1. In recent years, the city of Philadelphia has experienced a revival of sorts. With it's historic attractions, fine dining and exceptional nightlife, the rejuvenation of this city has been astounding. Along with major city improvements, the Philadelphia Real Estate market has flourished. There has been an excellent trend of appreciation on all properties located within the city. The city of Philadelphia is located in a prime location for consistent growth. This city is positioned between the financial capital of the world, New York City, and the nation's capitol, Washington D.C. While real estate prices in those markets are astronomical, Philadelphia Real Estate is still very affordable. Philadelphia Real estate overview From an investment perspective, local single and multifamily properties will remain attractive for their relatively predictable cash flow growth and the difficulties likely to be incurred in new construction. Property prices may grow only modestly in the months ahead. Still, the absence of rent controls in Pennsylvania counties will continue to draw buyers eager to add value by raising rents to market rates. With current conditions of foreclosure growth and existing inventory of properties, buying today in Philadelphia’s areas such as Northeast and Central City looks as attractive investment with low risk level. Prime areas of interest located in the following zip codes: 19120, 19124, 19149, 19111, 19152, 19103

3. Investment goals Taking conservative approach in cash flow calculation and by setting price frame for this financial structure we should be able to get 14-19% “cash-on-cash” return. Upon sell of the property the goal is to get 30-35%min. profit for cash initially invested. Positive cash flow and working capital funds should be reinvested into the future multi-family properties All calculations in this presentation are based on example of 1-family rental property. Cash flow and prices for multi-family properties should be calculated based on the same logistics. Very important core idea :By purchasing 2-5 properties monthly it is possible to create cash substantial monthly cash flow and have inventory of the properties for sale and reinvesting.

4. Strategy Best strategy is to: Purchase property for cash for 60-70% of its value Fix it for potential tenants and by doing it gain equity (approximately 20-30%)on the property. Get tenants start paying rent. Refinance the property for 70-80% LTV. Tenant pays mortgage including principal and generates cash flow for the owners. Owners getting initial investment back, plus cash out from refinancing while still receiving positive cash flow. Move to next property. Note: In 1996-2000 market price went down by approx. 20%.So, buying it at 60-70% of the value would minimize the risk of investment. (See slides below)

5. Cash purchase scenario

6. $47,200.00 Partners invest - $33,040.00 (70%) Working partner invest -$14,160.00 (30%) Profit from rent is split 50/50% ($5,735.00) Working partner receive $2,867.00 Partners receive $2,868.00 Tenant pays monthly rent $750.00 Cash investment scenario (2-nd year of rental excluding $5000.00 initial repair)

7. Finance/refinance purchase

8. $47,200.00 Partners invest - $12,500.00 (70%) Working partner invest -$5,000.00 (30%) Profit from rent is split 50/50% ($3,480.00) Working partner receive -$1,740.00 (after debt payment) Partners receive - $1,740.00 (after debt payment) Tenant pays monthly rent $750.00 Purchase Financing scenario (1 year occupancy)

9. Initial saving comparison Financing vs. Cash Numbers are based on $47,200.00 purchase price Mortgage financing Cash purchase Closing cost (@5%) $2,360.00 $0.0 Minimum of 2month mortgage payment $490.00 $0.0 Total initial saving: $2,860.00 Total initial saving in %: 6%

10. Cash purchase Refinancing Fix and repair Finding tenant and start receiving rent. Taking cash out and put it in other property, keeping positive cash flow on current property 2-3 weeks 3-4 weeks 4-6 weeks Total turnaround time is 9-13 weeks Time-line flow

11. Cash Property Rent Investors Mortgage Next Property 1.Purchase property for cash for 60-70% of its value 2.Fix it for potential tenants and by doing it gain equity (approximately 20-30%)on the property 3. Get tenants start paying rent 4. Refinance the property for 70-80% LTV. Tenant pays mortgage including principal and generates cash flow for the owners. 5. Owners get initial investment back, plus cash out from refinancing while still receiving positive cash flow.

