ZILKER HEIGHTS AUSTIN, TEXAS, U.S.A.

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1 ZILKER HEIGHTS AUSTIN, TEXAS, U.S.A. CENTRALLY LOCATED TOWNHOMES $ 3 5 0, NOW ONLY $275,000 PER UNIT A $75,000 SAVINGS!! Substantial reduction in price (over 22% discount)! Qualifies for faster depreciation (over 30 years old; wood)! Comes with Home Price Protection contract 15 years! Austin, Texas ranked the #1 place to invest in the U.S.A.! Zilker Heights townhomes located downtown, super central! Remodeled, top quality appliances, 2 bedrooms, 900+ sqft ACCELERATED DEPRECIATION (POSSIBLE TAX BENEFITS):! B u i l t in 1981! Wood frame construction! L a n d value is $37,500 per property per local government! B u i l d i n g value is estimated to be $237,500! Fully depreciate the building value in just 4.4 years HOME PRICE PROTECTION:! Each Zilker Heights buyer receives a Home Price Protection service contract from Equity Lock Financial, which has been fully paid for by the Seller ( This contract guarantees that the buyer will not lose money when they sell their Zilker Heights Townhome in the future if Austin real estate values have fallen because this contract compensates for market declines! This protection lasts for 15 years at no cost to the buyer AUSTIN, TEXAS:! Frequently named as one of the best cities in America! As the Capitol of Texas, Austin is at the center of power and business! From , Austin was the fastest growing major city in the U.S.! A ustin has great weather and a young, family friendly population ZILKER HEIGHTS TOWNHOMES ( Super location 2 minute walk to downtown bars, restaurants, Zilker park, Long Center (orchestra hall) and much more! Recently remodeled with new roofs, new exterior, and new appliances TIERRA CAPITAL, LLC 804 Congress Avenue Austin, TX T: F:

2 Part I. PRO FORMA OF RETURNS AND POTENTIAL TAX BENEFITS Illustrative Return Analysis for Zilker Heights Townhome Ownership Pre-tax returns: purchase (cash portion) (150,000) Assumes purchased the 1st of the tax benefit (depreciation) 13,359 26,719 26,719 26,719 19,297 (0) 1 th Month of net rental cash flow 9,376 9,929 10,481 11,063 11,675 12,319 less debt service (9,481) (9,481) (9,481) (9,481) (9,481) (9,481) Assumes 6.5% over 30 years principal repayment 1,397 1,397 1,490 1,591 1, ,811 capital gain from appreciation 93,526 Net Cash Flows (135,348) 28,564 29,209 29,891 23, ,175 Pro Forma IRR 28% Total Cash Return 373,679 Less Return of Cash 150,000 Net Cash Profit 223,679 Return on Equity 149% Total Tax Savings 112,813 Return from TS 75% Back up information for IRR calculation: Assumptions: Market Value (FYE) 288, , , , , ,526 5% growth per annum Gross potential rental income 20,580 21,609 22,689 23,824 25,015 26,266 1,715 month 5% growth Repairs & Maint. (600) (600) (630) (662) (695) (729) 5% growth Property Taxes (5,434) (5,706) (5,991) (6,291) (6,605) (6,935) 80% of appraised value Insurance (1,200) (1,236) (1,273) (1,311) (1,351) (1,391) 3% growth COA Dues (1,500) (1,545) (1,591) (1,639) (1,688) (1,739) 125 per month; detail upon request Management Fees (1,441) (1,513) (1,588) (1,668) (1,751) (1,839) 7% of collected rent Vacancy (1,029) (1,080) (1,134) (1,191) (1,251) (1,313) 5% of potential rental income Net Operating Income 9,376 9,929 10,481 11,063 11,675 12,319 US Taxable Income Estimator: Net Operating Income 9,376 9,929 10,481 11,063 11,675 12,319 Less interest expense (8,084) (8,084) (7,991) (7,891) (7,784) (7,670) Less US depreciation (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) US Estimated Taxable Income (6,707) (6,155) (5,510) (4,828) (4,109) (3,351) Estimated US Tax benefit (liability) 2,348 2,154 1,928 1,690 1,438 1,173 35% tax rate TOTAL RETURN SCENARIO ANALYSIS: Annual Rate of Property Price Appreciation 149% 0% 2% 4% 6% 8% 10% 75, % 185% 234% 288% 347% 412% 100, % 149% 185% 225% 270% 318% 125, % 126% 156% 188% 223% 262% 150,000 90% 112% 136% 163% 192% 225% 175,000 82% 101% 122% 145% 170% 198% Down payment: 200,000 77% 93% 112% 132% 154% 178% 225,000 72% 87% 103% 121% 141% 163% 250,000 69% 82% 97% 113% 131% 150% 275,000 66% 78% 91% 106% 122% 140% 300,000 64% 75% 87% 100% 115% 131% 325,000 62% 72% 83% 96% 109% 124% 350,000 60% 70% 80% 92% 104% 118% Disclaimer: nothing herein represents to be a forecast or guarantee. The numbers herein are presented to illustrate the potential economic benefits of owning a Zilker Heights home. This does not represent an offer to sell. Buyers are strongly encouraged to do their own analysis. 2

