockchamber.org www.mississippicasinos.com Also see any of the web sites for individual casinos in the Biloxi-Gulfport area. We wish you the best success with your real estate investment program.
Insurance amounts will vary based on your credit score and other factors. To obtain an accurate insurance quote, please contact an insurance provider. Our research has found that the best rates can be obtained from Mattina Insurance Company (228-832-1100).