Bai Om-Dan Phu Villages in Song Cau District, Vietnam- Ocean front Beach resort

WE HAVE LICENSE TO BUILD AND SURVEY IN OUR HANDS AT THIS TIME.

Property Boundaries:

• South to sea and mountain
• East to ocean
• West 800 meters from beach
• Sea surface 1km from shore
• 18 ha. approx 40 acres
• 400 meters of beach front before land acreage (large bay)
• 250 meters of beach front before land acreage (small bay)

General Marketing Observation

Through multiple trips and analysis of market potential, our team has determined that a niche exists for a relatively small development on the South Central Coast of Vietnam to serve the high end Eco-Tourism market. Additionally, the development is to be designed in Phases with the intent of being a self-supporting cost structure as the development grows.

Analysis has shown that most current resort/vacation developments in Vietnam are on a much larger scale (in excess of USD 20million). Due to the relatively low occupancy rates required to support these facilities and low development costs, it seems to have been the goal of most developers to seek larger resort facilities. Of course, we see a glut of these developments in the cities near Nha Trang and Danang, our major market competition to the north and south. Additionally, we have seen the delays in these developments due to lack of market support and financial restrictions.

The development our team has designed has Three (3) Phases. Each supports the other financially and each serves a particular market niche within a segment of the Eco-Tourism trade. Additionally, a travel infrastructure already exists to support our market including a close proximity airport, sea transportation, and road friendly travel. Property layout consists of 40 acres which include a large bay and small bay protected by rising mountains extending out to the water. Beach frontage is nearly 1/2 mile long. Photos accompany this synopsis.

Twin Sisters Bay Resort- Phase One Market Strategy Overview

Phase One consists of developing the high-end residences on the water of the small bay. It is estimated that we would develop 20 units with 2-3 units being 3 bedrooms. Costs of this development and maintenance are relatively low as outlined in Phase One Cost Evaluation.
With very little impact to the environment and the fact that there are very little supporting or tourism structures within the vicinity, this Phase would be marketed to high-end U.S. “innovators” seeking exotic tranquility and privacy. On site supporting structures would include a small restaurant, bar, pool, hot tubs, and small spa facility.

It is the intent of this Phase to offer a quiet, serene, and natural setting while having the luxuries of a 5 star resort. Personalized service would be established through our local property management team that is already in place. Services include, if desired, personal chef, driver, tour operator, and staff. All of these would be listed as upgrades with the intent of letting the guest create their own adventure. A list of amenities would be provided, including an activities list, to the resort guest and these amenities would be above and beyond standard resort villa rates. Additionally, these guests would have full use of the larger beach as a private enclave.

Twin Sisters Bay Resort- Phase Two Market Strategy Overview

Phase Two is a continuation and support of Phase One. Key markets include those that desire the Eco-Tourism experience at a more reasonable cost. Tailored more to 4 star, these individuals are identified as followers of the innovator group seen in Phase One. Many times, this group needs to see established facilities for comfort and a little less “roughing it”. Most would be identified as younger families and couples looking for an adventure. Phase Two provides for the development of an additional 50 land based villas of 1 bedroom size with 2-3 being reserved for 2 bedroom sizes. These would be provided at a lower cost than the pristine, Phase One development. Additional support facilities would be provided as well including a socializing area, additional pool, and additional bar. In addition, the larger bay would be available and established as a private beach. Activities would be expanded to include: scuba diving and snorkeling, rock climbing, hiking, fishing, and water sports (boating & wave runners). These activities would be offered as an integral part of the Phase Two development instead of the created amenity “add-ons” outlined for Phase One. The two phases can now support this full time amenity addition from an investment perspective.

Working capital generated by Phase One would aid in lower development costs of Phase Two. Additionally, Phase One allows the surrounding community to grow with the development. The influx of capital into the area will spur investment into resort supporting structures like restaurants, bars, local shops, etc. This is evidenced by similar patterns in the cities of Nha Trang on a large scale and Phan Thiet on a smaller scale.
Opportunities for amenity expansion abound with the development of the second Phase. These additional profit centers create additional working capital to help fund Phase 3. This also helps to increase occupancy of the Phase Three development.

