Snowbird Vacation Properties

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Information about Snowbird Vacation Properties

Published on March 27, 2008

Author: ziesmad


Snowbird Vacation Properties:  Snowbird Vacation Properties …an investment for tomorrow you can enjoy today US Housing Market:  US Housing Market Worst decline in decades Not forecast to improve until after 2009 Sub Prime Mortgages have many in over their heads Foreclosures at record levels Canadian Dollar:  Canadian Dollar Strongest it’s been in decades Not forecast to decline Alberta Oil not forecast to decline Albertans uniquely positioned to profit Opportunity is knocking…:  Opportunity is knocking… Now is the time to invest in US real estate Exchange rate is in our favor Real Estate market is in our favor Snowbird lifestyle has never been more attainable So…why isn’t everyone doing it?:  So…why isn’t everyone doing it? Too far away Not enough time Too difficult to manage I want to…it makes sense…but I just haven’t got around to it. What if….:  What if…. You could invest in a home without the hassle of buying the home You could invest as little as $50,000.00 It were managed for you You could stay at different properties You wouldn’t have to pay US taxes You have the same potential to make money as if you bought a home The Plan:  The Plan Snowbird Vacation Properties (SVP) will acquire properties in desirable vacation destinations preferably in gated communities and make them available to investors. SVP is uniquely positioned to negotiate a lower price based on its experience, contacts, and resources than perhaps an individual investor could achieve on his own. SVP believes it can acquire properties between 10 and 35 percent below current market value. The Plan…cont’d:  The Plan…cont’d SVP (a Nevada Corporation) will acquire the property on its own account in order to capture all the costs associated with acquiring the property. These costs will include but are not limited to legal fees, commissions, inspections, repairs and upgrades, insurance, appraisal fees, airfare and lodging, re-imbursement of time spent, finders fees, furnishing costs, security and other costs and fees as incurred by SVP. The Plan…cont’d:  The Plan…cont’d SVP will furnish the property so as to make the property suitable to be rented to the general public. This will include appliances, living room furniture, at least one TV, kitchen items (pots, pans, utensils, dishes, glassware, etc), beds, linens, lamps, tables, chairs, and any other items that are deemed necessary. Our estimate is that furnishing costs will range between $15000-$20000 per property depending on the size of the property and number of rooms requiring furnishing. The Plan…cont’d:  The Plan…cont’d Transitioning the Property to Investor Ownership Investors will contribute a minimum of $50,000.00 CAD. SVP will determine how much ownership it will make available to investors for each property and SVP will retain ownership equal to the amount not sold to investors. SVP will determine the transfer value at which the property will be valued for ownership transfer purposes. The following example explains in simple terms how that value will be established. Purchase Price including closing costs $250,000.00 Furnishing costs $ 20,000.00 ---------------- Total Transfer Value $270,000.00 The Plan…cont’d:  The Plan…cont’d Transitioning to Investor Ownership (cont’d) In the above scenario SVP may choose to make $200,000.00 of ownership equity available to investors. SVP would then retain ownership of the remaining $70,000.00. In this scenario, SVP would retain 25.93% of the ownership and the investors would have cumulatively 74.07% (18.52% per unit) of the ownership. An investor could acquire any amount between $50,000 and $200,000 if desired. For simplicity, tax reasons, and to keep costs lower, SVP will retain title to the property. Investors will enter into a Limited Partnership agreement with SVP that explicitly states their ownership percentage and ownership rights. The Plan…cont’d:  The Plan…cont’d Ownership Rights/Risks Investors will own a proportionate share of all the financial activity associated with the property according to how much capital they have contributed in relation to the total transfer value. They will share in costs of ownership, rental revenues, capital gains/losses upon disposal, and any tax liabilities incurred from rental and/or disposition of the property. Investors will have input as to when the property will be offered for sale and at what price it will be offered. There is no guarantee that a property can/will be sold for a profit. The Plan…cont’d:  The Plan…cont’d Investor Occupancy Privileges An investor can book time at any property within two weeks of occupancy date. At your home property, you can book time without fees according to your % of ownership in any one season. For example, if you own 20% of the property, you can book without cost up to 20% of either the peak season or off season total time. If your home property is unavailable, you may purchase an equivalent amount of time at another property where time is available two weeks