AIP Limited Partnership

AIP General Partners LtdWholly owned subsidiary of Aydon Income Properties Inc.

AIP LIMITED PARTNERSHIP

Metro Detroit Real Estate Investment Opportunity

INVESTMENT SUMMARY

AIPLimited Partnership

Content

Who we are & What we do Page 3

Why Detroit? Page 4

Sample Properties Page 6

Housing Vouchers / Section 8 / Inspection Page 7

The Opportunity / Property Management Page 8

Investment Highlights / Appreciation Expectations Page 9

How to Subscribe Page 10

Contact Information Page 11

2Copyright © 2015 Aydon Income Properties, Inc.


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Who we are and what we do

Who we are

What we do

IP General Partners Ltd. is a wholly owned

A subsidiary of Aydon Income Properties Inc. (”Aydon”), a publicly listed company on the

Canadian Securities Exchange (the “CSE”). Aydon is a real estate investment & development company targeting under-valued income producing properties in select areas of the United States and Canada with the goal of securing high cash flow and capital appreciation potential to maximize returns for its shareholders and investors.

ydon has structured a Limited Partnership

A investment to give investors the opportunity to take advantage of the recovery currently

underway in the United States after the financial crisis that led to a severe downturn in the residential housing market.

The AIP Limited Partnership's ("AIP" or "AIP LP") primary investment strategy is to acquire quality real estate assets at prices well below replacement cost in carefully selected areas of Detroit, Michigan where there is a low cost of entry with strong cash flows and a high probability of increasing home values.

AIP's aim is to capitalize on the real estate recovery by acquiring a large portfolio of single family homes in prime residential neighbourhoods of Metropolitan Detroit that can be turned around and made more profitable through rehabilitation and marketing programs designed to maximize occupancy and boost rents.

AIP is raising up to USD$3.4 million in equity to acquire up to 100 residential properties in its portfolio. These homes will be fully renovated, tenanted and managed by a leading property management company located in the Metro Detroit area.

We acquire under-valued properties well below replacement cost then renovate, upgrade, tenant, manage and maintain with the goal of maximizing cash flow and capital appreciation potential over the long term for our shareholders and investors.

AIP General Partners Ltd.

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Why Detroit?etroit is in recovery after suffering heavily in the

D downturn when real estate prices dropped by more than 75%. This resulted in properties being valued at

well below replacement cost, making the city a prime investment area that offers significant growth potential.

Although prices have begun to recover, there are few other major cities where investors can still buy property at such discounted prices that are also backed by the US government rental programs.

Strong Reasons to Invest in Real Estate in Detroit:

The basics· Detroit is the largest city in the state of Michigan and Greater Metro Detroit has a population of over 4 million (Source:

U.S. Census Bureau). · The terms of the Detroit's bankruptcy plan includes $1.7 Billion to be spent demolishing abandoned buildings,

improving public safety and upgrading basic services. · Detroit (and Windsor in Canada) has the busiest of all US-Canadian border crossings · US – Canada trade totals over $500 Billion per annum (more than $1 Billion a day). In 2014 work began on the

construction of the US$ 2.1 Billion New International Trade Crossing between Detroit and Windsor· Today there are 85,000 employees in Downtown Detroit and by 2016 is expected to be 100,000. (Source: Downtown

Detroit Partnership)· With increasing demands on residential accommodations, average rents are expected to climb by 17% over the next 3

years. (Source: LocalMarketMonitor.com).

Employment levels and job creation· The number of jobs in Metro Detroit has increased by 33.1% since March 2010. (Source: Simplyhired.com)· 146,420 were created in 2013 alone. (Source: Southeast Michigan Council of Governments)· University of Michigan economists George Fulton, Joan Crary and Donald Grimes predict another 130,000 will be

added by the end of 2015. (Source: Research Seminar in Quantitative Economics Michigan forecast)

Population growth· Metro Detroit's population is expected to grow steadily from 2014 with the creation of many new jobs.

Housing supply and demand· Housing supply (inventory) in Detroit has dropped continuously since 2007, a drastic 84.39%.· 84,312 properties were on the market in August 2007; by March 2014 there were only 13,162.· Only 7,564 new residential building permits were issued in 2013. (Source: Southeast Michigan Council of Government)

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Why Detroit Cont.?

· The Marcus and Milichap Report says: "Construction of new apartments will likely be fuelled by tightened vacancy rates and soaring rents. When builders start to build again, it's a good sign that a housing market is well on the road to recovery.”

· In Q4 2014, Detroit vacancy was the lowest year-end rate in 13 years, falling 30 basis points to 4.1%. (Source: Southeast Michigan Council of Government)

· Founder of Data Driven Detroit, Kurt Metzger, added: "Demand is outpacing the supply of desirable places to live in Detroit. Prices are just getting to the point where it makes sense to break new construction."

