A presentation by Chris Howard - 17 Dec 2008

1. While the UK market is quiet,
do you want to make money
in more active and profitable markets?
West Country Landlords Association
17th December 2008
Chris Howard
4:Property

2. What do you want to take away from this session?

3. What do you want to take away from this session?
How to make the most of your investments :
§ Protect what you’ve got
§ Increase your wealth by growing your returns

4. What do you want to take away from this session?
How to make the most of your investments :
§ Protect what you’ve got
§ Increase your wealth by growing your returns
We only have a short time, for a very substantial topic, so I’d like to focus
on the key elements :
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ Investors’ profits from development
§ What’s the best way to invest?

5. First of all, introductions

6. 4:you and 4:Property Projects
Existing Investments/ Developments
4 Property Projects

7. Who are you?
Two questions, for a show of hands
1. UK Home only
1-5 properties
5+ properties
2. Abroad No investments abroad
1-5
5+

8. Our Agenda Today
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ What’s the best way to invest?
§ Summary

9. Our Agenda Today
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ What’s the best way to invest?
§ Summary

10. The UK Market
§ As we know, strong growth in recent years

11. UK House Prices : The long view : 1970 - 2008
UK Average House Prices
1970 - 2007
250,000
200,000
150,000
100,000
50,000
0
70
73
76
79
82
85
88
91
94
97
00
03
06
09
19
19
19
19
19
19
19
19
19
19
20
20
20
20

12. UK House Prices : The long view : 1970 - 2008
UK Average House Prices
1970 - 2007
250,000
200,000
150,000
100,000
50,000
0
70
73
76
79
82
85
88
91
94
97
00
03
06
09
19
19
19
19
19
19
19
19
19
19
20
20
20
20

13. House Price Inflation 1984 - 2007
Source : The ODPM (Table 521) has carried out a
comparison between their statistics and those of the
Nationwide and Halifax. These are the figures for
annual house price inflation, in percentage terms,
since 1984.

14. The UK Market
§ As we know, strong growth in recent years, now faltering
§ A lot of media attention

15. Property : always newsworthy,
but not always informative
The Times 29th October 2007
The Times 13th March 2007

16. Property : always newsworthy,
but not always informative
The Times 29th October 2007
The Times 13th March 2007
The Times 23rd August 03
The Times 30th August 03

17. The UK Market
§ As we know, strong growth in recent years, now faltering
§ A lot of media attention
§ Many comments by vested interests

18. The UK Market
§ As we know, strong growth in recent years
§ A lot of media attention
§ Many comments by vested interests :
§ Savills, Knight Frank .. - central London ‘big ticket’
§ Estate Agents, RICS - the only way is up
§ Council of Mortgage Lenders - ‘lending’

19. The UK Market
§ As we know, strong growth in recent years, now faltering
§ A lot of media attention
§ Many comments by vested interests
§ A tendency to make over simplified statements

20. The UK Market
§ As we know, strong growth in recent years, now faltering
§ A lot of media attention
§ Many comments by vested interests
§ A tendency to make over simplified statements :
“The property market will ….” but there are many property markets
§ Residential / Commercial / Retail
§ and local performance matters

21. Looking into the crystal ball – but let’s try

22. UK House Prices : The long view : 1970 - 2008
UK Average House Prices
1970 - 2007
250,000
200,000
150,000
100,000
50,000
0
70
73
76
79
82
85
88
91
94
97
00
03
06
09
19
19
19
19
19
19
19
19
19
19
20
20
20
20
Is this just the changing exchange rate
between houses and available credit?

23. Looking into the crystal ball – but let’s try
What can we foresee?
§ A shortage of credit over at least the next 6-12 months
§ Local conditions matter – city centre apartments, regeneration etc
§ Financial markets will take a while to settle, then be more wary

24. Looking into the crystal ball – but let’s try
What can we foresee?
§ A shortage of credit over at least the next 6-12 months
§ Local conditions matter – city centre apartments, regeneration etc
§ Financial markets will take a while to settle, then be more wary
but,
§ Supply/ Demand will determine price level
§ Affordability may determine the ownership/ rental mix
§ For credit, experienced landlords will be favoured

25. Looking into the crystal ball – but let’s try
What can we foresee?
§ A shortage of credit over at least the next 6-12 months
§ Local conditions matter – city centre apartments, regeneration etc
§ Financial markets will take a while to settle, then be more wary
but,
§ Supply/ Demand will determine price level
§ Affordability may determine the ownership/ rental mix
§ For credit, experienced landlords will be favoured
Average house price
§ Has fallen by 10% over the last 12 months
§ likely to fall up to a further 10% (15%?) over 1-2 yrs

26. So what are the options for you?
The business questions:
§ How do you make the most of your assets?
§ How do you manage your money?
§ What could you do to raise your rate of return?

