BUSINESS MODELS

There are three different business models which can be implemented in the housing market. In general, the models can be applied in all segments. The models are as follows:

a) The rental market, in all income streams.

b) The rent to own market, in all income streams.

c) Outright purchase, in upper income and high-income streams.

The business model implemented can be applied as follows for mass development, a hedge fund company will purchase an entire development and rent all the units rolled out by the developer. The developer will enter into an arrangement with the hedge fund. This is done via a contractual arrangement for the entire development. The developer will then bridge finance its business with a financial institution for the construction and the rollout of the development.

BUSINESS MODEL ONE (1)

Column A

No. of Units to be Built

2,500 units

Type Townhomes/Condos

3 bed units

Unit Size

2,000SF

Unit Cost to Construct

USD$400,000.

SF Cost

USD$200.

Rental per unit

USD$2,450.

Rental Per Month

USD$2,450.

No. of Units

2,500 x 2,450

Month Income

USD$6,125,000.

Year Income

USD$73,500,000.

Construction Cost

2,500 Units x USD$400,000.

Total Including Taxes USD$1,000,000,000.

Column B

Column A

Infrastructure

USD$3.83 P.S.F.

50 Acres

43,560 S.F. per acre

Infrastructure 50 acres

USD$8,341,740.

Land Acquisition Cost

USD$12M

Hedge Fund Buy Back (HFBB)

USD$50,000. per unit

Hedge Fund Unit Buy Back

USD$450,000 per unit

Total Buy Back Cost

USD$1,170,341,740.

Professional Fees Estimate

USD$25,000,000.00

Total Project Cost

USD$1,170,341,740.

Term Rental 20 years

USD$1,470,000,000.

Interest on Rental per year

2.5%

Property Appr. P/A

6.14% annual

Column C

Column A

Column C

Property including home

26.35% annual

Construction Phase One

Number of Units: 500

Construction Phase Two

Number of Units: 500

Construction Phase Three

Number of Units: 500

Construction Phase Four

Number of Units: 500

Construction Phase Five

Number of Units: 500

Cost of Construction Phase One

USD$234,068,348.

Cost of Construction Phase Two

USD$234,068,348.

Cost of Construction Phase Three

USD$234,068,348.

Cost of Construction Phase Four

USD$234,068,348.

Cost of Construction Phase Five

USD$234,068,348.

Outline of Business One Model

In this Business Model One as outlined above Pomona Capital Investment Inc. have demonstrated in the table a rental model which is catered to the middle-income market in the Fort Lauderdale Area. The project description can either be multiple townhome units or condominiums.

The ancillary services provided in this model include: Gym, Swimming Pool, Tennis Court, Jogging Track, and Security. It is a fully gated development, that will provide a management company to undertake all services including: Land Scaping and Building Maintenance, in order to maintain property value.

The model has shown while the yearly income is fixed, there is an interest rate figure that is compounded on a year-on-year basis. The project is subdivided into five phases in order to reduce, the risk profile of both PCII and the Hedge Fund Company. The Hedge Fund will be purchasing an asset which will be escalating on a year-on-year basis.

The above model can be replicated in Orlando, Port St Lucie, Sarasota, Miami, Titusville, Tampa, Lakeland, Naples, Pembroke Pines and Weston Fort Lauderdale. Project Development in this model will take approximately Fifteen (15) months to complete Twenty-five Hundred (2,500) units, however the project is subdivided into five phases.

In the Florida Market the highest market segment of $400,000. - $599,999. there were 81,155 units sold. The other segment followed $300,000. - $399,999. which reported 43,683 unit sales. These two were the only market segments that reported year-over-year gains in home sales in Florida.

BUSINESS MODEL TWO (2)

Column A

No. of Units to be Built

2,500 units

Type Single Family Homes

4 bed units

Unit Size

3,000SF

Unit Construction Cost

USD$475,000.

SF Cost Approx.

USD$158.

Sales per Unit

USD$599,000.

Total Sales Cost

USD$1,497,000,000.

Construction Cost

2,500 Units x USD$475,000.

Total Including Taxes

USD$1,187,500,000.

Column B

Column A

Infrastructure

USD$3.83 P.S.F.

50 Acres

43,560 S.F. per acre

Infrastructure 50 acres

USD$8,341,740.

Land Acquisition Cost

USD$12M

Professional Fees Estimate

USD$35,000,000.

Total Project Cost

USD$1,242,841,740.

Approximate Project Profit

USD$254,158,260.

Construction Phase One (1)

Number of Units: 500

Construction Phase Two (2)

Number of Units: 500

Column C

Column A

Column C

Construction Phase Three (3) Number of Units: 500

Construction Phase Four (4)

Number of Units: 500

Construction Phase Five (5)

Number of Units: 500

Cost of Construction Phase One (1)

USD$248,568,348.

Cost of Construction Phase Two (2)

USD$248,568,348.

Cost of Construction Phase Three (3)

USD$248,568,348.

Cost of Construction Phase Four (4)

USD$248,568,348.

Cost of Construction Phase Five (5)

USD$248,568,348.

BUSINESS MODELS

BUSINESS MODEL ONE (1)

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Column C

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Column C

Outline of Business One Model

BUSINESS MODEL TWO (2)

Column A

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Column B

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