Cell: 916-412-7141 Fax: 916-660-1790 DC Venture Properties, Inc. 8690 Woodrock Way, Granite Bay CA 95746 First Time Sacramento

Cell: 916-412-7141Fax: 916-660-1790

www.dcventureproperties.com

DC Venture Properties, Inc.8690 Woodrock Way, Granite Bay CA 95746

First Time Sacramento Area Investors

Welcome to the First Time Sacramento Area Investor presentation prepared by DC Venture Properties, Inc., a full-service real estate company providing sales, financing and property management services.

Experienced Investors

Will appreciate our efficiency in finding, rehabilitating and managing properties for maximum financial

benefit.

Seasoned investors should click here to go directly to market/financial data.

First Time Investors

Get the guidance and support you need to reduce risk and make your first investment experience a pleasant and profitable one.

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Investment Strategy

While there are many variations in real estate investment strategies, they generally fit into one of the three main approaches to residential property investing in California.

Appreciation Model

Income/Cash flow Model

Mixed Investment Model

These investment strategies have all been very successful in California’s rapidly growing real estate market. Historically, success was virtually guaranteed due to the high annual appreciation rates experienced over the last several decades. However, times have changed, and investors can no longer count on high appreciation rates to achieve their ROI goals.

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Investment Strategy – Appreciation Model

The Appreciation Model has certainly been one of the most popular among California investors. In fact, many California homeowners can be described as informal investors since they have often stretched their buying power to maximize the benefits of high annual appreciation rates. This strategy is characterized as follows:

Buy property in desirable, high appreciation growth areas

Minimize negative cash flow to the extent possible

Hold property until investor’s ROI target is achieved

While this strategy may still be successful, investors will have to hold property for much longer in order to achieve their goals. Local real estate markets will not improve until the economy and jobs numbers improve.

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Investment Strategy – Income/Cash Flow Model

The Income/Cash Flow Model refers to generating a monthly return (income) on an investment. Cash Flow investors generally prefer multi-family properties, where the economies of scale and acquisition cost per rental unit make it more profitable. These types of property are usually valued on a multiple of earnings, not on the appreciation of properties in the surrounding areas. This strategy is characterized as follows:

Buy multi-family properties, with low cost per unit

Maximize positive cash flow to achieve investor’s ROI target

Hold as long-term investment

These properties will benefit from the increasing pool of renters resulting from mortgage defaults and a 4% to 5% increase in rental fees in 2012.

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Investment Strategy – Mixed Investment Model

The Mixed Investment Model is about getting the benefits of appreciation and a regular positive cash flow. Unlike multi-family properties that are priced based on earning capacity, single family properties will appreciate on the basis of desirability and demand for housing as the economy improves. With low acquisition costs resulting from the dramatic drop in values for most properties, investors can now achieve high single or low double digit ROI’s. This strategy is characterized as follows:

Buy distressed single family properties in low cost areas

Maximize positive cash flow to achieve investor’s cash flow target

Hold property until investor’s ROI target is achieved

These properties represent the target market recommended by DCVP.

Inventory Composition

Non_REO/Non-Short Sale

25%

REO25%

Short Sale50%

Ave Monthly Inventory = 2385

Ave Monthly Units Sold = 1072

Ave Unit Price ($000) = 126

Ave DOM (cumulative) = 120

Ave Months of Inventory = 2.2

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Market Overview

Sacramento County was hit hard by the 2008 real estate market collapse. Some areas have seen property values drop by 50%, 60% and even 70%. The best opportunity for investors is the segment of this market made up of single family units (SFR’s) priced under $200k. This segment averages 2385 units of monthly inventory, and is dominated by distressed properties as shown in the Inventory Composition chart below.

REO Ave Monthly Inventory = 661 Ave Unit Price ($000) = 116 Ave DOM (cumulative) = 60

Non-REO/Non-Short Sale Ave Monthly Inventory = 671 Ave Unit Price ($000) = 138 Ave DOM (cumulative) = 60

Short Sale Ave Monthly Inventory = 1331 Ave Unit Price ($000) = 132 Ave DOM (cumulative) = 120

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Market Overview (Cont’d)

The data below provides additional details describing the three main categories of properties that make up the under $200k single family unit (SFR) market segment. SFR Inventory <$200k

0

200

400

600

800

1000

1200

1400

MAY JUN JUL AUG SEP OCT

Calendar Year 2011

Un

its

Ava

ilab

le

Non-REO/Non-Short Sale REO Short Sale

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Target Market

DCVP’s target market is a subset of the under $200k single family unit (SFR) inventory available in Sacramento county.

