PEOPLE HELPING PEOPLE

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3 PEOPLE HELPING PEOPLE

4 HIGHLIGHTS A COMPREHENSIVE GUIDE OVERVIEW TYPE OF PROPERTIES SALES PRICES FUND-TO-VALUE NO CREDIT / NO INCOME QUALIFIER RESIDENTIAL & COMMERCIAL PROPERTIES MINIMUM $50,000 USD MAXIMUM CASE-BY-CASE MINIMUM 30% MAXIMUM 70% Program engineered to partner up with buyers securing all parties participation PDI Companies reserves its right to approve or reject properties No limit established for high price & high potential properties Of the property value ANNUAL COST FUNDING TERM ANNUAL MANAGEMENT FEE NOT A LOAN. UP TO 10 YEARS Fixed management fee to be paid on a monthly or quarterly basis No prepayment penalty

5 STRUCTURE FOR BUYING REAL ESTATE IN MEXICO BASED ON APPLICABLE MEXICAN & NAFTA LEGISLATION TRADITIONAL STRUCTURE For those foreigners interested in buying real estate in Mexico within a 90 miles strip from the ocean shore, they have to go through a FTD (Fideicomiso Traslativo de Dominio), a sort of trust administered by a Mexican banking institution, with an initial set up fee, plus an annualy paid administration fee. VS PDI S PPP STRUCTURE The PDI Team of professionals have simplified a long standing structure of owning Real Estate in Mexico. Mexican legislation allows foreign nationals to partner up with a Mexican individual or Company constituting a PARTNERSHIP. The new formed company, is allowed to conduct business in Mexico, as well as BUYING REAL ESTATE.

6 STRUCTURE PARTNER PDI NEW COMPANY

7 ONCE CONSTITUTED THE NEW COMPANY CAN NOW RENT

8 MORTGAGE FINANCING IN MEXICO VS PDI PARTNERSHIP PROGRAM MEXICAN MORTGAGE FINANCING PURCHASE PARTNERSHIP PROGRAM 70% MINIMUM DOWN PAYMENT MONTHLY AMORTIZATIONS OF PRINCIPAL + INTEREST FORECLOSURE IF DEFAULT IN PAYMENTS REPORTING PAYMENT HISTORY TO CREDIT BUREAU 30% MINIMUM DOWN PAYMENT FLEXIBLE PAYMENT STRUCTURE (MONTHLY, QUARTERLY) NO FORECLOSURE, OPTIONS TO DEFER DEFAULTED PAYMENTS PARTNERSHIP FUND, NOT A MORTGAGE LOAN, THEREFORE, IT S NOT REPORTED TO BUREAU

9 ADVANTAGES FOR FOREIGN BUYERS NO PROOF OF INCOME AND NO CREDIT SCORE REQUIRED. QUICK CLOSINGS Closing process greatly reduced to less than 4 weeks. CAPITAL GUARANTEED By shares of the New Formed Company, who owns the Real Estate, which cannot be disposed of, unless both partners agree. CAPITAL GAIN TAX For US citizens 4.9% and 10% for Canadian citizens, for investing in a company in Mexico as per NAFTA Treaty. *May vary per transaction NO FORECLOSURE If partner is not able to meet his commitment, PDI will find options to alleviate or fill his position without forclosure. GENERATING CASH FLOW Property can be rented full or part time while partner is away. PROPERTY MANAGEMENT PDI will act as property manager to maintain property values.