27. Now there is more property to choose from
§ UK
§ Europe - Old Europe, New Europe
§ Asia - China, SE Asia, India
§ South America
§ Australia….

28. Now there is more property to choose from
§ UK
§ Europe - Old Europe, New Europe
§ Asia - China, SE Asia, India
§ South America
§ Australia….
But this raises issues of
§ Availability, stability and realisability
§ What suits you?
§ How much time do you want to spend?

29. Our Agenda Today
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ What’s the best way to invest?
§ Summary

30. Active property markets follow active economies
Which to choose depends upon
Your target returns
§ How well you manage your portfolio
Your knowledge of the market
§ Your view of the country
§ Economic performance
§ Political stability/ Reliability
§ or your business partners knowledge

31. Active property markets follow active economies
Which to choose depends upon
Your target returns
§ How well you manage your portfolio

32. What is your target?
Cumulative returns
Investing at 5% p.a.
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1 2 3 4 5 6 7 8 9 10
At 5% per year, every year
£1,000 becomes £1,600

33. What is your target?
Cumulative Returns
Investing at a 30% per year return
16
14
12
10
8
6
4
2
0
1 2 3 4 5 6 7 8 9 10
At 30% per year, every year
£1,000 becomes £14,000

34. What is your target?
Comparison of Cumulative returns
30% p.a. or 5% p.a.
16
14
12
10
8
6
4
2
0
1 2 3 4 5 6 7 8 9 10
So for each £1,000 you invest, after 10 years,
The difference is substantial
Which would you prefer £1,600 or £14,000?

35. How do you achieve that?
Getting more from your investments
• Create a portfolio
– Place your funds in diverse independent investments
– Plan your profits and manage the uncertainty
• Spread your investment – seek more profitable markets
– Use your money in a range of investments
– Take advantage of higher return investments
– Don’t put all your eggs in one basket
• Achieve your planned returns
– A portfolio achieves closer to the planned returns
– A portfolio achieves higher returns

36. Property Markets
Different types
§ Emerging markets
§ Active Markets
§ Mature Markets
§ Stagnant Markets

37. Looking ahead now, Economic Growth in 2008-9

38. Markets behave differently
An important comparison
UK New joiners to EU
(eg Croatia, Romania)
Economic Growth 0% 6-7% p.a. (i.e. 25% in 4 years)

39. Markets behave differently
An important comparison
UK New joiners to EU
(eg Croatia, Romania)
Economic Growth 0% 6-7% p,a, (i.e. 25% in 4 years)
Property
Development Halted Active, investment and new jobs

40. Markets behave differently
An important comparison
UK New joiners to EU
(eg Croatia, Romania)
Economic Growth 0% 6-7% p,a, (i.e. 25% in 4 years)
Property
Development Halted Active, investment and jobs
Property
Appreciation -10% p.a. +10 - 20% p.a.

41. Property Markets
Different types
§ Emerging markets
§ Active Markets
§ Mature Markets
§ Stagnant Markets

42. Our Agenda Today
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ What’s the best way to invest?
§ Summary

43. Active property markets follow active economies
Which to choose depends upon
Your target returns
§ How well you manage your portfolio
Your knowledge of the market
§ Your view of the country
§ Economic performance
§ Political stability/ Reliability
§ or your business partners knowledge

44. International markets are readily accessible
What suits you best?
Now you can choose from :
§ UK
§ Europe - Old Europe, New Europe
§ Asia - China, SE Asia, India
§ South America
§ Australia….

45. International markets are readily accessible
What suits you best?
Now you can choose from :
§ UK
§ Europe - Old Europe, New Europe
§ Asia - China, SE Asia, India
§ South America
§ Australia….

46. International markets are readily accessible
What suits you best?
Now you can choose from :
§ UK
§ Europe - Old Europe, New Europe
§ Asia - China, SE Asia, India
§ South America
§ Australia….
Politically stable, strong economic growth
New Europe will continue to grow

48. The areas to invest in
There is currently substantial inward investment
§ EU - airports, cheap flights, motorways, banks and utilities
§ Corporations
§ Private Investment – company and property
Increasing local incomes and buying power

49. The areas to invest in
There is currently substantial inward investment
§ EU - airports, cheap flights, motorways, banks and utilities
§ Corporations
§ Private Investment – company and property
Increasing local incomes and buying power
Where to invest?
Areas of economic growth
§ Commercial Centres
§ Regeneration Areas
§ Tourist Areas

50. Foreign Direct Investment growing for 10 years
Foreign Direct Investment
during the 3 years before; 2 years after and 6-8 years after
joining the EU
1200
1000
800
600
400
200
0
Ireland UK Portugal Spain
Property Secrets : Eastern Europe

