2016 08-30 EAC Community Weekly Newsletter

EXECUTIVE PARTNERS

Kevin Yoo, CEO

No updates.

John Hostetler, COO

Awaiting updates.

MANAGING PARTNERS

Vil Nikollaj, Managing Partner

BNF – George Flint
– Pescas
o Schedule: working through final punch list (finish mid-week), then clean up, stage, listing party, sale
o Re-listed 8/25 with 95% completed project. Once 100% complete, will be updated.
o http://bit.ly/2cc9wOY
– Muirlands
o Beginning stucco and drywall towards the end of the week so we are doing decent thus far.
o Pre-listed at $4.15M as we did on Pescas. Goal is to find buyer to buy as-is and complete on their own with desired finishes or pay to have BNF finish.
o http://bit.ly/2bzb1oR

Southern California Youth Alliance – John Allen (53rd St)
– Property in escrow for $670k.
– 17-day Due Diligence ends 2 Sept. Buyer to sign waiver removing all contingencies.
– Tentative close 15 Sept, but will have buyer sign agreement in case delays caused by city. City provided estimate of 8 business days after plan checker and city engineer.
– John Allen having final meeting Thursday with plan checker and city engineer.

PPS – Giovanni Gracias
2672 Escala
– Property refinanced with 2-year loan last week.
– EAC received $125k of $155k balance. Remaining balance placed on 33rd St.
4184 33rd St Unit 3
– Property in escrow for $312k – $8k closing ($304k net)
– DD period ended. Anticipated closing 12 Sept.
– Waiting for update and confirmation from Giovanni
4748 College
– Property approx. 5 weeks from Foreclosure Auction, which would erase the junior liens.
– EAC working on two options:
(1) selling at reduced price then rolling losses to a future project with PPS until repayment
(2) buying at auction, then selling ourselves

Lou Ellis, Managing Partner

Awaiting updates.

Chad Urbshott, Managing Partner

3539 Judy:
Cancellation of contract has started and I expect it to be done by November at which time we can list the property. I got a letter from a neighbor last week though saying that she was concerned about people potentially breaking in. She says that the borrowers moved out Jan 1 and have since been back several times to pick up mail and other things that they had left behind. One day she saw an unfamiliar truck pull up though and she could tell they were up to no good and chased them away. I called a local property preservation company on Friday and they are willing to go out and do an inspection and board up the house for $250. This company is also a real estate brokerage and would be willing to work as our realtor once the existing contract is cancelled. I’ve included the $250 in the bills attached.

325 Cedar:
I talked to the assistant of our realtor since our guy was in the hospital. He’s home now and is doing well after an adjustment was needed for his defibrillator. She mentioned that she thinks 29900 is a bit high and that it is more of a rental neighborhood. We could look at selling the home on terms or Chad had mentioned you may be interested in keeping this house as a rental for your portfolio.

2275 Union:
I had my realtor go by the house with a letter offering to help the borrowers by either modifying their existing loan or releasing them from the debt in exchange for signing a cancellation of contract. She went by 3 times and there was nobody home. From what she could determine the house is vacant. She also recommended a good attorney who deals with land contract cancellations on a regular basis. She has used him before and said he is fast and inexpensive. I referred the contact information back to Peak and we just started the process of cancelling this contract along with 4113 Huston.

4113 Huston:
See above.

510 High Grove:
I finally got the last document needed to get this loan boarded with Peak so that they could receive payment on Friday of last week. Now that it is boarded Peak can receive the down payment and first month payment that was due Aug 1. The borrowers have the money ready and are eager to pay and I’ve made it very clear to Peak how important it is for us to receive the payment during this calendar month as it can greatly contribute to how much and when I can sell this note as performing.

As an additional update, I was informed on Friday last week that Peak is moving out of servicing and that all loans with them will need to be transferred before the end of October. I spoke to SN Servicing today and was very pleased with what they have to offer. They have a website that I can log into and get up to the minute information about each loan and what the next steps are for that particular loan. They also have much more reporting available that Peak didn’t have that will help in decision making and help speed up the entire holding process of any given note. The pricing is very comparable with the biggest difference being a fee they charge if they get a non performing loan to a performing loan. In that case they charge a $1000 fee that they will collect as the payments are made by the borrower. Although this is an extra fee we didn’t have with Peak it doesn’t greatly effect our bottom line especially since we would be selling that note within a few months anyway. I will be signing paperwork to transfer all my loans over to them and the whole transfer process should be done within a month as per RESPA regulations.

Since all of our notes are either performing or in loss mitigation there should be little or no interruption to any of our loans.

