MONEY ACADEMY · Money Academy Section 1: Worksheets & Handouts Section 2: The Art of Raising Money...

MONEY ACADEMY

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Money Academy

Section 1: Worksheets & Handouts

Section 2: The Art of Raising Money Slides

Section 3: Finance Request Template FRP & PFS

Section 4: Raising Money From Rehab & Hard Money Lenders

Section 5: Mastery System Template – “Private Lender Credibility Packet”

Section 6: Lending Documents & Compliance Slides

Section 7: Private Money Meeting Outline

Section 8: IRA Investing & Definition Slides

Section 9: Money Presentation PowerPoint Example for Group Presentation

Section 10: Example Company Pitchbook

Section 11: Example $14M Commercial Raise Deck

Section 12: Long Term Wealth & Retirement Planning Slides

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PREPARING BEFORE RAISING MONEY“RESIDENTIAL REDEVELOPMENT”OBJECTIVEGet comfortable and confident with what you do and why. Establish your knowledge, systems, & confidence in your business.

What do you do? Explain Residential Redevelopment

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What is involved in your rehab scope of work? ______________________________________________________________

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What type of houses do you go after? Colonials, Ranch, Split Levels, houses with at least 3 bedrooms, etc? (Be specific)

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Why do you target those specifics? (Share your market strategy on why you target)

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Who is your ideal buyer? (Describe profile)

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What does your ideal buyer want?

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What price ranges are they willing to buy in?

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Explain your social mission and your why. Share company goals.

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ULTIMATE MONEY ACADEMY 13

SUMMARY OF BUSINESS MODEL

1) Marketing to find deals (Explain how you get deals with equity/profit)

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2) How you calculate repairs (Describe SOW system & SOW Library resources)

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3) How do you determine an accurate value (ARV, explain comps, etc.)

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4) How you come up with the purchase price (MAO & deal analyzer)

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5) Exit strategies (Retail Buyer, Selling process & systems)

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6) Fund the deal (Define asset based lending & the opportunity to be a lender)

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7) Project Management (7 stage rehab system)

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8) Market to sell (Staging, pricing, realtors, & selling systems)

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COMPANY BIOGRAPHY (1 of 3)

OBJECTIVE- Show lender prospect that you have a solid team and how each team member adds value and hedges risk.

Partners/Founders

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Board of Advisors

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LEGAL TEAMMATES:

Real Estate Attorney _________________________________________________________________________________

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Short Sale Attorney __________________________________________________________________________________

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Business Contract Attorney ____________________________________________________________________________

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Zoning Attorney ____________________________________________________________________________________

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Insurance Agent ____________________________________________________________________________________

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MARKETING TEAMMATES: (IF APPLICABLE)

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CONSTRUCTION TEAMMATES

Carpenter __________________________________________________________________________________________

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Plumber ___________________________________________________________________________________________

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Electrician _________________________________________________________________________________________

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HVAC ______________________________________________________________________________________________________________________________________________________________________________________________

Project Manager _______________________________________________________________________________________________________________________________________________________________________________________

REAL ESTATE PROS

Realtor ______________________________________________________________________________________________________________________________________________________________________________________________

Home Inspector/Termite/Radon ____________________________________________________________________________________________________________________________________________________________________________

Architect ____________________________________________________________________________________________________________________________________________________________________________________________

Structural Engineer ______________________________________________________________________________________________________________________________________________________________________________________

Mortgage Banker/Broker _______________________________________________________________________________________

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Stager ______________________________________________________________________________________________________

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Photographer ________________________________________________________________________________________________

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REAL ESTATE PROS (CONT.)

Self-Directed Retirement Rep ____________________________________________________________________________________

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Coaches/Education ____________________________________________________________________________________________

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CPA/Bookkeeper _____________________________________________________________________________________________

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Title Company _______________________________________________________________________________________________

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Escrow Company _____________________________________________________________________________________________

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ENVIRONMENTAL CONTRACTORS:

Oil Tank Sweeper/Tester/Clean-up ________________________________________________________________________________

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Lead Paint Specialist ___________________________________________________________________________________________

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Asbestos Specialist _____________________________________________________________________________________________

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OBJECTION HANDLING

1) What is private lending?

Answer:

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2) I have heard a lot of people lose money in real estate?

Answer:

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3) What are my risks on lending to you?

Answer:

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4) If I give you money, what do I get? Any paperwork?

Answer:

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5) What are the terms of your lending program?

Answer:

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6) Is this investment really as safe as it sounds?

Answer:

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MORE QUESTIONS AND OBJECTIONS:

• Can I be an equity partner?

• Let’s joint venture instead?

• What if there is another real estate market correction or crash?

• What are the risks?

• What if you don’t pay or I have to end up foreclosing?

• How am I protected?

• What if you die?

• What if house burns down?

• What if there is an insurance claim on the home?

• What if something is wrong with title?

• What if you can’t sell it?

• What if interest rates go up?

• How am I going to know you’re using my money for the transaction?

• How does it work with the rehab money? Do I pay in installments?

• This house is a piece of crap?!?!?!

• Can I have a higher interest rate?

• Can I get 10 people to lend me $10k each?

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PRESENTATION CHECKLIST FOR PRIVATE LENDER

Research the lender as much as possible to build rapport before talking to them

Ask them how their investments have been doing over the past 12 months?

Ask them what their expectations are for the next 12 months that would satisfy them?

Go over company biography

Go over business plan (Explain how lenders are protected & what docs they receive)

Show them previous projects & SOW

Show them subject property if you have one (full details, pics, video, property packet, SOW)

Social Mission/Why

Share your goals, enroll them in your goals

Explain how they’re protected with the equity position (equity stack, tangible docs, comps, etc.)

Explain the terms for this project (1st lien/2nd lien, interest rate, months, etc.)

Ask them how capitalized they are(how much money do they have available to lend?)

Identify where the money is coming from

How quickly they can fund

Would they like to be alerted for money funding opportunities?

Close or give them assignments to get money account set up to fund

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ALTERNATIVE FINANCING OPTIONS• Assignments

• Seller Financing

• Subject-To

• Assumptions

• Lines of Credits

• Retirement Accounts

• Rehab Lenders

• Private Lenders

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FEDERAL RULES FOR RAISING MONEY(1 of 2)

THIS SUMMARIZES THE FEDERAL RULES FOR RAISING PRIVATE $$$:

Background: Congress passed Securities Act (“ACT”) after the 1929 stock market crash. Why? So promoters fully disclosure all material

info a person needs to make an informed investment decision when buying a ‘security.’

If It’s a Security: The promoter must register it with the SEC, and provide a mountain of disclosures to investors.

Question: Is a promissory note a “security” when the investor loans funds to a rehabber?

Answer --- generally, NO.

If it’s a plain vanilla promissory note, but if the borrower gets creative (i.e., builds in profit participation or an ‘equity’ kicker into

the note), then YES.

Question: So if I’m raising $ for rehab deals, can I ignore the rules? No. You should still follow the best practices outlined below. And keep

in mind -- if you guarantee rates of return, or oversell that it’s a safe investment, lenders can pursue other actions against you, such as “fraud

and misrepresentation.”

BEST PRACTICES WHEN RAISING $ FOR REHAB PROJECTS (even though a promissory note secured by a trust deed is technically, not a “security,” and won’t be in the plain vanilla cases):

• Limit offers and solicitations to persons who you have a preexisting relationship with. (I.e., you know about the person’s

sophistication and finances before you make the offer). DON’T use mass communications. DON’T make general, non-personal

offers.

• If possible, borrow $ with a promissory note for less than 12 months.

• Make it a plain vanilla promissory note (i.e., DON’T add profit participation, equity kickers, or ‘conversion into equity’ rights).

• Make sure each lender has his/her own promissory note, secured by the property as collateral, with different levels of security (i.e.,

DON’T put multiple lenders on the same note, secured by the same property, all in 1st position).

• In Short, it should be an interest only promissory note (i.e., no equity rights), fully secured by the property, given to a single

investor who gets his/her own seniority level in the security (i.e., 1st position, 2nd position, etc).

Legal Rules behind this:

“Security,” as Defined in the ACT: “Any note, stock, bond, ETC....” (So, start with the presumption that a note, generally, is a security)

BUT, the Supreme Court’s Interpretation of how to interpret “Security” under the ACT: Don’t interpret it to mean literally, “any note”

. . . some notes fall outside of the ‘security’ definition. For example, generally, a “note secured by a mortgage on a home” is NOT a note (as

defined under the ACT).

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FEDERAL RULES FOR RAISING MONEY(2 of 2)

4 FACTORS COURTS WILL CONSIDER IN DETERMINING IF A NOTE IS A “SECURITY:”

• Is the seller’s purpose to raise $ for general business use, and the buyer’s primary interest to generate a profit? (if yes, it’s viewed more

as an investment in a security, rather than a commercial loan).

• Does the seller’s ‘plan of distribution’ of the note resemble a ‘plan of distribution’ of a security (i.e., did you solicit a broad segment

of the market)?

• Did the public have a reasonable expectation that it was a security? (Substance over form rule; the public’s perception matters).

• Is there another regulatory scheme that significantly reduces the investment risk, making the protection of the ACT unnecessary?

(i.e., is it collateralized, or does another regulator oversee this area?)

Each state also has their own rules. Although they generally mirror the SEC Acts, variations exist.

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PRIVATE LENDER OBJECTIONS (1 of 4)

I AM JUST SO BUSY RIGHT NOWI definitely understand that fact as we are very busy too. I would suggest you make time because the investment is one of the safest you will ever see and the rates of return are staggering. I will do my best to make the meeting very brief, but I would hate to see you miss out on this opportunity.

THE REAL ESTATE MARKET IS TOO RISKYI understand your feelings. However, the reason we are doing so well is because we are literally buying properties at 65 cents on the dollar or less. Even if the market dropped another 20% this year we would still have a huge equity cushion based on what we are paying for these properties.

When we meet I will show you our buying formulas and I know you will agree that this might just be one of the safest things you can do with your money. The mere fact that we are acquiring properties at such a deep discount and that your money will be backed by real estate makes this one of the safest investments around. You compare that with the stock market where your money is not backed by anything.

The best thing to do is to just take 30 minutes and I will be happy to walk you through the whole process. How does that sound?

WHAT IS A PRIVATE LOAN AND HOW DOES PRIVATE LENDING WORK?That is the #1 question we always get. In fact, a private loan is a loan that is made to a real estate investor that is secured by real estate. Private Loan Investors are given a first or second mortgage that secures their legal interest in the property and secures their investment. We are not talking about high Loan-To-Value (LTV) ratios the banks and savings and loan institutions make on homes. We offer very low LTV ratios to our Private Lenders to increase security of the loan. Our standard LTV ratios are under 75% of the value of the property securing the loan and frequently as low as 60% to 68%. This means additional security on the investment.

For example, if a property is valued at $100,000, our Private Lender will never have to loan more than $75,000 dollars on the property. That’s a 75% loan-to-value ratio. This is obvious a much safer approach from that taken by conventional lenders. These banks get into trou-ble because they make loans at an 85%, 90%, or even 100% loan-to-value ratio leaving them no equity for transfer costs, if they are ever forced into a position where they have to take back the collateral property.

You, as a lender, will never lend more than 75% LTV. As a lender, it is in your best interest to minimize risk and maximize return and this is why a loan should never be made without a 25% safety net. We don’t violate this rule, because your security is at stake.

WHAT ARE MY RISKS WHEN I AM LENDING MONEY?Actually, there are several options but first and foremost, please be aware that “Integrity” is an essential part of our business and we only make sound investment decisions. One of our companies distinguishing features is that we have never been late on a payment to a private lender.

Additionally, our company’s policy is to invest our own funds into every one of our projects because if we aren’t confident in our investment decisions why should you be? Likewise, if we ever lose the support of investors, we can no longer operate our business and our own invest-ments would be at stake.

However, to answer the question:Option 1: Restructure the Payment – We could restructure the payment schedule on the note. For example, let’s say we are behind on pay-ments to you. Now our company can and would like to keep the house, but they can’t come up with enough money to bring you current in one lump sum. You could let us continue to make regular payments and make an extra payment on our arrearage in addition, or you could simply add the arrearage to the principal balance and extend the term of the loan. This means you would be collecting interest on interest for the entire remainder of the loan. There are always ways to work it out if both sides are willing.

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WHAT ARE MY RISKS WHEN I AM LENDING MONEY? (CONT.)

Option 2: We Deed You the Property – We could deed you the house. This is an opportunity for you to get a house at a greatly discounted price. When this happens, you can create tremendous profit by reselling the house because we never buy a house unless we are buying it at a steep discount.

Option 3: You Foreclose on the Property – If left with no other choice, you can simply foreclose. Foreclosure isn’t as time consuming and costly of a process as most people think. It’s as simple as sending your note and mortgage to an attorney and saying ‘foreclose’.

All you have to do then is sit back and wait. Nine times out of ten, before foreclosure is complete, someone will be calling your attorney’s office with a payoff letter, and your loan will get paid off. When this happens, you will collect all accrued interest, your principal balance, and all attorneys’ fees, court costs, and all other expenses you have incurred in connection with your loan.

If you wind up with the house that doesn’t mean you have to keep it. It can be sold immediately at a fair sale price and still produce a profit over and above the already high yield on your loan.

Now, we’ve talked extensively about default and maybe we’ve provided more information than is necessary, but we wanted to make sure you have all the facts and we’ve answered any potential questions.

WHAT HAPPENS IF I HAVE TO FORECLOSE ON THE PROPERTY?T he chances of this are miniscule; however it is a great question that must be addressed. First off, the foreclosure process isn’t as time con-suming and costly of a process as most people think. It’s as simple as sending your note and mortgage to an attorney and saying ‘foreclose’.

All you have to do then is sit back and wait. Nine times out of ten, before foreclosure is complete, someone will be calling your attorney’s office with a payoff letter, and your loan will get paid off. When this happens, you will collect all accrued interest, your principal balance, and all attorneys’ fees, court costs, and all other expenses you have incurred in connection with your loan.

If you wind up with the house that doesn’t mean you have to keep it. It can be sold immediately at a fair sale price and still produce a profit over and above the already high yield on your loan.

