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COPYRIGHT EDMUND HAPSBURG Edmund Hapsburg POPs Property Operating Plans a Melbourne Australia real estate agent invented POPs in 2014. POPs are a new way to operate own occupy buy sell invest develop property. Edmund Hapsburgs POP Agreements allow property owners and investors to enter into a property dealing whereby “they operate a property”. This means flexibility in the legal and beneficial ownership as a property can be operated anyway the two parties want it to be so that suits them, this total choice makes for wide spread application in many areas replacing many tradition rigid ways.

One form of this application suits home owners who can now convert their existing equity (and or future equity or develop) by getting that equity paid as cash to them by investor(s) over an agreed time period (30days to 30years) according to a POP that details their relationship and is centered around a Sale of the home at a future date BUT, the owner may stay in the home at no rent, or may put in tenants or pays rent and the agreement may optionally provide for investors to opt out and/or owners to resume the house, best of all POPs may not even involve a bank loan. POPs are a set of related agreements operating under one Master Agreement as an umbrella, which has selected components activated to meet the needs of the parties. POPs solve common problems such as not having enough deposit or showing serviceability to get a bank loan, so investors or homebuyers cant get into the property market and also miss out on the benefit of future growth but more importantly can never catch up. POPs can be applied where a house has a value that exceeds the mortgage and it can be already negative geared causing it’s owner financial distress, now an investor can step in to make it become cash flow positive to the owner. A feature of POPs is an agreed, sworn and relative development value component, this allows an owner of a home or rental property who may have negative or zero equity or if already negatively geared, to still receive positive cash flow funds as they are paid by the investor, who also pays any loan repayments.

POPs help owners having to sell up and move out now, as by using Pops they may avert or delay that event. Before POPs, owners could not take profit or exit quickly to do another deal without selling up and moving out.

Each POP is tailored to meet the life needs of the two parties so each POP will be different. POPs because of their “on board intelligent” structure, allow in a dynamic way, people to spread risk and reward, share, leverage and use non traditional funding, purchase and sale methods.

Traditional stand alone terms contracts, sales agreements, joint venture were not flexible and did not keep up with a dynamic, fast growing ever changing world and peoples lifestyle needs.

A “POP” is one agreement acting as an umbrella Property Operating Plan “POP” under which sit a set of related contracts about a particular property that reflect the relationship between an owner and investor concerning a property. A POP is created by an Originator which is a third party. A POP may be (or not, depending on its contained terms and conditions) supported and administered by any third party (or the Originator who brings the parties together) which provides for an independent introduction and administration platform. AffordableInvestments.com.au provides this service The POP determines how the property will be legally and beneficially held, nature of occupancy, the nature of equity and debt over time, the relationship and rights, liabilities, assets, property proprietorship of the parties and the operation of the property with respect to payment of bills against the property, rental, sale, improvements, maintenance, insurance, loans, tenancy, dealings with title, payment between the parties for rights and privileges granted at the outset of the agreement.

POPs flexibility arises from its on board intelligence embodied in the pre determined formulas and trigger points that allow for the parties to normally end or vary the agreement with a calculated fee (or no fee) for this privilege. Within the agreement there is provision to allow for assignment and provision for one or either or both parties to exercise rights to sell the property or draw equity using a loan facility secured against title as determined by a pre agreed table or formula or as the property market changes and hence the equity and or value in the property can be accessed, or rights there to traded as may agreed within the individual POP. POP investors can be credit impaired yet still invest. The collective set of contracts under the POP may include a terms contract of sale for real estate that contains special conditions. A POP includes the set or the computation of the sale date and formula and tables and trigger points or events and determine the equity pay down over an agreed time period and or sharing or accessing the equity by mortgage or caveat encumbrance and drawing down against a registered caveat or charge or mortgage of the embedded equity over time without selling the property. All POPs feature either a transfer of ownership to the investor or assignment or sale to open market at a pre determined date (or optional renunciation for a fee ), unless otherwise varied by mutual agreement at key trigger points prior to that date. Each POP is different and is tailored to meet the needs of the parties as they vary over time and may not involve bank finance. The POP is between the current legal owner and an incoming investor, their rights may also be assigned allowing for securitization and bundling as an investment asset class, POPs great benefit is to allow for access to equity and for the investor to access the residential property market (houses) without a deposit, but also making possible participation in the capital growth, but being able to exit at any time and maybe not even need a bank loan. Under a POP owners can stay in their home (or landlords can continue to let it out) and convert equity and future growth into a cash flow. POP Investors need not be “on title” and there may or may not be equity participation or a transfer of title. All rights are created and vest in solely in contract.