Twin Sisters Bay Resort- Phase Three Market Strategy Overview

Phase Three is the largest of the development phases. It is developed solely on the large bay with the intention of keeping it separate from Phase One & Two both geographically and in market strategy. The landscape provides for a natural separation and accommodates our plan entirely. Phase Three consists of 50 one and two bedroom units. These would be designed with common walls and all would have ocean view. Additionally, support centers would be created to support this facility. Additional restaurant, two pools, massage center, socialization area, 2 bars, Internet café and casino.

Key market to support this Phase include coastal travelers. Those coming down the coast from Hanoi en route to Ho Chi Minh. This market has been found to “get the most for its money”. These are usually first timers to Vietnam and wish to experience as much as possible within their limited vacation time. They normally travel through with the intent of staying 1-2 nights before heading out to the next city.

The Phase 3 units are the lower cost rentals of the 3 Phases. The draw to this Phase is threefold: 1) Lower Unit Cost , 2) Coastal proximity and 3) addition of casino. The lower cost unit is self explanatory as it is the most cost effective of all phases. Room costs will be slightly higher than comparables along the lesser developed coast. With regard to proximity, we have a distinct advantage. There is very little development between the two (2) resort centers of Danang and Nha Trang. We are located approximately 8 hours travel from Danang and 4 hours from Nha Trang. This allows for a logical layover for the coastal traveler. In addition to help support the decision to stay with us, our small casino will aid in the draw of consumers. When given a choice of stopovers along the coast, our negotiated casino rights will offer us a competitive edge. It is our intent to market this Phase to the local tourism groups and feeder programs.

Tourist Activities & Attractions

In and around our resort are activities to give the guest an alternative to relaxing in serene settings. Even before supporting infrastructure develops through a natural process we can provide the following:
Choice of Restaurants on Site totaling two (2) offering Eastern & Western Cuisine
Food Activity including special BBQ’s, Luau’s, and other socializing events
Las Vegas Style Casino Gambling On Site
Water sports including: wave runners, boating, sailing, fishing, scuba diving, and snorkeling.
Climbing and exploring the mountains of our property
Town excursions including Tuy Hoa & Song Cau. Longer in-land tours to the interior can be arranged and could include: rafting, hiking, golf, and general exploration.

FINANCIAL OVERVIEW

• VAT = 10%
• Costs Calculated based on : 30 Days Per month
• No Income Tax for 8 Years
• Lease on land for 49 years
• All Licenses, Fees, Surveys Paid For
• Cost Of Goods Not Calculated
• Amenity Revenue Not Calculated
• Estimate cost of monthly labor= $21,900
• Labor Costs Cross Verified And Are Current To 09/01/2005
• Labor Costs Based On Maximum Required. Multi Capable Labor can be shifted to accommodate resort needs.
• Phase One & Phase Two Resort labor can be outsourced (In example, laundry services, drivers, chefs (local) and additional local labor also required for part time)

Building Development Costs Estimated @ $100,000 per unit furnished and amenity stations and detailed as follows:

PHASE ONE:

• 20 villas
• 1 Restaurant
• Bar
• 1 Pool
• 1 Hot Tub
• 1 Spa facility

PHASE TWO:

• 50 Units
• 1 Socialization Area
• 1 Pool
• 1 Bar
• 1 Vietnam specialty restaurant

PHASE THREE:

• 50 Units
• 1 Restaurant
• 2 Pools
• 1 Spa Center
• 2 Bars
• 1 Café
• 1 Casino

Gross Profit Estimates figured at 35% which, through survey, represents a low end occupancy during slow season.

Total # of Employees for all Phases = 137 or an average of 1.14 employees per room. This number is also consistent with higher end resorts in Vietnam (Nha Trang average = 1.1).

All costing figures with regard to labor are figured at the maximum sized labor force. This causes all estimates to be conservative.

Phase One Development
Operational Breakeven Occupancy Rate: 15.3%

Phase Two Development
Operational Breakeven Occupancy Rate: 5.3%

Phase Three Development
Operational Breakeven Occupancy Rate: 6%

**Over all break even point with all phases running 8.9% **

Note: Figures are approximate and subject to market conditions. Occupancy rate breakeven amounts are calculated for room revenue only and do not include residual revenue generated from supporting amenities including: restaurants, bars, activities, spa’s and CASINO etc. Further cost breakdowns and analysis are available for qualified investors. 49% Ownership Investment Required: $USD 5 million, this will increase depending on the number of units that will finally be built and when FUNDS ARE SUBMITTED, before construction-during construction-after construction.