Now, we’ve talked extensively about default and maybe we’ve provided more information than is necessary, but we wanted to make sure you have all the facts and we’ve answered any potential questions.

WHAT LEGAL INSTRUMENTS PROTECT MY LOAN? OR WHAT DOCUMENTS DO I RECEIVE?When you loan money you will always receive the following documents.

1) A copy of the mortgage. T he original will be recorded on the land records and this must be paid off before the property is ever sold.2) An original Promissory Note. T his keeps me on the hook financially for the loan if something bad were to ever happen to me.3) A hazard insurance endorsement naming you as mortgagee. T his document protects you in case of a fire, water damage, etc.

T hese documents provide you with the security you need and the return which you desire. You will receive the same documents every time you make a loan on a property. We make sure that all of our investors are protected on every transaction.

WHO BORROWS AT HIGH RATES AND WHY?T hat is a great question (First Name). Investors like us do, because we have learned in our business that it’s not the cost of money that mat-ters, but quick access to the funds so we can capitalize on opportunities.

Our company acquires good deals in properties because we can act with lightning speed and can close with cash. Private loans give us this competitive advantage over other investors who take weeks to go through the bank approval process in order to purchase properties.

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WHO BORROWS AT HIGH RATES AND WHY? (CONT.)Additionally, if a real estate investor locates a good deal on a property, many times the bank wants to loan on the purchase price not the value of the house, thus penalizing the investor for finding a great deal. Having access to money is generally a deciding factor in investing in real estate, so paying a higher interest rate is irrelevant when compared with the risk of losing the deal. Does that make sense to you?

WHAT’S THE MINIMUM INVESTMENT?Our minimum investment is $50,000 dollars although we would prefer to be in the $100,000 dollar range. I would rather deal with one investor as opposed to 2 or 3 on one deal because it is a lot easier logistically. If you are looking to loan anything less than $50,000 then you would most likely be put in a 2nd position note

WHO HANDLES ALL OF THE DETAILS?We do and in fact, that is our job! I try and make your life as easy as possible. It’s our job to get you proper documentation and protect your interest. All of this costs you nothing. I pay all the costs and work directly with the attorney/title company. If you make a $100,000 loan, you send a check for $100,000 to the closing attorney/title company and they will notify you that they received the wire and before releas-ing any funds you will have a note and mortgage sent back to you on the property you are lending your capital on.

IS THIS A LONG-TERM INVESTMENT?Generally, your investment is tied to a specific project with a timeline ranging from 3 to 12 months. Most of our projects that we rehab take 5 to 7 months so we usually write the mortgage with a 9 month balloon. We also have longer term holds of one year and longer which is very advantageous to you, however the interest rate is a little lower because we keep you money in play for a much longer period of time. You can pick a term that suits your strategy. I would be more than happy to discuss both options with you.

WHAT IF I NEED TO LIQUIDATE?If you want out, a 60 day written notice is required, because we will need to replace your funds with another investor’s money. You really shouldn’t make mortgage loans if you feel you will liquidate this shortly, but the option is always available and we have been able to liqui-date in as little as two weeks in some scenarios. Also, unlike with a bank CD, there is no penalty for early withdrawal. Just call us, with 60 days’ notice and we will handle all of the details.

IS MY INVESTMENT REALLY AS SAFE AS IT SOUNDS?Yes! We always follow these common sense guidelines that we’ve talked about. Your money will grow two, three, or even four times faster than your current investments and you maintain control. Each one of our properties that we acquire is put through a rigorous financial evaluation in order to evaluate the profitability before the property is ever purchased.

Remember that making loans is a business and should be treated like a business. If you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle free and produce staggering yields.

The best part is that every loan you make is backed by a property unlike any stock market investments you may have made in the past.

CAN I DO LESS MONEY NOW AND THEN INCREASE IT IN THE FUTURE?You most definitely can, because it is your money. We do have a minimum investment on all of our projects and if you are looking to loan less than the minimum then you will have to go into 2nd position. It is easier for me to deal with one lender as opposed to 2 or 3 on each project so your money may not be active all the time.

What is the most you would be willing to lend right now?

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OKAY…I AM GOING TO THINK ABOUT IT?I understand _____________. Is there anything you are not clear on more specifically is there anything that is holding you back from going forward?

Why don’t we do this…the next project that comes across my desk that I need a private lender for I will call you and take you to the prop-erty so we can run through the numbers. I will show you the comps and the financials so that you feel more comfortable. How does that sound?

Or

Why don’t we do this. I just completed a project that we used another private lender on and I would love to take you to the property so we can run through the numbers. How does that sound?

HOW DO I USE MY IRA’S OR PENSION PLAN?Making real estate loans is a widely accepted use for IRA’s and other Retirement Plans. Most people do not know that you can make private mortgage loans using the funds which are already in your IRA’s and other retirement plans. Think of the power of loaning out funds at high interest rates that are Tax free or Tax Deferred!

In order for you to use retirement accounts for loans they must first be administered by a third party custodian. One custodian we com-monly work with is Equity Trust Company. You can visit them on the web at www.trustetc.com or simply talk to us and we’ll help you with the setup of your account.

After selecting your custodian, you simply send a transfer form to them and they’ll do all of the work for you. Once you’ve done that you are ready to make private mortgage loans.

From there, you simply notify your custodian about the investment you are looking to make and send the check for the gross amount of the loan. Even better, we can do all the work for you and you just sign few documents, sit back, relax and wait for your money to grow tax free or deferred like grass on a spring morning.

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Instructions & Checklist Promissory Note – On Demand

[__] This package contains (1) Instructions & Checklist for Promissory Note – On Demand; (2) Information for Promissory Note – On Demand; and (3) Promissory Note – On Demand;

[__] The Borrower must sign and date the Promissory Note

[__] Signature does normally not need to be witnessed or notarized.

[__] The Lender should keep the original Promissory Note containing the original signature of the Borrower. There should only be one original Promissory Note with the original signature.

[__] The Borrower should keep a copy of the Promissory Note.

[__] When the Borrower’s obligation under the Promissory Note is satisfied (i.e. the Note is paid off), the Lender should write “Cancelled”, “Satisfied in Full” or “Paid in Full” on the front face of the original Promissory Note and should then sign and date it. The original Promissory Note should then be given back to the Borrower.

[__] Laws vary from time to time and from state to state. It may be a good idea to have a lawyer review the completed Promissory Note before the Borrower signs it.

[__] These forms are not intended and are not a substitute for legal advice. These forms should only be a starting point for you and should not be used without consulting with an attorney first.

[__] The purchase and use of these forms, is subject to the Disclaimers and Terms of Use found at findlegalforms.com

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Information Promissory Note - On Demand

A Promissory Note creates an obligation for a Borrower to repay a loan back to a Lender together with a certain amount of interest.

Whenever a person lends money to another person, it is generally a good idea to have some document memorializing the transaction. The document should indicate identify the parties, the amount borrowed, the time for repayment, the rate of interest, conditions of default and any other necessary terms.

Just like any contract, a Promissory Note can help the Lender enforce repayment terms and can be useful in any effort necessary to collect the amount lent.

There are different types of Promissory Notes and countless different ways to structure a Note. Some Promissory Notes require a payment of the amount borrowed (“Principal”) plus interest at once, while others require periodic payments of interest, followed by a lump sum payment of the amount borrowed.

This particular Promissory Note – On Demand requires payment of the principal and interest at any time the lender requests it (i.e. upon demand of the Lender).

Please note that this information is not intended as and is not a substitute for legal advice

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Promissory Note - On Demand

Amount $ Date

FOR VALUE RECEIVED, the undersigned, (Borrower), maintaining an address at (Borrower's Address) promises to pay to the order of (Lender), whose address is (Lender's Address), the principal sum of $ (Principal), together with interest of Interest Rate) per year thereon from the date herein. The borrower also promises to pay percentage points of the original loan balance at the time of the signing of this note in addition to principal and interest due under this note.

The entire unpaid Principal and any accrued interest shall be immediately payable UPON DEMAND of any holder of this note.

All or any part of the Principal may be prepaid at any time and from time to time without penalty. Payments shall be applied first to accrued interest and the balance to the Principal.

In the event of any default by the Borrower in the payment of Principal or interest after demand is made, the unpaid balance of the Principal of this promissory note shall, at the option of the holder, become immediately due and payable. Any amount due at the time of default, shall accrue interest until payment at the rate of fifteen percent (15%) per year or the highest rate permitted by law, whichever is less.

Upon default in making payment within 7 days of demand, Borrower agrees to pay all costs of collection and reasonable legal fees incurred in any action to collect this note to the extent permitted by law.

Borrower and all other persons who may become liable for the payment hereof severally waive demand, presentment, protest, notice of dishonor or nonpayment, notice of protest, and any and all lack of diligence or delays in collection, which may occur.

All payments hereunder shall be made to such address as may from time to time be designated by any holder and must be made in United States funds.

Borrower and all other parties to this note, whether as endorsers, guarantors or sureties, agree to remain fully bound until this note shall be paid in full and waive demand, presentment and protest and all notices hereto. Borrower further agrees to remain bound by this note notwithstanding any extension, modification, waiver, or other indulgence, failure, discharge or release of any obligation hereunder.

The holder’s failure to exercise any right or option hereunder does not constitute a waiver of any future right or option.

No modification to this document or indulgence by any holder hereof shall be binding unless in writing.

If any provision of this Note is deemed unenforceable, in whole or in part, for any reason, the remaining provisions shall still remain in full force and effect.

This note shall take effect as a sealed instrument and is made and executed under, and is in all respects governed by, the laws of Connecticut.

_________________________________ (Signature of Borrower)

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12 Warranty Deed to Trust from Mastery Site Page 1 of 3

Do not write above this line-Recording information only

Warranty Deed to Trustee

The Grantor(s) ________________the County of ______________and the State of _______________for no consideration convey and warrant:

Unto __________________as Trustee and not personally under the provisions of a trust agreement dated April__, 200( ), known as __________________Land Trust, State of Connecticut to wit: (insert property address)

See attached schedule A

as recorded in the land records of _______________, Connecticut. Together with all the tenements, hereditaments and appurtenances thereto, belonging or in

anywise appertaining. To Have and to Hold the said premises in fee simple forever, with the appurtenances

attached thereto upon the trust and for the uses and purposes herein and in said Trust Agreement set forth.

Full power and authority granted to said Trustee, with respect to the said premises or any part of it, and at any time or times, to subdivide said premises or any part thereof, to dedicate parks, streets, highways or alleys and to vacate any subdivision or part thereof, and to resubdivide said property as often as desired, to contract to sell, to grant options to purchase, to sell on any terms, to convey either with or without consideration, to donate, to mortgage, pledge or otherwise encumber said property, or any part thereof, to lease said property or any part thereof, from time to time, in possession or reversion by leases to commence now or later, and upon any terms and for any period or periods of time and to renew or extend leases upon any terms and for any period or periods of time and to amend, change, or modify leases and the terms and provisions thereof at any time hereafter, to contract to make leases and to grant options to

This document prepared by: ______________________________________________ Mail after recording to: _____________________________________________________

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lease and options to renew or extend leases upon any terms and for any period or periods of time and to amend, change, or modify leases and the terms and provisions thereof at any time hereafter, to contract t make leases and to grant options to lease and options to renew leases and options to purchase the whole or any part of the reversion and to contract respecting the manner of fixing the amount of present or future renters, to partition or to exchange said property or any part thereof for other real or personal property, to grant easements changes of any kind, to release, convey or assign any right, title or interest in or about or easement appurtenant to said premises or any part thereof, and to deal with said property and every part thereof in all other ways and for such other considerations as it would be lawful for any person owning the same to deal with the same, whether similar to or different from the ways above specified, at any time or times hereafter.

In No Case shall any party dealing with the said trustee in relation to said premises, to whom said premises or any part thereof shall be conveyed, contracted to be sold, leased or mortgaged by said trustee, be obliged to see to the application of any purchase money, rent, or money borrowed or advanced on said premises, or be obliged to see that the terms of this trust have been complied with, or be obliged to inquire into the necessity or expediency of any act of said trustee, or be obliged or privileged to inquire into any of the terms of said trust agreement; and every deed, mortgage, lease or other instrument executed by said trustee in relation to said real estate shall be conclusive evidence in favor of every person relying upon or claiming under such conveyance, lease or other instrument, (a) that at the time of delivery thereof, the trust created by this Indenture and by said trust agreement was in full force and effect, (b) that such conveyance or other instrument was executed in full accordance of the trust’s conditions and limitation contained herein and in said trust agreement or in some amendment thereof and binding upon all beneficiaries there under and (c) that said trustee was duly authorized and empowered to execute and deliver every such deed, trust deed, lease, mortgage or other instrument.

The Interest of each and every beneficiary hereunder and of all persons claiming under them or any of them shall be only in the earnings, avails, and proceeds arising from the sale or other disposition of said real estate, and such interest is hereby declared to be personal property. No beneficiary hereunder shall have any title or interest legal or equitable, in or to said real estate as such, but only an interest in the earnings, avails and proceeds thereof as aforesaid.

And the grantor hereby covenants with said grantee that the grantor is lawfully seized of said land in fee simple; that the grantor has good right and lawful authority to sell and convey said land; that the grantor hereby fully warrants the title to said land and will defend the same against the lawful claims of all persons whomsoever; and that said land is free of all encumbrances, except taxes accruing subsequent April___, 200( ).

2122


In Witness Whereof, the said grantor(s) has (have) hereunto set his (their) hands and seals this ____ day of April, 200( ) AD. Signed Sealed and Delivered in our Presence:

___________________________________ (Seal) Grantor

___________________________________ Witness

___________________________________ Witness

State of ) ) SS: , month ____, 200( )

County of )

I Hereby Certify that on this day, before me, , the undersigned officer, personally appeared (Grantor) to me known as (or satisfactorily proven to be) the person(s) described herein and who executed the foregoing instrument and Acknowledged before me that he executed the same as his free act and deed.