Pops are not just a sale they offer a new way for people to “buy” or “sell” and transact property deals, to handle ownership, property transactions and funding of them, to access the value locked up in a property and derive or create a cash flow and for people to own shares in a property, so by massively lowering capital requirements, property becomes comfortable, flexible, affordable and doable for the masses and may not necessarily involve a bank to lend against the subject property title.

POP’s benefit owners by converting their equity to cash flow without them selling right now, or paying agent fees and or having to move out, enabling them to stay in the home(for 1,2,5 - 30 years or as agreed), this is ideal for elderly or cash strapped families or those that want to develop their own or another property or invest elsewhere. Similarly, landlords in a negative cash flow situation can convert locked up equity to a positive cash flow from what was previously a cash “drain”. The investor and owner agree on the intrinsic equity (OR an amount being derived from the outcome of a formula) at time of making the POP contract, making this extremely simple and powerful. The owner remains on title and gets paid a surplus amount by investor for its equity and gets the loan against the property paid by investor, who also receives the rent. Basically the owner forgoes further equity increase and realises his equity through receiving regular payments over a 90 day, 1,2,3,5,7,9-20 year period from the investor. POPs are not a reverse mortgage or a loan or offer of, nor a supply of credit.

POPs are great for people that are worried about their job security as they can end the agreement at any time, without penalty of a mortgage. Investors pay down agreed equity and the owners mortgage from their own cash flow so POPs are especially good for high salary earners with high weekly cash flow and who are paying a lot of tax. Current owners stay on title until property sold (usually on the open market, but also can be to the investor or to another investor) as per agreement, with the investors securing their position by caveat and statutory securities register. Owners cannot refinance, run up debt, cross-co lateralise, encumber or sell themselves unless agreed prior. Only areas with forward looking good capital growth are able to be POP’ed. POPs are fully complete closed packages that stand by themselves, but may also be traded**. POPs may be enabled so as to be willed, passed onto another party ! so may be bundled and securitized.

