Investment opportunities in St. Louis

Get the best possible return on your investment...

SITO
Investment Properties
<<<<<>>>>>

"You own them. We purchase,rehab,
and manage them for you."

...by providing a home for someone in need!

SITO's management company, Neighborhood Enterprises, is a
licensed, Missouri Real estate company and handles all sales.
Call Jim Roos at (314)771-3509
for more information.

Purchasing a Building

SITO

has buildings that are fully rented

and

available for

purchase as well as buildings in need of

remodeling

that

can

be purchased.

SITO

will help put together

a loan package to

used

with one of our banking partners or

you can arrange

for

your own

financing.

Whether the loan is a straight purchase or a purchase/rehab

(construction) loan, investors generally have 20% equity in

the

purchase. For example, if a building can be purchased for

$20,000

and

needs $80,000 in rehab, the total amount

needed would be

$100,000.

An investor should think in

terms of a 20% equity stake

in the deal, in

this case $20,000.

That means you bring a check for

$20,000 to the

loan closing

or allow the bank to hold something

else worth $20,000

for

the term of the loan. Most banks will

accept cash, real equity

property, Certificates of Deposit, and

similar collatoral.

The bank will

also hold a Deed of Trust on the

property you

are purchasing for the

term of the loan.

The old adage, "You make your money not when you sell a

property

but when you buy it", holds true for low-income

housing

also. This

means that you must buy a property for a

low enough

price to be able

to make money, when you sell

it. In today's real

estate market, with

housing valued at

premium levels, it is

important to have a partner like

ITO

Our

familiarity with the

neighborhoods in

which we work

and the

properties in them

will help you to identify a

purchase that is a

good investment.

Rental Income

The

ission of

ITO

is to provide decent,

affordable housing

for low-income persons. We want our

investment

partners to

share that mission, not

primarily be

interested in a quick

return on their

investment.

Over the long haul, however, most of our investment partners

realize a

decent return on their initial investment. What

would be

typical? Let's

take a typical

ITO

4-family

building

as an

illustration. These are

generally 4-room apartments

living room,

dining room,

kitchen, and bedroom. (Most of

our

families will use the

dining room as a second bedroom).

The rents for these units range from $325 to $400 per month

without

utilities. Taking the lower rent of $325 times four

yields a

Gross

Possible Rent of $1,300 per month and

$15,600 per year.

normally allow 5-10% as a vacancy

rate. Taking the higher

amount,

that is $15,600 X 10% =

$1,560. $15,600 - $1,560 =

$14,040. Out

of that amount

you must take normal operating

expenses for

Management,

Repairs, Taxes, Insurance, and Water

and Sewer. Here

are

some typical amounts:

Out of Net Operating Income must still be subtracted yearly

debt

service. On an $80,000 loan at 7.25% the monthly

payment is

$575 or

$6,900 per year. So the true cash flow for

this fairly

typical property

would be roughly $1,936--if there

are no

surprises, like a furnace or

water heater having to be

replaced.

With careful management of your property by

our

management company,

Neighborhood

Enterprises, the

surprises can be minimized and your cash

flow

maximized.

Increasing Value of Your Building

Real estate investment has been one of the most popular and

lucrative

forms of making money in the past few years. "Info-

mercials" on

television trumpet the fortunes that can be made

real estate. You

will not make a fortune on low-income

housing.

Over the years,

however, our investors who have

weathered the

ups and downs of the

real estate market have

seen the value of

their buildings increase at a

respectable rate.

Income
Gross Possible Rent	15,600	100%
Vacancy/Delinquency Rate	1,560	10%
*Collected Rent*	*14,040*	*90%*
Expenses
Management Fee	1,404	10%
Repairs ($100/room/year)	1,600	12%
Taxes	550	5%
Insurance	550	5%
Water & Sewer	1,100	8%
*Total Expenses*	*5,204*	*40%*
*Net Operating Income*	*8,836*	*60%*

3515 Oregon - 2 family in need
of rehab

3527 Oregon - 2 family in need
of rehab

3000 Henrietta - 2 family selling
for $100,000

3224 Henrietta - 4 family owned by
NE's management client, SITO

3228 Henreietta - 4 family owned
by an NE management client

3014-16 Henrietta - 4 family
managed by NE sold in 2005

3006-08 Henrietta - 4 family
managed by NE sold in 2005

2341 Michigan - single family for
sale to potential investor