AN EXCLUSIVE BUYING OPPORTUNITY IN THE #1 GROWTH MARKET IN THE U.S.A: MOBILE ALABAMA! High End Single Family Homes For $166,500 (Appraised Value $185,000) With Positive Cash Flow Potential For more information, please complete the information request form

WHAT IS AN "EMERGING MARKET STRATEGY" FOR WEALTH BUILDING?

Imagine if you had the foresight 7 years ago to invest heavily in Las Vegas, Miami, Phoenix, San Diego, and Honolulu, and to get out 2 years ago. Those markets all appreciated over 100% in a 5 year period. Many savvy investors made enough money in those markets in just 5 years that they never have to work again. Now, instead of waking up with that 8 am alarm clock, they are softly awakened by the warm breeze off the ocean blowing through their open window. As they slowly put on their robe, their thoughts turn to the fun activities that will fill their day, since they no longer have a boss or an office to get to by 9am. They are financially free.

Unlike the stock market, local real estate markets usually move in slow, predictable cycles. Appreciation is not magic or luck, it typically correlates closely with economic development and population growth in a local area.

WHAT IF YOU KNEW WHICH MARKET WOULD HAVE THE FASTEST GROWING ECONOMY IN THE COUNTRY OVER THE NEXT 5 YEARS? WOULD YOU GET IN EARLY?

If you missed out on Phoenix and Vegas and Florida (or if you rode those waves and know what it's all about), you have an exclusive opportunity to invest in Mobile, Alabama, ranked by Moody's and Forbes as the #1 market in the country for economic growth between 2008-2012.

WHAT IS DRIVING THE EXPLOSIVE GROWTH IN MOBILE?

According to Business 2.0 and CNN's Money Magazine, "Mobile is emerging as the South's next boomtown and a magnet for megaprojects". The biggest is a $4.1 billion steel mill that German industrial giant ThyssenKrupp is building in Mobile. It will create 2,700 jobs when it opens in 2010, generate almost twice as many spinoff jobs, and bring in 29,000 workers during the construction phase.

Wachovia Economics Group's 2007 Report lists some of the additional projects that are coming to Mobile:

• Berg Spiral Pipe Company to Open New $75 Million Plant
• International Shipholding Corporation to Open New $23 Million Plant
• Goodrich Aerospace Undertakes $11 million Expansion to Manufacturing Plant
• Mobile Aerospace Engineering to Undertake Plant Expansion
• Airbus North America to Open New Aircraft Assembly Plant

Tourism is also set to skyrocket, with a $600 million NASCAR race track and entertainment complex breaking ground this year. The "Dale Earnhardt Jr. Speedway" will be fully operational by 2010. It will also increase employment and spin-off jobs.

WHAT IS THE BEST MICRO MARKET TO BUY RESIDENTIAL PROPERTY IN IF I WANT TO CAPITALIZE ON THE GROWTH IN MOBILE?

The Eastern Shore in Baldwin County. Hands down. There are two primary reasons for this:

1. People who work in Mobile usually prefer to live in the Eastern Shore because it offers a more desirable lifestyle with superior shopping, restaurants and community life.
   
   
2. The Eastern Shore is going through its own economic boom. Retail mega-centers, restaurants, hotels and new office space all break ground this year. Job growth in the Eastern Shore and job growth in Mobile both translate to housing demand in the Eastern Shore

WHERE IS THE CHARMONT SUBDIVISION AND WHY IS THE LOCATION SO PREMIUM?

Charmont is in Baldwin County, just a few miles from the new retail developments in the Eastern Shore and an easy commute to downtown Mobile. It is located in the northwest corner of the town of Loxley, right on the border of the more expensive towns of Daphne and Spanish Fort, with premium access to all that the Eastern Shore has to offer. It is about 30 minutes north of Orange Beach and Gulf Shores, and 10 minutes inland from the Bay.

THE BABY BOOMERS BEGIN TO RETIRE OVER THE NEXT TWO YEARS. IS IT TRUE THAT BALDWIN COUNTY HAS NO PROPERTY TAXES FOR SENIOR CITIZENS?

