July 2014 Letter to Investors

July 2014 Investor Letter

For those of you who have been investing with us lately, you know that we have been very busy. As soon as we find and present a deal, we have had them funded within a matter of hours or even minutes, with several willing investors being turned away. It is clear to us that we do not have enough of the small deals to satisfy all of our investors. However, we have come across two significant deals lately which were requesting over $1MM dollars each. We feel as though our network of investor has grown to the point that we can approach these larger deals where the profit potential is tremendous for all of us.

Take a look at the investment from CRG on a deal that needed $1.615M dollars attached to this newsletter. This is a company that we and many of our investors have invested hundreds of thousands of dollars in and they have performed as promised on each deal for us. These guys are very good at what they do and have successfully built a niche for themselves rehabbing high end homes in LA County. The purchase price is $1.060M. The rehab will be $555K. The time to completion was estimated to be 12 months. They were willing to share 50% of the profits with us. At projected sales price of $2.8M, our profit would be $493K or 31% overall return or 2.5%/month return. This deal is as good or better than many of the small deals that many of you have been doing wiht us.

However, we do not have clarity as to the current capacity of our investors for upcoming projects. CRG only gave us 1 to 2 weeks for us to close on this deal, so we had to pass. We have a possible solution which would help us in the set up outlined below.

In order to streamline our investment efforts, our company will change how we work with our investors starting this month. Currently, after we find projects, we search for potential investors and collect funding. We would like to request that our investors open an account at our preferred banking establishment, the Bank of Southern California, an FDIC insured bank, and fund it with money they want to invest with us. This would eliminate both the lag time between finding a deal and determining if it can be fully funded, as well as increasing the ease of fund transfers by the investor.

• This account will be controlled by the investor only and the investor can deposit or withdraw funds at any time.
• The investor will then give the bank permission only to let our company know the balance in their account – nothing else.
• We will send the details of a given project to our investors as usual.
• If you decide to invest, you can transfer funds via a simple interbank transfer to the EAC GP, Inc. account on the bank’s secure website.

Investors that choose to open an account at our preferred bank will receive first notification of new investment opportunities and a personal guarantee from Dr. Yoo, as well as the partners on the ground (when applicable) for all funds invested. Investors that continue to transfer funds from a bank other than the preferred establishment will only be notified about any deals if there are still funds needed after the preferred investors had a chance to invest, and will receive a personal guarantee from the partners on the ground, but no longer a personal guarantee from Dr. Yoo himself.

The investors that open an account at our preferred bank will also receive 25% premium return on our deals. The investors that transfer funds from outside banks will receive a 25% discounted return on our deals. For example, on a typical fix and flip deal, we will offer 18% annualized or 1.5%/month return to all investors. To our investors who have opened an account at our bank, we will give a 25% premium return of 24% annualized or 2%/month return.

We hope that you understand the rationale with these new company guidelines as we strive to bring you the best investment opportunities with the highest possible return on investment. If you have any questions please contact John Hostetler, COO, at 760-519-4152 or [email protected]. We will start this program on all deals that we start after August 1, 2014.

Thank you,

Kevin Yoo, M.D. | President

John Hostetler | COO

EAC GP, Inc.

Cell: 858-449-9847

P.S. To date, we have only offered fix-and-flip deals to our investors, but we are also actively seeking buy-and-hold projects as well to provide long-term passive income. We have already invested in several properties with our own money in order to vet our partners on the ground as thoroughly as possible. We are currently working in several markets, including South Bend, IN, Phoenix, AZ, St. Louis, MO, Jacksonville, NC, and Cleveland, OH, to source excellent long-term investments. We are confident in several of our partners’ performance standards and will start offering these buy-and-hold opportunities to our investors soon. Stay tuned…