Port Picton Homes

Cold Creek 3-Storey Townhomes with Garage

CMHC Deck Traditional Deck

Cold Creek 3-Storey Townhomes with Garage · Picton, ON

Confidential Investment Memorandum · CMHC MLI Select Level 3 Portfolio Acquisition

Confidential Investment Memorandum

CMHC MLI Select Level 3 · 95% LTV · 50-Yr Amortization

Cold Creek 3-Block Acquisition Proposal (24 Units)

Underwriting for the acquisition of turnkey townhome blocks in Picton, Ontario, utilizing CMHC MLI Select 95% LTV / 50-year financing across 1-block (8 units), 3-block (24 units), and 4-block (32 units) allocation options.

Total Capital Required
$937,980
5% Equity ($525K) + All Closing Fees

Purchase Equity Down
$525,000
5.0% Purchase Equity (24 Units)

Net Operating Cash Flow
$104,022 / yr
$8,668 / mo (Pre-Tax Turnkey)

5-Year Levered IRR
21.4%
3.2x Total Equity Multiple (EM)

Portfolio Asset Value

$10,506,000

24 Units (3 Blocks × 8 Units)

CMHC 50-Yr Loan

$10,379,928

4.0% Fixed-Rate · 50-Yr Amortization

100% HST Rebated

$1,365,780

Enhanced PBRH (5%) + NRRPR (8%)

Debt Coverage (DSCR)

1.22x (with TIEG)

Exceeds CMHC 1.10x Covenant

Financial & Mortgage Due Diligence Advisory: This document is an illustrative pro-forma underwriting presentation. All figures, CMHC MLI Select financing assumptions (95% LTV, 50-year amortization, interest rates), tax rebates, and municipal grants are preliminary models. Prospective purchasers must consult their own certified financial advisors, licensed mortgage specialists, accountants, and legal counsel to conduct independent due diligence prior to executing binding purchase contracts.

The CMHC MLI Select Arbitrage Advantage

How 95% LTV and 50-year amortization generate institutional returns on private capital

Level 3 Qualified (100 Pts)

20x Capital Leverage

5% Down Payment Equity

By qualifying for CMHC MLI Select Level 3, only 5% equity down is required. An allocation of $540K down controls $10.8M in newly built, high-efficiency freehold townhomes in Prince Edward County.

Ultra-Low Debt Service

50-Year Amortization

Extending amortization to 50 years slashes annual mortgage principal and interest payments by ~32% vs. conventional 25-year debt, unlocking immediate positive monthly cash distributions from Day 1.

Zero Out-Of-Pocket Tax

100% Enhanced HST Rebate

Qualifies for 100% full elimination of the 13% Harmonized Sales Tax via Federal Purpose-Built Rental Housing (PBRH 5%) and Ontario NRRPR (8%) rebates, saving $1.37M to $1.82M in upfront outlays.

CMHC MLI Select — Level 3 Scoring Verification (100 Points)

Standard: 95% LTV · 50-Yr Amort · 4.0% Premium

Climate / Energy 50 Pts

≥70% Reduction vs. NBC 2020

All-electric cold-climate heat pumps, continuous envelope R-value, triple-pane low-E glazing, zero on-site gas.

Affordability 50 Pts

12.5% Units @ ≤80% Market

10% minimum threshold committed to 10-year rent stabilization at $1,500/mo (80% PEC median).

Total Score 100 Pts

Level 3 Maximum Qualification ✓

Unlocks maximum 95% LTV, 50-year amortization, and lowest capitalized insurance premium.

The Level 3 Operational Arbitrage — 4-Stage Performance Engine

How precision building physics translates into reduced tenant costs, sticky occupancy, and institutional returns

Cascading ROI Thesis

High-Performance Building Physics

R-30+ & ACH ≤ 1.5

Continuous exterior envelope insulation, triple-pane low-E argon glazing, and high-COP cold-climate inverter heat pumps. 100% all-electric with zero on-site fossil gas infrastructure.

✓ 100% Carbon Tax Immunity

Drastically Lower Utility Bills

~$130/mo Savings

Tenants save ~$1,560 per year on heating and cooling vs. standard Ontario code baselines. Lower utility overhead directly subsidizes net rental affordability.

✓ Eliminates Tenant Bill Shock

Superior Comfort & Retention

3–5 Yr Tenancies

Draft-free indoor thermal equilibrium, superior acoustic soundproofing from the thick envelope, and constant fresh air HRV filtration create unmatched tenant satisfaction.

✓ Near-Zero Voluntary Churn

Maximized Effective NOI & Exit

+$3,500 Saved / Turn

Avoiding annual turnover saves thousands in repainting, remarketing, and downtime. High-performance ESG assets command top-tier exit multiples and compressed cap rates.

