USA Feasibility Study by BRIC Group

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USA FEASIBILITY STUDY

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Feasibility Study – Investment and property investment in USA

• The USA economy has suffered immensely and to some degree benefited from several key factors. Since the turn of the century, the American economy went into hyper-drive, the dollar was strong, GDP was growing at a steady rate, property prices grew year on year and a dreamlike state of irresponsibility spread across the nation. The banks bought and sold securities on ever increasing margins as their capital floundered into what was to become a hellhole of illiquidity, without any adherence to general guidelines on how to run a business. It got to the point that they lent money to anyone or anything with a pulse and quickly resold the debt as a rolled security with a new label, to other banks that in return sold it further down the line and somehow back to the issuing bank on more than one occasion. As it turned out the only things involved without a here were the banks. We have all read the headlines about banks being bought out, bailed out and even going bankrupt. Millions of homeowners have been foreclosed on and many more are months behind on payments. Unemployment has sky-rocketed and the general “mood of the nation” remains negative.

That said only around 285 banks have been closed down since 2008 according to http://www.fdic.gov/bank/individual/failed/ banklist.html (as of October 1st this had risen to 294) which is a relatively small amount compared to other countries with the UK losing 434 alone in the last 3 years (http://www.telegraph.co.uk/news/uknews/7549591/Banks-have-closed-434-branchesin-three-years.html ) There has been lot of speculation and debate about who is/was to blame for the meltdown, especially in the States and this typically ends up in arguments about politics which at the end of the day simply fuels the fires of distrust, loathing and scepticism about New World Order.

The figures in this brochure are only indicators of what % gains could be achieved. They are not statements of fact and do not represent in any way guarantees of any profits to investors. Past performance is no guarantee of future results, and current performance may be lower or higher than the performance data quoted. Buying property is a major decision and one that should not be taken lightly. It is vital to ensure you have researched all aspects thoroughly and are in possession of all the relevant facts. Individual circumstances will vary widely, so it is essential to obtain professional advice and guidance tailored to your particular situation, esp cially in areas such as property purchase, potential rental returns, taxation and mortgages.

We will try and make this easy: 

The governments encouraged living on credit

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The banks lent money to people that couldn’t afford to repay it

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The population demanded everything NOW. A new car, a house, a second home!

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Advertisers and marketers highlighted excessively grandiose products as must have items.

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Manufacturing and later on management jobs were taken offshore.

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Shorter working hours were demanded…and given

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Insurance premiums continuously increased

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Quality was priced out of the market in favour of quantity.

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The “I will sue you if…” mentality.

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Archaic legalities and procedures that should have been disregarded years ago.

And finally the big ones –

Ignorance and the poor education of the masses – “The world does not end at the American border!” In fact the world begins at the borders and the sooner American people realise that, the sooner they will be able to make sensible choices about themselves and their country. Until this realisation hits home, they will be bottle fed the same diatribe of fear mongering by the media which is in turn, encouraged by the powers that be. We live in a 3 dimensional world; unfortunately much of the world relies on 2d – black or white – information and by not giving both sides of the story without prejudice on serious topics, it immediately turns every issue into a political debate which nine times out of ten it is not! We constantly hear about the ignorance of other countries and how their governments keep them in the dark. “Open your arms to a new democratic world of choice” we hear you shout. But if the only choices available are blue or red, then what choice do you really have.

The ridiculous thing is this….

This is not only applicable to the USA. It relates to most westernised countries that have been held in positions of great respect for centuries, but now they are all feeling the squeeze. Are they all in financial trouble due to the collapse of the US sub-prime market? Yes and no! The sub-prime fiasco triggered a domino effect across the globe, however if the rest of the world had not been singing from the same hymn sheet then the consequences would have been far more manageable.

HEADLINE NEWS

And as of 1st October 2010, there is now new speculation that the major financial institutions have “potentially” been foreclosing on properties without the necessary paperwork or authority. Having been bailed out to the tune of billions, they still have the nerve and audacity to squeeze even more blood from the stone. With Gmac, Bank of America and JP Morgan having “put on hold” new foreclosures and numerous claims about fraudulent practices, this is another nightmare that the economic crisis can thank the banks for. The good news is that the foreclosure rate will slow down to a trickle until things are investigated. Families on the cusp of repossession will stay in their homes and the market should be able to decrease its inventory levels in the interim period prior to some more banks going under in the next 12 months.

But when did this begin? Who is to blame?”

In our opinion it probably began in the mid 60’s when manufacturing was initially moved offshore. A decade or so later management jobs moved offshore, technology and intelligence went offshore and all of a sudden 50 years later we are importing all of the products from the Far East that used to be manufactured at home. Everything else is a peripheral addition that accumulated during the interim period. According to an article http://www.thetrumpet.com/index.php?page=article&id=1955 Manufacturing as a share of the economy has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent, and in 2004, it accounted for just 9 percent.

All governments are to blame because they didn’t recognise that for a country to be self-sufficient it has to export more than it imports. Increased tariffs were the only benefit for the various fiscal policies of the last half century. And even they are hardly a benefit, simply a smokescreen for not increasing your personal tax; they didn’t need to because you were paying more for the products and by proxy, higher taxes.

But what of the good news we promised earlier?

It surprises most, to hear that the USA is the world’s leading manufacturer. Yes it is true, but only just! http://radar.oreilly.com/2010/07/the-manufacturing-future.html IHS Global Insight, an economics consulting firm, has published a ranking of the manufacturing output of the leading economies, the U.S. still manufactures more stuff than anyone else — $1.7 trillion in manufacturing value added in 2009, compared to $1.3 trillion from China. http://moneywatch.bnet.com/economic-news/blog/macro-view/manufacturing-surprise-the-us-still-leads-in-makingthings/2134/ When measured on a dollar basis, America still produces more than any other country in the world; however China is catching up rapidly and could overtake the states within the next decade. China and other Far Eastern countries specialise in cheap labour and high volumes, whereas the USA specialises in quality high end products which consumers are happy to pay a little more for. This trend of the East galloping up the economic ladder will no doubt continue, but the USA and other westernised countries have the opportunity to take advantage of the current economic situation. Most industries have already streamlined in order to survive, but what they have also done is make themselves competitive for tomorrow.

The disparity of product manufacturing prices from the USA and the Far East has been shrinking in recent years, not because of workers in America working for less, but actually because workers overseas are asking for higher salaries, better working conditions and paid holidays. Chinese manufacturers have begun sourcing offshore themselves. While factories are being closed on the mainland, they are opening up others on the African continent because “Labour is cheap. The capitalists of communist China are having problems with the workers and the only option available is globalisation.

