Gcdd business plan for investors 2015 by GCDD Group

GC Design & Development Group, LLC Business Plan 1601 Rio Grande St. Ste. 455 Austin, Tx. 78701 e-mail: gcddgroup@gmail.com Tel: +1 512 7583716 +1 512 7583715

The contents of this document are confidential and intended solely for the recipient. Reproduction of, or forwarding to anyone not directly sent this document is strictly forbidden.

DISCLAIMER i

This Summary of Investment Opportunity (this “Summary”) summarizes certain information of GC Design & Development Group, LLC (DBA GCDD Group). Except where the context requires otherwise, in this Summary the “Company,” “firm,” “we,” “us,” and “our” refer to GCDD Group. This Summary is confidential and proprietary. It is being furnished by the Company to certain prospective investors, lending companies, and other governmental entities for the sole purpose of evaluation of the business and its operations. Without the prior written permission of the Company, such prospective investors or entities will not release this document or discuss the information contained herein or make reproduction of or use this Summary for any other purpose. Prospective investors should not assume that this Summary is complete and should conduct their own investigation and analysis of the Company, and agree they are responsible for conducting their own due diligence investigation to verify to their satisfaction any information, opinions, data or estimates in this document. The Company makes no representations or warrants as to the accuracy or completeness of the information presented herein. This summary presents information that may help to understand the business; however it may change based on market, economy, and other conditions that would require readjustments and variation as for the future performance of the Company. This Summary does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Forward Looking Statements Certain statements in this Summary constitute forward looking statements, which can often be identified by words such as “will,” “expect,” “plan,” “intend,” “anticipate,” and other words indicating that the statements are forward looking. Such forward-looking statements are expectations only and are subject to known and unknown risks, uncertainties, and other important factors that could cause the actual results, performance or achievements of the Company, or industry results, to differ materially from any future results, performance or achievements implied by such forward-looking statements. All of the financial information and projections are unaudited.

CONTENTS iii

EXECUTIVE SUMMARY

THE BUSINESS

BUSINESS DETAILS

REGISTRATION DETAILS

BUSINESS PREMISES

ORGANIZATION CHART

DEVELOPMENT TEAM

PREVIOUS EXPERIENCE

PRODUCTS/SERVICES

INVESTMENT STRATEGIES

MARKET POSITION

INSURANCE

MARKET RESEARCH AUSTIN

LEGAL CONSIDERATIONS

ARCHITECTURE

CUSTOMERS

THE MARKET

S.W.O.T. ANALYSIS

GCDD COMPETITORS

CURRENT PROJECTS

MARKETING STRATEGY

THE FUTURE

VISION STATEMENT

MISSION STATEMENT

FINANCIAL PLAN PROFIT AND LOSS FINANCIAL ANALYSIS BALANCE SHEET INCOME STATEMENT PROJECTED CASH FLOW OPERATING EXPENSES PROJECTION BREAKEVEN ANALYSIS

70 75 77 78 80 84 86 92

EXECUTIVE SUMMARY 2

OVERVIEW GCDD Group is an Austin-based planning, design, and real estate development firm that focuses in housing development within urban core areas in the main cities of Central Texas. Our design approach embraces the idea of developing the infill as a sustainable strategy to improve the quality of life in these cities. Organized as a collaborative group, our comprehensive services include all aspects of residential design and building â&#x20AC;&#x201C; ranging from market research, property investment and design to strategic planning, project management, development and construction. We provide personalized support, competent expertise and technical guidance to our clients to achieve sustainability through the highest quality of design while paying great attention to the intrinsic value of the properties we work in.

HOW WE DO IT Our knowledge in sustainability, planning, and design, combined with our real estate development expertise allow us to develop holistic projects that provide clients and investors quality design while obtaining the highest returns on their investments. Our investment approach targets innovative housing properties located in culturally attractive neighborhoods within the urban infill areas with high population growth. This means that all the projects we build are in neighborhoods where demand is strong and new supply is constrained.

OUR TEAM Each GCCD Group team member is a specialist who brings more than 20 years of combined academic and professional experience locally and internationally, and an industry know-how that assures the Company success in each project. GCDD Group team has an extensive experience in urban planning, housing design development, interior design, construction management, sustainability, and real estate finance.

WHY GCDD Group

The Company’s first developments in Central Texas will be located in the heart of East Austin -- an area that is currently undergoing an exciting and well-publicized transformation into Austin’s most popular and cool live/work/play neighborhoods. What is unique to this area is its high concentration of urban dwellers, young professionals, artisans, and so on. Austin is also in the process of becoming more socially, racial, and economically diverse. Moreover, the area is served by the MLK Red Line Station which is part of Austin’s new mass transit system and is very close to both: Downtown and Austin International Airport.

BUSINESS PLAN SUMMARY

OUR PROJECTS 9

GREAT LOCATIONS

Lemo House Bifamiliar Project_Caracas

GCDD Group has succesfully completed its first project in a privileged location in East Austin, at only 5 minutes walking distance from the MLK Red Line Station. We are currently seeking to buy more sites in the area, of about 7,000 to 10,000 sq. ft. of land, either vacant or occupated by a house. Our goal is to do high-end new contruction or remodeling projects.

OUTLOOK Since its creation, with minimum marketing efforts, GCDD Group has signed a handful of contracts for design and planning services. Our first built project in Austin, 3014 House, represents the best example of the design standards and development model that GCDD stands for. This house has attracted new clients lured by the project's architectural quality and attention to detail, not to mention, the enormous value it has as a real estate property. More projects are coming to our drawing boards. GCDD is now a real contender in the private housing development arena in Austin.

197

Whether the client is looking to buy their first home or as an investment property in the hot Austin market, GCDD’s designs and modern floor plans asure to meet the needs of most contemporary young families, empty nesters, and urbanites in general that have a modern life style and valuable good design. From one-of-a-kind remodels to entire highly energy efficient single-family homes and duplex communities, each new residence we conceive is built with a firm commitment to quality and high standards of comfort. In the coming years, GCDD Group will elevate and improve current standards by creating and enhancing new or existing structures in Austin’s infill communities through quality design and livability.

BUSINESS MODEL Organized as a collaborative group, GCDD Group has the capacity to offer fully- integrated design and development services, assisting clients and investors at every stage of the lifecycle of their property, from strategic planning, design and development, to sale or leasing. We acquire and invest in self-funded properties for redevelopment. We provide services in three main areas:

1. REAL ESTATE DEVELOPMENT AND INVESTMENT PROPERTY Our team invests in innovative housing products and develops properties in culturally attractive neighborhoods in fast-growing Central Texas. We assist clients to identify properties that work for the home and budget they have in mind. We develop the investment plan and assist in developing and selling the property. Our commitment is to create solid investments for the development of a healthy and sustainable economy.

3 201

201

200

199

1 199 3

199

9 198

198

5 198

198

2. BUILDING DESIGN $350,000

$300,000

$250,000

$200,000

We bring a fresh and unique approach to the concept of living within the urban core. We focus in infill high-end residential, spec homes, custom homes, multi-family, and mixed-use buildings. We invest locally but dream globally when it comes to create sustainable and environmentally friendly developments. We strive to creating designs that make both owners and investors proud. Our goal is to build more livable and enjoyable places.

$150,000

3. STRATEGIC PLANNING AND CONSULTING $100,000

$50,000

$0 Home Sales and Average Price in Austin.

We develop strategies for the development of the urban core. Our expertise in sustainable development and community and regional planning can help enhance entire communities. Our global capacities are the prime resource that we offer through consulting relationships with individuals, companies, non-profits and governmental institutions.

MARKET OPPORTUNITY Central Texas is recognized as the smartest, safest and fastest growing area in the country. Its strong economy, highly educated, talented workforce, globally respected research institutions, and driving entrepreneurial spirit keep us on the leading edge of business. At the heart of this region, Austin is highlighted with its stunning growth, lower business, and living costs, and a youthful, well-educated population. It's easy to see why Austin´s business makes national and international headlines; in fact, Kiplinger's ranked Austin in 2010 as the best city for the next decade.

Balanced market Seller’s market Buye’s market

Odessa 2.5

Austin sustainable business growth and job creation is mostly supported by the strong presence of high tech and Bio Tech companies, a handful of universities led by the University of Texas that combined provide one of the largest educated and highly-skilled workforces in the country, and the presence the State of Texas Government with its several departments and offices. Austin’s irresistible appeal of living in a beautiful, culturally rich area with a prosperous and dynamic business ecosystem have provided consistent growth for some of the world's most successful companies, including Dell, Whole Foods, Freescale, Facebook, Ebay/PayPal, GM, Samsung, and more.

x10

net arrivals per day, but apartment Collin County 1.5 construction hasn’t come close to reaching the need Garland 1.7

Austin 2.0 Texas average 3.4 months of housing inventory in select Texas Markets. Sources: The Real State Center Texas A&M University

Austin will be the fastest growing large metropolitan economy through 2020, with annual average growth for 2013-2020 of

Projected annual job growth: . Unemployment rate: . Median household income: $58,932 Ranked N°2 on The Best Cities for Future Job Growth 2014

“THE FASTEST GROWING CITY IN THE US” 2014

for the fourth year in a row

Fiscal Year (FY) 2014 Median Family Income

Austin’s median home price in April ´14 is $237,600, and up from one year ago by 4.5%. The average price, at $302,800, down 0.6% from a year ago, 36.8% of the population between 25 to 44 years of age (ACS 2012)

BUSINESS PLAN SUMMARY

1 Solid Start To Austin Area Home Sales In 2014 With Increases In Volume, Price Austin Board Of REALTORS® Releases Real Estate Statistics For January 2014 http://www.austinhomesearch.com/pages/austin-market-update

DEMAND FOR HOUSING In February 2014, Forbes magazine cited Austin as the fastest growing city in the country for the fourth year in a row. This growth has driven demand for housing in Austin and contributed to decreasing its housing inventory. Currently, there is about 2 months of housing inventory available in Austin, compared to 2.5 months of inventory in January 2013. A number that is way below than the accepted for the industry of 6.5 months. It is understood that fewer than 6 months of inventory reflects good conditions for sellers whereas greater than 6 months of inventory represents optimum conditions for buyers. According to the Texas A&M University Real Estate Center. From 2006 through 2013, the area has added 343,832 residents, an approximately of 110 net arrivals per day, but apartment construction and single family building permits havenâ&#x20AC;&#x2122;t come close to reaching the need for housing.1 On one hand, the stunning population and job growth rates features by Austin in the recent years continues to create pressure in its housing market, which is already suffering from limited developable land available near jobÂ´s centers. On the other hand, suburban sprawl is becoming unsustainable of strain of government infrastructure and in terms of transportation and quality of life. As a result, more and more new residents are gravitating toward urban areas. A key characteristic of the Austin housing market is that demand is primarily driven by young, highly skilled and well paid new buyers and investors coming from everywhere in the Nation changing the local housing market. Demographically, Austin ranked second on a list of best cities for millennials2.

Austin has a high number of adults under 34 years old comprising almost a third of its population. In addtion, it has the highest median annual income of the other Texas cities on the list, at $30,816.2 Austinâ&#x20AC;&#x2122;s reputation as a lively, active city, defined by live music, outdoor recreation, street festivals, green-living, and a young, educated citizenry is attracting more and more people avid to embrace its locally-driven creativity and innovation, particularly with the convergence of music, film and gaming into a digital media sector and with clean energy advances have positioned Austin among the Best U.S. Cities to live in.3 A large number of these young entrepreneurs and young households in formation moving to Austin are embracing the idea of living into the infill areas, seeking for amenities and less commuting. This trend is being largely supported by local government agencies and policy aimed to revitalize and reshape neighborhoods located within the urban core by improving its infrastructure, transportation, and safety. The demand for housing in areas in proximity to downtown and job centers is providing the basis for business opportunities to redevelop existing structures that provide a culturally rich urban living experience for these new urbanities. Overall, the housing market momentum is expected to continue, and investing in places that provide the type of urban experience that this creative class population is looking for will provide the best economic rewards.

2003

2013

US average $215,800

AUSTIN $225,000

US average $241,700

AUSTIN $159,000

The average house price in Austin.

2 The 25 Best Cities and Neighborhoods for Millennials. Niche Ink, a schools research website. http://ink.niche.com/the-25-best-cities-and-neighborhoods-for-millennials/

Business name: GC Design and Development Group, LLC DBA GCDD Group Registrered in the State of Texas. Business structure: Limited Liability Company Business location: 1601 Rio Grande ST. STE 455 Austin TX 78701 Date established: 09-16-2013 Business owners: Andres I Galindo Gimon and Jimena L Cruz Pifano

MANAGEMENT Mr. Galindo and Mrs. Cruz, both U.S. educated professionals in planning and sustainability with a prolific career in architecture, urban planning, and real estate development. Locally and internationally, they have developed a unique concept for residential housing design and development services with an identifiable urban-centric and contemporary style.

RELEVANT OWNERSâ&#x20AC;&#x2122; EXPERIENCE More than 20 years combined of solid professional experience both locally and internationally in architecture, urban planning, and project management that encompasses over 450,000 square feet of designed and built project developments, including residential, offices, health care, and retail. A combination of an active professional career in the consulting industry and an outstanding education in land development and construction management has given them a thorough understanding of all facets of the project development process, from land acquisition, financial feasibility, real estate transaction, and strategic planning to underwriting, design, and construction. (See Resume attached).

WE OFFER SPACE PLANNING AND INTERIOR DESIGN

STANDARD ARCHITECTURAL SERVICES (RESIDENTIAL)

REGULATORY ADVICE AND LAND USE ANALYSIS

For residential interiors and commercial workplaces, including a selection of finishes, furniture systems, audio visual installations, and artwork.

Design, procurement and implementation of building refurbishments and renovations, as well as small-scale building extensions, and one-off buildings (commercial, residential and industrial premises).

Developing effective design proposals that meet the requirements of building control, planning policies, zoning, and legislation.

THE BUSINESS 8

3Austin was voted the #1 Best City for the Next Decade (Kiplinger, 2010) Read more: http://www.regentpg.com/why-austin.php#ixzz2vyXfcdsX

THE GCDD ADVANTAGE GCDD Groupâ&#x20AC;&#x2122;s management is highly experienced and qualified. Mr. Andres Galindo leads the management team with over ten years of experience in the design and development industry. GCDD is one of the few design and development firms that offers investment opportunities along with design and building services. This distinguishes them from the rest as a fully integrated service provider that covers all stages of the property lifecycle. We recognize and cater an audience of homebuyers and investors in Central Texas that are design savvy, have an appreciation for architectural design and want to maximize their investmentâ&#x20AC;&#x2122;s returns. Our work is located in an intersection between architecture and real estate development. We have the technical expertise to serve our clients to meet almost any need when looking to design

and build their homes and to develop investment properties for investors. This duality brings to the table an incredible capacity to develop our own projects. Timing, ability, fast track, sophistication, and out of the box thinking is what places us in a privileged position to succeed.

COMPETITION There are a number of home builders and developers of residential properties in the area. Because GCDD Group offers an array of design and real estate development residential services, it finds direct competition in some local small-to mid-size contemporary infill custom home builders that have the ability to attract both home buyers and investors. Among the main home-builders competitors in the area are MX3 Homes, and Verde Builders. These companies affect us because of their higher capitalization and geographical proximity. Some small design and build firms, such as Moontower, which also provides design services and that are catering similar target markets and demographics.

SUSTAINABLE AND ENERGY EFFICIENCY IMPROVEMENTS

PROJECT MANAGEMENT

URBAN PLANNING CONSULTING

Design modifications and upgrades of buildings to improve their energy efficiency and sustainability credentials.

Oversight of contractors and work quality and coordination of construction process.

Urban design, plats and subdivisions, and community and site planning.

TARGET DEMOGRAPHICS YOUNG HOUSEHOLDS AND EMPTY NEST HOMEOWNERS (GENERATION Y OR MILLENNIAL) Our projects will cater to the creative-class buyerâ&#x20AC;&#x2122;s needs, young and small households between 30-40 years of age, and middle to upper class empty-nesters homeowners who live an urban livingstyle.

PRIVATE INVESTORS U.S nationals or International investors (primarily from Spain and Latin America) wanting to fetch up top dollar in high investment returns or in rental income in the hot Central Texas real estate market.

COMPANIES, NON-PROFITS AND COMMUNITY GROUPS That require technical advisory in local development and urban planning related issues.

OUR MARKET / THE FUTURE

MARKETING STRATEGY Branding is crucial in the world of real estate, so exposure is key. The marketing strategy for our company is based on principles that promote high quality design, social, economic and environmental responsibility, efficiency, developing a niche in renovation, heritage, community development, and minimizing risks in our practice to ensure project delivery on time at a cost range that can be easily absorbed by the market. Corporate design branding. Art events and open houses. e-Marketing and social Press releases. media. Contributions to local magazines. Join local or regional groups or organizations. Word of mouth. Postcards and direct mailers. Self-Financed projects.