Investment Options

First 20% Invested in Project: $80,000 will be 1% of ownership of project !!!!!!

Per-Construction: Hold 49% Ownership of Project as a Partner with an investment of aprox. 5 Million with a rate of return of 3.41% per month ($170,520/mth NET PROFIT) These figures are with resorts operating at 35% occupancy and 120 units only.

During Construction: Prices will increase as the Economy and Influx of funds to Vietnam for Resort type investments.

Investment Capital Includes

All Licenses, Government Negotiations, Staffing, Property Management, Construction
** Interested Parties Should Direct Any Questions To:

Zel Realty
Phone: 847-324-0155
Fax: 847-674-4772
E-Mail: ZelRealty@aol.com

Surrounding area: Song Cau District

Song Cau is located on the edge of sea's district in North - East corner of the Phu Yen provenience. Center of District is the Town of Song Cau about 53 km north Tuy Hoa Town. It is bounded by Qui Nhon - Binh Dinh in the North - West, Tuy An district in the South, Dong Xuan district in the South - West and East Sea in theEast.

Area : 487,3 km2- Popular : 91.923 person- Density : 188,6 p/km2 , Song Cau District has 9 villages and one town In there, Song Cau Town and Xuan Phuong (Former is old Xuan Phuong village ), Xuan Hai, Xuan Loc, Xuan Binh (Former is old Xuan Loc village ), Xuan Tho I, Xuan Tho II (Former is old Xuan Tho village ) were granted National Armament Hero Name by Vietnam State.

Structure of using land :- Forestry land (sylviculture) : 10.737,2 ha- Agriculture land : 5.260,2 ha- Living land : 455,7 ha- Specific land : 1.187,3 ha- Not-used land : 31.089,6 ha

Yield of food plant, industrial plant, rearing and catching seafood- Rations : 6.160 tons/year- Coconut : 1,752 million fruit/year- Cashew : 61 tons/year- Fish sauce : 1,74 million liter/ year- Salt : 17.000 tons/year- Seafood : 10.636 tons/year- Export shrimp/lobsters : 755 tons/year
Famous landscape - Vestiges: - Nhat Tu Son (Xuan Tho I), Bang Expanse, Ran Expanse (Xuan Hai), Nom Expanse (Xuan Canh), Nom Expanse (Xuan Hoa), Om Expanse (Xuan Phuong)- Vung Lam (the first trade seaway of Vietnam-USA)- Cu Mong Bay and Xuan Dai Bay- Gia Long King's Rested House (Long Binh), Cong Than Temple (Xuan Thinh)- Famous dish: snail, crab, arca, grouper, ... (Xuan Phuong and Xuan Canh villages- 1A Highway)

Property is located in the Song Cau District which is one of the largest exporter of lobster, various tuna and other seafood. Property is located in area which is coming under development and is one of the last frontiers along the coast with a great beach area and crystal clear water. The underwater vision is said to be up to 30meter depending weather like anywhere. There are no other resorts for miles, and secluded from traffic. One road in to property which is far from the main HWY 1a or you will have access by sea.

Airport is only 43km to the north in the city of Qui Nhon, and we may have a boat access for people who want to just relax for an hour and half, enjoy a cocktail after their journey and see the beautiful coast line with islands toget to the resort area. The resort is also near some Cham Towers in Tuy Hoa built between 7th-12th century. The city of Tuy Hoa also has an airport, about 53km south. There are rivers to kayak, mountains to climb and the South China Sea to explore while scuba diving.

The one of the most popular resort area’s is Nha Thang which is well know for its great white sand beach and tranquil atmosphere, $150-$330/night for more expensive resort, like Ana Mandara but well worth the money. This city is 170km south of the property, about 3.5 hours. There is another airport in Nha Trang. The area also has many attraction but it is getting more crowed and developed as we speak.

Now you have three airports to choose from and how you would like to get to property from your destination. The closest is Qui Nhon but if you like to sight see along your travel, you can start in the morning and head north out of Nha Trang and stop at sights along the way, have lunch in small fishing villages with great seafood. Then when you arrive at your resort you can melt into the sunset while a chef prepares your first great meal out on an open fire.