Executive Summary

Advantages of Investing in Real Estate

Pittsburghs Posed for Growth
Key Investment Considerations
Experienced Management Team
Investment Process
Synergy Capital Investment Portfolio
Investment Risks

Why Invest in Real Estate?

Diversification

Stocks vs. Real Estate

What about REITs?

Investment Comparison

Inflation S&P 500

Barclays
US
Aggregate Treasury
Russell
Bond
T-Bill
2000
Index
10 Yr

Synergy
Capital

5 Year

1.80%

4.83%

6.83%

5.89%

5.55%

3 Year

2.06%

11.66%

9.66%

5.73%

8.28%

7.00%

1 Year

1.75%

15.60%

15.97%

3.86%

5.02%

7.00%

Why Pittsburgh?

Pittsburgh Accolades
Americas Most Livable City, The Economist and Forbes.com
Best Commercial Real Estate Market, Moodys Investor Service
North American City of the Future, fDi
Economically Strongest U.S. Metros, The Brookings Institution
Top 10 City for Job Growth, Forbes.com
Americas Best Housing Market, Forbes.com
Best Cities for Recent Graduates, Huffington Post
Safe Havens in Real Estate, Kiplinger Magazine

About Pittsburgh
Quality of Life
Named among the Best Trips for 2012 by National Geographic Traveler
Ranked #1 as America's Most Livable City by The Economist in 2011 and
Forbes in 2010

Green Leader
Affordable Housing
Safety & Comfort
World-Class Health Care
Transportation Infrastructure

Pittsburgh Population by Age

65+ yrs.; 17%
Under 10 y rs.; 11%

55-64 yrs.; 14%

10-17 yrs.; 10%

18-24 yrs.; 9%

25-34 yrs.; 12%

45-54 yrs.; 16%
35-44 yrs.; 12%

Source: 2010 U.S. Census Bureau

Metro Area

Crime Index 2010

(rate per 100,000 inhabitants)

Pittsburgh, PA
Boston, MA
San Diego, CA
Raleigh, NC
Richmond, VA
Washington, DC
Philadelphia, PA
Denver, CO
Cleveland, OH
Minneapolis, MN
Portland, OR
Detroit, MI
Baltimore, MD
St. Louis, MO
Cincinnati, OH
Milwaukee, WI
Atlanta, GA
Kansas City, MO
Phoenix, AZ
Indianapolis, IN
Charlotte, NC
Seattle, WA

Violent Crime
319.5
406.0
378.5
242.6
269.3
380.0
551.8
337.1
415.7
268.5
635.4
685.3
497.4
314.1
464.1
413.8
461.3
370.8
627.9
528.2
353.0

Property
Crime
1,975.6
2,189.5
2,206.4
2,442.6
2,542.9
2,550.6
2,662.7
2,771.4
2,835.6
2,894.2
2,929.0
2,950.3
3,090.7
3,159.5
3,340.7
3,360.3
3,462.6
3,476.1
3,534.6
3,827.1
3,902.2
3,905.8

Source: FBI Uniform Crime Report 2010

Pittsburgh Investment & Development

According to the Brookings Institute, one of only three U.S.
metros to be deemed fully recovered from the Recession
In the last 5 years 217 companies technology companies
attracted $1.3 billion in total investment
Five Years and Running as Top 10 U.S. Location for Business
Investment
Pittsburgh Metro Tops National Average for Job Growth in
High-Wage Industries
Record-High Employment in 2012