Creating spaces that transform lives

• Building Design and Real Estate Development Strategies • Architectural services • Space Planning and Interior Design • Regulatory Advice and Land Use Analysis • Sustainable and Energy Efficiency Improvements • Project Management • Urban Planning Consulting

GC Design & Development Group, LLC 1601 Rio Grande ST. STE 455 Austin TX 78701 T. +614-636-2525 Cel. 512-758-3716

GOALS/OBJECTIVES •Expand and improve the diversity of housing production in the heart of Austin to create a more sustainable and livable environment. •Deliver an inspired 21st century living environment that demonstrates diversity in affordable and sustainable residential design. •Build a sustainable base of enthusiastically satisfied clients. •Become our clients’ most trusted provider of investment products that bring the highest quality of design and the best value for their investment. •Support our projects with the most advanced technology to ensure high efficiency and competiveness. •Operate profitably to expand our business and our market. Create or collaborate with non-profit organizations to produce affordable housing for families with low and moderate incomes. •Expand our collaborative practice and work with other businesses and disciplines to capture new markets. •Obtain AIA and LEED accreditations.

www.gcddgroup.com

VISION STATEMENT Austin is the most attractive destination in Texas for international investors that aim for solid investments in local and sustainable development. Austin offers diverse, dense and sustainable housing options where infill development is a priority for its growth. Through our comprehensive services, we guide and support our clients to make a difference in the world. We not only make great investments, but also contribute to the built environment and provide innovative solutions to the housing market, thus creating a better and more livable Austin.

GOALS •Increase the numbers of houses delivered per annum from 2 to 9 in 6 years. •Secure purchase agreements on all homes within 15 days of construction completion. •Annually increase the number of clients and gross revenues for design and consulting services by 15%. •Increase investors’ resturn by one-point on annual basis.

THE FINANCES On a current basis, investors can expect an annual ROI between 9% and 12.5% before taxes payable at the end of year two4. The initial capital has been allocated to set up the companyâ&#x20AC;&#x2122;s operations, acquire equipment and specialized software, payroll, lease office space lease, advertisement, property acquisitions, and development of its first two residential projects. The following financial summary is based upon successful completion of a total of 32 single family homes in six years and it is presented for illustration purposes only.

$4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000

Equity and Liabilities Sales Forecast

$2,000,000 $1,500,000

Single-Family Homes

2015

2016

2017

2018

2019

2020

#Units Built

Total Sales per $350,000 $371,000 $393,260 $412,933 $433,569 $455,248 Unit

$1,000,000 $500,000

INVESTMENT OPPORTUNITIES

Net Operating Income

$ INVESTMENT VALUE $250,000

Total Revenues

$200,000

REAL STATE RETURN LEVERAGED APPRECIATION +8% AVG CASH ON CASH RETURN

$150,000 $100,000

STOCK MARKET- AVG APR (7%) (NO LEVERAGE)

$50,000 $0

ORIGINAL $100,000 INVESTMENT

YEARS

Total Cost of Sales Gross Margin Cash Balance Total Profit

THE FINANCES 12

4 Conditions may vary and are subject to private agreement.

2015

2016

2017

2018

2019

2020

$ 61,388

$ 69,232

$ 233,829

$ 279,692

$ 341,937

$ 543,748

$ 731,827

$1,153,080

$ 2,042,114

$ 2,578,011

$ 3,153,816

$ 4,245,551

$ 589,389

$ 948,237

$ 1,633,160

$ 2,059,472

$ 2,524,457

$ 3,411,117

$142,438

$204,843

$ 408,954

$ 518,540

$ 629,359

$ 834,434

$ 139,025

$ 353,262

$ 233,641

$ 455,902

$ 527,751

$ 866,091

$ 45,141

$ 49,845

$ 168,353

$ 201,372

$ 246,186

$ 391,488

Austin Skyline_Source: Internet

COMPANY OVERVIEW 14

INTRODUCING GCDD GROUP

THE BUSINESS

GCDD Group was born from the desire to provide a superior, more sustainable and well-designed housing product at an attainable cost to the urban consumer in Central Texas. With those values in mind, GCDD Group was created as a fully integrated design and real estate development firm, providing services ranging from design and planning consulting to property investment. As a result of our multidisciplinary approach, we have developed the concept of S.U.R. Homes, which stands for sustainable urban residential. Every house that we build will help achieve sustainability goals set by local authorities by creating adaptable, enduring, and more efficient residential projects. It will also help renew some of the existing housing stock while embracing the community’s character and charm. Based on our in house design capacity, we have the ability to deliver modern and contemporary interior design and floor plans within a reasonable and very competitive price range that is attractive to both investors and urban dwellers.

GCDD Group is an Austin-based design and real estate development firm. The company combines a design/build firm with its own architects, designers, and construction personnel that coordinate contractors and consultants, and a real estate development firm that completes the company purchases and sales. While GCDD Group provides design and planning services, it also buys, develops, and sells investment properties and spec homes using its own resources and external investment capital from partners, turning these properties into profit. The investment properties acquired, along with construction costs and soft costs incurred, such as permits, development fees, and consultants fees are accounted for as cost of sales or goods. Investors’ money will be accounted as liabilities or long term debt and their financial costs accounted for as interests. The investment may also be capitalized and transformed into the company’s shares.

The company’s first development, located in East Austin, was a succesfully completed single family home of 1,250 sq. ft. of construction sitting on more than 5,700 sq. ft. of land. This property did not last long in the market, and was sold in 3 days for $330 sq.ft. GCDD Group is currently searching for others investment property of raw land with similar characteristics. On the other hand, GCDD Group is also providing design and planning consulting services to a handful of clients including small remodeling projects, design outsourcing to larger design firms, grand writing proposals for non-profit organizations, among others.

Revenues will not be recorded until the sale of the property is closed and paid in full. Once the money is paid in full the buyer can take possession of the property. For buyers that require bank financing, the buyer will be encouraged to complete the loan application process with the bank of their choice. Once the construction of the house has been completed and the mortgage loan has been approved, the bank will issue a check to GCDD Group. The buyer then will take possession of the property. It is relevant to mention that GCDD Group partners will begin developing relationships with mortgage brokers and lender institutions to finance home mortgages for qualified buyers.

THE COMPANY GC Design and Development Group, LLC is a registered corporate entity under the laws of the State of Texas of the United State of America. It was established in September 09, 2014 in the Office of the Secretary of State of Texas, doing business as (DBA) GCDD Group. Currently, the Company has one full-time employee, is working with six independent contractors and more than five consultants or experts on a project basis. Business location: 1601 Rio Grande ST. STE 455 Austin TX 78701 Business owners: Andres I. Galindo Gimon and Jimena L Cruz Pifano. Relevant owners’ experience: More than 20 years combined of solid professional experience both locally and internationally in architecture, urban planning, and project management that encompasses over 450,000 square feet of designed and built project developments including residential, offices, health care, and retail. A combination of an active professional career in the consulting industry and an outstanding education in land development and construction management has given to this team a thorough understanding of all facets of the project development process, bolstering their capacity to handle land acquisition, financial feasibility, real estate transactions, and strategic planning in addition to underwriting, design, and construction. (See Resume attached) We assist clients and investors providing •Building design and development strategies Assisting in locating, developing, and selling of spec homes, building renovations or re-purposing existing structures that suit clients´ and investors´ needs and the effective rationalization of existing property portfolios •Space planning and interior design For residential interiors and commercial workplaces, including a selection of finishes, furniture systems, audio visual installations and artworks. •Standard architectural services (residential) Design, procurement and implementation of building refurbishments and renovations as well as small-scale building extensions and one-off buildings (commercial, residential & industrial premises). •Regulatory advice and Land use analysis Developing effective design proposals that meet the requirements of building control, planning policies, zoning, and legislation. •Sustainable and energy efficiency improvements Design modifications and upgrades of buildings to improve their energy efficiency and sustainability credentials •Project Management Oversight of contractors and work quality. Coordination of construction process •Urban planning Consulting Urban design, plats and subdivisions, and community and site planning.

COMPANY OVERVIEW

BUSINESS DETAILS WebSite: www.gcddgroup.com

Austin, Texas.

GC Design and Development grou

BUSINESS PREMISES Business location: Our office is located in Downtown Austin Texas, just a few blocks west to the famous Congress Ave. Texas Capitol

ORGANIZATIONAL CHART

Andres Galindo Gimon Chief Executive Officer, Director of Development/ Co-Founder

Derek Dehay Real Estate Broker Consultant

Jimena Cruz Pifano Chief of Design & Sustainability

Admin. Assistant / Office Clerk*

Finance / Transaction Manager**

Carla Schuessler Project Coordinator/ Research Analyst

Project Manager / Design & Construction*

Land Development Assistant/Market Analyst**

* Expansion Phase 1 ** Expansion Phase 2

CONSULTANTS AND CONTRACTORS Floyd Goodwrich Aztec Inc. Consultant Civil Engineer and Foundations

Construction ATX Subcontrator Construction

Bluebonnet Aircondicion Services Subcontrator Construction

COMPANY OVERVIEW

George A. Gonzalez Jr. PE Genesis 1 Engineer Company Consultant Civil Engineer

MR Electric Subcontrator Construction

Snyder Pluming Subcontrator Construction

Jireh Remodeling Subcontrator Construction

Cancel Cruz Interiors & Contractors Inc. Subcontrator Construction

DEVELOPMENT TEAM GCDD Group is conceived as a collaborative group that offers an array of services that include all aspects of residential building and design. The work we offer responds to team effort. This team is expected to grow as the milestones set by its founders are met. It will consist initially of GCDD GroupÂ´s cofounders Mr. Galindo and Mrs. Cruz, as Development Director and Chief of Design and Sustainability respectively, an Office Manager/Project Coordinator, and an impressive list of design, real estate and construction firms. Names of owners: Andres I. Galindo Gimon (BArch. MSCRP) and Jimena L. Cruz Pifano (BArch. MSSD) Details of management & ownership As stated in GC Design & Development Group, LLC Company Agreement, Article VI, 6.01 Management by Managers clause, managers shall make all decisions and take all actions for the Company not otherwise provided for in this Agreement, including, without limitation, the following: entering into, making, and performing contracts, agreements, and other undertakings binding the Company that may be necessary, appropriate, or advisable in furtherance of the purposes of the Company and making all decisions and waivers thereunder, including a Fundamental Business Transaction; opening and maintaining bank and investment accounts and arrangements; collecting sums due the Company; to the extent that funds of the Company are available therefor, paying debts and obligations of the Company; acquiring, utilizing for Company purposes, and disposing of any asset of the Company; borrowing money or otherwise committing the credit of the Company for Company activities and voluntary prepayments or extensions of debt; selecting, removing, and changing the authority and responsibility of lawyers, accountants, and other advisers and consultants; obtaining insurance for the Company; determining distributions of Company cash and other property as provided in paragraph 5.02 of this Agreement; establishing a seal for the Company; and designating one or more committees, each of which shall be comprised of one or more Managers, to exercise any authority of the Managers in the management, business and affairs of the Company. As a GCDD Groupâ&#x20AC;&#x2122;s Owner / Manager, Andres I. Galindo Gimon and Jimena L. Cruz Pifano have the capacity, authority or power to transact business on behalf of the company, including making asset allocation decisions, borrowing money, debt or obligation engagements, hiring, and project development execution.

learned in his early childhood that what separates one´s ideas from their materialization is one’s discipline and vision. It is the combination of instinctive creative thinking, attention to detail and the strict technicality that has shaped Mr. Galindo’s professional career. Mr. Galindo has developed a prolific career in architecture, urban planning and real estate development with more than 12 years of local and international experience in the field. This represents more than 450,000 square feet of designed and built projects, comprising residential housing, and commercial residential and retail developments.

Andres Galindo Gimon Director of Development Mr. Galindo is responsible for the operation and production of the company. He handles all aspects of the marketing and development process including client development, market research, valuation, negotiation, asset allocation, project feasibility, property acquisitions, and underwriting. He manages contracts or agreements with clients, suppliers, distributors, federal or state agencies, or other organizational entities. Mr. Galindo confers with management, production or marketing staff to discuss project specifications or procedures and also reviews project designs. He is involved directly with the overall integration of design and construction, and he will also be handling the property transactions. Relevant Experience As the son of architects, and the grandson of a prolific civil engineer and a skilled metal smith immigrant, Mr. Galindo’s childhood was filled with values that reflect the art of creating and building things and spaces, focusing on orderliness, balance, harmony, logic, and abstract beauty. His family members greatly influenced him and thus he

COMPANY OVERVIEW

Mr. Galindo graduated from the University of Texas at Austin (UT) with a Master’s degree in Community and Regional Planning, specializing in Social and Economic Sustainable Development and Land development. He also holds a bachelor degree in Architecture from Universidad Simon Bolivar (USB) Caracas, Venezuela. Prior to and after graduating from UT in 2012, he has been devoting a lot of his time to understanding the dynamics that drive the urban development and housing market of this region, and more specifically of the City of Austin approaching it from different perspectives. Leveraging from his extensive experience and training in architecture and finance, and using the University of Texas as a platform while pursuing his Master´s degree, he focused in gaining expertise in planning, real estate, and community development in Central Texas by working actively with local housing authorities and real estate firms. As part of his professional experience in dealing with market analysis and research, Mr. Galindo coordinated and executed the Fifth Street Neighborhood Plan and Market Study for the University of Texas Center for Sustainable Development (CSD), a 18-month project funded by Community Development Block Grant (CDBG) from the U.S. Department of Housing and Urban Development (HUD). Prior to his work with CSD, he

worked as a financial analyst for Apartment Realty Advisors (ARA), the country's top privately held full-service investment advisory brokerage firm in the U.S. While orking with the affordable housing group he provided financial analysis and assisted senior staff in underwriting and marketing listings of over $50 million in multi-family assets. Prior ARA, Mr. Galindo worked as a research analyst at the City of Austin Neighborhood Housing and Community Development Authority (NHCD), and the Planning Department, where he coauthored the report call “The impact of Permanent Supportive Housing in neighboring property prices.” His desire for improving housing conditions while making more livable neighborhoods led him to be the recipient of the 2012 edition of the Dr. Kent Butler Student Planning Award by the Central Texas Section of the American Planning Association for their project “Creating Inclusive Corridors: Austin’s Airport Boulevard.” Prior moving to Austin, Mr. Galindo was the cofounder and former Project Development Director at the international building design and construction firm Oficina-12 Arquitectos (O12), based in Caracas, Venezuela. For more than 8 years, along with his business and life partner Jimena Cruz Pifano, he managed and ran this firm successfully by completing dozens of mid-size residential and commercial projects, growing from 0 to 6 employees and supervising a team of more than 15 professionals. During this time he led the expansion of project management services that helped the firm increase its gross revenues to more than $600,000 per year. With several awards and publications, this firm has been recognized for its high-end residential housing projects, comprising multi-million dollar projects, bold interior design ideas, and innovative multifamily residential projects. Among these awards is the 1st Salon de Arquitectura Interior of Caracas (SAI 2007), in the category of best residential projects, sponsored by DECONEWS Magazine. Later in his career, Mr. Galindo broke into the development world partnering with private investors and land owners

to develop infill mid-size multifamily residential projects in South America. In every project, he always brings great passion for quality design and innovative ideas, is never afraid of sorting by market constraints and clients’ needs to use his out-of-the-box thinking approach for solving problems. His great confidence and reliability are a product of his solid knowledge and education in finance, construction, project management, and real estate development. Prior Oficina-12 Arquitectos, Mr. Galindo worked as a project manager/architect for nearly 5 years at Pack Engineers (PE), a mid-size general contractor and project management company in Venezuela that provides residential and commercial services. As a design team leader, he oversaw the overall design process and construction of dozens of high-end custom homes and retail spaces. He was responsible for preparing and tracking project schedules and critical path, oversight the projects development. During that time he helped the company to expand the company´s business services by providing design and building services, increasing their portfolio of clients and profitability nearly 15% by reducing overhead costs. Most recently, Mr. Galindo is exploring sustainable and financially sound infill housing and business redevelopment in low income neighborhoods in Travis County as such practices are related to job creation and quality of life enhancement. He is also currently working on creative ways to integrate real estate and local art production, something that calls “the real estate of art.” Subsequent to the approval of his investor’s visa status, he will commit full-time as the Manager Director of Development at GCDD Group.

Jimena Cruz Pifano Chief of Design and Sustainability

Her position is defined as a consultant project-project based. Subsequent to the change of her visa status, Jimena Cruz Pifano will be responsible for developing and executing strategies to address issues such as energy use, resource conservation, recycling, pollution reduction, waste elimination, transportation, education, and building design. She will also evaluate and approve proposals for sustainability projects, taking into consideration factors such as cost effectiveness, technical feasibility, and integration with other initiatives. In addition, she will guide company staff to identify and evaluate pilot projects or programs to enhance the sustainable research agenda. Relevant Experience Master of Science in Sustainable Design. Two year as a Design faculty at Universidad Simon Bolivar in Venezuela

COMPANY OVERVIEW

PREVIOUS EXPERIENCE 23

5,600 SQ.FT OF CONSTRUCTION_OCALA, FLORIDA. OCALA HOUSE

PREVIOUS EXPERIENCE

DIAGRAMATIC PROPOSALS

SINGLE FAMILY [HOUSING] CONSULTING EXPERIENCE

Austin - Texas - USA

TWENTYYEARS OF EXPERIENCE IN 450,000 SQ.FT DESIGNED AND BUILT IN

ARCHITECTURAL OFFICE “12” ARCHITECTURE.

