business plan may 2014

Simcoe Green Homes Investment

Prospectus

TABLE OF CONTENTS 1. EXECUTIVE SUMMARY .................................................................................... 3 2. THE SGI VISION .............................................................................................. 5 1. Positive Green Impacts ........................................................................... 5 3. THE TEAM ..................................................................................................... 6 1. Jim Simcoe - Principal ............................................................................ 6 2. Kevin Gaynor - Principal ........................................................................ 6 3. Kristi Byers - Architect ........................................................................... 7 4. Jim Achey - Contractor ........................................................................... 7 5. Annette Di Bello Kelly – Accountant/CFO ................................................ 8 6. Aubri Almendariz - Operations …………………………………………………..8 4. BUSINESS OBJECTIVES .................................................................................... 9 5. JIM SIMCOE COMPANY TIMELINE .................................................................. 10 6. HEALTHY GREEN HOMES .............................................................................. 12 1. Custom Homes for Today’s Buyers ....................................................... 12 2. Product Specs ....................................................................................... 12 3. Cost Advantages .................................................................................. 13 4. Market Advantages ............................................................................... 13 7. MARKET ANALYSIS ....................................................................................... 14 1. Target Market Buyers ........................................................................... 14 2. Market Trends ...................................................................................... 14 3. Market Growth ..................................................................................... 15 4. Current Competition ............................................................................. 15 8. BUSINESS STRATEGY .................................................................................... 16 1. Value Proposition ................................................................................. 16 2. Marketing Campaign ............................................................................ 16 3. Competitive Edge ................................................................................. 17 9. INVESTOR OPPORTUNITY ............................................................................. 18 1. Equity Investors .................................................................................... 18 10. INSPIRED PHILANTHROPY ........................................................................... 19 1. Benefit to the Non-profit ...................................................................... 19 2. Benefit to Our Investors ........................................................................ 19 11. PROJECTED FINANCIALS ............................................................................. 20

Simcoe Green Homes Investment Agreement 676 Second Street, Encinitas, CA 92024

For further information call 760-271-7128 [email protected]

EXECUTIVE SUMMARY “Bringing back the front porch by building healthy ecovillages”

Investment Snapshot Simcoe Green Investments LLC is a real estate investment company with an eight-year track record in sustainable, green building design. We will build ecovillages in California, comprised of single-family homes and condos. These ecovillages will be made up of approximately 10-15 healthy green homes, all designed for multigenerational living. These ecovillages will feature: near net-zero homes, community gardens, electric cars and charging stations, etc. When possible the homes will all feature detached accessory units to allow for intergenerational living opportunities. This investment is geared towards impact investors who seek to make a positive social impact in the world, in addition to earning profits. The investors will own a share in the LLC, which will in turn, own, develop and sell the homes. This investment opportunity provides returns to impact investors in three areas: financial, social, and sustainable. Exit Strategy Investors will receive a pro-rata share at the close of the project. The close of the project will be defined as when the last house has been sold. For each ecovillage we anticipate a 12-15 month start-to-completion timeframe. Business Model The business objective of this investment is to purchase land and develop ecovillages with homes for resale. We measure our investment returns in three distinct areas:

1. Profit (Return on Investment and Internal Rate of Return are our two key indicators)

2. Social Impact (Jobs created, local economy support, etc) 3. Sustainability (Energy saved, CO2 emissions reduced, water conserved)




EXECUTIVE SUMMARY con’t


The Opportunity Our target demographic (young families) desire affordable green homes in neighborhoods that offer healthier living and neighborhood interaction. Currently this market is vastly underserved. Our ecovillage model provides our demographic with the things they care most about, including:

1. Healthy, non-toxic, energy-efficient homes. 2. Front porches and neighborhood designs that foster easy neighbor-to-

neighbor interaction. 3. Affordable homes that offer a bevy of amenities without high price tags.

We offer impact investors a socially responsible investment in this emerging market of ecovillage development. Vision Vision: Our ecovillages create happier, healthier homes in friendlier neighborhoods.