51. Our Agenda Today
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ What’s the best way to invest?
§ Summary

52. Property Markets
Different types
§ Emerging markets
§ Active Markets
§ Mature Markets
§ Stagnant Markets
Different Ways of investing
§ Land
§ Development
§ Buy to sell/ off plan
§ Purchase and hold (BTL)

53. Property Investment : Using the property cycle
• Land
• Development
• Buy to sell/ off plan
• Purchase and hold (BTL)

54. Property Investment : The Options
• Land
• Higher risk and potentially higher reward
• Needs good local knowledge
• Development
§ High returns, reliable profits, fixed project period
§ But not readily accessible to individual investors
• Buy to sell/ off plan
• Developer valuations
• Market maturity
• Purchase and hold (BTL)
§ Returns depend on market appreciation
§ And successful sale in the future

55. Property Investment
This is also the
sequence of
• Land
a project
• Higher risk and potentially higher reward
• Needs good local knowledge
• Development
§ High returns, reliable profits, fixed project period
§ But not readily accessible to individual investors
• Buy to sell/ off plan
• Developer valuations
• Market maturity
• Purchase and hold (BTL)
§ Returns depend on market appreciation
§ And successful sale in the future

56. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
PP2
25
PP1
10
5
Green Construction Property
With
Land Phase
Planning Ownership
Permission or BTL

57. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
PP2
25
PP1
10
5
Green Construction Property
With
Land Phase
Planning Ownership
Permission or BTL

58. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
PP2
25
PP1
10
5
Green Construction Property
With
Land Phase
Planning Ownership
Permission or BTL

59. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
PP2
25
PP1
10
5
Green Construction Property
With
Land Phase
Planning Ownership
Permission or BTL

60. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
PP2
25
Added
PP1 Value: 20
10
5
Green Development Property
With
Land (Construction) Ownership
Planning
Permission Phase or BTL

61. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
Added Value : 75
Costs : 35
Profit : 40
PP2
25
Added
PP1 Value: 20
10
5
Green Development Property
With
Land (Construction) Ownership
Planning
Permission Phase or BTL

62. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
A larger
Return
PP2
25
PP1
10
5
Green Development Property
With
Land (Construction) Ownership
Planning
Permission Phase or BTL

63. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
A larger
Return
PP2
25
But a
PP1 larger
10
% return
5
Green Development Property
With
Land (Construction) Ownership
Planning
Permission Phase or BTL

64. Managing your property investment wisely
Value of
Property
the Site
Appreciation
£ Property
Completes
100
BTL -
A larger Return
return depends
totally
on market
PP2 appreciation
25
But a
PP1 larger
10
% return
5
Green Development Property
With
Land (Construction) Ownership
Planning
Permission Phase or BTL

65. So the key questions for property investors,
and for you are …….
§ Are you making the capital gain or income you want
from your investments?
§ Are you using the market opportunities available to
you?
§ Are you using the stages of the property cycle?
§ Do you have the right balance, for you, of UK and other
more profitable property markets?

66. Our Agenda Today
§ The UK market outlook
§ Managing your assets to achieve stronger growth
§ Why the ‘new joiner’ markets
§ The investment options
§ What’s the best way to invest?
§ Summary

67. To grow your assets you have to look for growth
§ Invest in the market you know - use the cycle
§ create profit and asset
§ Watch market performance – for active markets
§ Seek more profitable markets
§ Spread your investments
§ Use your assets, to actively re-invest, this will
§ Raise your rate of return
§ Create larger assets to invest later

68. Typical UK residential development
% UK
Sales Value
£
20% PROFIT
50% BUILD
LAND
30%

69. New joiner to the EU residential development
% UK % NJEU
Sales Value Sales Value
£
20% PROFIT
35-40%
PROFIT
50% BUILD
BUILD 50%
LAND
30%
10 - 15%
LAND

70. New joiner to the EU residential development
% UK % NJEU
Sales Value Sales Value
£
20% PROFIT
35-40%
PROFIT
50% BUILD
Investment in
BUILD 50%
site, design
permission
LAND
30%
10 - 15%
LAND

71. New joiner to the EU residential development
% UK % NJEU
Sales Value Sales Value
£
20% PROFIT
35-40% Marketing,
PROFIT
sales and
construction
50% BUILD
Investment in
BUILD 50%
site, design
permission
LAND
30%
10 - 15%
LAND

72. New joiner to the EU residential development
Returns
% UK % NJEU
Sales Value Sales Value
£
20% PROFIT
35-40% Marketing,
PROFIT
sales and
construction
50% BUILD
Investment in
BUILD 50%
site, design
permission
LAND
30%
10 - 15%
LAND

