Proposal to convert prime location apartment building to boutique hotel.

1. Investment Proposal
The Bophut HIP Hotel

2. Presentation Outline
 The Investment Objective
 Property Description
 Current Status
 Projected Cash Flows
 Scenario Analysis
 Baseline Projection Assumptions
 Hotel Operations
 Partnership Structure
 Appendix

3. The Investment Strategy
 Objectives
 Produce a total annual return of 25%+ over a five year holding period
 Distribute income during holding period
 Strategy
 Purchase underutilized newer building, in prime, beachfront location with title
to the land
 Convert building to luxury “HIP” hotel to maximize income and property value
(“HIP” concept similar Starwood’s W brand)
 Hire professional hotel management company to operate
 Apply innovative and effective marketing programs
 May leverage up to 33% of purchase price
 The Request
 $400-800,000 in equity contributions from limited partners
 RB will invest $100-200,000 alongside other limited partners

4. Property Description
 Located in quaint, fast-growing
Fisherman’s Village
 Four floors, with six apartments and one
street front shop.
 Freehold title to beachfront land which is
very difficult to obtain in this area
Samui
 Size: approximately 6,500 square feet International
Airport
 Two full-floor luxury penthouse apts. Each
w/ three bedrooms and three ensuite
baths
 Two direct waterfront one-bedroom
apartments
 Two large, studio apts. w/ kitchens, full
bathrooms and balconies
 One large, modern, street-level
commercial space
 High-speed, wireless internet and cable tv
 Convenient to Bophut’s great restaurants,
yoga, diving and shopping

5. Current Status
 Ownership
 Corporate Structure: Thai Private Limited Liability Company
 Shareholders: Russell Blumenthal (40%), John Campbell (40%), Carl Lamb (20%). (Mr.
Blumenthal will invest a large portion of his sale proceeds back into this venture)
 Condition
 All mechanicals in good operating order. No major maintenance required
 Current Selling Price: $875,000
 Current Valuation:
Value @
The Property Size Pro Forma Income Expenses Net Operating Income Cap Rate
Typical
Rent Market Monthly
Unit Floor Use Features Percent Alloc Space (ft2) Rents Per ft2 Operating Monthly NOI Annual NOI 8.0%
1 Ground Commercial/Retail Street level, spacious, modern 12.5% 802 854 $ 1.06 $ 24 $ 829 $ 9,951 $ 124,390
2 Ground One Bedroom Apartment On the beach 12.5% 802 659 $ 0.82 $ 24 $ 634 $ 7,610 $ 95,122
3 First One Bedroom Apartment Direct water view 12.5% 802 732 $ 0.91 $ 24 $ 707 $ 8,488 $ 106,098
4 First Studio Apartment Large bathroom, kitchen, balcony 6.3% 401 366 $ 0.91 $ 15 $ 351 $ 4,215 $ 52,683
5 First Studio Apartment Large bathroom, kitchen, balcony 6.3% 401 293 $ 0.73 $ 15 $ 278 $ 3,337 $ 41,707
Full floor, 3 ensuite baths, direct
6 Second Three Bedroom Apartment 25.0% 1,605 1,463 $ 0.91 $ 37 $ 1,427 $ 17,122 $ 214,024
water view
Full floor, 3 ensuite baths, direct
7 Penthouse Three Bedroom Apartment 25.0% 1,605 1,707 $ 1.06 $ 37 $ 1,671 $ 20,049 $ 250,610
water view
100.0% 6,418 6,073 $ 0.95 $ 293 $ 5,780 $ 70,771 $ 884,634

6. Projected Cash Flows
Baseline Case
Acquisition
Sources of Funds
Cash Investment, General Partner 0
Cash Investment, Limited Partner 1,103,750
Capital Improvement Loan 0
Total: $1,103,750
Uses of Funds
Purchase, Real Estate 875,000
Corporate Structuring Costs 25,000
Brokers Commissions 0
Points 0
KSI Acquistion Fee 43,750
1st Year Capital Improvements 150,000
1st Year Funded Reserves 10,000
Total: $1,103,750
Property purchased at $136.34 per square foot.
Property Overview
Cash Taxable Cash Flow Taxable Gain Proceeds
Year Invested Income Before Taxes on Sale of Sale
2006 1,103,750 0 32,467
2007 37,126 68,072
2008 122,053 131,506
2009 165,886 174,524
2010 180,596 189,220 1,874,618 2,892,039

7. Baseline Projection Assumptions
 Sell in fifth year
 Invest $150,000 in upgrade prior to opening
 Selling price based on 8% cap rate
 Room rate growth of 8%
 Expense growth of 4%
 Starting average room rate = $193/night
 Average occupancy gradually increasing from 30% in first year to
50% in fifth year vs. Samui annual average of 67% (and moving up)
 Tax rate of 30%
 No debt

8. Scenario Analysis
5 Year Internal Rates of Return (IRR)
Average Nightly Rate
5-yr Occupancy $ 165.00 $ 195.00 $ 225.00
20% - 40% 3.5% 10.8% 16.8%
Baseline Case
30% - 50% 18.2% 24.3% 30.7%
40% - 60% 22.9% 29.7% 35.6%
50% - 70% 30.0% 37.0% 43.1%
Represents the projected internal rate of return over the first five years for each combination of occupancy growth range
(years one to five) and the average nightly room rate at the beginning of the period. Room rates are projected to grow at an
annual rate of 10%. IRR of 24.3% represents the Base Line Case projection result.