THE GREEN VISION POSITIVE GREEN IMPACTS We are in business to generate revenue and to fundamentally change how the real estate development industry operates. We’re creating homes that are healthy, cost less to operate, and help to protect the planet in the process. In doing so, our business creates positive impacts in five areas.

They are:

INVESTORS

1. Higher returns through greater profit margins and quicker sale times.

2. Safer investment as properties enjoy greater demand and stability.

3. Pride of ‘Action’. Investors are directly contributing to improving our environment, creating jobs and improving the lives of homebuyers.

COMMUNITY

1. Economic growth through job creation, tax revenue, etc.

2. Our model becomes the example for other builders to emulate, thus more healthy green homes are built in communities nationwide.

ENVIRONMENTAL

1. Lower CO2 emissions.

2. Less energy consumed.

3. Reduction in landfill waste.

4. Recycle materials used would have gone to a landfill.

NON-PROFIT

1. They can focus on their core mission, not fundraising.

2. Increased cash flow on a regular basis.

3. Opportunity to increase fundraising dollars through real estate offerings.

GREEN SUPPLIERS

1. More green suppliers in marketplace, causing prices to drop.

2. New products enter the market faster.

3. Larger selection of green products more readily available.



TEAM



JIM SIMCOE Jim Simcoe is the Founder and CEO of Simcoe Green Homes. A nationally recognized sustainability speaker and author, Jim has worked on green real estate projects throughout North America. Jim has been featured on NBC, Fox, SmartMoney.com, and San Diego Insider TV. Jim writes for various publications, such as Personal Real Estate Investor Magazine, BiggerPockets.com (the #1 real estate investing website in the US), EcoHome, San Diego Business Journal, RIS

Media, etc.

He is the co-author of the “Go Green, Bank Green” study published by Personal Real Estate Investor Magazine in March 2010. Jim is a Certified Green Building Professional, EcoBroker and Real Estate Broker. He lives with his wife, two daughters, two cats and one very spoiled Lab puppy in Cardiff-By-The-Sea, California.

KEVIN GAYNOR

Kevin Gaynor is a Building Performance Institute (BPI) Certified Building Analyst, Envelope and Multifamily Building Analyst, and Civil/Environmental Engineer, specializing in the areas of Land Development and Site Design. He has managed projects including single-family homes, commercial properties, 200+ multi-unit developments, hundred acre residential subdivisions, and numerous condo

conversions.

Kevin’s environmental consulting work has consisted primarily of preparing environmental studies, waste management design, and overseeing construction projects. He has developed multi-million dollar cost and quantity estimates for client projects. He has designed strategies for effective Storm Water Management, Storm Water Prevention & Pollution and Low-Impact Development.

Kevin graduated from University of Massachusetts-Amherst with a degree in Civil and Environmental Engineering in 1999. He lives in San Diego, California with his wife, Karin.


TEAM continued


KRISTI BYERS Kristi Byers, AIA, LEED®AP BD+C is the president of Kristi Byers, Architect APC, located in San Diego, CA, with clients throughout California, Arizona and Texas. She has worked in and studied architecture for more than two decades and has participated in a diverse range of commercial, civic, education, residential, mixed-use and master planning projects in roles ranging from Project Designer to Project

Architect to Project Manager and Director of Sustainability. A champion for green design, Kristi has served as a sustainability consultant and managed the LEED certification process for several buildings across the U.S., lectured about eco-friendly design to various municipalities, colleges, professional organizations and corporations and contributed as an item writer for the LEED 2009 examinations.

She has a Bachelor of Architecture degree from the University of Arizona and has been serving intermittently as an adjunct professor at Woodbury University in San Diego for the past six years. She is active in the design community and has served in a leadership role – from President to Committee Chairperson – at organizations including the American Institute of Architects – San Diego Chapter and California Council Chapter, San Diego’s US Green Building Council, Downtown San Diego Partnership, Urban Land Institute and Commercial Real Estate Women.