Reborn in the USA

There is a growing number of manufacturing companies in the process of moving back to the United States and this is a trend that could well continue. They may not return to their original places of origin, but relocate to states that offer more tax and financial incentives. Florida is one of the states that offers no state income tax; it offers relatively inexpensive labour in many areas and is a major transport hub for both national and international export of goods. Common sense investing Common sense investing is a forgotten skill. Over the last decade or so it has been replaced by family investors blindly following their neighbour into unknown lands in search of immediate prosperity. Unfortunately they didn’t do the maths or the due diligence and are now left with anchors around their necks. Since the government bailout’s, the banks have curbed pretty much everything. At least now economic fundamentals are, to a degree, being reinstated with minimum down-payments on traditional purchases in the region of 30% on traditional first home purchases. Add to this some form of mathematical analysis by the banks which calculates how much of the monthly household income will be required to pay off the mortgage.

Going back to one of our initial questions of who is to blame? . . . Everyone! Back to the USA… these newly streamlined industries are once again becoming competitive with offshore manufacturers. This we will see, most probably, in figures at the end of the year. With a decent set of positive numbers under the belt, expansion, recruitment and general mood swing should change for the better. This in turn should accelerate growth, stabilise markets and shortly afterwards the unemployment figures - which tend to run a good year behind - will begin a downward trend. This should increase the face value of the dollar and stabilise imports and exports to the point that Joe Public can afford to splash out every now and then.

Are we out of the woods?

Of course not; but any quantifiable positive news is better than unsubstantiated negative news and accusations. Each month the “Bad News” headlines continue to shout negative figures, but the truth of the matter is that the negative economic figures are actually improving. They are trending back towards positive territory and this should tell us that we have already seen the bottom of the crisis and although prices may continue to drop a percent or two for the next few months, for all intents and purposes, we are at the bottom and now is the time to invest. From an investment perspective, in our opinion, certain areas of the United States are becoming viable locations in which to invest especially where we are seeing real estate prices at 70% discount from previous highs and at levels not seen since the turn of the century. It will be a long time before the country is back to previous highs and that is not necessarily a bad thing. For liquid investors who are able to indulge their portfolios in capital secure holdings, the next several years will provide us with solid yields and the potential for some serious upside equity gains. If comparing U.S real estate to real estate in other westernised countries it is and always has been cheap, partly due to a weak dollar. And look at what you get for your money – a 3 bedroom single family home in a gated resort sold for an average of$200300,000 back in 2006 that equated to 159-239,000 euros at the time when the average exchange rate was at 1.26. Now let’s look at the prices once again. 170,000 euros for a 3 bedroom 2,000 sq.ft villa style home in a secure resort, with world class amenities, swimming pools, tennis courts, clubhouses, only minutes away from international airports with several flights per day, minutes from established infrastructure, hospitals, schools and employment centres. It was cheap compared to the rest of the world. Now with prices down between 50-70% from those 2006 highs, some areas of America offer real estate at next to nothing. In many international cities you can’t buy a private garage for the same price as you can buy a 2 bedroom condo in the U.S.

Risk reward scenarios are attractive, with yields expected to average 8% per annum after costs and taxes without speculating about future growth. Itâ&#x20AC;&#x2122;s better than the banks, safer than the markets and relatively inexpensive to get involved. Long term rental property is here to stay for most of the next decade or at least until foreclosed owners get their credit back. Buying properties now that prices are cheap, taxes low and while occupancy rates are edging close to 95% can only be, in our opinion, a positive inclusion to your investment portfolio. We recommend holding all investments for at least 3 years and possibly much longer as there is no timetable as to when the market will reach previous highs. The investments are based on cash flow evaluations only, which in our opinion offer excellent returns with limited downside risk. Any potential equity displayed on graphs and charts is only for comparative reasons and should not be considered part of any proposal. As long as unemployment remains high we are unlikely to reach previous levels, however as long as bad credit is commonplace and the cost of building remains off balance, resale investment properties will continue to be an excellent investment for the foreseeable future as the rental market will weigh more towards occupied than unoccupied.

The Current Property Market and Prospects for Real Estate Investment in USA

As you will be aware, BRIC Group believes that many areas of the real estate market in the U.S is seriously undervalued by any standard, but particularly by international standards. The average household income in Florida for example is $47,802 as of 2009 as against $44,448 in 2006 (these figures are estimated due to various numbers being published. 2010 incomes are not yet available). http://www.ers.usda.gov/data/unemployment/RDList2.asp?ST=FL Assuming that the recommended 30% of household income is allocated to mortgage payments and taxes in 2006 when the average house price in Florida was $258,000, this would calculate at an average of ($3,704 average monthly income) $1,111 would need to be set aside to cover monthly obligations.

Assuming that the recommended 30% of household income is allocated to mortgage payments and taxes in 2009 when the average house price in Florida was $130,000, this would calculate at an average of ($3,983 average monthly income) $1,195 would need to be set aside to cover monthly obligations. On face value this shows that properties are at least half price from 4 years ago and in some areas far less. But it gets more interesting.

The following analysis is based on purchasing the same property at different times

If you borrowed the full $258,000 over 30 years on a fixed rate mortgage in 2006 at a rate of 6.59% your monthly repayments would be $1,661 per month. If you borrowed the full $130,000 over 30 years on a fixed rate mortgage in 2010 at a rate of 4.35% your monthly repayments would be $653 per month.

Graphs from www.zillow.com

The calculation were taken from statistics at http://mortgage-x.com/x/ratesweekly.asp Add to this property tax calculations based on the same house price figures and NOT allowing for change in the “millage rate” property taxes would be $3,749 in 2006 and $1,889 in 2010.

2006 2010 House Price $258,000 House Price $130,000 Mortgage Repayments $1,661 Mortgage Repayments $653 Property Taxes $312.4 p/m Property Taxes $157.4 ($3,749/12) ($1,889/12) Total Monthly $1,973.4 Total Monthly $810.4 A total saving of $1,163 per month or $13,956 per annum

The figures above speak for themselves.

Your mortgage and property tax repayments per month from the median household income are currently around 20.4%. (The amount of money from the household monthly budget to cover all associated repayments can be considerable; and allowing for all expenses excluding utilities and upkeep should not exceed 28%) • 1970’s approximately 10% was allocated • 1980-early 90’s approximately 25% • 1993 approximately 14% due to lower interest rates and improved incomes • 1994 to 2000 approximately 15%

2002 to 2007 adjustable rate mortgages became common place and although the first few years were fixed and outgoings were around 18% of income, this more than doubled to over 36% in many cases after the expiration of the initial introductory percentage when percentages went up and capital was potentially included in the repayments. Now with government refinance programs such as the HAMP- Home Affordable Refinance Program (http://makinghomeaffordable.gov/ ) - many people have been able to adjust their monthly payments to more affordable levels. These programs did not work as well as expected, but nevertheless were a step in the right direction. We are once again heading towards a world of common sense finance and properties will become viable acquisitions for families in the near future. Most banks still recommend a maximum of up to 30% of all household income being set aside for repayments. But they also include taxes, association fees and in many cases utility bills. Lending has become more stringent with minimum deposits edging back towards 30% down, and this can only be a good thing. Once the banks roll out their lending practices the market will stabilise. As you can see from the financial breakdown above, American families can easily afford to buy homes at this present point in time. We are aware that families are concerned about unemployment and rightfully so, but this should begin to turn around in the next 12 months. The largest, and in many cases the only, stumbling block for families buying a new home is their bad credit. This is destined to remain with foreclosed owners for at least the next 3 years and in many cases probably twice that.