9. Hotel Operations
Competitive Advantages
 Direct beachfront location with arguably the best views on
Samui
 Luxury-level, “HIP” style, personalized service
 Located amongst the popular restaurants, bars, shops, yoga
and spas and diving centers on the main street of Bophut
Fisherman’s Village
 Less than 10 minutes from Samui International Airport
 Steps from the Ferry Port to neighboring islands and the
Angton National Park islands
 Can accommodate large families in luxury residential suites

10. Partnership Structure
 Limited Partnership or LLC
 Koh Samui Investments LLC is the General Partner and will assume all
management and reporting responsibilities
 General Partner receives 25% of operating cash flow plus 25% of realized
capital gains
 90% of cash flow distributed as received
 Assets will be owned through a Thai private limited company (may purchase
shares of existing company to avoid transfer tax)
 Taxes on money distributed will be the responsibility of the individual member
 There is no capital gains tax in Thailand

11. Appendix
 Photos of the property and surrounding area
 Projected Income and Expenses
 Analysis of Operating Cash Flows
 Analysis of Resale
 Partnership Analysis
 The KSI Team
 Disclaimer
 Contact Information

12. Projected Income and Expenses
2006 2007 2008 2009 2010
INCOME
Gross Scheduled Rent Income 427,050 461,214 498,111 537,960 580,997
Food & Beverage 55,456 66,822 88,250 100,997 104,027
Other Income #2 0 0 0 0 0
TOTAL GROSS INCOME 482,506 528,036 586,361 638,957 685,024
VACANCY & CREDIT ALLOWANCE 337,754 343,223 351,817 351,426 342,512
GROSS OPERATING INCOME 144,752 184,813 234,544 287,531 342,512
EXPENSES
Cost of Sales - Beverage 13,301 14,631 16,094 17,704 19,474
Payroll & Related Expense 12,000 12,480 12,979 13,498 14,038
Other Expenses 12,407 12,903 13,419 13,956 14,514
Administrative & General 9,080 9,443 9,821 10,214 10,622
Sales & Marketing 5,448 5,666 5,893 6,128 6,373
Energy 18,160 18,886 19,642 20,428 21,245
Prop. Op & Maint. 6,356 6,610 6,875 7,150 7,436
Management Fees 18,818 24,026 30,491 37,379 44,527
Manager Salary 15,000 15,600 16,224 16,873 17,548
TOTAL EXPENSES 110,570 120,246 131,438 143,329 155,777
NET OPERATING INCOME 34,182 64,567 103,107 144,201 186,735

13. Analysis of Operating Cash Flows
2006 2007 2008 2009 2010
NET OPERATING INCOME 34,182 70,233 108,999 150,330 193,108
- Debt Service, Capital Improvement Loan 0 0 0 0 0
- Debt Service, Second Mortgage 0 0 0 0 0
- Debt Service, Third Mortgage 0 0 0 0 0
- Debt Service, Refinance 0 0 0 0 0
+ Proceeds of Second Mortgage, Less Pts (after BOY 1) 0 0 0 0 0
+ Proceeds of Third Mortgage, Less Pts (after BOY 1) 0 0 0 0 0
+ Proceeds of Refinance, Less Points 0 0 0 0 0
- Funded Reserves* 10,000 0 0 0 0
Interest Earned on Funded Reserves 350 362 375 388 402
- Capital Additions* 150,000 0 0 0 0
- Tenant Improvements 0 0 0 0 0
- Leasing Commissions 0 0 0 0 0
CASH FLOW BEFORE TAXES 34,182 70,233 108,999 150,330 193,108
Cash on Cash Return (CFBT/Initial investment) 3.10% 6.36% 9.88% 13.62% 17.50%
Reserves Utilized 0 0 0 0 0
Reserves Remaining 10,350 10,712 11,087 11,475 11,877
NET CASH FLOW AFTER UTILIZING RESERVES 34,182 70,233 108,999 150,330 193,108
- Income Tax Attributable to Property 0 12,301 29,864 42,508 55,345
CASH FLOW AFTER TAXES AND RESERVES 34,182 57,932 79,135 107,822 137,763
Cumulative Cash Flow After Taxes 34,182 92,114 171,250 279,072 416,835