________________________________

Notary Public

2223

Business Model

Your Story Your Why

The Art of Raising Money

• Knowledge of the Lending Process• Where you find Lenders• Helping your lenders source money• Confidence in your real estate knowledge• Confidence in your business• Self Confidence

25

Communication = Wealth

Breakdown of Money Pitch – 12 steps1. Rapport Building2. Intent Statement & Agenda3. Discovery of current Investments & Goals4. Company Overview5. Investment buying criteria6. Terms & Conditions7. Documents & Protection8. Risks vs Rewards9. Closing Process10.Common ways our lenders Fund Deals11.Questions12.Commitment

The Importance of Learning to Raise Money…from all sources

26

Preparing Before Raising Money

Preparing Before Raising Money

1. Dress Properly2. Punctuality3. Foundational Marketing Materials4. Business Model5. Company Biography & Team6. Supporting Evidence

Foundational Marketing Materials

• Business Name• Vanity #• Website Name• Business Cards• Credibility Cards• Credibility Brochures• Polo Shirts

27

Mastery Resource

Mastery Resource

Supporting Evidence

• Show off Your SYSTEMS with Confidence– Marketing Systems– Motivated Seller Systems– Deal Analysis Systems– Rehabbing Systems– Selling Systems– Accounting Systems

28

Identifying & Finding Lenders

Brainstorm of Money Sources

Professional Rehab Lender

1. National Professional Rehab Lender1. Google Search

2. Local Rehab Lender1. Google Search

1. “<City, State, County> Hard Money Lenders”2. “<City, State, County> Private Money Lenders”3. “<City, State, County> Rehab Money Lenders”

29

Private Lenders

• Sphere of Influence– Friends & Family– Professional Network– Networking Events & Clubs– Real Estate Club Meetings– Real Estate Team & Professionals

• Realeflow Database – Leadpipes– Private Lenders List– Cash Buyer List

• Marketing Materials• Landing Page

Be the Expert in Your Niche or Market

• Volunteer at your Local Real Estate Club• Teach local investors• Host Local Subgroups• Host Networking Events• Document your projects• Interview other Real Estate Professionals• Educate & Re-Teach

– Self-Directed Retirement Strategies– Rehabbing

Think Like a Lender

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Executing the Finance Request Template

FOR DEALSHow To Effectively Raise A Capital for Your Real Estate Investments

RAISING CAPITAL

RAISING CAPITAL FOR DEALS

Your Path to Success

Ø Understanding the Lender Perspective

Ø The Financing Request Template

Ø Implementation

31


Lender Perspective

Ø First Impressions Matter

Ø Preparation, Knowledge, & Consistency

Ø Effective Presentation = Quick Turnaround

Ø Prove your points with facts and data

Ø Put your money where your mouth is


Financing Request TemplateOUTLINE

The Financing Request Package should be no more than 5-7 pages and follow the format below:Ø Cover PageØ Executive SummaryØ Property DescriptionØ Location & Market InformationØ Financial AnalysisØ Appendices


Cover Page

Ø Picture of Property

Ø Full Property Address

Ø Timing for Funding

Ø Complete Contact Information

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Executive Summary (1-2 Pages)

This is the MOST IMPORTANT part of the Financing Package. If you cannot explain and justify your investment in this section, the rest of the Package will not get read or reviewed.• Brief description/background on deal• Purpose of Loan Request• Exit Strategy• Loan Terms Requested• Sources & Uses of Funds• Brief summary of Borrower and/or Company


Executive Summary - Example


Sources & Uses of Funds

PURCHASE (EXAMPLE)Sources of Funds Amount %

1st Lien Mortgage $800,000 80.0%

2nd Lien Mortgage (Seller/Private) $0 0.0%

Equity (Borrower's Cash) $200,000 20.0%

TOTAL SOURCES $1,000,000 100.0%

Uses of Funds Amount %

Purchase Price / Acquisition Cost $700,000 70.0%

Hard Construction Costs $200,000 20.0%

Soft Costs (Carry Costs) $100,000 10.0%

TOTAL USES $1,000,000 100.0%

Real Estate Deal

Sources of FundsWhere is money coming from?

Purchase PriceConstruction

Costs (“Hard Costs”)

Carry Costs(“Soft Costs”)

SOURCES OF FUNDS = USES OF FUNDS

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Property Description (1-2 Pages)

Ø Property InformationØ Site/Land DetailsØ Construction DetailsØ Proposed Scope of Work / Improvements

Ø Additional Information to include in the Appendices§ Listing Sheet§ Photos of Subject Property§ Tax Assessor Card


Location & Market Analysis (1-2 Pages)

Ø Brief write-up on particular location (neighborhood) and general market information

Ø Summary Table of Comparables

Ø Additional Market Information (include in Appendices)§ Local area maps & aerial photographs§ Pricing trends, valuations, etc. (Zillow, Trulia)§ Demographics


Summary Table of Comparables

34


About Borrower (1 Page)

Ø Company Description

Ø Resume of Owners / Principals / Managers

Ø Historical Track Record


Appendices

The Appendices should include all relevant information and documentation to back up and support your Financial Package.Ø Transaction DetailsØ Property InformationØ Market InformationØ Financial AnalysisØ Borrower


Let’s Review

Ø Think Like a LenderØ Financing Request Template

§ Cover Page§ Executive Summary§ Property Description§ Location & Market Information§ Financial Analysis§ About Us§ Appendices

35


Implementation

Ø Do not reinvent the wheel

Ø Start using Financing Request Template immediately§ Executive Summary – Must be good!§ BACK UP WITH HARD DATA & FACTS

Ø UNDER PROMISE & OVER DELIVER§ Upside always takes care of itself

Ø START RAISING CAPITAL NOW

36

www.CommercialWebinar.com

I. COVER PAGEThe Financing Request Package should include a Cover Page with the following information:

• Picture of the Property• Full Property Address• Timing for Funding (Closing Date, etc.)• Borrower(s) Complete Contact Information, which should include:

o Name of Company (or entity that will own the investment)o Name of Owners & Principals involved in the transactiono Business Addresso Phone Numbers of Related Partieso Email Addresso Website Information

II. EXECUTIVE SUMMARYThe Executive Summary is a brief narrative of the financing request, which summarizes thetransaction, including the property and loan specifics. The Executive Summary should be clearand concise, and gives the borrower the ability to sell the deal to the lender.

The Executive Summary should include the following information for the lender’s review:• Brief description/background on the deal

o How did you source the opportunity?o What is the purchase price and timing of the transaction?o Why are you utilizing private money?

• Purpose of the Loan Requesto Purchase, Refinance, Bridge, Construction, Development, etc.

• Exit Strategyo What is your exit strategy and timing? How do you plan on repaying the loan?o Sale, Refinanceo Briefly justify your exit strategy

• Loan Proposal Request (Summarize loan terms you are requesting)o Closing Date / Timeframeo Loan Amounto Amount of Borrower Equityo Term of Loano Interest Rateo Any additional loan specifics

• Sources & Uses of Funds (see Appendices section for examples)o Sources – where capital is coming from on the dealo Uses – how the capital is being utilized in the dealo Sources of Funds must equal Uses of Funds

• Brief summary of Borrower and/or Companyo Quick write-up for lender to identify borrower and/or company

Finance Request Template

38


III. PROPERTY DESCRIPTIONThe Property Description section should provide a complete physical description of the land,improvements, and the property, as well as any additional visual aids, such as photos, site plans,etc. For development and construction financing, the borrower should include a detailed scopeof work, broken out line by line, regarding the proposed improvements to the property andassociate’s costs with those improvements.

Property Information• Property Name and/or Physical Address• Property Type (single-family, 1-4 unit, apartment, retail, mixed-used, office, etc.)• Number of Units & Net Rentable Square Feet

o Breakdown of units and sizes• Year Built/Renovated/Remodeled

Site/Land Details • Purchase Price• Total acreage or SF• Zoning• Ingress and egress• Utilities• Easements or deed restrictions• Roads / shared driveways• Excess land

Construction Details • Configuration, design features/utility• Type of roof, foundation, mechanical/electrical systems, heating/hvac systems• Public Utilities• Parking• Deferred Maintenance

Proposed Scope of Construction / Improvements • Detailed line-item list of all proposed improvements and associated costs• Construction Schedule• A construction budget/draw schedule spreadsheet template is available

IV. LOCATION & MARKET ANALYSISThis section should educate the lender on the property’s particular location/neighborhood, aswell as the general market information and economic drivers for the particular area/city. Inaddition, this section should include comparables (active and sold) that justify and strengthenthe exit strategy proposed.

39


The Location & Market Analysis section should generally include the following: • Brief write-up on the property’s location as well as the local market information

o Justify why good area/market for your investment• Demographic Information (pull from US Census or local city authorities)• Additional Facts & Figures

o Pricing trends, valuations, Zillow, Trulia, etc.• Map showing subject property and location of relevant comparables

Borrower should also provide a one-page summary of the comparables, preferably in excel, justifying the market value. The specifics of the comps will vary based upon the type of property, but the analysis should provide the lender with simple layout justifying the exit strategy and valuation.

Summary of comparables should include the following: • Criteria used for comparable analysis• 4 Active/UAG Comps• 4 Sold Comps• 4 Rental Comps

The lender will want to be able to easily compare the following information from this summary: • Purchase Price Analysis

o PSF, Per Unit, Per Acre, Cap Rate, etc.• Verify true comparable to the subject property

o Size, type, # bedrooms, # baths, land size, # units• Market Timing

o How long on the market? Sale Price to List Price

V. FINANCIAL ANALYSISThe lender is looking to review the assumptions made by the borrower when conducting theiranalysis, as well as any additional financial documentation that can be provided to prove out theanalysis.

The Financial Analysis should include the following information for the lender to review:• Detailed Financial Analysis Pro-Forma

o Detail assumptions made about analysis§ Loan Terms, Cost Breakdown, Residual Valuation

o Include particular model or excel spreadsheet utilized§ Flip Model§ Monthly Cash Flow Analysis§ Development/Construction Model

o Net Profit Analysiso Rental Pro-Forma (for refinance exit)

§ Shows sufficient debt coverageo IRR Analysis

40


VI. ABOUT BORROWERThis section should is a brief description of the company and the associated borrower(s),manager(s), or principal(s). The borrowing entity that is purchasing the property should also beincluded in the section. The lender is looking for company history and track record, as well thebackgrounds of the individuals in the transaction. The general format should be as follows:

• Description of the Company• Track Record

• List of current/historical real estate transactions• Resume of owners, principals, etc.

• Can be included in the Appendices, if applicable

VII. APPENDICESThe borrower should provide all relevant additional documentation related to the particulartransaction. The lender will typically request this additional information after initial review, butalways good to already have the information ready for the lender to review in order to expeditethe underwriting process. The typical items that the borrower should make available to thelender for review (if applicable) are as follows:

Property Information• Listing Sheet• Purchase & Sale Agreement• Copy of Deed• Appraisal (if applicable)• Pictures of the property (interior & exterior)• Tax Assessor Card• Photos of the property and site (interior and exterior)• Site plan, survey, or recorded plat• Floor plans• Aerial photographs• Construction Budget & Timeline

o Plot plans, permits, approvals, floorplans, sketches, zoning, elevationso 3rd Party Reports

§ PCR, Environmental, Zoning• Sources and Uses of Funds (example below)

41


PURCHASE (EXAMPLE) Sources of Funds Amount % 1st Lien Mortgage $800,000 80.0% 2nd Lien Mortgage (Seller/Private) $0 0.0% Equity (Borrower's Cash) $200,000 20.0%

TOTAL SOURCES $1,000,000 100.0%

Uses of Funds Amount % Purchase Price $650,000 65.0% Closing Costs $30,000 3.0% Hard Costs $200,000 20.0% Financing $100,000 10.0% Soft Costs (Carry Costs) $20,000 2.0%

TOTAL USES $1,000,000 100.0%

The borrower should also have the following personal financial information available if requested by the lender for further review:

• Personal Financial Statements• 2 years of Tax Returns• List of Real-Estate Owned Properties (REO Schedule)• Bank Statements• Credit Report

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Finance Request Package (FRP)

P: 857-206-6464 Ext. 1 E: [email protected]

SAMPLE

43


1

All forms must be completed.

BORROWER INFORMATION TODAY’S DATE:Borrower Full Name: Email:

Phone Number: Website:

How did you hear about us? Are you an Existing Borrower with GC?

LOAN INFORMATION Loan Purpose: Loan Amount: Loan Term (months):

Please provide any additional information on your loan request:

DEAL SUMMARY (Include short summary of the deal, including how you sourced the deal and exit strategy)

Is the Property currently under contract? Closing Date: Purchase Price: Rehab Costs: After Repair Value “ARV”:

Exit Strategy:

Projected timeframe (months): Permitting: Construction/Rehab: List/Sale:

REHAB SUMMARY (include brieft description of the rehab/improvements to be made to the property )

Yes No

Yes No

PROPERTY INFORMATION Property Type: Size (SF): # Units:

# Beds: # Baths: Land:

Please provide any additional information on the property (condition, zoning, etc ):

44


2


SALES COMPARABLES (Please provide at least 4 sold comps)Address Town Proximity Prop. Typ Yr Built Total SF Land Area #Beds #Baths Parking Sale Date Sale Price PSF DOM

AVG

SOURCES & USES TABLE - (SOURCES = USES)SOURCES OF FUNDS (where the money is coming from) Amount P/R %

1st Mortgage (Grand Coast)

2nd Mortgage (Seller/Private)

Equity (Borrower Cash)

TOTAL SOURCES

USES OF FUNDS (how the money is being applied)

Purchase Price

Closing Costs

Rehab/Improvement/Construction Costs (Hard Costs)

Financing Costs

Carry Costs (taxes, insurance, utilities, etc.)