Foreclosures

To understand why so many people got into debt it is crucial that we understand how foreclosures happen and who it happens to. The sub-prime scandals that hit the headlines 4 years ago painted a picture of the banks’ lending unsecured home loans to families who couldn’t afford the repayments. Of that there was never any real denial from the financial institutions that prostituted themselves in favour of a quick buck, but found themselves in quagmire of problems. However the proportion of delinquent mortgages, currently on the market is mostly from “Prime” mortgages; homeowners that on paper could afford to repay the loans. The sub-prime market represents only a small amount of the overall debt but a larger overall percentage of delinquent loans. Mark Fleming is chief economist for First American CoreLogic (http://corelogic.com), a mortgage data analytics firm, who recently announced that around 40% of all sub-prime mortgages (of which 80% are adjustable) were delinquent by at least 60 days (approximately 3 million of the 7.5 million sub-prime totals). 35% of these are over 90 days behind, 13% are already foreclosed and almost 4% are bank owned REO’s. CoreLogic report that almost 2.4 million sub-prime mortgages are actively delinquent which is down by 12.5% from a year ago. However the figures concerning lenders is that almost 6.5 million “Prime Mortgages” are also 60 days delinquent and foreclosures on these is currently over 2% and growing. In the third quarter of 2007 approximately 6.8% of all U.S mortgages were sub-prime adjustable rate mortgages and approximately 16% of these were delinquent by over 90 days. In January 2008 this figure was 21% and by May of the same year it was 25% By August 2008 a total of 9.2% of ALL outstanding mortgages were either delinquent or in foreclosure. September 2009 and the number was 14.4%. Sub-prime mortgages represent only 5.4% (2,376,120) of the 40 million mortgages in the U.S and are responsible for only 950,000 delinquencies compared to just over 6.3 million prime mortgages delinquencies.

As you will appreciate there are more foreclosures expected in the next year or two, which for investors means more

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Many banks are waiting for the market to turn in order to minimise losses

The downside to this is that while banks are holding the keys to hundreds of thousands of properties, they are NOT paying monthly association fees and other typical expenditure. This is having a negative effect, especially in communities that rely on association fees to maintain the upkeep of the development. Essentially they are cutting their noses off to spite their faces as

Freddie Mac Freddie Mac is one of the key players in the U.S mortgage market and although it has also felt the crisis, it has survived better than others due to its minimal exposure to the sub-prime market. The majority of its loans are prime mortgages that have

http://www.freddiemac.com/news/blog/frank_nothaft/20100322_what_drives_mortgage_delinquencies.html • Vacancy rates, which had climbed to the highest levels in half a century, have come off their peaks. • Rents, the principal source of income for property owners, have stabilized and begun to increase in markets with stronger local economies. • Private sources of mortgage funding – which made a mass exodus from the market in 2008 and have been absent ever since – are slowly re-entering the market.

America is experiencing a juxtaposition between very affordable home prices and historically low mortgage rates that hasn’t been seen for at least 50 years. Since nobody knows how long this will last, today’s market is a rare buying opportunity for working families with stable incomes and good credit. There are even some hints that the present combination of historically low rates and more reasonably priced homes is beginning to slip away in some markets. For example, the National Association of Realtors’ housing affordability index, while still high, has dropped nearly six percentage points in the past few quarters as existing home prices in many areas have reversed course and begun to rise again. Cape Coral-Ft Myers is currently considered the 7th most affordable place to buy a property in the world and Orlando is ranked at 104th according to a new report out called the “6th Annual Demographia International Housing Affordability Survey” by Dr. Tony Recsei. More information is available here - Real estate NAR insight. http://www.realtor.org/research/reinsights/economistcommentary

Who is already investing in the USA economy?

The largest default investor in real estate is the U.S government and by proxy the American public, courtesy of the massive bail outs that have attempted to stimulate the economy. The Canadians have been making hay, thanks to a strong currency, as have the Europeans who have been tempted to take advantage of the very favourable condition. One of the quirks in the spotlight however, is that while the world has been pumping millions in to China, the Chinese have been buying up vast amounts of American real estate all over the country. The Arabs, Brazilians and other wealthy South Americans are also heading across the border so as to capitalise on current market opportunities. PGGM, Holland’s largest pension fund manager, in conjunction with PFZW, the second largest pension fund manager in Holland, is investing a total of $270 million in grocery anchored centres in the mid-west. This follows a previous investment of $300 million to purchase $1.4 billion in multi-family communities across the country. http://nreionline.com/finance/news/pggm_inland_joint_venture_0907/ Affordable Housing re-enters the market - Aug 1, 2010 http://nreionline.com/finance/real_estate_investors_covet_affordable/ High yields coupled with increasing stability in the banking sector are luring the buyers back to the affordable housing sector. Tax credits are generating pre-tax returns between 13.8% and 15.5%. Not only are those returns nearly triple the 5% returns tax credits were generating back in 2007, but they also are well above the returns in alternative investments such as corporate bonds. The pre-tax return on the 10-year Treasury, for example, is hovering around 2.7%. British investment from companies such as Diageo, the food and drinks giant; British Aerospace and Smith Industries Aerospace are amongst the 330 British companies operating in the Florida State employing about 45,200 people here. Read more: http://www.miamiherald.com/2010/09/27/1841101/britain-has-faith-in-florida.html#ixzz10vCVGkgl Almost one-third of the home sales were in all-cash deals. Before the housing bust, less than 10 percent of sales were in all cash, according to the National Association of Realtors. http://www.npr.org/templates/story/story.php?storyId=129476836 An overview of the USA economy 2000-2010

Interest rates

Interest rates in the U.S are close to 50 year lows, having seen consecutive increases in August and September. http://www.reuters.com/article/idUSN1626068420100916 U.S. 30-year mortgage rates rose for a second straight week while those on 15-year mortgages dropped to a record low. Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.37 percent for the week ended Sept. 16, up from the previous week’s 4.35 percent and down from its year-ago level of 5.04 percent, according to the survey. Meanwhile, 15-year fixed-rate mortgages averaged 3.82 percent, down from 3.83 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.- 16th Sept.2010.

