Advantages of Investing in Real Estate

Advantages of Investing in Real Estate

Pittsburghs Posed for Growth
Key Investment Considerations
Experienced Management Team
Investment Process
Synergy Capital Investment Portfolio
Investment Risks

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Stocks Bonds
help grow your portfolio bring in income

Real estate International investments

provides a hedge against inflation provide growth and help maintain
and has a low "correlation" with buying power in an increasing
stocks globalized world

Cash
gives you and your portfolio
security and stability

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 Stock Market Private Lending for Real Estate

Intangible Asset Tangible asset you can visit

Uninsured
Invest at market price
Returns are unknown
Return subject to market
conditions
Liquid Asset
What about REITs?
Secured by mortgage deed
Collateral is insured
Collateralized below market
value (equity position)
Returns are known, fixed and
agreed upon
Illiquid asset

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 Barclays
Aggregate US Treasury
Russell Bond T-Bill Synergy
Inflation S&P 500 2000 Index 10 Yr 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%

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

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 Quality of Life
Named among the Best Trips for 2012 by National
GeographicTraveler
Ranked #1 as America's Most Livable City by The Economist in 2011 and
Forbes in 2010
Green Leader
Affordable Housing
Safety & Comfort
World-Class Health Care
Transportation Infrastructure

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 65+ yrs. Under 10 yrs.
17% 11%
10-17 yrs.
10%

55-64 yrs. 18-24 yrs.

14% 9%

25-34 yrs.
45-54 yrs. 11%
16%
35-44 yrs.
12%

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(rate per 100,000 inhabitants)
Metro Area Violent Crime Property Crime
Pittsburgh, PA 319.5 1,975.6
Boston, MA 406.0 2,189.5
San Diego, CA 378.5 2,206.4
Raleigh, NC 242.6 2,442.6
Richmond, VA 269.3 2,542.9
Washington, DC 380.0 2,550.6
Philadelphia, PA 551.8 2,662.7
Denver, CO 337.1 2,771.4
Cleveland, OH 415.7 2,835.6
Minneapolis, MN - 2,894.2
Portland, OR 268.5 2,929.0
Detroit, MI 635.4 2,950.3
Baltimore, MD 685.3 3,090.7
St. Louis, MO 497.4 3,159.5
Cincinnati, OH 314.1 3,340.7
Milwaukee, WI 464.1 3,360.3
Atlanta, GA 413.8 3,462.6
Kansas City, MO 461.3 Crime Report3,476.1
Source: FBI Uniform 2010
Phoenix, AZ 370.8 3,534.6
Indianapolis, IN 627.9 3,827.1
Charlotte, NC 528.2 3,902.2
LL Realty Seattle, WA 353.0 3,905.8
 According to the Brookings Institute, one of only three U.S.
metros to be deemed fully recovered from the Recession
In the last 5 years 217 companies technology companies
attracted $1.3 billion in total investment
Five Years and Running as Top 10 U.S. Location for Business
Investment
Pittsburgh Metro Tops National Average for Job Growth in
High-Wage Industries
Record-High Employment in 2012

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Advanced
Energy
Manufacturing

Financial & Business Health Care & Life

Services Sciences

Information &
Communications
Technology

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 Measured in dollars, Pittsburghs December 2012 home sale activity rose $101.2 million, or
34%, from $299.8 million in December 2011 to $401.8 million in December 2012 (RealSTATs:
December 2012)
Residential purchase dollars have jumped 17% in the first ten months of 2012 compared to 2011
(RealSTATs: January 2012 October 2012)
In the first ten months of 2012 the Pittsburgh commercial market thrived with non-residential
sales activity climbing 28.3% to $1.1 billion in 2012 from $855.4 million in 2011 (RealSTATs:
January 2012 October 2012)
Pittsburgh topped the U-Haul 2012 National Migration Trend Report with a reported 9.04%
increase for the year (Pittsburgh Business Times, April 2013)
According to a study completed by the Pittsburgh Downtown Partnership, Downtown
Pittsburgh's resident population has increased by more than 30% in the past 12 years, and its
population is getting younger (Pop City Media, April 2013)
Lot 24, a 96-unit apartment building built as a second phase of the Cork Factory Lofts in the
Strip District, leased up in less than 120 days during typically slow leasing months from
December 2012 March 2013 (Pittsburgh Business Times, April 2013)

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 Median Sales Price of Average Asking Monthly
Existing Single-Family Apartment Rent
Homes (4Q 2011) (1Q, 2012)
$350,000 $2,500