JIM ACHEY Jim Achey is a Certified Energy Modeling Professional, a certified LEED Green Associate and a member of the United States Green Building Council. With over 10 years of experience in the construction industry, Jim has worked on a full range of projects including the US Federal Courthouse in San Diego, the Los Angeles Valley College Performing and Media Arts Center, etc. Jim began his career as a mechanical

engineer designing HVAC systems and currently specializes in energy consulting/modeling for residential and commercial projects. Jim graduated from Drexel University, Philadelphia with a BS in Architectural Engineering. He lives with his wife in Rancho Santa Fe, California and enjoys surfing, yoga, baseball, and camping.


TEAM cont.


ANNETTE DI BELLO KELLY Annette Di Bello Kelly is a CPA and Certified Financial Planner (CFP). Annette brings to the organization 25 years of Financial, Accounting, Tax and Investment experience. She has an extensive background working with both public and non public companies of various sizes and industries. Further, with her background as a Registered Investment Advisor, she can contribute a great deal towards planning

for future investment returns.

Annette holds a Bachelor Degree in Accounting from California State University, Fullerton. In addition, she is a member of The American Association of Certified Public Accountants, The Financial Planning Association and The California Society of Certified Public Accountants. She lives in Carlsbad, California with her husband and daughter. AUBRI E ALMENDARIZ

A college professor by trade, Aubri helps keep everyone and everything at SGI functioning properly. She is often the first point of contact for SGI and oversees the daily operations of the company to ensure the business continually meets its vision and financial goals based on SGI’s objectives. Aubri’s experience with the real estate development world began in 2003, when she worked as Office Manager for a small commercial acquisition and development firm in Del Mar.

She stepped down from full-time work in 2007 to raise her family.

Aubri graduated with a BA in Liberal Arts from California State University San Marcos in 2002, and completed her MAE in TESOL from Alliant International in 2010. Aubri lives in Encinitas with her two children and Boston Terrier.

BUSINESS OBJECTIVES

The investment objectives of SGI are:

1. Provide impact investors with both a pro-rata share of profits from development projects, as well as the opportunity to invest in a socially responsible business that vastly improves communities.

2. Acquire land and construct small green home communities of 5-15

units of near net-zero homes made with healthy materials.

3. Utilize financing on each of our projects to maximize our return while minimizing our up-front costs. This allows us to do more concurrent projects.

* The communities will feature homes with large front porches, centered on a common courtyard, organic gardens, and walking paths. Our target buyers (young families) want healthy homes that cost less to operate, offer flexible living spaces, and conserve natural resources. We believe that SGI is well positioned to take advantage of the emerging trend towards smaller, greener homes that foster more interaction with neighbors. Our team has a combined 20 + years experience in sustainable development and green building projects throughout the US. We believe that healthy green homes represent the biggest opportunity in home building and we are uniquely positioned to capitalize on that opportunity.

Company Location The main office of Simcoe Green Investments is located at:

676 Second Street

Encinitas, CA 92024



JIM SIMCOE/COMPANY TIMELINE HISTORICAL 2005 • Operated 65-agent real estate company (The Sterling Real Estate Company) with 5 offices in San Diego County. Involved in 100+ real estate transactions, with an average sales price of $800,000. • Began a green building consulting firm, targeting affluent homeowners in San Diego. 2006 • Sold real estate company to Cendant (now Realogy). • Launched green building consulting firm, building a customer base of small

commercial property owners. • Became the first full-time EcoBroker in San Diego county. 2007 – 2008 • Certified as Energy Star Partner - Energy Star. • Certified as Green Building Professional - BuildItGreen. • Expanded green building firm to include large multi-family (400+ units, 15+

acres) owners. Developed strategies to save millions of dollars on energy and water costs for our clients.

• Expanded green building consulting to include real estate clients (owners, investors, builders, and developers) throughout the US.