12. Investment structure into Philadelphia Real Estate Market Real Estate Fund/ Investment corp Working Fund’s ManagerFund Members Members will contribute 70% into the fund Working Manager will contributes 30% into the fund Fund Members may participate actively in purchasing properties or be a “silent investors”. Members will have opportunities to check location and the property (if it is not on Sheriff sale) Members can recommend maximum price for purchase as well as number of properties in portfolio. Working Manager responsible for: Deal Origination. Due Diligence. Deal structuring. Management of Real Estate Investments Liquidation and Exit

13. Detail explanation of responsibilities Deal Origination: Manager deals with contractors, financial institutions, attorneys, business associates and agents as well as attending Sheriff Auctions and purchasing properties Due Diligence: The due diligence process includes compilation of business plan, market and competitive analysis, financial analysis, tenant reference checks, credit checks as well as an examination of financial structure and legal issues. Deal Structuring: Finding and negotiating financing terms with Financial Institutions and Outside Shareholders, as well as addressing accounting, tax and legal issues. Management of Real Estate Investments: Responsibilities at this stage include providing strategic guidance, establish short and medium term goals, implement management systems and accounts, out source non critical services and execute strategies and plans to achieve goals set. Liquidation and exit: The final stage of the investment cycle involves planning an exit strategy once set goals have be enriched and the property has achieved its maximum value. This phase could be delayed with real estate investments having the potential to be continually upgraded to keep track with new market trends and consumer expectation.

14. Due diligence information, as well as, area comparison analysis will be presented to the investors by the manager for review and approval. (See next slides)

16. Sales data in 19124 zip code

17. Sales data in 19149 zip code

18. Typical Property for $40,000.00-$55,000.00 buy range

20. Typical Property and neighborhood for $40,000.00- $55,000.00 buy range

21. Risk assessment of investment into Philadelphia Real Estate Market Potential issues Real Estate Fund /Investment corp Working Fund’s ManagerFund Members Potential issues

22. # Bedrooms Feb Jan Dec 3 Month % change Studio $1,103 $1,070 $1,215 9.2% 1 Bed $1,176 $1,215 $1,314 10.5% 2 Bed $1,652 $1,748 $1,831 9.8% 3 Bed $2,812 $2,761 $2,777 -1.3% Average Rents In Philadelphia, Pennsylvania (end of 2007)

23. Sources to cell property Using LOCAL REAL ESATE agency is very beneficial and shows much higher possibilities to attract LOCAL residents, instead of just listing it on MLS Using personal adds (such as graigslist.com) shows increase of interest in comparison to just listing it and placing on MLS. Attracting NY investors by putting NY based adds and offering full service with cash flow.

24. Source of Tenants Section 8 Tenants Need to pass initial inspection Initial Lease is for 2 years (usually includes utilities) with yearly re-inspection. Tenants pre-qualified to the rent. Direct deposit of the rent from City to owners account. Owners are not dealing directly with tenants. Usually rent is less by approximately 5-10% in comparison to regular tenants

25. Source of Tenants Regular Tenants Need to check credit/criminal history Owners can charge higher rent in comparison to section 8 tenants Higher possibility of eviction Property can be rented based month- to-month or 1 year terms

26. 244-341 545 W. Elkins Ave. 19120 61st Wd 2,257.50 sq. ft. BRT# 612030900 Improvements: Residential Dwelling VINCENT BERCAW C.P. October Term, 2007 No. 003820 $78,757.07 Mark J. Udren, Esq. 244-458 869 N. Uber St. 19130 15th Wd 914.68 sq. ft. BRT# 151063300 Improvements: Residential Dwelling EUGONDA BUTTS C.P. December Term, 2001 No. 000444 $37,752.98 Mark J. Udren, Esq. 244-554 4507 N. 8th St. 19149 49th Wd 1,035 sq. ft. BRT# 491246300 Improvements: Residential Property KEVIN ROBERTSON C.P. September Term, 2007 No. 002145 $62,139.86 Example of foreclosed properties for upcoming Sheriff Auction

27. Exit Strategy Market is not favorable to sellOffer rent-to–own option. Initially property should be owned by Corporation. Then by selling it to individual investor (who is a member of Corporation) for a full market price partners can recover initial investment, as well as, cash-out funds based on difference between purchased price and sell price. Combine few properties and sell it as a “package” to investors. Market is not favorable to sell property. Potential issue Issue solution