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I. Executive Summary

Silverstone Holdings LLC, a limited liability company, founded in 2001, is a privately held real estate investment company that specializes in multi-family investments in growing real estate markets. Focusing on cities on the upward trend of growth and development, Silverstone seeks out opportunities for maximizing yield and minimizing capital risk in upward trend markets.

Careful analysis of demand growth as well as economic indicators coupled with employment statistical data are some of the primary basis in initiating targets for multi-family investments though out any growing city within the US. The analysis and application of the standard industrial classification (SIC) codes, the North American Industry Classification Systems (NAICS), new permits for multi-family, key studies conducted by the Census Bureau and familiarity of the metropolitan growth/local trends has been the key variables in identifying target cities and submarkets.

Silverstone Holdings LLC is committed to the application of accurate data analysis for the purpose of minimizing capital risk for its investment partners.

II. Management Team

David Chung (Managing Member) – Mr. Chung holds a Bachelor of Architecture from California State Polytechnic University. He received his Master of Real Estate Development Degree (MRED) from the University of Southern California. His duties within Silverstone Holdings include strategy development, business development, and equity and debt financing. As a managing member of Silverstone Holdings LLC, Mr. Chung’s primary role is to ensure company growth by minimizing risk and maximizing profits. Seeking out real estate markets with job growth, housing affordability and migration trends throughout the United States will ensure upward trend and selective downward trend markets.

Min (Max) Kim (Managing Member) – Mr. Kim received his Bachelor of Science from the University of California, Irvine. He also holds a real estate license for the state of California. Mr. Kim’s primary duties are renovation and portfolio management, investor and broker relations, acquisitions and dispositions, and finance and treasury matters. As a managing member, Mr. Kim’s primary role will focus on the acquisitions and the analysis of real estate trends and housing demand throughout major growing cities within the United States. He will anticipate shifts within the micro and macro real estate cycles for successful acquisition strategies.

David Shin (Corporate Accounting/Tax) – Accounting and tax management will be directed by Mr. Shin. As an expert in the laws of taxes and corporate accounting, every effort will be made to maximize earnings and profits. Additionally, Mr. Shin will advise as to the structuring of the current and future entities.

John Sang esq. (Legal Counsel/Contracts) – Mr. Sang will provide the legal expertise needed for all contract and corporate documents.

Min "Max" Kim (Real Estate Broker/Analyst) – Mr. Kim will conduct analysis on real estate markets, trends and buildings both on and off the market. He will provide detailed analysis of all markets and buildings under consideration for acquisition as it relates to Silverstone’s business plan.

III. Operating Strategy

Our operating strategy is designed around one unifying concept – a commitment to our investors. We strive to achieve operational growth through integrity and fairness. With our investors in mind, we work to protect and preserve capital, co-invest in assets and business, and implement creative operations solutions.

Silverstone Holdings understand the necessity of controlling expenses to increase operating cashflow. Over the years, our growing portfolio has enabled us to create working relationships with vendors that help us achieve cost efficiencies in operating apartment buildings.

Our Management team will stay alert to quickly identify building repairs that will help improve the property without overspending. On the other hand, we realize that not spending enough on building repairs will compromise the long-term integrity (and value) of the building. Our staff understands the fine line between saving money and properly maintaining the property so that it remains a viable cashflow machine over time.

Under our management, a long-term holding strategy will be employed to operate the property. Therefore, all major repairs will consist of higher quality materials and workmanship. For example, any plumbing repairs will consist of copper and at the time of replacing the roof, we will install a four-ply, 25- year roof with a full warranty. Although these items may cost more initially, thy will extend the useful life of the repairs and thus reduce overall operating cost per-unit per-year in the long run.

Since it is inherent in real estate for buildings to physically and functionally depreciate over time, a plan must be implemented to mitigate these inevitable decreases in building value. In order for us to maintain the building effectively, we will establish a capital reserve account, with calculated deposits coming from operating cashflows to cover anticipated future repairs. The reserve account should eliminate the need to re-solicit investment funds from investors or borrow any additional money from banks as capital expenditures arise.

An important operating objective is to ensure a friendly atmosphere between tenants and management. The most important goal is to create a sense of community for the residents, amongst themselves and with management. This strategy will make it difficult for tenants to leave friends behind, even though it may mean paying a little more to stay. Experience has taught us that the longer tenants reside in the same unit, the less price-sensitive they are to gradual rent increases over time. Creating a positive environment where residents feel a sense of pride in taking good care of there “home” will be a win-win situation for residents and investors alike.

IV. Acquisition Strategy

Our primary goal is to acquire properties that meet certain basic criteria, as follow:

Property Type:

*Multi-Family Residential (apartment buildings)
*B or C Class properties (less subject to rent fluctuations, etc.)

Property Size: *Too large for “mom & pop” investors (who tend to overpay)
*Too small for institutional investors (who require lower returns)
*Ideal range is approximately 20 to 150 units

Location:

*Mature cities with stable economies
*Supply-constrained rental property availability
*Minimal new apartment construction activity
*Improving geographic & demographic areas
*Higher-than-national-average population growth rates

Performance:

*Properties that have below-market rents (with room for increases)
*No ownership restrictions (eg: rent caps/rent control)
*Minimum 10% stabilized cash-on-cash returns (grows over time)

Properties meeting the above criteria are located by searching the market as follows:

1) Fostering a strong working relationships with select real estate brokers who specialize in multi-family rental property transactions

2) Searching databases that list properties for sale, including Multiple Listing Service, Loopnet, and PropertyFirst.com on a daily basis for new listings

3) Farming large databases of desirable properties, contacting existing owners directly on a regular basis, and presenting unsolicited purchase offers to those who show an interest in selling

For every property we submit a Purchase Offer on, you can rest assured that we have crunched the numbers on several hundred others and physically inspected all of the pre-qualified properties in person. Making successful real estate purchases requires a tremendous amount of legwork and is a highly competitive process.

After locating a particular project to buy, we thoroughly evaluate its income potential, overall physical condition, and positioning relative to the market. Once a property meets all of the above criteria, then we proceed with an offer to purchase.

V. Holding Strategy

Our goal for this project is to own the property for an indefinite holding period and realize the benefits of increasing cash flows over time by raising rents and controlling expenses, while maintaining the depreciable value of the building itself. As rental revenues grow and the land value appreciates, investors will also enjoy gains from the increase in market resale value when the time is right to sell.

Equity investors will enjoy returns from the property as follows:

1. Cashflows from operation of the rental property on a regular basis

2. Disbursements from future refinancing activities (if & when deemed appropriate)

3. Gains on the future sale of the property at a future peak in the market cycle

The first and foremost goal of every acquisition is to pay back the investors’ initial capital contributions in a timely manner. Silverstone Holdings has designed an investment program that places investor interest first, with only a small portion of project cashflow being disbursed to Silverstone Holdings until investors have recovered their capital contributions in full along with preferred annual rate of return. Thereafter, once the capital account is effectively $0, the general managing partner (Silverstone Holdings) and the limited partner investors share in the long-term cashflow and ultimate gains from selling the property.