Affordability of property· Property in Detroit is 20% undervalued. (Source: Trulia Bubble Watch Q1 2014), therefore making it some of the most

affordable in the USA; a reason why local companies are investing heavily in Detroit.· The median sales price for single family homes in Detroit continues to strengthen, however it is still way below the

2005 average of $172,000. (Source: Trulia Bubble Watch Q1 2014).

Rental yields· Today there are 85,000 employees in Downtown Detroit and by 2016 is expected to be 100,000. (Source: Downtown

Detroit Partnership)· With these increasing demands on residential accommodations in downtown Detroit and surrounding neighbourhoods,

average rents are expected to climb by 14.6% by 2016. (Source: RentRange.com). Many are being priced out of the city center already.

· Those moving to neighbourhoods close to the city center can rent a detached house for the same price as a small apartment in the downtown area. “Places such as East English Village, Warrendale and Morningside are all in high demand” according to RentJungle.com.

· The increase in demand in these neighbourhoods has already had an effect on prices where rents are rising faster than in downtown Detroit.

· One year performance of median rents for a 3 bedroom single family home to March 2014 (Source:RentRange.com)- East English Village - Increase = 6.43% - (now $745 - up $45)- Warrendale - Increase = 12.44% (now $750 - up $83)- Morningside - Increase = 14.61% (now $800 - up $102).

Current investment· 14 of the 2015 Fortune 500 companies have HQs in the greater Detroit area.· Quicken Loans (Dan Gilbert) has invested over $1.7 Billion in downtown Detroit.· Detroit's Riverfront Project has spent over $1 Billion in the past 5 years. (Source: Detroit River Front Conservancy)· The new Red Wings Arena, a $650 Million rebuild, will transform a 45-block area into an entertainment district, new

retail plaza and residential and office space. Completion is scheduled for 2016.· The M1 Rail Network will spend $137 Million and will integrate a $500 Million rapid bus and rail system linking Detroit to

its suburbs, as well as a high-speed passenger railway between Detroit and Chicago. Completion in 2016, · The new International Trade Crossing to Windsor, Canada will create over 43,000 jobs at a cost of $2.1 Billion· Ford's 2014 $6.3 Billion profit was one of the best years in its 110 year history and the company recently committed to

investing $3.1 Billion on upgrading existing buildings and new facilities in Detroit and surrounding areas in Michigan.. · GM, made $5.61 Billion in 2014 excluding one-time charges and will invest $450 Million into their Hamtramck-Detroit

plant. This will create 1,400 jobs.· Chrysler Fiat made an operating profit in 2014 of $4.1 Billion fueled by a very strong North American performance. Their

Jeep plant is undergoing a $148 Million renovation and once completed will add 1,100 new jobs.

MODEST HOME PRISES & RISING RENTS = OPPORTUNITY FOR STRONG CASH FLOW & CAPITAL GROWTH.

A Sample of Properties

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8826 West Seven Mile Road, Detroit, MI

This well-maintained 3 bedroom bungalow property is located in one of Detroit's premier neighborhoods. The Bagley community boasts high home ownership rates, low vacancy, and some of the best schools & colleges in the City. On the same street, just a few hundred yards away is the campus of University of Detroit Jesuit High School, a private catholic school with one of the highest graduation rates in Michigan. The neighborhood is also home to the University of Detroit Mercy (known for its Law School) as well as Marygrove College. The layout features two bedrooms on the first level and large third bedroom on the second level. The home's taxes have been reduced, and is currently rented to a Section 8 tenant. The home sits on a large lot, with a land area size exceeding 5100 sq ft.

19736 Prest , Detroit, MI

This 3 bedroom bungalow style home is located on Detroit's northwest side, just south of 8 Mile Rd, Detroit's border. The proximity to the northern suburbs means the home is close to some of the largest shopping centers in the State and a thriving small business community. The densely populated area has attracted major regional retailers to community. In 2013, Meijer Supermarket opened one of its largest stores in the area right on 8 Mile within Detroit's city limits. The home itself has been fully updated in order to meet Section 8 requirements and features a newly installed “3 dimensional” roof. Before the mortgage crisis of the late 2000's, the home sold for $125,000 in 2006 according to public records. Schools in the area include Bow Elementary and Michigan Technical Academy (an award winning public charter school).

18959 Lauder, Detroit, MI

This beautiful 3 Bedroom all brick colonial was built during the post-World War II housing boom (1948). During this period, Detroit's economy was booming and the property is a testament to the era's unique architectural style. The home is located on a well maintained, high occupancy block on Detroit's northwest side. Among the reasons this neighborhood has remained stable is the proximity to premier educational institutions. Nearby Detroit Renaissance High School is ranked top 3 citywide (academic performance, graduation rates) according to data released by Detroit Public Schools. Also, one of the top employers in Detroit is located a short drive away (Detroit Medical Center's flagship campus – Sinai Grace Hospital). The current tenant has been thoroughly screened and has recently opted for lease renewal. The 1600 sq ft home has huge capital gain potential and sold for $135,000 in 2009.

