2016 02-23 EAC Community Weekly Newsletter
EXECUTIVE PARTNERS
Kevin Yoo, CEO
As have been mentioned in my previous writings, our IPs can invest their money in long term 2nd position loans on some of our future projects. This as you can see is essentially creating a note for you. The 2nd place notes may bear only modest returns of 10 to 12%. Our desire and our plan is to create notes for you at higher returns where you can obtain healthy passive income. We are working in Las Vegas, Nevada to create high return manufactured home notes.
Our plan is to create notes for you where you can park your money for 5 to 7 years at good if not outstanding returns. These will be fully amortized loans where you will be paid off completely at the end of the specified period of time. But just as your bank holding your mortgage on your home will be paid several times the value of the underlying loan, you will also enjoy the same with your notes. Essentially, we want you to be the bank.
We will also allow our IPs to cash out of these notes at any time. However, you will essentially only receive the principal minus all the payments you have received up to that time. This is to discourage an IP from asking for their money back without good reason. We will then offer this note to others at the discount created by only returning the principal minus all the payments to the original IP to increase the note return for the new IP.
Look for these notes coming to EAC Community soon. They will be priced in a range that will be very easy to buy around $10K or so each. They will be first offered to our Preferred Investor Partners and then to the rest of the Investor Partners.
John Hostetler, COO
Renegotiated terms with B2R.
I received an email from our awful “Relationship Manager” early last week in which he told me that B2R needed to re-price our loan from 6.45% to 7.00%. Needless to say, I was a bit upset about this, as absolutely no justification was given for this change. Furthering the insult, the moving index on which our final rate is based has actually decreased by about .4% since we received our initial rate sheet. This means that B2R was effectively boosting our rate by almost a full percentage point. Unacceptable.
I fired back an email and made sure that their Account Exec (Salesperson) was CC’d, requesting an explanation and making clear that they were jeopardizing several larger loans behind this one by treating us so poorly. Fortunately, that caught the eye of the Account Exec and she took it to her bosses to try to make it right.
Well, she must be a good salesperson, because she was able to actually LOWER our final rate on this $1.1 million loan from 6.45% to 6.16%, which is a huge win. We are thrilled, and expect to be signing closing papers by early next week.
Olga Levin-Diaz, CFO
Awaiting updates.
MANAGING PARTNERS
Vil Nikollaj, Managing Partner
– Visited Philadelphia potential turnkey provider, ABC Capital.
– The market has some good upside, but still have some concerns about the quality of the rehab work and classification of the properties.
– Waiting for response back from one of the co-owners
The post Vil Nikollaj, Managing Partner appeared first on EAC Investments.
Chad Urbshott, Managing Partner
4384 Ingleside:
Ingleside property has been sold.
Tony Banawa, Managing Partner
Awaiting updates.
Joseph Jin, Managing Partner
Awaiting updates.
GROUND PARTNERS
Lou Ellis, Ground Partner from Jacksonville, North Carolina
Awaiting updates.
Steve Shaffer, Ground Partner from Southbend, Indiana
226-228 Cleveland:
Completion of outside 75% complete, project moving forward.
201 Cleveland:
Project complete, on rental market
2016 Berkley:
Project complete, rented.
126 E Broadway:
Scope of work moving forward, rental market projected end of March
Andrew Davis, Ground Partner from Orlando, Florida
602 Emma and 1215 Avenue L:
The clerk finally got to the defaults on Friday. I have filed the motions for final judgment and proposed final order electronically. By court rule, I also must submit hard copies of the proposed final order for each property with a cover letter to the judge. Those have been prepared and will be sent to the court Monday. I’ll continue to check with the clerk when we can expect the judge to sign the defaults. The writs for possession are prepared and I will file them immediately when I know the final order has been entered. I’ve also alerted our process server to be ready to deliver the writs and your checks to the sheriff to execute the evictions after the final judgment and clerk stamps the writs.
We’re on the court’s and the sheriff’s schedule, now. I’ll keep you informed when significant events occur.
Giovanni Gracias, Ground Partner from San Diego, California
4748 College Ave:
– Final inspection from the city has been scheduled for Friday. Once we pass we will complete the smaller details, like staging & clean up. This is different from the plan permit that delayed us last time.
– Property is scheduled to hit the market by next weekend.
– Projected list price: $575K ($25K above our original projections)
2672 Escala Circle:
– The property was off the market for 2.5 weeks to allow higher pending comps to close.