YES! The Baby-Boomers begin to retire next year, setting the stage for one of the largest population shifts in recent history. If you were about to retire, and you were sick and tired of shoveling snow and looking for place to live out your golden years, might you think of moving South? And since Florida is so astronomiically priced, and Baldwin County Alabama has beaches that look identical to Florida, as well as some of the top rated golf courses in the country, and NO PROPERTY TAXES FOR PEOPLE OVER 65 YEARS OLD, would that be a retirement incentive? You could have the Florida lifestyle at a fraction of the cost, less crowded and NO property taxes!

WHAT WILL THE CHARMONT HOMES LOOK LIKE WHEN THEY ARE COMPLETE?

They will be 1510 sq ft detached single family brick homes with spacious yards, granite countertops and ceramic tile floors. This will not be a standard track home subdivision, Charmont is being designed as a real showpiece. The first phase (99 homes available EXCLUSIVELY to our investors) will be a track-custom hybrid, featuring at least 10 different external elevations with attention to detail and distinction on each one, 4 different floor plans, and 4 different internal color schemes, naturally spaced throughout the community. The second (final) phase will be sold EXCLUSIVELY to primary homeowners, and will be primarily high end custom homes, many of them larger than the ones we are buying.

WHAT AMENITIES DOES THE SUBDIVISION OFFER FOR THE RESIDENTS?

Charmont creates a premium lifestyle for residents who can retreat to an oasis of beautifully landscaped common areas, including an 80'x40' private swimming pool, with relaxing sun deck, outdoor barbecue and picnic area, plus a fully furnished clubhouse for social gatherings.

WHAT IS THE APPRAISED VALUE OF THESE HOMES?

We have two appraisals conducted by independent appraisal companies and they both came back at $185,000. View appraisal 1. View appraisal 2.

The Developer will begin selling phase two at $185,000 or higher for comparable 1510 sq. ft homes, and increase prices for larger homes accordingly.

Neighboring subdivisions adjacent to Charmont are selling slightly larger homes (1750-1850 sq. ft range) of comparable quality for $235,000 (and those are in communitites with NO swimming pool or clubhouse!).

WHAT IS MY PRICE? $166,500

WHY IS THIS THE PREMIERE INVESTMENT PROPERTY TO BUY?

After extensively studying the micro-markets, we have selected this specific product because it is extremely scarce and therefore creates value in the marketplace (imperative in an appreciation play!). In this premium area of Loxley, primary homeowners want to buy nicer homes with brick exteriors, a nice yard, granite countertops, etc. But almost all the 3BR/2BA homes that have brick, granite and ceramic tile are larger and more expensive than ours.

That means two things:

1. If local employees cannot afford to own or rent one of these more expensive homes, they currently need to move further away from the jobs and shopping centers and get into a lower end investor-grade home. We are solving that problem by creating a higher end home with a premium pool/clubhouse complex, that is also affordable, so people can live near their jobs on the Eastern Shore (Demand Real Estate!).
   
   
2. This home provides a premium exit strategy, because end users want to buy nicer homes in communities with higher end amenities. We are buying the least expensive home (with these caliber amenities) in the most expensive area of Loxley. That positions us perfectly if the area appreciates substantially over the next 3-5 years, because people who can currently afford a $250,000 home on their salaries will still be able to afford Charmont.

I LIVE OUT OF STATE. HOW WILL I MANAGE THE PROPERTY?

Finding a top quality property management company to lease and manage your property is one of the most important components of a successful out-of-state real estate investment. You may use any property management company you want, and we can provide you with a list of them...or you can use the company we are going to use.

We spent extensive time interviewing property management companies in the area, and have negotiated an incredible option for our investors:

The Developer's property management company will offer On-Site Leasing and Management services at special discounted rates for our buyers. They will have an office in the clubhouse near the pool, out of which they will be selling the final tier of custom homes. They will lease and manage your property out of this same office (if you choose to go with them) and ensure that the subdivision is kept in pristine condition. They will create and maintain the official Charmont website, and advertise extensively in all the local papers. They will launch a "Pre-Leasing" campaign during the construction period, so that tenants are lined up as soon as your home is complete. In addition to advertising, they will be pro-active and set up face to face meetings with the major local employers, and offer special incentives for all these new employees to live in Charmont.

