Successful investors know that it is best to allocate investments across several asset classes whose returns are not completely correlated with each other. Most of them have assets in cash, equities, bonds and real estate. Real estate is frequently under-represented in investor's portfolios, but real estate adds an important element of stability in an investor's returns.

Real estate has been under-represented because good property investment vehicles have not been easily available. For many investors, their home has been their main real estate investment. Many large fortunes in real estate have been amassed by buying and holding properties to generate significant returns through cash flow and appreciation, and by taking advantage of their tax benefits, notably depreciation, long-term capital gains tax treatment, and the ability to defer tax liabilities through the use of 1031 tax-deferred exchanges. Buying and holding properties offers some of the very highest returns, stability and tax advantages available.

North County Property's objective is to provide investors with a real restate investment alternative for buying and holding cash flow properties with superior returns and low volatility with all of the tax benefits of direct real estate ownership. Our investment houses all share the following fundamentals:

• Cash Flow
• Equity build-up
• Built-in equity

Most homeowners are familiar with equity build-up, which is driven by the appreciation of a home and paying down a mortgage balance over time. Equity build-up increases one's net worth in real estate assets.

Cash flow relates to deriving rental income in excess of all of the cash obligations and cost incurred, including the servicing of mortgage debt. To the extent that costs can be reduced and rents appreciate, cash flow will grow over time.

The best and most stable investment models combine both equity build-up and cash flow. For each property NCP offers for sale the pre-tax gains from cash flow and equity build-up are added together and projected out over a 5-7 year period under a set of modest assumptions about property, rent and expense appreciation.

NCP offers buy and hold investment opportunities that combine cash flow and equity build-up. We are not counting the built in equity or possibility of appreciation. Our projected returns are very conservative.

NCP assists in the identification, acquisition, rehabilitation (if necessary) residential properties in Florida. We then screen and put tenants in place. We also can provide full service management services.

Most importantly, we provide high cash flow properties, meaning that after putting down twenty percent on a property, the investor will realize positive cash flow, even after expenses related to vacancy, repairs and maintenance, property management fees, taxes, insurance, and mortgage payments. It is important for investors to choose structurally and cosmetically sound properties, obtain excellent tenants, and use a professional property manager.

We take into account the specific criteria of each investor to find the ideal investment before we offer them to investors. Well maintained properties are extremely desirable and command higher rents and better tenants. They also minimize deferred maintenance costs in the early years after acquisition. Careful screening of tenants helps reduce the amount of damage caused by tenants.

NCP knows how to identify properties that provide excellent cash flow and are not reliant on appreciation to deliver exceptional returns.

Cash Flow Analysis

Comparing the cash flow of investment properties is difficult, even for experienced real estate investors.

There are three primary ways that an investor makes money in real estate: cash flow, equity build up and appreciation. Building equity through the pay down of the mortgage and appreciation are generally well understood by most investors. Cash flow is much more ambiguous.

Conceptually, it is simple. Cash flow is the difference between the checks you write each month and the checks you deposit. However, many sellers of investment property have a much looser definition of cash flow, or make very unrealistic assumptions about it, and can easily mislead an unwary investor. Most commonly, the key elements of cash flow that are misstated are rents which are over estimated or expenses with are understated or omitted.

North County Properties provides complete cash flow analysis on every property that we offer for sell. We do not include depreciation benefits in an attempt to derive after tax cash flow, as it makes the cash flow numbers look better. While this tax benefit is real, the amount of benefit to each investor varies widely, as each individual investor's personal tax situation is different. We also do not include rent appreciation in our analysis. Our cash flow formulas are very conservative. The following are the factors that we include in our cash flow analysis:

• Rent
• Principal & Interest
• Property Taxes
• Hazard Insurance
• Vacancy Rate
• Maintenance
• Management Fee
• Reserves for Replacement
• The investment benefits of Positive cash flow + Instant equity…

Purchasing properties through North County Properties takes the hassles out of property investment. We make owning a rent ready property an investment that provides you with many benefits. Some of the benefits are common to most real estate investments. However, you enjoy extra benefits with investments through NCP.

Benefits common to most real estate investments

Equity build-up. If you finance a property, you owe less with each mortgage payment. Thus, your equity increases each month.

Possible tax savings. The IRS allows the depreciation of improved real estate. Investors take a deduction each year based on the predetermined useful life of the property (currently 27.5 years per IRS for residential real estate). This non-cash deduction may result in income tax savings. Always consult your tax professional to confirm how a real estate investment will affect you.

Possible appreciation. Although past performance is not necessarily a gauge to future performance, real estate has been one investment that has a long history of appreciation.

Predictable positive cash flow. There aren't many real estate investments with a predictable cash flow. Tenant-occupied Rent Ready properties provide a monthly positive cash flow that grows your cash starting day one.

No hassle ownership. North County Properties provides full service management. We've taken all the hassle out of property ownership so there are no surprises for you or your renters.

A true turnkey investment. An investment in one of our Rent Ready houses truly gives you a solid real estate investment and eliminates the biggest issues with residential property investments…managing the renovation, time delays, cost overruns, quality of construction and securing a quality tenant.