GDP

http://www.tradingeconomics.com/united-states/indicators/ http://www.indexmundi.com/united_states/gdp_real_growth_rate.html The GDP at constant prices in the United States was reported at 12987.35 billion of U.S. Dollars in 2009, according to the International Monetary Fund (IMF). In 2015, the United States’ GDP at constant prices is expected to be 15110.61 billion of U.S. Dollars. Real GDP is expressed in billions of national currency; the base year is country-specific. In 2009, the United States’ economy share of world total GDP, adjusted by Purchasing Power Parity, was 20.46 percent. In 2015, the United States share of world total GDP is forecasted to be 18.28 percent. This page includes a chart, historical data and forecast for the United States’ GDP at constant prices. http://www.tradingeconomics.com/united-states/gdp-at-constant-prices-imf-data.html http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm http://www.bloggingstocks.com/2010/09/10/economists-lower-2011-u-s-gdp-growth-forecasts-to-2-5/ In a recent article the National Bureau of Economic Research (NBER) told us the recession ended in June 2009, when economic activity stopped going down and turned upwards for the first time. The problem is most people are still worried about their jobs, if they have one and the lacklustre performance of the recovery so far. With unemployment fluctuating between 9.4 and 10.1%, and the underemployment rate near 17%, it is no wonder the news from the NBER received such scepticism. Even the Federal Reserve said consumer demand, bank lending and housing remain weak, especially for this stage of the recovery. http://www.marketoracle.co.uk/Article23172.html

Unemployment

Unemployment has been accused of being one of the key factors as to why the market has turned around sooner. With a national average of 9.6%, the economy looks far worse than it probably is. A key level of sustainable unemployment in the US is probably around 7.5-7.7%, so on face value things are not too bad, just a couple of points off where they really should be. During the first years after 2000, unemployment was between 3-4 % which sounds idyllic, however there should always be an allowance of unemployed that can fill the gaps that occur when workers change positions, companies or areas. Obviously the high unemployment rate has exacerbated the overall economic climate and it is widely believed that it is the key to turning the market round. Unemployment, by nature, runs between 12 and 18 months behind the national economy. When we first saw the property bubble deflate it was not until over a year later that unemployment began to accumulate. In recent months we have seen the unemployment rate begin to stabilise, if we ignore the annual trend of summertime employment which disappears around Labor Day as students go back to school etc.The autumn 2009 figures were also slightly skewed thanks to the government elections which created employment for well over 100,000 part timers. Recent reports show that the trade gap shrank far more than analysts’ expectations during the last quarter and this could help to encourage the banks to extend credit to the businesses already prepared to take on new employees. With more offshore manufacturing heading back “in country”, we should see unemployment sliding by the end of the second quarter of next year. http://www.tradingeconomics.com/Economics/Balance-Of-Trade.aspx?Symbol=USD

Investments, FDI Growth

The United States is the world’s largest recipient of FDI. More than $325.3 billion in Foreign Direct Investment (FDI) flowed into the United States in 2008, which is a 37 percent increase from 2007. The $2.1 trillion stock of FDI in the United States at the end of 2008 is the equivalent of approximately 16 percent of U.S. gross domestic product (GDP).55 http://www.bea.gov/international/di1fdibal.htm

Opting for USA Why USA is an option for Foreign Investment

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Affordability Regulation of the market Regulation and sophistication of credit instruments Resources Availability (pop. Growth. Reverse migration, migration, supply, rentals, tourism)

Affordability

According to Lawrence Yun, NAR Chief Analyst, the average Housing Affordability Index in the U.S has been a median 118 over the last 40 years. 100 is the key figure and denotes a level where the median wage required to purchase a median priced property with a down-payment of 20%. During the “Boom Years” the Housing Affordability Index was barely above 100, which means that homebuyers could only just afford to make the purchase. Lawrence Yun has commented that the Housing Affordability Index could reach 200 by the end of the year which would mean statistically, homeowners with 20% down payment could afford to buy TWO median homes on ONE median wage. (http://www.realtor.org/research/reinsights/ economistcommentary ) Another 2010 report by Demographia, shows very similar statistics on an international basis. The Cape Coral/Ft Myers region of southwest Florida is the 7th most affordable market in the world and Orlando at 104th. Other states including California, STILL rank as severely overpriced!

Regulation of the market

The United States boasts one of the most regulated real estate markets in the world and one that is pleasingly transparent. There is a structured method to the buying process that makes buying properties in the U.S very easy. All parties involved in the sale of properties must be licensed in the state where they are sold. Estate agents, mortgage brokers, title companies and management companies all licensed by the state have received a professional education and passed rigorous examinations. The NAR – National Association of Realtors – is one of the largest and most respected bodies of estate agents in the US and they are continuously pushing advanced training and qualifications. They also have the ability to strike Realtors off if they are bringing the industry into disrepute.

Regulation and sophistication of credit instruments

The regulation and sophistication of the financial institutions and their credit instruments is something that was most probably taken for granted up until 2007. But since the crash and the subsequent bailout by the government which cost tax payers trillions of dollars, the one thing that you can bank on is the fact that new legislation to monitor lending will be instigated in order to protect consumers. High-risk loans, self-certification mortgages and casual lending practices are a thing of the past – there will still be offers and deals, but on the whole the future possibility of securitization of mortgages will be watched with immense scrutiny. Loan and mortgage tools will be standardised to ensure that banks carry enough reserves to weigh against outgoing debt. One of the prime lessons learnt from the debacle is that apart from making lending too easy, the banks over leveraged themselves to such huge degrees that the smallest fluctuation in the real estate sector caused great concern – eventually. New lending rules are being instigated that should protect both the banks and the consumers who abide by these new “old-fashioned” regulations. The graph below illustrates that current condition of the housing market with around 52 million houses out of almost 80 million in total having a mortgage. The foreclosures of the last 3 years have caused the rental market to increase to almost half of that total. In the coming years this percentage will begin to decrease as these renters once again decide to purchase.

Why is Florida a good investment option?

Florida is one of the better choices in the USA as it has the benefit of one immensely stable industry, Tourism. It can’t be offshored, it can’t be segregated and although numbers have fallen since their highs in 2007, it still employs over 1 million Florida residents. Along with tourism come the subsidiary industries such as finance, commerce and agriculture. The simple truth of the matter is this; as long as the sun rises over the Atlantic coast and sets over the Gulf of Mexico, tourism to Florida is not going anywhere. Compared to most areas of the United States, Florida offers cheap housing and an unbeatable lifestyle and one that through 2008 was attracting 1,000 new residents a day to the sunshine state. Do not fool yourself into believing that it will stop in a hurry because it won’t.