CONSULTING EXPERIENCE

DESIGN. MORE THAN CARACAS BY OUR OWN

PRODUCTS/SERVICES

Our Real Estate Development and Investment Property service includes:

Our business model provides expertise sourcing, designing, developing, and marketing our portfolio. As an interdisciplinary group made up of individuals with diverse backgrounds, we offer great expertise in positioning an asset to achieve its highest value.

1. REAL ESTATE DEVELOPMENT INVESTMENT PROPERTY

AND

Real estate development is a multifaceted business, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of improved land or parcels to others. At GCDD Group we like maintaining the adaptability to serve almost all the activities described above. From a single-family or a spec home to an entire residential community, our team invests with our clients in innovative housing products and develops properties in culturally attractive neighborhoods in fast-growing Central Texas. We assist clients in identifying properties that work for the home and budget they have in mind. We develop the investment plan and assist in developing and selling the property. Our commitment is to create solid investments for the development of a healthy and sustainable economy. Our integrated platform and operational expertise allow us to produce risk-adjusted returns, enter and exit investments at a fast rate, and acquire assets under longer-term buy, hold, and reposition strategies. We combine our passion for design and for innovative lifestyle with a solid real estate investment strategy. We create the highest quality product in every market we operate.

COMPANY OVERVIEW

1. Locate Property 2. Perform due Diligence 3. Raise Equity Capital 4. Preliminary development strategies, back of the napkin analysis and construction costs. 5. Property Inspections 6. Acquire land or property 7. Undertake in-house building design 8. Hire Engineers 9. Prepare and approve all specs and drawings 10. Obtain all required approvals and permit 11. Prepare all construction bid documents 12. Project Scheduling 13. Bid Project 14. Select all contractors and consultants 15. Revise project plans if necessary 16. Execute construction contracts 17. Begin Infrastructure work 18. Begin Entitlements 19. Begin Construction of the project 20. Develop marketing and sale plan 21. Build model home (if necessary) 22. Final inspections 23. Close out property and request certificate of occupancy

2. INVESTMENT STRATEGIES Finding the value that can be derived from a property is at the heart of our real estate approach. In real estate, value can be created in numerous ways. Largely driven by the current conditions of the market and by two significant market players (investors and owner-occupants), at GCDD Group we believe that single-family residences provide the best investment opportunities a wide base of real-estate investors. In this sense, the combination of our value-added approach and our proved expertise in high quality residential projects offers the best advantages to clients that are looking to invest in the housing market. We employ a value-add process that joins imagination with objective analysis and careful due diligence. As part of the process within this approach, GCDD Group team will help the client identify pieces of land that should work for the property and budget the client has in mind. We will assist the client by giving them an idea of what the market conditions are, what current homes in the area sell for, and what they have in amenities they have so that the client can tailor plans to make the most profit with the spec home upon completion. We take a special care in determining the potential ROI of the selected property to assure its greatest returns. GCDD Groups has experience and knowledge of the permitting, design, and building process and all the relationships needed to develop a property. Once the property is complete, GCDD Group team will market and sell the property with its real estate partners. Partnership agreements will be defined on a case-by-case basis, depending on the level of the client involvement, and would be worked out prior to any part of the developing process taking place. This is ideal for clients that are new to the world of home building or for investors who prefer a more hands-off approach in their investing practices. Our services are also ideal for those who would like to build spec homes but do not reside in the town or state and are not able to manage the project all times. We have divided the investment strategies into two main categories, which can be combined if required, maximizing the potential of any deal. All these strategies involve a value-added approach that can range from developing raw land to renovating existing properties. (See Investors Memorandum enclosed in the annexes).

A. Buy and Hold Tactic: The initial point for most investors. The objective is to acquire the house with the sole purpose of renting it. For this method to be successful, we borrow money or rise capital from motivated investors to purchase the property under some set price and terms, and invest a determined sum in order increase its income capacity and to maximize its positive cash flow. B. Buy Low-Sell High Tactic: Acquire raw land or a home positioned in an area with high sales activity. Develop and build on the land or make the essential repairs or remodels as required and then sell the house for a higher price than what you paid, depending on the case.

3. BUILDING DESIGN AND INTERIOR DESIGN Our experienced team in residential design and development brings a fresh and unique approach to the concept of living within the urban core. We focus on infill high-end residential, spec homes, custom homes and multi-family, mixed-use buildings. We invest locally but dream globally when it comes to creating sustainable and environmentally friendly developments. We strive to create designs that make proud both owners and investors. Our goal is to build more livable and enjoyable places.

3014 Home _ Single Family.

COMPANY OVERVIEW

Design Process 1. Preliminary Phase. Meeting with the client and understanding the job. The client must provide: a. Survey of the property b. Map with location c. Digital photos of key furnishings, art works and special items that will have to fit in the new home d. Collection of images that represent the different tastes of the people that will inhabit the house. We want to understand the clients taste. e. A list of the types of spaces and activities that the home is going to accommodate. 2. Design. Preliminary Design Process / Conceptual Ideas. a. Schematic floor plans and visuals that express the main idea of the design concept. b. This schematic design will be discussed with the client to evaluate the options and choose the proposal to be developed. 3. Design. Draft Project a. Architectural plans: site plan, floor-plans, sections, elevations, and electrical plans. b. 3D model of the exterior of the house. c. Materials and basic furniture display will be defined. d. The draft project will be discussed with the client to approve final details and proceed to finalize the project in order to send it to the engineering team. 4. Design. Final Project a. Elaborate architectural plans with details and notes: site plans, floor-plans, sections, exterior and interior elevations. b. 3D model of the exterior and interior of the house. c. The plans will be submitted to the regulatory entity for building permits and to soliciting construction bids.

Pictures of some examples of our previous experience in the building design industry are: Town House 09, San Roman Apt, Tulipanes, Casa Medina, and Monterrey.

4. CONSTRUCTION PROCESS 1. Construction estimate. We elaborate an estimate and break it down into different items to understand the cost of each part of the construction. This estimate could have upgrade options or cost savings suggestions, depending on the clientÂ´s needs. 2. Preliminary construction schedule. The schedule describes activities week by week in order to give the client an idea of the decisions they will make on a monthly basis. 3. Construction. Once construction starts, we minimize changes to the design in order to complete the project in a timely manner. a. Monthly Construction Progress Report. The report includes: i. All the items presented in the original construction estimate including the amount of value installed to date and the balance left until completion on every line item. ii. A history of all change orders, payments, and a summary of the allowance variations over the course of the job made to date with a projected final cost. iii. Details on the allowance items. iv. Costs incurred to date, projected cost to completion, and overages or savings for each allowance category. 4. Closing. We take a small deposit on signing the construction contract that is credited to the final payment, which is due before the client moves into the house. After construction has ended, we return for a 30 day punch-list and touch-up and for a 12 month service call.

Lemo home _ single family. 2,700 sq.ft

5. PLANNING AND CONSULTING We develop strategies for the development of the urban core. Our expertise in sustainable development and community and regional planning can help enhance whole communities. Our global capacities are a prime resource that we offer through consulting relationships with individuals, companies, nonprofits and governmental institutions.

MARKET POSITION

ANTICIPATED DEMAND

Despite the tightness of the current housing market and high competitiveness among the residential real estate and design business, GCDD Group can still corner a healthy market share. Based on our strength and capacities we know in what league to play in, and how to play. We focus on building in the best locations within our means. We also rely on the potential draw international motivated investors into the U.S. that have previously worked with GCDD Groupâ&#x20AC;&#x2122;s management in the past.

Population and economic growth in the Austin area show no signs of slowing down this year. either does Austinâ&#x20AC;&#x2122;s increasingly competitive housing market. In 2014, Austin home buyers and sellers can expect home prices to continue to rise across all segments of the market. Based on the latest report from Austin board of realtors, it is expected multiple offers on home listings will be commonplace, and many homes will sell within days of hitting the market. Central Texas market is poised to experience a continuous and sustainable population growth. A combination of thriving economy, quality of life, affordability and good weather are drawing hundreds of people to move to this area. The rapid pace of this large inflow in population (mostly young and educated) has offset the capacity of builders and developers to keep up the housing demand. This significant unmet demand is projected to continue for a long haul. The bust in demand and insufficient supply is pushing down the level of inventory in Austin, reaching historic lows thus driving customers to make highly competitive offers, sometimes within hours of the property being listed. As housing market is not keeping up with demand, prices are rapidly increasing. The market is on fire, and a lot of its demand is most likely due to the technology, education and biotechnology industry. Despite some challenges that will inevitably arise in 2015, Austin is poised for a year that should build on the momentum it built up in 2013; there are no guarantees for the long haul.

We put a lot of emphasis on doing rigorous market analyses before bidding for a property. However, often times we do not have the means of picking and choosing the best locations for our projects. When a less-than-optimum location is the only option, we rely on our creativity and in-house design capacity to compensate by making the project a landmark in the area. This means beefing up its sale-ability with better amenities, stunning design, and sweetening the deal with competitive rates. We are fully convinced that our unique mix of abilities and fresh approach is what differentiates us from the competition. We know well how to leverage on our expertise when we cannot get the prime location and still strive to be the best in its level. We believe that buyers always look for the best available in every budget range.

Our conservative approach is anticipating a decent demand that will increase our market base 5% annually. We believe that for the 2014 -2019 period the demand for more modern-style design homes will gain more traction as the Generation Y bounces into the housing market as first time home-buyers.

COMPANY OVERVIEW

On the other hand, we expect a significant increase in demand for design services (Architecture and interior design) for new homes and remodeling. According to the 2014 Residential Design & Renovation Outlook published by the residential design specialized web site Houzz, 90% of all professionals surveyed said they expect revenue to grow in 2014. The expected dollar volume of revenue growth increases in tandem with firm size across all types of professionals. We expect a rise in gross revenues that come from these services reaching $10-15K per year. A modest growth rate will be complemented by an increasing demand for interior design projects driven by the optimism among homeowners in the outlook of the housing market. The market recovery is fueling the desire of home owners to add-value to their homes, and a large number is planning for renovations or remodeling. In this report Gen Yers were significantly more motivated than other age brackets to remodel in order to increase their home value (61 percent) and accommodate changing lifestyle needs. The remodeling market boost comes right out of our alley and we are prepared to benefit from it as we provide the whole array of services required to complete such projects.

PRICING STRATEGY Our firm's business strategy is to enter into a limited geographical area where it can leverage its staffs' existing reputation into long-term contracts centered on excellent service and cost effectiveness. We believe that we can serve this limited market better than larger firms and we have better service packages at more reasonable costs than existing competitors of equal size

VALUE TO CUSTOMER Details, quality design, reliability, affordability, and products that are tailored for specific market groups.

3014 House Reclaimed Doors_Austin, Texas

BUYING PATTERNS AND NEEDS Clients usually deal with real estate companies based on their reputation of professionalism and quality of services rendered in the past. This reputation is difficult to obtain by new firms unless its personnel brings it with them from having worked previously in the industry, such as ours. Price and scope are also important reasons why customers would choose a small company like GCDD Group over another company. Mr. Galindo and Mrs. Cruz bring to this new company the reputation of being proven entrepreneurs in the field. In the following sections of this document a selection of some of GCDDÂ´s business owners previous works is presented showcasing their particular talent and potential.

GROWTH POTENTIAL We would anticipate for the next 4 years a 15% annual growth driven by an aggressive marketing campaign in strategic market targeting fast growing population groups and demographics, such as Generation Y population. We also anticipate in a higher visibility and presence in the local scene as more properties and projects are completed, and a gradual increment in the volume of dollars invested in projects for motivated investors as a result of our transparent, efficient and profitable business approach. All of this will be supported by an expansion of the production capacity of our team and a better knowledge and experience with local clients and regulatory processes.

RESEARCH AND INNOVATION ACTIVITIES The constantly changing factors affecting project and market conditions play an important role of the performance of any company in this field. At the core of GCDD Groupâ&#x20AC;&#x2122;s business approach, innovation is considered in every step of the way in the production process and is aligned with the entrepreneur spirit of its founders, always aiming to come up with unique solutions for the housing needs of our clients. As for investment strategies, we approach projects from both branding and urban design perspectives, matching shared spaces and project features to the Gen Y profile. Our multi-disciplinary business approach allows us to combine and test different ways of solving problems through a quality and an integrity that stand out in our designs and developments. For us, innovation is the cornerstone in achieving success and it is present in three main areas of our business.

Design of our projects Sustainability, Use of materials, layouts, features and amenities offered GCDD Group is integrated by professionals that share a real passion for being on top of everything that relates to design and construction techniques. We support our knowledge with the latest research and specialized market studies to provide our clients with the best and most efficient solutions to their needs. We strive to be informed with the latest trends and designs before they get to mainstream media. We try to incorporate to our projects cutting edge technologies that assure investors and final owners they will receive the best quality and return of their investment. Innovation is materialized in the design layouts we propose by maximizing the use of the available space. We propose iconic designs that embrace the character of the place and bring the living experience to higher levels of comfort and taste. We look for holes in the market, niche markets that are unattended by local home builders and designers. Innovation is part of the

COMPANY OVERVIEW

spirit of the new demographics that are hitting the housing market and are willing to break with old establishments in housing design, development and production. We understand the importance of it and believe that providing the features and amenities that this group is seeking should be essential in every project we develop. We take a mid-century modern and rustic-minimalist spirit of our design and combine it with today's more sustainable and efficient processes and materials to achieve something new and exciting. Our design strategies include open floor plans and flexible interior components. Open floor plans with high ceilings provide a feeling of spaciousness. Galley kitchens have movable islands that include storage and countertops that open up for extra length. Sleeping areas have Murphy beds or movable wall dividers to screen bedrooms from living areas. Slick lighting and plumbing fixtures are also present. In order to offer higher-end interior finishes, we cut costs on the exterior. Along with the new interior design trends, we propose wood-frame construction, using cost-effective, prefabricated or reclaimed materials in innovative ways for creating interesting architectural effects. The following are some of the guidelines that are characteristic of our design. 1. Float Along. Modestly sized, mid-century modern homes are often light, thin and screen-like and would gently touch the earth. 2. Take Flight.Our homes certainly are designed aiming to provide dwellers with a different level of comfort. 3. Reach Out at the outdoor.Roofs not only shelter the enclosed space; they should reach out and extend out to the landscape to define and shelter an outdoor area as well. In doing so, we control how the sunlight enters and warms the interior space. 4. Uncommon. A small and modest house

celebrate the original structure while having the lightness and brightness of mid-century modern design. Nowadays, we can benefit with better glass and other materials for a more efficient structure. 5. No Small Doors. Big, well-built, easy to use doors are readily available. Whether sliding, telescoping, folding, overhead, big doors can connect an indoor and outdoor space, blurring the distinction between the two like never before. Only separated by a clear, and energy-efficient glass. 6. Enjoy Going Barefoot.Connecting interiors with exteriors and employing low maintenance and sustainable materials for our floors will enable us to live the casual and informal life we want. If possible, even our bedrooms can have that outdoor connection. We design homes that enable this connection. 7. Create Not So Open Plans.We want spaces that promote togetherness and interaction. However, spaces that are too open can be as stifling as spaces that are too closed. So create separate zones and areas. Change levels and ceiling heights. Create compression and decompression to create a feeling of awe. Have informal artwork 8. Keep It Family Friendly. on walls and do not be afraid or hesitant of showing it. No hiding here, just art work and messages everyone will be proud of. 9. Keep It Simple.Clean, spare and simple shapes, lines and forms. Use britgh, bold and interesting color, that adds a smile to your face and joy to your heart. 10. Add a Pop-Up.We avoid designing overly horizontal, 8-foot-tall and bland ceiling planes, incorporating some clerestory windows to increase spaciousness and let sunlight in. 11. Not limited to Architecture. Our work is filled with beautiful, simple, clean and functional objects. They are long-lasting, easy to use, pleasant to look at, inexpensive and ubiquitous.

Some of our sustainable design features

THE ECONOMIC BENEFITS TO THE COMMUNITY The National Association of Home Builders estimates that three jobs are created for each new single-family home that is built. About half of these jobs are in the construction industry and the rest in other industries that are needed to outfit and sell a home such as furniture, appliances, textiles, loan officers and lawyers. A total of $90,000 in government revenue is generated â&#x20AC;&#x201D; $67,000 in federal taxes and $23,000 in state and local taxes. GCDD Group is planning to build 32 new homes over a period of 6 years. Based on these figures we believe there will be nearly $2,000,000 raining through the U.S. economy in government revenues as a result of our economic activity. In addition, GCDD Group will generate at least 5 stable professional jobs and $845,000 in salaries.

public, we hope to narrow down to themes that are more in line with our. Whether portrayed in a painting, photography, sculpture, drawing, or video, the concept dwelling is both intimate and universal. It can be a state of mind and evoke a full spectrum of emotions, thoughts, memories, and images. We will feature works by local artists in a variety of media that depict different interpretations and representations of the concept of housing framed within the urban area. Details of these types of events will be develop along with our branding and marketing strategy. We want GCDD Group to be positioned and recognized as a platform for social interaction and economic development for our community, where art iplays an important role in it.