$300,000
$2,000
$250,000

$1,500
$200,000

$150,000
$1,000

$100,000
$500
$50,000

$- $-

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 The Pittsburgh office market vacancy rate for Q1 of 2013 was 8.0% compared to a national
average of 11.8% (CoStar first quarter 2013, Pittsburgh Market Reports)
Class A office vacancy remains very low at 6.3% for Q1 of 2013 (CoStar first quarter 2013,
Pittsburgh Market Reports)
Pittsburghs retail vacancy rate declined in Q1 of 2013 by 40 basis points to 4.1% which is 260
basis points lower than the national average of 6.7% (CoStar first quarter 2013, Pittsburgh
Market Reports)
Pittsburghs industrial market vacancy rate declined in Q1 of 2013 by 20 basis points to 7.9%
which is 70 basis points below the national average of 8.6% (CoStar first quarter 2013,
Pittsburgh Market Reports)

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Stability, rising occupancy and rental rates, job growth, and
strong key economic sectors- like energy, financial services
and health care - all make for a strong Pittsburgh real estate
market.

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 Synergy Investment Conditions:
Capital
Three-Year Commitment
Management Fixed 7% Annual Return
Investors
Team

Private
Residential Commercial
Lending

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 Compounded
Investment Annual 3-Year Annual Aggregate
Amount Interest Rate Return Return 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

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 Experienced Management Team

Value Added Strategy

Unique Deal Flow

Capital Preservation

Risk Mitigation

Alignment of Interests

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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

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 Experienced Management Team

Value Added Strategy

Unique Deal Flow

Capital Preservation

Risk Mitigation

Alignment of Interests

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 Raised over $3.5 million in private funds
Sold more than 30 single family homes
Over $4.5 million in gross sales revenues
Synergy Capital has never defaulted on an agreement with
an investor
All investors have reinvested funds

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Average Investment Period from Due Diligence to Closing:

7 Months

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

MLS 60%
Foreclosures
Estate Sales
Distressed Sales
Short Sales
Leads 40%
Wholesale leads (We Buy Houses etc.)
For Sale by Owner (FSBO): signs/online, craigslist, etc.
Referrals, Other Investors

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Estimate Renovation Cost (highest best use, additions)

Potential After Repair Value (ARV), estimated resell price
Calculate ancillary costs (holding, financing, closing costs)
Offering Accordingly (adhering to set %s / margins)
Meeting with Architects, Structural Engineers, Other Industry Consultants

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Title Search & receive clear title

Home inspection
Finalize renovation plans
Selecting general contractor
Coordinate Funding
Insuring the property
Time Frame 30-60 days

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Start & Manage Renovations

Home inspection after completion
Make final adjustments
Professional staging, photos, & video
Time Frame 6-12 weeks

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Pricing it to sell
Listing on MLS through Re/Max
Online marketing
Networking with Local Agents
Finding the right buyer
Time Frame 1-4 months

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Buyers appraisal, inspection

Working with buyers title agent
Coordinate loan payoff
Time Frame 30-60 days

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Renovation Projects

Wholesale Deals

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 Aspinwall:
224 2nd Street

Monroeville:
608 Winterberry Rd

Lawrenceville:
4616 Plummer Street

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Aspinwall: 224 2nd Street

Purchased $92,500
Funded with $180,000 from private lender
Total expenses $205,000
Sold for $299,900 in first week on the market
Time frame from start to finish: 191 days

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Monroeville: 608 Winterberry

Purchased $20,000 from private seller

Funded with $80,000 from private lender
Total expenses $98,000
Sold for $139,900 in first week on the market
Time frame from start to finish: 206 days

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Lawrenceville: 4616 Plummer

Purchased $61,000 from estate sale

Funded with $118,000 from private lender
Total expenses $120,000
Sold for $165,000 in first week on the market
Time frame from start to finish: 216 days

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 Sourcing Evaluating Due
Renovating Selling Closing
Properties Deals Diligence

Average Investment Period from Due Diligence to Closing:

18 Months

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 Sourcing Evaluating Due Loan
Lending
Borrowers Deals Diligence Payoff

Average Rollover Rate:

8 Months

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 Sourcing Evaluating Due Loan
Lending
Borrowers Deals Diligence Payoff

Synergy Capital will loan a max LTV of 65% which includes purchase costs, construction costs,
closing costs, insurance, a six month interest reserve, and loan origination fees.

Subject-to-Repair Appraisal: based on construction plans and specs for the renovations to be
completed

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 Availability of Investment Capital
Identifying Suitable Investments
Risks of Real Estate Investments
Dependence on Key Individuals
Illiquidity of Investments
Lack of Diversification
Use of Leverage

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