10 ONCE THE BUYER HAS FOUND A PROPERTY HE LIKES: STEP 1 STEP 2 STEP 3 STEP 4 - Become a PDI Member - Submit package for underwriting - Discuss partnership structure - PDI Issues conditional partnership letter - PDI conducts an inspection of the proposed property - Closing Package is sent to Legal Department - Property Appraisal is done - Act of Constitution for New Company and Escritura is signed - Buyer deposits its down payment and closing costs STEP 5 STEP 6 - PDI Deposits for the purchase - Partner is granted the right to use and moves in or rent. - Notary sends escritura for recording - Recorded originals are sent to all parties DEAL COMPLETED

11 ESTIMATED TIMELINE *TIMES MAY VARY DEPENDING ON EACH PARTNERSHIP STEP PROCESS WEEK 1 WEEK 2 WEEK 3 WEEK 4 WEEK 5 WEEK Become PDI-SAPI member Light-Doc package submitted for underwriting PDI performs property inspection Approved packages sent to legal department for closing FUNDING TAKES PLACE Partnership act of incorporation and escritura are sent for recording Recorded documents are scanned and originals shipped to all parties PROCESS IS COMPLETE

12 FEES THIS IS NOT A MORTGAGE LOAN, INSTEAD OF AN INTEREST RATE, PDI CHARGES WILL SHOW AS MANAGEMENT FEE. TRANSFER OF PROPERTY.- Notary fee Property Purchase Tax (ISABI) & Catastro fee (Traslado de Dominio) Recording fee LEGAL AND CLOSING.- Underwriting and Property Appraisal fee Act of Constitution of New Company and yearly asseamblies Closing fee MANAGEMENT.- Management fee HOA (where applicable) Property tax & utilities

13 DOCUMENTS REQUIRED Offer to purchase Property appraisal Catastro Certified done by PDI PDI Forms completed and signed by purchaser Buyer s Identification If married under jointly assets, spouse s ID Proof of legal entry to Mexico Property documents: Escritura or Property Title If Property Title, this must be accompanied by the Ejido s Assembly Act Rights Forfeiture Document voted and signed by all Ejido members and their heirs. Current year s property tax receipt Existing public utilities contracts Freedom of Liens certificate Obtained by Public Notary *Additional documents may be required

14 FEE S SCHEDULE ITEMS TO BE PAID BY THE BUYING PARTNER AS PER CLOSING PROCESS CONCEPT AMOUNT (in MX) WHEN TO PAY IT Business Membership fee Underwriting fee Appraisal fee Legal fee, Notary fee, Tax, Closing fees and Recording Legal fee, Notary fee, Tax, Closing fees and Recording $1, $3, As per property value s chart % As per property s purchase price % As per property s purchase price Before starting process After conditional closing issued After conditional closing issued 50% to start legal work 50% remaining at closing

15 RENTAL PROGRAM A COMPREHENSIVE OUTLINE OF HOW THE RENTAL IS TO BE HANDLED PDI may be the property manager of the property as long as we own any percentage in shares. PDI may be in charge of the up keeping of the property even when the buying partner is using it. PDI will do an annual audited report on the rental and management of the property. PDI and the buying partner will share net profits according to the percentages established in the Act of Constitution s terms. No major repairs will be done to the property without both partners agreement. PDI will establish the rental amount according to the prevailing market.

16 INVESTORS NOT JUST FOR BUYERS WE ALSO PARTNER UP BUYERS WITH INVESTORS As an investor you have the security of the company, the asset and the full package as outlined above. PDI would offer a set return, interest rate and a profit participation on the up side of the company. Also, you can structure your investment to take advantage of the low capital gains offered by NAFTA.

17 FREQUENTLY ASKED QUESTIONS Q What is the interest rate? A There is no interest rate only an annual management fee depending on partnership agreement it may range from 8% to 15% Q Can residential properties be covered? A Yes, both residential and commerial properties participate. Q How much does the Buying Partner have to pay in Closing Costs? A The average total amount of closing costs is being paid in Mexico, between 7.0% and 9.0% of the purchase price. Q What happens when I finish paying off PDI A You become the owner! You can chose to retain PDI Management as your accountant to manage your Mexican corporation. Q What is the required Mexican participation in corporation? A Only one shareholder needs to be Mexican and there is no required percentage.

18 MEET THE PDI FAMILY: Puerto Vallarta, Jalisco Mexico Office: (044) Toll Free: Canada Toll Free: USA