Terry Loftus Real Estate

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1 Terry Loftus Real Estate PROPERTY INVESTMENT ANALYSIS 12-Jan-2018 Prepared for: Consultant: Terry Loftus Property: 6-8 Wattle Street Yorkeys Knob Description: 21 Beachside apartments Purrchaser using equity in another property as full deposit. Loan is interest only. SUMMARY Assumptions Projected results over 10 yrs Property value $429,900 Property value $636,357 Initial investment $0 Equity $191,561 Gross rental yield 5.10% After-tax return /yr 61.69% Net rental yield 3.01% Net present value $146,494 Cap. growth rate 4.00% IF SOLD Inflation rate 2.50% Selling costs & CGT $74,495 Interest rate 4.50% Equity $117,066 Taxable income $75,000 After-tax return /yr 52.02% COMPUTER PROJECTIONS Investment Analysis End of year Property value Purchase costs Investments Loan amount Equity Capital growth rate Inflation rate (CPI) Gross rent /week Cash deductions Interest (I/O) Rental expenses Pre-tax cash flow Non-cash deductions Deprec.of building Deprec.of fittings Loan costs Total deductions Tax credit (single) After-tax cash flow Rate of return (IRR) Pre-tax equivalent Projections over 10 years yr 2yr 3yr 5yr 10yr $429, , , , , ,357 $13,872 $0 $444, , , , , ,797 $-14,896 2,300 20,183 38,783 78, , % 4.00% 4.00% 4.00% 4.00% 4.00% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% $430 21,913 22,461 23,022 24,188 27, % 20,016 20,016 20,016 20,016 20, % 8,988 9,213 9,443 9,921 11,225 $0-7,091-6,768-6,437-5,749-3, % 5,919 5,919 5,919 5,919 5,919 $0 5,322 5,311 4,005 2, $1, ,450 40,663 39,588 38,481 38,076 $75,000 6,373 6,178 5,512 4,768 4,177 $ % Your cost /(income) per week 90.73% (6) Disclaimer: Note that the computer projections listed above simply illustrate the outcome calculated from the input values and the assumptions contained in the model. Hence the figures can be varied as required and are in no way intended to be a guarantee of future performance. Although the information is provided in good faith, it is also given on the basis that no person using the information, in whole or in part, shall have any claim against Terry Loftus Real Estate, its servants, employees or consultants..

2 Terry Loftus Real Estate Page 2 Tabulated Breakdown of Spreadsheet Items PROPERTY VALUE (average growth of 4.00% per year) PURCHASE COSTS LOAN COSTS Property price: 429,900 Total book value: 429,900 Property market value: $429,900 Conveyancing costs: 1,000 Govt. Stamp duty: 12,872 Total Purchase costs: $13,872 Valuation fees: 300 Registration of mortgage: 350 Registration of title: 175 Search fees: 200 Total loan costs: $1,025 CONTRIBUTION TOWARD TOTAL COSTS LOAN DETAILS RENT CASH DEDUCTIONS PRE-TAX CASH FLOW Investments Loan Total Cost Property costs: 0 429, ,900 Renovation costs: Purchase costs: 0 13,872 13,872 Furniture costs: Loan costs: 0 1,025 1,025 Totals: $0 $444,797 $444,797 Loan type: I/O Yrs 1-40 Interest rate (yr 1) (%) 4.50 Loan: $444,797 Loan costs (written off over 5 yrs): $1,025 Monthly payment: $1,668 Annual payment: $20,016 Rent per week: 430 Potential annual rent: 22,360 Vacancy rate (%): 2.00 Annual rent: $21,913 Loan interest: $20,016 Rental expenses Regular Expenses: Agent's commission (8.25%): 1,808 Letting fees: 430 Rates: 2,500 Insurance: 1,250 Body corporate: 3,000 Special expenses: 0 Total expenses: $8,988 Regular expenses as % of annual rent: 40.20% Net yield or Capitalisation rate: 3.01% Year Initial 1yr 2yr 3yr 5yr 10yr Rent 21,913 22,461 23,022 24,188 27,366 Cash invested Principal payments Interest 20,016 20,016 20,016 20,016 20,016 Expenses 8,988 9,213 9,443 9,921 11,225 Pre-tax cash $0 $-7,091 $-6,768 $-6,437 $-5,749 $-3,874

