Freshstart Properties, Inc. (OCT: FSPP) is a publicly traded real estate company focused on purchasing pre-foreclosure, foreclosure, financially distressed and bank-owed residential properties at a discount to market. The company is uniquely positioned to take advantage of the real estate, whichever direction it goes as they buy, fix and sell when prices are heading upwards and they buy, fix and hold when the market softens because they are able to command much higher rental income. The company's efforts are currently focused in and around the Pacific Northwest.

For the past ten years, Freshstart's management has been buying, renovating, leasing, and selling properties in the Northwest. In that time, the company has developed a network of contacts in the Seattle-Tacoma real estate market and earned a reputation for improving neighborhoods by providing safe and affordable residences. As a publicly traded entity with access to equity markets, Freshstart enjoys a competitive advantage over similar, privately-held entities operating in the same geographical market.

Freshstart Properties' primary focus is on the acquisition and preservation of older residential neighborhoods in transition where market demand is on the rise and crime rates are falling. Specifically, Freshstart Properties targets neglected and abandoned homes and multiplexes with a high probability of producing better than average capital gains once renovations are complete.

The Company undertakes in-depth study of the area where properties are acquired. There are a number of factors that are taken into consideration before selecting a property for investment. This includes the cost of acquisition, prevailing property prices in that region, demographics, renovation costs, and the profitability potential of the property.

Factors that Freshstart Properties considers when selecting a property include:

• Cost of acquisition
• Recent sales of comparable properties
• Neighborhood demographics
• Renovation expense
• Resale or leasing potential

Strong Portfolio of Properties

Freshstart continues its strategy of identifying and purchasing properties that will generate respectable returns on its investments. To date, the company has acquired eight properties since it went public. All of the properties are located in the Pacific Northwest region. The acquired properties include single-family homes, homes on large parcels of land with development potential, and multi-family units. All properties are currently rented and are expected to provide above average ROI in the short term along with significant appreciation over the long-term.

Unlike much of the rest of the US real estate market, experts anticipate prices will remain firm in the Pacific Northwest region.

Unique Business Model

Freshstart Properties has a very unique yet simple three-step business model. The first step starts with the acquisition of abandoned, foreclosed or under-developed properties. The second step is to renovate and develop the property as per the demographic attributes and lifestyle of the locality. The third step is to either re-finance or lease the property, or lease the property at higher rentals. This whole process enables the Company to generate swift returns, which is also known as “House Flipping”. Programs like “Flip This House" has provided the right promotional platform to this business aiding to make this a highly profitable business.

Growth in Northwest Housing Markets

According to statistics provided for King and Pierce Counties, the real estate markets are expected to experience steady growth of approx. 5% going into 2008, while most parts of the country will experience a considerable slow down in appreciation and demand. Mike Crowley, executive vice president, of Master Builders Association of Pierce County said recently “ People get in the mindset that the sky is falling when in Pierce County and the South Sound it really isn’t. Maybe other parts of the country are suffering from job loss and a poor overall economy, but we aren’t. He discounts the theory that price drops will eventually show up in the Puget Sound area, primarily because of new jobs and expected income growth. “I’ve never seen it decline when you have good fundamentals.”

As recently reported in the Tacoma News Tribune, Here’s a look at some of the winners around the region:

The biggest price increases favored a couple of communities known for their water views: University Place (15.8 percent) and Browns Point (9.7 percent).

Kitsap County had the Puget Sound area’s biggest median price increase at 7.9 percent, beating Pierce County and King County’s 5.9 percent appreciation.

Real estate experts believe similar trends to continue into 2008, in terms of real estate inventories and the number of sales. Mike Scott of Scott Apartment Advisors anticipates rents to increase by approximately 8 percent as the vacancies are expected to fall from 4.7 percent to 3.5 percent.

Expanding to Newer Markets

Freshstart Properties is expanding its national footprint by seeking acquisition of properties outside the Seattle-Tacoma area. In seeking to diversify it portfolio, the company is constantly evaluating properties across Washington state. The current turmoil in the markets present an excellent opportunity to move into other markets beyond Pierce and King county

Lower Overhead Costs

The overhead costs for Freshstart Properties are comparatively lower than companies that acquire large tracts of land and develop them into residential apartments. The prime advantage is lower working capital requirements leading to better management of financial resources. The acquired properties come with a basic structure thereby reducing the costs involved in laying down the foundation. Repair costs and renovation costs are lesser as compared to costs involved in developing real estate properties from scratch.