2009 – 2010 • Raised capital and began investing in FNMA pools of single-family homes in

rural areas of Texas. • Investment model was to buy, green remodel, and sell. • Averaged 22% ROI for our investors. 2011 – 2012 • Expanded our business to include multi-unit property investments. • Began purchasing small pools of multi-unit investment properties in Texas. • Selected by offshore private investment firm to spearhead their burgeoning

$15M investment in US real estate. • Averaged 18% ROI for our investors during this time period. 2013 • Expanded target geographical area to include Southern California. • Expanded product offerings to include smart green home developments (5-10

units). • Hired experienced team to assist with rollout of new product offerings.



JIM SIMCOE/COMPANY TIMELINE cont. COMPANY PROJECTED 2014 • Develop and build first healthy green home community of San Diego. • Healthy green home community will feature modular homes with a design that facilitates interaction with neighbors. • Projected number of homes in construction (includes pre-construction): 30 in San Diego county. • Please refer to Financials for further details. 2015 • Projected number of healthy green homes in construction (includes pre-

construction and sales): 125 in San Diego county. • Please refer to Financials for further details. 2016 • Projected number of healthy green homes in construction (includes pre-

construction and sales): 250 in Southern California. • Please refer to Financials for further details. 2017 • Projected number of smart green homes in construction (includes pre-

construction and sales): 375 throughout California. • Please refer to Financials for further details. 2018 • Projected number of healthy green homes sold: 500 throughout California. • Please refer to Financials for further details.




HEALTHY GREEN HOMES HEALTHY GREEN HOMES FOR TODAY’S BUYER Our healthy green homes are built with the features current homebuyers demand. In short, we build what our buyers want, including: 1. Healthy living environments. 2. Modern designs that facilitate indoor/outdoor living. 3. Energy efficient homes. 4. Superb strength (steel or concrete SIP construction). 5. Lower maintenance costs. 6. Advanced air-quality systems.

PRODUCT SPECS Finished product: 1. 1,500-2,500 square foot, healthy green modular or street built home. 2. 600-700 square foot, accessory unit. Timelines (per house): 1. 6-12 months site prep and construction. 2. Days on Market – 90 days.



HEALTHY GREEN HOMES cont. Cost advantages: 1. Reduced material costs (less waste due to factory manufacturing). 2. Economies of scale in both production building and site development. 3. Production building advantages. 4. Site crews handle site development only. 5. Reduced sales commissions. Market advantages: 1. Little competition. 2. High consumer demand. 3. Improved finished product.

Sustainable Features

Copyright BluHomes 2013


MARKET ANALYSIS TARGET MARKET BUYERS For our homes we cater to family buyers. Family homebuyers can be defined as: • 30 – 55 years old. • College educated. • Families with kids in home. • Previous homebuyers. • Trading-up homebuyers.

MARKET TRENDS Moving away from large homes on small lots for the following reasons:

• Too costly to operate. • Homes can be toxic and harmful to long-term health. • Not indoor/outdoor living friendly. • Necessity for multi-generational family living:

o Baby Boomers aging. o Baby Boomer’s children (would be 1st time home buyers) priced

out of the market. • Share expenses while enjoying larger property.

More holistic buyer: • Desire for healthier, more usable property trumps the desire for

large house.

• Land has many more purposes than in the past: o Kids play area. o Organic gardens.

• Alternative to the ‘McMansion’ style homes that dominate this price

range.



MARKET ANALYSIS cont. MARKET GROWTH According to Yahoo Homes, a study done for Home Horizons in 2012 concluded that 50% of people consider green/energy efficient appliances and materials a part of their dream home.

As Baby Boomers continue to age, this market will continue to grow. The children of Baby Boomers are aging and their needs align closely with the product we provide. As they become more educated about the toxicity levels in typical homes, the demand for our product will only increase.

They need housing that is flexible and can suit the variety of their ever-changing needs. Put simply, a 4,500 square foot, 5-bedroom home with a small yard does not work for our target market anymore. Their needs have changed, but the housing supply has not.