prior to occupancy date at 35% of the normal rental rate which will be credited as rental income to the ownership of that property. The 35% of normal rental rate fee is to offset increased utility costs the other owners will incur while the property is occupied. The Plan…cont’d:  The Plan…cont’d Investor Occupancy Privileges (cont’d) If an Investor wishes to book time at a property in advance of the 2 week booking window, he will be required to pay the full rental rate. You can book any amount of time at any property if you wish to pay the full rental rate. An investor occupying a property at no cost or at 35% of the normal rate is expected to vacate the property in favor of a full rate renter if it is at all possible to do so. The Plan…cont’d:  The Plan…cont’d Management Fees SVP will charge a management fee for administration costs, collecting and distributing rental revenue, collecting and disbursing funds toward operating costs, repairs and maintenance, insurance, property taxes, property inspections and to market the property. The fee will be adjusted annually as costs change. The Plan…cont’d:  The Plan…cont’d Income Distribution SVP will collect all rental revenues associated with the property and administer the payment of commissions/finders fees associated with these revenues. Each investor can choose to either receive his proportionate share of rental revenue as a cash payment at the end of the year or have the amount applied toward the following years Management Fees. The Plan…cont’d:  The Plan…cont’d Example: (assuming rented for 6 peak season months and 2 off season months) Management Fee/per $50,000 $210.00 (includes everything) % Share of Rents $210.00 (Rebated at end of year) ---------- Net Cost of ownership $ 0.00 / month Comparison: Pine Lake Lot purchased 4 years ago for $55,000.00 Property Taxes $ 50.00 Condo Fee $ 114.00 Power $ 35.00 ------------ Cost of ownership $ 199.00 / month The Plan…cont’d:  The Plan…cont’d Rental Commissions/Finders Fees Any person who sources rental revenue for a property that SVP would not have sourced on its own is entitled to a rental commission/finders fee equal to 10% of the gross amount of rent received. SVP will also charge a 10% commission on rents it sources. This policy is meant to create an incentive to all interested parties to work diligently toward sourcing and obtaining rental revenue for all the properties managed by SVP. The Plan…cont’d:  The Plan…cont’d Length of Term An Investor is locked in until one of the following occurs: The property is sold The investor sells his interest in the property to someone else SVP retains the first right of refusal for any investor interest put up for sale The Plan…cont’d:  The Plan…cont’d Dispositioning the Property When a property is sold, SVP will capture all the proceeds and costs associated with the disposition of the property. The investor will receive his proportionate share of the Net proceeds upon disposition and will be responsible for reporting any income or capital gains/losses resulting from the closing out of his investment. Investors are welcome to use their proceeds to re-invest in other properties that SVP may be offering at that time. The Plan…cont’d:  The Plan…cont’d Funds contributed in Advance Investors can contribute funds in advance of SVP acquiring a property with the understanding that they will have opportunity to invest in the next property on a first come-first serve basis. Investors can choose whether the funds placed on deposit can be invested by ProSource Financial Mortgages to earn investment income or be placed in trust with the companies lawyer. The Plan…cont’d:  The Plan…cont’d Tax Benefits SVP is a Nevada corporation and holds title to the property from acquisition to disposition. Investors will participate through a limited partnership with the General Partner SVP. Our Canadian investors are insulated from state or federal US tax filing obligations on any rental or other revenue income.  Income distributions or capital gains from the limited partnership must be declared as part of the foreign or domestic tax filings of the individual partner personally or corporately. Personal US Estate tax issues are avoided as a result of the limited partnership umbrella and title holding of SVP Inc. Our research indicates that this structure provides the best possible tax strategy for foreign alien investors participating in the US real estate market and avoiding potential excessive taxation. Summary:  Summary Profit from the eventual recovery in the US real estate market Become a Snowbird for as little as $50,000 invested Flexibility – you choose where to stay Leave the management to us Tax benefits Uniqueness:  Uniqueness Investment financing options available through SVP Investment value is not based on the worth of SVP but on the value of the property (or portion thereof) that you own You are not buying time, your investment has intrinsic real estate value There is a clear exit strategy Snowbird Vacation Properties:  Snowbird Vacation Properties …an investment for tomorrow you can enjoy today

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