→ 1.12x DSCR Covenant Compliance

Acquisition Budget & Capital Outflow Breakdown

Complete line-by-line accounting of purchase price, debt financing, and closing expenditures

Sources & Loan Sizing	Amount (CAD)
Turnkey All-In Acquisition (24 units @ $450,000 — Includes CMHC Level 3 Envelope, Cold-Climate Heat Pumps & Energy Star Appliances)	$10,680,000
Total Net Portfolio Acquisition Value	$10,680,000
CMHC Insured Base Loan (95% LTV)	−$10,146,000
CMHC Insurance Premium (4.0% — Capitalized into Mortgage)	$405,840 (Capitalized)
Total Funded Loan Amount (Principal Balance)	$10,551,840

Investor Capital Uses & Closing Costs	Amount (CAD)
Equity Down Payment (5% of Net Total)	$525,300
Ontario Land Transfer Tax (LTT)	$208,620
Legal & Closing (Volume Tier: 1.00%)	$105,060
Appraisal & Physical Inspection ($150/unit + base)	$6,100
Phase 1 Environmental Site Assessment (ESA)	$3,500
Mortgage Broker Fee (Institutional Tier)	$89,400
Net HST Payable (13% Gross Less 100% Rebates)	$0 (Fully Rebated ✓)
Total Capital Required Out-of-Pocket	$937,980

Pro-Forma Revenue & Turnkey Operating Stack

Rental income schedule, zero-utility exposure architecture, and municipal TIEG tax grants

Unit Type & Rental Schedule	Units	Monthly Rent	Annual Gross
3-Bedroom Premium End Townhome	12	$2,650 / mo	$367,200
2-Bedroom Market Interior Townhome	9	$2,400 / mo	$253,800
2-Bedroom CMHC MLI Affordable Interior (<10%+)	3	$1,500 / mo	$43,740
Pet Fee Program (35% Adoption @ $35/mo)	8	$35 / mo	+$3,360
Gross Potential Revenue			$668,100
Less: Vacancy & Credit Loss Allowance (7.5%)			−$50,108
Effective Gross Income (EGI)			$617,992

Operating Expense Item	Per Unit / Yr	Annual Cost
Municipal Property Taxes	$1,000	$24,000
Building & Comprehensive Property Insurance	$1,590	$38,160
Repairs & Maintenance Allowance	$1,000	$24,000
Capital Replacement Reserve Fund	$300	$7,200
Landlord Utilities (Electric, Water, Sewer)	$0	$0 (Tenant Paid ✓)
Turnkey Professional Property Management (3.5%)	$901	$21,630
Total Baseline Operating Expenses (Opex)		−$114,990
Net Operating Income (NOI) — Baseline		$502,982

Tax Increment Equivalent Grant (TIEG) — 10-Year Municipal Subsidy

Under Prince Edward County's Community Improvement Plan (CIP), affordable multi-unit developments qualify for a 100% rebate on municipal property taxes for 10 years. (Official PEC CIP Portal ↗)

PEC CIP Portal ↗

Model TIEG Grant (+/yr):

Tenant Pocketbook Parity $0 Natural Gas Bill

Total Monthly Cost of Living: Cold Creek All-Electric vs. Conventional Gas Townhomes

While nominal contract rents reflect new-construction premium specs, tenants face zero natural gas customer delivery charges or heating bills. Cold-climate heat pumps (COP 3.0+) and Energy Star appliances reduce total tenant utility outlays by ~$130–$150/mo, making Cold Creek directly cost-competitive with older, lower-spec gas rentals.

Unit Type & Occupancy Cost Line Item	Typical PEC Gas Rental (Older Stock)	Cold Creek All-Electric Townhome	Tenant Net Comparison
2-BEDROOM INTERIOR TOWNHOME (WITH GARAGE)
Contract Base Rent	$2,275 / mo	$2,400 / mo	+$125 nominal
Enbridge Gas Base Fee + Space & Water Heating	$135 / mo	$0 / mo (No Gas Meter)	−$135 / mo
Hydro Electric (Plugs, Lighting & Heat Pump Power)	$115 / mo	$110 / mo	−$5 / mo
Total Monthly Cost of Occupancy (Rent + Utilities)	$2,525 / mo	$2,510 / mo	✓ $15/mo Cheaper + New Build
3-BEDROOM PREMIUM END-CAP TOWNHOME (WITH GARAGE)
Contract Base Rent	$2,525 / mo	$2,650 / mo	+$125 nominal
Enbridge Gas Base Fee + Space & Water Heating	$145 / mo	$0 / mo (No Gas Meter)	−$145 / mo
Hydro Electric (Plugs, Lighting & Heat Pump Power)	$125 / mo	$120 / mo	−$5 / mo
Total Monthly Cost of Occupancy (Rent + Utilities)	$2,795 / mo	$2,770 / mo	✓ $25/mo Cheaper + New Build

Zero Fixed Gas Base Charges Avoids the ~$300/yr mandatory Enbridge meter and connection charge before using a single therm.

