2015 07-14 EAC Community Weekly Newsletter

JULY 14, 2015

EXECUTIVE PARTNERS

Kevin Yoo, CEO

Recently, I spoke with a fellow physician and an old childhood friend of mine both of whom I placed into our EAC Community email list. We often speak about real estate investments and I of course share with them what EAC Community is doing. These two people have not invested with us at all so I was very surprised when they both talked to me about some of the deals we were working on. One of them told me he reads everything we send to him. This made me realize how important it is for us to communicate with everyone what we are doing. We are not actively posting our deals and discussing EAC Community activity to the rest of the world. What we are doing as a Community is very special. And people should hear about it. But more importantly, we have people come join our Community because they hear about us from our internet posting. We can find other good members to join us only if the word gets out. I encourage everyone to do this. Along that line, I will be discussing with our Executive and Managing Partners to have EAC, GP pay for Pro membership of our Managing Partners to Bigger Pockets so that they could actively post.

I would like to present a deal that we are currently working on in South Bend, Indiana. It is a 4-plex that we bought back in February 27, 2015 and are currently converting this to Rent-By-Room for 12 occupants. We are half way through the project and have 6 renters already lined up. Due to the fact that we originally raised funds for a 4-plex and since we are now turning this into a 12 unit building, we are in need of raising additional funds. We had raised originally $112K for this project but need an additional $80K. The property we believe will appraise for more than $300K once completed and fully rented out. We plan to have this fully rehabbed and rented and refinanced in 6 months. Our proposal to our Investor Partners is to pay 12% annualized return on this additional $80K at the time of refinance.

John Hostetler, COO

Finally the day is set for us to close on our B2R blanket loan on 17 of our properties – Friday, July 17th. We did have one property drop off of the loan in the final underwriting process due to the lack of experience of our property manager (and GP) Anthony Mwangi. However, this property will be included in our next tranche (assuming we go again with B2R,) as B2R’s underwriting guidelines have changed since when we began this engagement. We will immediately start working on our second refinance, as we have 15 properties comprising 23 units that will be rehabbed and rented within the next few weeks. This loan should be larger than the first, hopefully topping $1.5 million in property value!

We are closing on two properties this week. First, we have an opportunity for a quick flip of a 3 bed, 2 bath 1,001 sf home in Jacksonville, NC at 113 Armstrong Drive. This home was completely remodeled in 2011 and sold at $113K as a flip, but was foreclosed upon and we were able to get it under contract for $50,400. As all of the major systems in the house are good, we will put about $12,500 into the cosmetics and should be able to sell quickly for north of $100K. Madel will be sending out a proposal on this later today.

Second, we are purchasing a duplex in a nice area of St. Louis (just NE of Tower Grove Park) using Kevin’s retirement funds for the purchase and rehab. This will be our first purchase with our new team of Mary Krummenacher, Sam Lord, and Ray Lemons from start to finish. We have partnered with all of these fine professionals on several deals in the past, but always with others involved in some capacity. We look forward to letting this team shine on this property, with many more to come with investment opportunities attached.

Olga Levin-Diaz, CFO

I am working on a lot of infrastructure building behind the scenes.

We are implementing new financial analysis and reporting process, rental application and screening procedure, and property management software, which will go live on Aug 1st.

MANAGING PARTNERS

Vil Nikollaj, Managing Partner

RBD - Roger Faulkner

• Upas

Still waiting for approval from city, expect by end of next week
Contractors and bids being evaluated and finalized

• Garrison

RBD stopped second lien holder from foreclosing on property with their own funds
Waiting to see what the new amount of funds and timeline needed will be. Was $250k for 3-4mo. 

Isaac Guzman, Managing Partner

Awaiting updates.

Chad Urbshott, Managing Partner

Davor Rom (IIP Properties): Garfield is scheduled to be finished with rehab beginning of this week and showings are scheduled. For Libby, they are coordinating with the city to complete the the Point of Sale process this week. For Ingleside, they have submitted the CMHA (Section 8) package and are waiting for an inspection date to comply with the HUD criteria.

Nathan Turner (Notes): He identified 6 potential notes late last week, out of which we’ve directed him to start off with the purchase of one to test the waters. The total investment, including note purchase and additional expenses, will be approx. $15K. The net profit for the worst case scenario should be approx. $10K within 6-9 months.

Erby Beauvais (Jacksonville, FL): I had an REO tape sent to me with several hundreds of properties a couple weeks back. There were no properties worth looking at in the markets we’re currently working in, however I identified several potential candidates in the Jax, Fl market. I had Erby filter them out for the better areas, and we’ve identied at least a couple for potential flips. I’ve asked Erby whether he’s interested in doing a flip as JV partner on these.

Linda Lin, Managing Partner

Awaiting updates.

 

GROUND PARTNERS

Lou Ellis, Ground Partner from Jacksonville, North Carolina

Awaiting updates.

Anthony Mwangi, Ground Partner from South Bend, Indiana

• Byron SFR - Rehab complete. Awaiting inspection by the Housing Authority for a Section 8 tenant.
• Dennis SFR - Major demo complete. Ready for framing crew to start this week.
• Cleveland 4Plex - Main floor framing interior/exterior complete. Installed new subfloors on the main floor. Damaged concrete sidewalk demo'd and framed ready for pouring. Electrical rough in on main floor should be complete. Built new small porches/overhangs on all 5 exterior doors. Basement cleaned out and ready for repairs on concrete walls and floors. Awaiting approval by City on where we want to place the electrical meters on the exterior.
• Cleveland Duplex - Exterior painting of house completed. LL - demo and framing complete, currently hanging drywall, electrical and plumbing updates should be complete. UL - demo complete, currently framing where needed, converted a large closet into bathroom and roughed in supply and waste lines.
• Other – Evaluating several buys near the river where a new $4.9 MM public park just recently opened. Several new developments are currently underway in this area.

Frank Veliz, Ground Partner from Orlando, Florida

I currently have contracts in on several sfr flips, waiting on banks to accept offers

• Emma St.
  • Marketing units and going thru applications. We have one unit currently rented at 550
• 1215 Avenue L
  • Patched and painted walls
  • Installed Floors

Giovanni Gracias, Ground Partner from San Diego, California

12081 Calle De Medio

• We are nearing the completion of this project but will have to delay our open house until 7/25. We are still missiing 3 custom kitchen cabinets to arrive from the manufacturer.
• All finish material has been purchased and stager has been scheduled for friday 7/24

4748 College Ave

• We have completed the first 2 weeks of rehab and things are moving quickly.
• The foundation has been repaired, plans for the room addition have been approved and we are moving towards framing and opening wall according to our plans.
• Electrical and plumbing upgrades taking place this week along with all exterior paint
• Projected project timeline is 5 weeks.

2672 Escala Circle

• Closed on this property monday 7/6 and the scope of work requires approximitely $10K in rehab costs
• Projected project timeline is 2-3 weeks however since the property was a short sale the bank required that I cannot sell it for 90 days from the day I purchased it.
• We will do all work and begin marketing this property prior to the 90 days. We will be on the MLS in 30-45 days.

George Flint, Ground Partner from San Diego, California

Muirlands plans have been approved by BNF and we now working towards construction docs. Specs are more than half selected. We have value engineering meeting with our GC, Arch, Framing Sub, Foundation Sub, Stuctural Engieer, Plumbing Sub and Electrercial engineer on Monday 7/13/15 - this will allow us to avoid mistakes when submitting to the City and to create construction plans that will increase our changes of delievery the project on time and on budget.

  

John Allen, Ground Partner from San Diego, California

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