POPs are set yet, flexible investments catering to investors that may not want to be locked in as each deal is individually tailored so you (owner or investor) are not forced into a “one size fits all” model. This flexibility gives universal appeal to all parties and there are many variations on the standard POP and it can be used on old or new homes. POPs are not a managed investment scheme, not a provision of credit, they are one on one deals between an investor(s) and owner. POPs are paid for rights (and tradable rights) that exist in contract, the control is with the owner and investor parties and Originator or anyone else can perform the administration, therefore Originator is not a manager of an investment scheme. POPs are a hybrid of the best of; an operating lease for a car, a joint venture, a home equity release, reverse mortgage(here owners don’t repay, but get paid), terms contract, but here POPs are flexible and the two parties have the power not a bank or host platform and the POP itself may be sold on the open market. There are four 4 BASIC POPs whose terms & conditions are tailored to suit Owners & Investors; POPIN opening a transaction, for people who want to enter the property market with little or no deposit, but can make monthly payments. Also suits those with small deposit funds but good cash flow, or for credit impaired or those that don’t want to be on title or are currently maxxed out with the bank but can cash flow more investments, then later when they have had an uplift in equity, go to a bank and buy later(or the parties sell), when they are ready. Investors pay down to the owner the equity already in the property (like a terms Contract, so it is not a provision of credit ) together with the investor making ongoing mortgage payments over time and gain the exclusive (or part) benefit from future growth in capital value. So only areas with potential ongoing growth are POPed. The POP first leg is when the contracts are set up on the owners side. Then the second leg is when the investor is paired with an owner who satisfies the investors criteria & vice-a-versa. The final leg, third leg or Exit is by Set Sale to open market(or to investor) at a future date, as Agreed or CLOSE OUT termination of the POP, transfer to investor, or held in trust or shares transferred or the POP may be assigned. POPOUT – outward leg of transaction that can be willed, assigned, traded or closed. Type 1 POPRZ Owners can obtain urgent money for a great biz deal or when bank says “no more draw down”. This POP product allows owners the possibility of staying in home and later buy back. Occupation converts to under license/lease option and positive cash back-in-flow, from investor. Owners can ”cash in all or part of your equity & future growth“. Exit is by Set Sale to open market or back to owner at a future date, as agreed. Type 2 POPDV – for third parties to create super charged growth e.g., inject funds and create an uplift of within 12 months where properties may be developed to supercharge returns to venture partners. The POP has terms & conditions to suit parties and may include owners staying onsite and/or be in the deal and get JV partner to develop or build a second/more house/apartments, then sell one or one or all buildings.Exit is by Set Sale to open market at a future date, as agreed. Type 3 POPSH - to buy “shares in a property” are eligible parties only, shares in A Property or in A Syndicate. Set Sale to open market & future date as agreed. Or held in trust as rental asset, as may be agreed. Shares may be traded within membership or to open market*. Now many people involved easily for small affordable amounts as well as people with only a small amount of money who could have never get onto the property ladder. Type 4 POPRE - as renounce able contract that can be traded ,exited by seller (or investor) for a profit or for a FEE. Sale to open market & date is delayed to a future date as agreed. Exit is by Set Sale to open market at a future date, as agreed.

Given that most rentals are negative cash flow and so don’t pay the owner for many years, thus burdening them with Out of Pocket contributions and the financial stress of ownership as well as being a landlord, there will be owners that don’t want to crystallize their loss by selling, but would love some instant relief and to actually get their hands on some cash .. now they can convert an agreed amount of equity to cash flow and foregoing future capital growth(or just a part thereof, so the owner may still enjoy some future growth). At the same time there are investors who can’t get into a property or who are credit impaired or just don’t want to deal with banks OR are maxed out and want another deal !

There are also speculators that love trading and POPs offer a great instrument to trade with. Coupled with “shares in a property” this makes for a very attractive commodity in the financial and property market. The amount paid is the agreed equity and covers any loan payments, additionally any maintenance and agent fees are paid direct by investor. The property is insured with investor named as having an interest in the property and with a caveat being lodged. Title & credit checks are done on owner and insurance is obtained. The Originator refers clients to securities licensed professionals and uses a licensed real estate agent and we provide purchasers with the owners notice setting out a payment schedule and timeframe, consumer rights, dispute resolution, as well as outlining the consequences should the buyer and or investor not be in a position to purchase/sell the property at the end of the contract period or if there is a bad market at the time as generally the property is to be sold on open market not to investor. To protect the integrity of the transaction, the originator provides both owners and prospective investors/buyers/tenants with a written notice stating the exact nature of the transaction we are proposing seven days before any contracts take effect and both sides see a lawyer for independent advice Owners may want a flexible way to vary receipt of payment and length of term, with POP ‘s they can, at the outset of contract. This repayment is taxable income to owner, who now has no maintenance costs or repaying of home loan costs as long as investors pay them. The loan stays in place or until end of contract of 90 days,1,2,3,5,7,9-20 years, life, until sold, or paid or unless sold earlier. Owners cannot get out any time(unless then owner pays a fee to exit under a pre agreed option), but owner may have to start repaying their original home loan if investor pulls out(unless locked POP contract). Owner claims depreciation.

To propose a POP, an Owner gives Originator 30-90/180 days to place the deal with an investor.