High-Efficiency Mechanicals Cold-climate heat pumps (COP 3.0+) deliver 3 units of thermal output for every 1 unit of electrical input.

Rapid Absorption & Low Turnover Tenants recognize net parity on move-in, driving faster lease-up and higher long-term retention.

Prince Edward County Lifestyle & Rental Demand Driver

High-earning remote professionals, active downsizers, and local healthcare leaders driving year-round occupancy

100% Year-Round Tenancy

Active Trailside Living in Prince Edward County

Talbot on the Trail

Your morning walk starts at your front door.

Cold Creek · 3-Storey Townhomes

The best part of your commute is the last thirty seconds.

Cold Creek · Picton, Ontario

Own the neighbourhood you've been looking for.

5-Year Wealth Creation & Exit Waterfall

Year-over-year compounding through rent growth (2.5%), appreciation (3.0%), and debt paydown

Year	Asset Value	Mortgage Bal.	Total Equity	Gross Revenue	NOI	Net Cash Flow	Cumul. Return

Year 5 Exit Realization

$12,179,886

Gross Asset Disposition Value based on conservative 3.0% annual compounding from initial $10.5M valuation.

Net Equity Proceeds

$2,674,310

Net cash returned after full mortgage payoff and deducting 4.0% broker and legal disposition commissions.

Total 5-Yr Wealth Created

$2,316,520

Total Profit (Exit Capital Gain + 5 Years of Operating Cash Flows) on original $938K cash investment (3.47x Equity Multiple).

Cold Creek Phase 1 Master Plan & Asset Architecture

A master-planned residential enclave in Picton combining single-family detached homes, 2-storey street towns, a 32-unit stacked town parcel, and the flagship 86 3-storey purpose-built rental townhomes

Cold Creek Phase 1 Master Plan Aerial View

Cold Creek Phase 1 Aerial Master Plan · Picton, PEC

Fully serviced civil infrastructure, nature trails & connected streetscapes

Comprehensive Phase 1 Community Scope

Cold Creek Master-Planned Neighbourhood

86 3-Storey Townhomes

11 blocks (10 × 8-unit + 1 × 6-unit) purpose-built for rental. 3-storey layouts with private attached garages and Level 3 energy engineering.

Single-Family & 2-Storey Street Towns

Executive detached homes and 2-storey freehold street townhomes anchoring neighbourhood property values and aesthetic pride.

32-Unit Stacked Parcel & Parkland Integration

Attainable multi-residential parcel, direct connection to Millennium Trail network, and walkable to Picton Main Street & PEC Memorial Hospital.

8-Unit Back-to-Back Dollhouse Floor Plan — Top-Down View

8-Unit Block · Top-Down Dollhouse View · 2-Bed Interior & 3-Bed End-Cap Layouts

Neighbourhood & Streetscape

Pedestrian Community Design

High-durability architectural asphalt shingles, modern board-and-batten siding, private sheltered entries, and landscaped streetscapes.

3D Architectural Exterior Render (Shingle Roof)

Exterior Architecture

Modern 8-Unit Freehold Block

High-efficiency building envelope featuring contemporary glass balcony railings, architectural shingle roofing, and zero on-site gas infrastructure.

Outdoor Living & Terraces

Private Glass Railing Balconies

Spacious upper-level private terraces with contemporary glass balcony railings, maximizing natural light, outdoor living, and tenant retention.

Cold Creek · 3-Storey Townhomes

Your morning view, every morning.

Elderly couple enjoying tea on townhome balcony

Cold Creek · Picton, Ontario

Retire to your balcony, not from your life.