Pittsburgh Key Economic Sectors

Pittsburgh Residential Market

Measured in dollars, Pittsburghs December 2012 home sale activity rose $101.2 million, or 34%, from
$299.8 million in December 2011 to $401.8 million in December 2012 (RealSTATs: December 2012)
Residential purchase dollars have jumped 17% in the first ten months of 2012 compared to 2011
(RealSTATs: January 2012 October 2012)
In the first ten months of 2012 the Pittsburgh commercial market thrived with non-residential sales activity
climbing 28.3% to $1.1 billion in 2012 from $855.4 million in 2011 (RealSTATs: January 2012 October
2012)
Pittsburgh topped the U-Haul 2012 National Migration Trend Report with a reported 9.04% increase for the
year (Pittsburgh Business Times, April 2013)
According to a study completed by the Pittsburgh Downtown Partnership, Downtown Pittsburgh's resident
population has increased by more than 30% in the past 12 years, and its population is getting younger (Pop
City Media, April 2013)
Lot 24, a 96-unit apartment building built as a second phase of the Cork Factory Lofts in the Strip District,
leased up in less than 120 days during typically slow leasing months from December 2012 March 2013
(Pittsburgh Business Times, April 2013)

Median Sales Price of

Existing Single-Family
Homes (4Q 2011)
$350,000
$300,000

Average Asking Monthly

Apartment Rent
(1Q, 2012)
$2,500

$2,000

$250,000
$200,000
$150,000

$1,500

$1,000

$100,000
$50,000
$-

$500

$-

Source: The NAHB/Wells Fargo Housing Opportunity Index: Complete History by Metropolitan Area (1991-Current)

Pittsburgh Commercial Market

The Pittsburgh office market vacancy rate for Q1 of 2013 was 8.0% compared to a national
average of 11.8% (CoStar first quarter 2013, Pittsburgh Market Reports)
Class A office vacancy remains very low at 6.3% for Q1 of 2013 (CoStar first quarter 2013,
Pittsburgh Market Reports)
Pittsburghs retail vacancy rate declined in Q1 of 2013 by 40 basis points to 4.1% which is
260 basis points lower than the national average of 6.7% (CoStar first quarter 2013,
Pittsburgh Market Reports)
Pittsburghs industrial market vacancy rate declined in Q1 of 2013 by 20 basis points to
7.9% which is 70 basis points below the national average of 8.6% (CoStar first quarter
2013, Pittsburgh Market Reports)

Pittsburghs Posed for Growth

Stability, rising occupancy and rental rates, job growth, and
strong key economic sectors- like energy, financial services and
health care - all make for a strong Pittsburgh real estate market.

Investment Opportunity
Investment Conditions:
Three-Year Commitment
Fixed 7% Annual Return

Three-Year Return
Investment
Amount

Annual
Interest
Rate

Compounded
3-Year
Return

Annual
Return

Aggregate
Annual
Return

$ 25,000

7%

5,626

$ 1,750

$ 5,250

$ 50,000

7%

11,252

$ 3,500

$ 10,500

$ 100,000

7%

22,504

$ 7,000

$ 21,000

$ 250,000

7%

56,261

$ 17,500

$ 52,500

$ 500,000

7%

112,522

$ 35,000

$ 105,000

$ 750,000

7%

168,782

$ 52,500

$ 157,500

$ 1,000,000

7%

225,043

$ 70,000

$ 210,000

Key Investment Considerations

Experienced Management Team

Key Investment Considerations

Synergy Capital Track Record

Raised over $3.5 million in private funds
Sold more than 30 single family homes
Over $4.5 million in gross sales revenues
Synergy Capital has never defaulted on an agreement with an
investor
All investors have reinvested funds

Residential Investment Process

Average Investment Period from Due Diligence to Closing:

7 Months

Residential Investment Process

MLS 60%

Foreclosures
Estate Sales
Distressed Sales
Short Sales

Leads 40%
Wholesale leads (We Buy Houses etc.)
For Sale by Owner (FSBO): signs/online, craigslist, etc.
Referrals, Other Investors

Residential Investment Process

Estimate Renovation Cost (highest best use, additions)
Potential After Repair Value (ARV), estimated resell price
Calculate ancillary costs (holding, financing, closing costs)
Offering Accordingly (adhering to set %s / margins)
Meeting with Architects, Structural Engineers, Other Industry Consultants

Residential Investment Process

Title Search & receive clear title
Home inspection
Finalize renovation plans
Selecting general contractor
Coordinate Funding
Insuring the property
Time Frame 30-60 days