3 Part II. EQUITYLOCK FINANCIAL GUARANTEE Assurance in your investment today, a guarantee in your financial future tomorrow Each Condo Comes with Home Price Protection that Protect You:! Home Price Protection is a service contract that the Developer of Zilker Heights is providing each buyer that protects the buyer against falling real estate prices! This contract is between the buyer and Equity Lock Financial, which is a leading edge real estate protection company in the U.S. ( This contract protects the buyer for 15 years and pays the owner when they sell the property if the value of Austin real estate has gone down by the amount the local index has fallen! The contract is pre-approved and the buyer does not have to fill in any additional paperwork the contract will be assigned to them upon purchase of their home! There is an 18 month waiting period before the contract can be exercised. This is because the program is intended to encourage homeowners that are committed to remaining in their home for the long term, rather than as a speculative financial tool and because price movements are more stable over the longer term Example In 2008, Mr. Jones purchases a home from $300,000 and an EquityLock Home Price Protection contract for $4,500. The local index at the time is 100. In 2011, Mr. Jones sells the home under one of the following potential scenarios:! Scenario!A! Scenario!B! Scenario!C! Purchase!Price! in!2008! Resale!Price!in! 2011! Gain/!Loss!! Gain/Loss!on! Sale!of!house! Price!Index! Change! Payout!on! Contract! $300,000! $300,000! $300,000! $350,000! $290,000! $350,000! 105! 90! 90! +$50,000! "$10,000! +$50,000! +5%! "10%! "10%! $0! $30,000! $30,000! Net!Gain!with! ELF!Contract! +$50,000! +$20,000! +$80,000! You can eliminate market risk and increase your safety with EquityLock s guarantee. 3

4 Part III. AUSTIN, TEXAS, UNITED STATES OF AMERICA Austin is a diverse, educated and culturally rich community deep in the heart of Texas Austin is! The live music capital of the world! A top ten green city with lots of parks! Home to the Texas Longhorns and The University of Texas (one of the largest universities in the nation)! Unique Texas Hill Country surround by five distinct lakes! A top ten dog-friendly city! Home to the Nation s tallest Capital building and other historic buildings! One of the fastest growing areas in the U.S.! Highly educated, young, low unemployment! Growing economy, increasing job growth! Attractive to corporate America! High tech hub, top producer of U.S. patents! Affordable housing, low cost of living! Easily accessible by all major airlines! A sunny, warm place with 231 sunny days per year and relatively mild temperatures Texas is! Texas is home to 56 fortune 500 companies! 3rd largest state economy in the U.S. with Austin being a major contributor overall! Driven by the steady growth of the energy and manufacturing sectors and high growth in the technology and service sectors! Key ports in Houston, Corpus Christi and Laredo handle large amounts of trade by land and sea! A significant trading partner with Mexico, Canada and Asia! Is larger than California and New York but far less crowded! Full of diversity, intelligence and sophistication Come home to Austin, Texas a place many already call home, with rich history, culture, and a fun, vibrant atmosphere 4

5 Part IV. ZILKER HEIGHTS Elegant and beautifully appointed Tuscan style homes located on South First Street, just a three minutes walk from Lady Bird Lake, SoCo, the Long Center, and downtown Austin s finest restaurants, theatres, museums, parks and live music venues! 8 custom town homes centrally located in hot zip code! All units are 2 bedroom, 1.5 bath and have tons of upgrades! Common areas include private reading area, terrace, firepit, and zen rock garden. 5 Luxury Amenities! Tile floors with travertine accents! Custom maple cabinets! Granite countertops & backsplashes! Ultra high-end appliances including convection oven including stove and oven! Washer and dryer included in each Condo! Private backyards with patios