14. Analysis of Resale
2006 2007 2008 2009 2010
PROJECTED SELLING PRICE, incl. pers. property 903,000 1,383,429 1,894,307 2,424,933 3,089,362
- Costs of Sale 43,900 68,100 93,950 120,700 154,100
- Capital Improvement Loan Payoff 0 0 0 0 0
- Second Mortgage Payoff 0 0 0 0 0
- Third Mortgage Payoff 0 0 0 0 0
- Refinance Payoff 0 0 0 0 0
+ Balance of Reserve Fund 10,350 10,712 11,087 11,475 11,877
BEFORE-TAX SALE PROCEEDS 869,450 1,326,041 1,811,444 2,315,709 2,947,139
- Total Federal Tax on Sale (5,168) 43,935 118,709 259,605 387,888
AFTER-TAX SALE PROCEEDS 874,618 1,282,106 1,692,735 2,056,104 2,559,250
Internal Rate of Return, Before Tax -18.13% 14.03% 23.09% 26.02% 27.69%
Modified Internal Rate of Return, Before Tax -18.13% 13.94% 22.62% 25.12% 26.37%
Internal Rate of Return, after Tax -17.66% 11.74% 19.64% 21.52% 23.24%
Modified Internal Rate of Return, after Tax -17.66% 11.68% 19.28% 20.88% 22.29%
PV, Net Operating Inc. & Sale Price less Costs of Sale 694,626 900,391 1,042,048 1,129,013 1,212,369
PV, CFAT and Sale Proceeds after Taxes 727,040 884,970 971,620 991,284 1,032,861
EQUITY, excluding reserves 903,000 1,383,429 1,894,307 2,424,933 3,089,362
RETURN ON EQUITY (CFBT/equity) 3.79% 5.08% 5.75% 6.20% 6.25%

15. Partnership Analysis
2006 2007 2008 2009 2010
NET CASH FLOW FROM OPERATIONS (BEFORE TAX)
Total for Property 34,182 70,233 108,999 150,330 193,108
Cash Flow Distributed to Investor (RMB) 14,711 30,227 46,911 64,699 83,110
Cash Flow Distributed to General Partner 7,691 15,802 24,525 33,824 43,449
INVESTOR CAPITAL ACCOUNT
Balance, Beginning of Year 703,750 680,423 678,419 679,111 682,169
± Income or Loss from Operations (8,615) 28,222 47,603 67,757 88,329
- Distributions from Cash Flow 14,711 30,227 46,911 64,699 83,110
Balance, End of Year 680,423 678,419 679,111 682,169 687,388
+ Profit from Sale 0 0 0 0 943,711
- Distribution from Sale 0 0 0 0 1,611,886
The Bophut Building Boutique Hotel Partnership Analysis
Report Prepared for Private Investor
2006 2007 2008 2009 2010
GENERAL PARTNER’S CAPITAL ACCOUNT
Balance, Beginning of Year 0 (12,195) (13,243) (12,881) (11,282)
± Income or Loss from Operations (4,504) 14,755 24,887 35,423 46,178
- Distributions from Cash Flow 7,691 15,802 24,525 33,824 43,449
Balance, End of Year (12,195) (13,243) (12,881) (11,282) (8,554)
+ Profit from Sale 0 0 0 0 493,367
- Distribution from Sale 0 0 0 0 474,769
One-quarter Share 1,923 3,951 6,131 8,456 129,554

16. Measures of Investment Quality
IRR, Before-Tax: 27.69%
MIRR, Before-Tax: 26.37%
PV, at 25.00% $1,212,369
Debt Cap. Gross Cash on Operating Gross Operating
Coverage Rate Income Cash Expense Income, Expenses,
Ratio Multiplier Return Ratio $/sf $/sf
2006 0.00 3.26% 6.07 3.10% 76.39% 75.18 17.23
2007 0.00 6.69% 7.37 6.36% 62.00% 82.27 17.85
2008 0.00 10.38% 8.01 9.88% 53.53% 91.36 19.56
2009 0.00 14.32% 8.40 13.62% 47.72% 99.56 21.38
2010 0.00 18.39% 9.00 17.50% 43.62% 106.73 23.28

17. Disclaimer
This report is not intended as an offering to purchase securities.
The information and calculations presented in this analysis are believed to be accurate,
but are not guaranteed. They are intended for the purposes of projection and analysis,
and should not be used for preparation of income tax returns. Federal tax calculations
in this report are based upon the Tax Reform Act of 1986, the Revenue Reconciliation
Act of 1993, the Taxpayer Relief Act of 1997 and the Jobs and Growth Tax Relief
Reconciliation Act of 2003 and are subject to revision as well as further clarifications,
interpretations, rulings, regulations and technical corrections.
These tax calculations are also based upon certain assumptions about the taxpayer and about
the property, and do not take into account the possibility of Alternative Minimum Tax liability,
the At-Risk rules, investment interest limitations, possible future-year indexing of tax brackets,
or the impact of other investments which may intereact to produce tax consequences other than
those projected here. The user of this program and information should consult a tax specialist
concerning his/her particular circumstances before making any investment decision.
*Note especially that a taxpayer’s ability to use losses generated by this investment to offset
income generated by this investment is likely to be affected by the taxpayer’s particular
circumstances, including Adjusted Gross Income, and passive and investment income or losses
from other activities. Consult your tax advisor regarding these issues.
Any reference to "this partner," "this LP" or "this member" refers to any partner or
member with a given percentage interest based on his/her share of capital invested.