6824 Warwick , Detroit, MI

This full brick 1.5 story home includes over 1000 sq ft of living space, a large backyard and a detached 2 car garage. The property is located in the Warrendale community which derives its name from the neighborhood's main road: Warren Avenue. This road is lined with small businesses reflecting the diverse culture of its residents. Warrendale has become a melting pot, and borders the well-known suburb of Dearborn (home to Ford Motor Company's global headquarters). Detroit's main North-West artery, the Southfield Freeway (M-39), is located a short drive away providing quick access to amenities such as Fairlane Shopping Center. The current tenant holds a Section 8 housing voucher, with the majority of the rent paid by the local housing commission. The home sold for $110,000 in 2006 according to public records.

Net Yield: 12.82% Selling Price: $47,000




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Housing Vouchers

Inspection

DHC Housing Choice Voucher Program (Formally Section 8)


his subsidy program is strictly monitored

T and has stringent qualification policy, substantially mitigating landlord risks. This

policy has resulted in an extremely low percentage of evictions and higher quality of tenants.

Every year the Housing and Urban Development (HUD) conduct inspections of all the Section 8 properties. Once they have passed the Inspection, guarantee vouchers are re-issued.

AIP Properties are monitored closely through continued inspections by the management company under the supervision of AIP.

he Section 8 program is designed to assist

T families and people that require financial assistance with rental payments. As rent prices

continue to rise, programs like this can be helpful to individuals and families that just can't seem to make ends meet.

Section 8 is a housing voucher program offered by the U.S. federal government that provides “decent, safe and sanitary” housing to eligible families and individuals.

Administered by local Public Housing Agencies (PHA), Section 8 receives federal funds from the U.S. Department of Housing and Urban Development (HUD). Metro Detroit (Wayne and Oakland County) is made up of 37 Section 8 departments whose responsibility is to distribute Section 8 funding. Currently there is a greater demand than there are suitable homes for Section 8 tenants. There are more than 8,000 pre-approved families with housing vouchers on a waiting list for Section 8 properties.

Approximately, 80% to 100% of the Tenant's rent is paid by the government. This payment goes directly to the owner's designated management company.

t's important to know that all Section 8 houses

I must first be inspected by the Section 8 program to ensure the home meets federal

government criteria. This guarantees that the homes are of high standard which is important to the tenant as well as to AIP and its investors.

Under the Section 8 program, every year each house is re-inspected by the Section 8 inspectors to insure that the high standard of housing is maintained. In order to renew and continue funding, tenants are motivated to look after the house as if it were their own in order to get another year of vouchers.

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PropertyManagement


The Opportunity

fter extensive research and due diligence,

A AIP has identif ied and reserved a remarkable portfolio of fully tenanted

income producing homes. These homes are being purchased at well below their replacement costs and are yielding net returns in excess of 13% .

The key points again:

Homes from $45,000

Already tenanted

Yields of 13% plus

Prices at below replacement cost

High capital gains potential

Newly refurbished

High Quality homes meeting government standards

Turn-key, problem free investment

Experienced management team

IP Limited Partnership contracts the best

A a n d m o s t p r o f e s s i o n a l p r o p e r t y management companies in all target

locations. Our Property Managers provide a comprehensive management program with turnkey rental services and management of property maintenance on a 24/7 basis 365 days a year. These exper ienced management companies do everything that is required from making sure the properties comply with all relevant codes to filling leases and organising maintenance

Each management company offers:

Collection and management of rental payments

Advertising for new tenants

Tenant screening

Maintenance and call out services

Online personal property management accounts with investments being tracked in real time

Regular property inspection reports

Property Security (the property is secure when not tenanted)

Dedicated first point of contact for landlords

Support with potential exit strategies, marketing properties that are to be sold

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Investment Overview

AIP Limited PartnershipOffering Details

$ 3,400,000

$ 5,900,000 $ 2,500,000

3,400

100

$1,000/unit

3-5 years8.0%

Number of LP Units offered

Total Equity Investment (LP Units - $US)

Approx Number of properties to acquire in portfolio

Approx Cost of properties to be acquired

Vendor Financed Mortgage (50% Loan to Value)

Preferred (Priority) Return to Limited PartnersAnticipated term of investment

Investment Price per Unit

Offering Details

IP LP's objective is to provide investors with A ongoing cash flow from a portfolio of high income-producing real estate located in

Detroit, Michigan where the housing market has been particularly hard hit and median home prices have fallen by more than 75% from their historic highs.