73. New joiner to the EU residential development
% UK % NJEU
Sales Value Sales Value
£
20% PROFIT
35-40%
PROFIT
50% BUILD
BUILD 50%
Investment
LAND
30%
10 - 15%
LAND

74. New joiner to the EU residential development
Returns shared
% UK % NJEU
50 / 50
Sales Value Sales Value
£
Investors first call
20% PROFIT on profits,
35-40%
PROFIT then
4P + local Partner
50% BUILD
BUILD 50%
Investment
LAND
30%
10 - 15%
LAND

75. Our Agenda Today
§ Why property
§ Why the ‘new joiner’ markets
§ The investment options
§ Investors’ profits from development
§ Where should I invest?
§ Summary

76. New joiner to the EU residential development
% UK % NJEU
Sales Value Sales Value
£
20% PROFIT
35-40%
PROFIT
50% BUILD
BUILD 50%
LAND
30%
10 - 15%
LAND

77. Find the site
Location,
Starigrad Croatia amenities,
appeal
Utilities,
access,
attractiveness

78. Design the detailed Scheme
- on the outside
Lika, Croatia

79. Design the detailed Scheme
– and on the inside

80. Market the Scheme to property buyers
Mountain view,
Borovets
Rila View,
Samarkov

81. 4:Croatia
Each country is different, but similar segments
In Croatia, focusing on
§ Coastal and ski tourist centres and
§ Second homes near the capital, Zagreb
§ Apartments at Cavtat, Dubrovnik
But local knowledge is key

82. 4:Montenegro
Each country is different, but with
similar segments
In Montenegro, focusing on
§ the tourist centres, near
Dubrovnik airport
§ Boka Bay and Kotor, in a
beautiful but small economy
But local knowledge is key

83. 4:Bulgaria
Each country is different, but with
similar segments
In Bulgaria focusing on
§ Tourist centres, and
§ second homes near the
Capital, Sofia
But local knowledge is key

84. 4:Romania
Each country is different, but
with similar segments
In Romania focusing on
§ Commercial Centres, and
§ the Capital, Bucharest
But local knowledge is
key

85. 4Property Investments - Current Projects
SINGLE COUNTRY Returns Investor Profit
Land
1. Romania Land 40% p.a. 96% in 2 years
Development
2. Cavtat, Croatia 35% p.a. 82% in 2 years
3. Romania Land and Devt 30% p.a. 120% in 3 years

86. 4Property Investments - Current Projects
SINGLE COUNTRY Returns Investor Profit
Land
1. Romania Land 40% p.a. 96% in 2 years
Development
2. Cavtat, Croatia 35% p.a. 82% in 2 years
3. Romania Land and Devt 30% p.a. 120% in 3 years
PORTFOLIO INVESTMENTS
4. Wealthbuilder – int. paid 18% p.a. Income 54% over 3 years
Landlords Investment 20% p.a. C.Gain 73% over 3 years
5. UK Tax Free - SIPPS 20% p.a. 73% in 3 years
5. Invest4charity 28% p.a. 63% in 2 years

87. Our Agenda Today
§ Why property
§ Why the ‘new joiner’ markets
§ The investment options
§ Investors’ profits from development
§ Where should I invest?
§ Summary

88. In summary - Make the most of your investments
Create a portfolio of independent investments
§ Use the strength that different investments brings you
Make the most of the cumulative returns over time
§ Achieve higher profits, more predictably, year in, year out
Choose the investments that suit your strategy
§ Choose to earn income or capital gain
§ Short term or long term

89. 4Property Projects allow our investors to
Profit from the market changes
§ Spread your investment in the active property markets wisely
§ Use these major economic changes
§ Expect active EU property markets for 5-10 years
Include the profitable 4Property Projects in your portfolio
§ High rates of return : 20% - 40% per year compound
: on plan performance typically 2x in 3yrs
§ Investor Security
§ During the project : First charge on the assets
§ On completion : First share of profits

90. 4Property Projects allow our investors to
Profit from the market changes
§ Spread your investment in the active property markets wisely
§ Use these major economic changes
§ Expect active EU property markets for 5-10 years
Include the profitable 4Property Projects in your portfolio
§ High rates of return : 20% - 40% per year compound
: on plan performance typically 2x in 3yrs
§ Investor Security
§ During the project : First charge on the assets
§ On completion : First share of profits
A natural part of any property investment

91. ‘Just good business’
§ Good profitable business for you
§ Wise use of major economic trends
§ Long lasting and repeatable, rolling over….
§ What else would you look for?

92. Thank you
4 Property
Telephone : 0800 1601 004
E mail : invest @ 4property . uk. com
Website : www . 4property . uk . com