May 14, 2013 Investor Newsletter

Investor Newsletter for the week of May 14, 2013

New Rehab Investment Opportunity for our Investors

As I indicated in the letter sent earlier this week, appropriately-priced properties in San Diego are proving to be difficult to find for our in-house rehab business. We continue to develop strategies to enable us to participate in this market. In the meantime, however, we have several colleagues in the rehab business throughout Southern California who have been at the game longer and do have a small, but solid pipeline of deals. We have invested successfully numerous times with several of these colleagues, and would like to tell you about one of our projects with one of the best in the business.

Capital Redevelopment Group, LLC is a real estate company out of Los Angeles that is a very adept group of real estate investors. Jeff Coga and Jesus Yinh are two of the principals in this group, and they have been focused mainly on residential fix and flips in the Los Angeles area since 2008. I urge you to explore their site at http://www.capitalredevelopmentgroup.com.

With another local San Diego friend, I have personally invested quite a bit of money with this group in three deals, and intend to continue doing so. We are about to close our first deal in which we invested $93,000 over 9 months and received $11,160 for flat 12% return. Although the return is respectable, the annualized return was only 15% because the project lasted longer than anticipated.

They have brought another project to us and we have negotiated better terms. We have asked for and received a monthly rather than a flat return, so that if a project lasts longer than expected, our money keeps working for us. We have also asked for more than initially offered. CRG is going to pay 3% per month, which is an annualized return of 36%. They are estimating approximately 9 months to invest in this project, so the projected return is 27%. Please see the attached Executive Summary produced by CRG for full details.

Project Encinita, 6237 Encinita Ave., Temple City, CA 91780

Purchase price: $570,000

Estimated After Repaired Value: $1,225,000

Estimated Rehab Costs: $280,000

Estimated Profit Before Expenses: $289,250

Gap Funding Required $203,000

Return to Gap Fund (9 months) $54,810 (27% one time or 36% annualized)

We feel this is an excellent project on many points.

1. CRG is a very good and proven company from my experience with them.

2. This property is being bought at such a discount (53% discount) the project is safer than most. The profit margin is such that CRG should have no trouble paying us and be able to cover significant cost overruns in the project, should they happen.

3. Your money continues to earn more by the month and more the longer it is lent out.

4. Jeff and his group will provide both personal and corporate guarantee for your investment and will provide you a preferred rate of return of 3% per month.

This project was first presented to us seeking the first position deed of trust loan, but another investor filled this need quickly. EAC Group has done its own due diligence and believes the comparable sales for this property support the after repair value.

Sincerely,

Kevin Yoo, M.D.

President, EAC, GP