OPEN HOUSE SHOWCASING LOCAL ART Gen Yers are known for their preoccupation with socializing and their open support to the local economy. We would like to display a selection of local artists' work in our properties to transform the spaces into a itinerant home/art gallery concept. The open houses will have a dual purpose in which art and real estate blend creating we believe is a great synergy that benefits our public, the communities where we work in and our company ,and is aligned with our core principals of sustainability. This will directly expand our marketing strategy to a different level and audience, as these type of activities gain local recognition. This strategies creates opportunities for local artists that dwell in these communities and find it difficult to get exposure due to the limited space available to showcase their work. At first, these art events will be open to a wide range of artists and themes. Eventually, as we gain more recognition from the

COMPANY OVERVIEW

Artist sample_Alexa Meade

INSURANCE General Liability with MID-CONTINENT CUASUALTY COMPANY

Policy No. 04-GL-009090146. From 04/09/2014 to 04/09/2015.

Builders Risk Policy with MID-CONTINENT CUASUALTY COMPANY Policy No. 04-CA-002803612P. From 04/09/2014 to 04/09/2015. Workers Compensation and Employers Liability with TEXAS MUTUAL INSURANCE COMPANY Policy No. SBP-0001267766. From 04/09/2014 to 04/09/2015

RISK MANAGEMENT Below, its a chart that summarize our risk managament strat.

RISK Exposure to contractors resulting from errors in the proposed budged. It creates credibility deterioration and can lead to legal issues. Inadequate planning, inaccurate budget estimation or errors in your designs that may require additional funding from customers or investors. Changes in city codes and development law or construction standards affecting permit approval and compliance.

Bad pricing of projects and properties affecting profitability and financial feasibility.

LIKELIHOOD

IMPACT

STRATEGY

Likely

High

Include protection clauses in the contractor agreements. All contractors must carry insurance protection with required liability of at least $500,000.

Likely

Medium

Request interim reports and review of every step of the process.

Medium

Stay inform with the most recent regulation and up to date information available and literature in related topics. Participate in conferences, forums, etc.

Less Likely

Likely

High

Ensure market analysis and due diligence are perform adequately. Use techniques and databases that provide accurate information. Consult realtors and builders in the area. First hand visits to sites, comprehensive ad valorem analysis.

COST CONTROL STRATEGIES As every home we build is unique, developing a cost control strategy is key. We have developed a set of standards that will be largely affected by the following considerations that are linked to the development process: • Conscious and well-documented designs and specifications - the type, amount, and quality of the things to be included in the home must be clear and simple as possible. • Always negotiate the best prices for the labor and materials that will be used in the construction process. • Reduce building times for homes in order to reduce financial costs, real estate taxes, insurance, etc. • Make sure materials are ordered in correct amounts and, waste and theft are constantly controlled.

LEGAL CONSIDERATIONS Some exemptions to the City of Austin planning laws allow design professionals to perform work such as single family design and duplexes. They do not require drawings and plans for residential project submittals with less than 5,000 sq. ft. on one-story and less than 20 feet height to be sealed by a Licensed Architect of Certified Design Builder. Beyond building codes and regulations, every house we build complies with Texas Law regarding new home warranties. In general, the terms of the warranty should be as follows: • During the first year of ownership the home shall be free from defects caused by faulty workmanship and defective materials due to non-compliance with building standards. The period of ownership commences on the date of closing unless otherwise specified by the builder. • During the first two years of ownership, the home shall be free from defects caused by faulty installation of plumbing, electrical, heating and cooling systems. • During the first ten years of ownership, the home shall be free from major construction defects. “Major construction defects” means accrual damage to the load-bearing function and which vitally affects or is imminently likely to affect use of the dwelling for residential purposes to the extent that the home becomes unsafe, unsanitary or otherwise unlivable. Such load-bearing components may include:

COMPANY OVERVIEW

A. Foundation systems and footings B. Beams C. Girders D. Lintels E. Columns F. Walls and partitions G. Floor systems H. Roof framing systems “Major construction defects” does not include damage due to movement of the soil caused by flood, earthquake or other natural disasters.

OPERATIONS Technology (Software) Our design and development firm requires basic office supplies and equipment such as computers, telephones and printers. In addition to Microsoft Office software, AutoCAD, Sketch Up, and Adobe Creative Suite software, there is another software required to maintain the operation of the firm and provide professional design solutions with three-dimensional realism. A description of the cost of this software is described below:

SERVICE PROVIDED

COST

SOFTWARE

PURPOSE

Autocad

2D Architectural Drawings

Design/Consulting

$1,050.00 Annual

SketchUp

3D Modeling / Rendering

Design/Consulting Marketing

$500 One Time

Adobe Creative Suite

Illustrating

Design/Consulting Marketing

$360 Annual

Quickbooks

Accounting

Internal Administration

$150 Annual

Microsoft Office

Document creation

Consulting Marketing Administration

$160 One Time

MLS Actris

Market Studies Property Search

Real Estate Investment

$1,500.00 Annual

Open Project

Project Management

Construction and Scheduling

No fee

Warranties & refunds Only for new constructions we will offer buyers a one-year warranty on everything in their home, a two-year warranty on mechanical items and a 10-year structural warranty.

final walk through, an extremely thorough inspection will be completed. Any areas of concern will be marked and necessary corrections will be made. This is an extra service we gladly provide to our home buyers.

Quality control Our policy is simple: Each new home buyer deserves complete satisfaction in his or her home. That's why every GCDD Groupâ&#x20AC;&#x2122;s team member places such an emphasis on customer research and tirelessly seeks input from past and current home buyers to continually improve and create the ideal home.

12 Week Post-Closing Inspection We send to our clients a reminder letter in the mail with a form to fill out and send back to our office with their concerns. The form is also available online. We respond to the client to schedule a time for a GCDD representative to visit the home and schedule repairs.

Quality Control Inspection The quality of our homes sets us apart from other home builders. To make sure our homes meet our high standards, we conduct our own examination as well as all the required inspections. Before the

GCDD group will assure compliance with OSHA Procedures in all constructions and business premises. Memberships & affiliations: [Is your business a member of any particular industry association or

club? Do you have any affiliations with any other organisation?] ULI, RECA, AIA, Austin Chambers of Commerce, ACTRIS.

SUSTAINABILITY PLAN Environmental/resource impacts

Infill development The city of Austin is changing at a rapid pace. Housing costs have risen by 85% in the last ten years. As a result, many residents have been forced to move out of the City. This inequitable development pattern not only threatens the culture and diversity of the City, but also exacerbates the problems of suburban sprawl taking over the countryside.

infrastructures instead of overburdening . It will contribute to the economic viability of existing neighborhoods and aging infrastructure, and to the ecological health of the city as a whole. Our housing products will be located within the existing urban grid, counteracting the impact of sprawl development. We will follow the Smart Growth Principles by developing compact building designs in existing communities to strengthen their sense of place, and encourage the development of denser neighborhoods that support the intensification of public transportation.

Health, schools, taxes, traffic, the environment, economic growth, fairness and opportunity are all affected by development decisions. From the length of our daily commute to the price of a new home â&#x20AC;&#x201C; what, where and how we build have major impacts on our environment. Growth presents a tremendous opportunity for progress. Communities around the U.S. are looking for ways to get the most out of new developments and to maximize their investments. Frustrated by developments that require residents to drive long distances to and from their jobs and homes, many communities are challenging rules that make it impossible to put workplaces, homes, and services closer together, questioning sprawl and development that neglects existing infrastructure while expanding new sewers, roads, and services into the fringe. On the other side, in many communities where development has improved daily life, the economy, and the environment, smart growth principles have been key to that success. GCDD Group will develop urban infill housing that is sustainable and energy efficient. It will increase the capacity of existing electrical and water

COMPANY OVERVIEW

Mccann Adams Studio_East Riverside Corridor Study, Austin.

Projects samples from Alley Flat 8: Johanna Street_For: Alley flat Initiative.

Austin's Alley Network Map for infill development developed by students of the UT School of Architecture

Energy Efficient Design We will follow the principles of the Austin Green Building Program (AGBD) and the Leadership in Energy and Environmental Design (LEED) to minimize the impact of our designs on the environment. The AGBD Single-Family Home Rating assesses the design, construction, and performance of new construction, remodels, and additions for a variety of homes, according to a set of basic requirements for all ratings and the extent to which they incorporate a set of recommended green building measures for points. The Rating also serves as an educational and marketing tool for AEGB participants and homebuyers and provides a handy means of comparison for both building professionals and homebuyers. The system defines five environmental topics that include several steps: energy, water, materials and products, health and safety, and community.

•Radiant-barrier metal roof •Soy-based spray foam insulation sprayed between the rafters to form a thermal envelope in the attic •Whole-house on-demand water heater •Energy Star rated appliances •Right-sized air conditioning system (based on a Manual J calculation) and programmable thermostat •Custom double-pane, Fibrex® frame, low-E windows •Low-flow plumbing fixtures •Reclaimed wood floors or bamboo floors (a renewable resource) plus polished concrete floors •No-VOC paints and adhesives •Silestone countertops •Custom cabinets made with no- or low-VOC adhesives •Leadership in Energy and Environmental Design (LEED).

Energy Efficient

Renewable Energy

Water Efficient

Social Spaces

Indoor Air Quality

Green Materials

COMPANY OVERVIEW

Our housing units will include the following energy efficient features:

Smart Code Considerations Austin's City Council may soon begin a process to make it easier for homeowners to build and rent small secondary residences in neighborhoods across the city. Secondary dwellings, called accessory dwelling units in city code and sometimes referred to as granny flats, are small homes that often share the same lot as a larger dwelling. Austin's City Code currently allows granny flats of up to 850 square feet to be built on lots of at least 7,000 square feet by right, or on lots of 5,750 square feet if the neighborhood allows them. The resolution notes that 34 percent of Austinites live in single-person households, which could benefit from more options. A recent review of Austin's land code by Opticos Design Inc. also recommended the city's rules be changed to allow for more housing options.

Imagine Austin Manual

Austin Imagine Road Access Plan

MARKET RESEARCH

Employment

AUSTIN

Population According to the US Census Bureau (USCB), the Austin-Round Rock-San Marcos MSA was the second fastest growing metropolitan population in America between 2010 and 2011. The population of the Austin-Round Rock-San Marcos MSA is projected to nearly double between 2010 and 2035 to 3.3 million, with most of that growth shared between Bastrop and Williamson Counties (increases of 190% and 143%, respectively). Williamson County is expected to see the highest absolute population growth (a little over 600,000). The City of Austin has the largest concentration of population in the region at over 840,000 estimated in 2013, becoming the 11th largest city in the nation and fourth-largest in Texas.

3,000,000

2,000,000

1,000,000

1970-1980-1990-2000-2005-2015-2025-2035 Central Texas Growth 1970-2035 Source: CAMPO, 2011

THE MARKET 44

The City of Austin added the most jobs for a city in the region in absolute terms between 2000 and 2010 (close to 60,000). Employment in the Austin-Round Rock-San Marcos MSA is currently 880,000 and is expected to more than double to 1.64 million in 2035, an increase of 86%. Although many of the new jobs are expected to be located in Austinâ&#x20AC;&#x2122;s core, others will be located in suburban growth centers such as Tech Ridge in north Austin. Travis County is expected to see the highest absolute employment growth, adding just under 400,000 employees, with Williamson County following with just over 250,000 employees.

1970-1980-1990-2000-2005-2015-2025-2035 Central Texas Employment Growth 1970-2035 Source: CAMPO, 2011

AUSTIN ECONOMY From an industry perspective, the usual suspects will drive Austin’s job growth. Employment in retail, leisure and hospitality, construction and professional, scientific and technical services is expected to remain especially robust in the coming year. Even the public sector, which was one of the only set of employers to slash local jobs in 2013, appears poised to stabilize payrolls this year. Growth in that broad mix of sectors should provide Austin with a balanced blend of low-middle-and high-wage jobs. That could prove increasingly important as the region’s cost of living ticks higher in the coming years. GCDD has two types of customers. The first type consists of those who are looking to invest in Austin, one of the hottest markets in The U.S. They can be locals, U.S. citizens, or international investors who know Austin is the place to be. We work hard to gain their trust because all investors deserve to have peace of mind when they invest their hard-earned money. This is how we want investors to feel when they invest in GCDD group. The second type of customers consist of the homebuyers. This type of customer where the action takes place to close downtown Austin. They are in the 30–45 year old age range and tend to not have

children. They’re looking for a place that is big enough to raise children, or are looking to make an investment for the future while living in their home for a couple of years. Other customers of this type are only looking to invest in a property that they can rent out. A lot of the older homes in the area cannot accommodate these priorities, so we are building new ones to fill the demand.

Transportation Improvements MetroRail Red Line The city’s first commuter rail line, the MetroRail Red Line between Leander and downtown Austin, began operations in March 2010. The service runs Monday through Saturday, with peak-hour headways of thirty minutes, with limited midday and service and limited night-time service on Fridays and Saturdays. There are nine stations along the line, and current ridership is 2,400 average daily riders. The distance between the two terminal stations is about 32 miles. The Red Line operates on a former Southern Pacific branch line, and Capital Metro shares the railway with freight carriers, using temporal separation to ensure that passenger rail operations do not mix with freight rail operations.

PROJECT CONNECT _Central Texas High-Capacity Transit System Plan

MetroRail Comeâ&#x20AC;Ś

Red

Line

Improvements

In 2013, Capital Metro was awarded a $11.3 million federal grant as part of the fifth round of the Transportation Investment Generating Economic Recovery, or TIGER, a discretionary grant program. The grant will allow Capital Metro to advance a number of rail improvements equaling over $27.3 million, including: -Railway and signal timing improvements that will help reduce vehicle delays and rail traffic congestion -Commuter rail improvements, including additional sidings and double tracking in the most critical areas, which are projected to increase ridership capacity by 15% and reduce commute times by five to ten minutes -Freight rail enhancements, including the replacement of several bridges, and rail rehabilitation and realignments that will increase speeds and enhance safety while doubling freight capacity and improving reliability Design and environmental clearance are underway for these important improvements.

which are typically more expensive and heterogeneous, in terms of the type of housing, architecture, and demographics. On the other hand, there is a market that targets properties in the outskirts or suburbs. These properties are homogeneous and significantly more inexpensive than most properties in the country. Centrally located neighborhoods are generally less than 10 minutes away from downtown. Typically, neighborhoods in these areas offer the perfect combination of convenience and comfort while maintaining the city's funky, college-town vibe, while having a lively, eclectic mix of housing and culture. The subject or target area that we have selected is located within a 3-mile radius from

the intersection of Sixth Street and Congress Avenue, coinciding with the area

defined as Designated Housing Area by the City of Austin Zoning Code. We selected this area based on its proximity and accessibility to employment, public transit, and urban amenities, and because we consider that it is best positioned to take advantage of most of the new city investments and improvements that are currently in the pipeline. These unique attributes are what make Central Austin a perfect location to market our services and

<150

TRA

25% $750+

$150-$199

15%

THE MARKET

URB

RAP

5% $200-$249

$500-$745

EXP

ROW

$300-$499

$250-$99

CAMPO Trans Consensus M

Alignments shown to environmental im refinement.

Austin Markets The Austin Real Estate market actually consists of two separate markers. On one hand, there is a market that targets properties in central Austin,

CENTR HIGHTRANS

(not to sca

Target Market The main focus in our companyâ&#x20AC;&#x2122;s work is the urban context, with efficiency and sustainability throughout. We believe that the success of a project is a result of the combination between its location, its design, and its value. Prime locations that are within an urban setting, and typically in close proximity to retails stores, restaurants, and entertaiment venues that cater young demographics. In addition, it has to have original and innovative designs that stand, and balancing value of investment and return.

NORTH

1Q2012

1Q2014

Home Prices Clockwise Lowest to Highest Sources: The Metrostudies

Hutto

Lakeline

Palm Valley

These areas, among others, are poised to grow denser and to accommodate the population committed to using public transportation. Most of TOLL ROAD the city’s 45efforts to redirect growth have been concentrated in this area. Central Austin is in fact a sum of different sub markets that gravitate its core. We have divided our market area into two main submarkets based on location, which are Central/South and North and North/East Austin. Round Rock

IH-35

Leander

US 79

projects. Its rich urban character, strong sense of place and thriving real estate market allow us to combine our passion for real estate investing with our defined vision for innovative design and 0 lifestyle. We believe the current conditions of RR 62that this market are luring the type of tenants that we are targeting, with a particular taste and appeal HW Y4 toward more modern and contemporary designs. 5 What makes this market unique is that the eclectic charm that neighborhoods in Austin have allows new and modern architecture to coexist with existing and old structures.