CURRENT COMPETITION Very little competition exists in this space. Production builders still follow traditional, stick-built development models and have neither the teams, nor the expertise to change their approach to the needs of this market.

The competition that does exist in this space takes a very basic approach. They tout low-flow fixtures and CFL light bulbs. We sell a healthy lifestyle and a more flexible, environmentally friendly home. They focus on the materials. We focus on the benefits.



BUSINESS STRATEGY

Simcoe Green seeks funding from investors who are interested in capitalizing on the emerging market of healthy home development. Simcoe Green provides an outstanding opportunity to be at the forefront of a burgeoning market with little competition.

Our green homes offer an unparalleled level of living for our target market.

VALUE PROPOSITION We build green homes that are healthy, high-performance, environmentally friendly and flexible enough to suit your family for the next 20 years.

MARKETING CAMPAIGN The core theme of our marketing campaign is “Be Happy”.

The “Be Happy” concept allows us to draw a subtle, yet direct, comparison to our competition. It informs our target market that there is a better alternative to the typical home. Typical homes are too big, too inflexible, too expensive to run, and too unhealthy.

Ours feature: Healthier living. Lower utility bills and long-term maintenance. High-performance. Faster appreciation. More flexibility. Better air quality.



BUSINESS STRATEGY cont. COMPETITIVE EDGE Our competitive edge is based on three key components.

First, our background is in sustainability and the creation of healthy living environments. We were early adopters of the green living/green building movement and have a solid history of successful green building projects throughout the US. Our experience has given us great insight into what our market wants, and we’ve always focused on the ‘why’ people buy, rather than the ‘what’.

Second, our typical competitors are builders who are now building green for the first time and have little experience on what green elements our target market requires. They may be experts in stick building McMansions but that is no longer what the market wants.

Third, the brand we’ve built is one of a green company first, and a green builder second. That gives us a higher level of political capital when dealing with local governments. They see us as a company improving communities rather than just a profit-at-all-costs developer. Thus we’re able to partner with cities rather than face the typical adversarial relationship between cities and developers.



INVESTOR OPPORTUNITY Prospective investors are able to participate in our program as equity investors:



Equity Investors

Description Provide capital in exchange for a pro-rata share of profits.

Minimum Investment $200,000

Equity Yes

Profit Participation Pro-rata share of company profits distributed quarterly.

Structure Member in Simcoe Green Investments, LLC.

Exit Strategy A balloon payment (initial investment + profit) will be returned on 5/1/2018.

Security Investors are pro-rata shareowners of all company properties.

INSPIRED PHILANTHROPY A core component of our business is supporting non-profit organizations. We offer a revolutionary way for targeted non-profits to receive donations from us. Rather than just receive an occasional donation check, each selected non-profit will receive a quarterly payment based on a percentage of our company’s net profits.

As net profits increase over time, so do the quarterly payments. These payments come directly from the share of profits received by Simcoe Green Homes, AFTER our investors have received their profits.

For example:

Year Annual Net Profits Non-Profit Annual Non-Profit Donation% Donation Year 1 $250,000 5% $12,500

Year 2 $500,000 5% $25,000

Year 3 $750,000 5% $37,500

Year 4 $1,000,000 5% $50,000

Year 5 $1,500,000 5% $75,000

TOTAL $4,000,000 5% $200,000

BENEFITS TO THE NON-PROFIT 1. Compounded interest - donation amounts continue to increase over time.

2. Regular donations received on a quarterly basis.

BENEFITS TO OUR INVESTORS 1. Opportunity to select the non-profit(s) to be supported.

2. Take advantage of all applicable tax write-offs.




For a 5-year Projected Pro-Forma please contact Jim Simcoe at:

[email protected] (760) 271-7128


business plan may 2014

Real Estate

healthy green homes

investment returns

investment opportunity

singlefamily homes

custom homes

impact investors

strategy investors

equity investors