3 Terry Loftus Real Estate Page 3 NON-CASH DEDUCTIONS Depreciation on the building (Capital allowance) Property value: $429,900 Construction cost: $236,764 Depreciation allowance rate (%): 2.50 Depreciation allowance: $5,919 Depreciation of fittings (annual claim) Total value $0 Depreciation claim in first year $5,322 Loan costs (written off over 5 yrs): $1,025 TOTAL TAX DEDUCTIONS (Cash & Non-Cash Deductions) Year 1yr 2yr 3yr 5yr 10yr Interest 20,016 20,016 20,016 20,016 20,016 Expenses 8,988 9,213 9,443 9,921 11,225 Deprec.-building 5,919 5,919 5,919 5,919 5,919 Deprec.-fittings 5,322 5,311 4,005 2, Loan costs Total deductions 40,450 40,663 39,588 38,481 38,076 TAX CREDITS & AFTER-TAX CASH FLOW (Refunds credited in same year as deductions incurred) Year yr 2yr 3yr 5yr 10yr Pre-tax cash 0-7,091-6,768-6,437-5,749-3,874 Tax credits 6,373 6,178 5,512 4,768 4,177 After-tax cash Cost /(income) per week (6) INTERNAL RATE OF RETURN (over 10 years) Internal rate of return (IRR) 61.69% Pre-tax equivalent of IRR 90.73% Internal rate of return (if sold) 52.02% Net present value (NPV) $146,494 Cash on cash return?????% Cash positive by year 9 Cash neutral investment $24,908 PROJECTIONS OVER 20 YEARS Year Property Equity Rent Total Pre-tax Tax After-tax value deductions cash flow credit cash flow $429,900 $-14,896 $0 $0 1yr $447,096 $2,300 $21,913 $40,450 $-7,091 $6,373 $-718 2yr $464,980 $20,183 $22,461 $40,663 $-6,768 $6,178 $-590 3yr $483,579 $38,783 $23,022 $39,588 $-6,437 $5,512 $-925 4yr $502,922 $58,126 $23,598 $38,902 $-6,097 $5,032 $-1,065 5yr $523,039 $78,243 $24,188 $38,481 $-5,749 $4,768 $-981 6yr $543,961 $99,164 $24,792 $38,039 $-5,392 $4,578 $-814 7yr $565,719 $120,923 $25,412 $37,930 $-5,027 $4,494 $-533 8yr $588,348 $143,551 $26,047 $37,916 $-4,652 $4,438 $-214 9yr $611,882 $167,085 $26,699 $37,970 $-4,268 $4,396 $128 10yr $636,357 $191,561 $27,366 $38,076 $-3,874 $4,177 $303 11yr $661,811 $217,015 $28,050 $45,408 $-3,471 $6,675 $3,204 12yr $688,284 $243,487 $28,751 $37,728 $-3,057 $3,501 $444 13yr $715,815 $271,019 $29,470 $38,023 $-2,633 $3,340 $707 14yr $744,448 $299,651 $30,207 $38,325 $-2,199 $3,182 $983 15yr $774,226 $329,429 $30,962 $38,634 $-1,753 $3,022 $1,269 16yr $805,195 $360,398 $31,736 $38,952 $-1,297 $2,850 $1,553 17yr $837,402 $392,606 $32,530 $39,277 $-829 $2,665 $1,836 18yr $870,899 $426,102 $33,343 $39,611 $-349 $2,476 $2,127 19yr $905,734 $460,938 $34,176 $39,953 $143 $2,282 $2,425 20yr $941,964 $497,167 $35,031 $40,303 $647 $2,083 $2,730

4 Terry Loftus Real Estate Page 4 EQUITY PROJECTIONS Projected values over 5 yrs 10 yrs 15 yrs 20 yrs Property value 523, , , ,964 Loan 444, , , ,797 EQUITY $78,243 $191,561 $329,429 $497,167 Internal rate of return % 61.69% 40.64% 31.40% Approximate costs if sold... Capital Gains Tax 21,060 53,318 95, ,110 Solicitor's fees 2,615 3,182 3,871 4,710 Sales commission 14,879 17,995 21,786 26,399 EQUITY (after sale) $39,689 $117,066 $208,548 $323,948 Internal rate of return (if sold) % 52.02% 35.89% 28.55%

5 Terry Loftus Real Estate Page 5 TAX BENEFITS These are shown below for the given taxable incomes and are based on the specified tax scale. Number of properties: 1 Investor Current taxable income: 75,000 Rental income: 21,913 Total income: 96,913 Rental deductions: 40,450 New taxable income: 56,463 Current tax (on 75,000): 17,300 New tax (on 56,463): 10,927 Tax saving: 6,373 Total tax credits: $6,373