130 TOLL ROAD

McNeil Junction

Central / South Austin has homes that are

Howard Lane

183

ST. DAVID’S NORTH AUSTIN MEDICAL CENTER

ARBORETUM

ACC NORTHRIDGE

Pickle

Braker

Tech Ridge Park & Ride

N LAMAR

Domain

Taylor

Chinatown

Kramer

Masterson

RAL TEXAS -CAPACITY SIT VISION

Manor

North Lamar Transit Center

Ohlen

US 2

BURNET

Northcross Justin Koenig West North Loop

Highland/ACC

Koenig

TRIANGLE

Berkman Triangle

Mueller

Hyde Park UNIVERSITY OF TEXAS Dean UT/ Dean Keeton Keeton San Jacinto UT/ West Mall UT Stadium

SETON MEDICAL CENTER

OMMUTER/REGIONAL RAIL

PID BUS

N Congress

38th 32nd/ St. David’s

MLK, Jr.

West Austin

WHOLE FOODS

Woolridge Square

Seaholm

Republic Square

15th LAVACA

Capitol

GUADALUPE

Museum

PRESS LANES

11th Brazos 7th

4th

Downtown CONV CENTER Cesar Chavez

130 TOLL ROAD

BAN RAIL

Aldrich

Hancock 41st

38th

35th

183

CENTRAL MARKET

IH-35

Rosedale

ANSFER/STOP

W PRESERVATION

DELL CHILDREN’S MEDICAL CENTER

Crestview Sunshine

MOPAC

ale)

Plaza Saltillo

Rainey

sit Working Group Map; June 2012

Auditorium Shores Barton Springs Lamar Square

n for conceptual purposes and subject mpact, regulatory changes and route

Oltorf West

PALMER/LONG CENTER & AUDITORIUM SHORES

SoCo Oltorf

St. Edward’s

Bluebonnet Brodie Oaks

Riverside

Travis Heights

ACC RIVERSIDE Pleasant Valley

Lakeshore

IVE

ST. EDWARD’S UNIVERSITY

Grove

IDE

South Congress Transit Center

BEN WHITE/290/71

Westgate

S CONGRESS

M Oak Hill

Elgin

Rundberg

Research

Slaughter

Litle Texas

Pleasant Hill South Park Meadows

ABIA

known for their charming and eclectic neighborhoods built around historic layouts. Some of these neighborhoods were the cityâ&#x20AC;&#x2122;s first suburbs and they features eccentric bungalows, easy access to downtown, and city parks and recreation. This area is typically more expensive and has featured a longstanding and robust pass of redevelopment. The Zip codes of this area include 78703, 78704, and 78731. East / North-East Austin is a more upscale and coming area currently undergoing a huge

revitalization as an influx of nightlife, restaurants, luxury condos, and new homes are sweeping the area. Modern architecture, bungalows, and lofts coexist with barbeque joints, experimental theaters, and food trucks. Major developments are also under the works along East 6th Street, 12th Street, Airport Boulevard, Mueller Development, and along the I-35 access road, which includes for luxury condos, entertainment spots and hotels. While the area is comprised heavily of young professionals, many new families are also living here in the area. Zip codes included in this area are 78702, 78722, 78751, and 78756.

MARKET STATISTICS

78703

78704

78731

78702

78722

78751

78756

Residential Listings: Average Size (Sq Ft): Average Year Built: Average List Price: Highest Price: Lowest Price: Average Price / Sq Ft: Highest Price / Sq Ft: Lowest Price / Sq Ft:

109 3,011 1973 $1,286,088 $7,250,000

178 1,546 1981 $539,515 $4,000,000

94 2,987 1978 $875,860 $4,750,000

108 1,465 1981 $409,067 $1,299,999

8 1,530 1965 $367,652 $465,000

40 1,377 1962 $409,929 $1,195,000

36 1,565 1981 $433,105 $747,000

$199,900 $416 $929 $186

$115,000 $340 $1,365 $190

$128,000 $277 $1,140 $141

$169,450 $297 $764 $163

$217,000 $245 $289 $205

$87,500 $299 $422 $184

$98,500 $277 $386 $171

Note: Statistics represent residential listings only. April 2014

I - 35 (INTERSTATE) I - 35 (INTERSTATE)

EAST/NORTH EAST CENTRAL/SOUTH

AUSTIN_ZIPCODE MAP

Austin, the hottest market in the Lone Star State Analysts for Redfin, the technology-based real estate brokerage firm, have released a study on eight of the hottest housing markets in the U.S., with top honors going to Texas and the Pacific Northwest. Texas is well represented with San Antonio, Dallas, Houston, and Austin, joining Raleigh, Portland, Seattle and Denver on the list. Citing strong job and population growth and cost of living as critical factors in all markets, these eight cities are bucking the greater national trend of declining home sales. Over 46 percent of all homes placed on the market in February 2014 were sold within two weeks. Anyone currently shopping for a home knows Austin's real estate is red-hot. Properties are often sold within just days or even hours of being listed. Redfin notes that houses in Austin spent an average of just 26 days on the market in February 2014 before they were purchased, a significant decline from the 40-day average just over a year before.

In addition to a healthy economy and job growth, Redfin also points to Austin's relative affordability — and lack of inventory — as reasons for the competitiveness. This February there was a 12.5 percent decline in inventory, coupled with a 3.3 percent increase in sales. “Buyers should prepare themselves: These markets are shaping up to be even more competitive than they were in 2013,” says the study. Much of this housing market boom is from folks relocating to trendy areas. According to a survey conducted by Redfin, many people looking for homes in the south cited job opportunities as their No. 1 reason for relocating to Texas. And although Austin has the hottest market in the Lone Star State, according to this study, Dallas and Houston are close behind. Economics aside, Redfin also points to another interesting cultural trend. Because the population of most of these cities are around child-bearing age, families are not only growing with the addition of kids, they're seeing an increase in "traveling grandparents," folks that leave behind their own cities to be near their children and grandchildren.

200

180

160

140

120

100

Major Cities Single-Family Housing Construction Permits Major Cities Month of Inventory Note :Seasonally adjusted Sources: U.S. Census Brureau and Real Estate Center at Texas A&M University Index 200= 100 Austin-Round Rock Dallas-Fort Worth-Arlington Houston-The Woodlands-Sugar Land

San Antonio-New Braunfels

Austin Real Estate Market In Austin, during the four quarters ending 1Q2012, 13.3% of all new housing starts were priced less than $150,000. By 1Q2013 that percentage had decreased to 11.1% of annual starts, and as of 1Q2014 only 4.3% of annual starts in Austin were priced under $150,000. During that same period, starts on homes priced greater than $300,000 grew from 22.2% to 36.4%. “As more builders focus their product to the buyer from $300,000 to $500,000, others are employing creative solutions to bring product to market that is more in-line with the historical pricing trends in Austin. Some of these tactics include introducing the detached condo product, entering new submarkets, or even expanding the range of gentrification. Austin continues to expand the heart of its new home market while these creative solutions add diversity to the market’s housing mix,” said Madison Inselmann, Regional Director of Metrostudy’s Austin market5.

Austin Housing Market Starts 2014 Strong: New Home Starts & Vacant Developed Lots up in a Big Way Posted in Austin Market | Posted on 04-17-2014 |

Written by Metrostudy News Metrostudy, a housing information and consulting firm, reported today that their quarterly survey of the Austin market revealed a 16% increase in new home starts from 1Q-13. Metrostudy’s survey recorded 2,209 new detached home starts in the first quarter of 2014, a 16% increase from 1Q-13’s total. Austin builders started 9,668 new homes in the last twelve months, representing a 15% increase year-over-year. At the same time, area builders closed 2,045 new homes in the last three months, 2% more than the first quarter of last year. Over the last four quarters, builders have closed 8,916 new homes, a 19% increase over the prior four quarters. “The strength of demand over the last eighteen months has once again emboldened builders and developers to invest in new areas in order to keep up with the growing variety of buyers in the changing Austin market,” said Madison Inselmann, Regional Director of Metrostudy’s Austin market. “In order to meet the demand of today’s buyer, the market is moving into new submarkets and is introducing some new product offerings.” “Just likethe year before, developers start 2014 strongly by delivering more than 2,500 vacant developed lots to the market in the first quarter. Hopefully, unlike last year, this kind of delivery can continue through the end of the year as the Austin

Distribution of Annual Starts by price AUSTIN MARKET 30%

26.6%

25% 20% 15%

15.3%

13.1%

10% 5%

4.3% <$150

$150-$199

$200-$249 1Q2012

$250-$299 1Q2013

$300-$499 1Q2014

THE MARKET

5Texas Remodel Valuation Report 2014 Edition Release date: April 1, 2014 . http://www.metrostudyreport.com/category/austin-market/

$500-$749

$500+

market remains tight on available lots,” says Inselmann. The 2,584 vacant developed lots delivered in the first quarter represent the largest single quarter delivery since the first quarter of 2008. Over the last twelve months, developers have brought 8,404 lots to market, more than 1,200 fewer than were absorbed over that same period. As a result, the total lot count in Austin stands at 14,219, 8% below 1Q-13’s count. The growth in new home starts has dropped the relative lot supply in Austin to 17.6 months, below the 20 months considered equilibrium in the Austin market. “The lot delivery in the first quarter was a welcomed sight after the disappointingly light delivery to end 2013. That being said, we won’t ease this lot crunch until we see consecutive quarters of delivery on this scale,” states Inselmann. Amongst all of the positive metrics experienced in 2013 (increase in starts, rising prices, and strong in-migration), one of the more significant numbers was the increase in model homes open for business. By opening new subdivisions and sections, the market will be able to meet the robust demand in 2014 more efficiently than it could by just extending existing developments, according to Metrostudy.

and the inquiries for new projects score was 58.5, a decrease of 0.7 points over the previous month.

“The unusually cold weather may have kept traffic numbers down to start the year but the new home marketed continued to expand nevertheless. With strong job and population growth at our backs, the new home market should continue to expand in relation to our ability to deliver lots to market. As we do continue to expand, it will be important to keep an eye on affordability in the production home market, as the median new home price continues to tick up in relation to the median household income in the Austin MSA,” concludes Mr. Inselmann.

Wooden deck additions ranked in the top five for total recoup cost nationwide, in the south west central U.S., Austin, Dallas, and San Antonio, recouping up to 111.9 percent of the total project cost.

Marketwide Trends In all markets, practical remodels that directly improved a home’s functionality, sustainability, and curb appeal were generally more profitable than upscale, luxury projects in 2013. Small projects that increased a home’s curb appeal (and thus its sell factor) continued to be popular in 2013: a steel entry door replacement ranked No.1 in total recoup cost nationwide, in the west south central U.S., and in Houston, recouping up to 105.5 percent of the total project cost. Fiber-cement siding replacement ranked in the top five for total recoup cost nationwide, in the west south central U.S., Dallas, Houston, and San Antonio, recouping up to 93.2 percent of the total project cost. In general, Profitable projects were also those that added livable square footage to a home using existing spaces.

ARCHITECTURE The Architecture Billings Index, developed by the American Institute of Architects, stood at 50.4 for January 2014, an increase of 1.9 points over the previous month (any score above 50 indicates an increase in billings). Both the project inquiries index Housing Solar Pannel

Smaller projects that boost a home’s curb appeal continued to be popular in most markets. Steel entry door replacements, for example, ranked No. 1 for total recoup cost nationwide, in the south west central U.S., and in Houston, recouping up to 105.5 percent of the total project cost. In addition, projects that increased a home’s livable square footage using existing spaces showed significantly higher recoup cost values and growth in 2013. Basement remodels ranked in the top five for recoup cost in four of the five major cities in Texas, recouping up to 99.6 percent of the total project cost. Major renovations were popular in more functional rooms such as kitchens and bathrooms. Kitchen remodeling projects ranked in the top five for recoup cost growth in all five Texas metro areas, recouping up to 143.9 percent of the total project cost. The largest gain in recoup cost in 2013 was in backup power generator installation, which increased 14.8 percent ($1,576) to recoup 67.5 percent ($7,922) of the total project cost. Finally, projects that increased a home’s sustainability showed significantly higher recoup cost values and growth in 2013. Backup power generators ranked No. 1 for recoup cost growth in Austin, El Paso and Houston – including a 105.1 percent gain in recoup cost in El Paso. In addition, natural materials (wood, cement, steel) led to a significantly higher recoup cost than synthetic, plastics-based materials (composites, vinyl)5.

THE CUSTOMERS

Customer demographics Home Buyers Born between 1979 and 2000, the nation’s 80 million Echo Boomers, also known as generation Y (Gen Y) or millenials, represent more than 25 percent of the U.S. population. The sheer size of this generation indicates that “its impact on real estate and the economy in general will be as striking and long-lasting as that of the baby boomers,” says Leanne Lachman, Urban Land Institute (ULI) leader and president of Lachman Associates, a real estate consulting and research firm that recently concluded a nationwide survey of Gen Y for ULI. Both the ULI survey and an earlier study by RCLCO, a marketing consulting and research firm headquartered in the District of Columbia, suggest that this group is the primary catalyst for a surge in urban multifamily development for the short and mid term and for the eventual return of the housing market. The ULI survey of 1,241, 18- to 32-year-olds revealed that Gen Yers expect to buy a home within the next three to five years. But Patrick Phillips, the Institute’s chief executive officer, says he believes this goal may be delayed for years due to fallout from the recession, weak employment, stricter credit rules and mortgage market reforms. Studies indicate that Generation Y population is more ethnically diverse than previous generations, and thar it welcomes diversity in all aspects of their lives. ULI member Duggal noted that they are comfortable with mass transit and want to live within the urban core. They can’t afford high rents and are open to trade-offs to be in the right location.

THE MARKET

5Texas Remodel Valuation Report 2014 Edition Release date: April 1, 2014

Key Customers

Austin and the Gen Y

Nation-wide investment-home buyers in 2013 had a median age of 42, earned $111,400 and bought a home that was relatively close to their primary residence – a median distance of 20 miles. Fifty percent of investment buyers said they purchased for rental income, 34 percent wanted to diversify their investments or saw a good investment opportunity, and 22 percent bought for a family member, friend or relative to use – often to house a son or daughter while attending college. Seven percent of homes purchased by investment buyers last year have already been resold, and another 10 percent are planned to be sold within a year. Overall, investment buyers plan to hold the property for a median of 5 years, down from 8 years in 20126.

Overall, age demographics in Austin are following national trends, with a large population of Gen Yers demanding housing to rent or buy as they turn 22. Ranking No.6 among the top 50 metro areas in U.S at 2009, Austin is right in the center of the new twitter-sphere. This vibrant and eclectic city is home of nearly two dozen of colleges and universities that add a total population of 181,200 registered students. Altogether these institutions graduate over 15,000 students every year. This provides one of the largest educated workforces in the country with 38.2 percent of its population over age 25 holding a bachelor’s degree or higher. According to local sources, it is believed that over 30 percent of these fresh-college-graduates are able to find a job and stay in Austin7.

MOST EDUCATED

Top 50 Metro Areas,2009

AUSTIN

*Based on population 25 years and older with at least a bachelor’s degree. Source: U.S. Bureau of the Census. Figure 2: Austin’s Education Attainment

Based on the population 25 years and older with at least a bachelor’s degree Source: U.S. Bureau of the Census. From: www.austintexasnow.com. This Information has not been validated.

6 7

Austin people life

According to a 2008 housing market report conducted by BBC Research & Consulting of Denver (BBC), in Austin, young workers, which comprise the largest occupational category, earn an average of $22,000 to $40,000 per year. This group of residents makes up the low-to middle-income renters who cannot find affordable rental units near the urban center of Austin. Austinâ&#x20AC;&#x2122;s moderate and high paying jobs are heavily concentrated around Mo-Pac, in the southwest and western portions of the city, and downtown, as well as in north Austin. Since housing in downtown and west Austin currently caters to a small subset of workers, in these employment centers, these neighborhoods have become the most expensive parts of the city. This has forced other residents, such as young professionals and lower-earning workers to find more affordable residences further away from Austinâ&#x20AC;&#x2122;s employment opportunities creating increased traffic along major arteries. Unfortunately, those who frequent and most enjoy the living experience that downtown

THE MARKET

offers are unable to afford rent and home prices. As far as transportation, during the past decades, the City of Austin has made important investments in public transit infrastructure in an attempt to increase accessibility to job centers. Capital Metro has taken the lead on growing mass transit and existing railroad lines in order to connect neighborhoods with downtown, and designating special corridors and transit oriented development around the main stations. As additional mass transit systems, (the new rapid bus system, for example), are added to the network, Austin becomes more compatible with a lifestyle based on public transportation than on driving. In Austin, many young people choose to replace driving, not only with public transportation, but also other alternatives such as Zip Car and Car2go. According to a recent survey by KRC Research and Zip Car, 45 percent of people between 18 and 34

years of age surveyed, said they have consciously made an effort to replace driving with transportation alternatives. This percentage is considerably higher than the 32 percent of older populations consciously committed to transportation alternatives. This survey shows that “public transportation is more compatible with a lifestyle based on mobility and peer-to-peer connectivity than driving” (Davis and Dutzik 2012, 3). Additionally, small cars and alternative vehicles such as Mini Cooper, Fiat 500, Scion are scoring at the top of the national ranking sales in North America (Grattan 2012). It seems evident that size is not an issue when brand perception, singular life-style, cost, and gas mileage are present. One can argue that this may also be true when it comes to housing preferences for this age group. Finally, signs of the importance of Gen Yers in Austin will become more relevant as the city expands and becomes less affordable. The shift in transportation trends could shake the foundations of transportation policy-making and the way we develop new housing to meet the demand. As many of the nation’s, and especially Austin’s youth prefer to live

in places where they can easily walk, bike, and take public transportation, the success of the City of Austin will depend on how well it offers adequate, affordable housing, with proximity to employment centers, social events and services, to this group. Chapter 2 will explore the issues surrounding housing affordability that affects Generation Y and it will review approaches used by other cities to alleviate this problem. Social interaction and a civic-minded value system are hallmarks of this generation and integral to Gen Y lifestyle and behavior. Coined the “we generation,” Gen Yers are known for their preoccupation with socializing and their open support to local economy. Thus, they desire housing in active, urban neighborhoods that have amenities and services that offer opportunities to interact with peers and enhance the social experience. In general, they are more social than any previous generation.