TOTAL USES

NEEDS LIST (PLEASE BE PREPARED TO COMPILE AND SUBMIT THE INFORMATION LISTED BELOW IN ORDER TO EXPEDITE THE UNDERWRITING PROCESS)

• Personal Financial Statement

• Purchase & Sale Agreement

• Tax Assesor Card

• Comparative Market Analysis (CMA)

• Property Listing Sheet

• Financial Pro-Forma

• Scope of Work

• Pictures – time stamped (interior & exterior)

MARKET / LOCATION (brief summary of the particular location/neighborhood as well as general market information)

FINANCIAL ANALYSIS PROJECTED NET PROFIT:

$ 0.00 $ 0.00 $ 0.00

0.0%0.0%0.0%0.0%

$ 0.00 0.0%

0.0%0.0%0.0%0.0%0.0%0.0%0.0%

$ 0.00 0.00%

45

Personal Financial Statement (PFS)

P: 857-206-6464 Ext. 1 E: [email protected]

SAMPLE

46


1


BORROWER INFORMATION TODAY’S DATE:Borrower Name: Company Name:

Social Security #: Date of Birth: Phone: E-mail:

Home Address:

Credit Score: Date of Credit Report: Employer Name:

Years on the Job: Type of Business: Title:

REAL ESTATE INVESTMENT EXPERIENCE Number of Properties you bought & rehabbed in the last 2 years:

Investor Status: Total(s) in the last two years Sold: Held as Rental:

DESCRIBE YOUR EXPERIENCE (ie. Rehab experience, when/how you got started; do you run your own projects or work with partners; level of rehab experience: gut rehabs, cosmetic rehabs, etc.)

CO-BORROWER INFORMATIONCo-Borrower Name: Relationship to Borrower:

Social Security #: Date of Birth: Phone: E-mail:

Home Address:

Credit Score: Date of Credit Report: Employer Name:

Years on the Job: Type of Business: Title:

REAL ESTATE INVESTMENT EXPERIENCE Number of Properties you bought & rehabbed in the last 2 years:

Investor Status: Total(s) in the last two years Sold: Held as Rental:

DESCRIBE YOUR EXPERIENCE (ie. Rehab experience, when/how you got started; do you run your own projects or work with partners; level of rehab experience: gut rehabs, cosmetic rehabs, etc.)

Full Time

Full Time

Years of Experience:

Years of Experience:

Part-Time

Part-Time

BORROWER BUSINESS INFORMATION Legal Name: TIN #:

Organizational Structure (Sole, Trust, LLC, LLP, etc.): Website:

47


2


SCHEDULE OF EXPERIENCE IN THE LAST TWO YEARS (ONLY INCLUDE DEALS SOLD)

FOR CURRENT/ONGOING REHABS, OR RENTALS, PLEASE SEE REO SCHEDULE ON PAGE 4

Address Own % Date Acq. Purchase Price Rehab Budget Sold Date Sold Price Net Profit

ASSETS (ACTUAL VALUES) Amount ($)

Cash on hand and in banks

Marketable Securities

Business Owned (Scheduled D)

Real Estate Owned (Scheduled E)

Other Assets (list):

TOTAL ASSETS:

LIABILITIES Amount ($)

Notes payable to banks

Notes payable to others

Credit cards payable

Accounts Payable (other)

Real Estate mortgages payable

Other Liabilities (list):

TOTAL LIABILITIES:

NET WORTH (Assets – Liabilities):

TOTAL LIABILITIES & NET WORTH:

STATE OF FINANCIAL CONDITION AS OF DATE:

BORROWER NAME:

123 Main Street 100% 01/01/15 $ 100,000 $ 50,000 01/01/15 $ 25,000 $ 51,000

$ 0.00$ 0.00

$ 0.00 $ 0.0048


3


ANNUAL INCOME Amount ($)

Salary

Bonuses

Interest & Dividends

Real Estate Income (net)

Partner or Owner Draws/Distributions

Other Income (list) gifts, trusts, etc.

Other:

Other:

Other:

Other:

Other:

TOTAL INCOME ($):

Is any of this income likely to be reduced or interrupted within the next year?

CONTINGENT LIABILITIES In Dollars (Omit Cents)

As endorser, co-maker or guarantor?

On leases or contracts?

Legal claims

Other special debt

Amount of contested income tax liens

EXPENSES (Monthly) Amount ($)

Mortgage/Rent - Residence

All other debt service

Income Taxes

Insurance Premiums

Property Taxes

Other Living Expenses

Other Expenses (list):

Other:

Other:

TOTAL EXPENSES ($):Are you a defendant in any suits or legal actions or been convicted of a crime? If so, describe and provide a letter of explanation.

Personal bank accounts carried at (BANK NAMES)

Have you ever been declared bankruptcy? If so, please attach a Letter of Explanation

CO-BORROWER NAME:

Yes No

ANNUAL INCOME Amount ($)

Salary

Bonuses

Interest & Dividends

Real Estate Income (net)

Partner or Owner Draws/Distributions

Other Income (list) gifts, trusts, etc.

Other:

Other:

Other:

Other:

Other:

TOTAL INCOME ($):

Is any of this income likely to be reduced or interrupted within the next year?

CONTINGENT LIABILITIES In Dollars (Omit Cents)

As endorser, co-maker or guarantor?

On leases or contracts?

Legal claims

Other special debt

Amount of contested income tax liens

EXPENSES (Monthly) Amount ($)

Mortgage/Rent - Residence

All other debt service

Income Taxes

Insurance Premiums

Property Taxes

Other Living Expenses

Other Expenses (list):

Other:

Other:

TOTAL EXPENSES ($):Are you a defendant in any suits or legal actions or been convicted of a crime? If so, describe and provide a letter of explanation.

Personal bank accounts carried at (BANK NAMES)

Have you ever been declared bankruptcy? If so, please attach a Letter of Explanation

BORROWER NAME:

Yes No

$ 0.00

$ 0.00

$ 0.00

$ 0.00

49


4


SCHEDULE E – REAL ESTATE OWNED (REO) - (PLEASE INCLUDE CURRENT/ONGOING REHABS, RENTALS, & PERSONAL PROPERTIES)

Property Type Own % Date

Acquired Purchase Price Rehab Cost Market Value Lender Name Loan Balance Loan Maturity Monthly Loan Pmt

Gross Rental Income

Address

Address

Address

Address

Address

Address

Address

Address

Address

Address

Address

Address

Address

Address

Total REO Value: $ Total Mortgage Balance: $ Total Equity in Real Estate: $

BORROWER NAME:

SCHEDULE D - BUSINESS OWNEDName Own % Initial Date Cost of Investment Market Value Description/Type

123 Main Street, Anywhere, USASingle Family 100% 01/01/15 $ 100,000.00 $ 20,000.00 $ 200,000.00 Chase $ 60,000.00 01/01/2030 $ 1,200.00 $ 13,000.00

0.00 0.00 0.0050


5


OTHER IMPORTANT NOTES

The undersigned hereby declare and represent that all statements made in this application and in the supporting documentation are complete and true, that all financial credit information has been given as an inducement to Grand Coast Capital Group to grant the loan for which this application is made. The undersigned authorize Grand Coast Capital Group, and/or its affiliates, to verify all information provided and to make such additional normal inquiries as reasonably may be related to or associated with this application, from credit bureaus, creditors, and references listed on this application and the supporting documentation, and authorizes Grand Coast Capital Group to provide such information to others, as permitted by law.

BORROWER NAME:

APPLICATION COMPLETED AND SIGNED AS OF DATE:Borrower Name: Co-Borrower’s Name:

Borrower’s Signature (Individual) Co-Borrower’s Signature (Individual)

Borrower’s Social Security Number: Co-Borrower’s Social Security Number:

Borrower’s Date of Birth: Co-Borrower’s Date of Birth:

FOR GC USE ONLY

To Be Completed by LO.LO Name:

LO Signature: Date:

Face-to-Face Interview Mail Telephone

PLEASE ATTACH ALL SUPPLEMENTARY DOCUMENTS TO END OF APPLICATION Please list all attached documents –( ie Letter of Explanation, Sample of Previous Projects, etc)

51

HOW TO GET A COMMITMENT OF 75%+ OF YOU MONEY IN 24HRS

Rehab Lenders

The 5 C’s of Borrowing

1. Collateral2. Capacity3. Capital4. Character5. Capacity

53

COLLATERAL

Collateral

• The Numbers• Purchase Price, Rehab Costs, ARV• Net Profit• 10% return on investment (ROI)

=Net Profit/(Purchase + Rehab)

• Deal story• Why is it a good deal?• Market• Ability to execute• Viable Exit Strategy

Collateral• IT IS ALL ABOUT THE COMPS!!!!

– At least 3, if not 4, sold comparable’s to justify your ARV– Need to be sold within last 6 months (no more than 1 year)– Within 1 mile of subject property

– Same or comparable neighborhood– APPLES TO APPLES

• Size (SF) need to be within 20% of subject property size (1,000 SF subject = 800-1,200 SF comps)– Stop focusing on ppsf!!

• # of Beds & # of Baths• Style, layout, land, parking• Be careful with averages and price per square foot comparisons

• LOCAL MARKET ANALYSIS– Velocity in the Market = Days on Market (DOM)

• How long are properties sitting on the market before closing? < 90 days• Is it increasing or decreasing?

– Median Sale Price• Is this increasing or decreasing in your local marketplace?

– EMPLOYMENT & POPULATION GROWTH

• DO NOT TRY AND CREATE MARKET– Provide similar/better product at the same price (if not lower)

– Understand the demographics and who your buyer is

54

Collateral

• Rehab• Importance of working with licensed contractors, bids, detail SOW• Share actual bids and quotes from Contractors

– Timeline– Budget

• Share you 7 Stage Rehab System• Share you 6 critical Documents to keep on Budget and Timeline

1. Independent Contractor Agreement2. SOW

3. Payment Schedule4. W-95. Insurance Indemnification

6. Lien Waivers

Collateral• Loan-to-Value (LTV) = Loan Amount / After-Repair Value (ARV)

– Ask Maximum LTV

• Loan-to-Cost (LTC) = Loan Amount / (Purchase Price + Rehab Costs)– Ask Maximum LTC

• Borrower Equity = How much cash is borrower putting into the deal– Includes down payment, points, closing costs, carry costs, and financing costs for length of term

• How Does LTC work– If lender does 80% LTC

– Total Cost x 80%

• For Example– PP $100,000 and Rehab Cost $50,000 = Loan Total Cost of $150,000

– $150,000 x 80% = $120,000 Loan Amount based on 80% LTC

CAPACITY

55

Capacity

• Experience• If you don't have any RE experience, put together a

summary of your experience in other fields.• Track record of success elsewhere

» assumption you will be successful in RE

Capacity

• Track record• Individual Track Record• Community Track Record

» Leverage your investment in the Mastery community, education, systems, and tools

CAPITAL

56

Capital

• Your Financials• Create a PFS –• This should always be updated

• Be pro-active about your credit• Skin in the game• Understanding sources & uses, financing

structures

CAPITAL

Character

• Do they Trust me?• RELATIONSHIP biz

• Despite online technology, you must create a human relaitionship

• Integrity• Professionalism• Realistic

57

CAPACITY

Capacity

• Your competence as a borrower• Understanding lenders criteria• GCC as example

• Realistic• Conservative• Data backs up story

Most Important C

• Confidence• You have invested the time• You have put in the work• You have done the due diligence• You are the borrower a Hard Money Lender is

looking for!

58

Section 5

59

HomeSellingGuide

AResidentialRedevelopmentCompany

PuttingYourMoneyToWorkForYou

INSERTCOMPANYNAMEORLOGO

HERE

60

WhoAreWe?

Sinceitsinception,CTHomeshaspassionatelypursuedourgoaltohelphundredsofpeopleinourcommunityfindananswertotheirrealestateneeds.OurorganizationisproudtobeamemberoftheBetterBusinessBureauandhasbeenanupstandingmemberofthegreaterSanDiegoareaforyears.

OURMISSIONWhenapassionforrealestateiscombinedwithtalentedindividualswhohaveanuncompromisingdrivetosucceed,amazingthingswillhappen.AtCTHomes,it’sourgoaltonotonlyhaveapositiveeffect on ourselves and our families - but also to inspire,motivate and create lasting change ineveryoneweencounter.Wewilltreatourclientsandteammemberswithrespectatalltimes.Oneofourmotto’sis“HowyoudoanythingishowyoudoEverything.”Ourcompanywilldedicateitselftoeverlastingeducationandprofessionalgrowththatwillmaketheleadersoftomorrow.

ImportantFactsAboutCTHomes

•  LeadingfullservicerealestatesolutionscompanyinSanDiegoCounty,specializedinbuyingandsellingproperty

•  Focusedonprovidingsolutionsforclientsandvalueforlendersbylocatingandrenovatingdistressedproperties.

•  Ourgoalistoprovidetheabsolutehighestlevelofservicetoourclients

CTHOMES,LLCisaprofessional,fullservicerealestatesolutionsfirmthatbuysandsellspropertiesthroughoutSanDiegoCounty.Wespecializeinbuyingdistressedhomesatasignificantdiscount,andrenovateandresellthemtoretailhomebuyersandlandlords.Foundedin2004byThanMerrillandPaulEsajian,CTHomesisexcitedtobepartofthearea’srenaissanceandweaspiretocontinuecontributingtotheeconomicrejuvenationofCharlotteanditsneighborhoods.

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WhoAreWe?

THESTORYOFCTHOMES,LLCAftergraduatingfromYaleandbrieflyplayingintheNFL,founderandCEOThanMerrillsethissightsonrealestateinvesting.Heturnedtohischildhoodfriend,PaulEsajian,andYalefootballteammate,KonradSopielnikow, and sold themon the vision. The three foundedCTHomes, LLC in2004, andflipped30homes their first year. In2005,Paul’sbrother, JD, joined the teamasprojectmanager,overseeing all the renovation projects. In 2009, the teammoved across the country to sunny SanDiego,wheretheirbusinessskyrocketed.

AtCTHomes,LLC,ourteamishighlymotivated,knowledgeable,ethicalandresourceful.Qualifiedtohandleanyrealestatetransaction,ourdedicatedstaffiscommittedtohelpingpeoplewiththeirrealestate needs andmaking successful deals happen. Our team of professionals has the integrity tofollow up on our promises, and the expertise to navigate any transaction to ensure you’re fullyinformedformakingthebestdecisionpossible.

“We’re highly motivated, knowledgeable, ethical, and qualified to handle any real estate transaction.

We are committed to helping people with their real estate needs and making successful deals happen“.

