2016 04-19 EAC Community Weekly Newsletter

EXECUTIVE PARTNERS

Kevin Yoo, CEO

EAC and Joseph Jin, our Managing Partner for Chicago, Illinois have been working very hard last few months on creating a partnership in Chicago with Operators, Justin Ericsson and Willem Young, from company called Profit for Rentals (PFR) to create a portfolio of several hundreds of income generating residential properties. Justin is an extremely adept turn-key operator who has a highly efficient real estate machine in place in Chicago that could help us build this portfolio. We want to make this opportunity available to our Investor Partners who are interested in becoming equity partners and not debt partners.

The partnership that we are setting up is for PFR to find, rehab, and rent properties at 75% LTV. EAC will fund the purchase and rehab and set up the refinance. The typical B-class property all in cost will be $80K, appraise for $110K, refinance for $65K, meaning we will have to leave cash in the deal. The typical property along with carrying costs will require approximately $25K cash to do. We will raise this money from our Investor Partners making them equity partners in the property giving them part of the cash flow and part of the equity. We plan to deliver annualized ROI of at least 10% and IRR of at least 20%. We will pay out if and when property generates income and if and when the property is sold. Our plan is to hold these properties long term. Essentially we are creating several apartment complexes in Chicago, Illinois. And we are inviting our Investor Partners to join us in creating these income portfolios.

John Hostetler, COO

B2R Updates:

Got a call from them last night, Hunter is kind of helping push this thing through and what happened was, about a month ago, when Kevin and I signed the papers, the package went to the final underwriting and they wanted to go back out and have the appraisals looked at again. And so they sent each appraiser a whole list of questions and now they wanted on every single one of our homes are being refinanced. In the end, in this week, I think those were all finished in Friday of last week and so what Hunter told me was none of the appraisers changed their opinion and all stood by their numbers which is great and now they’re just trying to push through the last piece to the credit approval process and so I believe I’m going to have the answer tomorrow morning as to green light and its certainly is sure for me that its gonna go through some pressure on one thing or another, not the rate, but maybe the LTV would be likely reduced and he feels he can get it through, he is working with his boss and they feel they can get it through as is but if not it may slightly reduced, at this point we can get it done and its gonna be approved the next day or two.

Olga Levin-Diaz, CFO

I’m working on finalizing the rental final numbers for April and working on some correspondence there. I’m also trying to get some additional leads for our Florida properties and figure out what we should do next. Madel help me put together a list reaching out to the people that are local and buying properties there. Nick is waiting for a quote from someone else and I think we have to change things around there to sell everything and get out.

MANAGING PARTNERS

Vil Nikollaj, Managing Partner

Refer on Giovanni, John and George’s update.

Chad Urbshott, Managing Partner

http://eacinvestments.com/wp-content/uploads/2016/04/EAC_Analysis-211-NW-17th-Delray-Beach.xlsx

Tony Banawa, Managing Partner

No 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:
Construction phase – Completion schedule end of May

201 Cleveland:
Upper rented, lower unit on market

2016 Berkley:
Rented

126 E Broadway:
Tenant scheduled for move in May 15, 2016

Andrew Davis, Ground Partner from Orlando, Florida

Awaiting updates.

Giovanni Gracias, Ground Partner from San Diego, California

4748 College Ave:
We received an offer at $542K last week and I countered back at $560K. They came back with a final offer of $552K and have decided to accept it. We are waiting for them to sign the counter officially so we can open escrow. Buyer was cross qualified by our preferred lender. I will forward escrow info
once we are officially under contract.

2672 Escala Circle:
We have interest from a Keller Williams agent who has 2 buyers that saw the property last week. I am waiting to see if they will send us an offer. I gave him a deadline of 7pm tonight. One of the potential buyers is a renter in the complex and ready to buy.

George Flint, Ground Partner from San Diego, California

1222 Muirlands:
Framing is about 10% done. Ruff electrical, plumbing and AV are about to start.

Pescas:
Framing is 90% done. Ruff electrical, plumbing and AV are about 70% done. Roof and dry wall are the next trades to be on site.

Other updates:
Overall projects are moving smoothly. We are going to start showing the properties once the framing is done with the hopes to pre-sale them.

John Allen, Ground Partner from San Diego, California

4336 53rd Street:
As many of you know, the buyer who was represented by Michael Parker pulled out, and we entered into a contract with Matt Weaver’s development group, Blue Centurion Homes. Terms are $650,000 purchase price, 30 day DD and 60 day close, with seller option to extend to 90 days for approvals.

The grading permit will be ready to pull. The building plans should also be plan checked and approved, I don’t foresee a reason why we can’t hit our June 4thdeadline, but with the City being backed up like it is, anything is possible.

The buyer has had no issues thus far, and I’ve been in touch with them providing plan updates and information for their feasibility analysis. So far, so good. I will keep everyone posted with any new developments.

Samuel Lord, Partner from St. Louis, Missouri

3441 Shenandoah:
Nothing to report

4759/61 Alaska:
Units all currently rented. Must reattach down spout on front side of building and install new gutter on front (around porch).

4552/54 Virginia:
Showing vacant unit as ready for rent. Per inspection cleaned up and must tuck point specific areas of the basement where mortar has come out. Will place new tread runners on back outside steps per inspection and make minor repairs as needed.

Have requested several roofers to come and view the parapets and flashing of the roof. Have had set appointments and failed to show. Still requesting this. Roof in good shape but must have the flashing/parapet repaired as these we know are bad.

3501 Iowa:
Investigated potential rain leak last week on first floor. Received another call on same when no rain. Believe there may be a water line leak in second floor lines. Something that will need to be checked during work once empty. Have had no word back from section 8 concerning missed payment in March. Have requested tenant to contact their agent also. 1st Floor tenant has requested new apartment and trying to move to Oregon property as it fits requirements. She had walked area previously but preferred Winnebago. Speaking with her again to take Oregon as it should be ready to go by month end.

3116 Michigan:
Home cleaned out of tenant trash. Minor repairs to shower wall needed and re-caulk and glaze/epoxy bathtub. Have sprayed all basement areas to eradicate any potential mold threat. Ran Ozone generator multiple times totaling more than 60 hours. Have showings set up and call backs to those that have been interested in the unit.

3438/40 Ohio:
Replacing outside deck steps this week. Tenant has complained about bed bugs, mice, and squirrels. Have had local exterminating companies view the unit and they believe mice are present but we can find no access for squirrels.

Other updates:
Will work to clean up any outstanding issues at all units prior to changeover to Unistream. Any outstanding issues or potential issues will be discussed with Ollie.

Nathan Turner, Ground Partner from Ontario

4233 Comanche:
I am currently in negotiations for two more notes I have identified as possible purchases for EAC. I will let you know once I have better numbers to report on the two next purchases.

Thank you!