We have negotiated these extensive leasing and management services at a discount, available exclusively to our buyers. Most companies charge you a fee each time they lease the property (usually ½ month's rent to 1 full month's rent), at least 10% or more to manage the property each month, and periodic/annual advertising fees even if your unit is full. For our buyers, we have negotiated a one-time up front advertising fee of $325, and then a discounted rate of 8% of the gross rent per month for management. There will be NO leasing fees, NO fees during the period your unit is vacant, NO annual fees, and NO additional advertising fee even if your unit goes vacant down the road!

WHAT IS THE RENTAL MARKET LIKE FOR THESE PROPERTIES?

We studied local rental demand. With all these new employees moving into the area, we asked what rental price point is most in demand right now? What rental price point gets leased up as soon as it comes online? The answer we got from local property management companies was $1200/month*. We then asked: How can we create value in the marketplace by providing the highest quality property with the sweetest amenities that can still rent at that demand price point?

You will see on the appraisals above that the independent appraisers estimated the market rent at around $1400/month* because there are not many subdivisions with the same quality homes and amenities that are renting for less than $1400/month*. But by offering these homes for rent at $1200/mo*, we are hitting the demand price point and offering a community that is unmatched in the area for that price…setting the stage for a rental frenzy!

The preferred property management company can also advertise your home as a "lease with an option to buy". This means that you have a tenant who would like to buy the property at a future date. The tenant signs the lease with you and also signs an option agreement, giving them a right to purchase the home at a fixed price within a fixed timeframe, pays you a non-refundable option premium in exchange for that right, and pays a higher monthly rent (some of which gets credited towards their future purchase price). As a lease-option tenant intends to buy the home one day, they usually take very good care of the home, just as a primary homeowner would.

* Like all markets, the rental market is subject to adjust and there are no guarantees of monthly rent.

WHAT ARE MY FINANCING OPTIONS?

All Buyers will be required to put up a $5,000 reservation deposit to reserve a unit. The $5,000 is REFUNDABLE for any reason (and will state that on the reservation form), until you sign the hard contract. When you sign the hard contract, the deposit will become NON-REFUNDABLE.

You have two financing options:

1. You can purchase the home the conventional way. Put up your 10% down payment within 14 days of signing the hard contract, and close on the house when it is complete. As long as you have a 680 credit score, the preferred lender currently has programs available for both full documentation buyers as well as stated income buyers. (All programs, rates and qualifications subject to change daily. No rates or programs guaranteed).
   
   
2. You can use a "construction to permanent" loan. This means that you close on your loan at the beginning of the construction process, the builder uses the money to build your home, and you modify the loan into a permanent loan when home is completed. If you choose this option, the builder will pay $6,600 towards your closing costs and interest during construction period and guarantee you the home will be completed and rent ready in 70 days. The builder is willing to compensate you for taking on the construction loan because it means he does not have to tie up his lines of credit during the construction process. The contract will guarantee you that if the builder does not complete your home in 70 days, he is responsible for making ALL remaining loan payments for you until your home is complete and showing you proof of payment.

WHAT IS THE MONTHLY HOA FEE AND WHAT DOES IT INCLUDE?

The monthly Home Owners Association fee is estimated to be $83. In addition to maintenance of common area amenities, this fee INCLUDES LAWNCARE AND LANDSCAPE MAINTENANCE FOR EACH INDIVIDUAL HOME. This way every home will look pristine from the outside, enhancing community appeal for re-sale to primary home owners!

IS THE COST OF INSURANCE HIGH ON THE GULF COAST?

We did very careful research on this and the answer is just another added bonus of investing in the town of Loxley. Charmont did not get touched by Hurricane Katrina. It is 30 minutes north of the beach and 10 minutes inland from the Bay. It is also in Zone X, which means it is officially designed a NON-Flood Zone. Furthermore, these are brick homes and built to the new international hurrican grade standards to withstand 140mpi windloads. For these reasons, insurance rates are not that different from elsewhere around the country. A standard one year investor policy with FULL WIND, FLOOD AND HAZARD INSURANCE is around $75/month*.

* All insurance quotes are subject to change by the day. Rates and programs are never guaranteed.

WHAT ARE THE ESTIMATED PROPERTY TAXES?

The property has not been assessed yet, but based on the standard formula for calculating local property taxes, it is estimated that they will be approximately $91/month. You heard correctly. Baldwin County has one of the lowest property tax rates in the country!