INSERTOWNERPHOTOHERE

ThanMerrill,Co-Owner

JDEsajian,Co-Owner

PaulEsajian,Co-Owner

KonradSopielnikow,Co-Owner




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CompanyCredentials

CERTIFICATIONS&MEMBERSHIPS:

CaliforniaLicensedRealtor,SFR,BrokerinCharge,HUD,NAR,SDAR,SBAOR

(Studentinsertanyprofessionalcertificationsorlicenses)

REALESTATEKNOWLEDGE&EXPERIENCE:

Wehaveinvestedagreatdealoftime,energyandcapitalinvestmentintoourrealestateeducation,attending thenation'spremier realestate investingeducationprogram - FortuneBuildersMastery.Beyond the principles of sound investing, wewere trained on how to build a successful businessbasedonsystemsandpredictability.Havingcompletedover1,000realestatedeals,FortuneBuilderscoaches and systems have allowed us to strategically invest in real estate, grow and expand ourbusiness,andtheyareavailableforustoleveragewhenanalyzingourrealestatedeals.

(Studentinsertanycorporateexperience)

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CompanyBusinessModel

OVERALLINVESTMENTAPPROACHOur overall investment strategy and specialty is topurchase distressed properties at a deep discount –usually30%to50%belowmarketvalue,andrenovateand sell those properties to retail homebuyers andlandlords.

AtCTHomes,weprideourselvesonhavinga strongfoundationofrealestateknowledgeandtraining.Ourfocus is on providing SOLUTIONS for our clients andfindingVALUEforourlendersbylocatingugly,vacanthomesthatareeyesoresandweputthembackintouseafterrenovation.

WeFollowAStrictDueDiligenceProcess

We have a systematic and disciplined approach when purchasing investment properties, putting each potential investment through a strict due diligence process. This rigorous set of criteria includes, but is not limited to, the following:

•  Comparable property analysis and examination by an certified, independent appraiser•  An economic study of the neighborhood, city planning and development•  Demographics of area, marketability, and growth potential•  Statistics on the crime rate•  Public transportation and schools•  Overall condition of the property, including heating and air, plumbing, electrical, roof and structural

condition

Our Business Strategy •  We purchase distressed residential

properties 30%-50% below currentmarket value

•  We purchase, renovate and sellthese properties to retail buyers andlandlords

Ourcorebusinesslieswithinoursystems,educationandknowledgeoftherealestateindustry.WedidnotjustbuyaCDofftheInternetandbecomearealestateinvestorovernight.Wehavespentthousandsofdollarstolearnhowtobesuccessfulinthisbusinessanddoittherightwaythefirsttime.Throughouraffiliation,weareconnectedwithanationalnetworkof investorsthatprovidecontinual support and weekly trainings on changes throughout our industry. This process hasallowedustocircumventmanypitfallsmostnoviceinvestorswouldmake.Learningthehardwayisnotaphraseinourvocabulary,andwecertainlywouldnotaskanyonetolendtousifweweren’tconfidentinoursystemsandbusinessmodel!

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WHAT’SOURCOMPETITIVEADVANTAGE?OurcompanycanacquiregreatdealsonpropertiesbecausewehavetheabilitytoactquicklyandcanclosewithCASHontheseller’stimeline.Thisiswhywecanbuypropertiesatsuchadiscount.Obtaining loans through private money lenders gives us this competitive advantage over otherinvestorswhosometimestakeweekstogothroughthetimeconsumingbankapprovalprocessinordertopurchaseproperties.

AdvantagestoWorkingWithUs•  We have the experience, business systems and

knowledge to purchase properties QUICKLY and with CASH

•  We create value by finding ugly, vacant homesand putting them back in use after renovation

•  We pay wholesale prices to all contractors andtypically get bulk discounts on all materials

•  We have a creative marketing system to findand purchase properties before they’re everlisted

•  We find our own buyers allowing us to secure astrong sales price and save on salescommissions

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Lending to us also provides a win-win for thehomeowner aswell.With your cash funding, we canoffer homeowners something that very few buyerscan.Wearehelpingsellersbypurchasingtheirhomesin their timeline - in as little as 10-14 days. Knowingthat we’re going to renovate the home and we arebuying inas-is condition is a very important factor tosellers who live in older, outdated homes, or thoseneedingrepairs.Thesesellerswillalsonotberequiredto pay any attorney fees, closing costs, homewarranties, inspection fees, realtor commissions, etc.We are not the perfect fit for everyone; but for theseller with the rightmotivation, these features are anecessity.

WehaveanaggressiveTEAMapproach,andatop-notchabilitytoexpandourclientbasethroughourknowledge of deal structuring and advanced realestatetechniques.

Wealsoemploymarketingstrategiesassoonaswepurchaseahome–givingusafairadvantageoverarealtor.Typically,mostrealtorsdon’tspendtimeor money on marketing or lead generationstrategies. As a result, it can sometimes takemonths to attract potential buyers. Often times,weareabletofindourownbuyersallowingustosecure a strong sales price and save on salescommissions.Ourrenovationprocessisalsodownto a science with handpicked and provenconstruction crews who know we are not retailclients.Wepaywholesalepricestoallcontractorsandtypicallygetbulkdiscountsonallmaterials.

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CTHOMESVS.TRADITIONALBUYERHerearejustafewbenefitssellershaveofworkingwithCTHomestosellahome:

ü CASHOFFERü NOCOMMISSIONü QUICKCLOSEü NOFEESü PAYNOCLOSINGCOSTS

ü WEBUYTHEHOUSEASISü NOAPPRAISALü NOLENDINGRESTRICTIONS

MosthomeownershavenoideawhatoptionsareavailabletothembeyondlistingahousewithaRealtorortryingtosellthehouseontheirownandjusthopingforthebest.WeprovideauniquealternativetolistingtheirhouseontheirownorwithaRealtor.

When we work directly with a home seller, what we provide can not only make for a smoothtransaction,butitcanalsoadduptothousandsuponthousandsofdollarsinsavingsascomparedtosellingahomethroughtraditionalmeans.Our“outofthebox”creativeapproachtorealestateinvestingisacutabovetherest.

HowDoWeComparetoaTraditionalBuyer?

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TraditionalBuyer CTHOMES

MethodofPayment BankFinancing CASH

Repairs 1-8%ofHomesValue None(SoldAS-IS)

ClosingTimeframe 45+Days 10-14Days

Commissions 6%ofSalePrice None

SellerPaidClosingCosts 1-6%ofthePurchasePrice Zero

Appraisal Mandatory None

LengthofTimeonMarket150DaysontheMarket(SanDiegoAverage) 0Days

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OURINVESTMENTBUYINGCRITERIAOurgoalistobuydistressedhomesinstableareaswherethereisstillstrongbuyingdemand.Partof our grand vision is to improve the overall quality of living in both urban and suburbanneighborhoods.Inadditiontoimprovingoverallqualityoflife,wearecommittedtoincreasingthevalueofrealestate inourcommunity.Ourcompanybuildsvaluebyrehabilitatingpropertiesthatareinsignificantneedofrepairs.Weareabletotargetdistressedpropertiesandbreathenewlifebackintothembyrenovatingandimprovingtheconditionoftheproperty.Bydoingso,weareabletocreatebeautifulhomesandencouragehomeownership.

The ability to identify a wise real estate investment is certainly a learned skill. We have beenthoroughlytrainedandpossessthisskill -alongwiththe intuitiontospotthesegreat investmentopportunitiesintoday’smarket.

Not every opportunity is a “good deal”, andwe have built our company on a stable foundationknowingournumbers.Ifthenumbersdon’tmakesensetousitcertainlywon’tmakesensetoourlenders.Ourgoalistobeinbusinessformanyyearsandbrandacompanythatwillbepasseddowntoourchildren,whichcannotbeaccomplishedbytakinguncalculatedrisks.

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TypesofPropertiesWeTarget

•  Distressed properties in significant need of repairs•  Properties where sellers need to sell quickly•  Properties owned free and clear

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HOWDOWEBUYHOMESSOFARBELOWMARKETVALUE?

AtCTHomes,wehavecreatedamarketingmachinethatproducesaconsistentflowofhighqualityleads. We are very different from our competitors because we don’t just put in offers onMLSproperties–we take it to thenext level.Ourcreativemarketing strategiesallowus to reach thehomeownerdirectly,beforethepropertyevengoestoaRealtortobelistedontheMLS;whereas,thepurchasepricewouldescalate.

Thesearesomeofthemarketingstrategiesweusetolocategreatdealswaybelowmarketvalue:

INSERTYOURMARKETINGPHOTO

HERE

Internet DirectMail OtherStrategiesTwitter Probate BanditSignsBuyerSqueezePages Pre-Foreclosure NetworkingEventsSellerSqueezePages BackTax DoorHangersPrimaryWebsites FreenClear OtherWholesalersFacebookBusiness CodeViolations HouseBannersGoogleBusinessListings Divorce SocialMediaAdsGoogleAdWords ExpiredListings A-TeamVanYouTube NonOwnerOccupied Zbuyer

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HOWWESELLPROPERTIESQUICKLYTherearemanymethodsweusetosellpropertiesveryquickly.Weinvestalotoftimeandmoneyintomarketingtobuildastrong listofbuyerclientsforourhomes.Despitewhatthemediasays,therearetonsofbuyersouttherewhoareawareofthefactthatnumerousbuyingopportunitiesexistintoday’srealestatemarket.Theproblemis:theyjustdon’tknowhowtoidentifyandanalyzethemtoensuretheyareactuallygettingagoodvalue.That’swherewecomein.Weareconstantlyon the hunt for the next great buying opportunity, and use proven techniques to analyzeinvestmentproperties.

Ourabilitytolocateagreatrealestatedealcoversalltypesofrealestateinvestments.Weareabletoidentifygreatbuyingopportunitiesforthefollowingtypesofbuyers:

•  Retail•  Landlord•  Rehabber

INSERT

“IMAGE_SOLDHOUSETOCOUPLE“HERE

MethodsWeUsetoSellProperties

•  Bandit signs & Guerilla Marketing•  Realtor/List on MLS (Multiple Listing Service)•  Internet/ Listing Websites•  Pre-Listing Walkthroughs

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PrivateLending

Essentially,privatemoneylendingisyouropportunitytobecomethebank,reapingtheprofitsjustlikeabankwould.It’sagreatwaytogeneratecashflowandproduceapredictableincomestream-whileatthesametime,provideexcellentsecurity.Youcandowhatthebankshavebeendoingforyears…makeaprofitablereturnonloansbackedbyrealestate.Thereisnootheropportunitylikeit.

Through private money lending, you have the opportunity to become the bank

HOWTHEPROCESSWORKSTheprocessissimple.Wefindanextremelyundervaluedpropertywewanttopurchase-andonceyougiveusthegreenlight,weborrowthefundsfromyoutopurchaseandrenovatetheproperty.Atclosing,youreceiveamortgageonthehomealongwithotherimportantdocuments.Nextstageisthepropertyrenovation.Oncetherenovationsarecomplete(typically3-6monthsdependingonthesizeoftheproject),we’lllistandselltheproperty.Whenit’stimeforclosing,you’llreceiveyourprincipleplus10%interestpayment.It’sjustthatsimple!Thegoalistokeepturningthatmoneyforyouandkeepyoumakingsubstantialprofitssoyoukeepcomingbacktous–buildingalongtermmutuallybeneficialrelationship.

Sources of Private Money •  401k•  Self-Directed IRA •  Profit Sharing•  Personal Savings, Trust Fund, or any other

money sitting around…•  Many are TAX DEFERRED PROFITS

•

WHATISPRIVATELENDING?Aprivatemoneyloanisaloanthatisgiventoarealestate investor, secured by real estate. Privatemoney lendersaregivena firstorsecondmortgagethat secures their legal interest in thepropertyandsecures their loan.Whenwe have isolated a homethat iswellundermarketvalue,wegiveourprivatelenders an opportunity to fund the purchase andrehabofthehome.Throughthatprocess,thelendercanyieldextremelyhighinterestrates–4or5timesthe rates you can get on bank CD’s and othertraditionalplans.

TypicalHoldTime:

RehabFlip:3-6monthsWholesaleFlip:3-15days

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PrivateLending

OVERVIEWOFTHEPRIVATELENDINGPROCESS

DEALSCENARIO

Here’swhatthenumberswouldlooklikeonatypicalrenovationproject,witha6monthhold(includingrehab&re-selltime)withaprivatelenderreturnof10%.

PurchasePrice: $95,000

RepairCost: $68,000

TotalLoanAmount:(6MonthHold) $163,000

SalesPrice: $250,000

LenderPotentialReturn:$8,150

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PrivateLending

It’s a win/win opportunity for both the lender and borrower

What’sinitforyou?•  Secure returns on a loan backed by real estate•  High returns on your money•  A predictable income stream because rates

fluctuate very little•  No management costs•  No daily headaches with managing contractors

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MONEY“HERE

HOWYOUBENEFITFROMPRIVATELENDINGYou, as the private money lender can benefit greatlyfromloaningyourcapital.Arealestatemortgage/deedof trust provides you with security instruments youwouldnotgetwithotheropportunities.Youalsohaveaddedlayersofprotectionbecauseofhowwebuy,andbecauseyouhaverecourseavailabletoyouincaseweweretodefaultontheloan.

We currently pay 4-5 timeswhat a typical bankCD ispaying.Ourrateswillfluctuateverylittlealldependingon the purchase price and rehab involved. The lowerthepricewepayforahome,wecanpayalittlehigherratetomakesureourlendersmakeitworththeirtime.Privatelendingmeansyoucanrelaxwhilethemoneyisinatrulysecureplace,workingforyou.

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PrivateLending

Our equity is built in the purchase of the home,wherewearebuying30-40%belowaretailbuyer–that creates instant equity at purchase. Also, in atypicaltransaction,wecutoutthemiddlemancost,such as: commissions, mortgage broker fees, loanfees;andourattorneycostsarealsolowerbecausethereislessworkforthemtoreview.

Becauseofourbuyingstrategy,weareabletoofferour buyers a fully renovated home at or beloweverythingelseintheneighborhood.Wewalkawayfrom hundreds of “close” deals that do not meetour specific buying criteria, and simply won’t buyunlessitmakessenseforeveryoneinvolved.

