Affinity's approach to value investing is rooted in a strict due diligence process and a commitment to buying properties at below market value in markets with strong economic growth. Affinity's strategy is simple: to locate under-valued, and poorly managed properties in up-trending cities. We typically invest in buildings with good locations and construction and high tenant standards (Class "B"); or older buildings that are not in disrepair and that maintain steady occupancy (Class "C").

Advantages of Investing In Real Estate

• Leverage is the use of borrowed capital to enhance the earning of an investment - rental income pays off your mortgage
• Appreciation - strategically selected investment real estate is a powerful vehicle for wealth creation
• Income you may never outlive - the cash flow received from investment real estate is an ongoing venture
• Return on Investment exceeds that of savings account, GICs, and money market accounts
• Mortgage Interest Rates are at a 50-year low
• Diversification is the key to any long term investment strategy
• Professional Management for carefree ownership
• Hedge against Inflation - rents typically increase in inflationary periods
• Three Income Generators - cash flow, appreciation and principal reduction

Advantages of Multi-Family Investment

Since the value of multi-family communities are based on the net operating income generated by the property, inflationary periods result in higher rental rates, hence, higher value - basically a hedge against inflation. Conventional bank financing is also based on the income of the property, which increases the likelihood of securing a high-ratio mortgage, to take full advantage of the power of leverage.

Investment in large, multi-family properties also has built-in economies of scale when it comes to renovations, marketing and advertising, and on-site staffing, such that the operating expenses can be optimized since the costs are spread over hundreds of rental units. We understand that tenant amenities such as a swimming pool, games room, fitness centre, or clubhouse on-site, which are primarily found in larger rental communities, will translate into a more stable tenant mix and typically higher occupancy rates.

Affinity's investment strategy is to invest in multi-family residential rental properties due to the attractive characteristics of this asset class. When the single-family housing market is in a downturn and the economy is in a recession:

• Rental apartment occupancies typically increase.
• Higher occupancies mean stable rental rates and fewer turnovers of rental residents.
• Residential and apartment construction slows down or stops; no new inventory leads to increases in Apartment values.

Finding the Right Opportunity

Affinity utilizes strict due diligence and extensive time to find the right opportunities for our investors. Affinity's conservative approach ensures that each investment opportunity offers the most significant and immediate value and potential return to our investors. Our goal is to acquire properties with the right combination of price, location, quality, growth and rental potential. Affinity's in-house analysts and our team of contracted experts conduct extensive financial projections, inspections and audits prior to acquiring any investment property, in order to be able to make educated and unbiased investment decisions. All of our reports and analyses are made available to our investors upon request.

Upon acquisition of an investment property, new management is contracted, a revitalization program is implemented as appropriate, and eventually the property is re-financed once net operating income is stabilized and over 80% occupancy is achieved (generally after 12-24 months). The rental income will have been increased and the operating expenses will have either been maintained or decreased, thereby increasing the property value based on capitalization rates applied to the net operating income.

Affinity has a predetermined exit strategy of two or more years, (depending on the project) or once an increase in value of 40% or greater is achieved. Affinity's minimum goal is a return of 20-25% average per year from the investment.

Project Selection Criteria

Affinity selects projects based upon a variety of property-specific factors and the potential rewards that can be achieved. The company selects projects based upon:

• Property priced below market value, and below replacement value
• Property being structurally sound
• Property having a good mix of 2 Bedroom suites and attractive tenant amenities
• Motivated seller
• Property currently being poorly managed
• Attractive local real estate trends return on investment
• Limited equity requirements for acquisition

Our Investor risk is mitigated by these key factors:

• Commitment to buying at below market value (discounted/distressed)
• Conservative approach to property selection
• Significant potential for financial return
• Flexible, creative deal-specific approach to structuring opportunities