GENERATION Y POPULATION AUSTIN MSA AND TRAVIS COUNTY

Population 2010

Age 18 to 34 years

Share of the population

ExpectedRenters in 2015 (ULI survey)

Travis County

1,006,003

318,903

31,7%

105,238

Austin MSA

1,681,506

484,274

28,8%

159,810

2010

Source: 2010 U.S. Census Share of expected renters in 2015 obtained from ULI/Lachman Survey, (2010) estimated in 33% of the population age 18-34 yrs. Table 1: Generation Y Austin's Population

S.W.O.T. ANALYSIS

Strengths

STREGTHS

Multidisciplinary experience in the field gain for years of professional work and the highest level of related education Market analysis expertise and knowledge in urban planning and land development policy Local and international networking and connection with potential investors

Weaknesses

WEAKNESSES

New company in a competed local market Customers facing difficulties to borrow money. Exposure always changing housing market conditions Lawsuits and legal claims Licenses and land availability

Construction and management experience Low administrative and overhead cost that allow us to compete in price Absolute in-house control of the design process and program criteria Experience working with local authorities

Opportunities OPPORTUNITIES

Threats

Build on international experience to enrich the local development scene

Financing problems to leverage larger projects

Good market reception for quality and environmental friendly projects and developments Build brand loyalty with foreign investors willing to break into more sustainable housing markets Combine local art initiatives for social and economic interaction through design and real estate development

THE MARKET

THREATS

The most significant challenges ahead include securing a suitable location, establishing the initial client base, and ultimately positioning the firm to be able to have a presence in a larger, regional market Intense competition from larger real estate investors firms and hedge funds groups jumping into distressed properties

“WE CONSIDER OUR WEAKNESSES AND THREATS TO BE OPPORTUNITIES FOR LEARNING AND WE KEEP MOVING FORWARD

”

GCDD COMPETITORS Competitor details

Placed in Austin CBD, the company will face high competition. However, after defining our company scope and type of services, the firm overlaps with four other firms ranging from design and build firms to small home builders. These are the following: MX3 Homes is a small custom home builder that started business after the mortgage crisis hit in 2009, and exclusively builds contemporary housing in Austin’s central neighborhoods. This group develops real estate projects in areas close to Austin’s Downtown, specifically in neighborhoods that are experiencing a cultural boom. They build homes to fit the needs of this market. Houses are located in hip and upcoming neighborhoods such as East Austin, Crestview, Allandale, South Central, Bouldin, among others. Typically, the selected neighborhoods are experiencing some of the most innovative and interesting restaurants and shops. They purchase

1907 E 20th St MX3 Homes

THE MARKET

dilapidated or “tear down” homes and build new ones in prime locations where lots are scarce and unavailable. These type of modern bungalows homes are targeting young individuals or families with no kids between 30-40 years of age. MX3 homes currently for sale are over $150-$380 per square foot and the median price is $385,000. Moontower Design Build is a design and construction team in Austin. Moontower provides residential design and construction services for young and entrepreneurial consumers in Austin. Moontower provides backyard design services, interior design, and homes retrofit. Moontower project sizes varies and it is a consider a small-size firm with 1-5 employees. Verde Builder. It is a local home builder. It offers cost efficient, sustainable, eco-friendly custom home building and remodeling throughout the Greater Austin area. These homes are targeting young individuals or families with no kids between 30-40 years of age. Verde Builder homes currently for sale are over $160 per square foot and the median price is $385,000.

2011 East 10th Verde Builders

Hyde Park Background Overhaul Moontower

Competitor ESTABLISHED Establishe Size Value toTO VALUE COMPETITOR EMPLOYERS HOME SIZE CUSTOMERS DATE d date customers [MX3 Homes]

[Moontower]

Weaknesses WEAKNESSES

2009

6-10

Around Large scale 2,000 custom homes. 2,500 sq.ft. More than 5 years of local experience. Large scale investors.

Well established relations with investors and lenders, aggressive acquisition strategy and expansion. Strong presence in the area.

Medium to low quality designs. Great exposure to changing condition of housing submarkets. The highest price per sq. ft. in the area. Third party design consultant that adds additional development costs.

2010

2-5

Large scale Around custom homes. 1,000 2,500 sq.ft. Home designed with advanced sustainable features. They provide Financing and lending. Local experience.

Well-respected building experience and business networking in the industry locally. Creative approach and unique design features.

Outsource of architectural services adding development costs. Oversized properties not aligned with buyers demands and trends

2-5

Good and stylish Around Medium scale 500 - 2,500 custom homes. design. sq.ft. Home designed with advance sustainable features and projects with unique character in architectural design.

HOMES

[Verde Builders]

Strengths STRENGTHS

Lack of managerial experience.

CURRENT PROJECTS 60

NEW BONES & OLD SOUL 3014 east 13th street

Fully remodeled house buit in 1947 of 1,246 sq. ft. with a vernacular minimalist interior design located in one of the hottest neighborhoods of Austin.

AFTER

DURING

BEFORE

INVESTMENT PROPERTIES 62

â&#x20AC;&#x153;... the house fits in seamlessly with the rest of the neighborhood, which is important to us.â&#x20AC;? Rachellen & Ray - New homeowners.

“The thoughtfulness of the layout and attention to detail is remarkable. Andres Galindo and his colleagues did amazing work.” Rachellen & Ray - New homeowners.

“... We love how bright and airy the house is, especially the exposed rafters in the living room with the bits of glass in between to allow more sunlight.” Rachellen & Ray - New homeowners.

“... when we saw this home, we knew that we could be happy there and could stay there for the rest of our lives.”

Rachellen & Ray - New homeowners.

INVESTMENT PROPERTIES 64

The property was sold in

3 days for $330 sq.ft.

13 min 8 min

11 min 6 min

U.T.

Mueller H-E-B

18 min 10 min

DownTown

5 min 3 min

3014 E 13 th St

MLKTrain

Station

20 min 9 min

ATX Airport

13 min 4 min

Walnut Creek

EAST AUSTIN BOUNDARIES •Radiant-barrier metal roof •Soy-based spray foam insulation sprayed between the rafters to form a thermal envelope in the attic •Whole-house on-demand water heater •Energy Star rated appliances •Right-sized air conditioning system (based on a Manual J calculation) and programmable thermostat •Custom double-pane, Fibrex® frame, low-E windows •Low-flow plumbing fixtures •Reclaimed wood floors. •No-VOC paints and adhesives •Silestone countertops •Custom cabinets made with no- or low-VOC adhesives

W.I.C.

BATH

FLEXROOM

BEDROOM 1 LIVING

UTILITIES

MASTER BEDROOM

COVERED PORCH

W.I.C.

UNCOVERED PATIO

KITCHEN DINING MASTER BATH

SINK W/DISP.

PARTIALLY COVERED PARKING

COVERED ENTRY

3 BR -2 BA 3 bedrooms + 2 bathrooms Integrated Kitchen / Living / Dining Private front Porch in Master Bedroom Wood deck @ backyard

MARKETING STRATEGY

INVESTMENT AND DEVELOPMENT Strategy: Branding is crucial in the world of real estate, thus visibility is key. Our strategy begins by investing in self-financed small residential projects, including distressed and dilapidated properties located within the Austin’s urban core to be redeveloped or rehabilitated following high quality design and energy efficiency standards. The type of housing we propose is expected to generate market exposure of our firm’s capacity to deliver innovative, responsible, and outstanding housing. In order to make these houses easily recognizable we created the concept of Sustainable Urban Residential Home or (SUR Home). SUR Homes will show distinguishing modern architectural features in the exterior made with novel materials like steel, wood and masonry, which entails the respect and care we aim for. Overall, we believe that infill construction helps to regenerate, recycle, beautify, and keep Austinites connected to their homes and to their vibrant communities. Investing in highly transited neighborhoods allows us to position our company as an alternative to large and traditional design & build firms. We plan to increase presence using social media and eMarketing techniques as a platform to reach out to our potential clients (E.g. Houzz: Pro Subscription Program)

COMMUNITY APPROACH Strategy: Attracting local media and specialized magazines by combining real estate, design, and local art production. We propose the concept of Two Day Art and Open House event to launch the sale a home. This is an innovative way to integrate local art within our housing production. By partnering with artists that reside in the neighborhoods we can use real estate as a platform for local artist. We help communities and local artists to market their work by providing them with

MARKETING STRATEGY

a unique space to exhibit and sall their art . The idea is to transform the houses for sale into temporary art galleries that will be decorated and furnished with local artists’ production. This marketing technique is being used more and more frequently by local bars, restaurants, and mom and pop stores in order to draw customers that praise, recognize and embrace local art expressions. Embracing local and neighbourhood spirit is one of our core principles and we want to convey that to our clients, investors, and buyers. Local Magazines: Tribeza, Austin Home, Etc. Join local or regional groups or organizations such as Chambers of Commerce and Independent business alliances. Groups often serve a dual purpose. First, they serve as business networks to provide marketing and connect members to potential sales leads and suppliers. Second, they serve as advocacy groups, bringing together many small businesses to provide a stronger voice in regional or national politics.

Planned promotion /advertising PLANNED PROMOTION/ADVERTISING type

Expected business improvement EXPECTED BUSINESS

Cost ($)

Target TARGET date DATE

Online Advertising HOUZZ.com

Paid advertisements and banners. Increasing exposure to potential customers looking for design services.

$3,000

2014

Mail-Out Postcards and direct email campaign

To reach out at new investors and potential clients

Search Engine Optimization (SEO).

Using pay-per-click advertising such as Google Ad-words and Overture.com (Yahoo!).

$350

Lawn signs and banners

Use space and exterior wall of properties to advertise the company, draw people to visit our web-site and capture new clientele

$50

Art and Open house event

Attract local artists and design savvy clients. Generate news in local media and newspapers. Mailers

$2,500

IMPROVEMENT

Channel type

Products/service

Percentage of sales (%)

Advantages

Internet

Major Listing Service (MLS)

85%

More than 95% of realtors have access to this database

Direct Mail

Foreclosure listing Services

Best Business Bureau BBB

Online Services

10%

COST

2014 2015

2014

Disadvantages

Access to mail address of Low turn over potential and motivated sellers. New owner may require design and construction service to update properties High number of customers looking for contractors and design services. Good reputation

Sales Channels

THE FUTURE

VISION STATEMENT Austin is the most attractive destination in Texas for international investors that aim for solid investments in local and sustainable development. Austin offers diverse, dense and sustainable housing options, where infill development is a priority for its growth. Through our comprehensive services, we guide and support our clients to make a difference in our world. We not only make great investments, but also contribute to the built environment and provide innovative solutions to the housing market, creating a better and more livable Austin.

Mission statement GCDD Group creates and improves a diversity of housing products and meaningful investments for homeowners, and local and international investors by providing fully comprehensive services that include all aspects of building design.

Our Logo

In many cultures, the image of the deer has been connected to the idea of a fresh perspective on old issues. Nowadays, housing has become the most important and perhaps the largest single investment that a person will make in their lifetime. The image of a deer signifies wisdom, grace, determination, ability to regenerate, and strong intuition. These characteristics that intrinsically rooted in our approach toward every project that we undertake. We have chosen the

MARKETING STRATEGY

deer as the company’s iconic image because it represents the art of being both determined and gentle, two principles that are embedded in our vision. Our company’s culture rely on the passion to find opportunities to revise and reverse patterns of thought, establishments, behaviors that no longer serve the purposes of current needs. As a deer, we are in tune with nature and all it comprises, and when it comes to housing we take all detail into consideration. Watchfulness, regrowth, creativity, beauty, peace, strength, and abundance are adjectives that describe our attitude.

Goals/objectives • Position GCDD Group at the forefront of the next generation of design in real estate investment and development in Central Texas, combining a passion for real estate investment with a defined vision for innovative design and lifestyle • Expand and improve the diversity of housing production in the heart of Austin, creating a more sustainable and livable environment. • We are our clients most trusted provider of investment products that bring the highest quality of design and the best value for their investment. • Support our projects with the most advanced technology to ensure high efficiency and competiveness. • Operate profitably to expand our business and our market. Create or collaborate with non-profit organizations to produce affordable housing for families with low and moderate incomes. • Expand our collaborative practice and work with other business and disciplines to capture new markets. • Obtain AIA and LEED accreditations. • Build a sustainable client base that is enthusiastically satisfied.

Action plan Please note: This table does not include sustainability milestones as they are listed in the sustainability section above.

OF DateDATE of expected EXPECTED completion

Person PERSON responsible

Obtain home builder credential and professional education, including OSHA card and General contractor license

2015

Andres Galindo

Build a Database with potential clients and investors, locally and internationally.

2015

Carla Schuessler

Obtain Texas AIA certification. The National Council of Architectural Registration Boards (NCARB)

2017

Jimena Cruz Pifano

Ask for referrals and keep tract of customer satisfaction

2015

Carla Schuessler

2015

Andres Galindo

Milestone

MILESTONE

Get involved with the planning commission meetings and participate actively in networking events within industry organizations

COMPLETION

RESPONSABLE

THE FINANCES

KEY OBJECTIVES & FINANCIAL REVIEW Financial objectives

In order to launch the company and to assure the completion of its first two residential developments in Year 1, GCDD Group has secured a total amount of investment of $375.000 as permanent capital.

EQUITY AND LIABILITIES

$25,000 8%

$8,000 3%

This capital is already being allocated to set up the operations of the company, acquire equipment and specialized software, payroll, lease office space, advertisement, property acquisitions and development of it first two residential projects. Up to date, its founders have actively invested in permanent capital and equipment the amount of $375,000. Additional funding has been obtained through a line of credit with a private investor in the order of $25,000 at 7.99% APR payable in 90 amortized payments.

$268,834 89%

Equity from Shareholders ($) Project Loans / Line of Credit Credit Cards

INVESTMENT COMPARISON

TYPICAL RATE OF RETURN

EASE OF ACCESS TO FUNDS

TAX ADVANTAGES

LEVERAGE/ APPRETIATION

ABILITY TO CONTROL RISK

EXPENSIVE FEES

WILL BANKS LEND FOR

CD´s

(1.31-2.23%) APR

LIMITED

NONE

N/A

IRA´s

VARIABLE

LIMITED

NONE

YES

BANK ACCOUNT

(0.85-1.05%) APR

UNLIMITED

NONE

N/A

MINIMAL

MUTUAL FUNDS

VARIABLE

LIMITED

NONE

YES

STOCKS

VARIABLE

UNLIMITED

NONE

YES

REAL STATE INVESTMENT

(7-10%) APR BACKED BY REAL STATE

LIMITED

YES

* Info from: http://www.bankrate.com/

Future Capital Required

Financial Assumptions

In addition to the $300,000 that has already been invested in the company, which will cover the entire operation of it, we plan to raise additional $500,000 - $750,000 of investment capital by the end of year two in other to increase our purchasing capacity and revenue base. Most of the company's future liabilities will come from qualified private investors and management investment. We offer several exit opportunities to our investors, including the sale of the entire property or development, leasing it out or refinancing at a later date. On a current basis, investors can expect an annual ROI between 9% and 12.5% before taxes payable at the end of year two (Please see the Investor’s Memorandum Attached).

It is assumed that:

Key Considerations Up to date, we have received letters of interest from several investors motivated in participating with us in small- and middle-size residential developments ranging from two to ten homes. We are anticipating that after the completion of our first two developments, along with the formal take-off of our fund raise marketing strategy, the number of investors will grow significantly based of the quality of our products and the returns given. During the first two years, we will also leverage from banks and lending institutions. The company expects to reach profitability on year two of operation, and does not anticipate any serious cash flow problems. Conservatively, we anticipate that during the first three years, accumulated income per quarter per segment will be adequate to expand our operations as we diversify our portfolio of services.

