June 10 Newsletter

June 10, 2013 Investor Newsletter

In the past several weeks we have come across several good opportunities and I will present one of them in this newsletter. But before that, let me discuss with you a new development in our company.

Up to this point, we have been investing with you without sufficient consideration to security laws. To remedy this, we are working with our attorney Jillian Sidotti, Esq. () to start a real estate fund through which we can legally pool together our funds. Two of our investors, Jeff Brown and Hung Nguyen, have agreed to work with Jillian this week to help develop this fund. I have elicited their help in order to make sure that we create a fund that is investor friendly. We envision the fund to have the following features, although much of this will be refined in the coming days:

• The fund will be held by EAC, LP and it will be available to all accredited and 35 non-accredited individuals.
• Each investor would have his or her own account and an investor will be able to put in new money any time or take their money out at any time as long as there is money available in their accounts to do so.
• Each investor will be able to invest in any deal and only deals he or she wants to invest in.
• Each deal will pay out the majority of its earnings to the investors invested in the deal. A minority of the profits will be paid out to EAC, GP.
• The majority and minority portions will be decided upon by the investors in each deal on a case by case basis.
• An 8% annualized portion of the profits of each deal will be taken out of the profits and paid to EAC, LP. EAC, LP will then distribute this money quarterly to all investors in the fund.
• In this way, all accounts in the fund will get preferred return of at least 8% annualized whether they are invested in any deals or not. This will ensure that each investor gets some returns irrespective of how the deals performed.
• The fund would be able to invest in both in-state and out-of state-deals that have been determined to be worthy by EAC, GP.
• We will negotiate that the principal invested in each deal will be guaranteed by the companies we invest in both on the corporate and personal level. The returns they will give us will be preferred return.
• EAC, LP and I will also guarantee the principal. And the majority portion of each deal to be paid out to investors will be preferred return.
• All deals that are buy and hold will be held in EAC, LP or YOJ, LLC, a sister company of EAC.

We want to give the most flexible and safest investment we can to our investors. We believe having the fund will allow us to spread risk as some projects will have poor returns while others will have excellent ones. We also believe having the fund will allow us to move quickly and confidently in the market where such traits are crucial in making us competitive.

One of our investment strategies is to become the money source for gap funding to highly competent rehabbers anywhere in the country. The opportunity to have their projects funded 100% is very appealing to these rehabbers making the demand for such lending very high. And the returns should be excellent for us as well. EAC, LP will vet these rehabbers and their projects to limit risks in investing with them. We will negotiate with them personal and corporate guarantees and lucrative returns. We will also develop strong relationship with several of these individuals in each market so that if one rehabber failed, we would simply take it over with someone else and finish it off.

Gap Funding for REIG

Patrick Clark (Cell: 619-212-1814; ) and Brian Daly (Cell 619-888-4376) are local San Diego rehabbers who own REIG Asset Management (). I and several fellow investors have invested half a dozen deals with them in the last year or so and they have consistently delivered good returns. They are a very competent group. This week they have brought us two rehab opportunities, and I will tell you about one of them now.

1023 Mimosa Avenue, Vista, CA (

This property is a 4 bedroom/3 bath 1984 sq. ft. home. It will be purchased at $300,000 and will sell for $450,000 fixed up. The rehab cost is estimated to be $55,000. They need $85,000 of gap funding. They have estimated conservatively 5 months to finish this project. Although you will see in their executive summary that it is a flat 10% return, they have agreed instead to give us 2% of the invested amount per month. This is 10% total return for 5 months or 24% annualized return.

We have done our own analysis of this property and feels that it is a very safe deal. Moreover, REIG has proven itself to be a solid company and we look forward to doing business with them again in the future.

Kevin Yoo, M.D.