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CALCULATOR“HERE

WhyPrivateLendingisSoCompelling

•  Passiveincome(minimaltimeinvolved)•  Nodealingwithtenants•  Nomanuallaborrenovatingproperties•  Nodealingwithunscrupulouscontractors•  Short-termuseoflendersmoney•  Senseofsecuritythatmoneywillbecomingbacksoon•  Securecollateralpositioninmarketableandliquidrealestate•  BorrowersdotheHARDWORKoffindingthecollateral•  BorrowersputTHEIRMONEYintolender'scollateral•  BorrowersputTHEIRTIMEandLABORintolender'scollateral•  Borrowertakesmajorityoftherisk•  Iflendermustforeclose,lendermakesevenmoremoney•  Multipleloanscanbemadeatonetime•  Itiseasyandcleanwork•  Hugeannualindustrybusinessloanvolume•  Youmakemoneywhileyouaresleeping•  Itimprovesthegolfgamebyallowingmoreplaytime•  Profitscanbetaxfree•  ItisPROFITABLEwithnocaponearnings

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PrivateLending

RISKSVS.REWARDS

You are making a 10x greater return on your money!

SittinginBank RealEstatePrivateLending

$100,000x1%interest $100,000x10%interest

12MonthTerm=$1,000ROI 12MonthTerm=$10,000ROI

*BackedbyRealEstatePrivateLending

StockMarket RealEstatePrivateLending

CompletelyUnsecured SecuredbyDeedofTrustorMortgageDeed

CompletelyUninsured CollateralisFullyInsured

InvestatMarketPrice CollateralizedBelowMarketValue

ReturnsAreUnknown ReturnsAreFixedandAgreedUponTerm

TangibleAsset

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PrivateLending

HOWPRIVATEMONEYHELPSOURCOMPANY

Privatemoneylendersbringspeedandefficiencytoourtransactions,andourleverageisfargreaterwhenwepurchaseusingprivatecashfunds.Manyofthehomeswearepurchasingareinneedofquicksalewithin10-14days.Atraditionalbankrequires30-45daystoclosealoan.Manytraditionalhomesalesfalloutofcontractbecauseoffinancingissues. Usingquickcashasleverageallowsustonegotiateamuchlowerpurchasepriceandreduceourrisk.

Being able to offer a fast closingwith private fundsmotivates sellers to take our offer over thecompetition, andentices them to takeamuch lowerprice than theywould froma conventionalbuyer. Also, lending guidelines are also continually changing and are requiring applications,approvals, junk fees and strict investor guidelines. They also limit the number of investmentpropertiesthatcanbepurchasedbyonecompany.

On a new home purchase requiring renovations, private lender funds will be allocated to thepurchase price, renovations, carrying costs, cost to resell and a small buffer for unexpectedexpenses.

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Our Benefits of Using Private Money •  We won’t have to deal with banks, applications,

approvals, etc.•  We can buy at deeper discounts•  Gives us a competitive advantage above the rest•  Allows us to buy with cash - Cash is King

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PrivateLending

WEPROTECTOURLENDERS

Mortgagesofferthebankssolid,long-term,fixedreturns.Youcanputyourselfinthepositionofthebankbydirecting your capital, including retirement funds towell-secured real estatemortgages.Mortgageshaveultimatesecuritybecauseifdefaultoccurs,thebankcanrecoveritsinvestmentasthefirstlienholderontheproperty.

Each property we acquire is put through a rigorous evaluation process in order to assess theprofitabilitybeforethepropertyiseverpurchased.“lntegrity" isanessentialpartofourbusiness,andweonlymakesoundbuyingdecisions.Also, foryourprotection,youarealsoprovidedthesedocumentstosecureyourloan:

PromissoryNote:Thisisyourcollateralforyourloan.

DeedofTrust/Mortgage:Thisisthedocumentthatisrecordedwiththecountyclerkandrecordertopubliclysecureyourloanagainsttherealpropertythatweareprovidingascollateral

HazardInsurancePolicy:Thisiswhereyouastheprivatelenderwouldbelistedasthe“Mortgagee”foryourprotectionincaseoffireornaturaldisaster,etc.

We do pay for a title search aswell as a title policy on the home just aswewould in a typicaltransaction.Forarentalinvestmentwithalong-termnote,wealwayskeepavalidhazardinsurancepolicyonthepropertytoprotectagainstcausalities.You’llbenamedasamortgageeandnotifiedifthe insurance was not kept current. In the event of any damage to the property, insurancedistributionswouldbeusedtorebuildorrepairtheproperty,orusedtorepayyou.

OverviewoftheClosingProcess

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CommonWaysPrivateLendersFundDeals

HOMEEQUITYLINEOFCREDITAhomeequitylineofcreditisaverypowerfulsourceoffundingthatmanypeoplehaveanddon’teventhinkof.Unleveragedequityisdeadmoneyandit’snotmakinganyinterest.Youcaneasilytapintothatmoney.It’sawaytomakesureyou’reinfirstpositionwhenwe’rereadytopullthetriggerandbuyaproperty.

PERSONAL&BUSINESSLINESOFCREDITPersonalloansand“signaturelinesofcredit”canbeobtainedfrommostbanksorcreditunionsbyanyonewithgoodcreditandastableincome.

RETIREMENTACCOUNTSMoreandmoreprivatemoney lendersareusing their IRA funds to invest in realestate.Aself-directed IRA is essentially the same as a traditional IRA, but allows you to purchase a broaderrangeofinvestments,includingrealestate.

LIQUIDATEDSECURITIES&INVESTMENTSInvestmentsareawaytoputyoursavingstoworkearningmoremoney.However,ifyourstocksandinvestmentshavenotperformedasyouhadexpected,itmightbetimetoconsiderbecomingaprivate lender.Asyouknow, stocks canbe liquidatedasandwhenyouwish. Sometimesyouneed to liquidate your investments because you need the money for something you want topurchasesuchasrealestate.

CommonSourcesofFunding•  Cash•  Home Equity Line•  Personal & Business Lines of Credit•  Retirement Accounts•  Liquidated Securities & Investments

CASHCash held in most types of bank accounts can beaccessedquicklyandcanfundyourdealsinminutes,insteadofhoursordays.Feesaregenerallyminimalforwiretransfersandcashier’schecks.

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InvestingWithaSelf-DirectedIRAAccount

However,inorderforyoutouseretirementaccountsforloans,theymustfirstbeadministeredbya thirdpartycustodian.After selectingyourcustodian,yousimplysenda transfer formto themandthey’lldoalltheworkforyou,onceyou'vedonethatyouarereadytomakeprivatemortgageloans.Wewouldbehappytorecommendalocalcustodianwe’veworkedwithinthepastwhocanassistyouwithsettingupyouraccount.

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Most people think that an IRA can only be used topurchaseinvestments,likestocksandmutualfunds.Butthat’s not true! You can get private mortgage loansusing the funds which are already in your IRA’S andotherretirementplans.

As it pertains to lending for real estate investments,enter the Self-Directed IRA. The IRS has set forthguidelines onwhat you can and cannot invest inwithyour IRA. Many people are surprised at the scope ofoptions available. From tax liens, gold, real estateinvestmentsandrealestatenotes,IRA’saremuchmorepowerfulthanmostpeopleeverrealized.Ifyouaddtothat power of a Roth IRA which allows you to enjoyyourearningstax-freeordeferred,andyou’vegotafastroadtoaneasyretirement!

RetirementAccountsThatCanBeSelf-Directed

•  Roth IRA’s•  Traditional IRA’s•  SEP IRA’s•  SIMPLE IRA’s•  401k (solo)•  401k (qualified plan)•  Educational Savings Accounts•  Health Savings Accounts

*Profits can be tax free or tax deferred when you invest withone of these vehicles

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LoanTerms&Conditions

PaymentSchedule:Typically,wepayonelargelumpsumatclosingonashort-termnote.Thisismucheasiertomanageforbothofus,especiallyifwe’reworkingoutofaretirementaccount.Onalongernote,wewillpaymonthlyjustlikeatypicalmortgage.

1stor2ndLienPosition:Thelender,as“mortgagor,”hastherightoffirstlienholderandPowerofSaleontheproperty.The1stlienpositionisplacedbehindaseniormortgage.Youareprobablyusedtohearingthetermfirstandsecondmortgage.Thesecondmortgage isa junior lienbecause it’s in2ndposition.Theseniorlienorfirstmortgagemustbepaidpriortothe2ndlien.

MinimumLoanAmount:Whenworkingwithprivatelenders,$50,000isour minimum standard loan amount. Whenfirst lendingtous,a lower initial loanamountmay be agreed upon to ensure you’reconfidentwhenworkingwithourcompany.

MortgageTerms:Themajorityofourloansaresetuponan8-12month note; however, it depends on the sizeoftheproject.Ifwearedoingateardownandrebuild, we will have to wait on the countyinspectors for many approvals - thus causingdelays. We account for all of those detailsupfrontandwillgiveyouestimatedtimeframefor the return on your principle and interest.Also,wedonotpoolfunds–yourfundingwillbetiedtoonepieceofpropertysecuredbyadeedoftrust.

LoanTerms&Conditions•  MinimumLoanAmount-$50,000

•  InterestRate–10%onaverage

•  PaymentSchedule–paidmonthlyonthe1st

ofthemonthoraccrued•  MortgageTerms–12months(projectsusually

completedin3to6months)

•  ReturnofPrincipalandInterest–paidbackatclosing

•  1stor2ndLienposition

•  Optiontorenew

•  Alldocumentsrecorded

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Testimonials

<<<INSERTCOMPANYTESTIMONIALSWITHPHOTOSHERE(IFAVAILABLE)>>>

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PropertyShowcase

CTHOMESRENOVATIONPROJECTS

Herearejustafewofourpastrehabprojects:

BEFORE AFTER

INSERT“BEFORE”PHOTOHERE

INSERT“AFTER”PHOTOHERE





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PropertyShowcase

CTHOMESRENOVATIONPROJECTS

Herearejustafewofourpastrehabprojects:

BEFORE AFTER







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TakingtheNextSteps

GETTINGSTARTEDWITHUS

Ifwe haven’t already, it’s important to sit down anddiscuss all these details in person.Wewillneedacleardefinitionofwhatyourgoalsare,i.e.longtermorshortterm,andtheamountyouarecomfortableinitiallylending.Atthatpoint,wewillpresentyouwithanycurrentopportunitiesthatfitthatcriteriaorcontactyouassoonaswehaveonethatfits.

Ifyouhaveanyinterestinthisopportunity,pleasesendusanemail:[email protected]

REFERRALPROGRAMWord ofmouth is typically howwe are able toworkwith private lenders like you. It would begreatly appreciated if you passed our information on to anyone that may be interested in theopportunitytobealender.Inourbusiness,it’salwaysimportantthatwehaveasteadystreamoflenders.Onceyou’vedoneafewdealswithusandyou’ve learnedhowwe’repurchasingso low,youmayattempttodoitonyourown. Ifthat’syourgoal,we’rehappytohelpyouanywaywecan.

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FrequentlyAskedQuestions

WHATISPRIVATELENDING?Whenwe have isolated a home pricedwell undermarket value,we give our private lenders anopportunitytofundthepurchaseandrehabofthehome.Lenderscanalsoearnhighinterestrates- generally4or5timestheratesyoucangetonbankCDsandothertraditionalopportunities.

HOWISTHEMONEYUSED?Onanewhomepurchaserequiringrenovations.Thecostwillbeallocatedto thepurchaseprice,renovations,carryingcosts,costtoresell,andalsoasmallbufferforunexpectedexpenses.

WHYDON’TYOUGETATRADITIONALLOAN?Therearemany reasons,but theprimary reason is: timeandnegotiation leverage. Manyof thehomeswearepurchasingareinneedofaquicksalewithin10-14days.Atraditionalbankrequires30-45daystoclosealoan.Also,ourleverageisfargreaterwhenwepurchaseusingcashinsteadoffinancing.Many traditional home sales fall out of contract because of financing issues; and thisallowsustonegotiateamuchlowerpurchasepriceandreduceourrisk.

Lending guidelines are also continually changing. Most new requirements include applications,approvals, junk fees, and strict investor guidelines. They also limit the number of investmentpropertiesthatcanbepurchasedbyonecompany.

HOWCANYOUAFFORDTOPAYSUCHHIGHRETURNS?We make our money on the purchase, and this allows us to purchase 20-30% below a retailpurchaser. This instantly creates thousands of dollars in equity. Typically, we also cut out themiddlemaninatransaction,i.e.,commissions,mortgagebrokerfees,loanfees.Ourattorneycostsareusuallyalsolower,becausethereislesspaperworktoreview.

AREYOUREALLYHELPINGSELLERS?Absolutely.Withyour cash funding,wecanoffer somethingvery fewbuyers can.Wearebuyingwithintheirtimelineinaslittleas10-14days.Knowingthatwe’regoingtorenovatethehomeandpurchaseit inas-isconditionisaveryimportantfactortomostsellersofdistressedproperty.Theselleralsowon’thavetopayanyadditionalfees.

WHATIFTHEMARKETGETSWORSEANDVALUESGODOWN?Thisisagreatquestionandvalidconcern.However,ourstrategyisnottospeculate3yearsdowntheroad.Ourgoalistopurchasequicklyandsellevenfaster.Mostofourprojectsarecompletein1-2monthsandwillbesoldin4-5months.Themarketdoesn’ttendtoshiftthatdramaticallyinamatterofmonths-it’stypicallyalongerprocessforanareatodecline.Remember,we’rebuyinginstrategicareaswhereinventoryisalreadylowanddemandishigh;thisgreaterminimizesourrisk.

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WHATINTERESTRATEDOYOUTYPICALLYPAYYOURPRIVATELENDERS?Mostofourlendersarepaid10%simpleinterest.Ourrateswillfluctuateverylittlealldependingonthepurchasepriceandrehabinvolved.Thelowerthepurchaseprice,wecansometimesaffordtopayalittlehigherratetomakesureourlendersmakeitworththeirtime.

