September 2014 Investor Letter

Last month we were working on a duplex purchase in Cleveland, Ohio which would pay our investor a longer term guaranteed return of 12%. The response from all of you to this new investment vehicle was strong, yet we only had one project to present and fund at the time. Fortunately, we do have a many more projects in the works, two of which are presented below.

It also occurred to us, however, that we already own over $600K of income producing single- and multi-family properties, some of which would be appropriate to make available using this same concept. Doing so would accomplish two things. First, it will enable more of our investors to start earning a good return on idle funds. Second, it would free up a significant amount of capital for us to move very quickly on properties which have a short window of opportunity. There are projects on which we have to pass because we simply cannot move quickly enough. The process of completing due diligence, presenting the project to investors, gathering funds and completing the purchase is time consuming, and we often see opportunities on which we simply have to pass because of the time constraints. With a cache of acquisition funds at our disposal, however, we could move quickly on these projects and present the property to investors after the property is acquired and stabilized.

Following is a summary of how this new vehicle would work:

Investor

• The investor puts up certain amount of cash for each property and in exchange receives a position of a Beneficiary in a Trust for the property.
• This investment will be in the form of a promissory note secured by first Deed of Trust made out to the property’s Trust. There is no equity position for the investor.
• The investor will also receive personal and corporate guarantees for the principal and interest from Dr. Yoo and EAC, LP, respectively.
• As a Beneficiary, the investor will receive a 9 - 15% annualized return, with the annual return determined by the cash flow potential of the property. Typically this will be 12%, but could range from 9% to 15%.
• The investor may exit the investment any time within at least 4 weeks of notice.
• The cash amount from the investor will typically be 65% to 90% of the value of the property.

EAC, LP

• We will manage the property and cover ALL other costs.
• From the day the Investor’s money is received, we will make monthly payments, whether the property is vacant or rented.
• EAC will keep the remaining cash flow, if any, after all expenses and reserves are paid. This will typically be a nominal amount, as seen from the pro formas presented below.

Our plan is to refinance a portion of our portfolio as soon as it reaches $500K in any single market, expected to be in 2 to 3 years, and pay the investors off in full. These investments will be a way station for our investors’ money as they wait for a higher return project that typically pay out 18 - 24% annualized return. Since our investors will be placed in queue for the higher return projects, he/she can invest in these properties while waiting their turn. The ability to cash out at any time can be done because other investors as they cash out of higher return deals will need a place to put their cash. If no such funds are available, we will use our own funds to cash you out. These investment vehicles can also be used by an investor who desires a steady, safe, and relatively high return on your money for approximately 2-3 years, without having to constantly reinvest it.

The following properties we are buying in Birmingham, Alabama will show how this would work.

1506 Alabama Birmingham, AL 35211 This home is already rehabbed and rented with Section 8 tenant. Purchase Price $ 35,000 Closing costs $2000 Total $37,000 ARV $ 50,000 % ARV 62% Monthly Breakdown Income Expenses Investor Payout 13% $379.17 Total Rent $ 795.00 Annual Taxes $ 75.00 $ 900.00 Insurance $ 50.00 $ 742.00 Vacancy/non payment $ 79.50 10% CAPEX Reserves $ 79.50 10% Repairs & Maintenance $ 79.50 10% Property Management $ 39.75 5% Total $ 363.50 46% NOI $ 431.50 6801 Division Birmingham, AL 35211 This home is already rehabbed and rented with Section 8 tenant. Purchase Price $ 33,000 Closing Costs $2000 Total $35,000 ARV $ 50,000 % ARV 70% Monthly Breakdown Income Expenses Investor Payout 12% $350.00 Total Rent $ 750.00 Annual Taxes $ 75.00 $ 1,000.00 Insurance $ 61.83 $ 742.00 Vacancy/non payment $ 75.00 10% CAPEX Reserves $ 75.00 10% Repairs & Maintenance $ 75.00 10% Property Management $ 37.50 5% Total $ 361.83 48% NOI $ 388.17

These two homes are currently available for any of our investors who may be interested. As we do for all other projects, we will send out notifications of these cash flow properties for you to invest in as soon as they become available. We will present them first to our preferential investors who have accounts opened up in our bank in an order of whose next in line for an investment.

As for opening up accounts in our bank, we have spent the last month negotiating with our current bank and in the end, they cannot handle our needs. However, because we also bank with Citibank for some real estate needs, we have resolved with them how to accommodate our investors. In order for this to work, you must open up a business account. Instead of making our investors go through the costs of creating a business, we suggest opening up a subaccount under our real estate business account for YOJ Holdings, LLC. Although this account belongs to our company, we will sign a corporate resolution provided by Citibank to ensure we have no power to transfer funds out of the account.

You should, however, grant us the privilege to see the balance of your account via secure web access. This set up ensures your protection but allows us to know what our potential buying power is at all times and have easy and efficient transfer of funds once you have chosen an investment in our company. Once again, EAC, LP and Dr. Yoo will provide corporate and personal guarantees only to those who open up accounts at Citibank. And although you can invest in any and all of our projects without this account at Citibank, those investors who have done so will have preferential access to our deals.

We will send you a copy of the resolution for your review. If you agree to open up a subaccount, you may go to the nearest Citibank and connect with the Business Account Specialist at that branch. Our point of contact for Citibank Business Banking Specialist is Rana Lotfi at (858) 200-6961 and email is [email protected]. Let us know when you are ready to do this and we will have Rana speak to the Business Account Specialist at the branch you will be going to prior to your visit.

Please contact John Hostetler @ 760-519-4152 or [email protected] if you have any questions about our new opportunities.