DO THESE PROPERTIES HAVE THE POTENTIAL FOR A POSITIVE MONTHLY CASH FLOW?

Yes, but it depends on how much money you put down, what your individual financing qualifications are and what type of mortgage you choose. Let's do a sample analysis taking a full documentation buyer with 680+ credit who puts 20% down and selects a 5/1 Interest-Only ARM:

Buyers who wish to put only 10% down will most likely have higher rates and mortgage insurance. Buyers who choose conventional principle and interest financing will likely have a higher monthly payment. Buyers that go "Stated Income" and buyers who own more than 10 properties will most likely have higher rates.

If you find yourself in a negative cash flow situation, you may consider lease-optioning your property to get a higher monthly income.

ENTER THE "GO-ZONE": ICING ON THE CAKE FOR THOSE WHO QUALFIY!!

Three years ago, Congress passed The Gulf Opportunity Act of 2005 (HR 4440), designating certain areas of Louisiana, Mississippi and Alabama as the Gulf Opportunity Zone, or "GO-Zone", and introduced the most extraordinary tax benefits for real estate professionals in the history of the United States. GOOD NEWS: Charmont is Qualified GO-Zone property!

In an attempt to incentivize the rebuilding of areas affected by Hurricane Katrina, the Act allows real estate professionals who buy newly constructed properties in the GO-Zone and put them into service before December 31, 2008, the following benefits:

• 50% first year bonus depreciation
• 5 year net operating loss carry back
• 20 year net operating loss carry forward

WHAT THE HECK DOES ALL THAT MEAN, AND HOW DO I KNOW IF I CAN BENEFIT FROM THE GO-ZONE IF I BUY IN CHARMONT?

Normally a residential investment property is depreciated over 27.5 years, which comes out to 3.64% per year. That means if you buy a regular property for $166,500, and the land is worth about $30,000, the value of your structure (called your "depreciable basis") would be $136,500. Normally, you would depreciate this over 27.5 years, giving a paper "loss" that can be written off of $4,968 per year.

If you qualify as a "real estate professional" for tax purposes and you buy this same property in the GO-Zone (Charmont!), it generates a 50% first year bonus depreciation, which means instead of a $4,968 first year depreciation, it would generate a $70,707 first year depreciation! And you are allowed to carry this "loss" backwards 5 years, take it against income you have already paid taxes on, and get a refund from the government! So, If you are in the 35% tax bracket, that is a tax refund of $24,747! If you put $33,300 down on this property, that would be a 74% cash on cash return JUST FROM THE TAX INCENTIVE ALONE. If you factor in your discounted price ($18,500 of built-in equity when you buy), thats a 130% return on your 20% down payment, and that doesn't include any cash flow or appreciation.

If you are NOT a real estate professional but you make less than $100,000 per year, you can only take $25,000 of total real estate losses against your other income. So, if you made exactly $100,000 of taxable income, and this was your only investment property, you could take the $70,707 loss against your earned income spaced out over a 3 year period. Since you are in the 28% bracket that would be a tax savings of around $7,000 per year! If you make between$100,000 and $150,000, the amount of real estate losses you can take against your earned income phases out.

Also, GO-Zone bonus depreciation is not subject to restrictions of alternative minimum tax (AMT).

You should consult your CPA about your individual situation, applicable law, and recapture regulations.

WHEN YOU LOOK BACK IN 5 YEARS, WHAT WILL YOU BE ABLE TO SAY ABOUT YOUR DECISION TO BUY?

Every once in a while an opportunity comes along so extraordinary, that it becomes a defining moment in a person's financial life. A successful investor is defined by their ability to pull the trigger when they see a premium investment opportunity. Today we look back and see who got into the aggressive growth markets of the last 5 years, and who is talking about "if only I had". Another pivotal moment is before us today, and 5 years from now the same discussion will be had....what group will you be in?

For more information, please complete the information request form.

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Please note that all prices, building costs, interest rates, appreciation rates and terms are subject to change without notice. NREI Club is not responsible for losses, damages, or changes in the market conditions. Investors are urged to perform their own due diligence investigations before entering into any real estate transaction, or other contractual relationship, and prior to making a purchase decision.