HOWLONGWILLMYFUNDSBEHELD?Themajority of our loans are set up on an 8-12month note, but it depends on the size of theproject. Ifwearedoingateardownandrebuild,wewillhavetowaitonthecountyinspectorsforapprovals.Thiswillcausedelays.Butweaccountforallofthosedetailsupfrontandwillgiveyouestimatedtimeframeforthereturnonyourloanbeforehand.

WHATIFI’MONASHORT-TERMNOTEANDSELLTHEHOMEAFTERONLY1MONTH?It’sextremely importanttousthatwedonotwasteyourtime. However,occasionally,situationsmayoccur wherewefindabuyerimmediately.Inthisscenario,weprovideyouwithtwooptions:we can eithermove the note to another property, or provide youwith aminimumof 3monthsinterest.Mostlendersseethestrengthofourpurchaseabilityatthatpoint,andsimplymovethenotetoanotherproperty.

WHENWILLIRECEIVEPAYMENTS?Typically,wepayonelargelumpsumatclosingonashort-termnote.Thisismucheasiertomanageforbothofus,especiallyifwe’reworkingoutofaretirementaccount.Onalongernote,wewillpaymonthly,justlikeatypicalmortgage.

ISTHEREAGUARANTEEONYOURLOANS?No. There is no government backed guarantee on these privately held real estate notes. You’rederivingprotectionfromtheequityintherealestate.Ifatanytimeweweretodefaultonthenote,youhavelegalrighttotakethehome(essentiallyforecloseonus).Manylenderslaughaboutthisoneandsay,“Ihopeyou’readaybehindonpayments - I’dgladly take thisoneoffyourhands.”Youhave to remember thatweplan for theworst, andour homeshave thousands of dollars ofequityinthem.Soinaworsecasescenario,oftentimeswejustdon’tmake“asmuch”profitasweoriginallyhopedfor.

ISTHEIRSAPPROVEDTOUSERETIREMENTACCOUNTSINTHISMANNER?Yes, these are established tax guidelines, and it is completely legal. However, we alwaysrecommendtheservicesofacustodiantoinvestretirementfundstaxdeferredortax-free.

85


WHOBUYSINSURANCE?Wedo.Wepayforatitlesearchandalsoatitlepolicyonthehome,justaswewouldinatypicaltransaction.

WHATKINDOFINSURANCEPOLICYDOYOUGETONTHEHOME?Ifwepurchasea renovation,wegetabuilders riskpolicy (VacantDwellingPolicy). Incaseofanydamage,insurancedistributionswouldbeusedtorebuildorrepairtheproperty,orusedtopayyouoff.

HOWMUCHISITGOINGTOCOSTMETOLENDTOYOU?Itisourpolicytopayforalltheclosingcostssothatyourentireloanamountgoestoworkforyou.Wewillpayfortheclosingagent,documentpreparationfees,notaryfees,overnightmailfees,bankwirefeesandrecordingcosts.Wedonotchargeanyfeesorcommissionstoourprivatelenders.

WILLMYMONEYBEPOOLEDWITHOTHERLENDERS?No,wedonotpoolfunds.Yourfundingwillbetiedtoonepieceofpropertysecuredbyadeedoftrust.

IFYOUDEFAULTONTHELOAN,HOWDOIACQUIRETHEPROPERTY?Inthisunlikelyscenario,wewouldsimplytransferownershipofthepropertytoyou,ifpossible.Ifforanyreasonwedidnot(orcouldnot),thenyouhaveallthelegalrightsofasecuredlender.Thebestway to legally protect your interest in caseof a defaultwouldbe to hire an attorney. Theynormallywouldseektoretrieveyourloanamount,anyunpaidinterest,anycollectioncosts,allyourattorneyfeesandmaybeevenmore.Anattorneycouldadviseyouofwhetherornotitmakessensetoforecloseonthepropertyorseekownershiptoprotectorrecoupyourloan.

86

Section 6

87

Private Money Documents & Compliance

Accredited Investor Definitions

THE BIG 3!!

• Promissory Note = Simply a promise to pay. Sets theterms such as interest rate, time, pre-payment

• Mortgage Deed or Trust Deed = This is the securityinstrument that is recorded by the private lendersattorney or escrow that secures their position againstthe real asset

• Insurance = Add as Loss Payee on your Builders RiskVacant Dwelling Insurance

• www.fbrealestateinsurance.com

WHAT THE LENDER RECEIVES

• Promissory Note

• Copy of the Mortgage

• Added as “Loss Payee” on borrowers hazardinsurance naming the lender as mortgagee

• Title Lenders Policy

• Optional “Personal Guarantee”

88

WHAT IS IN THE PROMISSORY NOTE

• Borrowers name & address

• Subject property address

• Start & End date of the note

• Amount of loan

• Interest Rate

• Monthly payments if any

STEPS TO FUND & RECORD

• Step 1 = Lenders wire money to Escrow or Closing Atty

• Step 2 = Escrow or Closing Atty finalizes Prom Note & Deed

• Step 3 = Add Lender as “loss payee” on property insurance

• Step 4 = Sign & execute docs

• Step 5 = Escrow or Closing Atty records on the land records

DON’T GET CAUGHT MISSING A STEP

• DO NOT have private lenderswire funds directly to youraccount

• DO NOT fund businessoperations with private money used for a deal

• DO NOT “miss” adding lenderas “loss payee” to insurance

• DO NOT borrow money you donot intend to pay back

89

WE DO NOT GUARANTEE RATES

• Do not use the word “guarantee”

• Do not put “guarantee” in writing

• Do not put “guarantee” in marketing

• Do not put “guarantee” in emails

5 TIPS TO COMPLY

• Never use the word “guarantee”

• Disclosure “This is not an offer to solicit”

• Do not “mass” distribute your marketing for lenders

• Rule 506 Reg D

• Don’t co-mingle funds• Finally use a professional

• Attorney• Escrow

I DON'T NEED TO KNOW EVERYTHING TO BENEFIT

FROM SOMETHING!!!

~Don’t let fear hold you back, rather leverageknowledge & other professionals to move forward

with Confidence.

90

Section 7

91

Private Money Meeting Outline to Follow

Rapport building • Research them as much as possible• Trying to build a “trust” connection• Private lender interview sheet• Family, Friends, Common Connections

• “Oh really, tell me more?”

Intent statement & agenda • Agenda: Purpose & length of the meeting• Posture: You don’t need their money now• Personal questioning: They must be open• Business relationship for life• Commitment: At the end all I ask for is a simple yes or no

Discovery of current investments & goals • How they made their money?• Experience in real estate?• Experience with private money investments?• Current investments & returns?• Current availability of funds?

Company overview • Personal story of company founded• Experience & education• Company goals• Private lending track record• Competitive advantage

Investment buying criteria • Types of properties we buy• Buying criteria: what we pay for houses?• Why our buying criteria insures safety for you as a lender• Case study

Terms & Conditions • 8-12% interest no points• 1st or 2nd Lien position• 12 months no monthly payments & Fee w/ option to renew

92

Documents & protection • Promissory Note• Mortgage Deed or Deed of Trust• Hazard Insurance Policy – Lender Listed as “Loss Payee”• Personal Guarantee*

Risks vs. rewards Bank account Stock market

Closing process Know the flow chart

Common ways our private lenders fund deals • Cash in the bank• Home equity• Personal & business credit lines• Liquidated securities & investments• Retirement accounts

Questions What if something happens to you? What if you don’t sell the house for what you think? What if I have to pull my money out? What if I can’t fund an entire deal? Can I think about it? Why isn’t everyone investing this way?

Commitment • You can’t be afraid to ask for the money• Have a concrete plan for follow up if they need more time

93

Section 8

94

IRA Investing & DefinitionsA SMARTER WAY TO INVEST IN REAL ESTATE

Investing in financial and real estate markets involves a substantial degree of risk. There can be no assurance that the investment objectives or returns described herein will be achieved. Past performance is no guarantee of future performance or that such investment opportunities will become available to the Fund.

These materials are intended only for discussion purposes and should not be relied upon in evaluating the merits of investing in any securities. Potential investors who express an interest in investing in the Fund will be provided with a private placement memorandum and other offering documents.

CONFIDENTIAL – NOT FOR DISCLOSURE OR DISTRIBUTION

1974 Erisa Act▪ It’s not a matter of legality

for other brokers or bankbut rather a matter ofchoice

▪ Most banks or custodians do not have an incentive to offer these investment solutions

▪ 1974 Erisa Act

▪ Publication 590

▪ Publication 560

▪ IRC 4975

Typical Retirement Plans VS Self Directed

➢Typical Retirement Plans Invest in➢Stocks➢Bonds➢Mutual Funds

➢Retirement Plan investments are restricted by the plan document

➢Self Directed Plans Invest in➢Real Estate➢Mortgage Notes➢Private Placements – PPM➢Limited Partnerships & LLC’s➢Offshore Hedge Funds➢Private Stock➢Joint Ventures, Etc

➢ANYTHING, except➢ Life Insurance Policies➢ Collectibles

➢Art➢ Coins➢ Cars, Etc

95

What is a Self-Directed Plan

1. You are a separate entity

2. IRA is a separate entity

3. Third party administrator

1. Record keeping

2. Tax reporting

4. Custodian/trustee

1. Holds the money

2. Must be IRS approved

1You

2IRA

401K

3TPA

4Custodian

Trustee

Restrictions on Real Estate

➢ Must be for investment

purposes only

➢ Cannot rent to

➢ Ascendants

➢ Parents

➢ Grandparents

➢ You or your spouse

➢ Descendants

➢ Children

➢ Grandchildren

➢ But may rent to

➢ Aunts, uncles

➢ Cousins

➢ Nieces, nephews

➢ May not let

disqualified people use

or live in the property

Prohibited Transaction & Disqualified Person

Prohibited Transactions

➢ Neither you nor any

disqualified people may benefit

from IRA

➢ Cannot buy, sell or exchange

property between plan and

➢ Self or

➢ Disqualified people

➢ Cannot provide goods, services

or facilities

What Is a Disqualified Person➢ Self

➢ Spouse

➢ Lineal ascendants

➢ Lineal descendants

➢ Employer of the plan

➢ Fiduciary

➢ Anyone providing services tothe plan

➢ If you are 50% owner of a ➢ Corporation

➢ Partnership

➢ Trust

96

Comparison of Investment Returns

➢ IRAs➢ Individual Retirement

Accounts➢ What you are doing for your

own retirement

➢ Qualified Plans➢ ERISA controlled➢ Typically, what an employer

provides you

➢ Other Plans➢ Education➢ Health

➢ IRAs➢Roth IRA➢ Traditional IRA➢ Simple IRA➢ SEP-IRA

➢ Qualified Plans➢ 401k/457/403b➢Defined Benefit➢ Profit Sharing➢ Individual K

➢ Other Plans➢ Coverdell Education

➢Savings Account

➢Health Savings Account

IRA Investing in a Property

1. Locate an investment property.

2. Negotiate purchase contract in the name of the IRA:

“Custodian” TS FBO John Smith IRA #123

3. Submit approved contract to “Custodian” with deposit instructions

4. “Custodian” will execute contract and submit deposit

5. Do your due diligence – home inspection, title search, etc.

6. Submit approved closing documents with escrow instructions to “Custodian”

7. “Custodian” will execute closing documents and fund escrow

Congratulations! Your IRA now owns the property.

*All income and expenses related to the property must flow through theIRA*

Accredited Investor Opportunity with Grand Coast?

➢Experience Real Estate Investment Team with Strong Historical Lending Track Record

➢Unparalleled Access to New Lending Opportunities

➢Real Estate Operators, Not Allocators

➢Detailed Underwriting & Valuation Process

➢Loan Diversification

➢Generates “Passive” Income

➢Strong Reputation & Alignment of Interest


97

Section 9

98

       

101

’

118

Section 10

120

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AGENDA

EQU

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……

……

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RATE

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INVE

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PROC

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Und

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Revi

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t M

anag

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rigin

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d So

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twor

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view

of P

SA &

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view

of a

ny th

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part

y re

port

s§

Hist

orica

l fin

ancia

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al o

verv

iew

and

initi

al sc

reen

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al R

evi e

w, v

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C Fi

nanc

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§P&

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Info

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§Te

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Info

rmat

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§Ph

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l Pro

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port

s§

Envi

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l Rep

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§In

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Cert

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§Ti

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an D

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inve

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139

CON

TACT

US

DISCLAIMER

This

docu

men

t is p

rivat

e, co

nfid

entia

l and

pr

oprie

tary

and

cont

ains

stat

emen

ts a

nd

info

rmat

ion

rela

ting

to E

SC th

at is

bas

ed o

n th

e be

liefs

of E

SC’s

man

agem

ent.

Suc

h st

atem

ents

and

hist

orica

l ret

urn

data

hav

e no

t bee

n re

view

ed o

r aud

ited

by a

n in

depe

nden

t par

ty.

Past

per

form

ance

is n

o gu

aran

tee

or p

roje

ctio

n of

futu

re re

sults

. ES

C m

akes

no

repr

esen

tatio

n or

ass

uran

ce o

f fu

ture

per

form

ance

or i

nves

tmen

t ret

urns

, an

d ac

tual

retu

rns a

re li

kely

to m

ater

ially

di

ffer f

rom

pas

t res

ults

. Th

e in

form

atio

n co

ntai

ned

in th

is do

cum

ent

is co

nfid

entia

l inf

orm

atio

n of

ESC

that

has

not

be

en p

ublic

ly re

leas

ed a

nd m

ay n

ot b

e co

pied

, rep

rodu

ced,

or d

isclo

sed

to a

ny th

ird

part

y w

ithou

t the

prio

r con

sent

of E

SC.

This

docu

men

t is n

eith

er a

n of

fer t

o se

ll no

r th

e so

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140

http://equitystreetcapital.com

http://www.equitystreetcapital.com/

Section 11

141

Crossroads South

Forward-Looking Statements

This presentation contains statements that are forward looking within themeaning of the Private Securities Litigation Reform Act of 1995. These includestatements regarding Big V Capital’s future growth momentum, operations,market share, business outlook, and financial performance expectations.These statements are estimates only and actual results may ultimately differfrom them. Except to the extent required by applicable securities laws, weundertake no obligation to update or revise any of the forward lookingstatements that you may hear today.