According to a recent NAR study:http://www.floridarealtors.org/Research/upload/Profile-of-International-Home-Buyers-in-Florida-2010-2.pdf

Although home buyers come from all over the world, a few regions and countries account for a majority of home sales to international clients. According to the survey of Florida REALTORS®, Canada had the largest share of buyers of any country accounting for 36 percent of recent sales. Buyers from the United Kingdom accounted for 15 percent of foreign home buyers, virtually unchanged from 16 percent the previous year. The rest of Western Europe accounted for an additional 14 percent.

Economic Factors

The lack of state income tax is reason enough for many people to relocate, but the outdoors lifestyle is something that you canâ&#x20AC;&#x2122;t put a price on. When you look out of your window today, the chances are that it is not 80 degrees Fahrenheit (27 degrees Celcius), the sun is not shining and the look on most peopleâ&#x20AC;&#x2122;s faces you meet tells you how miserable they are. That is why Florida will not roll over and die! Florida is home to more boat owners and leisure craft than any other state in the country and quite possibly more than anywhere else in the world. It has been one of the top destinations worldwide for decades when compared against entire countries. It has also been one of the leading destinations for retirees and with almost 70 million baby boomers due to begin retiring next year, Florida will continue to be in demand. If Florida was an independent country, it would be the 20th largest in the world by economy alone. It is the 4th largest employer of IT professionals and a major hub for international investment and trade with imports and exports doubling in the last decade and now standing at $103 billion at the end of 2009.Total FDI into Florida was $33.6 billion making it one of the leading recipients of FDI anywhere in the country well in excess of 10% of the national total.

Primary

Areas of Investment

Florida is the 4th most populous state in America and one of the cheapest in which to live. For industry this is good news, as there are plenty of skilled workers available and proportionately they work for less than their counterparts in other states. The State Government has been increasingly supportive of new industry looking to move into Florida. High Tech, Medical and Finance industries are now being actively encouraged to make the transition. And one by one they are coming. Not at the speed that the government would like to see, but nevertheless, they are a good look at the opportunities available. Southwest Florida already has a higher speed internet than much of the country but with new fibre optic cable being laid across the state (432 fibres per cable capable of multiple terabytes per fibre) the internet infrastructure is going to change in the very near future. In fact Florida knows the IT industry better than most states, as it was here that IBM PC was born in Boca Raton. Currently there are over 25,000 IT companies in Florida with a total workforce of over 250,000. Florida is one of only 22 states in the U.S which are “right-to-work” states. This means that, according to the “Taft-Hartley Act”, workers can choose if they wish to belong to a union organisation. From an employer’s point of view this is a huge benefit as yearly organised strikes are few and far between. A recent study by Demographia summarised the area by showing the Cape Coral-Ft Myers area as being the 7th most affordable place in the world to purchase a median priced home on a median household income AND THE Orlando Metro was 104th.

We have are currently evaluating two other areas for future investment

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Jacksonville The Space Coast area including Melbourne to Port St Lucie

Secondary Areas of Investment (Currently under evaluation)

Independent report from the NAR for the Cape Coral/Fort Myers area http://www.realtor.org/wps/wcm/connect/ a55b8e8041b5f5b699c4fda3819af93a/lmr_fl_fortmyers_Q22010.pdf?MOD=AJPERES&CACHEID=a55b8e8041b5f5b699c4f da3819af93a shows the same area to be close to an all-time low affordability based on the same median parameters and one of the best places in the country in which to invest. Independent report from the NAR for the Cape Coral/Fort Myers area http://www.realtor.org/wps/wcm/connect/5488a78 041b5f7fb9a43ffa3819af93a/lmr_fl_orlando_Q22010.pdf?MOD=AJPERES&CACHEID=5488a78041b5f7fb9a43ffa3819af93a shows the same area to be close to an all-time low affordability based on the same median parameters and one of the best places in the country in which to invest. In our opinion, if it is very affordable now for local families and prices will start to rise once again within the next few years. For foreign investors this puts you in the right place at the right time, as you can buy property at “pennies on the dollar”; and receive a decent yield of between 6-8% on average for several years. An exit plan can then be put in place to sell the property to local families once their credit is back in place in order to capitalise on any equity gain that has accrued in the interim period. The charts below show the change in price per Square Foot from 2006 to 2009

Advantages of investing in Florida real estate

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Diversification Risk/Reward Cash Flow Short and medium term growth

Tourism Industry in Florida Tourists Despite the recent economic woes and partially thanks to the concept of “Staycations” – where families stay closer to home as against travelling abroad (for more information about national visitors to Florida, read out “Tourist Guide Brochure”) - Florida tourism is once again heading in a positive direction. Between 1999 and 2007, tourism to Florida grew every year except 2001 and the drop was put down to the Twin Towers. In these years tourism grew from 58.9 million to 84.5 million, which represents amazing growth in such a short period of time. In 2008 the number fell to 84.2 million and by 2009 the numbers were down to 80.9 million. This may seem a lot but when compared to figures 10 years previously; it is still 22 million in growth volume.

In 2009 there were a total of 80.9 million visitors to Florida with 41.5 million or 51.3% arriving by air and the remaining 39.4 million arrived by other means (road, train or boat) The first 2 quarters of 2010 are showing approximately 4% improvement on 2009 according to figures released by Visit Florida (http://media.visitflorida.org/research.php)

Employment

Unemployment in Florida was running at 11.7% as of the last official documentation released in May 2010, which represented 1,086,000 unemployed from the total Floridian workforce of 9,272,000. This was actually down from previous months but that can possibly be put down to seasonal labour fluctuations especially in coastal areas and in Orlando. The ideal unemployment rate, NAIRU or “Non-accelerating inflation rate of unemployment” which is more commonly known as the natural rate of unemployment for the entire country should be around 7%, as against 5% which it had been since the 1990’s, which allows for job movement, retirement, illness etc. and this is the same for Florida. The largest discrepancy in the unemployment graphs is that the amount of unemployment during the peak “boom years” was down to around 3.5%, which was completely unsustainable. Had the unemployment levels been at 7% when the market collapsed, the graphs would still have spiked but the picture would not be as bad as it currently appears to be. http://www.businessweek.com/magazine/content/10_24/b4182012718823.htm As a note of interest in 2009, 32 of the Fortune 500 companies were located in Florida. These types of companies account for thousands of employees at above average wages. http://money.cnn.com/magazines/fortune/fortune500/2009/states/FL.html

Amongst lots of headlines about unemployment, two of the key areas have actually continued to grow year on year. Education and Health are possibly the most important industries in the country for longevity.The population is forever increasing at manageable levels and is pegged to continue doing so. Healthcare has however kept itself quietly on the side-lines, with the exception of the Medicare debacle; and has continued to improve as a business sector from both a financial perspective and from an employment one. One other aspect of population is how immigration affects the U.S. Recent figures show the amount of “Foreign Nationals Obtaining Legal Permanent Resident Status by State” from 1988 to 2008.

Immigration figures above are based on legal immigrants who have moved to the country.

