No Range of Experience Kevin Strasser

Kevin Strasser

WestOne Properties Real Estate Service Provider

Executive Summary  Advantages of Investing in Real Estate  Pittsburgh’s Posed for Growth  Key Investment Considerations  Experienced Management Team  Investment Process  Synergy Capital Investment Portfolio  Investment Risks

Why Invest in Real Estate?

Diversification Stocks help grow your portfolio

Bonds bring in income

Real estate provides a hedge against inflation and has a low "correlation" with stocks

International investments provide growth and help maintain buying power in an increasing globalized world

Cash gives you and your portfolio security and stability

Stocks vs. Real Estate Stock Market • • • • • •

Intangible Asset Uninsured Invest at market price Returns are unknown Return subject to market conditions Liquid Asset What about REITs?

Private Lending for Real Estate • • • •

Tangible asset you can visit Secured by mortgage deed Collateral is insured Collateralized below market value (equity position) • Returns are known, fixed and agreed upon • Illiquid asset

Investment Comparison Barclays Aggregate US Treasury Bond T-Bill Index 10 Yr

Inflation

S&P 500

Russell 2000

Synergy Capital

5 Year

1.80%

4.83%

6.83%

5.89%

5.55%

-

3 Year

2.06%

11.66%

9.66%

5.73%

8.28%

7.00%

1 Year

1.75%

15.60%

15.97%

3.86%

5.02%

7.00%

Why Pittsburgh?

Pittsburgh Accolades  America’s Most Livable City, The Economist and Forbes.com  Best Commercial Real Estate Market, WestOne Service  North American City of the Future, fDi  Economically Strongest U.S. Metros, The Brookings Institution  Top 10 City for Job Growth, Forbes.com  America’s Best Housing Market, Forbes.com  Best Cities for Recent Graduates, Huffington Post  Safe Havens in Real Estate, Kiplinger Magazine

Pittsburgh Population by Age 65+ yrs.; 17% Under 10 yrs.; 11%

55-64 yrs.; 14%

10-17 yrs.; 10%

18-24 yrs.; 9%

25-34 yrs.; 12% 45-54 yrs.; 16% 35-44 yrs.; 12%

Source: 2010 U.S. Census Bureau

Crime Index 2010 (rate per 100,000 inhabitants)

Metro Area Pittsburgh, PA Boston, MA San Diego, CA Raleigh, NC Richmond, VA Washington, DC Philadelphia, PA Denver, CO Cleveland, OH Minneapolis, MN Portland, OR Detroit, MI Baltimore, MD St. Louis, MO Cincinnati, OH Milwaukee, WI Atlanta, GA Kansas City, MO Phoenix, AZ Indianapolis, IN Charlotte, NC Seattle, WA

Violent Crime 319.5 406.0 378.5 242.6 269.3 380.0 551.8 337.1 415.7 268.5 635.4 685.3 497.4 314.1 464.1 413.8 461.3 370.8 627.9 528.2 353.0

Property Crime 1,975.6 2,189.5 2,206.4 2,442.6 2,542.9 2,550.6 2,662.7 2,771.4 2,835.6 2,894.2 2,929.0 2,950.3 3,090.7 3,159.5 3,340.7 3,360.3 3,462.6 3,476.1 3,534.6 3,827.1 3,902.2 3,905.8

Source: FBI Uniform Crime Report 2010

Pittsburgh Key Economic Sectors Advanced Manufacturing

Energy

Financial & Business Services

Health Care & Life Sciences

Information & Communications Technology

Median Sales Price of Existing Single-Family Homes (4Q 2011) $350,000

Average Asking Monthly Apartment Rent (1Q, 2012) $2,500

$300,000 $2,000 $250,000 $200,000 $150,000

$1,500

$1,000

$100,000 $500 $50,000 $-

$-

Source: The NAHB/Wells Fargo Housing Opportunity Index: Complete History by Metropolitan Area (1991-Current)