•GCDD Group will start two mid-size residential projects (Remodeling or new construction of single-family homes or duplex) and each will take no more than 6 months to complete. The following is the production volume for the next five years: o Year One (2015): 2 homes o Year Two (2016): 2-4 homes o Year Three (2018): 4-5 homes o Year Four (2019): 4-6 homes o Year Five (2020): 6-8 homes •The square footage and purchase price of each property will vary but should range from 1,250 to 1,700 Sq. ft., preferably in lots larger than .14 acres at a price of no more than $215,000. •Construction cost for remodeling projects will vary largely based on the conditions and the scope of work required. (Approximately $50 -$80 /sq. ft.) •Total Construction costs required per property is expected to decrease as project managers, designers, and contractors involved introduce value engineering techniques to improve production time and labor skills. It is expected that the cost will decrease annually at a rate of 1-2% from year one. •Construction cost for new projects will vary largely based on the condition and the scope of work required. (Approximately $125 -$185/sq. ft.) •Turn Time on average is 180 days (6 months) from purchase to resale closing. This time may vary depending on the scope of the project. •The total investment to be allocated in each qualified property will range from $250,000 to $400.000 -including improvements, purchase price and commissions.

THE FINANCES

During the development period the company must guarantee that all cash is available to operate the company until the property is sold (Approximately 6 months). •The sale price of each property will be based on market derivatives (price per square footage $/sq. ft. and the size of the property, and it will range from $300,000 to $600,000. •We anticipate gross revenues coming from a single development investment in the order of $65,000 and $125,000 Starting on year one, GCDD Group plans to raise additional cash from qualified investors to fund larger projects aiming to bring additional $500,000 - $750,000 in equity interest in the company or as promissory notes, depending on the conditions of each deal.

Single-Family Homes # Units Built Total Sales per Unit Real Estate Sale Commissions (Paid-Out)

Growth 2015 Rate

2014 2 $350.000

$198.500 Construction Cost $85.000 Total COGS

$299.250 Total Margin $50.750 Gross Margin/ Total 17% Sales Total Margin Accumulated $101.500 TOTAL GROSS SALES

$700.000

•Additional developments that involve small residential communities of over 10 detached single-family homes are currently being discussed. Its correspondent cash flow analysis is not included in this business plan. (SANA Community Life at West Lake Hills and SUR Properties at East-Austin) •Real Estate Sales Commissions are 3% of sales (From SUR Properties, a Real Estate a subsidiary Company of GCDD Group that will be created in 2014) •Real Estate Purchase Commissions are 3% of any acquisition.

Growth 2016 Rate

Growth 2017 Rate 5

$371.000

$393.260

5% $412.923

5% $433.569

5% $455.248

$11.798

$12.388

$13.007

$13.657

8% $250.053

8% $270.057

8% $291.662

$214.380

$231.530

$85.000

-2%

$83.300

$316.075

$326.628

-3%

$80.801

5% $343.242

17%

-4%

$77.569

29%

2019

67%

Growth Rate

2018

$16.695

20%

Growth Rate

50%

$15.750

Purchase Price

•Return of investment offered for investors as interest rates will be negotiable between the parts, and we estimate that it will be no less than 8% annually, two annual payments of interest only and one payment of capital in the year two.

-5%

$73.691

5% $360.633

5% $379.010

$54.925

21%

$66.632

$69.681

$72.936

$76.238

17%

20%

-0%

20%

-0%

20%

62%

$164.775

102%

$333.159

$1.113.000

$1.966.300

25% $418.089 $2.477.538

22% $510.552

34% $686.142

$3.034.984

$4.097.228

Design and Consulting Services

ly for year one and two.

•We expect gross annual revenues coming from design services and consulting in the order of $20,000 and $30,000.

•Upon attaining the Architecture License, we anticipate a lift in design fee of 60%, predicted to happen on year 2016.

•The cost of services is approximately 70%, which comes mostly from labor, software, and printing.

•After year three (2017) we expect our revenues to jump to $50,000 and $80,000

•We anticipate our revenues to grow 15% annual-

REVENUE REVENUE

2014

2015

2016

2015

2016

2017

2018

2019

Income Rental Income Design and Consulting Services Single-Family Homes Real Estate Commissions Adquisitions

430,00

0,00

27.172,21

30.432,88

41.084,38

55.463,92

62.119,58

69.573,94

700.000,00

1.113.000,00

1.966.300,00

2.477.538,00

3.034.984,05

4.097.228,47

4.225,00

9.647,10

34.729,56

45.009,51

56.711,98

78.748,64

General Assumptions

Macro-economic Indicators

Austin Indicators

•We forecast average U.S. inflation of 2.1%

•Average number of days number of days single-family homes spent on the market 45 days

•Interest rates expected to rise: 10-year U.S. Treasury yield forecast to reach 4.4%

•The median price for single-family homes will increase 6% annually

•Equities expected to deliver respectable single-digit returns 7.0% nominal annualized return

•The number of leases will increase 7% annually

•Industry gross profit margin rates ranges from 18%-21% (National Home Builders Association 2012).The percentage points in each category: Subsistence 5% Survivor 10% Marginal 15% Solid 20% Strong 25% Exceptional 30% Extreme 35%

THE FINANCES

•Fiscal Year (FY) 2014 Median Family Income $75,400 Tax Considerations Corporate Tax Rate 28% Depreciable life 27,5 years (Only for period longer than a year) The following financial summary is based on upon successful completion of all the projects as delineated above, and is presented for illustration purposes only. No distributions or return of capital is contemplated within these figures.

Investment Study Case

Property 3014 E 13th ST. Austin, TX 78702 Total Built Area: 1,860 sq. ft. Total Heated Area: 1,300 m2

Profit and Loss: One Single-Family Home 3014 E 13th ST Austin TX 78701

Projected Sale Price of Home at Completion Single-Family Home

350.000

Minus: Sales Commissions

-15.750

NET SALES PRICE

$334.250

Cost Budget Land / Purchase Property (1,245 sq. ft. in .1316 Acres)

192.750

Construction Cost (1,300 sq. ft. )

71.500

Foundation, Siding, framing, windows, landscaping, plumbing, interior finishes and tiles. Total Purchase and Construction Basic Living

$-264.250

Necesities Kitchen

6.500

Appliances. Energy Star Certified

3.200

Air conditioner. Energy Star Certified

1.800

Water Heater. Energy Star Certified

1.550

Total Basic Living necesities Total Costs

$-13.050

$-277.300

NET PROFIT

(Unleveraged)

$56.950

Return of

Investment ROI

21%

Prospect Buyerâ&#x20AC;&#x2122;s Analysis Our first priority is to help the seller set a realistic price on their property. In order to guaranty a properties are competitive and that will be absorbed by the market in short time, we examine the purchasing power of our potential final buyer. For example, if the home price is $350,000.00 and the buyer were to put $75,000.00 down (20% of the homeâ&#x20AC;&#x2122;s price)on a 30 year loan with a 5.000% interest rate, the total payment on the principal and interest will be $1,476.26. If the annual property taxes are $3,700.00 and the annual insurance is $1,500.00 that will bring the total monthly payment to $1,909.59. With a monthly payment of this amount, the total gross monthly income of the buyer will need to be at least $6,365.31 or an annual salary of $76,380.00 in order to qualify for the loan. (Fiscal Year (FY) 2014 Median Family Income $75,400). The median home value in the Zip code 78702 is $269,000 or $ between $ 200 and $250/ sq. ft. 78702 home values have gone up 16.4% over the past year, and Zillow predicts they will rise 3.3% within the next year. The median price of homes currently listed in 78702 as of May 2014 is $350,000. Average Rents list price / sq. ft. is $1.70. Considering the house will draw a lot of attention for its unique design and new features and that is in a prime location the rents would be $2,100 or $700 per bedroom.

THE FINANCES

Financial Analysis Summary Cash Flow Sales Less: Cost of Goods Sold Gross Income Less: Overhead Net Income (before real estate) Operating Expenses Lease Payments Mortgage Interest Payment Tax Depreciation Taxable Income Less: Tax Income After-Tax Plus: Depreciation Less: Mortage Balance After-Tax Cash Flow Profit

2015 2016 2017 2018 2019 2020 731.827 1.153.080 2.042.114 2.578.011 3.153.816 4.245.551 589.389 948.237 1.633.160 2.059.472 2.524.457 3.411.117 142.438 204.843 408.954 518.540 629.359 834.434 142.438

204.843

408.954

518.540

629.359

834.434

97.307 45.131 12.637 32.494

136.267 68.576 19.201 49.374

190.830 218.123 61.074 157.049

419.608 98.931 27.701 71.231

303.242 326.117 91.313 234.804

306.572 527.862 147.801 380.061

$32.494 $49.374 $157.049 $71.231 $234.804 $380.061 4,4% 4,3% 7,7% 2,8% 7,4% 9,0%

Balance Sheet

BALANCE SHEET

Sep 6 - Dec 31, 2013 Jan - Jun, 2014 ASSETS Current Assets Bank Accounts Business Advantage Chk (3900) Total Bank Accounts Accounts Receivable Accounts Receivable (A/R) Total Accounts Receivable Total Current Assets Fixed Assets 3014 E 13th St Buildings Improvements Total 3014 E 13th St Software Total Fixed Assets Other Assets Accumulated Amortization Escrow Deposit Organizational Costs Total Other Assets TOTAL ASSETS LIABILITIES AND EQUITY Liabilities Current Liabilities Credit Cards CORP (7372) HomeDepot Credit Card Total Credit Cards Other Current Liabilities Payroll Tax Liabilities Renters Deposit

THE FINANCES

154.036,28

24.937,88

154.036,28

24.937,88

0,00 0,00 154.036,28

2.648,00 2.648,00 27.585,88

0,00 0,00 0,00 0,00 0,00 0,00

0,00 192.809,80 25.649,82 218.459,62 1.095,98 219.555,60

-70,00 45.000,00 350,00 45.280,00 199.316,28

-70,00 0,00 350,00 280,00 247.421,48

1.119,11 0,00 1.119,11

2.147,77 4.969,97 7.117,74

0,00 0,00

2.497,88 0,00

Total Other Current Liabilities Total Current Liabilities Long-Term Liabilities N/P - AG N/P - AVG N/P - PCB Project Loan Total Long-Term Liabilities Total Liabilities Equity Additional Capital Paid-In Capital Stock Retained Earnings Net Income Total Equity

0,00 1.119,11

2.497,88 9.615,62

2.433,93

953,83 0,00

0,00 0,00 2.433,93 3.553,04

8.560,60 9.514,43 19.130,05

198.000,00 1.000,00 0,00 -3.236,76 195.763,24

253.000,00 1.000,00 -3.236,76 -22.471,81 228.291,43

TOTAL LIABILITIES AND EQUITY 199.316,28

247.421,48

REVENUE

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Income Rental Income Design and Consulting Services

610

-180

2.239

1.963

4.515

3.682

3.063

3.500

1.875

350

2.145

414.500

1.150

3.075

Single-Family Homes Real Estate Commissions Adquisitions

TOTAL INCOME

3.389

2.573

4.515

3.502

3.063

3.500

1.875

416.375

3.425

2.145

COST OF SALES Cost of Goods Sold (Real Estate Sale Commissions)

218

18.653

192.700

205.000

Cost of labor - COS

200

2.950

5.425

850

1.250

2.345

Freight & delivery - COS

305

Subcontractors - COS

922

2.787

8.579

17.600

6.680

5.350

8.950

17.360

562

5.216

4.891

14.325

5.825

8.890

13.500

6.300

192.788

1.684

8.003

16.674

37.655

13.430

32.893

228.766

26.104

-189.399

2.573

2.831

-4.501

-13.611

-34.155

-11.555

383.483

-225.341

-23.959

2.200

3.936

6.367

594

1.063

1.719

Land / Purchase Property Construction Cost

Supplies & Materials - COGS TOTAL COST OF GOOD SOLD GROSS PROFIT Operating Expenses Payroll Expenses Payroll Total Payroll Taxes and Benefits Payroll Processing

Total Payroll Expenses

2.794

2.854

4.999

8.086

General Expenses Advertising

250

400

250

Auto Expense

120

Bank Charges

Business Promotion

209

120

Commissions & fees

356

109

650

200

380

275

147

500

1.130

913

898

269

271

Dues & Subscriptions Insurance Insurance - Liability

Job Materials

355

180

900

554

192

664

3.550

550

Legal & Professional Fees Meals and Entertainment

165

143

267

178

250

150

125

Other General and Admin Expenses

1.096

Parking Expense

Office Expenses

Income Statement (12 months) Profit and Loss GC Desogn and Development Group, LLC

THE FINANCES

Nov

Dec

Year 2015 REVENUE

430

1.965

27.172

414.500

829.000

4.225

416.465

860.827

Income Rental Income Design and Consulting Services Single-Family Homes Real Estate Commissions Adquisitions

TOTAL INCOME

2015

2016

18.653

320

240

5.500

4.150

6.850

1.485

Cost of Goods Sold 37.523 (Real Estate Sale Commissions) Land / Purchase 397.700 Property Construction Cost 13.580 Cost of labor - COS Freight & delivery 581 - COS Subcontractors 77.878 COS Supplies & Materials 67.932 - COGS

12.670

24.528

595.194

-12.669

391.938

265.633

6.367

42.603

1.719

11.503

8.086

60 8.146

120 54.226

250 120 3 -

450 120 3 -

2.694 620 27 379 2.040

2.690

271 -

271 200

3.328 735

550

6.960

507

1.278

1.096

TOTAL COST OF GOOD SOLD GROSS PROFIT Operating Expenses Payroll Expenses Payroll Total Payroll Taxes and Benefits Payroll Processing Total Payroll Expenses General Expenses Advertising Auto Expense Bank Charges Business Promotion Commissions & fees Dues & Subscriptions Insurance Insurance - Liability Job Materials Legal & Professional Fees Meals and Entertainment Office Expenses Other General and Admin Expenses

2018

2019

2020

430

27.172

30.433

41.084

55.464

62.120

69.574

829.000

1.318.110

2.328.661

2.934.113

3.594.288

4.852.289

4.225

9.356

33.680

43.649

54.998

76.368

860.827

1.357.898

2.403.425 3.033.226 3.711.406 4.998.231

37.305

59.315

69.860

88.023

107.829

145.569

385.000

623.700

1.122.660

1.454.967

1.833.259

2.545.611

21.132

31.698

51.773

60.264

67.496

82.442

909

1.363

2.226

2.592

2.903

3.545

121.760

182.641

298.313

347.237

388.905

475.020

106.210

159.316

260.215

302.891

339.238

414.355

595.194

1.058.032

1.805.048

2.255.974

2.739.629

3.666.541

265.633 -

299.866 0

598.377 1

777.252 0

971.777 0

1.331.691 0

42.603

95.092

138.909

173.445

212.182

219.641

11.503

7.982

11.334

13.976

16.939

17.510

120 54.226

103.074

150.242

187.421

229.121

237.151

2.694 620 27 379 2.040

3.000 950 55 300 3.015

3.600 950 55 300 4.250

4.800 1.200 55 500 5.350

5.040 1.450 55 500 7.720

5.292 1.700 55 800 -

2.690

2.700

3.550

4.050

4.550

5.050

3.328 735

3.650 150

3.650 -

4.780 -

6.960

7.656

8.421

9.263

10.190

11.209

507

532

559

587

616

647

1.278

1.342

1.409

1.480

1.554

1.632

1.096

680

714

750

787

827

COST OF SALES

2017

Income Statement (12 months) Profit and Loss GC Desogn and Development Group, LLC

REVENUE Printing & Reproduction Professional Development Rent or Lease Repair & Maintenance Shipping and delivery expense Stationery & Printing Tools Utilities Property Taxes Subtotal Operating Expenses Total Expenses (OE+Payroll) Net Operating Income Other Income Other Ordinary Income Total Other Income Other Expenses Depreciation Interest Payment Suspense Total Other Expenses Net Other Income NET OPERATING INCOME (NOI) BEFORE INCOME TAX

Jan

Feb

Apr

May

Jun

Jul

Aug

Sept

Oct

245

2.166

2.186

650

500 -

500 20

500 -

500 60

500 -

550 -

160

50 109 -

15 157 -

228 106 -

27 23 -

235 -

215 -

200 -

135 215 2.533

115 -

4.673

1.200

5.610

2.701

1.856

5.740

2.399

6.762

2.617

1.820

4.673

3.994

8.404

5.495

4.650

8.534

5.253

11.761

10.703

9.906

-194.072

-1.422

-5.573

-9.996

-18.261

-42.689

-16.808

371.721

-236.044

-33.865

205 205 (204,68)

356 356 (355,68)

785 785 (747,30)

26 26 (26,00)

220 220 (220,00)

330 330 (330,00)

401 401 (401,46)

(194.277,09)

THE FINANCES

Mar

(1.421,86)

(5.928,56)

(10.743,34)

(18.287,19)

(42.909,00)

(17.138,00)

371.391,31

(236.373,67)

(34.266,13)

Nov

Year 2015

Dec

REVENUE

2015

2016

2017

2018

2019

2020

265

560

Printing & Reproduction

560

145

152

160

168

176

5.001

Professional Development

5.001

2.850

2.993

3.142

3.299

3.464

550

6.150

Rent or Lease

6.150

7.200

7.560

8.780

9.219

9.680

Repair & Main80 tenance

327

Shipping and delivery expense

327

343

361

379

398

417

150

350

Stationery & Printing

350

367

386

405

425

446

521

600

550

110

1.330

2.400

2.520

2.646

2.778

2.917

1.167

3.700

1.936

3.331

40.646

Subtotal Operating Expenses

40.646

38.221

41.714

49.191

53.844

49.442

10.022

11.476

94.871

Total Expenses (OE+Payroll)

94.871

141.295

191.957

236.612

282.965

286.593

-22.691

380.461

170.762

Net Operating Income

170.762

158.571

406.420

540.640

688.812

1.045.098

Tools Utilities

3.700 Property Taxes

Other Income -

Other Ordinary Income

Total Other Income

Other Expenses Depreciation 400

398

2.436

Interest Payment

2.436

4.661

18.251

17.996

20.277

19.979

1.345

Suspense

1.345

Total Other 3.781 Expenses

3.781

4.661

18.251

17.996

20.277

19.979

(3.743,57)

(4.661,42)

(18.250,59)

(17.996,30)

(20.276,92)

(19.978,72)

388.169,36

522.643,42

$668.535

$1.025.119

400

398

(399,97)

(398,48)

(23.090,64)

380.062,69

(3.743,57)

167.018,52

Net Other Income NET OPERATING INCOME (NOI) BEFORE INCOME TAX

167.018,52

153.910,00

Profit and loss forecast The following table itemizes our revenues and associated costs. We expect to be paying higher costs in marketing and advertising than other companies as we attempt to build sales volume. As the reader can see in the accompanying charts, we expect consistent yearly profits to begin in Year 1.