Florida is a hotspot for Enterprise

Many areas of Florida are open for business and cater for many different segments of industry.There are a number of specialised “Enterprise Zones” all over the state; many of which offer lucrative incentives for relocating businesses. All of these enterprise areas are employment hotspots. http://www.floridaenterprisezones.com/Map.htm

Retirement

Retirement for many “boomers” has been about moving south to a better climate and Florida has been the destination of choice for the last half a century. This is unlikely to change as there are too many benefits to disregard.

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No state taxes on pension monies or on any income

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Better climate

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Cheaper living

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Better lifestyle

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Cheaper properties

They will come, but maybe not this year or next January 2011 kicks off the retirement of the baby boomers, people born after 1946; and this huge mass of retirees represents over 70 million people. Once destined to move south – lock stock and barrel – they are currently in a bit of a conundrum. If they can’t sell their properties in their home states, many won’t have the capital to buy one of the cheap properties in Florida. Those that can afford to buy, are doing so in preparation for their new lifestyles in the sun, but one of the interesting things

Why invest in Central and west Florida

Central and West Florida are principally made up of Orlando Metro and the Tampa Bay area, both of which have seen huge growth in the years prior to the market collapse.

Tampa

Located due west of Orlando, Tampa is the only large city on the west coast as well as having the only large scale port. Tampa has long been known for its stunning beaches which run from Clearwater down to St. Pete and the Sunshine Skyway, which connects Tampa with the Sarasota area, crossing the Tampa Bay. To those that have not visited Tampa Bay, it is also an extremely cosmopolitan city and home to a vast array of industries that together employ millions of the residents. Thanks to intuitive foresight the Tampa Bay region has remained as one of the leading locations in Florida for relocating companies from out of state and from overseas; attracted by the high quality of living, excellent IT communications, a strong work force, the wonderful climate and the relaxed outdoor lifestyle. Hernando, Hillsborough, Pasco, and Pinellas are the four counties constituting the Tampa-St. Pete-Clearwater MSA, more commonly known as the Tampa Bay region although Manatee, Polk and Sarasota are included by certain statistical organizations.

Population Tampa Bay is the second largest urban metro in Florida and home to almost 3 million residents and around 4 million if including the Greater Tampa Bay Region. The Tampa Bay Partnership and U.S. Census data showed an average annual growth of 2.47 percent; an increase of approximately 97,000 residents per year between 2000 and 2006. The combined Greater Tampa Bay region experienced a combined growth rate of 14.8 percent, growing from 3.4 million to 3.9 million and hitting the 4 million mark on April 1, 2007 in the continuous Tampa Bay urban area. Nearly 20% of Tampa Bay’s population is in the 18-34 age groups and represent the first home buyers of tomorrow and the tenants of today.

Population growth Tampa area by county 2009 2014 Hernando County 172,507 197,650 Hillsborough County 1,214,963 1,349,330 Manatee County 323,995 361,143 Pasco County 468,624 542,730 Pinellas County 928,947 945,041 Polk County 596,861 666,624 Sarasota 388,633 428,088

growth 2009-214

14.58% 11.06% 11.47% 15.81% 1.73% 11.69% 10.15%

Tampa Bay Population Growth 1990 2,962,824 2000 3,469,880 2009 4,094,530 2014 4,490,606 Growth 2000-2009 Growth 2009-2014

18% 9.7%

In 2008 the areaâ&#x20AC;&#x2122;s construction based boom was brought to a halt by the economic crisis and by 2009 it was ranked as the fourth worst performing housing market in the United States. Things however are now beginning to change and we believe that we are now very nearly at the bottom of the market with prices down to 2003 levels.

Rail and Transport Links The CSX Railroad Company provides rail service for the entire Tampa Bay region and serves every major population and industrial center east of the Mississippi including Ontario and Montreal. CSX also connects with more than 166 bulk inter-modal distribution terminals and rail-to-truck bulk transloading facilities throughout its service area, linking it to all of continental North America. On July 1, 2007, an intermodal transportation authority was created to serve the 7 county Tampa Bay areas. The Tampa Bay Area Regional Transportation Authority (TBARTA) was formed to develop bus, rapid transit, and other transportation options for the region. The region is extremely aware of how important it is and TBARTA are already planning various improvements and expansions in order to cope with future demand. Tampa Bay is scheduled to begin a high-speed rail link by 2015 which will essentially be the end of the line on the west coast for the foreseeable future until it gets extended down to Ft Myers and Naples in the southwest in the future. Until then it remains the hub of west Florida and an important link for incoming and outgoing products imports and exports at the Tampa Port. Currently there are 8 international companies bidding for the contract to construct the first leg of the railroad between Tampa and Orlando.

Road Networks I-4 is the main road that connects Tampa to Orlando and then onwards to Jacksonville and the states to the north. Recent infrastructure improvement shave been completed which also allows for increased levels of traffic flow from both the north and south. Future infrastructure plans include 375 miles of new roads, 134 miles of new local bus routes, 90 miles of bus rapid transit (MetroRapid). Tens of thousands of new jobs will be created, both permanent and construction-related projects in the near term. The Tampa Bay’s Foreign Direct Investment Study (http://www.tampabay.us/relocation-information/foreign-directinvestment.aspx ) was commissioned to provide specific information on fully integrated international operations in the Tampa Bay market as well as to identify and increase future investment opportunities for international business in the Tampa Bay region. The study identified 394 foreign owned companies operating in the Tampa Bay area, across 18 different industries and employing 37,000 people who collectively generate sales in excess of $13.6 billion.

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Manufacturing 105 companies Wholesale trade 85 Retails Trade 41 Professional Services 32 Administration and Support 24 Finance and Insurance 23

Tourism Tourism is a major economic driver for Tampa Bay, generating almost $13 billion in annual revenue. The Tampa Bay region hosts an estimated 35 million visitors each year including 768,000 from cruise companies including Carnival Cruise lines, Royal Caribbean Cruises and Holland American Cruises. Busch Gardens is also located in Tampa and receives millions of visitors each years, many of which stay in the area. Tampa Bay boasts 14 regional shopping centres and around 1,700 stores, so there is plenty of opportunity to earn some air miles on your credit cards. There are also 40 smaller shopping centres in the region which often cater more for the local residents. Education Tampa has been a popular university choice over the years and this continues with tens of thousands of students moving into the area each year. This, along with excellent medical facilities, continues to draw thousands of retirees as well as younger families in search of a better way of life. With easy access, an established manufacturing footprint and other industries, plus tourism, the Tampa Bay area will soon begin to thrive once again. We feel the time is right. Three of the 10 largest universities in the nation are within a 2 hour drive of Tampa Bay. The University of South Florida in Tampa, The University of Central Florida in Orlando and The University of Florida in Gainesville have a combined population of 150,000 students. The Tampa Bay region is also home to 65 colleges and career institutions. Science and Service Clusters Tampa Bay is one of the leading destinations or “clusters” of the science and service related industries in Florida. The area boasts many key industries including: • Bio-engineering, cancer research, neuroscience and marine industries. • Corporate shared services, financial, critical information processing and professional services. Local headquarter operations include Home Shopping Network, Jabil Circuit, Tech Data, Raymond James, Roper Industries, Publix Super Markets, Val-Pak, Nielsen Media, Outback Steakhouse, TECO Energy, Progress Energy, Verizon Florida, Syniverse and many more. Florida Business Incentives. The State of Florida and the Communities of Tampa Bay have created a variety of programs for companies seeking assistance with their growing company needs and various assistance including Grants and Incentives that are aimed at both employment generation and for companies looking to relocate in to Enterprise Zones or through the development of Brownfield sites