Core Unit Type A

2-Bedroom Interior Layout (2 Bed / 1.5 Bath with Garage)

Spacious open-concept main floor with gourmet quartz kitchen island
Dual upper bedrooms with dedicated ensuite baths and walk-in closets
Dedicated ground-floor mechanical & laundry room with private entrance
Contemporary Glass Balcony Railings: Included as standard in the +3% building specification upgrade package
Architectural Shingle Roofing: Premium architectural asphalt shingles for extended durability and low maintenance
CMHC Climate Standard: Built to achieve ≥70% GHG & energy reduction vs. NBC 2020 reference building via high-COP cold-climate heat pump HVAC & zero gas infrastructure

Core Unit Type B

3-Bedroom End-Cap Layout (3 Bed / 1.5 Bath with Garage)

Triple-exposure corner unit with expansive natural daylighting
3 full bedrooms upstairs + flexible ground-floor home office space
Direct parking stall access and landscaped private entry patio
Expansive Outdoor Living: Private upper terrace with contemporary glass railings and high-performance weatherproofing
High-Performance Thermal Envelope: Continuous exterior insulation & triple-pane glazing qualifying for Level 3 MLI Select 50 Energy Points
Individual utility metering ensuring 100% tenant-paid operational costs

Level 3 Building Physics vs. Conventional Build Comparison

Quantifying the cascading ROI from high-performance envelope engineering to investor balance sheet

50 Energy Points (≥70% GHG Cut)

Performance Category	Standard Ontario Code Build (OBC 2020)	Cold Creek CMHC Level 3 PBR	Landlord & Investor Advantage
Building Envelope & Glazing	Standard R-20 batts, double-pane vinyl windows, ACH ~3.0	R-30+ continuous exterior insulation, triple-pane low-E argon, airtight ACH ≤ 1.5	Zero envelope moisture / $0 Tarion defects
HVAC & Carbon Infrastructure	Fossil gas furnaces (rising federal carbon taxes & connection fees)	All-electric cold-climate inverter heat pumps + HRV ventilation	100% immune to carbon tax escalations
Tenant Monthly Utility Burden	$260–$310 / month (volatile winter gas & electrical baseboards)	$125–$155 / month (hyper-efficient heat pump COP ≥ 2.8)	~$130/mo savings (~$1,560/yr per unit)
Tenant Retention & Turnover	12–18 month average tenancy (high turnover, annual repaint/re-leasing)	3–5 year average tenancy (superior acoustic & thermal comfort)	Saves ~$3,500+ per avoided vacancy turn
Financing & Institutional Liquidity	Conventional 75% LTV, 25-yr amort, standard institutional exit	CMHC 95% LTV, 50-yr amort, institutional ESG liquidity grade	Compressed exit cap rate & 3.2x EM

Portfolio Scaling Roadmap — 8-Unit, 24-Unit & 32-Unit Allocation

Comparing capital requirements, cash yields, and 5-year equity generation across portfolio scales

Phase 1: Entry Block

Acquisition of 1 Block (8 Units) — $3.6M Portfolio

Deploy $353,243 total capital ($180K down payment + all closing expenses) to secure 8 units. Delivers $19,034/yr initial cash flow with TIEG ($11,034/yr base) at a 1.12x DSCR.

Phase 2: Core Deployment

Acquisition of 3 Blocks (24 Units) — $10.8M Portfolio

Deploy $960,927 total capital ($540K down payment + all closing expenses) to secure 24 units. Delivers $59,957/yr initial cash flow with TIEG ($35,957/yr base) at a 1.12x DSCR.

Phase 3: Institutional Scale

Expansion to 4 Blocks (32 Units) — $14.4M Portfolio

Expanding to 4 blocks requires $1,231,911 total capital ($720K down payment + closing costs). The 32-unit scale expands annual cash flow to $80,068/yr with TIEG ($48,068/yr base) at a 1.12x DSCR.

Acquisition Timeline & Next Steps

1. Execute formal Letter of Intent (LOI) & reserve preferred block parcels.
2. Finalize CMHC MLI Select Phase 1 underwriting submission with designated commercial lender.
3. Close equity draw ($180K for 1 block / $540K for 3 blocks / $720K for 4 blocks).
4. Developer executes turnkey construction and manages all MLI compliance certification.

Schedule Executive Briefing

Cold Creek 3-Storey Townhomes with Garage Portfolio

Cold Creek 3-Block Acquisition Proposal (24 Units)

The CMHC MLI Select Arbitrage Advantage

The Level 3 Operational Arbitrage — 4-Stage Performance Engine

Acquisition Budget & Capital Outflow Breakdown

Pro-Forma Revenue & Turnkey Operating Stack

Tax Increment Equivalent Grant (TIEG) — 10-Year Municipal Subsidy

Total Monthly Cost of Living: Cold Creek All-Electric vs. Conventional Gas Townhomes

Prince Edward County Lifestyle & Rental Demand Driver

5-Year Wealth Creation & Exit Waterfall

Cold Creek Phase 1 Master Plan & Asset Architecture

Cold Creek Master-Planned Neighbourhood

Level 3 Building Physics vs. Conventional Build Comparison

Portfolio Scaling Roadmap — 8-Unit, 24-Unit & 32-Unit Allocation

Acquisition Timeline & Next Steps