Summary Cash Flow Sales Less: Cost of Goods Sold Gross Income Less: Overhead Net Income (before real estate) Operating Expenses Lease Payments Mortgage Interest Payment Tax Depreciation Taxable Income Less: Tax Income After-Tax Plus: Depreciation Less: Mortage Balance After-Tax Cash Flow Profit

THE FINANCES

2015 2016 2017 2018 2019 2020 731.827 1.153.080 2.042.114 2.578.011 3.153.816 4.245.551 589.389 948.237 1.633.160 2.059.472 2.524.457 3.411.117 142.438 204.843 408.954 518.540 629.359 834.434 142.438 204.843 408.954 518.540 629.359 834.434 97.307 45.131 12.637 32.494

136.267 68.576 19.201 49.374

190.830 218.123 61.074 157.049

419.608 98.931 27.701 71.231

303.242 326.117 91.313 234.804

306.572 527.862 147.801 380.061

$32.494 $49.374 $157.049 $71.231 $234.804 $380.061 4,4% 4,3% 7,7% 2,8% 7,4% 9,0%

Year

0 Cash Flow

Initial Investment (Outlay) IRR on ATCF differences Cash On Cash Return

$-294.169

2 $32.494

3 $49.374

4 $157.049

5 $71.231

6 $234.804 $380.061

$294.169 29,8% 15,3%

PROJECTED CASH FLOW The following is our flow table and chart. We do not expect to have any short-term cash flow problems. Our short-term debt (promissory notes) will be repaid in two equal payments in 2016-2017. Cash Flow (12 months) CASH ON HAND (beginning of period)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

154.460

43.248

43.706

40.290

55.535

46.028

20.910

4.322

380.564

145.740

610

-180

2.239

1.963

4.515

3.682

3.063

3.500

1.875

350

2.145

414.500

1.150

3.075

4.350

6.350

7.350

550

4.850

1.550

701 -

1.879 -

2.157 -

891 -

2.431 -

441 -

80.000

20.000

10.000

Capital Stock

1.000

Opening Balance Equity

2.183

Retained Earnings

TOTAL CASH RECEIPTS

241.733

47.700

50.378

69.032

67.379

67.319

23.335

425.547

385.539

147.885

218

18.653

192.700 -

200 922

2.787

2.950 36 8.579

5.425 305 17.600

850 75 6.680

5.350

205.000 1.250 66 8.950

2.345 99 17.360

562

5.216

4.891

14.325

5.825

8.890

13.500

6.300

192.788

1.684

8.003

16.674

37.655

13.430

32.893

228.766

26.104

CASH SALES Rental Income Design and Consulting Services Single-Family Homes Real Estate Commissions Adquisitions COLLECTION CREDIT Project Loans / Line of Credit Credit Cards Promissory Notes CASH SHAREHOLDERS Additional Capital Paid-In

CASH PAID OUT Cost of Goods Sold (Real Estate Sale Commissions) Purchases Land/Property Construction Cost Cost of labor - COS Freight & delivery - COS Subcontractors - COS Supplies & Materials COGS

TOTAL COST OF GOODS

THE FINANCES

Nov

Dec

111.474

88.383

154.460

430

1.965

27.172

- 414.500

829.000

4.225

25.000

8.500 -

110.000

1.000

2.183

504.848

1.161.971

111.475

Cash Flow (12 months)

Year 2015 %

CASH ON HAND (beginning of period) CASH SALES Rental Income Design and Consulting Services Single-Family Homes Real Estate Commissions Adquisitions COLLECTION CREDIT Project Loans / Line of Credit Credit Cards Promissory Notes CASH SHAREHOLDERS Additional Capital Paid-In Capital Stock Opening Balance Equity Retained Earnings TOTAL CASH RECEIPTS

18.653

37.523

397.700

85%

320

240

13.580

581

5.500

4.150

77.878

17%

6.850

1.485

67.932

15%

CASH PAID OUT Cost of Goods Sold (Real Estate Sale Commissions) Purchases Land/ Property Construction Cost Cost of labor - COS Freight & delivery - COS Subcontractors - COS Supplies & Materials - COGS

2015

2016

2017

2018

2019

2020

139.025

390.888

464.905

851.506

1.205.828

430

27.172

30.433

41.084

55.464

62.120

69.574

1.318.110 2.328.661

2.934.113

3.594.288

829.000

6 1.870.765

4.852.289

4.225

9.356

33.680

43.649

54.998

76.368

25.000

8.500 -

8.500 150.000

5.000

125.000

1.000

2.183

1.161.536

37.305 385.000

1.907.287 2.873.330

3.884.732

4.917.233

69.860

88.023

107.829

623.700 1.122.660

1.454.967

1.833.259

59.315

6.868.997

145.569

21.132

31.698

51.773

60.264

67.496

2.545.611 82.442

909

1.363

2.226

2.592

2.903

3.545

121.760

182.641

298.313

347.237

388.905

475.020

106.210

159.316

260.215

302.891

339.238

414.355

REVENUE Operating Expenses Payroll Total Payroll Taxes and Benefits Payroll Processing Advertising Auto Expense Bank Charges Business Promotion Commissions & fees Dues & Subscriptions Insurance Insurance - Liability Job Materials Legal & Professional Fees Meals and Entertainment Office Expenses Other General and Admin Expenses Parking Expense Printing & Reproduction Professional Development Rent or Lease Repair & Maintenance Shipping and delivery expense Stationery & Printing Tools Utilities Taxes (Real Estate, Etc) Interest TOTAL OPERATING EXPENSES

Jan

Feb

CASH POSITION (end of period) Before Taxes

May

Jun

Jul

Aug

Sept

Oct

2.200

3.936

6.367

594

1.063

1.719

94 209 70 88 900 165 267

3 147 87 97 178

250 356 88 554 143 81

250 109 898 355 192 47 250

3 269 664 17

250 3 650 271 3.550 56 85

60 400 20 3 200 500 271 25

250 120 3 50 1.130 271 180 550 150

250 120 3 380 913 271 125

250 120 3 120 275 271 25

1.096

6 50

16 -

3 -

14 -

9 -

25 -

35 245

25 -

55 -

35 -

2.166

2.186

650

500 -

500 20

500 -

500 60

500 -

550 -

160

50 109 -

15 157 -

228 106 -

27 23 -

235 26

215 220

200 330

135 215 2.533 330

330

115 401

4.673

3.994

8.404

5.495

4.676

8.754

5.583

12.091

11.033

10.307

223 -

350 1.024

198.485

3.994

10.088

$43.248

$43.706

$40.290 $55.535 $46.028 $20.910

THE FINANCES

Apr

Loan principal payment Capital purchase (specify) Other startup costs Reserve and/or Escrow Ownersâ&#x20AC;&#x2122; Withdrawal SUBTOTAL TOTAL CASH PAID OUT

Mar

13.498

21.350

46.409

19.013

44.984

$4.322

$380.564

239.799 $145.740

36.411 $111.474

Nov

Year 2015

Dec

Cash Flow (12 months)

6.367

42.603

44%

1.719

11.503

12%

250 120 3 271 -

60 450 120 3 271 200

120 2.694 620 27 379 2.040 2.690 3.328 735

0% 3% 1% 0% 0% 2% 3% 3% 0% 1%

550

6.960

507

1.278

1.096

274

265

560

5.001

550 -

6.150 80

6% 0%

327

110 400

150 110 1.167 398

350 521 1.330 3.700 2.436

0% 1% 1% 4% 3%

10.422

11.875

97.307

21%

225

226

674

36.402

0% 350 0% 0% 1.024 0% 693.525 148%

$468.446

$88.383

Operating Expenses Payroll Total Payroll Taxes and Benefits Payroll Processing Advertising Auto Expense Bank Charges Business Promotion Commissions & fees Dues & Subscriptions Insurance Insurance - Liability Job Materials Legal & Professional Fees Meals and Entertainment Office Expenses Other General and Admin Expenses Parking Expense Printing & Reproduction Professional Development Rent or Lease Repair & Maintenance Shipping and delivery expense Stationery & Printing Tools Utilities Taxes (Real Estate, Etc) Interest TOTAL OPERATING EXPENSES

0% 0% Loan principal payment Capital purchase 0% (specify)

100%

2015

2016

2017

2018

2019

2020

42.603

95.092

138.909

173.445

212.182

219.641

11.503

7.982

11.334

13.976

16.939

17.510

120 2.694 620 27 379 2.040 2.690 3.328 735

3.000 950 55 300 3.015 2.700 3.650 150

3.600 950 55 300 4.250 3.550 3.650 -

4.800 1.200 55 500 5.350 4.050 4.780 -

5.040 1.450 55 500 7.720 4.550 4.780 -

5.292 1.700 55 800 5.050 4.780 -

6.960

7.656

8.421

9.263

10.190

11.209

507

532

559

587

616

647

1.278

1.342

1.409

1.480

1.554

1.632

1.096

680

714

750

787

827

274

285

315

350

560

145

152

160

168

176

5.001

2.850

2.993

3.142

3.299

3.464

6.150 80

7.200 -

7.560 -

8.780 -

9.219 -

9.680 -

327

343

361

379

398

417

350 521 1.330 3.700 2.436

367 600 2.400 4.661

386 2.520 18.250,59

405 550 2.646 182.996,30

425 2.778 20.277

446 2.917 19.979

97.307

145.956

210.207

419.608

303.242

306.572

674

2.833

6.568

3.322

3.597

3.896

Other startup costs Reserve and/or Escrow 350 Ownersâ&#x20AC;&#x2122; Withdrawal 235.561 SUBTOTAL 1.024 238.394 6.568 3.322 3.597 3.896 TOTAL CASH PAID OUT 770.647 1.442.382 2.021.824 2.678.904 3.046.468 3.977.008 CASH POSITION (end of period) Before Taxes

$390.888

$464.905

$851.506

$1.205.828

$1.870.765 $2.891.988

OPERATING EXPENCES PROJECTION

Operating Expenses

Jan Feb Mar

Apr

May Jun

Jul

Aug

Sept Oct

Nov

Year % 2015

Dec

Payroll Expenses Payroll

- 2.200

Total Payroll Taxes and Benefits Payroll Processing TOTAL PAYROLL EXPENSES

- 594 -

2.794

2.200 2.200 2.200 2.200 2.200 3.936 6.367 6.367 6.367 6.367 42.603 594

594

1.063 1.719 1.719 1.719 1.719 11.503 -

2.794 2.794 2.794 2.794 2.854 4.999 8.086 8.086 8.086 8.146

43,8%

11,8%

120 0,1% 54.226

55,7%

General Expenses Advertising

250

400

250

Auto Expense Bank Charges 3 Business Promo209 tion Commissions & 70 fees Dues & Subscrip- 147 tions

20 3

120 3

120

356

109

650

200

380

275

500

913

898

269

271

- 0,0%

355

180

200

735 0,8%

554

192

664

550

143

Office Expenses 267 178

250

150

125

Insurance

Insurance Liability Job Materials Legal & 900 Professional Fees Meals and Enter165 tainment Other General and Admin Expenses Parking Expense 6 Printing & Repro50 duction Professional Development 2.166

1.096

3.550

1.130

450

2,8% 2.694 120 620 0,6% 3 27 0,0% 379 0,4% 2.040 2.690 3.328

6.960

2,1% 2,8% 3,4%

7,2%

507 0,5% 1.278 1.096

1,3% 1,1%

274 0,3%

245

265

560 0,6%

650

2.186

5.001

5,1%

Operating Expences Projection

THE FINANCES

Operating Expenses Payroll Expenses Payroll Total Payroll Taxes and Benefits Payroll Processing TOTAL PAYROLL EXPENSES

General Expenses Advertising Auto Expense Bank Charges Business Promotion Commissions & fees Dues & Subscriptions Insurance Insurance - Liability Job Materials Legal & Professional Fees Meals and Entertainment Office Expenses Other General and Admin Expenses Parking Expense Printing & Reproduction Professional Development Rent or Lease Repair & Maintenance Shipping and delivery expense Stationery & Printing Tools Utilities Taxes (Real Estate, Etc) Interest

2015

2016

2017

2018

2019

2020

42.603

86.092

120.909

173.445

212.182

219.641

11.503

7.293

9.957

13.976

16.939

17.510

120

54.226

93.385

130.865

187.421

229.121

237.151

2.694 620 27 379 2.040 2.690 3.328 735 6.960 507 1.278

3.000 950 55 300 3.015 2.700 3.650 150 7.656 532 1.342

3.600 950 55 300 4.250 3.550 3.650 8.421 559 1.409

4.800 1.200 55 500 5.350 4.050 4.780 9.263 587 1.480

5.040 1.450 55 500 7.720 4.550 4.780 10.190 616 1.554

5.050 4.780 11.209 647 1.632

1.096

680

714

750

787

827

274 560

285 145

285 152

315 160

315 168

350 176

5.001

2.850

2.993

3.142

3.299

3.464

6.150 80

7.200 -

7.560 -

8.780 -

9.219 -

9.680 -

327

343

361

379

398

417

350 521 1.330 3.700

367 600 2.400 -

386 2.520 -

405 550 2.646 -

425 2.778 -

446 2.917 -

2.436

4.661

17.996

20.277

19.979

18.250,59

5.292 1.700 55 800

SUBTOTAL OE

43.082

42.882

59.965

67.187

74.121

69.421

TOTAL OPERATING EXPENSES (OE+Payroll)

$97.307

$136.267

$190.830

$254.608

$303.242

$306.572

40%

33%

19%

Growth Rate

Projected Expences Projection

BREAK-EVEN ANALYSIS Our break-even analysis is based on the assumption that our gross margin is around 20%. In other words, we will have 80% direct cost of sales. It is conservatively believed that during the first three years, average profitability per year per unit will be about an average 10% commission rate. Management expects that the sales collected from 1.44 homes and five design and consulting projects of $5,500 average per year will guarantee a break-even point. The combination of design and investment services that we offer provides us with two revenue streams that help us to build up a strong cash flow and will allow us to endure market adjustments or fluctuations.

Breakeven Analysis GC Design and Development Group, LLC Breakeven Analysis Year 1 (2014) Prepared By: Andres Galindo Gimon

Gross Margin % of Sales 2015 2016 2017 2018 2019 2020 Gross Margin $142.438 $204.843 $408.954 $518.540 $629.359 $834.434 Total Sales $731.827 $1.153.080 $2.042.114 $2.578.011 $3.153.816 $4.245.551 Gross Margin/Total Sales 19,5% 17,8% 20,0% 20,1% 20,0% 19,7% Total Fixed Expenses Payroll $54.225,53 $93.385,24 $130.865,49 $187.420,95 $229.121,10 $237.151,16 Operating Expenses $43.081,51 $42.882,18 $59.964,93 $67.187,41 $74.120,77 $69.420,75 Operating + Payroll $97.307 $136.267 $190.830 $254.608 $303.242 $306.572 Breakeven Sales in Dollars (Annual) Gross Margin % of Sales 19,5% 17,8% 20,0% 20,1% 20,0% 19,7% Total Fixed Expenses $97.307 $136.267 $190.830 $254.608 $303.242 $306.572 Yearly Breakeven Amount $499.950 $767.062 $952.914 $1.265.830 $1.519.593 $1.559.820 Monthly Breakeven Amount $41.662 $63.922 $79.409 $105.486 $126.633 $129.985 Number of Units Needed to 1,41 2,16 2,68 3,57 4,28 4,39 Breakeven Sales Forecast of Units 2,00 3,00 5,00 6,00 7,00 9,00 Breakeven Units/ Sales Fore70% 72% 54% 59% 61% 49% cast Units

THE FINANCES

Number of Units to Breakeven

2 1,41

2,16

2,68

3,57

4,28

4,39

2014

2015

2016

2017

2018

2019

Number of Units Needed to Breakeven

Total Units Sales Forecast