Residential Investment Process

Start & Manage Renovations
Home inspection after completion
Make final adjustments
Professional staging, photos, & video
Time Frame 6-12 weeks

Residential Investment Process

Pricing it to sell
Listing on MLS through Re/Max
Online marketing
Networking with Local Agents
Finding the right buyer
Time Frame 1-4 months

Residential Investment Process

Buyers appraisal, inspection
Working with buyers title agent
Coordinate loan payoff
Time Frame 30-60 days

Residential
Investment
Portfolio
Renovation Projects
Wholesale Deals

Residential Portfolio - Highlights

Aspinwall:
224 2nd Street
Monroeville:
608 Winterberry Rd
Lawrenceville:
4616 Plummer Street

Aspinwall: 224 2nd Street

Purchased $92,500
Funded with $180,000 from private lender
Total expenses $205,000
Sold for $299,900 in first week on the market

Time frame from start to finish: 191 days

Monroeville: 608 Winterberry

Purchased $20,000 from private seller

Funded with $80,000 from private lender
Total expenses $98,000
Sold for $139,900 in first week on the market

Time frame from start to finish: 206 days

Lawrenceville: 4616 Plummer

Purchased $61,000 from estate sale

Funded with $118,000 from private lender
Total expenses $120,000
Sold for $165,000 in first week on the market

Time frame from start to finish: 216 days

Commercial Investment Process

Average Investment Period from Due Diligence to Closing:

18 Months

Private Lending Process

Average Rollover Rate:

8 Months

Private Lending Process

Synergy Capital will loan a max LTV of 65% which includes purchase costs, construction
costs, closing costs, insurance, a six month interest reserve, and loan origination fees.
Subject-to-Repair Appraisal: based on construction plans and specs for the renovations
to be completed

Investment Risks
Availability of Investment Capital
Identifying Suitable Investments
Risks of Real Estate Investments
Dependence on Key Individuals
Illiquidity of Investments
Lack of Diversification
Use of Leverage

Invest with Synergy Capital

Real estate is a tremendous opportunity to add value and diversification
to investment portfolios and outperform industry averages
Information-intensive aspect of real estate investing favor experienced
and well connected investors like our local firm
Specialized managers with excellent market knowledge add enormous
value
Invested management team encourages thoughtful acquisitions, careful
oversight, and timely dispositions
Management team garners a margin of safety by paying a low purchase
price in which properties are acquired at a discount

Exhibits

Exhibit 1: Self-Directed IRA or 401(k)

All investments must be arms length, meaning the buyer and seller are acting in their own self-interest and there
is no influence from other parties.
You cannot sell or buy property from a disqualified individual. Disqualified individuals include you, your spouse,
your parents, your kids and/or their spouses, grandchildren, grandparents, investment advisors, fiduciaries and
entities where the disqualified individual owns 50% or more interest.
You cannot receive immediate benefit from a property owned by your IRA. No vacation homes, personal
residences or office spaces because these would benefit you in some way.
You cannot lend yourself money to perform rehab work or cosmetic work on the home purchased by your IRA.
You can't perform any maintenance on the home or even furnish the home. It's all done via a property
management company, which is nice because then you don't have to deal with tenants. All income or rental
profits generated from your investment must go back to your self-directed IRA and all expenses like
improvements, property taxes and bills directly related to the investment property must be paid from your IRA
account.
Your IRA may invest in: Single-family residences and vacation homes, Certain condominiums and duplexes,
Multi-family (5+ units) properties, Commercial properties (retail/office/warehouse), International properties
A self-directed 401(k) offers the same benefits of pre-tax savings and automated payroll deductions that you'll
find with a traditional 401(k) plan. The difference is in your investment choices.
A self-directed plan is similar to a brokerage account. It's essentially a do-it-yourself 401(k), and you're the fund
manager. Rather than choosing 401(k) investments from a short menu of pre-approved mutual funds,