– My Realtor’s cousin will be submitting an official offer this week and offering a quick close. I will evaluate the offer and its favorable we will accept and move to escrow. Otherwise the property will be back on the market at a higher price point than originally listed price of $530K.
12081 Calle de Medio:
– The VA loan was being underwritten by Movement Mortgage here locally but they could not close until updated financials were provided from the buyers. Unfortunately, the buyer’s husband was on assignment and took longer than expected to submit documentation. We are waiting on his updated pay stubs and 2015 tax returns to be submitted so we can close escrow.
– Payoff demand for the property has been requested and will be sent to EAC.
George Flint, Ground Partner from San Diego, California
1222 Muirlands:
– We have permits!!!
– Demo starts this week.
– Its go time team…….
Pescas:
– Demo is complete
– Pool is dug
– Concrete work is 80% done
– Underground plumbing 50% done
– Framing starts this week
Other updates:
John Allen, Ground Partner from San Diego, California
4336 53rd Street:
We have received 4 LOI’s to this point in time. The best offer is from a reputable developer for $700k, with a 60 day DD period and a 90 day close. We expect to counter a couple of the terms. Matt and I were both thinking cutting the DD period down to 30 days, with close in 60, with option for us to extend to 90 if we need to finish the approvals.
Samuel Lord, Partner from St. Louis, Missouri
3441 Shenandoah:
– Flooring and tile to be completed in next few days. Setting bathrooms by end week as well as kitchens. Touchup and trim package finish by end of week.
– Electricians setting lighting and trimming out that scope of work and making proper connections at panels.
– Outside work on front overhang/façade has been slow but have base completed. Contacting our gutter contractor who is equipped for the oddity to replace gutters and fascia (which is rotted).
– There is more tuck point required on Western side of the building and awaiting approval to access neighboring property (fenced with dog). On market by end of month.
4759/61 Alaska:
Have shown home multiple times. Have another two showings today and one at end of week. will lower to $550 ask. Will most likely have a contract by end of month as there are some very interested in the property.
4552/54 Virginia:
– Doing background checks today and collecting deposit on renters and if passes the credit/background check will take possession mid march.
– Gutters/fascia replaced on back of building and new roofing put over the first 3 feet of back of home.
– Uploaded photos of roof but primarily the parapet. Roof is rough but parapet and flashings are presently the largest concern. Parapets were not capped properly (used traditional roll shingle) and shingle is breaking at base curve. Although a new roof would be preferable re capping properly and fixing flashing as needed would be a quick alternative as would be silver coating. Cost is cheaper and work done quickly which would alleviate many of the issues we have seen inside.
3501 Iowa:
– Working with Section 8 on this property. Did go in and view issues with mold in back closets. The line set of first floor is in closet with most issues. Further look and found there is no insulation on the back wall. There is mold in between existing drywall and the outer brick wall.
– Suggestion is to remove drywall and insulate. back rooms get extremely cold in winter and with high ceilings, heating bill averages $500 month.
– Also suggest to install fans in rooms with reverse to assist in pulling heat down.
– Tenant is looking for a smaller 3 bedroom and more efficient home for heating/cooling.
– Electrical issue brought up in section 8 report could not be found in bedroom light.
– Suggest if we can deal with tenant and move to Oregon townhome (and fits the profile/rent) would enable work on the 3 bedroom on Iowa.
– Will be sealing points outside on ledges and such in coming weeks.
3116 Michigan:
No calls this month. I believe Lou discussed tuck point brick at the home but have heard nothing back. When home rehabbed, the largest issue at time was the parapets which were rebuilt. Roof in good condition.
3438/40 Ohio:
– Replaced broken flange on second floor toilet.
– Property in process of having lateral replaced. Trench was backfilled late last week. Following up on today.
Other updates:
– Holidays are over and tax time coming and have increased calls on rentals.
– Our winter has been off kilter with record highs one day and snow the next which has scheduling some work in a bind for outside.
Nathan Turner, Ground Partner from Ontario
4233 Comanche:
The former occupant has finally moved out and actually left the property without incident. However, it does need a lot of work and has been in a state of disrepair for a long time, but there is no evidence of roof leaks/mold, etc. The realtor gave us a CMA which showed its fair value at $30K, which was $10K less than she originally stated. She then pulled up some new listings of similar properties which are in far worse shape that were just sold, and flippers are now relisting them for $10K more within days. So we’ve listed the property at $39K to gauge interest.
Mike Whitehead, Ground Partner from Nevada
Awaiting updates.
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