We do not need to re-hash all of the details of the current financial market crisis. Suffice to say that the sub-prime mortgage crisis, the decline in the stock market, the federal Reserve Board's dramatic actions to stem the momentum of the crisis, the slow down in virtually all the commercial real estate markets, and the great caution now exhibited by lenders around the country all are testament to the downward real estate cycle.

Prices are down. Loans are in default. Lenders have taken back properties. Some sellers are desperate. All of these conditions represent investment opportunities.

OPPORTUNITY INVESTORS MAKE SUBSTANTIAL PROFITS
IN EVERY MARKET CYCLE

JK Investment Properties is in the process of forming one or more Opportunity Funds to take advantage of this downturn in the residential market. Now is the time to acquire properties at significant discounts.

Our Opportunity Funds will have three or five year lives. Some acquisitions can be turned for profit on a short term; most will be held for several years. Opportunistic and patient investments will be profitable investments.

PROPERTY ACQUISITION TYPES

Our Opportunity Funds will target those asset types that have declined significantly in value and are most likely to have owners with the greatest need to sell:

• Distressed or foreclosed houses, condos and apartments

• Below market 2-4 unit complexes

• Partially constructed or unsold condo conversions

• Distressed builder closeout homes

ADD YOUR NAME TO OUR 'OPPORTUNITY FUND' INVESTOR LIST

If you are interested in receiving information from us on Opportunity Funds, please call Federica at (858) 277-2700 or email federica@jkip.com at our office. You can also click this Contact Us link and add your name to the list, reference 'Opportunity Funds'.

In these critical times most of us stop to consider how our investments are doing. Are they secure? Are they declining in value? Should I adjust my asset mix? Should I sell something?

Except under extreme circumstances real estate investors should not sell property. Real estate is for the long term and in most cases it will survive even the most dramatic downturn. Don't panic. Every real estate investor suffers a period of decline.

Like any portfolio, the JK Investment Properties' holdings has a few projects that need extra attention during this part of the market cycle. Fortunately, our portfolio has no losers and all of our values are holding up well.

We can classify our holdings as follows:

15 PROPERTIES CURRENTLY HELD OR ALREADY SOLD

Bought and Sold - One mobile home park and two self-storage with returns to our investors ranging from 15% to 35% per annum.

Bought and Held - Six self-storage and one mobile home park performing well above projections with annual cash-on-cash returns of 10% to 20%.

Developed and Leasing up - Three self-storage in Madrid, Spain that are leasing up well.

Bought and Sold - One self-storage that struggled. We sold this property to return 100% of the investor capital along with a small return.

Bought and Held - One medical office building in San Diego, a single credit tenant with solid cash flow.

3 PROPERTIES WITH SPECIAL MANAGEMENT NEEDS DURING THE DOWNTURN

Completed Development Project - Self-storage that is leasing up slowly.

In Process Development Project - Self-storage that now has the approvals in place but is on hold.

Bought and Held - Medical office building that is 100% full and has excellent cash flow. A year from now, however, the building has a potential of having several vacancies. We may suspend cash flow distributions to build up reserves in anticipation of the potential vacancies.

THESE PROJECTS HAVE THE FOLLOWING IN COMMON:

• The value of each has not declined dramatically

• Each needs to preserve cash to hold on during rough times

THE LESSONS ARE:

• Hold the course

• Take no precipitous actions

The principals of JK Investment Properties have an extensive background in the acquisition and management of manufactured housing communities (MHC), also known as mobile home parks. We have purchased two MHC's in the last five years. We sold the first one and gave our investors more than 25% annual return. We still own the second property. It generates annual cash-on-cash returns to our investors in excess of 12% and the market value has increased by several million dollars since acquisition.

Many of our investors have asked us to purchase more MHC's. In recent years, these properties have been very difficult to acquire. However, since the commercial real estate markets have slowed a little this year we are beginning to find more opportunities to purchase. In the coming months JK hopes to have new investor opportunities for MHC's.

If you are interested in investing in MHC properties with stable monthly cash flow, please click on this Contact Us link or email federica@jkip.com referencing your interest in MHC's. We will place you on a list of interested investors.