Benefit to Owner A POP enables owner(s) (landlords) to do some or all of : RECEIVE A POSITIVE CASH FLOW NO agent sales fee now (maybe agent fee later if they use an agent to sell on open market) NO Cost (save for admin FEE usually smaller than agent fee ) of the actual entry into a POP agreement Achieve maximum cash flow, maybe even without affecting your social security entitlements** Fund future nursing care Avoid the stress, expense and inconvenience of selling your home and relocating in a new area Spend your retirement years in comfort. Avoid the anxiety, stress and worry of a Reverse Mortgage Keep your options open should you need to move into a nursing home Banks, other financial institutions may not be required to assist either parties, depending on each client & deal. Not having to sell now and take a real loss, but be able still to get some future growth or develop Be able to develop your property and or share in the profit Stay in your Home as long as you wish or can subject to agreement, which can be from 1-30 years! Occupancy is secured by one of; lease, caveat on title, POA/deed, life occupancy) No payment of our fee(unless other than POP work done) or agents fees now (unless sold by agent later) Can share equity and or growth with family(or others) without selling to help children Have a lifestyle that an improved cash flow can provide, such as time with the family and grand kids

Benefit to Investor Finally you don’t have to wait trying to save never catching up while watching prices spiral up and can now stop chasing and start earning. Pops allow you to control a property for least amount of out of pocket funds and enjoy growth to create future wealth to support your lifestyle. Investors can get another investment when they are ready, not have to wait for the bank. POPs are one of the lowest risk type of entry arrangements as you are not liable for the entire capital like you would be if you borrowed to BUY in ! When the investor is then bank ready, they can use their POP to perhaps buy using the bank, or just control the property through to sale. Where else can you enter the property market for Fee plus a weekly payment and get the future capital gain, but at a price today. Payments under this deal are tax deductible to investor and so are costs. Rent income goes to investor and so does all capital gain after contract date (or as may be agreed to suit cash flows of both parties if there are budget restrictions). Also you may be able to make forward pre payments to help reduce your tax in some circumstances. Under a POP, the investor controls a property investment sale (but owner has agreed prior). Investors can get out anytime, but has paid their fees and costs, and the fees may be tax deductible, so claims tax deductions operating costs. Investors position is Protected by Caveat and Personal Property Dealing register. How Do Investors Benefit ? (subject to individual POP terms and conditions as each deal is different) No deposit – allowing you to get started in property cycle earlier No Loan – meaning the Bank has no say over your decision to invest No capital at risk – such as the family home on offer as security… No worries about job loss! No capital loss on market downturn – although you have made payments along the way you would have made the same or more if you owned direct AND BE LOCKED IN !

For investors, the significant benefits with a POP is that they haven’t paid cash or used other equity for a deposit and on cost fees, except for the POP FEE to the proposer / administrator.

Other benefits are that you can simply step out of the POP into another. Reduced holding costs No need to source a tenant (if rented or owner occupied under POP) No risk of vacancy (if insured and with a rent guarantee) or owner occupied under POP No risk of tenant damage – if the occupant is the past Owner (if rented it is insured Originator manage claim) No ongoing property maintenance – the Owner is responsible (costs recovered) No land tax payable now No large upfront stamp duty – there is no sale of property until a Trigger Event occurs and you elect to buy, OR you direct it sold as per your POP no duty payable at end by investor rates and taxes payable – deductible (the Owner may pay*) No interest rate fluctuations – unlike direct ownership because the payments are fixed under POP With a Pop you are able to acquire growth much earlier in the wealth accumulation phase and therefore maximize the end result rather than waiting for available equity but you may also supercharge it in some cases with development of the site !! POPPING a property directly carries the risk that if the property needs to be sold in the first couple of years the value may not increase sufficiently to recoup the POP FEE, admin fee or purchase costs or the paid out cash flow. But using the POP you as the controlling investor simply stop paying, you control the property and enjoy the capital growth in the future or have shares with others. FEES may reduce investors taxable income and for suitable sites you may even create an uplift in value if developed. Edmund Hapsburg