To take advantage of this opportunity, AIP has structured a Limited Partnership, (AIP LP) which facilitates the acquisition of a portfolio of approximately 100 single-family residential properties located in the Metro Detroit area.

AIP LP's portfolio of selected properties is located in well-established residential neighbourhoods. There is a low cost of entry and strong cash flows combined with good prospects for capital appreciation suggesting significant returns to investors.

There are 3,400 Units available for a total investment offering of US$3,400,000.

AppreciationExpectations

IP Limited Partners are entitled to receive a

A minimum priority or Preferred Return of 8% annually. However, based on recent

dynamics in the rental sector and shrinking available inventory of homes, it is reasonable to anticipate a more robust income stream and subsequent capital gains.

This is not an offer or solicitation of an offer to purchase any securities. The material contained in this document must be read in conjunction with the Confidential Offering Memorandum in order to understand fully all the implications and risks of the securities to which it relates and must not be relied upon to make an investment. Past Performance is not indicative of future results.

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How to Subscribe?

IP LP Units are denominated in U.S.

A currency with the rental income earned by the portfolio paid quarterly in U.S. dollars to

unit holders. The minimum investment required is US$10,000 with subsequent increments of US$1,000.

SUBSCRIPTION PROCEDURE

AIP has prepared the necessary subscription documentation in compliance with applicable securities regulations. The documentation that you must complete will depend on the jurisdiction in which you are resident and the prospectus exemption on which you are relying.

ALL PURCHASERS

1. Complete and execute all applicable lines on pages 1, 2 and 3 of the Subscription Agreement.

2. Provide a certified cheque, or bank draft or wire transfer made payable to “AIP Limited Partnership” for the Total Subscription Price (as defined in the Subscription Agreement) indicated on page 1 of the Subscription Agreement.

3. Provide a separate cheque marked “VOID” from the account to which distributions should be credited.

OFFERING MEMORANDUM EXEMPTION

If relying on the “Offering Memorandum” exemption, investors will need to complete and execute Schedule D – Eligible Investor Status Certificate and Exhibit A attached to the Subscription Agreement.

MAILING/DELIVERY INSTRUCTIONS:

Please deliver all completed Subscription Forms and payment to:

AIP Limited PartnershipP O Box 34569Pemberton PlazaNorth Vancouver, BCV7P 1T0

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Contact Us

For more information about this investment, please contact us:

Vid Wadhwani

T. +1.604.729.7077

[email protected]

David B Jackson

T. +1.604.657.8613

[email protected]

David C Carkeek

Dr. Daniel R. Gouws

T. +1.604.760.9212

T. +1.604.760.9212

[email protected]

[email protected]

Allan M Goulding

Jadvinder Grewal

T. +1.604.729.8775

T. +1.604.729.8775

[email protected]

[email protected]

AIP General Partners Ltd.500 - 900 West Hastings Street

Vancouver, BC, V6C 1E5

Canada

Telephone: +1 855 322 7771

eMail: [email protected]

website: www.AydonProperties.com

Copyright © 2015 Aydon Income Properties, Inc.


This Investment Highlights report is based upon information supplied by Aydon Income Properties solely for use by a limited number of qualified investors in connection with the consideration of the purchase of units of Aydon Income Properties Limited Partnership (the “AIP LP”) on a “private placement” basis (the “Investment”) and is confidential and is for the confidential use of only those persons to whom such information is delivered in connection with the Investment. This information is intended as a summary of certain information contained in the AIP LP Confidential Offering Memorandum together with all attachments and/or supplements thereto from time to time (the “OM”). Any potential investor in the Units should review the OM in its entirety prior to making any investment decision with respect to the AIP LP. Neither this document, nor its delivery to any prospective investor, shall constitute an offer to sell or the solicitation of an offer to buy any securities of the AIP LP. The material in this document must be read in conjunction with the Confidential Offering Memorandum in order to understand fully all the implications and risks of the securities to which it relates and must not be relied upon to make an investment. Past Performance is not indicative of future results.

Please visit our website at www.AydonProperties.comor call us at or email us at 1-855-322-7771 [email protected]

For More Information

Safe Harbour:

About AIP General Partners Ltd.

IP General Partners Ltd. is a wholly owned

A subsidiary of Aydon Income Properties Inc. (”Aydon”).

Aydon is a real estate investment & development company targeting under-valued income producing properties in select areas of the United States and Canada with the goal of securing high cash flow and capital appreciation potential to maximize returns for it's shareholders and investors.

The most important aspect of rental property is the

property manager

500 - 900 West Hastings Street, Vancouver, B.C. V6C 1E5 Canada

AIP Limited Partnership

Real Estate

Transcript of AIP Limited Partnership