Short Sale properties are not suitable opportunities for investors due to their time consuming processes and unpredictable results.

Instead we recommend REO and Non-Short Sale properties.

There are ample inventories of both REO’s and Non-Short Sale properties available on a consistent basis.

The default rates are expected to remain high, and as a result REO’s will continue to replenish inventories.

0

100

200300

400

500600

Uni

ts A

vaila

ble

1 to 60K 61K to 120K 121K to 180K

Price Range

Target Market Inventory $1k to $60k

Ave Monthly Inventory = 70 Ave Unit Price ($000) = 48 Ave DOM (cumulative) = 65

$61k to $120k Ave Monthly Inventory = 421 Ave Unit Price ($000) = 94 Ave DOM (cumulative) = 88

$121k to $180k Ave Monthly Inventory = 514 Ave Unit Price ($000) = 152 Ave DOM (cumulative) = 74

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Target Market (Cont’d)

A snapshot of the mid-November target market inventory is shown below. These statistics may vary slightly in future months, but we do not expect major changes in inventories until after 2012.

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Investment Analysis

The simplified financial analysis below provides an indication of the cash flow investors can expect based on their investment preferences such as property price range and cash vs. financed acquisitions.

DESCRIPTION CASH FIN 70% CASH FIN 70% CASH FIN 70%

Purchase Price 48,000 48,000 94,000 94,000 152,000 152,000Closing Costs 558 3,285 673 3,852 817 4,566Down Payment 0 14,400 0 28,200 0 45,600Property Rehabilitation Costs 12,500 12,500 12,500 12,500 12,500 12,500 Total Acquisition Costs 61,058 30,185 107,173 44,552 165,317 62,666

Monthly Rental Rate 929 929 1,100 1,100 1,249 1,249Gross Scheduled Income (MRR x 12) 11,148 11,148 13,200 13,200 14,988 14,988Adjustment for Vacancy Rate (4.5%) (502) (502) (594) (594) (674) (674) Operating Revenues 10,646 10,646 12,606 12,606 14,314 14,314

Property Taxes (1.25%) 600 600 1,175 1,175 1,900 1,900Property Insurance 530 530 560 560 600 600Repairs and Maintenance 600 600 600 600 600 600Lawn/Garden Maintenance Service 720 720 720 720 720 720Property Management 1,116 1,116 1,200 1,200 1,200 1,200 Total Operating Expenses 3,566 3,566 4,255 4,255 5,020 5,020

5-1 Conf ARM @ 3.375% 0 1,782 0 3,491 0 5,640

Cash Flow from Operations 7,080 5,298 8,351 4,860 9,294 3,654Cap Rate/ROI % 11.6% 17.6% 7.8% 10.9% 5.6% 5.8%

Rental Vacancy Rate = 4.5%

Typical Monthly Rent 2 Bedroom = $ 929

Typical Monthly Rent 3 Bedroom = $1249

Lawn/Garden Maintenance Service = $60 (cut, trim & sweep twice monthly)

DCVP Property Management Fees = 10% (of gross monthly rent up to $100/unit)

Local Property Tax Rate = 1.25% (most areas in Sacramento County)

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Rental Market Statistics

All statistics presented are averages based on data collected from cities across the County of Sacramento (where appropriate), or based on specific knowledge of service costs. It should be noted that actual costs may vary by area based on property conditions, location and prevailing rates.

DC Venture Properties, Inc. is located in Granite Bay, and operates as an independent real estate company with no affiliations -- since 2005.

DRE License # 01422673

NMLS Identification # 275706

Professional Associations:National Association of Realtors

California Association of Realtors

Placer County Association of Realtors

National Short Sale Council


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Professional Designations:

Company Profile

Documents

Cell: 916-412-7141 Fax: 916-660-1790 DC Venture Properties, Inc. 8690 Woodrock Way, Granite Bay CA 95746 First Time Sacramento