Orlando

Orlando is vacation heaven for millions of tourists each year. It is one of the most popular cities in the world for family based activity holidays, but it is also an industrial centre, transport hub and financial centre. Once you leave I-4, Orlando becomes a residential city, where people live and work as in any other large city. Behind the baubles and facades of tourism there lies one of the most important and influential economic dragons in the southern states. Orlando has matured from a humble agricultural background to be a significant player in the business sector and one that is destined to continue growing over the next few years. Orlando Metro is a multi-faceted region that has far more on offer than first meets the eye and many of these industries offer above average incomes to its employees. http://www.orlandoedc.com/Industry-Strengths/ • Advanced Manufacturing o Specialising in the production of high performance components for medical equipment, computing, power generation systems, frequency control products, automotive systems Metro Orlando is emerging as a significant hotspot for advanced manufacturing in the U.S. These companies share a reliance on research, engineering and intensive manufacturing capabilities • Agritechnology Metro Orlando is rapidly becoming a prime location for the developing field of agritechnology, which is a segment of biotechnology focusing on genetic engineering, cloning and high tech horticulture and agriculture. Key projects led by gritech companies based in the area include: • Cloning hard-to-grow plants • Extraction of plant oils for medicinal and botanical purposes • Development alternative irrigation processes to conserve precious water and protect the environment • Extracting liquid from vegetables for use in pharmaceuticals, nutraceuticals, food colouring, flavours, and cosmetics • Aviation & Aerospace • The aerospace & aviation sector has developed from being a collection of military and small airstrips to become a hub for global commercial air travel, advanced flight training, air defence projects and space exploration. Aviation in the region is anchored by one of the top airports in the world, Orlando International Airport. It is frequently cited as a key advantage to companies doing business in the Metro Orlando area. With more than 50 airlines, scheduled service to over 100 domestic and international locations and thriving air cargo operations, companies across a diverse range of industries can easily transport both people and goods to virtually anywhere in the world. • Clean Technology & Sustainable Energy • Metro Orlando has established a strong traditional energy sector with the presence of such worldwide industry leaders as Siemens Energy, Inc. and Mitsubishi Power Systems, as well as leading utility companies and a host of related service and equipment companies. With this foundation in place, the sector is beginning to move towards alternative fuel sources. The Central Florida region is rapidly becoming a hotbed for renewable energy and alternative fuel endeavours as businesses and non-profit entities engage in a variety of research and development projects aimed at deploying more cost-efficient, environmentally-friendly power. With federal government urgency to reduce reliance on foreign oil, hydrogen technologies are a key area of research being conducted. NASA, the world’s chief end user of liquid hydrogen, and the federal Department of Energy, have awarded millions of dollars in grant money toward hydrogen research to the region. • Digital Media The progressive digital media sector in Metro Orlando has evolved from the convergence of several established fields including: • Modelling, simulation and training (MS&T) • Film & television production • Theme park/ride and show • Interactive & immersive entertainment Nowadays the region is positioned in the heart of one of the top 12 clusters in the country for digital media. As new applications continue to emerge, the industry has kept pace in Metro Orlando. With a focus on content creation and enabling technologies, the digital media sector features: • 1,200+ companies • 30,000 creative specialists • Annual revenue of an estimated $9 billion (figure includes location-based entertainment)

Film & Television Production •

Well known as the world’s premier tourist destination, Metro Orlando is also a leading destination for film, television and commercial production. State-of-the-art soundstages and unique venues have helped the region become one of the busiest production centres in the United States. Offering year-round filming capabilities, a highly-skilled local crew base, and supportive local communities have helped advance this region’s reputation as one of the world’s best. In the past 17 years, this region has grown from a $2.5 million to an $845.5 million annual production market. Today, more than 3,400 Metro Orlando employees are engaged in film and television production-related activities.

Financial Services & Financial Technology •

The push for going green takes on new meaning in Metro Orlando, as the region has emerged as a national leader for the financial services and financial technology industry. Led by top industry players that have major divisions and operations based or housed in Orlando – such as Fiserv, Harland, FIS, The Bank of New York Mellon, Charles Schwab and Chase – Orlando employs over 50,000 financial services and financial technology workers. Perhaps even more noteworthy is the fact that Orlando is among the top metros in the nation when it comes to employment growth in this industry. From 2003 to 2007, Orlando’s financial service employment grew 13 percent, while FiTech employment grew 30 percent.

The industry is bolstered overall by a world-class telecom infrastructure, a strong and ever-growing technology base (which includes more than 1,000 software and information technology businesses), and an increasing number of knowledge and multi-language workers coming from our community colleges and universities. In particular, the University of Central Florida, now the third largest university in the country, granting more than 800 economics, accounting and finance degrees.

Life Science & Biotechnology

Metro Orlando is poised to become one of the most advanced industry clusters in the world for life science. In fact, the region is one of only two locations worldwide currently constructing an all-new ‘medical city’, a move serving to differentiate Central Florida as an industry and research leader. Anchored by the University of Central Florida’s College of Medicine and the Sanford-Burnham Medical Research Institute – a premier, non-profit medical research facility focused on advances in combating diabetes, obesity and cardiovascular disease – Orlando’s ‘medical city’ will consist of: • University of Central Florida’s Burnett School of Biomedical Sciences; • Cancer Research Institute of M. D. Anderson Cancer Center Orlando (CRI) • Nemours Children’s Hospital; • Orlando VA Medical Center; • Department of Veterans Affairs (VA) Medical Simulation Center for Excellence; and • University of Florida Research Center. This region’s emerging biotechnology and life science sector grew from a renowned regional healthcare system, comprising some of the top hospital systems in the country – including Florida Hospital and Orlando Health. The sector emerged as a spin off from a prominent agricultural base and the collaborative efforts of the regions established photonics and modelling & simulation sectors. Clinical trials of newly-developed medications are becoming an important aspect of this sector as well. Today, this Central Florida sector features: • 150+ biotechnology and life science companies • 9,248 workers • Estimated $2.6 billion in earnings The biotechnology and life science sector is further augmented by several prestigious educational and research centres such as: • University of Florida’s Institute of Food and Agricultural Sciences (IFAS) and

Central Florida Research Park, one of the country’s top 10 research facilities.