Investment Opportunity Investment Conditions: Synergy Capital

Management Team

Residential

ďƒ˜ Three-Year Commitment ďƒ˜ Fixed 7% Annual Return

Investors

Commercial

Private Lending

Three-Year Return Investment Amount

Compounded 3-Year Return

Annual Interest Rate

 Annual Return

Aggregate Annual Return

$ 25,000

7%

$

5,626

$ 1,750

$ 5,250

$ 50,000

7%

$

11,252

$ 3,500

$ 10,500

$ 100,000

7%

$

22,504

$ 7,000

$ 21,000

$ 250,000

7%

$

56,261

$ 17,500

$ 52,500

$ 500,000

7%

$

112,522

$ 35,000

$ 105,000

$ 750,000

7%

$

168,782

$ 52,500

$ 157,500

$ 1,000,000

7%

$

225,043

$ 70,000

$ 210,000

Key Investment Considerations Experienced Management Team Value Added Strategy Unique Deal Flow Capital Preservation Risk Mitigation Alignment of Interests

Experienced Management Team Josh Adamek – Managing Partner • • • • •

Ten year track record 2003-2010 built personal portfolio of rental properties Full-time since 2010 Has been the principal in over 100 transactions Vice President of ACRE of Pittsburgh

Scott Hastings – Managing Partner • • • • • • •

Eleven years of experience, completing over 500 transactions Accumulated 50 rental units in first year of investing 2002-2007 was the 2nd largest wholesaler in Pittsburgh with over 200 transactions 2008-2010 opened Pittsburgh regional office for a national private lending company 2010-2011 started own investment company and bought, renovated, sold 30 properties Reputable real estate agent Mentor to Pittsburgh area real estate investors

Key Investment Considerations Experienced Management Team Value Added Strategy Unique Deal Flow Capital Preservation Risk Mitigation Alignment of Interests

Commercial Investment Process Sourcing Properties

Evaluating Deals

Due Diligence

Renovating

Selling

Closing

Average Investment Period from Due Diligence to Closing: 18 Months

Private Lending Process

Sourcing Borrowers

Evaluating Deals

Due Diligence

Average Rollover Rate: 8 Months

Lending

Loan Payoff

Invest with Synergy Capital  Real estate is a tremendous opportunity to add value and diversification to    

investment portfolios and outperform industry averages Information-intensive aspect of real estate investing favor experienced and well connected investors like our local firm Specialized managers with excellent market knowledge add enormous value Invested management team encourages thoughtful acquisitions, careful oversight, and timely dispositions Management team garners a margin of safety by paying a low purchase price in which properties are acquired at a discount

Exhibit 1: Self-Directed IRA or 401(k) 

All investments must be arms length, meaning the buyer and seller are acting in their own self-interest and there is no influence from other parties.



You cannot sell or buy property from a disqualified individual. Disqualified individuals include you, your spouse, your parents, your kids and/or their spouses, grandchildren, grandparents, investment advisors, fiduciaries and entities where the disqualified individual owns 50% or more interest.



You cannot receive immediate benefit from a property owned by your IRA. No vacation homes, personal residences or office spaces because these would benefit you in some way.



You cannot lend yourself money to perform rehab work or cosmetic work on the home purchased by your IRA. You can't perform any maintenance on the home or even furnish the home. It's all done via a property management company, which is nice because then you don't have to deal with tenants. All income or rental profits generated from your investment must go back to your self-directed IRA and all expenses like improvements, property taxes and bills directly related to the investment property must be paid from your IRA account.



Your IRA may invest in: Single-family residences and vacation homes, Certain condominiums and duplexes, Multi-family (5+ units) properties, Commercial properties (retail/office/warehouse), International properties



A self-directed 401(k) offers the same benefits of pre-tax savings and automated payroll deductions that you'll find with a traditional 401(k) plan. The difference is in your investment choices.



A self-directed plan is similar to a brokerage account. It's essentially a do-it-yourself 401(k), and you're the fund manager. Rather than choosing 401(k) investments from a short menu of pre-approved mutual funds, participating employees have an entire universe of investments to consider.