Investment Overview Webinar

Harbison Court Retail Shopping Center

Example $14,000,000 Commercial Real Estate Raise Deck

142

Executive SummaryHarbison Court - Retail Shopping Center

Columbia, SC

What’s the Story

•Institutional grade Shopping Center•60% of cost basis•In place income of 75%•Immediate opportunities to force appreciation•Projected return of 60% of capital


Paul Esajian Jeff Rosenberg Jason Nidiffer

Sponsors

R

146

Benefits of These Investments

• Passive investments• High projected returns• Experienced operators• Allows you to participate in larger deals• Tax advantages


Projected Returns to Investors5 Year Projected Returns for a $100,000 Investment

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Investment Basis $100,000 $100,000 $100,000 $36,749 $36,749 $36,749

Property Cash Flow $8,326 $10,841 $5,149 $5,358 $5,559

Proceeds from Refinance $63,251

Proceeds from Sale of Property $56,897

Ending Investment Balance $100,000 $36,749 $36,749 $36,749 -

Cash Distributions by Year $8,326 $74,091 $5,149 $5,358 $62,457

Cash on Cash Return by Year 8.33% 29.50% 14.01% 14.58% 15.13%

Average Annual - Cash on Cash Return 16.31%

Cash on Cash Return - Year 1 8.33%

Annual - Internal Rate of Return (IRR) 15.30%

Total Cash Distributions $155,382

Equity Multiple 1.55x

Net returns to investors after all fees & reservesAll projections are hypothetical and are predicated upon various assumptions. The future operating and financial performance information contained in the financial projections is for illustrative purposes only and actual

performance may vary significantly. The numbers used in the projections are not intended to portray any sort of targeted or anticipated returns and there can be no assurance that it will achieve its projections.

www.CommercialWithFB.com


How to Invest

147

http://www.commercialwithfb.com

Big V Properties Team

Jeffrey RosenbergManaging Partner

President and CEOYears of Experience: 30

Jason NidifferPartner

Acquisitions, Underwriting & Capital Markets

Years of Experience: 17

Michael RosenbergPartner

Chief Operating OfficerYears of Experience: 15

Big V Properties Partners

Big V Properties Management Team

R y a n S m a lle yAssociate General Counsel

P a u l C o rn e tteBig V Investments

148

Track Record

Big V Properties: 45 Retail Shopping Centers$500+ Million Dollar Portfolio of Properties

Some of Our Retail Shopping Centers

Pocono Crossing

Poplin Place Belvedere Plaza

Westside Centre Crossroads South

Lexington Towne CentreFirst Tuesday Center Ridge Crest Plaza

149

Business Model

E-Commerce Sales is Widely Misunderstood

10%

E-Commerce Sales

90%

Brick & Mortar Retail Sales

Source: CBRE Research “Beyond the Headlines”

150

5 Year Projections for E-Commerce Sales

15%

E-Commerce Sales

85%

Source: CBRE Research “Beyond the Headlines”

Brick & Mortar Retail Sales

7 Reasons We Like This Deal


Market & Growth with the Market

1Harbison Court Retail Shopping Center

151

Columbia, SC - Facts• State Capital and Largest City with a diverse economy• Major Industries include state government, education,

healthcare • Population: 900,000 (70th Largest MSA in Country)

• Home to the University of South Carolina (Largest in SC)• Total Enrollment: over 34,000

• Highly educated workforce with low cost of business

Columbia, SC - Facts

Columbia, SC - Large Employers

152

Property Location & Demographics


Location of Property

Location & Accessibility

153

Demographic Summary

Demographic Summary

Demographic Summary

154

Minimal Deferred Maintenance


Cap Ex History

Discount & Service Orientated Tenants


155


Anchor Stability & Strong Sales

156

Tenant Roster

157

Tenant Roster (cont’d.)


158



Purchase Price


159

Purchase Price below Replacement Cost

Significant Upside with Vacant Space


64,415 square feet available to lease

160

High Tenant Demand in Harbison, SC Submarket

Outparcels & Breakup Strategy


Outparcels & Breakup Strategy

161

Starbucks / Chipotle Outparcel

Purchase: $2,500,000Est. Sale Price: $3,500,000Value Created: $1,000,000

Former “Babies R Us” Space

Purchase: $1,650,000TILC: $1,500,000Est. Sale Price: $6,000,000Value Created: $2,850,000

**Not Included in Underwriting

Financial Underwriting


162

Executive Summary - Structure of the Deal

Harbison Court - Retail Shopping Center Columbia, SC

Sources & Uses of Funds

Annual Cash Flow

163

Annual Cash Flow

Projected Returns to Investors


164


Net returns to investors after all fees & reservesAll projections are hypothetical and are predicated upon various assumptions. The future operating and financial performance information contained in the financial projections is for illustrative purposes only and

actual performance may vary significantly. The numbers used in the projections are not intended to portray any sort of targeted or anticipated returns and there can be no assurance that it w ill achieve its projections.

Tax Benefits of Investment


Taxable Equivalent Distribution Calculations Assumes a 35% Tax Rate

All projections are hypothetical and are predicated upon various assumptions identified throughout this offering memo, including an assumption that the Property will sell in year five.The future operating and financial performance information contained in the financial projections is for illustrative purposes only and actual performance may vary significantly. Thenumbers used in the projections are not intended to portray any sort of targeted or anticipated returns and there can be no assurance that it will achieve its projections.

165

http://www.CommercialWithFB.com

All projections are hypothetical and are predicated upon various assumptions identified throughout this offering memo, including an assumption that the Property will sell in year five.The future operating and financial performance information contained in the financial projections is for illustrative purposes only and actual performance may vary significantly. The numbers used in the projections are not intended to portray any sort of targeted or anticipated returns and there can be no assurance that it will achieve its projections.

Investor Communication


Investor Communication - Quarterly Reports

166

Investor Communication - Distributions

Investor Owner Annual Conference


Net returns after all fees & reservesAll projections are hypothetical and are predicated upon various assumptions. The future operating and financial performance information contained in the financial projections is for illustrative purposes only and

actual performance may vary significantly. The numbers used in the projections are not intended to portray any sort of targeted or anticipated returns and there can be no assurance that it w ill achieve its projections.

167



How to Subscribe


CurrentlyFull


Click Here ~

Click “Don’t have an account”to create account


168




Create account& click “sign up”


Email: [email protected]

How to Subscribe:

169

Section 12

170

PROFESSIONAL ADVICE DISCLAIMER

The following information is for educational purposes only.We will not be providing financial, legal, or professionaladvice. We will introduce you to strategies that we use, butthey may not apply to your personal situation, so alwaysspeak with your team of professionals before applying anyof the strategies learned today.

EARNINGS DISCLAIMER

Any examples depicting profits, earnings, or results shouldnot be interpreted as typical for the average student. Wehave numerous documented successful deals from ourcoaching students, but we do not track each student and sowe cannot provide a typical result. Assume the averageperson makes little to no money. This business takes hardwork. The students depicted have purchasedFortuneBuilders’ advanced coaching services, and some ofthe students may now be working as one of our coaches.

171

Why Is This Important?

� Compound Interest + Tax deferred Profits = Lasting Wealth

� Large Tax Deductions (Over $50,000+)

� Hard-Earned Assets are Protected from Creditors� 401k

� Provide Wealth for Your Future Generations

Why should we learn the tools of Wealth?

Save $17,500 in Taxes

172

Leverage the IRS to keep more $$$$$

� While the owner earned $162,500, only $113,500 is taxable by Uncle Sam. Assuming an adjusted gross income (AGI) tax rate of 35 percent, that’s $17,500, she can now keep for herself (versus paying the taxman). In actuality, the tax savings would most likely be higher with the increased tax rate proposals.

Tax Vehicles to Create Wealth

Vehicles for You to Setup

� Roth IRA

� Traditional IRA

� Roth Solo 401k or Roth 401k

� Company 401k

� Defined Benefit Plan

� Insurance

Vehicles for Your Spouse

� Roth IRA

� Traditional IRA

� Solo 401k

� Insurance

Paul’s Top Two Picks

The Roth IRA� After Tax Contribution

� $6,000 for 2020

� Income Phase out� $124,000 single� $196,000 joint

� Grows Tax Free

� Come out Tax Free

� Do not ever have to take withdrawals

401k/Solo 401k� Can contribute up to $57,000 of your

income into an account

� Contributions are Tax Deductible

� Grows Tax deferred

� Withdraw after 59 ½ with no penalty

� Must start drawing at 70 ½

� Withdraws are taxed as ordinaryincome at retirement

173

401k Contribution Definition

� An individual can contribute 20% of net Schedule C income minus the deductible self-employment tax. Assuming the employee makes the maximum 401(k) elective contribution of $19,500 for 2020 and the employer does the maximum profit sharing contribution of $37,500 then the max total contribution is $57,000 for the year.� Two Pieces to Max out

� One is the $19,500 employee elective contribution

� Two is the $37,500 employer contribution� Match� Profit Share� 3% Safe Harbor

401k Contribution Calculation Example 50k of 1099 Income

� $50,000 in 1099 Income� Less ½ Self Employment(SE) Tax

� SE Tax total of 15.3%

� Employer 7.65� Employee 7.65

� x 20% calculates Profit Sharing

� Employer Contribution

� + 19,500 � Max Employee Elective Contribution

� Total 401k Contribution

$50,000 Example

-3,825 = (50k x 15.3%)/2

$46,175

x20%

$9,235

+19,500

$28,735 Total 401(k) Contribution

If you make 50k in Real Estate Income this Year w/ Financial Literacy!

� Real Estate Income w/ new BZ’s = $50,000

� Solo 401k Contribution Less($28,735)

� Taxable AGI after 401k Contribution = $21,265

� Traditional IRA Contribution*** Less($5,000)

� Taxable AGI after Trad IRA Contribution =$16,265

� Defined Benefit Plan*** Less($15,000)

� Taxable AGI after Defined Benefit Cont. = $1,265

� Meals & Entertainment Expense Less($1,000)

� Taxable AGI Income as a BZ’s owner = $265� At a 35% Tax Rate you owe $92.75 of taxes leveraging IRS sponsored rules to save

for your own Retirement

*** subject to individual age and earnings

174

Wealth Pyramid

Insurance

Defined Benefit Plan

Spouse Solo 401k

401k

Traditional IRA

Roth IRA

Who has a $200,000 Income Goal?

If you make 200k in Real Estate Income this Year w/ Financial Literacy!

� Real Estate Income w/ new BZ’s = $200,000

� Solo 401k Contribution Less($57,000)

� Taxable AGI after 401k Contribution = $143,000

� Defined Benefit Plan*** Less($20,000)

� Taxable AGI after Defined Benefit Cont. = $123,000

� Captive Insurance Premium*** Less($100,000)

� Taxable AGI Income as a BZ’s owner = $23,000� At a 35% tax rate you owe $8,050 in taxes leveraging IRS sponsored rules to

save for your own Retirement

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What is Captive Insurance?

� A Captive Insurer is a special purpose insurance company formed primarily to underwrite the risks ofits parent or affiliated groups.

� The biggest difference between a captive insurer and a commercial insurance company is that a captive typically does not sell insurance to the general public

Your Living Trust is Owner of Captive

Real Estate

LLC or Corp1yr 200k

CaptiveInsurance Company

Solo 401kIn

sura

nce

Co.

Pay

s U

nuse

d

Prem

ium

to C

aptiv

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wne

r

***RE LLC or Corp pays

100k Insurance Premium

Asset Protection & Entity Structure200k Real Estate Earnings Example

YOU

Control

DB Plan

**20k Contribution

*54k Contribution

How to Sock 100k of Tax Free Compounding Cash!!

� 401k = $46,000

� DB Plan = $25,000

� Trad IRA = $5,000

� Spouse Solo 401k = $16,000

� 2 Kids/Parents = $8,000

� Total = $100,000

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100k @ 12% for 5 YearsIn Tax Protected Vehicle’s

� PV = $100,000

� r = 12% yearly/12 months = 1%

� n = 5 years x 12 months = 60

� FV = $181,669.69

100k @ 12% for 5 YearsTaxed at 35% Bracket not in Wealth Vehicle

Principal 12% Gross 35% Tax Net

$100,000 $12,000 $112,000 $4,200 $107,800

$107,800 $12,936 $120,736 $4,527 $116,208

$116,208 $13,945 $130,153 $4,880 $125,272

$125,272 $15,032 $140,305 $5,261 $135,043

$135,043 $16,205 $151,249 $5,671 $145,577

The $36,000 Mistake

$0

$50,000

$100,000

$150,000

$200,000

5 Year Savings

Not Us ing TaxPro tected VehiclesUsing Wealth Vehiclesthat grow Tax Free

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Your Next Steps

Implement Wealth Building Strategies

1. Open a Roth IRA

2. Open a Solo 401k for you

3. Open a Solo 401k for your spouse or child

4. Start Investing!!!!

100 Porter St.

178

100 Porter St.

Tax Free Profits!!$1200 = $21,450

$21,450 invested at 12%

� 5 years worth $38,413.68

� 10 years worth $68,793.06

� 15 years worth $123,197.89

� 20 years worth $220,628.65

� 25 years worth $395,112.31

� 30 years worth $707,585.97

� 40 years worth $2,269,324.06

� 60 years worth $23,341,627.19

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The Evolution of a FortuneBuilder

� Marketer

� Wholesaler

� Rehabber

� Niche Specialist

� Transaction Specialist

� Passive Income

� Retirement

� 1-6 months to implement

� 6-12 months build cash

� 1st-2nd Yr big checks

� 2nd-3rd Yr Less work more $$$

� 3rd-4th Yr Make $$$ off everything

� 4th Yr less risk, less work, same $$

� For as long as you want, hobby is making money….just for fun

Paul’s Principals

1. People form Habits & Habits form Futures

2. Each level of income demands a different You

3. Greatness always starts by saying YES!

4. You don’t have to get it right, you just have to get it going

5. People lose more money from indecision than bad decisions

6. In life you’re either consistent or non-existent!

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