Tony Banawa, Managing Partner

1008 Braemar:
Purchase Price: $48,000
ARV: $160,000
Sold $165,000
Purchase Date Closed: 03/02/2016

EAC is not involved in the profits on this deal, an investor get’s share of profit’s on this deal. Deal closed and sold for $165k…$5k more than expected. EAC will be funded back this week.

16920 Old Elm:
Purchase Price: $98,000
ARV: $145,000
ARV%: 68
Total Rehab: $12,500

June 24th: Renter is about to move in. We have final rent determination for $2,241.00 in which we were expecting between $2200-$2300. Currently working on the Refi @ 7.25% for a loan amount of $108,750. This is 75% LTV or 90% LTC whichever is less. Estimated cash out of refi is $12,865 for a monthly payment of $1,256.

06/28/2016: Done going through inspection phase with HUD

06/29/2016: Sent in email to check up on refi update status and final construction release draw. Justin will work on Final Draw. $21,750 total. We have received only $10,775 of that thus far, so we need to release the remainder less the $1,500 that Justin referenced for final pending items.

06/30/2016: Kevin signed LOI proposal to execute refi.

July 20: Old elm tenant is complaining that she wants two new exterior doors and threatening to cancel her move. The agent promised two new doors so I’m making them pay for half the $600 cost. We did a change order for $300 to pay half the cost.

July 20th: Renter moving in within 2 weeks.

Karen will be handling renter info on podio. Tenant is Sonya Anderson. Willem will send out email to Karen and CC us. I am currently waiting on answers from Karen based on Willem’s questions about the renter and the lease contract availability for Refi.

Refi is moving along. Gary, attorney on PFR side is arranging the Master business resolution(that included signing rights and approval from all 4 entities involved)and quit claim deed(to transfer ownership rights from EAC to CFI) as required by Renovo to resume REFI. That’s where we stand for Old Elm.

20813 Homeland:
Purchase: $79,000 on June 22nd, 2016
ARV: $130,000
Total Rehab: $15,000
Project Time Frame: 2 months

06/28/2016: Closed on Homeland Purchase

06/29/2016: Requesting initial draw of half construction costs which is $7,500

Finished interior and exterior. Punch phase (needs inspector to finish it up)

08/27/2016: Rehab is done. Just need inspection done for Section 8 tenant.

Inspection shouldn’t be more than a week away.

Willem sent out email as to why it’s not being leased right now. ill update once received.

7718 S Loomis:
Purchase: $32,000
ARV: $196,000
Total Rehab: $86,000
Estimated Hold time: 4 months.
Est Gross Flip Profit: $37,100.
Est COC%: 28.9
Acquired: March 23rd, 2016

Going on 5 months on this extensive rehab flip. Rehab is said to be pretty much complete. Waiting for Willem to confirm updates.

18279 Idlewild Street:
Purchase: $100,000
ARV: $170,000
Total Rehab: $25,000
Time Frame: 5 months

The scope for this property is to finish off the lower level adding the 4th bedroom with misc upgrades in the house. It’s in very nice condition it just need some TLC.”

Rundown:
1988 house in good condition overall that needs $25k in upgrades worth $170k. We are buying for $100,000 and putting in $25k in upgrades. PFR, our GP’s, just bought the same house across the street and already contracted to sell for $179k which will be one of the future comps. The property taxes are higher than we like on this one however we are confident we can get them lowered in time with a lawfirm that has 90% success rate.

Scheduled to close soon. Appraiser came out on August 10th.

Antonio Cerqueira, Managing Partner

2502 Ingersoll:
About the deal: Fix and flip deal in up and coming Philadelphia neighborhood.
Duration: May-September 2016
Completed work: Demo, rough plumbing and electric, tiling, drywall, stairs
Remaining work: compound, Finish plumbing, electric, flooring
Pictures: https://goo.gl/jSXDrq (updated today)

2520 Ingersoll:
About the deal: Fix and flip deal in up and coming Philadelphia neighborhood.
Duration: May-September 2016
Completed work: Demo, rough plumbing and electric, some drywall
Remaining work: Finish drywall, compound, tilling, Finish plumbing, electric, flooring
Pictures: https://goo.gl/jjAfBu (updated today)
Note: Waiting for permits inspection

2167 66th Ave:
About the deal: Fix and flip deal in Philadelphia
Duration: May-September 2016
Completed work: Unit 1 already renovated Unit 2 renovation finished
Remaining work: Both units already renovated, now we start the inspection period. We expect this deal to close in about 4 weeks.
Pictures: https://goo.gl/tXE88J (updated today)
Note: We got already an agreement of sale for this property.