Manufacturing, Warehousing & Distribution

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Metro Orlando’s central location in Florida positions it as a hub with exceptionally quick, easy access to air, land, water and space transportation routes. This distinctive geographical advantage makes the region an ideal location for general manufacturing, warehouse and distribution businesses.

A full range of manufacturers and warehouse/distributors are represented in Metro Orlando, supplied by a deep, diverse talent pool of experienced employees. Major corporations headquartered in the region include Mitsubishi Power Systems, Inc. and HD Supply. A proliferate number of mid-sized manufacturers and distributors further fuel the region’s economic engine.

Modelling, Simulation & Training

Metro Orlando has long been established as the nation’s epicentre for modelling, simulation and training (MS&T) technology. The MS&T sector in Metro Orlando features: • 150+ companies • 32,000 workers • Gross Regional Product of $3 billion As the largest MS&T cluster in the country, the region has evolved over the past 40 years from its roots in military training to provide applications in such diverse fields as:  Aviation and Aerospace  Education  Emergency Services  Entertainment  Homeland Security Information Technologies  Medical Technologies  Micro-electronics  Optics and Photonics  Transportation

Optics & Photonics

Since the early 1960s, Metro Orlando’s optics and photonics industry has grown from a highly specialized military pursuit to a strong, diverse sector.Today the Orlando area of central Florida is an internationally-recognized leader in this industry: • Approximately 95 optics and photonics companies • 15,000+ workers • Over $2 billion in gross regional product These companies enjoy an environment fostering progress through collaboration with internationally recognized academic institutions, a highly skilled workforce and numerous community and government agencies dedicated to facilitating industry growth throughout Metro Orlando. The optics and photonics industry in Metro Orlando is clearly poised to flourish well into the future.

Software & Hardware •

Metro Orlando is home to some of the most progressive, talented and diverse software development companies in the U.S. Led by companies serving the financial services industry, more than 1,000 businesses specializing in software development and service, data processing and information retrieval are based in the region.

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Employing approximately 12,000, these companies generate nearly $1 billion in annual revenue and serve such distinct industries as banking and finance, government, education, consumer products and utilities automation. The software sector also crosses over into the well-established modelling, simulation and training and digital media clusters, which are heavily involved in developing programs for use in such applications as film and television, interactive entertainment, military exercises and transportation planning.

Why invest in Southwest Florida & Fort Myers Region

The Southwest Florida region especially in Lee and Collier Counties is mostly known as a wonderful vacation destination by visitors from around the globe. However, it is also home to numerous industries that are not reliant on tourism. Construction and associated financial services, to a degree, have seen a large downturn since the crisis began as the area appeared to be one big building site that grabbed all of the headlines. Nevertheless there were and still are many industries that continued to prosper quietly on the side-lines. IT companies have a solid base in the area, attracted several years ago by faster than average internet connections and publishing companies also thrived for similar reasons. The space and aviation sector also found a home in SW Florida, able to make use of the easy access to several international airports and the Kennedy Space centre. Agriculture has also thrived in the area having been established with the citrus business, agriculture and derivative industries have tamed the landscapes and now grow a variety of vegetables and crops; are home to horticulture, ranches of cattle, livestock and poultry, aquaculture and forestry products.

Some of the reasons businesses thrive here: •

Transportation: Lee County is located on the Gulf of Mexico and offers easy access to Southwest Florida International Airport and Interstate-75 from all areas. From Fort Myers, it’s a 2.5 hour drive to either Tampa or Fort Lauderdale, providing easy access to shipping across the country or around the globe.

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Environment: Southwest Florida provides a great climate and great living environment for you and your employees.

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Support for incoming businesses: The Horizon Council, a private group dedicated to bringing economic expansion to the area, works with the Lee County Department of Economic Development serving the business community.

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Infrastructure: Telecommunications support for the growth and development needs of corporate information technology.

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Skilled Employment: Fort Myers and Lee County are home to the new Florida Gulf Coast University, several junior colleges and universities, and there are many training programs and facilities available to residents.

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Citizenship: There are many opportunities for businesses to get involved with the community through non-profit organizations and business, professional and trade associations.

Businesses that are already in the region and sectors that are being targeted to move here

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Administrative & Support Services Finance and Insurance Services Information Industries Publishing Industries Telecommunications Life Science Industries Manufacturing Mining Fishing Marine & Boating Industry Scientific & Technical Services Space and Flight Industries Wholesale Industries Construction Tourism

Although tourism, fishing and healthcare may be the first to lead SW Florida to lower unemployment, it is probably higher paying industries coming to the area that hold the future of higher paying jobs in their hands. The region offers some of the fastest internet connections in the country and that counts for a great deal in many industry sectors. Other areas of Florida currently under investigation include the east coast between Melbourne and Port St Lucie which hold promise for next year and also the Jacksonville region, which is the financial capital of Florida and the gateway to the northern states. Both areas are expected to drop in value over the next few months, but the fundamentals for future investment are strong.

Summary

The BRIC Group has spent endless months investigating and evaluating the U.S, in particular the Florida market and in our opinion there is a great deal of opportunity for us and our fellow investors. Although the U.S property market has created vast tracts of empty homes, there are several areas of the country that offer a silver lining to the clouds of debt and despair. BRIC Group has entered into the foreclosure market; a niche market that will appeal to a large proportion of our clients. Investors who are in a financially liquid position to invest are expected to see average net yields after property taxes and costs of between 6 and 8% depending on location and unit specification. These yields DO NOT include future capital gains as it is, of course, too speculative to try and second guess the market. Prices will most definitely rise in coming years and eventually increase to previously high levels, but without the benefit of a crystal ball we cannot say when. We do, however believe that the market has bottomed out in certain areas and we are constantly monitoring other regions, so that we may “strike while the iron is hot”. As BRIC Group actively purchases these properties, renovates them, provides qualified tenants and professional management companies, we feel that investing in this market should be considered a longer term “Armchair Investment” and should not be considered as a short term investment strategy. Over the course of the next 5-10 years, families that have been through the foreclosure procedure will be able to re-enter the property market and provide investors with a relatively stable exit strategy. Meanwhile families who have managed to survive the fall-out will be returning to the market, which should begin to have an overall effect on house prices within the next 24 months; in fact we are already seeing several areas of Florida increasing in value in specific areas.

For more information about how to invest in Florida property market, please contact us:

(1) 0877 922 7421 International: +34 952-810-711 Freephone UK: 0800 006 2002 Email: info@bric-investment.com Toll Free USA:

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